ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2017
August 2017
I. Auditor’s Report
Whether the semi-annual report has been audited?
□Yes √ No
The semi-annual report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
June 30, 2017
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 688,690,424.44 532,909,026.07
Settlement reserve
Interbank lendings
Financial assets at fair value
101,573.76 429,190.68
through profit/loss
Derivative financial assets
Notes receivable 1,182,682,094.60 534,386,586.59
Accounts receivable 14,701,820.59 12,287,262.88
Accounts paid in advance 76,821,426.20 74,784,221.59
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserve
Interest receivable 8,363,178.08 2,843,178.08
Dividends receivable
Other accounts receivable 14,673,103.80 10,765,397.03
Financial assets purchased under
agreements to resell
Inventories 1,846,271,997.98 1,786,433,036.50
Assets held for sale
Non-current assets due within one
year
2
Other current assets 1,605,443,182.91 1,750,278,829.24
Total current assets 5,437,748,802.36 4,705,116,728.66
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 498,964,610.81 404,029,552.27
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments
Investment property 8,160,298.60 8,402,944.74
Fixed assets 1,785,781,644.39 1,865,691,585.06
Construction in progress 77,471,004.70 71,771,324.26
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 694,861,087.12 700,684,529.08
R&D expenses
Goodwill 478,283,495.29 478,283,495.29
Long-term deferred expense 77,934,606.11 93,588,397.35
Deferred income tax assets 224,774,690.99 107,654,597.15
Other non-current assets 314,785,612.34 300,982,000.00
Total non-current assets 4,161,017,050.35 4,031,088,425.20
Total assets 9,598,765,852.71 8,736,205,153.86
Current liabilities:
Short-term borrowings
Borrowings from the Central Bank
Money deposits accepted and
inter-bank deposits
Interbank borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable 13,128,583.00 11,298,583.00
Accounts payable 496,426,124.62 340,972,366.21
Accounts received in advance 735,440,901.02 623,990,614.91
3
Financial assets sold for
repurchase
Fees and commissions payable
Payroll payable 228,782,300.86 288,027,136.09
Taxes payable 322,159,779.82 486,959,651.85
Interest payable
Dividends payable
Other accounts payable 1,059,628,766.11 641,472,271.53
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of
securities
Payables for acting underwriting
of securities
Liabilities held for sale
Non-current liabilities due within
one year
Other current liabilities 398,585,802.29 241,487,812.54
Total current liabilities 3,254,152,257.72 2,634,208,436.13
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable
Special payables
Provisions
Deferred income 43,254,768.06 43,978,795.45
Deferred income tax liabilities 110,569,452.31 117,287,002.52
Other non-current liabilities
Total non-current liabilities 153,824,220.37 161,265,797.97
Total liabilities 3,407,976,478.09 2,795,474,234.10
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
4
Of which: Preference shares
Perpetual bonds
Capital reserve 1,295,405,592.25 1,295,405,592.25
Less: Treasury shares
Other comprehensive income 16,248,005.87 36,144,477.95
Special reserve
Surplus reserve 256,902,260.27 256,902,260.27
Provisions for general risks
Retained earnings 3,749,798,945.14 3,503,069,053.49
Equity attributable to owners of the
5,821,954,803.53 5,595,121,383.96
Company
Minority interests 368,834,571.09 345,609,535.80
Total owners’ equity 6,190,789,374.62 5,940,730,919.76
Total liabilities and owners’ equity 9,598,765,852.71 8,736,205,153.86
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2. Balance Sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 528,305,431.80 225,792,686.26
Financial assets at fair value
101,573.76 429,190.68
through profit/loss
Derivative financial assets
Notes receivable 1,125,205,190.32 449,016,169.03
Accounts receivable 4,832,609.01 6,377,346.00
Accounts paid in advance 26,996,010.91 11,815,064.19
Interest receivable
Dividends receivable
Other accounts receivable 107,964,845.62 105,514,906.34
Inventories 1,619,239,408.03 1,549,397,565.11
Assets held for sale
Non-current assets due within one
5
year
Other current assets 1,529,472,614.54 1,750,000,000.00
Total current assets 4,942,117,683.99 4,098,342,927.61
Non-current assets:
Available-for-sale financial assets 498,446,610.81 403,547,952.27
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 1,155,089,408.32 1,155,089,408.32
Investment property 29,928,735.32 30,846,736.84
Fixed assets 1,316,145,605.30 1,375,089,823.91
Construction in progress 66,999,423.58 68,022,146.66
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 184,585,242.77 186,370,081.28
R&D expenses
Goodwill
Long-term deferred expense 74,967,676.17 92,695,064.02
Deferred income tax assets 36,778,706.50 36,366,330.90
Other non-current assets 13,094,812.34 982,000.00
Total non-current assets 3,376,036,221.11 3,349,009,544.20
Total assets 8,318,153,905.10 7,447,352,471.81
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable 28,583.00 28,583.00
Accounts payable 443,272,755.49 307,649,868.02
Accounts received in advance 1,896,379,847.78 1,003,521,896.65
Payroll payable 68,388,606.08 90,742,908.53
Taxes payable 133,731,895.75 320,037,309.94
Interest payable
Dividends payable
6
Other accounts payable 285,105,712.08 282,570,379.80
Liabilities held for sale
Non-current liabilities due within
one year
Other current liabilities 41,291,780.61 37,589,367.67
Total current liabilities 2,868,199,180.79 2,042,140,313.61
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Special payables
Provisions
Deferred income 42,121,087.21 42,745,851.74
Deferred income tax liabilities 9,297,654.96 15,385,289.84
Other non-current liabilities
Total non-current liabilities 51,418,742.17 58,131,141.58
Total liabilities 2,919,617,922.96 2,100,271,455.19
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 1,247,162,107.35 1,247,162,107.35
Less: Treasury shares
Other comprehensive income 17,391,783.56 37,315,555.64
Special reserve
Surplus reserve 251,800,000.00 251,800,000.00
Retained earnings 3,378,582,091.23 3,307,203,353.63
Total owners’ equity 5,398,535,982.14 5,347,081,016.62
Total liabilities and owners’ equity 8,318,153,905.10 7,447,352,471.81
7
3. Consolidated Income Statement
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 3,670,127,764.59 3,045,034,706.73
Including: Sales income 3,670,127,764.59 3,045,034,706.73
Interest income
Premium income
Fee and commission income
2. Operating costs 3,012,871,713.47 2,512,805,683.52
Including: Cost of sales 913,179,198.91 780,394,434.66
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and surtaxes 606,131,354.51 471,239,184.35
Selling expenses 1,249,688,761.13 1,013,923,133.24
Administrative expenses 263,421,695.43 257,077,455.72
Finance costs -17,264,642.65 -9,764,161.14
Asset impairment loss -2,284,653.86 -64,363.31
Add: Profit on fair value changes (“-”
-119,656.35 2,080,010.18
means loss)
Investment income (“-” means
81,017,484.47 44,324,855.36
loss)
Including: Share of profit/loss of
associates and joint ventures
Exchange gains (“-” means loss)
Other gains
3. Operating profit (“-” means loss) 738,153,879.24 578,633,888.75
Add: Non-operating income 39,166,602.83 8,139,697.17
Including: Profit on disposal of
487,886.67 5,477.22
non-current assets
8
Less: Non-operating expense 2,189,022.01 5,088,602.48
Including: Loss on disposal of
1,193,100.98 4,324,035.29
non-current assets
4. Total profit (“-” means loss) 775,131,460.06 581,684,983.44
Less: Corporate income tax 203,016,533.12 144,981,768.68
5. Net profit (“-” means loss) 572,114,926.94 436,703,214.76
Net profit attributable to owners
548,889,891.65 431,055,462.62
of the Company
Minority interests’ income 23,225,035.29 5,647,752.14
6. Other comprehensive income net of
-19,896,472.08 -18,119,909.34
tax
Other comprehensive income net
of tax attributable to owners of the -19,896,472.08 -18,119,909.34
Company
6.1 Other comprehensive
income that will not be reclassified
into profit/loss
6.1.1 Changes in net
liabilities or assets with a defined
benefit plan upon re-measurement
6.1.2 Share of other
comprehensive income of investees
that cannot be reclassified into
profit/loss under the equity method
6.2 Other comprehensive
income to be subsequently reclassified -19,896,472.08 -18,119,909.34
into profit/loss
6.2.1 Share of other
comprehensive income of investees
that will be reclassified into profit/loss
under the equity method
6.2.2 Profit/loss on fair value
changes of available-for-sale financial -19,896,472.08 -18,119,909.34
assets
6.2.3 Profit/loss on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
6.2.4 Effective profit/loss on
cash flow hedges
6.2.5 Currency translation
differences
9
6.2.6 Other
Other comprehensive income net
of tax attributable to minority interests
7. Total comprehensive income 552,218,454.86 418,583,305.42
Attributable to owners of the
528,993,419.57 412,935,553.28
Company
Attributable to minority interests 23,225,035.29 5,647,752.14
8. Earnings per share
8.1 Basic earnings per share 1.09 0.86
8.2 Diluted earnings per share 1.09 0.86
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
4. Income Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 2,032,050,832.48 1,738,703,915.32
Less: Operating costs 808,157,556.90 766,632,166.44
Taxes and surtaxes 521,153,270.11 438,712,029.21
Selling expenses 119,601,430.10 106,464,016.98
Administrative expenses 180,104,417.79 185,132,665.41
Finance costs -8,358,356.49 -8,383,165.64
Asset impairment loss -1,943,865.48 -170,676.54
Add: profit on fair value changes
-119,656.35 2,038,778.28
(“-” means loss)
Investment income (“-” means
74,940,152.97 43,379,375.36
loss)
Including: Share of profit/loss of
associates and joint ventures
Other gains
2. Operating profit (“-” means loss) 488,156,876.17 295,735,033.10
Add: Non-operating income 23,115,601.27 8,735,915.53
Including: Profit on disposal of
117,524.82 0.00
non-current assets
Less: Non-operating expense 798,234.93 4,318,076.25
Including: Loss on disposal of 47,678.15 4,318,076.25
10
non-current assets
3. Total profit (“-” means loss) 510,474,242.51 300,152,872.38
Less: Corporate income tax 136,935,504.91 74,329,610.21
4. Net profit (“-” means loss) 373,538,737.60 225,823,262.17
5. Other comprehensive income net
-19,923,772.08 -17,718,890.00
of tax
5.1 Other comprehensive income
that will not be reclassified into profit
and loss
5.1.1 Changes in net liabilities
or assets with a defined benefit plan
upon re-measurement
5.1.2 Share of other
comprehensive income of investees
that cannot be reclassified into
profit/loss under the equity method
5.2 Other comprehensive income
to be subsequently reclassified into -19,923,772.08 -17,718,890.00
profit/loss
5.2.1 Share of other
comprehensive income of investees
that will be reclassified into
profit/loss under the equity method
5.2.2 Profit/loss on fair value
changes of available-for-sale -19,923,772.08 -17,718,890.00
financial assets
5.2.3 Profit/loss on reclassifying
held-to-maturity investments into
available-for-sale financial assets
5.2.4 Effective profit/loss on
cash flow hedges
5.2.5 Currency translation
differences
5.2.6 Other
6. Total comprehensive income 353,614,965.52 208,104,372.17
7. Earnings per share
7.1 Basic earnings per share 0.74 0.450
7.2 Diluted earnings per share 0.74 0.450
5. Consolidated Cash Flow Statement
Unit: RMB
11
Item January-June 2017 January-June 2016
1. Cash flows associated with
operating activities:
Cash received from sale of
3,555,497,838.84 2,839,999,383.84
commodities and rendering of service
Net increase in money deposits
from customers and interbank
placements
Net increase in loans from the
Central Bank
Net increase in funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from
reinsurance business
Net increase in deposits of policy
holders and investment fund
Net increase in disposal of
financial assets at fair value through
profit/loss
Interest, fees and commissions
received
Net increase in interbank
borrowings
Net increase in funds in repurchase
business
Tax refunds received 14,260,319.10 368,270.62
Cash generated by other operating
163,681,861.39 274,445,609.43
activities
Subtotal of cash generated by
3,733,440,019.33 3,114,813,263.89
operating activities
Cash paid for goods and services 519,208,246.66 517,398,554.95
Net increase in loans and advances
to customers
Net increase in funds deposited in
the Central Bank and interbank
placements
Cash paid for claims of original
insurance contracts
Interest, fees and commissions
paid
12
Cash paid as policy dividends
Cash paid to and for employees 664,176,293.14 540,282,959.39
Taxes paid 1,695,407,866.03 1,174,821,006.32
Cash used in other operating
429,282,389.42 556,198,130.24
activities
Subtotal of cash used in operating
3,308,074,795.25 2,788,700,650.90
activities
Net cash generated by operating
425,365,224.08 326,112,612.99
activities
2. Cash flows associated with
investing activities:
Cash received from retraction of
2,122,314,171.98 2,233,652,050.58
investments
Cash received as investment
79,384,831.47 44,324,855.36
income
Net cash received from disposal of
fixed assets, intangible assets and 412,563.04 500,379.86
other long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash generated by other
1,646,000.00 0.00
investing activities
Subtotal of cash generated by
2,203,757,566.49 2,278,477,285.80
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 74,306,031.33 75,351,512.67
assets
Cash paid for investment 2,096,875,360.87 1,632,621,071.61
Net increase in pledged loans
Net cash paid to acquire
0.00 795,770,032.45
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
2,171,181,392.20 2,503,742,616.73
activities
Net cash generated by investing
32,576,174.29 -225,265,330.93
activities
3. Cash flows associated with
financing activities:
Cash received from capital
contributions
Including: Cash received from
13
minority shareholder investments by
subsidiaries
Cash received as borrowings
Cash received from issuance of
bonds
Cash generated by other
financing activities
Subtotal of cash generated by
financing activities
Repayment of borrowings
Cash paid for interest expenses
302,160,000.00 50,360,000.00
and distribution of dividends or profit
Including: dividends or profit
paid by subsidiaries to minority
interests
Cash used in other financing
activities
Sub-total of cash used in financing
302,160,000.00 50,360,000.00
activities
Net cash generated by financing
-302,160,000.00 -50,360,000.00
activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
155,781,398.37 50,487,282.06
equivalents
Add: Opening balance of cash
527,849,026.07 1,040,373,733.07
and cash equivalents
6. Closing balance of cash and cash
683,630,424.44 1,090,861,015.13
equivalents
6. Cash Flow Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Cash flows associated with
operating activities:
Cash received from sale of
2,364,605,355.19 1,644,591,743.75
commodities and rendering of service
Tax refunds received 13,013,817.25 0.00
Cash generated by other operating
79,147,317.52 220,264,244.15
activities
Subtotal of cash generated by 2,456,766,489.96 1,864,855,987.90
14
operating activities
Cash paid for goods and services 451,629,264.08 433,945,983.66
Cash paid to and for employees 280,790,376.47 261,484,424.76
Taxes paid 1,125,948,368.08 785,049,481.14
Cash used in other operating
114,239,605.20 230,121,472.77
activities
Subtotal of cash used in operating
1,972,607,613.83 1,710,601,362.33
activities
Net cash generated by operating
484,158,876.13 154,254,625.57
activities
2. Cash flows associated with
investing activities:
Cash received from retraction of
2,069,314,171.98 2,233,318,095.80
investments
Cash received as investment
78,831,554.77 43,379,375.36
income
Net cash received from disposal of
fixed assets, intangible assets and 0.00 409,000.00
other long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash generated by other investing
1,646,000.00 0.00
activities
Subtotal of cash generated by
2,149,791,726.75 2,277,106,471.16
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 59,402,496.47 68,357,442.76
assets
Cash paid for investment 1,969,875,360.87 2,418,298,049.74
Net cash paid to acquire
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
2,029,277,857.34 2,486,655,492.50
activities
Net cash generated by investing
120,513,869.41 -209,549,021.34
activities
3. Cash flows associated with
financing activities:
Cash received from capital
contributions
Cash received as borrowings
15
Cash received from issuance of
bonds
Cash generated by other
financing activities
Subtotal of cash generated by
financing activities
Repayment of borrowings
Cash paid for interest expenses
302,160,000.00 50,360,000.00
and distribution of dividends or profit
Cash used in other financing
activities
Sub-total of cash used in financing
302,160,000.00 50,360,000.00
activities
Net cash generated by financing
-302,160,000.00 -50,360,000.00
activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
302,512,745.54 -105,654,395.77
equivalents
Add: Opening balance of cash
225,792,686.26 548,650,832.84
and cash equivalents
6. Closing balance of cash and cash
528,305,431.80 442,996,437.07
equivalents
16
17
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2017
Unit: RMB
January-June 2017
Equity attributable to owners of the Company
Item Other equity instruments Minority Total owners’
Less: Other General
Special Retained
Share capital Preference Perpetual Capital reserve Treasury comprehensive Surplus reserve risk interests equity
Other reserve earnings
shares bonds shares income reserve
1. Balance at the
end of the prior 503,600,000.00 1,295,405,592.25 36,144,477.95 256,902,260.27 3,503,069,053.49 345,609,535.80 5,940,730,919.76
year
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the
503,600,000.00 1,295,405,592.25 36,144,477.95 256,902,260.27 3,503,069,053.49 345,609,535.80 5,940,730,919.76
beginning of the
18
year
3. Increase/
decrease in the -19,896,472.0
246,729,891.65 23,225,035.29 250,058,454.86
period (“-” means 8
decrease)
3.1 Total
-19,896,472.0
comprehensive 548,889,891.65 23,225,035.29 552,218,454.86
8
income
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity
instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
19
3.2.4 Other
3.3 Profit
-302,160,000.00 -302,160,000.00
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
general risk
provisions
3.3.3
Appropriation to
-302,160,000.00 -302,160,000.00
owners (or
shareholders)
3.3.4 Other
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
20
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for
making up loss
3.4.4 Other
3.5 Special
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
4. Closing
503,600,000.00 1,295,405,592.25 16,248,005.87 256,902,260.27 3,749,798,945.14 368,834,571.09 6,190,789,374.62
balance
January-June 2016
Unit: RMB
January-June 2016
Equity attributable to owners of the Company
Item Other equity instruments Minority Total owners’
Less: Other General
Special Retained
Share capital Preference Perpetual Capital reserve Treasury comprehensive Surplus reserve risk interests equity
Other reserve earnings
shares bonds shares income reserve
21
1. Balance at the
end of the prior 503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
year
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the
beginning of the 503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
year
3. Increase/
decrease in the -18,337,408.5
467,099.06 779,270,063.38 345,609,535.80 1,107,009,289.68
period (“-” means 6
decrease)
3.1 Total
-18,337,408.5
comprehensive 829,630,063.38 20,688,034.14 831,980,688.96
6
income
3.2 Capital
increased and
22
reduced by
owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity
instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
3.3 Profit
-50,360,000.00 -50,360,000.00
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
general risk
provisions
23
3.3.3
Appropriation to
-50,360,000.00 -50,360,000.00
owners (or
shareholders)
3.3.4 Other
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for
making up loss
3.4.4 Other
3.5 Special
reserve
3.5.1
24
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other 467,099.06 324,921,501.66 325,388,600.72
4. Closing
503,600,000.00 1,295,405,592.25 36,144,477.95 256,902,260.27 3,503,069,053.49 345,609,535.80 5,940,730,919.76
balance
8. Statement of Changes in Owners’ Equity of the Company
January-June 2017
Unit: RMB
January-June 2017
Other equity instruments Less: Other
Item Special Retained Total owners’
Share capital Preference Perpetual Capital reserve Treasury comprehensive Surplus reserve
Other reserve earnings equity
shares bonds shares income
1. Balance at the end of
503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
the prior year
Add: Changes in
accounting policies
Correction of errors
in prior periods
Other
2. Balance at the 503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
25
beginning of the year
3. Increase/ decrease in
the period (“-” means -19,923,772.08 71,378,737.60 51,454,965.52
decrease)
3.1 Total
-19,923,772.08 373,538,737.60 353,614,965.52
comprehensive income
3.2 Capital increased
and reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital
increased by holders of
other equity instruments
3.2.3 Amounts of
share-based payments
charged to owners’ equity
3.2.4 Other
3.3 Profit distribution -302,160,000.00 -302,160,000.00
3.3.1 Appropriation
to surplus reserve
3.3.2 Appropriation
to owners (or -302,160,000.00 -302,160,000.00
shareholders)
3.3.3 Other
3.4 Internal
26
carry-forward of owners’
equity
3.4.1 New increase
of capital (or share
capital) from capital
reserve
3.4.2 New increase
of capital (or share
capital) from surplus
reserve
3.4.3 Surplus reserve
for making up loss
3.4.4 Other
3.5 Special reserve
3.5.1 Withdrawn for
the period
3.5.2 Used in the
period
3.6 Other
4. Closing balance 503,600,000.00 1,247,162,107.35 17,391,783.56 251,800,000.00 3,378,582,091.23 5,398,535,982.14
January-June 2016
Unit: RMB
January-June 2016
Item
Share capital Other equity instruments Capital reserve Less: Other Special Surplus reserve Retained Total owners’
27
Preference Perpetual Treasury comprehensive reserve earnings equity
Other
shares bonds shares income
1. Balance at the end of
503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
the prior year
Add: Changes in
accounting policies
Correction of errors
in prior periods
Other
2. Balance at the
503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
beginning of the year
3. Increase/ decrease in
the period (“-” means -17,166,330.87 720,151,931.34 702,985,600.47
decrease)
3.1 Total
-17,166,330.87 770,511,931.34 753,345,600.47
comprehensive income
3.2 Capital increased
and reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital
increased by holders of
other equity instruments
3.2.3 Amounts of
share-based payments
28
charged to owners’ equity
3.2.4 Other
3.3 Profit distribution -50,360,000.00 -50,360,000.00
3.3.1 Appropriation
to surplus reserve
3.3.2 Appropriation
to owners (or -50,360,000.00 -50,360,000.00
shareholders)
3.3.3 Other
3.4 Internal
carry-forward of owners’
equity
3.4.1 New increase
of capital (or share
capital) from capital
reserve
3.4.2 New increase
of capital (or share
capital) from surplus
reserve
3.4.3 Surplus reserve
for making up loss
3.4.4 Other
3.5 Special reserve
29
3.5.1 Withdrawn for
the period
3.5.2 Used in the
period
3.6 Other
4. Closing balance 503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
30
Anhui Gujing Distillery Company Limited
Notes to Semi-Annual Financial Statements 2017
(Currency Unit Is RMB Unless Otherwise Stated)
I. Company history
Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property,
Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company with
net assets of RMB377,167,700 and state-owned shares of 155,000,000 shares and considered Anhui Gujing
Company as the only promoter. The registration place was Bozhou Anhui China. The Company was established
on March 5, 1996 by document of WZM (1996) No.42 of Anhui People’s Government. The Company set up
plenary session on May 28, 1996 and registered in Anhui on May 30, 1996 with business license of 14897271-1.
The Company has been issued 60,000,000 domestic listed foreign shares (“B” shares) in June 1996 and
20,000,000 ordinary shares (“A shares) on September 1996, ordinary shares are listed in national and par value is
RMB1.00 per share. Those A shares and B shares are listed in Shenzhen Stock exchange.
Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries (the Company)
specialize in producing and selling white spirit.
Registered capitals of the Company were RMB235,000,000 with stocks of 235,000,000, of which 155,000,000
shares were issued in China, B shares of 60,000,000 shares and A shares of 20,000,000 shares. The book value of
the stocks of the Company was of RMB1 Yuan per share.
On May 29, 2006, a shareholder meeting was held to discuss and approval a program of equity division of A share,
the program was implement in June 2006. After implementation, all shares are outstanding share, which include
147,000,000 shares with restrict condition on disposal, represent 62.55% of total equity, and 88,000,000 shares
without restrict condition on disposal, represent 37.45% of total equity.
The Company issued
on June 27, 2007, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on
June 29, 2007. Up to that day, outstanding shares with restrict condition on disposal are 135,250,000, representing
57.55% of total equity, the share without restrict condition are 99,750,000, representing 42.45% of total equity.
The Company issued
on July 17, 2008, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on
July 18, 2008. Up to that day, outstanding shares with restrict condition on disposal are 123,500,000, representing
52.55% of total equity, the share without restrict condition are 111,500,000, representing 47.45% of total equity.
The Company issued
on July 24, 2009, 123,500,000 outstanding shares with restrict condition on disposal are listed in stock market on
July 29, 2009. Up to that day, the Company’s all shares are all tradable.
31
As approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943, the Company privately offered
16,800,000 ordinary shares (A-shares) to special investors on July 15, 2011, with a par value of RMB1 and the
price of RMB75.00 per share, raising RMB1,260,000,000.00 in total, the net amount of raised funds stood at
RMB1,227,499,450.27 after deducting RMB32,500,549.73 of various issuance expenses. Certified Public
Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi
[2011] No. 1065. After private issuance, the share capital of the Company increased to RMB251.8 million.
Pursuant to the decision of annual shareholders meeting in 2012, the Company that considered 251,800,000 shares
as base number on December 31, 2013 transferred capital reserve into share capital at a rate of “10 shares for per
10 shares” accounting for 251,800,000 shares and implemented in the year of 2012. Upon the transference, the
registered capitals increased to RMB503,600,000.
In April 2016, the company entered a strategic cooperation agreement with Wuhan Tianlong Yellow Crane Tower
Co., Ltd., creating a new age for cooperation related to Chinese famous spirit. As the only Chinese famous spirit
in Hubei Province, it features unique mellow taste, elegant appearance and tempting smell. Moreover, Yellow
Crane Tower White Spirit won the Golden Prize respectively in 1984 and 1989 National White Spirit Appraisal
Competition as one of the business card representing Hubei Province’s economy. At present, the company has
established three major bases in Wuhan, Xianning and Suizhou, of which, Xianning Base has integrated
modernism, ecologism and high technology as a new spirit-making base, known as “the most beautiful chateau in
China”. In 2016, Yellow Crane Tower Spirit won “2015 Top 10 Star Product in Hubei Province”.
By June 30, 2017, the Company issued 503,600,000 shares.
The company is registered at Gujing Town, Bozhou City, Anhui Province.
The approved business of the Company including procurement of grain (operating with business license),
manufacture of distilled spirits, wine distilling facilities, packaging material, bottles, alcohol, grease (limited to
byproducts from wine manufacture), and research and development of high-tech, biotechnology development,
agricultural and sideline products deep processing, as well as sale of self-manufacturing products.
The Company and the final parent company is Anhui Gujing Company Co., Ltd in China.
Financial statement of the Company will be released on August 25, 2017 by the Board of Directors.
On June 30, 2017, there were 23subsidiaries included in the consolidation scope. Please refer to Note 8 “Rights
and Interests in other Entities” for details. At the end of this period, 2 subsidiary was added into the consolidation
scope when compared to that at the beginning. Please refer to Note 7 “Change of the Consolidation Scope” for
details.
II. Basis for the preparation of financial statements
1. Basis for the preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Company prepared financial statements in accordance with the ASBE-Basic Standard (No. 33 issued decreed
32
by Ministry of Finance and No. 76 revised decreed by Ministry of Finance), the 41 specific standards of
Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 Feb 2006 and
revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of
Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the Accounting
Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention
of Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014)
by China Securities Regulatory Commission.
In line with relevant rules of ASBE, financial accounting of the Company is based on accrual system. Except
financial instruments and instrument real estate, the financial statement is calculated on the basis of history costs.
Available-for-sale non-current assets are calculated by the lower one of fair value deducting estimated costs and
original costs meeting the standard of available-for-sale. If assets confront impairment, it shall be withdrawn
provision for impairment in line with relevant stipulations.
1. Continuous operation
The management of the Company executed the assessment on the continuation ability and had not discovered any
event or situation caused significant suspicion on the continuation ability. Thus, the financial statements compiled
based on the hypothesis of the continuation.
III. Declaration of compliance with the enterprise accounting standards
The financial statements of the Company have been prepared in accordance with the Enterprise Accounting
Standards to present truly and completely the financial position of the Company on June 30, 2016, operating
results, cash flow from January to June in 2017 and other relevant information. The financial statement of the
Company met the relevant disclosure requirements of financial statement and notes of “Compiling stipulations of
public information disclosure No.15---general rules of financial statement” (revised in 2014).
IV. Main accounting policies and accounting estimates
The company and various subsidiaries are mainly specialized in manufacturing and selling white spirit. According
to the actual production & operation and related ASBE provisions, this company and various subsidiaries have
formulated some specific accounting policies and estimations related to various transactions and matters including
revenue recognition. Please refer to Note IV. 23 “Revenues” for details. For any description of major accounting
judgment and estimations made by the company’s management, please refer to Note IV. 28 “Major Accounting
Judgment and Estimations” for details.
1. Accounting year
Accounting year is divided to annual term and medium term. Accounting medium refers to reporting period
shorter than a complete accounting period. The Company employs a period of calendar days from 1 Jan. to 31 Dec.
each year as accounting year.
2. Operating cycle
33
Normal operating cycle refers to the period from the Company purchases the assets for processing to realize the
cash or cash equivalents. The Company regards 12 months as an operating cycle and regards which as the
partition criterion of the mobility of the assets and liabilities.
3. Bookkeeping base currency
Renminbi is the dominant currency used in the economic circumstances where the Company and its domestic
subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use Renminbi as their
bookkeeping base currency. And the Company adopted Renminbi as the bookkeeping base currency when
preparing the financial statements for the reporting period.
4. Accounting treatment methods for business combinations under the same control and those not under the
same control
The term “business combinations” refers to a transaction or event bringing together two or more separate
enterprises into one reporting entity. Business combinations are classified into the business combinations under
the same control and the business combinations not under the same control.
(1) Accounting treatment of the business combination that is under the same control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the business
combination, and that control is not transitory. The assets and liabilities obtained are measured at the carrying
amounts as recorded by the enterprise being combined at the combination date. The difference between the
carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or
the total face value of shares issued) is adjusted to share premium in the capital reserve. If the balance of share
premium is insufficient, any excess is adjusted to retained earnings. Other direct expenses occur when the
Company conducting business combinations is recognized in current profit and loss. The combination date is the
date on which one combining enterprise effectively obtains control of the other combining enterprises.
Those assets and liabilities obtained by the Company during the business combination should be recognized in the
carrying value of the equity of the merged party on the merger date. The difference between the carrying amount
of the net assets obtained and carrying amount of the merger consideration (or total par value of issued shares)
paid shall be adjusted to capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess
shall be adjusted against retained earnings.
Direct costs of a business combination shall be reckoned into current gains and losses.
(2) Accounting treatment of the business combination that is not under the same control
A business combination involving entities not under common control is a business combination in which all of the
combining entities are not ultimately controlled by the same party or parties both before and after the business
combination. In business combination not under the same control, acquirer refers to party obtaining control of
34
other combining corporations in the date of acquisition and acquiree refers to corporation participating in
combination. Date of acquire refers to the date the acquirer actually obtaining control of the acquiree.
As for combination not under the same control, costs of combination includes assets that acquirers occur in the
date of combination in order to obtain control of acqirees, loans, fair value of issued equity securities,
intermediary costs such as audit, legal services and evaluation consultation, and other administrative fees occurred
in the reporting period. As for trading costs that acquirers as combination consideration issue equity securities or
debt securities, it shall be reckoned into initial accounts of equity securities or debt securities. As for business
combination realized by several exchanges and trades, in the combined financial statement of the Company, the
Company shall recalculate the stock right obtained by acquirees before the date of acquisition in line with fair
value of the stock right in the date of acquisition. When the Company acts as the combination party, the cost of a
business combination paid by the acquirer is the aggregate of the fair value at the acquisition date of assets given
(including share equity of the acquiree held before the combination date), liabilities incurred or assumed, and
equity securities issued by the acquirer. Any excess of the cost of a business combination over the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets is recognized as goodwill, while any excess of the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets over the cost of a business combination
is recognized in profit or loss. The cost of equity securities or liability securities as on combination consideration
offering is recognized in initial recording capital on equity securities or liability securities. Other direct expenses
occur when the Company conducting business combinations is recognized in current profit and loss. The
difference between the fair value and the carrying amount of the assets given is recognized in profit or loss. The
Company, at the acquisition date, recognized the acquiree’s identifiable asset, liabilities and contingent liabilities
at their fair value at that date. The acquisition date is the date on which the acquirer effectively obtains control of
the acquiree.
As for deductible temporary difference of acquirers obtained by acquirers which can’t be confirmed due to failure
of meeting the confirmation requirements of deferred income tax assets, if there is newly information proving the
existence of relevant situation in the date of acquisition in a year after the acquisition date and financial benefits of
deductible temporary difference of acquirers in the date of acquisition are estimated to be realized, deferred
income tax assets shall be confirmed. At the same time, goodwill shall be decreased. If goodwill is insufficient,
the difference shall be reckoned into current gains and losses; except the above circumstance, reliable deferred
income tax assets relevant to the Company shall be reckoned into current gains and losses.
For a business combination not involving enterprise under common control, which achieved in stages that
involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of
Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) on the “package deal” criterion (see Note IV.
5 (2)), to judge the multiple exchange transactions whether they are the “package deal”. If it belongs to the
“package deal” in reference to the preceding paragraphs of this section and the Notes described in Note IV. 13
35
“long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the
individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the sum of the book value and new investment cost of the Company holds
in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related
comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring
date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when
disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets
with a defined benefit plan measured at the equity method arising from the acquiree’s re-measurement, the others
shall be transferred into current investment gains).
In the Company’s consolidated financial statements, as for the equity interests that the Company holds in the
acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date;
the positive difference between their fair values and carrying amounts shall be recorded into the investment gains
for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests
that the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree
directly disposes the related assets or liabilities when disposing the investment (that is, except for the
corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the
equity method arising from the acquiree’s re-measurement, the others shall be transferred into current investment
gains on the acquiring date).
5. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term “control” is the
power of the Company upon an investee, with which it can take part in relevant activities of the investee to obtain
variable returns and is able to influence the amount of returns. The consolidated financial statements comprise the
financial statements of the Company and its subsidiaries. A subsidiary is an enterprise or entity controlled by the
Company.
The Company would reassess it if the involved relevant factors of above control definitions changed, which was
caused by changes of relevant facts and situations.
(2) Methods for preparing the consolidated financial statements
The Company begins to include subsidiaries into consolidation scope from the date obtaining net assets of
subsidiaries and actual control of production and operation and terminates to include subsidiaries into
consolidation scope from the date losing actual control of subsidiaries. As for the disposal of subsidiaries,
operating results and cash flow are included in consolidated income statement and consolidated statement of cash
flow before the date of the disposal; as for current disposal of subsidiaries, opening balance of the consolidated
balance sheet shall not be adjusted. As for subsidiaries increased in the combination not under the same control,
36
operating results and cash flow after the date of the acquisition are included in consolidated income statement and
consolidated statement of cash flow, in addition, opening balance of the consolidated balance sheet shall not be
adjusted. As for subsidiaries increased in the combination under the same control and combined parties under
acquisition, operating results and cash flow from the beginning of combination to the date of combination are
included in consolidated income statement and consolidated statement of cash flow, in addition, opening balance
of the consolidated balance sheet shall be adjusted.
Where a subsidiary was acquired during the reporting period, through a business combination involving entities
under common control, the financial statements of the subsidiary are included in the consolidated financial
statements as if the combination had occurred at the date that common control was established. Therefore the
opening balances and the comparative figures of the consolidated financial statements are restated. In the
preparation of the consolidated financial statements, the subsidiary’s assets, liabilities and results of operations are
included in the consolidated balance sheet based on their carrying amounts; while results of operations are
included in the consolidated income statement, from the date that common control was established.
All the significant inter-company balances, trading and unrealized profits shall be offset when preparing the
consolidated financial statement.
If current loss shoulder by minority shareholders of a subsidy over the proportion enjoyed by minority
shareholders in a subsidy at owners’ equity at period-begin, its balance still offset minority shareholders’ equity.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the
Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own
accounting period or accounting policies. Intra-Company balances and transactions, and any unrealized profit or
loss arising from intra-Company transactions, are eliminated in preparing the consolidated financial statements.
Unrealized losses resulting from intra-Company transactions are eliminated in the same way as unrealized gains
but only to the extent that there is no evidence of impairment.
When losing control right of subsidiaries because of the disposal of stock right investment or other reasons, the
Company shall recalculate residual stock right in accordance to the fair value in the date of losing control right. As
for remaining equity investment after disposal, the Company will re-account it according to the fair value at the
date the control was lost. Any profit or loss occurred shall be recorded into the investment income during the
period of losing control right. Then follow-up measurement of remaining equity shall be arranged in line with “No.
2—Long-term Equity Investment” or “No. 22—Affirmation and Calculation of Financial Instrument”. More
details please refer to Note IV, 13 “Long-term Equity Investment” or Note IV, 9 “Financial Instrument”.
The company through multiple transactions step deals with disposal of the subsidiary's equity investment until the
loss of control; need to distinguish between equity until the disposal of a subsidiary's loss of control over whether
the transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject to
the following conditions and the economic impact of one or more of cases, usually indicates that several
transactions should be accounted for as a package deal: ① these transactions are considered simultaneously, or in
37
the case of mutual influence made, ② these transactions as a whole in order to achieve a complete business results;
③ the occurrence of a transaction depends on occurs at least one other transaction ; ④ a transaction look alone is
not economical, but when considered together with other transaction is economical. If they do not belong to the
package deal, each of them separately, as the case of a transaction in accordance with “without losing control over
the disposal of a subsidiary part of long-term equity investments” (see Note IV. 13. (2) ④)) and “due to the
disposal of certain equity investments or other reasons lost control of a subsidiary of the original” (see previous
paragraph) principles applicable accounting treatment. Until the disposal of the equity investment loss of control
of a subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of a
subsidiary and the loss of control of the transaction. However, before losing control of the price of each disposal
entitled to share in the net assets of the subsidiary's investment corresponding to the difference between the
disposals, recognized in the consolidated financial statements as other comprehensive income, loss of control over
the transferred together with the loss of control or loss in the period.
6. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The Company
classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint
arrangements. A joint operation refers to a joint arrangement where the Company enjoys assets and has to bear
liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Company is only
entitled to the net assets of the arrangement.
The Company’s investments in joint ventures are measured at the equity method according to the accounting
policies mentioned in Note IV. 13 (2) ② “Long-term equity investments measured at the equity method”.
For a joint operation, the Company, as a joint operator, recognizes the assets and liabilities that it holds and bears
in the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to the
Company’s stake in the joint operation; recognizes the income from sale of the Company’s share in the output of
the joint operation; recognizes the income from sale of the joint operation’s outputs according to the Company’s
stake in it; and recognizes the expense solely incurred to the Company and the expense incurred to the joint
operation according to the Company’s stake in it.
When the Company, as a joint operator, transfers or sells assets (the assets not constituting business, the same
below) to the joint operation, or purchases assets from the joint operation, before the assets are sold to a third party,
the Company only recognizes the share of the other joint operators in the gains and losses arising from the sale.
Where impairment occurs to the assets as prescribed in , the Company shall fully recognizes the loss for a transfer or sale of assets to a
joint operation; and shall recognize the loss according to its stake in the joint operation for a purchase of assets
from the joint operation.
7. Recognition standard for cash and cash equivalents
38
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having
short holding term (normally will be due within three months from the day of purchase), with strong liquidity and
easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying [the
spot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchange
rate on the date of transaction]. The exchange of foreign currency and transactions related to the foreign exchange
are translated at the spot exchange rate.
(2) Accounting treatments for translation of foreign currency monetary items and non-monetary items
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the
balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ① those
relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which
are capitalized in accordance with the principle of capitalization of borrowing costs, ② hedging accounting, the
exchange difference related to hedging instruments for the purpose of net oversea operating investment is
recorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period;
exchange difference from changes of other account balance of foreign currency monetary items,
③available-for-trade is recorded into profit or loss except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate
prevailing on the transaction date, and the amount denominated in the functional currency is not changed.
Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at
the date when the fair values are determined. The exchange difference thus resulted are recognized in profit or loss
for the current period or as capital reserve.
9. Financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant financial instrument
contract. Financial assets and liabilities are measured at fair value in initial recognition. As for the financial assets
and liabilities measured at fair value of which changes are recorded into current gains and losses, the relevant
dealing expenses are directly recorded into gains and losses; and the dealing expenses on other kinds of financial
assets and liabilities are included in the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay for transferring
a liability in an orderly transaction on the measurement date. As for the financial assets or financial liabilities for
which there is an active market, the quoted prices in the active market shall be used to determine the fair values
39
thereof. The quoted prices in the active market refers to the prices available from stock exchange, broker’s
agencies, guilds, pricing organization and etc., which represent the actual trading price under equal transaction.
Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal
techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring to other financial instruments of
the same essential nature, the cash flow capitalization method and the option pricing model, etc., to determine its
fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized
respectively at the price of transaction date. Financial assets shall be classified into the following four categories
when they are initially recognized: (a) the financial assets which are measured at their fair values and the variation
of which is recorded into the profits and losses of the current period, (b) the investments which will be held to
their maturity; (c) loans and the account receivables; and (d) financial assets available for sale.
① The financial assets which are measured at their fair values and the variation of which is recorded into the
profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be measured at their fair
value when they are initially recognized and of which the variation is recorded into the profits and losses of the
current period;
The financial assets meeting any of the following requirements shall be classified as transactional financial assets：
A. The purpose to acquire the said financial assets is mainly for selling them in the near future; B. Forming a part
of the identifiable combination of financial instruments which are managed in a centralized way and for which
there are objective evidences proving that the enterprise may manage the combination by way of short-term profit
making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments
which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the
derivative instruments which are connected with the equity instrument investments for which there is no quoted
price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering
the said equity instruments.
The financial assets meeting any of the following requirements shall be designated as financial assets which are
measured at their fair values and the variation of which is recorded into the profits and losses of the current period
for initial recognition: A. the designation can eliminate or significantly reduce the difference of relevant gains and
losses between recognition and measurement causing from different bases for measurement of financial assets; B.
The official written documents for risk management and investment strategies of the enterprise have clearly stated
that it shall, manage, evaluate and report to important management personnel based on the fair value, about the
financial assets Company or the Company of financial assets & liabilities which the financial assets are belong to.
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For the financial assets which are measured at their fair values and the variation of which is recorded into the
profits and losses of the current period shall continue to be measured by fair value, gains and losses of change in
fair value, dividends and interest related with these financial assets should be recorded into gains and losses of
current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a
fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise
is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the
post-amortization costs, the profits and losses that arise when such financial assets or financial liabilities are
terminated from recognition, or are impaired or amortized, shall be recorded into the profits and losses of the
current period.
The actual interest rate method refers to the method by which the post-amortization costs and the interest incomes
of different installments or interest expenses are calculated in light of the actual interest rates of the financial
assets or financial liabilities (including a set of financial assets or financial liabilities). The actual interest rate
refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the
predicted term of existence or within a shorter applicable term into the current carrying amount of the financial
asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of taking into
account all the contractual provisions concerning the financial asset or financial liability (the future credit losses
shall not be taken into account).and also the various fee charges, trading expenses, premiums or reduced values,
etc., which are paid or collected by the parties to a financial asset or financial liability contract and which form a
part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the
active market, with fixed recovery cost or recognizable. Financial assets that are defined as loans and the accounts
receivables by the Company including notes receivables, accounts receivables, interest receivable, dividends
receivable and other receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of post-amortization costs
employing the effective interest method. Gains or loss arising from the termination recognition, impairment
occurs or amortization shall be recorded into the profits and losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets available for
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sales on the initial recognition and financial assets excluded those measured at fair value and of which the
variation into profits and losses of the current period, they are some financial assets, loans and accounts
receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed according to its
amortized cost method, that is the initially recognized amount which deduct the principal that had been repaid, to
plus or minus the accumulative amortization amount formed by the amortization between the difference of the
initially recognized amount and the amount on the due date that adopted the actual interest rate method, and at the
same time deduct the amount after the impairment loss happened. The cost at the period-end of the
available-for-sale liabilities instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from
changes in the fair value are recognized as other comprehensive income，and be carried forward when the said
financial assets stopped recognition, then it shall be recorded into the profits and losses of the current period. But,
the equity instrument investment which neither have quotation in the active market nor its fair value could not be
reliable measured, as well as the derivative financial assets that concern with the equity instruments and should be
settled through handing over to its equity instruments, should take the follow-up measurement according to the
cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution announcement
by invested companies, it shall be recorded into the profits and losses of the current period.
(3) Impairment of financial assets
The Company assesses at the balance sheet date the carrying amount of every financial asset except for the
financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be
impaired, a provision is provided for the impairment.
The Company carries out a separate impairment test for every financial asset which is individually significant. As
for a financial asset which is individually insignificant, an impairment test is carried out separately or in the
financial asset Company with similar credit risk. Where the financial asset (individually significant or
insignificant) is found not impaired after the separate impairment test, it is included in the financial asset
Company with similar credit risk and tested again on the Company basis. Where the impairment loss is recognized
for an individual financial asset, it is not included in the financial asset Company with similar credit risk for an
impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present
value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate
the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition
of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after
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impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of
impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment is serious and
not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity
instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline
range of the fair value over 20%; while the “non-temporary decline” refers to the consecutive decline time of the
fair value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the
fair value of the capital reserve which is directly included are transferred out and recorded in the profits and losses
for the current period. The accumulative losses transferred out are the balance obtained from the initially obtained
cost of the said financial asset after deducting the principals as taken back, the amortized amount, the current fair
value and the impairment loss originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting
periods thereafter, there is any objective evidence proving that the value of the said financial asset has been
restored and the restoration is objectively related to the events that occur after the impairment loss was recognized,
the originally recognized impairment loss is reversed. The impairment losses on the available-for-sale equity
instrument investments are reversed and recognized as other comprehensive incomes, and the impairment losses
on the available-for-sale liability instruments are reversed and recorded in the profits and losses for the current
period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active
market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is
connected with the said equity instrument investment and which must be settled by delivering the said equity
investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is terminated: ① The
contractual rights for collecting the cash flow of the said financial asset are terminated; ② The said financial
asset has been transferred and nearly all of the risks and rewards related to the ownership of the financial asset to
the transferee; or ③ The said financial asset has been transferred. And the Company has ceased its control on the
said financial asset though it neither transfers nor retains nearly all of the risks and rewards related to the
ownership of the financial asset.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a
financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial asset
and liability accordingly according to the extent of its continuous involvement in the transferred financial asset.
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The term "continuous involvement in the transferred financial asset" refers to the risk level that the enterprise
faces resulting from the change of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items is recorded in the profits and losses of the current period: (1) The book value
of the transferred financial asset; and (2) The sum of consideration received from the transfer, and the
accumulative amount of the changes of the fair value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the
transferred financial asset is apportioned between the portion whose recognition has been stopped and the portion
whose recognition has not been stopped according to their respective relative fair value, and the difference
between the amounts of the following 2 items is included into the profits and losses of the current period: (1) The
summation of the consideration received from the transfer and the portion of the accumulative amount of changes
in the fair value originally recorded in other comprehensive incomes which corresponds to the portion whose
recognition has been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Company needs to determine
whether almost all of the risks and rewards of the financial asset ownership are transferred. If almost all of the
risks and rewards of the financial asset ownership had been transferred to the transferee, derecognize the financial
assets. For almost all of the risks and rewards of the financial asset ownership retained, do not end to recognize
the financial assets. For which neither transfer or retain almost all of the risks and rewards of the financial asset
ownership, continuously judge whether the Company retain the control of the assets, and conduct accounting
treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and
whose changes are recorded in current gains and losses and other financial liabilities. Financial liabilities are
initially recognized at their fair values. As for a financial liability measured at fair value and whose changes are
recorded in current gains and losses, the relevant trading expense is directly recorded in the profits and losses for
the current period. As for other financial liabilities, the relevant trading expenses are recorded in the initially
recognized amounts.
① Financial liabilities measured at fair values and whose changes are recorded in current gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities designated to be
measured at fair values and whose changes are recorded in current gains and losses in the initial recognition under
the same conditions where such financial assets are divided into transactional financial assets and financial assets
designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial
recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are
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subsequently measured at their fair values. Gains or losses arising from the fair value changes, as well as the
dividend and interest expenses in relation to the said financial liabilities, are recorded in the profits and losses for
the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an
active market and whose fair value cannot be reliably measured and which must be settled by delivering the equity
instrument, it is subsequently measured on the basis of costs. Other financial liabilities are subsequently measured
according to the amortized cost using the actual interest rate method. Gains or losses arising from de-recognition
or amortization of the said financial liabilities is recorded in the profits and losses for the current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability measured at its fair value and
the variation thereof is recorded into the profits and losses of the current period, or the loan commitment which is
not designated as a financial liability measured at its fair value and the variation thereof is recorded into the gains
and losses that will be loaned lower than the market interest rate, which shall be initially recognized by fair value,
and the subsequent measurement shall be made after they are initially recognized according to the higher one of
the following: a. the amount as determined according to the Accounting Standards for Enterprises No. 13 –
Contingencies; b. the surplus after accumulative amortization as determined according to the principles of the
Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the initially recognized amount.
(6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the
financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a
creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the
contractual stipulations regarding the new financial liability is substantially different from that regarding the
existing financial liability, it terminates the recognition of the existing financial liability, and at the same time
recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall
include into the profits and losses of the current period for the gap between the book value which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out
and the new financial liabilities it has assumed)
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the
derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is
recognized in profit or loss.
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An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as
a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if
(a) the economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative
separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a
financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and
financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the
financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is
presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall
be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. The Company issues (including refinancing), re-purchases, sells or written-offs the equity
instrument as the disposing of the changes of the equity. The Company not recognized the changes of the fair
value of the equity instrument. The transaction expenses related to the equity transaction would be deducted from
the equity.
All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are
deducted from shareholders’ equity. The Company does not recognize any changes in the fair value of equity
instruments.
10. Receivables
The receivables by the Company include account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving
that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of
interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
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① Provisions of bad debts in account receivables that is individually significant.
The Company recognized the accounts receivables which amounted to more than 2 million as the account
receivables that is individual significant.
For an account receivable that is individually significant, the asset is individually assessed for impairment, the
impairment loss is recognized at the difference between the present value of future cash flow less the carrying
amount, and provision is made accordingly.
② Provisions of bad debts in account receivables that individually insignificant item with similar credit risk
characteristics that have significant risk:
A. Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of
financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk
reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow
expected to be derived from the assets.
Evidence of portfolios:
Item Basis
Age portfolios Age
Related party portfolios Companies within the combination scope of the Company
B. Provision by credit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by the assessed result
from the experience of historical loss and current economic status and the existing loss in the estimated account
receivables according to the set of account receivables and credit risk characteristic.
Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Don’t withdraw the bad debts provision unless the related-party lost the repaying
Related party portfolios
capability
a. Portfolio by age analysis
Category Proportion for accounts receivable (%) Proportion for other receivable (%)
Within 1 year (including 1 year, similarly
hereinafter)
Including: [within 6 months] 1.00 1.00
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Category Proportion for accounts receivable (%) Proportion for other receivable (%)
[7 to 12 months] 5.00 5.00
1 to 2 years 10.00 10.00
2 to 3 years 50.00 50.00
Over 3 years 100.00 100.00
③Accounts receivable with insignificant amount but being individually withdrawn bad debts provision
When making individual impairment test on accounts receivable with insignificant amount but high credit risk, the
impairment loss shall be recognized based on the difference of the book values higher than the present value of
future cash flows, then withdraw the bad debts provision. For example, accounts receivable of related parties;
accounts receivable involving dispute or litigation, arbitration; accounts receivable having clear signs to indicate
that debtor probably cannot implement obligations of payment.
(3) Reversal of provision for bad debt
If there is any provident demonstrating recovery of the value of the accounts receivable and objectively
correlating to the issues after the confirmation of the losses, the original confirmed losses would be reversed and
recorded into current gains and losses. However, the reserved book value shall not exceed the amortized costs of
the accounts receivable under non-withdrawing impairment circumstance.
11. Inventory
(1) Category of inventory
Inventory mainly includes raw materials, packing materials, self-made semi-manufactured products, goods in
process and finished goods, etc.
(2) Pricing method for outgoing inventories
Inventory is priced by actual costs when it is obtained. Inventory costs include procurement costs, processing
costs and other costs. Weighted average method is used to price inventory when it is received and delivered.
(3) Recognition basis of net realizable value and withdrawal method of falling price provision for inventories
Net realizable value in daily activity, it is referred to the estimated selling price minus the estimated selling
expenses and related tax and fees in normal operating process. When confirming the net realizable value of
inventories, the Company shall take the intention of inventories into consideration and influence of issues after
balance sheet date.
On the balance sheet date, the evaluation criteria should base on the lower value between costs and net realizable
value. When net realizable value is lower than costs, falling price provision of inventories shall be made. Under
normal circumstances, the Company withdraws the falling price provision in according to individual inventory
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items, but for large quantity and low-unit-price inventories, falling price provision of inventories shall be made
based on the category of inventories; for those inventories that relating to the same product line that have similar
purposes or end uses, are produced and marketed in the same geographical area, and cannot be practicably
evaluated separately from other items in that product line, their falling price provision of inventories shall be
consolidated.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any write-down of the
inventories, have disappeared, the amount of write-down shall be recovered and reversed from the original
amount of depreciation reserve for inventories. The reversed amount shall be included in the profits and losses of
the current period.
(4) Inventory system for inventories is perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods: one-off amortization method
Packing articles: one-off amortization method
12. Divided as assets held for sale
If a non-current assets could be immediately sold only according to the usual terms of selling this kind of assets
under current situation, and the Group has made a decision on disposing a non-current asset, entered into an
irreversible transfer agreement with the transferee and the transfer is likely to be completed within one year, the
non-current asset is measured as a non-current asset held for sale, which shall not be depreciated or amortized
since the date held for sale but shall be measured at the lower one of the net amounts of the book value and the
fair value after deducting the disposal expense. Non-current assets held for sale include single-item assets and
disposal groups. Where a disposal group is an asset group and the goodwill obtained in the business combination
is apportioned to the asset group according to the “Accounting Standard No. 8 for Business Enterprises—Asset
Impairment”, or a disposal group is an operation in such an asset group, the disposal group shall include the
goodwill in the business combination.
The non-current assets of single amount and the assets among the disposing group that both be divided as assets
held for sale, should be listed alone of the current assets on the balance sheet; liabilities related to the assets
transfer among the disposing group which be divided as assets held for sale, should be listed alone of the current
assets on the balance sheet.
An asset or an disposal group was classified as held for sale before, but if it couldn’t meet the recognition
conditions for held-for-sale non-current asset later, the Company shall cease to classify it as held for sale, and
measure it by the lower amount of the followings: (1) its carrying amount before the asset (or disposal group)
was classified as held for sale, adjusted for any depreciation, amortization or impairment before the asset (or
disposal group) being classified as held for sale; or (2) its recoverable amount on the date of the subsequent
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decision not to sell.
13. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the Company has
control, joint control or significant influence over the investees. The long-term equity investment that the
Company does not have control, joint control or significant influence over the investees, should be recognized as
available-for-sale financial assets or be measured by fair value with the changes should be included in the
financial assets accounting of the current gains and losses, and please refer the details of the accounting policies to
Notes IV. 9 “Financial instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the
Company and the relevant activities of the arrangement should be decided only after the participants which share
the control right make consensus. Significant influence refers to the power of the Company which could anticipate
in the finance and the operation polices of the investees, but could not control or jointly control the formulation of
the policies with the other parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the
share of the book value of the owner’s equity of the merged enterprise, on the date of merger, is regarded as the
initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity
investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by
the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained
earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall,
on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise on
the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity
investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference
between the initial cost of the long-term equity investment and total face value of the shares issued shall offset
against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
The equities of the combined party which respectively acquired through multiple transaction under the same
control that ultimately form into the combination of the enterprises under the same control, should be disposed
according whether belongs to package deal; if belongs to package deal, each transaction would be executed
accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package
deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the
merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the
long-term equity investment, and as for the difference between the initial investment cost of the long-term equity
investment and sum of the book value of the long-term equity investment before the combination and the book
value of the consideration of the new payment that further required on the combination date, should adjust the
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capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity
investment held before the combination date which adopted the equity method for accounting, or the other
comprehensive income confirmed for the available-for-sale financial assets, should not have any accounting
disposal for the moment.
For the long-term investment required from the business combination under different control, the initial
investment cost regarded as long-term equity investment on the purchasing date according to the combination cost,
the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and
the equity securities issued by the Company. The equities of the acquirees which respectively acquired through
multiple transaction that ultimately form into the combination of the enterprises under the different control, should
be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be
executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to
package deal, the sum of the book value of the original held equity investment of the acquirees and the newly
added investment cost should be regarded as the initial investment cost of the long-term equity investment that
changed to be accounted by cost method. If the original held equity is calculated by cost method, the other
relevant comprehensive income would not have any accounting disposal for the moment. If the original held
equity investment is the financial assets available for sale, its difference between the fair value and the book value
as well as the accumulative changes of the fair value that include in the other comprehensive income, should
transfer into the current gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses
occurred in the business combination by the combining party or the purchase party, shall be recorded into current
profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds
securities which are as consideration for combination by the combining party, should be recorded as the initial
amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term equity investments
shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash
payment paid by the Company, the fair value of equity securities issued by the Company, the agreed value of the
investment contract or agreement, the fair value or original carrying amount of exchanged assets from
non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses,
taxes and other necessary expenditures directly related with gaining the long-term equity investments shall also be
recorded into investment cost. The long-term equity investment cost for those could execute significant influences
on the investees because of appending the investment or could execute joint control but not form as control,
should be as the sum of the fair value of the original held equity investment and the newly added investment cost
recognized according to the No.22 of Accounting Standards for Business Enterprises—Recognition and
Measurement of Financial Instrument.
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(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which forms into
common operators) or significant influence over the investors should be measured by equity method. Moreover,
long-term equity investment adopting the cost method in the financial statements, and which the Company has
control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial
investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity
investment. The return on investment at current period shall be recognized in accordance with the cash dividend
or profit announced to distribute by the invested entity, except the announced but not distributed cash dividend or
profit included in the actual payment or consideration upon gaining the investment.
②Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company’s attributable share of the fair value
of the invested entity’s identifiable net assets for the investment, the initial cost of the long-term equity investment
may not be adjusted. If the initial cost of a long-term equity investment is less than the Company’s attributable
share of the fair value of the invested entity’s identifiable net assets for the investment, the difference shall be
included in the current profits and losses and the cost of the long-term equity investment shall be adjusted
simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive
income according to the net gains and losses as well as the portion of other comprehensive income which should
be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment;
corresponding reduce the book value of the long-term equity investment according to profits which be declared to
distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the
other changes except for the net gains and losses, other comprehensive income and the owners’ equity except for
the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as
include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable
assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and
losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies adopted
by the investees is not accord with that of the Company, should be adjusted according to the accounting policies of
the Company and the financial statement of the investees during the accounting period and according which to
recognize the investment income as well as other comprehensive income. For the transaction happened between
the Company and associated enterprises as well as joint ventures, if the assets launched or sold not form into
business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Company
according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the
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basis. But the losses of the unrealized internal transaction happened between the Company and the investees
which belongs to the impairment losses of the transferred assets, should not be neutralized. The assets launched by
the Company to the associated enterprises or the joint ventures if could form into business, the long-term equity
investment without control right which acquired by the investors, should regard the fair value of the launched
business as the initial investment cost the newly added long-term equity investment, and for the difference
between the initial investment cost and the book value of the launched business, should be included into the
current gains and losses with full amount. The assets sold by the Company to the associated enterprises or the
joint ventures if could form into business, the difference between the acquired consideration and the book value of
the business should be included in the current gains and losses with full amount. The assets purchased by the
Company to the associated enterprises or the joint ventures if could form into business, should be accounting
disposed according to the regulations of No. 20 of ASBE—Business Combination, and should be recognized gains
or losses related to the transaction with full amount.
The Company shall recognize the net losses of the invested enterprise until the book value of the long-term equity
investment and other long-term rights and interests which substantially form the net investment made to the
invested entity are reduced to zero. However, if the Company has the obligation to undertake extra losses, it shall
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later, the Company shall, after the
amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume
recognizing its attributable share of profits.
For the long-term equity investment held by the Company before the first execution of the new accounting
criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is debit difference of the equity
investment related to the investment, should be included in the current gains and losses according to the amount of
the straight-line amortization during the original remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity investment
increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by
the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if
the capital reserves are not sufficient to offset, the retained profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on
subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable
net assets of subsidiaries by disposing the long-term equity investment shall be recorded into owners’ equity;
where the Company losses the controlling right by disposing part of long-term equity investment on such
subsidiaries, it shall treated in accordance with the relevant accounting policies in Note IV. 5 (2) “Method on
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preparation of combined financial statements”.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal
still adopts the equity method for measurement, the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still
adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees, should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees, should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the
control of them, while the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement, should be carried forward into the current gains and losses
according to the proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
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the recognition and measurement standards of financial instrument, the other comprehensive income and the other
owners’ equity should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed
remained equity should change to calculate according to the recognition and measurement standards of financial
instrument, and difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current investment income with full amount when terminate adopting the
equity method.
The Company respectively disposes the equity investment of the subsidiaries through multiple transactions until
lose the control right, if the above transactions belongs to the package deal, should execute the accounting
disposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until lose
the control right, while the difference between each expenses of the disposal and the book value of the long-term
equity investment in accord with the disposed equity before losing the control right, should firstly be recognized
as other comprehensive income then be transferred into the current gains and losses of losing the control right
along until the time when lose it.
14. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes
leased or ready to transfer after capital appreciation land use rights and leased buildings. Besides, for the idle
constructions held by the Company for operation and lease, if the Board of Directors (or the similar institutions)
made the written resolutions which affirmatively disclosed to use which for operation and lease with the intention
would not change in the short term, should also be presented as the investment property.
Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate are
likely to flow about the economic benefits of the asset and its cost can be measured reliably, is included in the cost
of investment real estate. Other subsequent expenditures of gains or losses should be recorded in the current gains
and losses when occurred.
The Company uses the cost model for subsequent measurement of investment property, and in accordance with
the depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in Note IV. 20 “Long-term
assets impairment”.
Occupied real estate for investment property or investment property is transferred to owner-occupied real estate or
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stock conversion as the recorded value after the conversion, according to the book value before the conversion.
From the date of transference, investment properties shall be transferred into fixed assets or intangible assets when
investment properties transfer into self-owned properties. From the date of transference, fixed assets or intangible
assets shall be transferred into investment properties when the intention of self-owned properties changes to be
earning rents. Upon transference, investment properties using cost modeling shall use its book value before
transference as the entry value after transference; investment properties using fair value shall use its fair value in
the date of transference as the entry value after transference.
As for investment property disposed or perpetually out of use, and estimated without economic benefits from the
disposal, confirmation shall be terminated. Disposal consideration of the investment property after sale,
transference, discard or damage deducting its book value and relating taxes shall be recorded into current gains
and losses.
15. Fixed assets
(1) Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are
held for the sake of producing commodities, rendering labor service, renting or business management; and their
useful life is in excess of one fiscal year.
(2) Depreciation methods of fixed assets
The initial measurement of a fixed asset shall be made at its cost after considering the effect of expected discard
expenses. The Group shall withdraw the depreciation of fixed assets by adopting the straight-line method since the
second month of its useful life. Useful life, expected net salvage value (refers to the expected amount that the
Group may obtain from the current disposal of a fixed asset after deducting the expected disposal expenses at the
expiration of its expected useful life) and annual depreciation rate of each fixed assets are as below:
Category of fixed Expected net salvage Annual deprecation
Method Useful life (Y)
assets value (%) (%)
Average method of
Housing and building 8.00-35.00 3.00-5.00 2.70-12.10
useful life
Average method of
Machinery equipments 5.00-10.00 3.00-5.00 9.50-19.40
useful life
Average method of
4.00 3.00 24.25
Transportation vehicle
useful life
Office equipment and Average method of 3.00 3.00 32.33
useful life
others
Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of
the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected
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service life in the end.
(3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note IV. 20 “Long-term assets impairment”.
(4) Fixed Assets under finance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.
Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the
fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can
be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the
leased assets are depreciated over the shorter of the lease terms and the useful lives of the leased assets.
(5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the
Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that
meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the
component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be
recognized in profit or loss in the period in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction
of carrying value and related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the
fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
16. Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction expenditures
during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant
costs. Construction in progress is transferred to a fixed asset when it is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision
impairment please refer to Note IV. 20 “Long-term assets impairment”.
17. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs
incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign
currency borrowings. The borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as
an expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment property
and inventories, etc.) that necessarily take a substantial period of time for acquisition, construction or production
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to get ready for their intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed
funds before being used on the asset or any investment income on the temporary investment of those funds. Where
funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is
determined by applying a weighted average interest rate to the weighted average of the excess amounts of
accumulated expenditure on the asset over and above the amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in
foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are
recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time
of construction or production activities before ready for intended used or sale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production
of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use
or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during
these periods recognized as an expense for the current period until the acquisition, construction or production is
resumed.
18. Intangible assets
(1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or
controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic
benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be
measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked in
the profit or loss when they occur.
Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such as
plants that are developed and constructed by the Company, and relevant land use rights and buildings, are
accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased
are allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the land
use rights and buildings should accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value and
any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. An
intangible asset with an indefinite useful life is not amortized.
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For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method at
the end of the period, and makes adjustment when necessary. An additional review is also carried out for useful
life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of
economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize
according to the policy of intangible assets with definite useful life.
(2) Research and development cost
Cost of research and development is distinguished into the research phase and the development phases.
Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in
the period in which it is incurred:
① it is technically feasible to complete the intangible asset so as to use it or sell it;
② it is clearly invented to complete the intangible asset in order to use it or sell it;
③ it is probable that the intangible asset is capable of generating future economic benefit, such as the market for
the product produced by the intangible asset or the intangible asset itself, it is objectively evidential that the
intangible asset is economically usable if it is going to be used internally;
④ there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell
it;
⑤ the cost of the development of the intangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit
or loss for the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note IV. 20 “Long-term assets impairment”.
19. Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a
period during which an expense is expected to bring economic benefits to an entity) which is longer than one year
and which includes at least part of the reporting period during which the expense was incurred and subsequent
reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense
incurred and allocated in each month of the beneficial period using the straight line method.
20. Long-term assets impairment
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with
definite useful lives, investment properties measured by cost methods and long-term equity investment on
subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all
non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimated
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if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets
not ready for use, are tested for impairment annually regardless of indicators of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is
lower than the book value. The recoverable value is the higher of estimated present value of the future expected
cash flows from the asset and net fair value of the asset less disposed cost. The fair value of asset is determined by
the sales agreement price within an arm’s length transaction. In case there is no sales agreement, but there is active
market of assets, the fair value can be determined by the selling price. If there is neither sales agreement nor active
market, the fair value of the asset can be estimated based on the best information obtained. Disposal expenses
include expenses related to the legislation, taxes, transportations and the direct expense for the asset to be ready
for sale. When calculating the present value of expected future cash flows from an asset or asset Group, the
management shall estimate the expected future cash flows from the asset or asset Group and choose a suitable
discount rate in order to calculate the present value of those cash flows.
Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of
individual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subject
asset belongs. Asset Group is the smallest set of assets that can have cash flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of
the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the
goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected
future cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order to
calculate the present value of those cash flows. Once the loss from above asset impairment is recognized, the
recoverable part cannot be reserved in the subsequent periods.
21. Payroll
The payroll of the Company mainly includes the short-term employee compensation, welfare after demission,
demission welfare and other long-term employee benefits. Of which:
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of
which the non-monetary benefits should be measured according to the fair value.
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includes
basic endowment insurance, unemployment insurance and annuity etc, and the corresponding payable and deposit
amount should be included into the relevant assets cost or the current gains and losses when happen.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor
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contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a
layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date
between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan
or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the
reorganization of the payment of the demission welfare and at the same time includes which into the current gains
and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report
within 12 months, should be disposed according to other long-term payroll payment.
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.
The group would recorded the salary and the social security insurance fees paid and so on from the employee’s
service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the
condition that they meet the recognition conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be
accounting disposed according to the setting drawing plan, while the rest should be disposed according to the
setting revenue plan.
22. Estimated liabilities
Recognition of accrued liabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee on
quality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, and
meet the follow condition simultaneously would determined as liabilities: (1) This obligation is current obligation
of the Company; and, (2) The performance of this obligation will probably cause economic benefits outflow of the
Company; and, (3) The amount of this obligation can be reliably measured.
On balance sheet date the Company performed relate obligation that consider risk, incertitude, time value of
currency of contingency factor. According to the best estimate of the expenditure required to settle the present
obligation for estimated liabilities measured.
If the expenditure required to settle the liability is expected to be fully or partly compensated by a third party, to
determine the amount of compensation will be received at the basic, separately recognized as an asset, and is
recognized in the amount of compensation does not exceed the carrying value of estimated liabilities.
23. Revenues
(1) Commodity sales revenues
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the
significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the
enterprise retains neither continuous management right that usually keeps relation with the ownership nor
effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the
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relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be
measured in a reliable way.
In the Company’s daily accounting practices, as for the domestic sales, when the products had shipped out of the
library and had handed over to the buyers, and the major risk as well as the reward on the ownership of the
products had transferred to them, without keeping any continued management right which commonly related to
the ownership nor carrying out any effective control of the products which had been sold, and at the same time the
amounts received could be calculated reliably, and the relevant economic interest may flow into the enterprise, as
well as the relevant costs which had occurred or is going to occur could be calculated reliably, should recognize
the implementation of the commodity sales revenues. As for the overseas sales, should recognize the
implementation of the revenues when the goods had made shipment and gained the customs export declaration.
(2) Revenues from providing labor services
If an enterprise can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall
recognize the revenue from providing services employing the percentage-of-completion method on the balance
sheet date. The percentage-of-completion is determined by the proportion of the costs incurred against the
estimated total costs.
The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, means
that the following conditions shall be met simultaneously: ① The amount of revenue can be measured in a
reliable way; ② The relevant economic benefits are likely to flow into the enterprise; ③ The schedule of
completion under the transaction can be confirmed in a reliable way; ④ The costs incurred or to be incurred in
the transaction can be measured in a reliable way.
If the Company can not measure the result of a transaction concerning the providing of labor services in a reliable
way, it shall be conducted in accordance with the following circumstances, respectively: If the cost of labor
services incurred is expected to be compensated, the compensation amount for the cost of labor services shall be
recognized as the revenue from providing labor service, and the cost of labor service incurred shall be as the
current cost; if the cost of labor services incurred is not expected to compensate, no revenue from the providing of
labor services may be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing
of labor services, if the part of sale of goods and the part of providing labor services can be distinguished from
each other and can be measured respectively, the part of sale of goods and the part of providing labor services
shall be treated respectively. If the part of selling goods and the part of providing labor services can not be
distinguished from each other, or if the part of sale of goods and the part of providing labor services can be
distinguished from each other but can not be measured respectively, both parts shall be conducted as selling
goods.
(3) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue
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on accrual basis. In the Company’s daily accounting practices, it should be calculated and recognized according to
the chargeable time and methods in accordance with the relevant contract or agreement.
(4) Interest revenue
In accordance with the time that others use the Group’s monetary capital and the actual rate.
24. Government subsidies
Government grants are transfer of monetary assets and non-monetary assets from the government to the Company
at no consideration, excluding the capital invested by the government as equity owner. Government grant can be
classified as grant related to the assets and grants related to the income. The government grants which were
acquired by the Company will be used to purchase or otherwise form become long-term assets will be defined as
grant related to the assets; the others will be defined as grants related to the income. If the files have not clearly
defined government grants objects, it will be divided in the following manner compartmentalize the grants into
rant related to the assets and grants related to the income: (1) government documents defined specific projects
targets, according to the relative proportion of the budgets of specific items included the expenditure of to form
assets and the expenditure will be charged into expense to be divided, the division ratio required at each balance
sheet date for review and make changes if necessary; (2) government documents to make a general presentation
purposes only, does not specify a particular project, as grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or
receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair
value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a
nominal amount is recognized immediately in profit or loss for the period.
When received the government grants actually, recognized and measured them by the actual amount received.
However, there is strong evidence that the end of fiscal support policies able to meet the conditions specified in
the relevant funds are expected to be able to receive financial support, measured at the amount receivable.
Government grants are measured according to the amount receivable shall also comply with the following
conditions: (1) grants receivable of government departments issued a document entitled have been confirmed, or
could reasonably estimated in accordance with the relevant provisions of its own official release of financial
resources management approach, and the expected amount of a material uncertainty which does not exist; (2) it is
based on the local financial sector to be officially released and financial support for the project and its financial
fund management approach voluntarily disclosed in accordance with the provisions of “Regulations on Disclosure
Government Information”, and the management approach should be (inclusive of any compliance business
conditions may apply), and not specifically formulated for specific businesses;(3) related grants approval has been
clearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that
will be received within the prescribed period with the a reasonable assurance; (4) according to the specific
circumstances of the Company and the subsidy matter, should satisfy the other conditions (if any).
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss
63
over the useful life of the related asset. For a government grant related to income, if the grant is a compensation
for related expenses or losses to be incurred in subsequent period, the grant is recognized as deferred income, and
recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a
compensation for related expenses or losses already incurred, the grant is recognized immediately in profit or loss
for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is
offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the
period. If there is no related deferred income, the repayment is recognized immediately in profit or loss for the
period.
25. Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, current income tax liabilities or assets for the current and prior periods are measured at
the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for
income tax expenses in the current period is based on the taxable income according to the related tax laws after
adjustment to the accounting profit of the reporting period.
(2) Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or
between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base
that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance
sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset
or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor
taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized. For
taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint
ventures, no deferred income tax liability related is recognized except where the Company is able to control the
timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in
the foreseeable future. All deferred income tax liabilities arising from taxable temporary differences except the
ones mentioned above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a
transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible
losses) at the time of transaction, no deferred tax asset is recognized. For taxable temporary deductible differences
associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax
asset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, or it is
not probable to obtain taxable income which can be used for the deduction of the temporary difference in the
future. Except mentioned above, the Company recognizes other deferred income tax assets that can deduct
64
temporary differences to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary
differences are recognized to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws,
which are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer
probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax
assets to be used, the Company reduces the carrying amount of deferred tax assets. The amount of such reduction
is reversed when it becomes probable that sufficient taxable profit will be available.
(3) Income tax expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or
loss in current accounting period, except expense for income tax of the current period and deferred income tax
that booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose from
business combination.
(4) Income tax offset
When we have the legal right, and have intended to, to make settlement with net amount or through the asset
acquisition and liability fulfillment simultaneously, the Company shall present the net value from the offset
between current income tax asset and current income tax liability in the financial statement.
When the Company has the legal right to make a settlement with the current income tax asset and current income
tax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxable
subject under the same tax payer, or related to different taxable subject, but the intension of net value settlement in
regard of the current income tax asset and current income tax liability, the Company shall present net value after
the offset of deferred income tax asset and deferred income tax liability.
26. Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.
Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.
(1) The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term,
and either included in the cost of the related asset or charged to profit or loss for the current period. The contingent
rents shall be recorded in the profit or loss of the period in which they actually arise.
(2) The Company as Leaser under operating Lease
65
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis over
the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is
more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in
which they actually arise.
(3) The Company as Lessee under financing Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the
lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the
minimum lease payment is recorded as the carrying amount of the long-term payables; the difference between the
recorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognized
finance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the lease
agreement shall be added to the amount recognized for the leased asset. The net amount of minimum lease
payment deducted by the unrecognized finance shall be separated into long-term liabilities and long-term liability
within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent
rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lessor of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception
of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is
recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs,
and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance
income, which is amortized using the effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term
liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent
rent shall be credited into profit or loss in which actually incurred.
27. Changes in main accounting policies and estimates
(1) Change of accounting policies
There was no any change of accounting policies
(2) Change of main accounting estimates
There was no any change of main accounting estimates.
28. Significant account judgment and estimates
The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in
the financial statements that cannot be measured accurately, due to the internal uncertainties of operation activities.
These judgments, estimates and assumptions are based on historical experiences of the Company’s management
66
as well as other factors that are considered to be relevant. These judgments, estimates and assumptions may affect
value of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency at
the balance sheet date. However, the result derived from those uncertainties in estimates may lead significant
adjustments to the carrying amounts of the assets or liabilities affected in the future.
The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern.
Where the changes in accounting estimates only affect the period when changes occurred, and they are recognized
within the same period. Where the changes in accounting estimates affect both current period and future period,
the changes are recognized within the period of change and future period.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment,
estimates and assumptions over the value of items in the financial statements:
(1) Classification of lease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the
Accounting Standard for Business Enterprises No. 21—Leasing. The management shall make analysis and
judgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, or
whether the Company has substantially held the risks and rewards related to the ownership of leased assets.
(2) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance method is used for bad
debt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of
receivables. Assurance of receivable impairment needs judgments and estimations from the management. The
difference between actual results and original estimates shall have impact on the carrying amount of receivables
and receivable bad debt provisions or the reverse during the change of estimation.
(3) Impairment of inventories
The Company measures inventories by the lower of cost and realizable net value according to the accounting
policies in regard of inventories and provisions for decline in value of inventories are made if the cost is higher
than their net realizable value and obsolete and slow-movement inventories. Inventories decline in value to net
realizable value is the estimated selling price in the ordinary course of business. Net realizable value is determined
on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect
of post balance sheet events. The difference between the actual result and the original estimates shall have impact
on reverse of the carrying amount of the inventories and their decline in value or provisions during the period of
change.
(4) The fair value of financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using various
valuation methods, including of discounted cash flow analysis model. The Company needs to estimate future cash
flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such
assumptions have uncertainties and their changes shall have impact on the fair value of financial instruments.
67
(5) Impairment of financial assets available-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions of
management, to determine whether impairment loss is recognized in the income statement. The process of making
the judgments and assumptions, the Company is required to assess the extent and duration of the fair value of the
investment below cost, as well as investment financial position and short-term business outlook, including
industry conditions, technological change, the credit rating, default rates and counterparty risk.
(6) Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other than
financial assets at the balance sheet date. For an intangible asset that has indefinite useful life, impairment test is
made in addition to the annual impairment test if there is any indication of impairment. For non-current assets
other than financial assets, impairment test is made when there is any indication that its account balance cannot be
recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and
present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the price of similar
product in a sale agreement in an arm’s length transaction or an observable market price less the additional cost
directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over the asset’s production,
selling price and relevant operating expenses, and discount rate used to calculate present value. All available
materials that are considered to be relevant shall be used in the estimation of recoverable value. These materials
include estimations of production, selling price and operating expenses based on reasonable and supportable
assumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of
present value of future cash flow of the assets or assets group where goodwill has been allocated. The Company
shall makes estimation on the future cash flow derived from assets or assets group and determine an appropriate
discount rate for the present value of future cash flow when the estimation of present value of future cash flow is
made.
(7) Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line
method over their useful lives after taking into account residual value. The useful lives are regularly reviewed to
determine the depreciation and amortization costs charged in each reporting period. The useful lives are
determined based on historical experience of similar assets and the estimated technical changes. If there is an
indication that there has been a change in the factor used to determine the depreciation or amortization, the rate of
depreciation or amortization is revised.
(8) Deferred tax assets
68
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that future
taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This
requires the management of the Company make a lot of judgments over the estimation of time period, value and
tax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.
(9) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’s
everyday operation. If it is possible for any item to make expenditure before tax that needs to be approved from
competent tax authorities. If there is any difference between finalized determination value and their initial
estimations value, the difference shall have the impact on the income tax and deferred income tax of the current
period during the final determination.
(10) Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience, product quality
assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized as
accrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likely
to lead to the outflow of economic benefits of the Company, the Company or the best estimate of the current
obligation expenditure required recognized as a accrued liabilities. Recognition and measurement of accrued
liabilities is dependent on the judgment of management. In the processing of judgment the company needed to
appraise the related risks, uncertainties and time value of money and other factors.
V. Taxation
1. Main taxes and tax rate
Category of taxes Particulars about specific tax rate
Income tax was in accordance with 17%, 6% of tax rate to calculate output tax and
VAT according to the balance of the current the deductibility deduct the input tax to
calculate value added tax.
Sales of wine per 1000 ml or per kg 1 Yuan to calculate the amount of consumption
Consumption tax tax, a flat rate, 20% of the annual turnover to calculate the amount of consumption tax
at valorem.
Urban maintenance and construction tax 1, 5, 7% of the actual taxable turnover amount.
Education expenses surcharge 3% of the actual taxable turnover amount.
Local education surcharge 2% of the actual taxable turnover amount.
Enterprise income tax For details, see the table below
Table of income tax rate of different entities:
Name of the entities Income tax rate
Anhui Longrui Glass Co., Ltd 15%
69
Name of the entities Income tax rate
Anhui Ruisiweier Technology Co., Ltd 15%
Bozhou Gujin Rubbish Recycling Co., Ltd 10%
Anhui Gujing Distillery Company Limited and its other
25%
subsidiaries
2. Tax Preference and Approval
(1) On December 5, 2016, the company’s subsidiary Anhui Longrui Glass Co., Ltd. was attested to be qualified as
a hi-tech enterprise and obtained Hi-tech Enterprise Certificate (NO.: GR201634001204) which shall be valid in 3
years. Corresponding corporate income tax was also paid at the rate of 15% from January to June in 2017.
(2) On October 21, 2016, the company’s subsidiary Anhui Swisse Will Science & Technology Co., Ltd. was
attested to be qualified as a hi-tech enterprise and obtained Hi-tech Enterprise Certificate (NO.: GR201634000832)
which shall be valid in 3 years. Corresponding corporate income tax was also paid at the rate of 15% from January
to June in 2017.
VI. Notes on major items in consolidated financial statements of the Company
The following notes (including notes on major items in consolidated financial statements of the
Company), unless otherwise noted, the opening period was January 1, 2017, the closing period was
June 30, 2017.
1. Monetary funds
Item Closing balance Opening balance
Cash in treasury 286,750.06 323,885.02
Bank deposit 683,334,584.32 527,379,498.81
Other monetary funds 5,069,090.06 5,205,642.24
Total 688,690,424.44 532,909,026.07
Of which: the total amount deposited in overseas 0.00 0.00
Note: At the end of this period, the amount of other monetary fund frozen for property preservation due to any
litigation was RMB5,060,000.00; there’s no limitation and restriction on the usage and remittance of funds
deposited abroad due to pledge and mortgage etc.
2. Financial assets measured by fair value and the changes be included in the current gains and losses
Item Closing balance Opening balance
Trading financial assets 101,573.76 429,190.68
70
Item Closing balance Opening balance
Of which: equity tool investment 101,573.76 429,190.68
Total 101,573.76 429,190.68
3. Notes receivable
(1) Notes receivable listed by category
Item Closing balance Opening balance
Bank acceptance bill 1,182,682,094.60 534,386,586.59
Total 1,182,682,094.60 534,386,586.59
(2) Notes receivable pledged at the period-end
Item Amount
Bank acceptance bill 30,050,000.00
Total 30,050,000.00
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet
date at the period-end
Amount of recognition termination at Amount of not terminated recognition at
Item
the period-end the period-end
Bank acceptance bill 214,635,061.84 0.00
Total 214,635,061.84 0.00
4. Accounts receivable
(1) Accounts receivable classified by category
Closing balance
Book balance Bad debt provision
Category Book
Proport Withdrawal
Amount Amount value
ion (%) proportion (%)
Accounts receivable with significant single amount for which bad debt
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 16,185,22 1,483,40 14,701,82
100.00 9.17
characteristics: 3.12 2.53 0.59
71
Closing balance
Book balance Bad debt provision
Category Book
Proport Withdrawal
Amount Amount value
ion (%) proportion (%)
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
16,185,22 1,483,40 14,701,82
100.00 9.17
Total 3.12 2.53 0.59
(Continued)
Opening balance
Book balance Bad debt provision
Category Book
Proport Withdrawal
Amount Amount value
ion (%) proportion (%)
Accounts receivable with significant single amount for which bad debt
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 14,155,94 1,868,68 12,287,26
100.00 13.20
characteristics: 8.37 5.49 2.88
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
14,155,94 1,868,68 12,287,26
100.00 13.20
Total 8.37 5.49 2.88
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
Closing balance
Aging Withdrawal proportion
Account receivable Bad debt provision
(%)
Within 1 year 14,366,274.57 186,545.01 1.30
72
Closing balance
Aging Withdrawal proportion
Account receivable Bad debt provision
(%)
[Of which: within 6 months] 13,294,218.03 132,942.18 1.00
[7-12 months] 1,072,056.54 53,602.83 5.00
1 to 2 years 254,712.64 25,471.26 10.00
2 to 3 years 585,699.30 292,849.65 50.00
Over 3 years 978,536.61 978,536.61 100.00
Total 16,185,223.12 1,483,402.53 9.17
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The reversed amount of the bad debt provision during the Reporting Period was of RMB 385,282.96.
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
There was no actual verification of accounts receivable during the Reporting Period
(4) Top 5 of the Closing Balance of the Accounts Receivable Collected According to the Arrears Party
The total amount of top five of account receivable of closing balance collected by arrears party was
RMB5,932,674.70, 36.65% of total closing balance of account receivable, the relevant closing balance of
bad debt provision withdrawn was RMB95,286.24.
5. Prepayment
(1) List by Aging Analysis
Closing balance Opening balance
Amount Proportion Amount Proportion
Within 1 year 74,630,643.30 97.15 73,928,796.23 98.86
1 to 2 years 1,365,299.40 1.78 853,434.06 1.14
2 to 3 years 824,998.50 1.07 1,991.30 0.00
3 years 485.00 0.00 0.00 0.00
Total 76,821,426.20 100.00 74,784,221.59 100.00
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
The total amount of top five of account receivable of closing balance collected by arrears party was
RMB37,469,605.21, 48.77% of total closing balance of account receivable.
6. Interest Receivable
Item Closing balance Opening balance
73
Item Closing balance Opening balance
Interest of certificate of deposit 8,363,178.08 2,843,178.08
Total 8,363,178.08 2,843,178.08
7. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Closing balance
Book balance Bad debt provision
Category Propor Book
Amount tion Amount Withdrawal value
(%) proportion (%)
Other accounts receivable with significant single amount for which bad 41,342,9 41,342,9
72.61 100.00 0.00
debt provision separately accrued 38.53 38.53
Other accounts receivable withdrawn bad debt provision according to 15,596,4 923,318. 14,673,1
27.39 5.92
credit risks characteristics 22.43 63 03.80
Other accounts receivable with insignificant single amount for which
0.00 0.00 0.00 0.00 0.00
bad debt provision separately accrued
56,939,3 42,266,2 14,673,1
Total 100.00 74.23
60.96 57.16 03.80
（Continued）
Opening balance
Book balance Bad debt provision
Category Book
Propor
Amount tion Amount Withdrawal value
(%) proportion (%)
Other accounts receivable with significant single amount for which bad 41,342,9 41,342,9
78.14 100.00 0.00
debt provision separately accrued 38.53 38.53
Other accounts receivable withdrawn bad debt provision according to 11,564,2 798,834. 10,765,3
21.86 6.91
credit risks characteristics 31.44 41 97.03
Other accounts receivable with insignificant single amount for which
0.00 0.00 0.00 0.00 0.00
bad debt provision separately accrued
74
Opening balance
Book balance Bad debt provision
Category Propor Book
Amount tion Amount Withdrawal value
(%) proportion (%)
52,907,1 42,141,7 10,765,3
Total 100.00 79.65
69.97 72.94 97.03
①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Closing balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal proportion
Withdrawal reason
receivable provision (%)
11,840,500.00 11,840,500.00 100.00 Enter enterprise bankruptcy
Jianqiao Securities Co., Ltd.
liquidation
29,502,438.53 29,502,438.53 100.00 Enter enterprise bankruptcy
Hengxin Securities Co., Ltd.
liquidation
Total 41,342,938.53 41,342,938.53 100.00 --
②In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 14,303,346.78 169,982.80 1.19
[Of which: within 6 months] 13,629,613.55 136,296.14 1.00
[7-12 months] 673,733.23 33,686.66 5.00
1 to 2 years 93,034.55 9,303.46 10.00
2 to 3 years 912,017.45 456,008.72 50.00
Over 3 years 288,023.65 288,023.65 100.00
Total 15,596,422.43 923,318.63 5.92
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawn bad debt provision of Reporting Period was of RMB124,484.22.
(3) Particulars of the Actual Verification of Other Accounts Receivable during the Reporting Period
75
There was no actual verification of other accounts receivable during the Reporting Period
(4) Other Account Receivable Classified by Account Nature
Nature Closing book balance Opening book balance
Securities investment 41,342,938.53 41,342,938.53
Margin &cash pledge 2,623,695.72 1,457,444.95
Business travel borrowing charges 998,466.05 2,024,382.20
Rent and utilities fee 5,268,699.65 4,242,987.61
Others 6,705,561.01 3,839,416.68
Total 56,939,360.96 52,907,169.97
(5) Top 5 of the Closing Balance of the Other Accounts Receivable Collected According to the Arrears Party
Proportion (%) Bad debt
Name of the
Nature Closing balance Aging provision
entity
Closing balance
No.1 Securities investment 29,502,438.53 Over 3 years 51.81 29,502,438.53
No.2 Securities investment 11,840,500.00 Over 3 years 20.79 11,840,500.00
No. 3 Prepayment of oil fee 3,843,881.68 Within 6 months 6.75 38,438.82
No. 4 Cash deposit of contract 500,000.00 7-12 months 0.88 25,000.00
No. 5 Prepayment of oil fee 309,680.72 Within 6 months 0.54 3,096.81
Total -- 45,996,500.93 -- 80.77 41,409,474.16
8. Inventory
(1) Category of Inventory
Closing balance
Item
Book balance Falling price reserves Book value
Raw materials& package 95,155,492.84 8,897,753.50 86,257,739.34
Homemade semi-finished products and goods in process 1,594,846,413.08 0.00 1,594,846,413.08
Finished product 171,527,201.36 6,359,355.80 165,167,845.56
Total 1,861,529,107.28 15,257,109.30 1,846,271,997.98
76
（Continued）
Opening balance
Item
Book balance Falling price reserves Book value
Raw materials& package 122,173,639.41 8,897,753.50 113,275,885.91
Homemade semi-finished products and goods in process 1,426,282,016.97 0.00 1,426,282,016.97
Finished product 255,258,344.54 8,383,210.92 246,875,133.62
Total 1,803,714,000.92 17,280,964.42 1,786,433,036.50
(2) Falling Price Reserves of Inventory
Increase Decrease
Item Opening balance Closing balance
Withdrawal Others Reverse or write-off Others
Raw materials&
8,897,753.50 0.00 0.00 0.00 0.00 8,897,753.50
package
Finished product 8,383,210.92 0.00 0.00 2,023,855.12 0.00 6,359,355.80
Total 17,280,964.42 0.00 0.00 2,023,855.12 0.00 15,257,109.30
(3) Withdrawal Provision Basis of the Falling Price of the Inventory and the Reasons of the Reserve or
Write-off
Reaso
Specific basis of withdrawal of falling ns for
Item Reasons for write-off
price reserves of inventory revers
al
Raw materials& The realizable net value was lower The raw material withdrawn impairment disposed in
package than the cost Reporting Period
The realizable net value was lower The raw material withdrawn impairment disposed in
Finished product
than the cost Reporting Period
9. Other Current Assets
Item Closing balance Opening balance
Financial products 1,469,242,152.73 1,750,000,000.00
Tax to be deducted 2,201,030.18 278,829.24
Pledging T-bond repurchase 134,000,000.00 0.00
77
Item Closing balance Opening balance
Total 1,605,443,182.91 1,750,278,829.24
10. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity instruments 498,964,610.81 0.00 498,964,610.81 404,029,552.27 0.00 404,029,552.27
Of which: measured at fair value 498,964,610.81 0.00 498,964,610.81 404,029,552.27 0.00 404,029,552.27
Measured by cost 0.00 0.00 0.00 0.00 0.00 0.00
Others 0.00 0.00 0.00 0.00 0.00 0.00
Total 498,964,610.81 0.00 498,964,610.81 404,029,552.27 0.00 404,029,552.27
(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Available-for-sale Available-for-sale
Category Total
equity instruments debt instruments
Cost of the equity instruments/amortized cost of the liabilities
477,300,602.98 0.00 477,300,602.98
instruments
Fair value 498,964,610.81 0.00 498,964,610.81
Changed amount of the fair value accumulatively included in
21,664,007.83 0.00 21,664,007.83
other comprehensive income
Withdrawn impairment amount 0.00 0.00 0.00
11. Investment Property
Item Houses and buildings Land use right Total
I. Original book value
1. Opening balance 12,952,376.16 2,644,592.00 15,596,968.16
2. Increased amount of the period 0.00 0.00 0.00
3. Decreased amount of the period 369,880.00 0.00 369,880.00
(1) Disposal 0.00 0.00 0.00
(2) Other transfer 369,880.00 0.00 369,880.00
78
Item Houses and buildings Land use right Total
4. Closing balance 12,582,496.16 2,644,592.00 15,227,088.16
II. Accumulative depreciation and accumulative amortization
1. Opening balance 6,637,952.24 556,071.18 7,194,023.42
2. Increased amount of the period 239,083.87 3,562.27 242,646.14
Withdrawal or amortization 239,083.87 3,562.27 242,646.14
3. Decreased amount of the period 369,880.00 0.00 369,880.00
(1) Disposal 0.00 0.00 0.00
(2) Other transfer 369,880.00 0.00 369,880.00
4. Closing balance 6,507,156.11 559,633.45 7,066,789.56
III. Depreciation reserves
1. Opening balance 0.00 0.00 0.00
2. Increased amount of the period 0.00 0.00 0.00
Withdrawing 0.00 0.00 0.00
3. Decreased amount of the period 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00
(2) Other transfer 0.00 0.00 0.00
4. Closing balance 0.00 0.00 0.00
IV. Book value
1. Closing book value 6,075,340.05 2,084,958.55 8,160,298.60
2. Opening book value 6,314,423.92 2,088,520.82 8,402,944.74
12. Fixed Assets
(1) List of Fixed Assets
Transportati Office
Houses and Machinery
Item on equipment Total
buildings equipment
equipment and other
I. Original book value
59,543,178. 119,895,314. 2,977,519,349.
1. Opening balance 1,955,039,777.18 843,041,079.32
48 76 74
79
Transportati Office
Houses and Machinery
Item on equipment Total
buildings equipment
equipment and other
5,907,513.2
2. Increased amount of the period 2,671,781.61 6,293,537.65 3,045,268.70 17,918,101.17
1
5,907,513.2
(1) Purchase 0.00 3,598,288.61 2,080,268.70 11,586,070.52
1
(2) Transfer of project under
2,301,901.61 2,695,249.04 0.00 965,000.00 5,962,150.65
construction
(3) Taking back of rental housing 369,880.00 0.00 0.00 0.00 369,880.00
1,824,192.0
3. Decreased amount of the period 878,509.19 19,393,755.40 245,292.36 22,341,748.97
2
1,824,192.0
(1) Disposal or Scrap 878,509.19 16,414,520.10 245,292.36 19,362,513.67
2
(2) Transfer of project under
0.00 2,979,235.30 0.00 0.00 2,979,235.30
construction
63,626,499. 122,695,291. 2,973,095,701.
4. Closing balance 1,956,833,049.60 829,940,861.57
67 10 94
II. Accumulative depreciation
48,351,168. 85,841,214.3 1,105,782,444.
1. Opening balance 593,976,445.86 377,613,615.97
56 3 72
2,632,345.4 10,935,682.9
2. Increased amount of the period 36,740,869.90 45,234,413.88 95,543,312.11
3 0
2,632,345.4 10,935,682.9
(1) Withdrawal 36,370,989.90 45,234,413.88 95,173,432.11
3 0
(2) Taking back of rental housing 369,880.00 0.00 0.00 0.00 369,880.00
1,747,045.9
3. Decreased amount of the period 936,222.10 17,162,930.54 204,785.43 20,050,984.04
7
1,747,045.9
(1) Disposal or Scrap 936,222.10 15,081,164.61 204,785.43 17,969,218.11
7
(2) Transfer of project under
0.00 2,081,765.93 0.00 0.00 2,081,765.93
construction
80
Transportati Office
Houses and Machinery
Item on equipment Total
buildings equipment
equipment and other
49,236,468. 96,572,111.8 1,181,274,772.
4. Closing balance 629,781,093.66 405,685,099.31
02 0 79
III. Depreciation reserves
1. Opening balance 4,192,270.86 1,265,656.39 7,047.07 580,345.64 6,045,319.96
2. Increased amount of the period 0.00 0.00 0.00 0.00 0.00
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decreased amount of the period 0.00 6,035.20 0.00 0.00 6,035.20
(1) Disposal or Scrap 0.00 6,035.20 0.00 0.00 6,035.20
4. Closing balance 4,192,270.86 1,259,621.19 7,047.07 580,345.64 6,039,284.76
IV. Book value
14,382,984. 25,542,833.6 1,785,781,644.
1. Closing book value 1,322,859,685.08 422,996,141.07
58 6 39
11,184,962. 33,473,754.7 1,865,691,585.
2. Opening book value 1,356,871,060.46 464,161,806.96
85 9 06
(2) List of Temporarily Idle Fixed Assets
Accumulative Impairment
Item Original book value Book value Notes
depreciation provision
Houses and buildings 15,969,525.54 11,633,943.26 4,192,270.86 143,311.42
Machinery equipment 8,018,961.47 6,707,454.28 1,259,621.19 51,886.00
Transportation equipment 58,119.66 49,329.00 7,047.07 1,743.59
Office equipment and others 873,232.11 266,689.51 580,345.64 26,196.96
Total 24,919,838.78 18,657,416.05 6,039,284.76 223,137.97
(3) Details of Fixed Assets Failed to Accomplish Certification of Property
Item Book value Reason
Houses and building 808,602,900.81 In process
Total 808,602,900.81 --
81
13. Construction in Progress
(1) List of Construction in Progress
Closing balance Opening balance
Item Book Depreciation Book Book Depreciation Book
balance reserves value balance reserves value
Removal and R&D project of base liquid and 903,846. 903,846. 903,846. 903,846.
0.00 0.00
support facility project
31 31 31 31
4,547,39 4,547,39 4,932,00 4,932,00
Operation network of Gujing 0.00 0.00
3.16 3.16 8.56 8.56
2,828,62 2,828,62 2,828,62 2,828,62
Information integration system 0.00 0.00
6.03 6.03 6.03 6.03
Renovation project of potential safety 49,371,8 49,371,8 47,819,5 47,819,5
0.00 0.00
concerns
16.86 16.86 16.27 16.27
4,449,39 4,449,39
Renovation project of wine culture museum 0.00 0.00 0.00 0.00
8.37 8.37
2700 tons irrigation project of Xianning 2,710,60 2,710,60 1,785,62 1,785,62
0.00 0.00
Yellow Crane Tower 5.68 5.68 9.19 9.19
Design & Integration project of Hefei 2,822,17 2,822,17
0.00 0.00 0.00 0.00
experience pavilion 9.84 9.84
Autonomous system of process pipe and 2,324,51 2,324,51 1,133,75 1,133,75
0.00 0.00
Gujing blend and store 8.70 8.70 4.23 4.23
Renovation project of Yellow Crane Tower 152,830. 152,830.
0.00 0.00 0.00 0.00
wine culture museum 19 19
Project of sewage disposal and 3,634,23 3,634,23
0.00 0.00 0.00 0.00
transformation 1.28 1.28
609,719. 609,719.
QR online device 0.00 0.00 0.00 0.00
65 65
1,011,21 1,011,21
Phase II of CRM 0.00 0.00 0.00 0.00
5.90 5.90
565,753. 565,753.
One-card system 0.00 0.00 0.00 0.00
86 86
82
Closing balance Opening balance
Item Book Depreciation Book Book Depreciation Book
balance reserves value balance reserves value
8,810,44 8,810,44 5,096,36 5,096,36
Other projects with small single amount 0.00 0.00
7.08 7.08 5.46 5.46
77,471,0 77,471,0 71,771,3 71,771,3
Total 0.00 0.00
04.70 04.70 24.26 24.26
(2) Changes of Significant Construction in Progress
Amount that Other
Estimated Opening Increase transferred to decreased Closing
Name o f item
number balance Amount fixed assets amount of balance
of the period the period
Removal and R&D
project of base liquid
800,000,000.00 903,846.31 0.00 0.00 0.00 903,846.31
and support facility
project
Operation network of
8,350,000.00 4,932,008.56 384,615.36 0.00 769,230.76 4,547,393.16
Gujing
Information
6,000,000.00 2,828,626.03 0.00 0.00 0.00 2,828,626.03
integration system
Renovation project of
potential safety 193,407,581.00 47,819,516.27 1,552,300.59 0.00 0.00 49,371,816.86
concerns
Renovation project of
6,900,000.00 4,449,398.37 144,988.15 4,594,386.52 0.00 0.00
wine culture museum
2700 tons irrigation
project of Xianning 5,000,000.00 1,785,629.19 924,976.49 0.00 0.00 2,710,605.68
Yellow Crane Tower
Design & Integration
project of Hefei 9,000,000.00 2,822,179.84 148,535.78 0.00 2,970,715.62 0.00
experience pavilion
Autonomous system
of process pipe and 4,388,251.25 1,133,754.23 1,190,764.47 0.00 0.00 2,324,518.70
Gujing blend and
83
store
Renovation project of
Yellow Crane Tower 50,000,000.00 0.00 152,830.19 0.00 0.00 152,830.19
wine culture museum
Project of sewage
disposal and 8,500,000.00 0.00 3,634,231.28 0.00 0.00 3,634,231.28
transformation
QR online device 3,810,000.00 0.00 609,719.65 0.00 0.00 609,719.65
Phase II of CRM 2,300,000.00 0.00 1,011,215.90 0.00 0.00 1,011,215.90
One-card system 2,090,000.00 0.00 565,753.86 0.00 0.00 565,753.86
Other projects with
48,147,771.50 5,096,365.46 8,221,709.73 1,367,764.13 3,139,863.98 8,810,447.08
small single amount
Total 1,147,893,603.75 71,771,324.26 18,541,641.45 5,962,150.65 6,879,810.36 77,471,004.70
(Continued)
Of which:
Proportion Capitalization
Accumulative the amount
estimated of Project rate of the
amount of of the Capital
Project name the project Progress interests of
capitalized capitalized resources
accumulative (%) the period
interests interests of
input (%) (%)
the period
Removal and R&D project of base Self-owned
92.73 100.00 0.00 0.00 0.00
liquid and support facility project fund
Self-owned
Operation network of Gujing 66.16 97.00 0.00 0.00 0.00
fund
Self-owned
Information integration system 55.15 98.00 0.00 0.00 0.00
fund
Renovation project of potential Self-owned
57.04 95.00 0.00 0.00 0.00
safety concerns fund
Renovation project of wine culture Self-owned
66.52 100.00 0.00 0.00 0.00
museum fund
2700 tons irrigation project of Self-owned
50.00 90.00 0.00 0.00 0.00
fund
Xianning Yellow Crane Tower
Design & Integration project of 33.00 100.00 0.00 0.00 0.00 Self-owned
84
Of which:
Proportion Capitalization
Accumulative the amount
estimated of Project rate of the
amount of of the Capital
Project name the project Progress interests of
capitalized capitalized resources
accumulative (%) the period
interests interests of
input (%) (%)
the period
fund
Hefei experience pavilion
Autonomous system of process pipe Self-owned
52.97 90.00 0.00 0.00 0.00
fund
and Gujing blend and store
Renovation project of Yellow Crane Self-owned
5.00 5.00 0.00 0.00 0.00
fund
Tower wine culture museum
Project of sewage disposal and Self-owned
60.00 90.00 0.00 0.00 0.00
fund
transformation
Self-owned
QR online device 18.72 40.00 0.00 0.00 0.00
fund
Self-owned
Phase II of CRM 50.95 60.00 0.00 0.00 0.00
fund
Self-owned
One-card system 31.67 95.00 0.00 0.00 0.00
fund
Other projects with small single Self-owned
30.56 58.97 0.00 0.00 0.00
fund
amount
Total -- -- 0.00 0.00 0.00 --
14. Intangible Assets
Item Land use right Patent right Software Trademark Total
I. Original book value
1. Opening balance 628,279,302.56 45,866,942.63 10,058,954.96 169,116,600.00 853,321,800.15
2. Increased amount
0.00 0.00 1,971,254.62 0.00 1,971,254.62
of the period
(1) Purchase 0.00 0.00 735,042.72 0.00 735,042.72
(2) Internal R & D 0.00 0.00 0.00 0.00 0.00
(3) Transfer of 0.00
0.00 0.00 1,236,211.90 1,236,211.90
construction in
85
Item Land use right Patent right Software Trademark Total
progress
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Closing balance 628,279,302.56 45,866,942.63 12,030,209.58 169,116,600.00 855,293,054.77
II. Accumulated
amortization
1. Opening balance 102,006,461.48 45,714,910.47 4,915,899.12 0.00 152,637,271.07
2. Increased amount
6,679,324.47 20,284.98 1,095,087.13 0.00 7,794,696.58
of the period
(1) Withdrawal 6,679,324.47 20,284.98 1,095,087.13 0.00 7,794,696.58
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Closing balance 108,685,785.95 45,735,195.45 6,010,986.25 0.00 160,431,967.65
III. Depreciation
reserves
1. Opening balance 0.00 0.00 0.00 0.00 0.00
2. Increased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Closing balance 0.00 0.00 0.00 0.00 0.00
IV. Book value
1. Closing book value 519,593,516.61 131,747.18 6,019,223.33 169,116,600.00 694,861,087.12
2. Opening book
526,272,841.08 152,032.16 5,143,055.84 169,116,600.00 700,684,529.08
value
86
15. Goodwill
Increase Decrease
Generated from
Item Opening balance Closing balance
enterprise Other disposal Disposal
merger
Wuhan Pride Yellow Crane Tower
478,283,495.29 0.00 0.00 0.00 0.00 478,283,495.29
Distillery Co., Ltd.
Total 478,283,495.29 0.00 0.00 0.00 0.00 478,283,495.29
16. Long-term Unamortized Expenses
Other
Opening Increased Amortization Closing
Item Decrease reasons for
balance amount amount balance
decrease
Yeast house & yeast frame
1,395,010.07 0.00 741,496.60 0.00 653,513.47
project
Reform on highly qualified
3,583,860.08 0.00 1,860,700.86 0.00 1,723,159.22
base liquid project
Wine warehouse goods shelf 845,341.88 0.00 281,780.64 0.00 563,561.24
Specialty store decoration
4,552,189.86 0.00 2,914,480.92 0.00 1,637,708.94
engineering
Beijing experience centre
19,757,703.37 0.00 1,235,278.98 0.00 18,522,424.39
decoration
The relocation compensation
10,125,000.00 0.00 750,000.00 0.00 9,375,000.00
of Beijing experience center
Pottery jar warehouse 15,060,486.86 0.00 2,203,971.00 0.00 12,856,515.86
Decoration project of wine
610,434.11 0.00 215,453.76 0.00 394,980.35
culture museum
Sewage Treatment Project 4,250,000.00 0.00 300,000.00 0.00 3,950,000.00
Afforestation fees 11,761,161.10 292,045.37 7,900,324.24 0.00 4,152,882.23
Renovation of potential
2,417,801.09 0.00 805,933.74 0.00 1,611,867.35
safety concerns
Shenzhen experience centre 4,885,049.82 0.00 666,143.16 0.00 4,218,906.66
Others 2,458,879.09 0.00 669,237.36 0.00 1,789,641.73
Landscape renovation of
2,831,715.21 151,140.52 507,663.45 0.00 2,475,192.28
Zuimei Chateau
87
Other
Opening Increased Amortization Closing
Item Decrease reasons for
balance amount amount balance
decrease
Zhengzhou Experience
4,679,367.54 21,315.78 262,808.36 0.00 4,437,874.96
Center
Shanghai Experience Center 4,374,397.27 0.00 749,896.68 0.00 3,624,500.59
Renovation of Brewing
0.00 1,218,582.48 169,247.55 0.00 1,049,334.93
Workshop
Hefei Experience Center 0.00 2,970,715.62 412,599.40 0.00 2,558,116.22
Kitchen renovation of
0.00 249,829.06 0.00 0.00 249,829.06
Beijing Experience Center
Jars of Blend & Store
0.00 181,316.25 90,658.14 0.00 90,658.11
Workshop
Plant silo 0.00 101,147.57 2,809.65 0.00 98,337.92
Renovation of dormitories 0.00 300,000.00 0.00 0.00 300,000.00
Parking lots 0.00 1,000,000.00 0.00 0.00 1,000,000.00
Renovation of Yellow Crane
0.00 720,720.72 120,120.12 0.00 600,600.60
Tower Plant
Total 93,588,397.35 7,206,813.37 22,860,604.61 0.00 77,934,606.11
15. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) List of Deferred Income Tax Assets
Closing balance Opening balance
Item Deductible temporary Deductible temporary Deferred income tax
Deferred income tax assets
Differences Differences assets
Bad debt provision 43,749,659.69 10,937,414.92 44,010,458.43 10,996,043.87
Impairment of inventories 15,257,109.30 3,814,277.33 17,280,964.42 4,268,065.64
Impairment provision of the
6,011,287.30 1,502,617.50 6,017,322.50 1,504,126.30
fixed assets
Deferred income 43,254,768.06 10,813,692.01 43,978,795.45 10,964,946.75
Deductible losses 64,286,355.76 16,071,588.94 74,310,846.55 18,577,711.64
Unrealized internal profits 6,230,047.55 1,557,511.89 3,886,999.22 971,749.81
88
Difference between book value
720,310,353.62 180,077,588.40 241,487,812.54 60,371,953.14
and tax basis of liabilities
Total 899,099,581.28 224,774,690.99 430,973,199.11 107,654,597.15
(2) Lists of Deferred Income Tax Liabilities
Closing balance Opening balance
Deductible Deductible
Item Deferred income tax Deferred income tax
temporary temporary
liabilities liabilities
differences differences
Change of fair value of trading financial
37,983.63 9,495.91 157,639.98 39,410.00
assets
Change in fair value of available-for-sale
21,664,007.83 5,416,001.96 48,192,637.29 12,048,159.32
financial assets
Additional deduction of difference of fixed
15,538,949.80 3,884,737.45 11,629,445.21 2,907,361.30
assets
Asset evaluation increment of business
405,036,867.97 101,259,216.99 409,168,287.60 102,292,071.90
combination not under the same control
Total 442,277,809.23 110,569,452.31 469,148,010.08 117,287,002.52
(3) List of Unrecognized Deferred Income Tax Assets
Item Closing balance Opening balance
Deductible temporary difference 27,997.46 27,997.46
Deductible losses 3,935,808.39 3,504,550.14
Total 3,963,805.85 3,532,547.60
18. Other Non-current Assets
Item Content Closing balance Opening balance
Certificate of deposit Certificate of deposit 300,000,000.00 300,000,000.00
Prepayment of projects and Prepayment of projects and
14,785,612.34 982,000.00
equipment equipment
Total -- 314,785,612.34 300,982,000.00
19. Notes Payable
Category Closing balance Opening balance
Bank acceptance bill 13,100,000.00 11,270,000.00
Trade acceptance 28,583.00 28,583.00
89
Category Closing balance Opening balance
Total 13,128,583.00 11,298,583.00
Notes: the total amount of overdue notes payable is RMB28,583.00 in the reporting period, which is
generated from the failure of paying of suppliers when notes are due.
20. Accounts Payable
(1) List of Accounts Payable
Item Closing balance Opening balance
Within 1 year 437,987,948.66 278,284,194.09
Over 1 year 58,438,175.96 62,688,172.12
Total 496,426,124.62 340,972,366.21
(2) Significant Accounts Payable Aging over One Year
Item Closing balance Unpaid/ Un-carry-over reason
A Company 7,589,380.47 Final payment of the project
B Company 7,454,526.71 Final payment of the project
C Company 3,253,820.58 Final payment of the project
D Company 2,377,538.64 Final payment of the project
E Company 1,994,174.95 Final payment of the project
Total 22,669,441.35 --
21. Advance from Customers
Item Closing balance Opening balance
Loans 735,440,901.02 623,990,614.91
Total 735,440,901.02 623,990,614.91
22. Payroll Payable
(1) List of Payroll Payable
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 287,527,410.11 545,922,623.32 604,702,047.33 228,747,986.10
II. Post-employment benefit-defined
499,725.98 59,729,825.37 60,195,236.59 34,314.76
contribution plans
III. Termination benefits 0.00 0.00 0.00 0.00
90
IV. Other benefits due within one
0.00 0.00 0.00 0.00
year
Total 288,027,136.09 605,652,448.69 664,897,283.92 228,782,300.86
(2) List of Short-term Salary
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus, allowance, subsidy 231,921,133.46 475,151,669.68 545,990,982.07 161,081,821.07
2. Employee welfare 0.00 8,431,420.00 8,431,420.00 0.00
3. Social insurance 67,054.59 21,936,962.01 21,637,960.33 366,056.27
Of which: 1. Medical insurance
53,976.40 19,779,652.21 19,474,634.30 358,994.31
premiums
Work-related injury insurance 6,704.27 1,210,534.78 1,215,207.91 2,031.14
Maternity insurance 6,373.92 946,775.02 948,118.12 5,030.82
4. Housing fund 8,380,962.40 24,906,231.62 24,029,014.46 9,258,179.56
5. Labor union budget and
47,158,259.66 15,496,340.01 4,612,670.47 58,041,929.20
employee education budget
6. short-term paid absence 0.00 0.00 0.00 0.00
7. Short-term profits sharing plan 0.00 0.00 0.00 0.00
Total 287,527,410.11 545,922,623.32 604,702,047.33 228,747,986.10
(3) List of Drawing Scheme
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 471,096.94 56,936,688.35 57,400,464.27 7,321.02
2. Unemployment insurance 28,629.04 2,793,137.02 2,794,772.32 26,993.74
Total 499,725.98 59,729,825.37 60,195,236.59 34,314.76
23. Taxes Payable
Item Closing balance Opening balance
VAT 53,804,152.68 118,133,291.16
Consumption tax 73,980,267.41 219,571,438.66
Corporate income tax 156,146,559.16 94,273,743.45
91
Item Closing balance Opening balance
Personal income tax 14,478,942.52 1,562,260.59
Urban maintenance and construction tax 6,705,700.80 19,129,378.01
Stamp tax 540,051.48 871,395.56
Education Surcharge 6,263,567.19 18,650,757.21
Others 10,240,538.58 14,767,387.21
Total 322,159,779.82 486,959,651.85
24. Other Accounts Payable
Item Closing balance Opening balance
Margin &cash pledge 644,292,495.89 587,919,286.15
Business travel borrowing charges 1,910,227.09 2,207,592.61
Quality guarantee 40,981,539.06 10,478,503.90
Housing deduction 9,258,179.56 8,380,962.40
Others 41,461,773.18 32,485,926.47
Unsettled sales discount 321,724,551.33 0.00
Total 1,059,628,766.11 641,472,271.53
Other payables increased at the end of this period, mainly due to an increase in the amount of non clearing
discounts made by dealers.
25. Other Current Liabilities
Item Closing balance Opening balance
Accrued expenses 398,585,802.29 241,487,812.54
Total 398,585,802.29 241,487,812.54
26. Deferred Revenue
Item Opening balance Increase Decrease Closing balance Formed reason
Government subsidies 43,978,795.45 1,646,000.00 2,370,027.39 43,254,768.06 Related to the assets
Total 43,978,795.45 1,646,000.00 2,370,027.39 43,254,768.06 --
92
Of which, items involved in government subsidies:
Amount Related
recorded into to
Opening Amount of Other
Item non-operating Closing balance assets/re
balance newly subsidy changes
income in lated
report period income
Related
Technical reform of wine
380,208.35 0.00 31,249.98 0.00 348,958.37 to the
production system assets
Related
Instruments subsidies 1,433,250.00 0.00 110,250.00 0.00 1,323,000.00 to the
assets
Intelligent solid brewing Related
technology innovation 213,541.65 0.00 15,625.02 0.00 197,916.63 to the
assets
project
Related
Anhui service industry
1,673,170.76 0.00 146,341.44 0.00 1,526,829.32 to the
development guide fund assets
Anhui innovative province
Related
construction independent
4,139,755.00 0.00 365,272.50 0.00 3,774,482.50 to the
innovation ability assets
construction subsidy
Energy-saving and reform
Related
project of coal-fired
318,750.00 0.00 76,500.00 0.00 242,250.00 to the
industry boiler and glass assets
furnace
Related
Bozhou city logistics
180,000.00 0.00 30,000.00 0.00 150,000.00 to the
center project assets
Related
Equipment subsidy 1,232,943.71 0.00 99,262.86 0.00 1,133,680.85 to the
assets
Related
Financial subsidy for
997,580.45 0.00 265,811.76 0.00 731,768.69 to the
energy-saving project assets
Related
Financial subsidy for 1,484,373.94 0.00 267,110.76 0.00 1,217,263.18
to the
93
Amount Related
recorded into to
Opening Amount of Other
Item non-operating Closing balance assets/re
balance newly subsidy changes
income in lated
report period income
assets
technology innovation
Special fund to enterprise Related
development directed by 112,500.00 0.00 15,000.00 0.00 97,500.00 to the
assets
municipal finance
Related
Iot traceability system
5,197,500.00 0.00 556,875.00 0.00 4,640,625.00 to the
project assets
Related
Land refund 24,213,446.47 0.00 275,103.09 0.00 23,938,343.38 to the
assets
Motor and boiler Related
energy-saving reform 687,500.12 0.00 68,749.98 0.00 618,750.14 to the
assets
project
Automated storage hook Related
and product quality online 546,875.00 0.00 46,875.00 0.00 500,000.00 to the
assets
monitoring
Related
Research fund on smart
217,400.00 346,000.00 0.00 0.00 563,400.00 to the
Koji-making technology assets
Related
Renovation of Gujing
950,000.00 0.00 0.00 0.00 950,000.00 to the
Zhangji Spirit Room assets
Key technical cooperation Related
on isotopic authenticity of 0.00 300,000.00 0.00 0.00 300,000.00 to the
assets
important food
Related
Security enhancement
0.00 1,000,000.00 0.00 0.00 1,000,000.00 to the
project assets
Total 43,978,795.45 1,646,000.00 2,370,027.39 0.00 43,254,768.06 --
94
27. Share Capital
Increase/decrease in Reporting Period (+,-)
Capitalization
Item Opening balance Newly Bonus of Closing balance
Others Subtotal
issue share shares public
reserves
The sum of shares 503,600,000.00 0.00 0.00 0.00 0.00 0.00 503,600,000.00
28. Capital Surplus
Item Opening balance Increase Decrease Closing balance
Capital premium 1,262,552,456.05 0.00 0.00 1,262,552,456.05
Other capital reserves 32,853,136.20 0.00 0.00 32,853,136.20
Total 1,295,405,592.25 0.00 0.00 1,295,405,592.25
29. Other Comprehensive Income
Reporting Period
Less: recorded
in other
Reporting comprehensive Closing
Opening period Attributable to Attributable
Period income in Less: period
Item owners of the to minority
Balance Amount prior period Income tax
Company after shareholders Balance
before income and transferred expense
tax after tax
tax to profit or
loss in current
period
I. Other
comprehensive
income cannot be
0.00 0.00 0.00 0.00 0.00 0.00 0.00
reclassified into
profits and losses
in future
II. Other
comprehensive
36,144,477.95 22,845,859.36 37,030,866.60 5,711,464.84 -19,896,472.08 0.00 16,248,005.87
reclassified into
profits or losses
Of which: profits
or losses of 36,144,477.95 22,845,859.36 37,030,866.60 5,711,464.84 -19,896,472.08 0.00 16,248,005.87
change in fair
95
Reporting Period
Less: recorded
in other
Reporting comprehensive Closing
Opening period Attributable to Attributable
Period income in Less: period
Item owners of the to minority
Balance Amount prior period Income tax
Company after shareholders Balance
before income and transferred expense
tax after tax
tax to profit or
loss in current
period
value of
available-for-sale
financial assets
Total 36,144,477.95 22,845,859.36 37,030,866.60 5,711,464.84 -19,896,472.08 0.00 16,248,005.87
30. Surplus Reserves
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 256,902,260.27 0.00 0.00 256,902,260.27
Total 256,902,260.27 0.00 0.00 256,902,260.27
Notes: Based on the regulations of the Corporation Law and Article of Association, the Company should
withdraw 10% of the statutory surplus reserves according to the net profits. If the accumulated amount of the
statutory surplus reserves exceeded the 50% of the registered capital, the Company could no more withdraw.
31. Retained Profits
Item Reporting Period Last period
Opening balance of retained profits before adjustments 3,503,069,053.49 2,723,798,990.11
Total opening balance of retained profits before adjustments (Increase+, decrease-) 0.00 0.00
Opening balance of retained profits after adjustments 3,503,069,053.49 2,723,798,990.11
Add: Net profit attributable to owners of the Company 548,889,891.65 829,630,063.38
Less: Withdrawal of statutory surplus reserves 0.00 0.00
Withdrawal of discretional surplus reserves 0.00 0.00
Withdrawal of generic risk reserve 0.00 0.00
Dividend of common stock payable 302,160,000.00 50,360,000.00
Dividend of common stock transfer into share capital 0.00 0.00
Closing retained profits 3,749,798,945.14 3,503,069,053.49
96
32. Operating Revenues and Costs
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 3,640,782,146.34 891,178,513.56 3,024,521,955.55 764,241,551.89
Other operations 29,345,618.25 22,000,685.35 20,512,751.18 16,152,882.77
Total 3,670,127,764.59 913,179,198.91 3,045,034,706.73 780,394,434.66
33. Business Taxes and Surcharges
Item Reporting Period Same period of last year
Consumption tax 477,359,578.63 387,368,333.18
Business tax 0.00 1,287,301.81
Urban maintenance, construction tax and educational surcharge 107,125,009.74 81,797,388.99
Urban land use tax 6,268,387.32 0.00
Real estate tax 8,038,252.32 0.00
Stamp duty 3,894,182.32 0.00
Others 3,445,944.18 786,160.37
Total 606,131,354.51 471,239,184.35
Notes: the measurement standards of business tax and surcharges see Notes V. Tax
34. Sales Expenses
Item Reporting Period Same period of last year
Employee’s remuneration
123,985,954.16 91,988,233.13
Business travel charges
47,121,726.34 50,616,867.44
Advertising expense
185,979,223.96 232,167,675.77
Transport fees
23,693,930.48 14,302,719.73
Promotion fees 556,575,629.94 382,200,662.52
Sample wine
113,260,666.41 81,770,179.30
Labor cost
157,857,846.03 126,056,794.13
Other sales expenses
41,213,783.81 34,820,001.22
Total 1,249,688,761.13 1,013,923,133.24
97
35. Administration Expenses
Item Reporting Period Same period of last year
Employee’s remuneration
138,467,339.94 138,598,708.62
Office expenses
6,842,426.24 5,051,588.92
Taxes
0.00 16,180,538.79
Repair charge
29,106,759.72 7,396,042.34
Depreciation charge
28,961,402.74 25,666,709.05
Amortization of intangible assets
7,794,696.58 4,495,152.80
Sewage charge
11,408,909.28 7,028,047.40
Material wastage
6,132,749.56 22,093,807.33
Business travel charges
847,155.37 923,463.49
Water & electricity fees
5,009,938.09 4,305,991.70
Others
28,850,317.91 25,337,405.28
Total
263,421,695.43 257,077,455.72
36. Financial Expenses
Item Reporting Period Same period of last year
Interest expenses 0.00 0.00
Less: Interest income 17,954,811.63 9,929,844.92
Less: Amount of capitalized interest 0.00 0.00
Exchange gains and losses 409,322.34 93,752.69
Less: capitalization of foreign currency
0.00 0.00
exchange gains and losses
Others 280,846.64 71,931.09
Total -17,264,642.65 -9,764,161.14
37. Asset Impairment Loss
Item Reporting Period Same period of last year
Bad debt loss -260,798.74 5,597.28
Inventory falling price loss -2,023,855.12 -69,960.59
Total -2,284,653.86 -64,363.31
98
38. Gains and Losses from Changes in Fair Value
Sources Reporting Period Same period of last year
Financial assets measured by fair value and the changes be included in
-119,656.35 2,080,010.18
the current profits and losses
Of which, gains on the changes in the fair value of derivative financial
0.00 0.00
instruments
Total -119,656.35 2,080,010.18
39. Investment Income
Same period
Item Reporting Period
of last year
Investment income received from financial assets measured by fair value and the
0.00 0.00
changes be included in the current profits and losses during holding period
Investment income received from disposal of financial assets measured by fair value
2,329,585.99 4,982,722.91
and the changes be included in the current profits and losses during holding period
Investment income received from holding of available-for-sale financial assets 22,622,635.21 39,030,480.05
Investment income received from disposal of available-for-sale financial assets 49,254,878.84 311,652.40
Total 6,810,384.43 0.00
Investment income received from financial assets measured by fair value and the
81,017,484.47 44,324,855.36
changes be included in the current profits and losses during holding period
40. Non-operating Gains
Recorded in the amount
Same period of last
Item Reporting Period of the non-recurring
year
gains and losses
Total gains from disposal of non-current assets 487,886.67 5,477.22 487,886.67
Including: Gains from disposal of fixed assets 487,886.67 5,477.22 487,886.67
Government grants (details, see the statement below, lists
3,899,636.68 24,316,926.49
of government subsidies) 24,316,926.49
Penalty income 7,861,891.12 335,651.90 7,861,891.12
Sales of scrap 3,475,474.77 2,712,008.98 3,475,474.77
Others 3,024,423.78 1,186,922.39 3,024,423.78
99
Recorded in the amount
Same period of last
Item Reporting Period of the non-recurring
year
gains and losses
Total 39,166,602.83 8,139,697.17 39,166,602.83
Of which, government subsidies recorded into the current gains and losses:
Same
Reportin period Related to the
Item
g Period of last assets/ income
year
Reward for outstanding party works, Excellent Communist Party Member and Related to the
5,000.00 0.00
Advanced Grass-roots Party Organization income
200,000. Related to the
Subsidy for projects from Science and Technology Department of Xianning 0.00
00 income
Related to the
13,013,8 368,270.
Tax refunds of land use tax and real estate tax of Gujing Industry Park income
17.25 62
Related to the
76,080.0
Patent award 0.00 income
0
Related to the
50,500.0 337,268.
Subsidy for skill training of Employees income
0 00
Related to the
200,000.
Award for water-saving 0.00 income
00
300,000. Related to the
Quality Award 0.00
00 income
Related to the
55,000.0 600,000.
Anhui Excellent Achievement Prize income
0 00
Related to the
100,000.
Special reward of skills competition 0.00 income
00
Related to the
100,000.
The title of honor award for “Time-honored of Anhui” 0.00 income
00
Related to the
20,000.0
Export subsidy 0.00 income
0
100
Same
Reportin period Related to the
Item
g Period of last assets/ income
year
2,500,00 Related to the
Subsidy for air pollution control 0.00
0.00 income
Related to the
1,246,50
Tax refund for energy-saving and environmental protection 0.00 income
1.85
Related to the
2,370,02 2,274,09
Received assets related to government subsidies deferred revenue amortization income
7.39 8.06
Related to the
20,000.0
Award for technology innovation team 0.00 income
0
Related to the
600,000.
Subsidy to high and new tech enterprises 0.00 income
00
Related to the
200,000. 220,000.
Other payments by Treasury Payment Center income
00 00
Related to the
3,360,00
Enterprise supporting fund 0.00 income
0.00
24,316,9 3,899,63
Total --
26.49 6.68
41. Non-operating Expenses
Recorded in the amount of
Item Reporting Period Same period of last year the non-recurring gains and
losses
Loss on disposal of non-current assets 1,193,100.98 4,324,035.29 1,193,100.98
Including: Loss on disposal of fixed assets 1,193,100.98 4,324,035.29 1,193,100.98
Others 995,921.03 764,567.19 995,921.03
Total 2,189,022.01 5,088,602.48 2,189,022.01
101
42. Income Tax Expense
(1) List of Income Tax Expense
Item Reporting Period Same period of last year
Current income tax expense 320,222,019.81 148,337,746.92
Deferred income tax expense -117,205,486.69 -3,355,978.24
Total 203,016,533.12 144,981,768.68
43. Other Comprehensive Income
See Note VI. 29
44. Cash Flow Statement
(1) Other Cash Received Relevant to Operating Activities
Item Reporting Period Same period of last year
Margin 126,884,726.25 205,517,087.14
Government subsidies 7,686,580.00 1,625,538.62
Interest income 17,954,811.63 9,929,844.92
Recover of the pledge of bank deposit 0.00 46,945,425.70
Other 11,155,743.51 10,427,713.05
Total 163,681,861.39 274,445,609.43
(2) Other Cash Paid Relevant to Operating Activities
Same period of last
Item Reporting Period
year
Cash paid in selling expenses and administrative expenses 414,549,277.31 438,621,689.10
Fixed term deposits used to issue the pledge for the notes payable or cash deposit of notes 0.00 101,039,705.03
Others 14,733,112.11 16,536,736.11
Total 429,282,389.42 556,198,130.24
(3) Other Cash Received Relevant to Investment Activities
Item Reporting Period Same period of last year
Received assets related to government subsidies 1,646,000.00 0.00
Total 1,646,000.00 0.00
102
45. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash flows generated
from operating activities
Net profit 572,114,926.94 436,703,214.76
Add: Provision for impairment of assets -2,284,653.86 -64,363.31
Depreciation of fixed assets, of oil-gas assets, of
95,173,432.11 85,133,585.71
productive biological assets
Investment property amortization 242,646.14 290,134.90
Amortization of intangible assets 7,794,696.58 4,770,255.89
Long-term unamortized expenses 22,860,604.61 24,575,083.20
Losses on disposal of fixed assets, intangible assets and
705,214.31 4,318,558.07
other long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative)
Losses from variation of fair value (gains: negative) 119,656.35 -2,080,010.18
Financial cost (gains: negative) 409,322.34
93,752.69
Investment loss (gains: negative) -81,017,484.47 -44,324,855.36
Decrease in deferred income tax assets (gains: negative) -117,120,093.84 -19,257,304.18
Increase in deferred income tax liabilities
-7,892,851.83 -5,407,672.44
(“-” means decrease)
Decrease in inventory (gains: negative) -59,838,961.48 -282,384,101.39
Decrease in accounts receivable from operating activities
-656,394,178.36 -722,315,697.46
(gains: negative)
Increase in payables from operating activities (decrease:
652,862,975.93 843,787,934.03
negative)
Deferred revenue amortization -2,370,027.39 2,274,098.06
Net cash flows generated from operating activities 425,365,224.08 326,112,612.99
103
Supplemental information Reporting Period Same period of last year
2. Investing and financing activities that do not involving
cash receipts and payment:
Conversion of debt into capital
Company bonus convertible due within one year
Fix assets under financing lease
3. Net increase in cash and cash equivalents
Closing balance of cash 683,630,424.44 1,090,861,015.13
Less: Opening balance of cash 527,849,026.07 1,040,373,733.07
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 155,781,398.37 50,487,282.06
(2) Cash and Cash Equivalents
Item Closing balance Opening balance
I. Cash 683,630,424.44 527,849,026.07
Including: Cash on hand 286,750.06 323,885.02
Bank deposit on demand 683,334,584.32 527,379,498.81
Other monetary funds on demand 9,090.06 145,642.24
II. Cash and cash equivalents 0.00 0.00
Of which: Bond investment due within three months 0.00 0.00
III. Closing balance of cash and cash equivalents 683,630,424.44 527,849,026.07
46. The Assets with the Ownership or Use Right Restricted
Item Closing book value Restricted reason
Monetary capital 5,060,000.00 Froze by Court
Notes receivable 30,050,000.00 Pledge
Total 35,110,000.00 --
VII. Changes of Merge Scope
During the reporting period, the Company set up the new subsidiary Anhui RunAnXinKe Testing
104
Technology Co., Ltd、Suizhou Jun He Trading Co., Ltd. For more details, please see Note VIII 1. Equity in
Subsidiary.
VIII. Equity in Other Entities
1. Equity in Subsidiary
The Structure of the Enterprise Group
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
Bozhou,
Bozhou Gujing Sales Co., Ltd. Bozhou, Anhui Business trading 100.00 Investment
Anhui
Bozhou,
Bozhou Gujing Transportation Co., Ltd. Bozhou, Anhui Transportation 99.00 1.00 Investment
Anhui
Bozhou,
Anhui Longrui Glass Co., Ltd. Bozhou, Anhui Production 99.00 1.00 Investment
Anhui
Bozhou Gujing Waste Reclamation Co., Bozhou,
Bozhou, Anhui Waste cycled 100.00 Investment
Ltd. Anhui
Anhui Jinyunlai Culture & Media Co.,
Hefei Anhui Hefei Anhui Ads marketing 100.00 Investment
Ltd.
Anhui Swisse Will Science & Bozhou, Technology
Bozhou, Anhui 100.00 Investment
Technology Co., Ltd. Anhui research
Bozhou,
Anhui Subway Cordial Wine Co., Ltd. Bozhou, Anhui Production 100.00 Investment
Anhui
Business
Shanghai Gujing Jinhao Hotel Hotel
Shanghai Shanghai 100.00 combination under
Management Co., Ltd. management
the same control
Business
Bozhou,
Bozhou Gujing Hotel Co., Ltd. Bozhou, Anhui Hotel operating 100.00 combination under
Anhui
the same control
Anhui Yuanqing Environmental Co. , Bozhou, Sewage
Bozhou, Anhui 100.00 Investment
Ltd. Anhui Treatment
Anhui Gujing Cloud E-commerce Co.,
Hefei, Anhui Hefei, Anhui E-commerce 100.00 Investment
Ltd.
Anhui Zhenrui Construction Engineering Bozhou, Engineering
Bozhou, Anhui 100.00 Investment
Co., Ltd. Anhui construction
105
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
Bozhou Gujing Distillery Marketing Bozhou, Commercial
Bozhou, Anhui 100.00 Investment
Anhui
Co., Ltd. trade
Anhui RunAnXinKe Testing Bozhou, Technical
Bozhou, Anhui 100.00 Investment
Anhui
Technology Co., Ltd detection
Business
Wuhan Pride Yellow Crane Tower combination not
Wuhan, Hubei Wuhan, Hubei Production 51.00
Distillery Co., Ltd. under the same
control
Business
Pride Yellow Crane Tower Distillery Xianning, combination not
Xianning, Hubei Production 51.00
(Xianning) Co., Ltd. Hubei under the same
control
Business
Hubei Yellow Crane Tower Distillery Suizhou, combination not
Suizhou, Hubei Production 51.00
Co., Ltd. Hubei under the same
control
Business
Commercial combination not
Tian Long Jin Di (Wuhan) Co., Ltd. Wuhan, Hubei Wuhan, Hubei 51.00
trade under the same
control
Business
Xianning, Commercial combination not
Xianning Junhe Sales Co., Ltd. Xianning, Hubei 51.00
Hubei trade under the same
control
Business
combination not
Hubei Junhe Advertising Co., Ltd. Wuhan, Hubei Wuhan, Hubei Ads marketing 51.00
under the same
control
Wuhan Junya Shibo Technology Co., Wuhan, Hubei Wuhan, Hubei Technology 51.00 Investment
106
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
Ltd. development
Commercial
Wuhan Junya Sales Co., Ltd. Wuhan, Hubei Wuhan, Hubei 51.00 Investment
trade
SuiZhou, Commercial
Suizhou Jun He Trading Co., Ltd. SuiZhou, Hubei 51.00 Investment
Hubei trade
IX. The Risk Related Financial Instruments
The main financial instruments of the Company are equity investment, financial product, trust investment,
account receivables and account payables, etc, the specific explanation of each financial instrument are in
relevant item of Note VI. Risk related to these financial instruments and the risk management policies the
Company adopted to reduce the risk is as follows: the management of the Company monitors and manages
the risk exposure to ensure the aforesaid risk within the limit scope of control.
(I) Risk Management Objectives and Policies
The goals of the Company is to maintain a proper balance between the risk and the income, reduce the
negative influence of risk to the operation performance of the Company to a minimum, and maximize profits
of shareholders and other equity investors, basing on the risk management goal, the Company basis
policies are to recognize and analyze each risk the Company faced, establish proper risk bottom line and
conduct risk management, timely and reliably supervise each risk, control the risks within the limit scope .
1. Market Risk
(1) Foreign Exchange Risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. Foreign
exchange risk is referred to the risk of loss from the change of exchange rate. The main operation of the
Company is within the territory of China, mainly settled by RMB, only small amount of export business and
the influence of the proportion in the total income is rather small; the exchange rate risk is very little.
(2) Interest Rate Risk- Cash Flow Change Risk
The operation capital of the Company is sufficient, there is no external borrowing in the Company; the
interest rate risk is very little.
(3) Other Price Risk
What the Company held are classified as available financial assets and tradable financial assets measured at
fair value on balance sheetdate. Thus, the Company bares the risk change of securities market. The
Company adopt variety of equity group to reduce the price risk in equity security investment.
107
2. Credit Risk
On June 30, 2017, the largest credit risk exposure what may lead to the financial losses was the other party of
the contract failed to fulfill the obligations and causes loss of the Company’s financial assets and financial
guarantee, which including:book value of financial assets recognized in consolidated balance sheet; as for the
financial instruments measured at fair value, the book value reflect its risk exposure, but not the largest one,
the largest risk exposure will change when the future fair value changed.
The Company only trade with the third party authorized with good credit and large scale. In line with the
policies of the Company and the items of sale contracts, the Company gives priority to first payment
shipment, only small amount of credit transactions and examines and verifies the credit of the client who
trading with by credit way.
The Company's working capital was in bank with higher credit rating, so credit risk of working capital was
low.
3. Liquidity Risk
When managing liquidity risk, the Company maintained the management’s believe that supervising the
sufficient cash and cash equivalents to meet the operating demand of the Company and reduce the influence
of the fluctuation of cash flow.
X. The Disclosure of the Fair Value
1. Closing Fair Value of Assets and Liabilities Calculated by Fair Value
Closing fair value
Fair value
Fair value Fair value
Item measurement
measurement items measurement Total
items at level
at level 1 items at level 2
3
I. Consistent fair value measurement
(I) Financial assets calculated by fair value
and changes record into current profits or 101,573.76 101,573.76
losses
1. Trading financial assets 101,573.76 101,573.76
(1) Equity tool investment 101,573.76 101,573.76
(II) Available-for-sale financial assets 498,964,610.81 498,964,610.81
1. Equity instrument investment 498,964,610.81 498,964,610.81
108
Closing fair value
Fair value
Fair value Fair value
Item measurement
measurement items measurement Total
items at level
at level 1 items at level 2
3
Total assets of consistent fair value
499,066,184.57 499,066,184.57
measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at
Level 1
The consistent fair value measurement items were the share public trade on Shanghai Stock Exchange or
Shenzhen Stock Exchange, the market price recognition basis was the closing price of the share on balance
sheet date. When the shares held were in the restricted period, the price shall be determined according to the
relevant valuation methods mentioned in SFC [2007] No. 21.
XI. Related Party and Related Transaction
1. Information of Parent Company
Proportion of Proportion of voting
share held by rights owned by
Registration
Name of parent company Nature of business Registered capital parent company parent company
place
against the against the
Company (%) Company (%)
Beverage,
Construction
Anhui Gujing Group Co., Ltd. Anhui materials, and plastic 1,000,000,000.00 53.89 53.89
productions
manufacture
Notes: The finial control of the Company was People’s Government of Bozhou, Anhui
2. Information of Subsidiary of the Company
For more details, please refer to Note VIII, 1. Equity in Subsidiary
3. Information of Other Related Party of the Company
Name Relationship
Anhui Ruifuxiang Food Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruijing Restaurant Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Haochidian Catering Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
109
Name Relationship
Shanghai Ruiyao Hotel Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Shanghai Beihai Restaurant Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruijing Trade Travel (Group) Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Bozhou Hotel Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Real Estates Group Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
East Ruijing Enterprise Investment Development Co.,
Affiliated enterprise of controlling shareholder and actual controller
Ltd
Anhui Hengxin Pawn Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Ruineng Thermoelectricity Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Holiday Inn Hefei Affiliated enterprise of controlling shareholder and actual controller
Bozhou Rufuxiang High-protein Feed Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Hotel Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruixin Pawn Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Zhongxin Financial Leasing Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Huixin Finance Investment Group Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Hefei Longxin Financial Management Consulting Co.,
Affiliated enterprise of controlling shareholder and actual controller
Ltd.
Bozhou Anxin Microcredit Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Ecological Industrial Park Management Affiliated enterprise of controlling shareholder and actual controller
Large Central Plain Wine Valley Culture Tourism Affiliated enterprise of controlling shareholder and actual controller
Development Co., Ltd.
Anhui Xinyuan Government Landscape Engineering Affiliated enterprise of controlling shareholder and actual controller
Co., Ltd.
Bozhou Gujing Hotel Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Youxin Financing Guarantee Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Aoxin Real Estate Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Lixin E-Commerce Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Xinxin Property Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
110
Name Relationship
Bozhou Huisheng Building Catering Company Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Junlai Hotel Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Real Estates Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Real Estates Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Shenglong Trading Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing International Travel Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
4. List of Related Party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten Thousand Yuan)
①Information on acquisition of goods and reception of labor service
Related party Content Reporting Period Same period of last year
Purchase of raw
15,810.48 103,717.97
Anhui Ruifuxiang Food Co., Ltd material
Accepting food and
accommodation 807,692.59 1,003,377.40
Bozhou Hotel Co., Ltd. services
Accepting catering
89,759.00 9,460.00
Anhui Ruijing Restaurant Management Co., Ltd. services
Anhui Xinyuan Government Landscape Engineering Co., Ltd. Afforestation fees 589,278.15 0.00
Holiday Inn Hefei Purchase of goods 35,451.28 89,654.36
Accepting food and
accommodation 70,699.06 14,088.46
Holiday Inn Hefei services
Anhui Gujing Hotel Development Co., Ltd. Accepting labor
3,413.21 188,450.00
service
Anhui Gujing Hotel Development Co., Ltd. Purchase of
7,245.28 0.00
materials
Bozhou Gujing Junlai Hotel Management Co., Ltd. Accepting food and 149,579.79 199,119.00
111
Related party Content Reporting Period Same period of last year
accommodation
services
Accepting food and
accommodation 26,285.00 0.00
Anhui Gujing Hotel Development Co., Ltd. services
Accepting food and
accommodation 1,592,452.00 2,051,307.00
Bozhou Huisheng Building Catering Company services
Anhui Haochidian Catering Co., Ltd. Accepting food and
accommodation 4,800.00 0.00
services
Anhui Gujing International Travel Co., Ltd. Accepting labor
12,240.00 0.00
service
Bozhou Gujing Hotel Co., Ltd Purchase of property 11,900,000.00 0.00
Total -- 15,304,705.84 3,659,174.19
②Information of sales of goods and provision of labor service
Related party Content Reporting Period Same period of last year
Sales of white
Anhui Hengxin Pawn Co., Ltd. 6,176.78 4,941.54
spirit
Sales of small
Anhui Gujing Group Co., Ltd. 62,464.38 19,355.93
sized materials
Providing labor
Anhui Gujing Group Co., Ltd. 9,897.94 0.00
service
Providing
catering and
Anhui Gujing Group Co., Ltd. 102,811.00 195,376.99
accommodation
services
Sales of white
Bozhou Huisheng Building Catering Company 17,000.00 16,538.46
spirit
Bozhou Hotel Co., Ltd. Sales of white 61,965.81 41,025.64
112
Related party Content Reporting Period Same period of last year
spirit
Sales of white
Anhui Ruijing Trade Travel (Group) Co., Ltd 2,498,463.23 1,744,615.38
spirit
Providing
catering and
Anhui Ruijing Trade Travel (Group) Co., Ltd 599.99 0.00
accommodation
services
Sales of white
Anhui Ruifuxiang Food Co., Ltd 339,877.92 164,692.31
spirit
Sales of white
Anhui Huixin Finance Investment Group Co., Ltd. 14,683.36 9,123.08
spirit
Sales of white
Anhui Gujing Hotel Development Co., Ltd. 14,529.91 55,384.64
spirit
Sales of white
Anhui Gujing Real Estates Group Co., Ltd. 9,854.52 8,981.53
spirit
Providing labor
Anhui Gujing Real Estates Group Co., Ltd. 456,621.63 0.00
service
Sales of white
Bozhou Gujing Real Estates Development Co., Ltd. 20,033.69 82,896.41
spirit
Providing
catering and
Bozhou Gujing Real Estates Development Co., Ltd. 600.00 800.00
accommodation
services
Sales of white
Bozhou Ruineng Thermoelectricity Co., Ltd. 128,848.87 85,867.71
spirit
Sales of white
Bozhou Ruifuxiang High-protein Feed Co., Ltd. 20,332.81 9,692.31
spirit
Sales of white
Anhui Aoxin Real Estate Development Co., Ltd. 6,099.86 3,658.47
spirit
Sales of white
Anhui Lixin E-Commerce Co., Ltd. 7,435.83 4,406.15
spirit
113
Related party Content Reporting Period Same period of last year
Sales of white
Anhui Ruixin Pawn Co., Ltd 5,499.01 24,747.70
spirit
Sales of white
Anhui Xinxin Property Management Co., Ltd. 21,703.08 18,563.07
spirit
Sales of white
Anhui Youxin Financing Guarantee Co., Ltd. 3,089.68 12,155.90
spirit
Sales of white
Anhui Zhongxin Financial Leasing Co., Ltd. 6,102.42 3,670.78
spirit
Sales of white
Bozhou Anxin Microcredit Co., Ltd 5,800.72 1,230.77
spirit
Sales of white
Bozhou Gujing Hotel Co., Ltd 24,100.26 15,273.85
spirit
Sales of white
Bozhou Gujing Junlai Hotel Management Co., Ltd. 4,307.69 5,076.92
spirit
Sales of white
Bozhou Gujing Real Estates Management Co., Ltd. 38,442.24 29,307.69
spirit
Sales of white
Shanghai Beihai Restaurant Co., Ltd. 0.00 8,153.85
spirit
Sales of white
Shanghai Ruiyao Hotel Management Co., Ltd. 0.00 4,461.54
spirit
Providing labor
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 5,485.98 0.00
service
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. Utilities 94,630.14 0.00
Providing
catering and
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 20,896.00 17,110.00
accommodation
services
Sales of small
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 5,101.65 47,934.55
sized materials
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. Sales of white 337,678.77 51,583.59
114
Related party Content Reporting Period Same period of last year
spirit
Sales of white
Anhui Haochidian Catering Co., Ltd. 182,598.15 0.00
spirit
Providing
catering and
Anhui Shenglong Trading Co., Ltd. 400.00 0.00
accommodation
services
Sales of small
Anhui Xinyuan Government Landscape Engineering Co., Ltd. 8,507.41 0.00
sized materials
Providing
catering and
Anhui Gujing International Travel Co., Ltd. 3,960.00 0.00
accommodation
services
Providing
East Ruijing Enterprise Investment Development Co., Ltd 201,390.13 0.00
labor service
Sales of white
Hefei Longxin Financial Management Consulting Co., Ltd. 7,902.56 0.00
spirit
Total -- 4,755,893.42 2,686,626.76
(2) Information of Related Lease
The Company serves as the leasee
Rental expense confirmed in Rental expense confirmed in
Name of lessor Type of leased assets
the report period the same period of last year
Anhui Gujing Group Co., Ltd. Houses and buildings 1,095,238.10 1,150,000.00
The Company serves as the lessor
Rental income confirmed
Rental income confirmed in
Name of leasee Type of leased assets in the same period of last
the Report period
year
Anhui Gujing Hotel Management Co., Ltd. Houses and buildings 246,190.49 169,597.89
5. Receivables and Payables of Related Party
(1) Receivables
Name o f item Closing balance Opening balance
115
Name o f item Closing balance Opening balance
Accounts receivable
Bozhou Hotel Co., Ltd. 156,600.00 0.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 6,418.60 0.00
Anhui Huixin Finance Investment Group Co., Ltd. 48,555.00 0.00
Anhui Lixin E-Commerce Co., Ltd. 8,273.00 0.00
Total 219,846.60 0.00
Other accounts receivable:
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 39,160.45 0.00
Anhui Xinyuan Government Landscape Engineering Co., Ltd. 9,085.28 0.00
Anhui Gujing Real Estate Co., Ltd. 25,342.50 0.00
Anhui Gujing Group Co., Ltd. 73,083.36 0.00
Total 146,671.59 0.00
(2) Payables
Name o f item Closing balance Opening balance
Accounts received in advance
Anhui Ruijing Trade Travel (Group) Co., Ltd 769,894.01 0.00
Anhui Ruifuxiang Food Co., Ltd 20,130.00 195,200.00
Bozhou Huisheng Building Catering Company 18,540.00 0.00
Holiday Inn Hefei 17,000.00 0.00
Shanghai Beihai Restaurant Co., Ltd. 9,900.00 0.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 9,492.00 0.00
Anhui Gujing Hotel Development Co., Ltd. 16,020.00 0.00
Bozhou Gujing Junlai Hotel Management Co., Ltd. 5,400.00 0.00
Shanghai Ruiyao Hotel Management Co., Ltd. 5,040.00 0.00
Hefei Longxin Financial Management Consulting Co., Ltd. 3,840.02 0.00
Bozhou Gujing Real Estates Development Co., Ltd. 184.58 0.00
Anhui Ruijing Restaurant Management Co., Ltd. 0.00 599,136.01
116
Name o f item Closing balance Opening balance
Bozhou Hotel Co., Ltd. 0.00 36,000.00
Bozhou Ruifuxiang High-protein Feed Co., Ltd. 0.00 13,200.00
Anhui Haochidian Catering Co., Ltd. 0.00 115,200.00
Total 875,440.61 958,736.01
Other accounts payable:
Bozhou Huisheng Building Catering Company 10,500.00 15,500.00
Anhui Ruijing Trade Travel (Group) Co., Ltd 33,637.70 38,043.40
Total 44,137.70 53,543.40
XII. Commitments and Contingencies
1. Significant Commitments
Operating Lease Commitments
As of the end of balance sheet date, the irrevocable operating lease commitments that the Company signed
were as followed:
Item Closing balance Opening balance
Minimum lease payments of irrevocable operating lease
1 year after balance date 2,300,000.00 2,300,000.00
2 year after balance date 2,300,000.00 2,300,000.00
3 year after balance date 2,300,000.00 2,300,000.00
Future years 22,808,333.33 23,958,333.33
Total 29,708,333.33 30,858,333.33
XIII. Events after Balance Sheet Date
As of June 30, 2017, there was no other significant event after balance sheet date.
XIV. Other Significant Events
Segment Information
There was no segment information based on operating segments to disclose, since the Company didn’t
determine operating segments in accordance with internal organizational structure, management requirements
and internal report systems.
117
XV. Notes of Main Items in the Financial Statements of the Company
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Closing balance
Book balance Bad debt provision
Category Book
Proporti Proportion
value
Amount on (%) Amount (%)
Accounts receivable with significant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 5,490,940 658,331. 4,832,609
100 11.99
characteristics: .95 94 .01
Accounts receivable with insignificant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
5,490,940 658,331. 4,832,609
Total 100 11.99
.95 94 .01
（Continued）
Opening balance
Book balance Bad debt provision
Category Book
Proporti Proportion
value
Amount on (%) Amount (%)
Accounts receivable with significant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 6,979,229 601,883. 6,377,346
100.00 8.62
characteristics: .19 19 .00
Accounts receivable with insignificant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
6,979,229 601,883. 6,377,346
Total 100 8.62
.19 19 .00
①In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision
Aging Closing balance
118
Account receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 0.00 0.00 0.00
[Of which: within 6 months] 0.00 0.00 0.00
[7-12 months] 0.00 0.00 0.00
1 to 2 years 0.00 0.00 0.00
2 to 3 years 141,121.87 70,560.94 50.00
Over 3 years 587,771.00 587,771.00 100.00
Total 728,892.87 658,331.94 90.32
②In the groups, accounts receivable adopting other methods to withdraw bad debt provision
Closing balance
Name of the group
Account receivable Bad debt provision Withdrawal proportion (%)
Related party group within
4,762,048.08 0.00 0.00
combination scope
Total 4,762,048.08 0.00 0.00
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawn bad debt provision of Reporting Period was of RMB56,448.75.
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
There was no actual verification of accounts receivable during the Reporting Period.
(4) Top Five of Account Receivable of Closing Balance Collected by Arrears Party
The total amount of top five of account receivable of closing balance collected by arrears party was
RMB5,244,757.08, 95.52% of total closing balance of account receivable, the relevant closing balance of
bad debt provision withdrawn was RMB492,545.00.
2. Other Accounts Receivable
(1) Other Account Receivable Classified by Category
Closing balance
Book balance Bad debt provision
Category Book
Proport Proportion
value
Amount ion (%) Amount (%)
119
Other accounts receivable with significant single amount for which bad debt 41,342,93 41,342,93
27.61 100.00 0.00
provision separately accrued 8.53 8.53
Other accounts receivable withdrawn bad debt provision according to credit 108,399,1 434,334.4 107,964,8
72.39 0.40
risks characteristics 80.03 1 45.62
Other accounts receivable with insignificant single amount for which bad
0.00 0.00 0.00 0.00 0.00
debt provision separately accrued
149,742,11 41,777,27 107,964,8
Total 100.00 27.90
8.56 2.94 45.62
（Continued）
Opening balance
Book balance Bad debt provision
Category Book
Proport Proportion
value
Amount ion (%) Amount (%)
Other accounts receivable with significant single amount for which bad debt 41,342,938 41,342,93
28.07 100.00 0.00
provision separately accrued .53 8.53
Other accounts receivable withdrawn bad debt provision according to credit 105,925,69 410,793.5 105,514,90
71.93 0.39
risks characteristics 9.86 2 6.34
Other accounts receivable with insignificant single amount for which bad
0.00 0.00 0.00 0.00 0.00
debt provision separately accrued
147,268,63 41,753,73 105,514,90
Total 100.00 28.35
8.39 2.05 6.34
① Other receivable with single significant amount and withdrawal bad debt provision separately at end of
period
Closing balance
Other accounts receivable (unit） Other accounts Bad debt Withdrawal proportion
Withdrawal reason
receivable provision (%)
11,840,500.00 11,840,500.00 100.00 Enter enterprise bankruptcy
Jianqiao Securities
liquidation
120
Closing balance
Other accounts receivable (unit） Other accounts Bad debt Withdrawal proportion
Withdrawal reason
receivable provision (%)
29,502,438.53 29,502,438.53 100.00 Enter enterprise bankruptcy
Hengxin Securities
liquidation
Total 41,342,938.53 41,342,938.53 -- --
②In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 3,497,858.54 35,446.52 1.01
[Of which: within 6 months] 3,486,160.17 34,861.60 1.00
[7-12 months] 11,698.37 584.92 5.00
1 to 2 years 23,379.90 2,337.99 10.00
2 to 3 years 704,466.79 352,233.40 50.00
Over 3 years 44,316.50 44,316.50 100.00
Total 4,270,021.73 434,334.41 10.17
③In the groups, other accounts receivable adopting other methods to withdraw bad debt provision
Closing balance
Name of the group
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Related party group within
104,129,158.30 0.00 0.00
combination scope
Total 104,129,158.30 0.00 0.00
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting period
The withdrawn bad debt provision of Reporting Period was of RMB23,540.89
(3) Particulars of the Actual Verification of Other Accounts Receivable during the Reporting Period
There was no actual verification of other accounts receivable during the Reporting Period
(4) Other Account Receivable Classified by Account Nature
Nature Closing book balance Opening book balance
Intercourse funds between entities within 104,129,158.30 104,068,160.31
121
combination scope
Securities investment 41,342,938.53 41,342,938.53
Margin &cash pledge 1,209,658.09 1,191,658.09
Employee loan 248,508.07 72,924.00
Rent and utilities fee 482,547.98 296,244.71
Others 2,329,307.59 296,712.75
Total 149,742,118.56 147,268,638.39
(5) Top 5 of the Closing Balance of the Other Accounts Receivable Collected According to the Arrears
Party
Name of Proportion (%) Bad debt
the Relationship Nature Closing balance Aging provision
entity Closing balance
Intercourse funds
The Company’s between entities
No.1 78,335,000.00 Within 3 years 52.31 0.00
subsidiary within combination
scope
Securities
No.2 Non-related party 29,502,438.53 Over 3 years 19.70 29,502,438.53
investment
Intercourse funds
The Company’s between entities
No. 3 24,517,794.79 Within 2 years 16.37 0.00
subsidiary within combination
scope
Securities
No. 4 Non-related party 11,840,500.00 Over 3 years 7.91 11,840,500.00
investment
Intercourse funds
The Company’s
No. 5 between entities 927,219.44 Within 6 months 0.62 0.0
subsidiary
within combination
122
Name of Proportion (%) Bad debt
the Relationship Nature Closing balance Aging provision
entity Closing balance
scope
Total -- -- 145,122,952.76 -- 96.91 41,342,938.53
3. Long-term Equity Investment
(1) List of Long-term Equity Investment Classified by Category
Closing balance Opening balance
Depreciati
Item Depreciation
Book balance on Book value Book balance Book value
reserves
reserves
Investment to the 1,155,089,408 1,155,089,408 1,155,089,408 1,155,089,408
0.00 0.00
subsidiary .32 .32 .32 .32
1,155,089,408 1,155,089,408 1,155,089,408 1,155,089,408
Total 0.00 0.00
.32 .32 .32 .32
(2) Investment to the Subsidiaries
Withdrawn
impairment Closing
provision balance of
Investee Opening balance Increase Decrease Closing balance
in the impairment
Reporting provision
Period
Bozhou Gujing
84,864,497.89 0.00 0.00 84,864,497.89 0.00 0.00
Sales Co., Ltd.
Anhui Longrui
85,793,666.00 0.00 0.00 85,793,666.00 0.00 0.00
Glass Co., Ltd.
Shanghai Gujing
Jinhao Hotel
49,906,854.63 0.00 0.00 49,906,854.63 0.00 0.00
Management Co.,
Ltd.
Bozhou Gujing 648,646.80 0.00 0.00 648,646.80 0.00 0.00
123
Withdrawn
impairment Closing
provision balance of
Investee Opening balance Increase Decrease Closing balance
in the impairment
Reporting provision
Period
Hotel Co., Ltd.
Gujing
Transportation 6,875,743.00 0.00 0.00 6,875,743.00 0.00 0.00
Co., Ltd.
Anhui Swisse
Will Science &
50,000,000.00 0.00 0.00 50,000,000.00 0.00 0.00
Technology Co.,
Ltd.
Anhui Subway
Cordial Wine Co., 30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Ltd.
Anhui Yuanqing
Environmental 16,000,000.00 0.00 0.00 16,000,000.00 0.00 0.00
Co. , Ltd.
Anhui Gujing
Cloud
5,000,000.00 0.00 0.00 5,000,000.00 0.00 0.00
E-commerce Co.,
Ltd.
Anhui Zhenrui
Construction
10,000,000.00 0.00 0.00 10,000,000.00 0.00 0.00
Engineering Co.,
Ltd.
Wuhan Pride
Yellow Crane
816,000,000.00 0.00 0.00 816,000,000.00 0.00 0.00
Tower Distillery
Co., Ltd.
124
Withdrawn
impairment Closing
provision balance of
Investee Opening balance Increase Decrease Closing balance
in the impairment
Reporting provision
Period
Total 1,155,089,408.32 0.00 0.00 1,155,089,408.32 0.00 0.00
4. Revenues and Costs of Operation
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 1,996,798,133.21 787,209,683.22 1,713,016,802.41 749,998,664.73
Other operations 35,252,699.27 20,947,873.68 25,687,112.91 16,633,501.71
Total 2,032,050,832.48 808,157,556.90 1,738,703,915.32 766,632,166.44
5. Investment Income
Same period of
Item Reporting Period
last year
Long-term equity investment income accounted by cost method 0.00 0.00
Investment income received from disposal of financial assets measured by fair value and
2,329,585.99 4,982,722.91
the changes be included in the current profits and losses during holding period
Investment income received from holding of available-for-sale financial assets 22,065,303.71 38,085,000.05
Investment income received from disposal of available-for-sale financial assets 49,254,878.84 311,652.40
Others 1,290,384.43 0.00
Total 74,940,152.97 43,379,375.36
XVI. Supplementary Materials
1. Items and Amounts of Extraordinary Gains and Losses
Item Amount Explanation
125
Item Amount Explanation
Gains/losses on the disposal of non-current assets -705,214.31
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of
0.00
official approval documents
Government grants recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the 24,316,926.49
government’s unified standards
Capital occupation charges on non-financial enterprises that are recorded into current gains
0.00
and losses
Gains due to that the investment costs for the Company to obtain subsidiaries, associates and
joint ventures are lower than the enjoyable fair value of the identifiable net assets of the 0.00
investees when making the investments
Gain/loss on non-monetary asset swap 0.00
Gain/loss on entrusting others with investments or asset management 0.00
Asset impairment provisions due to acts of God such as natural disasters 0.00
Gains and losses from debt restructuring 0.00
Expenses on business reorganization, such as expenses on staff arrangements, integration,
0.00
etc.
Gain/loss on the part over the fair value due to transactions with distinctly unfair prices 0.00
Current net gains and losses of subsidiaries acquired in business combination under the same control
0.00
from period-begin to combination date
Profit and loss from contingencies irrelative to the normal business operations of company 0.00
Gain/loss from change of fair value of transactional assets and liabilities, and investment
gains from disposal of transactional financial assets and liabilities and available-for-sale 51,524,808.48
financial assets, other than valid hedging related to the Company’s common businesses
Depreciation reserves returns of receivables with separate depreciation test 0.00
Gain/loss on entrustment loans 0.00
Gain/loss on change of the fair value of investing real estate of which the subsequent
0.00
measurement is carried out adopting the fair value method
Effect on current gains/losses when a one-off adjustment is made to current gains/losses
0.00
according to requirements of taxation, accounting and other relevant laws and regulations
126
Item Amount Explanation
Custody fee income when entrusted with operation 0.00
Other non-operating income and expenses other than the above 13,365,868.64
Project confirmed with the definition of non-recurring gains and losses and losses 0.00
Subtotal 88,502,389.30
Income tax effects 21,884,672.27
Minority interests effects (after tax) 1,682,839.50
Total 64,934,877.53
Notes: the number “+” among the non-current gains and losses items refers to profits and revenues, while
“-”referred to losses or expenditure.
The recognition of the non-current gains and losses items was executed according to the regulations of No.1 of the
Information Disclosure Explanatory Notice of the Companies Public Offering Securities-Non-current Gains and
losses (Z-J-H-Announcement [2008] No. 43) .
2. Return on Net Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
Basic EPS Diluted EPS
Net profit attributable to common
9.86 1.09 1.09
shareholders of the Company
Net profits attributed to the common
shareholders after deducting the 8.69 0.96 0.96
non-current gains and losses
127
