Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
中瑞岳华会计师事务所（特殊普通合伙） RSM China Certified Public Accountants 电话：+86(10)88095588
Office Address:3-9/F,West Tower of China Overseas Tel： +86(10)88095588
办公地址：北京市东城区永定门西滨河路 8
Property Plaza, Building 7,NO.8,Yongdingmen Xibinhe
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邮政编码：100077 Post Code:100077 Fax： +86(10)88091199
Independent Auditor’s Report
ZhongruiYuehua Shen Zi [2013] No 5933
To The Board of Directors of Anhui Gujing Distillery Co., Ltd.:
We have audited the accompanying financial statements of Anhui Gujing Distillery Co.,
Ltd. (hereafter, the Company) and its subsidiaries (hereafter, the Group), which
comprise the statement of financial position and the consolidated statement of financial
position as at 31 December 2012, the statement of comprehensive income and the
consolidated statement of comprehensive income, the statement of cash flows and the
consolidated statement of cash flows and the statement of changes in shareholders'
equity and the consolidated statement of changes in shareholders' equity for the year
then ended and a summary of significant accounting policies and other explanatory
notes.
ⅠManagement’s responsibility for the financial statements
Management of Anhui Gujing Distillery Co., Ltd. is responsible for the preparation and
fair presentation of financial statements. This responsibility includes: (1) preparation of
financial statements in accordance with Enterprise Accounting Standards of China and
for the purpose of fair presentation; (2) designing, implementing and maintaining internal
control necessary to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
ⅡAuditors’ responsibility
Our responsibility is to express an opinion on those financial statements based on our
audit. We conducted our audit in accordance with the Chinese Certified Public
14
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Accountants' Auditing Standards (hereafter, the Standards). The Standards require that
we comply with Chinese Certified Public Accountants Ethical Requirements and plan
and perform the audit to obtain reasonable assurance as to whether the financial
statements are free from material misstatement.
An audit involves the performance of audit procedures to obtain audit evidence relevant
to the amounts and disclosures in the financial statements. The procedures selected
depend on judgment of the Certified Public Accountants (hereafter, the CPAs), including
the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the CPAs consider
internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Ⅲ Audit opinion
In our opinion, the financial statements of Anhui Gujing Distillery Co., Ltd. And its
subsidiaries have been prepared in accordance with the Enterprise Accounting
Standards of China and present fairly, in all material respects, the consolidated and
separate financial position of Anhui Gujing Distillery Co., Ltd. as at 31 December 2012
and its consolidated and separate financial performance and cash flows for the year
then ended.
(No content apart from signature and stamp.)
15
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
RSM China Certified Public Accountants Certified Public Accountants
Wanqiang lin
Certified Public Accountants
China. Beijing Liping zhang
21st April 2013
II. Financial Statement
Unit of statements in the notes appended to financial report is RMB Yuan
1. Consolidated balance sheet
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 2,609,650,352.09 2,082,032,491.33
Settlement reserves
Intra‐group lendings
Transactional financial assets
Notes receivable 156,449,495.65 490,543,018.49
Accounts receivable 7,887,007.25 37,685,831.22
16
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Accounts paid in advance 85,305,973.47 233,262,710.73
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance
contract reserves
Interest receivable 7,253,858.34 4,451,540.35
Dividend receivable
Other accounts receivable 21,559,146.98 7,882,417.86
Financial assets purchased
under agreements to resell
Inventories 782,399,498.85 578,157,069.43
Non‐current assets due within
1 year
Other current assets
Total current assets 3,670,505,332.63 3,434,015,079.41
Non‐current assets:
Loans by mandate and
advances granted
Available‐for‐sale financial
27,991,376.84
assets
Held‐to‐maturity investments
Long‐term accounts receivable
Long‐term equity investment
Investing property 31,451,269.49 32,558,410.26
Fixed assets 783,740,205.15 362,778,190.84
Construction in progress 423,672,281.54 133,017,100.51
Engineering materials
Disposal of fixed assets
Production biological assets
Oil‐gas assets
Intangible assets 320,716,225.67 248,594,232.04
R&D expense
Goodwill
Long‐term deferred expenses 30,959,542.67 9,678,465.54
Deferred income tax assets 19,091,237.05 21,178,071.70
Other non‐current assets
Total of non‐current assets 1,637,622,138.41 807,804,470.89
Total assets 5,308,127,471.04 4,241,819,550.30
Current liabilities:
Short‐term borrowings
Borrowings from Central Bank
Customer bank deposits and
17
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
due to banks and other financial
institutions
Intra‐group borrowings
Transactional financial
liabilities
Notes payable 224,460,000.00
Accounts payable 461,112,575.26 219,823,856.45
Accounts received in advance 114,610,235.81 135,597,187.88
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee’s compensation
178,726,582.68 192,762,077.27
payable
Tax payable 645,410,021.57 671,079,511.43
Interest payable
Dividend payable
Other accounts payable 297,098,777.98 248,890,018.78
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting
underwriting of securities
Non‐current liabilities due
within 1 year
Other current liabilities 2,120,250.11 2,075,708.75
Total current liabilities 1,923,538,443.41 1,470,228,360.56
Non‐current liabilities:
Long‐term borrowings
Bonds payable
Long‐term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities 697,845.96
Other non‐current liabilities 8,403,073.03 10,475,905.29
Total non‐current liabilities 9,100,918.99 10,475,905.29
Total liabilities 1,932,639,362.40 1,480,704,265.85
Owners’ equity (or shareholders’
equity)
Paid‐up capital (or share
503,600,000.00 251,800,000.00
capital)
Capital reserves 1,297,032,031.07 1,546,738,493.19
18
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Less: Treasury stock
Specific reserves
Surplus reserves 218,736,964.73 147,070,297.60
Provisions for general risks
Retained profits 1,356,119,112.84 815,506,493.66
Foreign exchange difference
Total equity attributable to
3,375,488,108.64 2,761,115,284.45
owners of the Company
Minority interests
Total owners’ (or shareholders’)
3,375,488,108.64 2,761,115,284.45
equity
Total liabilities and owners’ (or 5,308,127,471.04 4,241,819,550.30
shareholders’) equity
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
Chief of the accounting division: Xia Xueyun
2. Balance sheet of the Company
Prepared by Anhui Gujing Distillery Company Limited
Unit: Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 2,390,346,607.43 1,885,937,555.53
Transactional financial assets
Notes receivable 139,414,615.95 481,125,332.25
Accounts receivable 1,293,202.89 1,857,487.49
Accounts paid in advance 1,151,359.52 148,873,681.27
Interest receivable 6,129,902.78 4,395,740.35
Dividend receivable
Other accounts receivable 161,967,822.69 263,635,938.96
Inventories 748,777,364.57 545,878,714.66
Non‐current assets due within
1 year
Other current assets
Total current assets 3,449,080,875.83 3,331,704,450.51
Non‐current assets:
Available‐for‐sale financial
27,991,376.84
assets
Held‐to‐maturity investments
Long‐term accounts receivable 4,172,166.85
Long‐term equity investment 258,089,408.32 247,991,408.32
Investing property 29,814,360.87 32,558,410.26
Fixed assets 562,993,821.32 152,140,192.21
19
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Construction in progress 423,672,281.54 132,982,180.51
Engineering materials
Disposal of fixed assets
Production biological assets
Oil‐gas assets
Intangible assets 200,084,457.08 124,709,474.17
R&D expense
Goodwill
Long‐term deferred expenses 27,338,996.93 4,536,265.22
Deferred income tax assets 18,496,292.51 20,167,034.56
Other non‐current assets
Total of non‐current assets 1,552,653,162.26 715,084,965.25
Total assets 5,001,734,038.09 4,046,789,415.76
Current liabilities:
Short‐term borrowings
Transactional financial
liabilities
Notes payable 80,000,000.00
Accounts payable 446,890,857.97 225,568,150.93
Accounts received in advance 714,794,965.38 590,174,171.08
Employee’s compensation
79,627,703.42 102,876,125.19
payable
Tax payable 314,625,057.22 446,265,127.40
Interest payable
Dividend payable
Other accounts payable 168,504,557.80 89,012,417.91
Non‐current liabilities due
within 1 year
Other current liabilities 1,998,845.04 1,798,000.00
Total current liabilities 1,806,441,986.83 1,455,693,992.51
Non‐current liabilities:
Long‐term borrowings
Bonds payable
Long‐term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities 697,845.96
Other non‐current liabilities 8,403,073.03 10,354,500.20
Total non‐current liabilities 9,100,918.99 10,354,500.20
Total liabilities 1,815,542,905.82 1,466,048,492.71
Owners’ equity (or shareholders’
equity)
Paid‐up capital (or share 503,600,000.00 251,800,000.00
20
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
capital)
Capital reserves 1,249,255,645.23 1,498,962,107.35
Less: Treasury stock
Specific reserves
Surplus reserves 213,634,704.46 141,968,037.33
Provision for general risks
Retained profits 1,219,700,782.58 688,010,778.37
Foreign exchange difference
Total owners’ (or shareholders’)
3,186,191,132.27 2,580,740,923.05
equity
Total liabilities and owners’ (or
5,001,734,038.09 4,046,789,415.76
shareholders’) equity
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
Chief of the accounting division: Xia Xueyun
3. Consolidated income statement
Prepared by Anhui Gujing Distillery Company Limited
Unit: Yuan
Item Amount of this period Amount of last period
I. Total operating revenues 4,197,057,315.26 3,307,979,236.00
Including: Sales income 4,197,057,315.26 3,307,979,236.00
Interest income
Premium income
Handling charge and
commission income
II. Total operating cost 3,243,155,636.29 2,473,852,861.75
Including: Cost of sales 1,220,831,141.50 861,012,764.70
Interest expenses
Handling charge and
commission expenses
Surrenders
Net claims paid
Net amount withdrawn
for the insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
638,945,267.01 522,390,054.93
charges
Selling and distribution
1,075,977,234.87 798,067,079.39
expenses
21
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Administrative expenses 393,028,645.85 345,615,957.58
Financial expenses -88,430,981.17 -51,871,404.15
Asset impairment loss 2,804,328.23 -1,361,590.70
Add: Gain/(loss) from change in
fair value (“‐” means loss)
Gain/(loss) from investment
1,656,581.66
(“‐” means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (“‐”
means loss)
III. Business profit (“‐” means
953,901,678.97 835,782,955.91
loss)
Add: non‐operating income 21,972,077.88 16,911,302.91
Less: non‐operating expense 3,446,696.09 2,619,353.87
Including: loss from non‐current
511,271.68 396,678.97
asset disposal
IV. Total profit (“‐” means loss) 972,427,060.76 850,074,904.95
Less: Income tax expense 246,837,774.45 283,684,618.59
V. Net profit (“‐” means loss) 725,589,286.31 566,390,286.36
Including: Net profit
achieved by combined parties
before the combinations
Attributable to owners of the
725,589,286.31 566,390,286.36
Company
Minority shareholders’
income
VI. Earnings per share ‐‐ ‐‐
(I) Basic earnings per share 1.44 1.17
(II) Diluted earnings per
1.44 1.17
share
Ⅶ. Other comprehensive
2,093,537.88
incomes
Ⅷ. Total comprehensive incomes 727,682,824.19 566,390,286.36
Attributable to owners of the
727,682,824.19 566,390,286.36
Company
Attributable to minority
shareholders
Where business mergers under the same control occurred in this report period, the net profit
achieved by the merged parties before the business mergers was RMB 0.
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
22
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Chief of the accounting division: Xia Xueyun
4. Income statement of the Company
Prepared by Anhui Gujing Distillery Company Limited
Unit: Yuan
Item Amount of this period Amount of last period
I. Total sales 2,535,315,597.69 1,957,164,481.24
Less: cost of sales 1,207,277,936.81 827,862,350.62
Business taxes and surcharges 604,155,623.28 495,328,024.61
Distribution expenses 364,959,419.40 190,724,471.78
Administrative expenses 240,774,307.44 222,853,051.65
Financial costs -71,949,250.84 -33,627,927.71
Impairment loss 3,629,434.58 -1,535,341.86
Add: gain/(loss) from change in
fair value (“‐” means loss)
Gain/(loss) from investment (“‐”
570,794,532.17 371,010,624.52
means loss)
Including: income form
investment on associates and
joint ventures
II. Business profit (“‐” means loss) 757,262,659.19 626,570,476.67
Add: non‐business income 15,984,988.19 7,458,576.15
Less: non‐business expense 1,770,071.21 1,848,819.85
Including: loss from non‐current
8,044.53
asset disposal
III. Total profit (“‐” means loss) 771,477,576.17 632,180,232.97
Less: income tax expense 54,810,904.83 134,309,163.96
IV. Net profit (“‐” means loss) 716,666,671.34 497,871,069.01
V. Earnings per share ‐‐ ‐‐
(I) Basic earnings per share 1.42 0.99
(II) Diluted earnings per share 1.42 0.99
VI. Other comprehensive income 2,093,537.88
VII. Total comprehensive income 718,760,209.22 497,871,069.01
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing Chief of the accounting division: Xia Xueyun
5. Consolidated cash flow statement
Prepared by Anhui Gujing Distillery Company Limited
Unit: Yuan
Item Amount of this period Amount of last period
I. Cash flows from operating
activities:
Cash received from sale of 5,256,820,153.39 3,467,179,264.61
23
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
commodities and rendering of
service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from
reinsurance business
Net increase of deposits of
policy holders and investment
fund
Net increase of disposal of
tradable financial assets
Cash received from interest,
handling charges and
commissions
Net increase of intra‐group
borrowings
Net increase of funds in
repurchase business
Tax refunds received 642,100.00 976,614.88
Other cash received relating to
152,260,005.14 213,872,969.49
operating activities
Subtotal of cash inflows from
5,409,722,258.53 3,682,028,848.98
operating activities
Cash paid for goods and
1,117,167,748.88 1,108,607,023.23
services
Net increase of customer
lendings and advances
Net increase of funds
deposited in the central bank and
amount due from banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest,
handling charges and
commissions
Cash for paying policy
dividends
Cash paid to and for employees 722,698,221.19 516,181,360.59
24
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Various taxes paid 1,556,750,391.03 981,128,678.39
Other cash payment relating to
926,238,532.97 450,210,319.42
operating activities
Subtotal of cash outflows from
4,322,854,894.07 3,056,127,381.63
operating activities
Net cash flows from operating
1,086,867,364.46 625,901,467.35
activities
II. Cash flows from investing
activities:
Cash received from withdrawal
of investments
Cash received from return on
investments
Net cash received from
disposal of fixed assets, intangible 68,940.95 987,318.61
assets and other long‐term assets
Net cash received from
disposal of subsidiaries or other
business units
Other cash received relating
240,000.00 8,100,000.00
to investing activities
Subtotal of cash inflows
308,940.95 9,087,318.61
from investing activities
Cash paid to acquire fixed
assets, intangible assets and 621,048,614.85 344,656,892.95
other long‐term assets
Cash paid for investment 25,199,993.00
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating
to investing activities
Subtotal of cash outflows from
646,248,607.85 344,656,892.95
investing activities
Net cash flows from investing
‐645,939,666.90 ‐335,569,574.34
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
1,231,500,000.00
contributions
Including: Cash received from
minority shareholder investments
by subsidiaries
25
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Cash received from
borrowings
Cash received from issuance
of bonds
Other cash received relating
to financing activities
Subtotal of cash inflows from
1,231,500,000.00
financing activities
Repayment of borrowings
Cash paid for interest
expenses and distribution of 113,310,000.00 79,818,322.54
dividends or profit
Including: dividends or profit
paid by subsidiaries to minority
shareholders
Other cash payments
3,211,800.00
relating to financing activities
Sub‐total of cash outflows from
113,310,000.00 83,030,122.54
financing activities
Net cash flows from financing
-113,310,000.00 1,148,469,877.46
activities
IV. Effect of foreign exchange rate
changes on cash and cash 162.90 -683.56
equivalents
V. Net increase in cash and cash
327,617,860.76 1,438,801,086.91
equivalents
Add: Opening balance of
2,082,032,491.33 643,231,404.42
cash and cash equivalents
VI. Closing balance of cash and
2,409,650,352.09 2,082,032,491.33
cash equivalents
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
Chief of the accounting division: Xia Xueyun
6. Cash flow statement of the Company
Prepared by Anhui Gujing Distillery Company Limited
Unit: Yuan
Item Amount of this period Amount of last period
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 3,423,191,472.27 2,185,615,817.88
service
26
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Tax refunds received
Other cash received relating to
237,910,854.26 67,797,805.76
operating activities
Subtotal of cash inflows from
3,661,102,326.53 2,253,413,623.64
operating activities
Cash paid for goods and
1,374,069,572.75 1,022,068,472.17
services
Cash paid to and for employees 336,171,582.81 235,666,465.31
Various taxes paid 1,111,980,958.34 692,592,618.07
Other cash payment relating to
273,079,396.45 78,996,659.00
operating activities
Subtotal of cash outflows from
3,095,301,510.35 2,029,324,214.55
operating activities
Net cash flows from operating
565,800,816.18 224,089,409.09
activities
II. Cash flows from investing
activities:
Cash received from retraction
9,900,000.00 10,000,000.00
of investments
Cash received from return on
570,794,532.17 363,057,695.16
investments
Net cash received from
disposal of fixed assets, intangible 68,940.95 276,019.86
assets and other long‐term assets
Net cash received from
disposal of subsidiaries or other
business units
Other cash received relating
1,240,000.00 8,100,000.00
to investing activities
Subtotal of cash inflows
582,003,473.12 381,433,715.02
from investing activities
Cash paid to acquire fixed
assets, intangible assets and 584,887,244.40 318,792,844.60
other long‐term assets
Cash paid for investment 45,197,993.00 30,000,000.00
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating
to investing activities
Subtotal of cash outflows from
630,085,237.40 348,792,844.60
investing activities
Net cash flows from investing
-48,081,764.28 32,640,870.42
activities
27
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
III. Cash Flows from Financing
Activities:
Cash received from capital
1,231,500,000.00
contributions
Cash received from
borrowings
Cash received from issuance
of bonds
Other cash received relating
to financing activities
Subtotal of cash inflows from
1,231,500,000.00
financing activities
Repayment of borrowings
Cash paid for interest
expenses and distribution of 113,310,000.00 79,818,322.54
dividends or profit
Other cash payments
3,211,800.00
relating to financing activities
Sub‐total of cash outflows from
113,310,000.00 83,030,122.54
financing activities
Net cash flows from financing
-113,310,000.00 1,148,469,877.46
activities
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents
V. Net increase in cash and cash
404,409,051.90 1,405,200,156.97
equivalents
Add: Opening balance of
1,885,937,555.53 480,737,398.56
cash and cash equivalents
VI. Closing balance of cash and
2,290,346,607.43 1,885,937,555.53
cash equivalents
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing Chief of the accounting division: Xia Xueyun
7. Consolidated statement of changes in owners’ equity
Prepared by Anhui Gujing Distillery Company Limited
Amount of this period
Unit: Yuan
Amount of this period
Equity attributable to owners of the Company Total
Item Minority
Paid‐u Capital Less: Specifi Surplu Genera Retain owners’
Others interests
p reserv treasur c s l risk ed equity
28
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
capital e y stock reserv reserv reserv profit
(or e e e
share
capital)
251,80 1,546, 147,07 815,50
I. Balance at the end of the 2,761,11
0,000. 738,49 0,297. 6,493.
previous year 5,284.45
00 3.19 60 66
Add: change of
accounting policy
Correction of errors in
previous periods
Other
251,80 1,546, 147,07 815,50
II. Balance at the 2,761,11
0,000. 738,49 0,297. 6,493.
beginning of the year 5,284.45
00 3.19 60 66
III. Increase/ decrease of 251,80 ‐249,7 71,666 540,61
614,372,
amount in the year (“‐” 0,000. 06,462 ,667.1 2,619.
824.19
means decrease) 00 .12 3 18
725,58
725,589,
(I) Net profit 9,286.
286.31
31
(II) Other 2,093, 2,093,53
comprehensive incomes 537.88 7.88
725,58
2,093, 727,682,
Subtotal of (I) and (II) 9,286.
537.88 824.19
31
(III) Capital paid in and
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share‐based payments
recognized in owners’
equity
3. Others
71,666 ‐184,9
‐113,310,
(IV) Profit distribution ,667.1 76,667
000.00
3 .13
71,666 ‐71,66
1. Appropriations to
,667.1 6,667.
surplus reserves
3 13
2. Appropriations to
general risk provisions
3. Appropriations to ‐113,3 ‐113,310,
29
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
owners (or shareholders) 10,000 000.00
.00
4. Other
(V) Internal 251,80 ‐251,8
carry‐forward of owners’ 0,000. 00,000
equity 00 .00
1. New increase of
251,80 ‐251,8
capital (or share capital)
0,000. 00,000
from capital public
00 .00
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
503,60 1,297, 218,73 1,356,
3,375,48
IV. Closing balance 0,000. 032,03 6,964. 119,11
8,108.64
00 1.07 73 2.84
Amount of last period
Unit: Yuan
Amount of last period
Equity attributable to owners of the Company
Paid‐u
p Specifi Surplu Genera Total
Item Capital Less: Retain Minority
capital c s l risk owners’
reserv treasur ed Others interests
(or reserv reserv reserv equity
e y stock profit
share e e e
capital)
235,00 336,03 97,283 381,15
I. Balance at the end of the 1,049,47
0,000. 9,042. ,190.7 3,314.
previous year 5,547.82
00 92 0 20
Add: retrospective
adjustments due to
business combinations
under the same control
Add: change of
accounting policy
Correction of errors in
30
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
previous periods
Other
235,00 336,03 97,283 381,15
II. Balance at the 1,049,47
0,000. 9,042. ,190.7 3,314.
beginning of the year 5,547.82
00 92 0 20
III. Increase/ decrease of 16,800 1,210, 49,787 434,35
1,711,63
amount in the year (“‐” ,000.0 699,45 ,106.9 3,179.
9,736.63
means decrease) 0 0.27 0 46
566,39
566,390,
(I) Net profit 0,286.
286.36
36
(II) Other
comprehensive incomes
566,39
566,390,
Subtotal of (I) and (II) 0,286.
286.36
36
16,800 1,210,
(III) Capital paid in and 1,227,49
,000.0 699,45
reduced by owners 9,450.27
0 0.27
16,800 1,210,
1. Capital paid in by 1,227,49
,000.0 699,45
owners 9,450.27
0 0.27
2. Amounts of
share‐based payments
recognized in owners’
equity
3. Others
49,787 ‐132,0
‐82,250,0
(IV) Profit distribution ,106.9 37,106
00.00
0 .90
49,787 ‐49,78
1. Appropriations to
,106.9 7,106.
surplus reserves
0 90
2. Appropriations to
general risk provisions
‐82,25
3. Appropriations to ‐82,250,0
0,000.
owners (or shareholders) 00.00
00
4. Other
(V) Internal
carry‐forward of owners’
equity
1. New increase of
capital (or share capital)
31
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
251,80 1,546, 147,07 815,50
2,761,11
IV. Closing balance 0,000. 738,49 0,297. 6,493.
5,284.45
00 3.19 60 66
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
Chief of the accounting division: Xia Xueyun
8. Statement of changes in owners’ equity of the Company
Prepared by Anhui Gujing Distillery Company Limited
Amount of this period
Unit: Yuan
Amount of this period
Paid‐up
Less: General Total
Item capital Capital Specific Surplus Retained
treasury risk owners’
(or share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the 251,800, 1,498,96 141,968, 688,010, 2,580,74
previous year 000.00 2,107.35 037.33 778.37 0,923.05
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the beginning 251,800, 1,498,96 141,968, 688,010, 2,580,74
of the year 000.00 2,107.35 037.33 778.37 0,923.05
III. Increase/ decrease of
251,800, ‐249,706, 71,666,6 531,690, 605,450,
amount in the year (“‐”
000.00 462.12 67.13 004.21 209.22
means decrease)
716,666, 716,666,
(I) Net profit
671.34 671.34
32
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
(II) Other comprehensive 2,093,53 2,093,53
incomes 7.88 7.88
2,093,53 716,666, 718,760,
Subtotal of (I) and (II)
7.88 671.34 209.22
(III) Capital paid in and
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share‐based payments
recognized in owners’
equity
3. Others
71,666,6 ‐184,976, ‐113,310,
(IV) Profit distribution
67.13 667.13 000.00
1. Appropriations to 71,666,6 ‐71,666,6
surplus reserves 67.13 67.13
2. Appropriations to
general risk provisions
3. Appropriations to ‐113,310, ‐113,310,
owners (or shareholders) 000.00 000.00
4. Other
(V) Internal carry‐forward 251,800, ‐251,800,
of owners’ equity 000.00 000.00
1. New increase of
251,800, ‐251,800,
capital (or share capital)
000.00 000.00
from capital public reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
503,600, 1,249,25 213,634, 1,219,70 3,186,19
IV. Closing balance
000.00 5,645.23 704.46 0,782.58 1,132.27
Amount of last period
Unit: Yuan
Item Amount of last period
33
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Paid‐up
Less: General Total
capital Capital Specific Surplus Retained
treasury risk owners’
(or share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the 235,000, 288,262, 92,180,9 322,176, 937,620,
previous year 000.00 657.08 30.43 816.26 403.77
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the beginning 235,000, 288,262, 92,180,9 322,176, 937,620,
of the year 000.00 657.08 30.43 816.26 403.77
III. Increase/ decrease of
16,800,0 1,210,69 49,787,1 365,833, 1,643,12
amount in the year (“‐”
00.00 9,450.27 06.90 962.11 0,519.28
means decrease)
497,871, 497,871,
(I) Net profit
069.01 069.01
(II) Other comprehensive
incomes
497,871, 497,871,
Subtotal of (I) and (II)
069.01 069.01
(III) Capital paid in and 16,800,0 1,210,69 1,227,49
reduced by owners 00.00 9,450.27 9,450.27
1. Capital paid in by 16,800,0 1,210,69 1,227,49
owners 00.00 9,450.27 9,450.27
2. Amounts of
share‐based payments
recognized in owners’
equity
3. Others
49,787,1 ‐132,037, ‐82,250,0
(IV) Profit distribution
06.90 106.90 00.00
1. Appropriations to 49,787,1 ‐49,787,1
surplus reserves 06.90 06.90
2. Appropriations to
general risk provisions
3. Appropriations to ‐82,250,0 ‐82,250,0
owners (or shareholders) 00.00 00.00
4. Other
(V) Internal carry‐forward
of owners’ equity
1. New increase of
capital (or share capital)
34
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
from capital public reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
251,800, 1,498,96 141,968, 688,010, 2,580,74
IV. Closing balance
000.00 2,107.35 037.33 778.37 0,923.05
Legal representative: Yu Lin Person‐in‐charge of the accounting work: Ye
Changqing
Chief of the accounting division: Xia Xueyun
Anhui Gujing Distillery Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2012
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
Note 1: Company Profile
1.1 History
Anhui Gujing Distillery Co., Ltd. (hereafter “the Company” or "Company") was the company limited by shares
approved by Administration Bureau of State-owned Property of Anhui province following the approval
WanGuoZiGongZi (1996) NO. 053 (皖国资工字(1996)第053号文), Anhui Gujing Group Co., Ltd. as the sole
sponsors, established net assets in the assessment of main production operating assets of its core company
Anhui Bozhou Gujing distillery 377.1677 million transferred into the 155,000,000 state-owned shares, and the
registered location was the Bozhou City of People's Republic of China. The company was registered in the The
People's Republic of China on 5 March 1996 and was approved by People’s Government of Anhui province
following the approval WanZhengMin (1996) NO.42 ( 皖 政 秘 (1996)42 号 文 ). The company convoked the
founding meeting on 28 May 1996, and registrated on 30 May 1996 by Administration for Industry and Commerce
of Anhui province. The registration number of Business License for Enterprise as a Legal Person is: 14897271-1.
35
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
The Company has been issued 60,000,000 domestic listed foreign shares (hereafter “B” shares) in June 1996
and 20,000,000 domestic listed CNY ordinary shares (hereafter “A” shares) in September 1996, the par value of
ordinary shares is CNY1.00 per share. Both A share and B share are listed in Shenzhen Stock exchange.
The headquarters of the company is located in Gujing town, Bozhou city, Anhui province. The company and the
subsidiaries (collectively called “Group”) is mainly engaged in liquor production and sales, it belongs to the food
manufacturing industry.
The original registered capital was CNY 215 million, the total amount of shares were 215 million, including
state-owned shares 155 million and domestic listed foreign shares 60 million, the par value is CNY 1 per share.
On 29 May 2006, the shareholder meeting for the Company’s shareholdings reform of A-share market have
been discussed and approved the proposal of the shareholdings reform, and that has been implemented in
June 2006. After the Company’s shareholdings reform implemented, all shares of the Company became floating
shares, which including 147,000,000 shares with restrict condition on disposal, represent 62.55% of total share
capital, and 88,000,000 shares without restrict condition on disposal, represent 37.45% of total share capital.
On 27 June 2007, the Company issued the , the 11,750,000 restricted outstanding shares with restrict condition on disposal became
non-restricted in stock market, and the conversion date is on 29 June 2007. Hence, outstanding shares with
restrict condition on disposal are 135,250,000 shares, representing 57.55% of total share capital, the share
without restrict condition on disposal are 99,750,000 shares, representing 42.45% of total share capital.
On 17 July 2008, the Company issued the , the 11,750,000 restricted outstanding shares with restrict condition on disposal became
non-restricted in stock market, and the conversion date is on 18 July 2008. Hence, outstanding shares with
restrict condition on disposal are 123,500,000 shares, representing 52.55% of total share capital, the share
without restrict condition on disposal are 111,500,000 shares, representing 47.45% of total share capital.
On 24 July 2009, the Company issued the , the 123,500,000 restricted outstanding shares with restrict condition
on disposal became non-restricted in stock market, and the conversion date is on 29 July 2009. Hence, all
shares of the Company were became outstanding shares without restrict condition on disposal.
According to the approval by China Securities Regulatory Commission (the authorization file No.
zhengjianxuke[2011]943), on 15th July 2011, the Company private issued 16,800,000 shares of ordinary share
(A shares) to specific investors, the par value in CNY 1 per share, and the offering price is CNY 75 per share, the
36
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
funds raised amounting to CNY 1,260 million, deduct those sundry issuing charges amounting to CNY
32,500,549.73, the actual funds raised net amounting to CNY 1,227,499,450.27. The above funds have been
reviewed by Reanda Certified Public Accountants Co., Ltd., and issued the Capital Verification Report (REANDA
YAN ZI[2011]No.1065). After private issued, the share capital was increased to CNY 251.8 million.
According to the resolution of 2011 annual general meeting of stockholders, every 10 shares transferred to
increase 10 shares by capital reserves used the base of the 251.8 million shares on 31 December, 2011, the
total amount of increase by transferring were 251.8 million shares and has been implemented in 2012. After
increase by transferring the registered capital was increased to CNY 503.6 million.
Up to 31 December, 2012, the accumulated total amount of issued capital was 503.6 million shares, see the note
7.24.
The approved business scope: grain procurement (operation by license), manufacture of distilled spirits, beer,
red wine, facilities for wine making, packaging materials, and glass bottles, alcohol, feeds, grease (limited to the
by-products from alcohol manufacture), development of high-tech, biotechnology development agricultural and
sideline products deep processing, sales of goods from own production.
The parent company of the group and ultimate parent company is the Anhui Gujing Group Co., Ltd.
The financial statement is approved by the resolution of board of directors on 21 April, 2013. According to the
articles of association, the financial statements will be submitted to the shareholders meeting for consideration.
Note 2: Basis for preparation of the financial statements
The financial statements of company have been prepared on basis of going concern in conformity with Chinese
Accounting Standards for Business Enterprises and the Accounting Systems for Business Enterprises issued by
the Ministry of Finance of People’s Republic of China in February 2006, and Accounting Standards (order No.38
of the Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities to
the Public No.15 – General Provisions on Financial Reports (2010 Revision) issued by the China Securities
Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the
company has adopted the accrual basis of accounting. Except for certain financial instruments which are
measured by at fair value, the Company adopts the historical cost as the principle of measurement in the
financial statements. Where assets are impaired, provisions for asset impairment are made in accordance with
relevant requirements.
37
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Note 3: Statement of Compliance with Enterprise Accounting Standards
The financial statements of the company are recognized and measured in accordance with the regulations in the
Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial
position, business result and cash flow of the Company as of 31 December 2012 .In addition, the financial
statements of the company comply, in all material respects, with the revised disclosing requirements for financial
statements and the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public
No.15—General Provisions on Financial Reports (2010 Revision) issued by China Securities Regulatory
Commission (CSRC) in 2010.
Note 4: Important Accounting Principles and Accounting Estimates
4.1 Accounting period
The accounting period of the Company is classified as interim period and annual period. Interim period refers to
the reporting period shorter than a complete annual period. The accounting period of the Company is the
calendar year from January 1 to December 31.
4.2 Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic
subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional
currency. The Company adopts CNY to prepare its functional statements.
4.3 Business combination
A business combination is a transaction or event that brings together two or more separate entities into one
reporting entity. Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
(1) Business combination involving entities under common 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
combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the combination date,
obtains control of another enterprise participating in the combination is the absorbing party, while that other
38
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
enterprise participating in the combination is a party being absorbed. Combination date is the date on which the
absorbing party effectively obtains control of the party being absorbed.
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 the capital premium (or share premium) in the capital reserve. If the balance of the capital premium
(or share premium) is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the
combination shall be recognized as an expense through profit or loss for the current period when incurred.
(2) Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of
the combining enterprises are not ultimately controlled by the same party or parties both before and after the
business combination.
For a business combination not involving enterprises under common control, the party that, on the acquisition
date, obtains control of another enterprise participating in the combination is the acquirer, while that other
enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer
effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the
sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities
issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services,
valuation and consultancy services etc and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as
equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at
the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of
related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be
offset.
For a business combination achieved in stages that involves multiple exchange transactions, the equity interest
39
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date,
with any difference between its fair value and its carrying amount is recorded as investment income. The other
comprehensive income of the acquiree before the acquisition date relating to the previously held interest in the
acquiree is transferred to investment income.
Combination cost is the aggregate of the carrying amount of the equity interest held in the acquiree prior to the
acquisition date and the fair value of the cost of the additional investment at the acquisition date.
Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through the
business combination shall be measured by the fair value at the acquisition date. Where the cost of combination
exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be
recognized as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i)
the acquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets, liabilities and
contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of
combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets,
the acquirer shall recognize the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the
conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional
information can prove the existence of related information at acquisition date and the expected economic
benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved,
relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference
shall be recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of
deferred income tax assets is related to the combination.
4.4 Preparation of the consolidated financial statements
(1) The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control.
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from
its operating activities. The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is
an enterprise or entity under the control of the Company.
40
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
(2) Preparation of the consolidated financial statements
The subsidiary of the Company is included in the consolidated financial statements from the date when the
control over the net assets and business decisions of the subsidiary is effectively obtained, and excluded from
the date when the control ceases.
For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal
(the date when control is lost) are included in the consolidated income statement and consolidated statement of
cash flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to the opening
balance of the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating results and
cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening
balance and comparative figures in the consolidated financial statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving
enterprises under common control, the financial statements of the subsidiary are included in the consolidated
financial statements. The results of operations and cash flow are included in the consolidated balance sheet and
the consolidated income statement, respectively, based on their carrying amounts, from the date that common
control was established, and the opening balances and the comparative figures of the consolidated financial
statements are restated.
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. Where a subsidiary was acquired during the reporting period
through a business combination not under common control, the financial statements was reconciliated on the
basis of the fair value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions,
and any unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the
consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately
in the consolidated balance sheet within shareholders’/ owners’ equity and net profit. Net profit or loss
attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the
consolidated income statement below the net profit line item.
41
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds
the minority shareholders’ portion of the opening balance of [shareholders’] [owners’] equity of the subsidiary, the
excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other
reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The
difference between 1) the total amount of consideration received from the transaction that resulted in the loss of
control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the
former subsidiary’s net assets immediately before the loss of the control is recognized as investment income for
the current period when control is lost. The amount recognized in other comprehensive income in relation to the
former subsidiary’s equity investment is reclassified as investment income for the current period when control is
lost. The retained interest is subsequently measured according to the rules stipulated in the - “Chinese
Accounting Standards for Business Enterprises No.2 - Long-term equity investment” or “Chinese Accounting
Standards for Business Enterprises No.22 - Determination and measurement of financial instruments”. See Note
4.10 Long-term equity investments and Note 4.7 Financial instruments for details.
4.5 Cash equivalent
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.
4.6 Foreign exchange
(1) Translation in foreign exchange 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) Translation of monetary foreign currency and non-monetary foreign currency
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
42
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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, ③
available-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.
(3) The translation of financial statement in foreign currency
When the consolidated financial statements include foreign operation(s), if there is a foreign currency monetary
item constituting a net investment in a foreign operation, exchange difference arising from changes in exchange
rates are recognized as “exchange differences arising on translation of financial statements denominated in
foreign currencies” in owner’s equity, and in profit or loss for the period upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into CNY by following rules. Assets and
liabilities in the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; all
equity items except for retained earnings are translated at the spot exchange rates at the dates on which such
items occur; income and expenses in income statement are translated at the spot exchange rates at the date of
transaction; the opening retained earnings is the closing retained earnings of the last period after translation; the
closing balance of retained earnings is calculates and presented in the basis of each translated income
statements and profit distribution item; the difference arising between the assets and liabilities and shareholders’
equity shall be booked as translation difference of foreign currency statements, and shall be presented as a
separate component of equity in the balance sheet. On a loss of control over Group’s oversea operation due to
disposal, the Company transfers the accumulated or proportionate share of the accumulated exchange
difference arising on translation of financial statements of this oversea operation attributable to the owners’
equity of the Company and presented under shareholders’ equity, to profit or loss in the period in which the
disposal occurs.
Foreign currency cash flows and cash flow of oversea subsidiaries are translated at the spot exchange rates on
43
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
the date of cash flows.The effect of exchange rate changes on cash is separately presented as an adjustment
item in the cash flow statement.
The opening and actual amount of last year are presented in the financial statement after translation.
4.7 Financial instruments
(1) Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction. For a financial instrument which has an active market, the Company
uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to
the price that can be regularly obtained from exchange market, agencies, industry associations, pricing
authorities; it represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Company establishes fair value by using a
valuation technique. Valuation techniques include using recent arm’s length market transactions between
knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the
same, discounted cash flow analysis and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at the value of a
competitor’s interest rate swap quoted by a recognised financial institution as at the Company’s balance sheet
date in accordance with the principle of consistency.
(2) Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.
On initial recognition, the Company’s financial assets are classified into one of the four categories, including
financial assets at fair value though profit or loss, held-to maturity investments, loans and receivables and
available-for-trade financial assets. A financial asset is recognized initially at fair value. In the case of financial
assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and
loss of the current period; transaction costs relating to financial assets of other categories are included in the
amount initially recognized.
1) Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
44
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and
there is objective evidence indicating that the enterprise recently manages this portfolio for the purpose of
short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument,
or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted
equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured.
For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of
the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of
relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is
reported to the enterprise’s key management personnels. Formal documentation regarding risk management or
investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or
losses arising from changes in the fair value and any dividends or interest income earned on the financial assets
are recognized in the profit or loss.
2) Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are
subsequently measured at amortized cost using the effective interest method. Gains or losses arising from
derecognition, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of
the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow considering all
contractual terms of the financial asset or financial liability without considering future credit losses, and also
consider all fees paid or received between the parties to the contract giving rise to the financial asset and
financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or
45
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
discounts, etc.
3) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in
an active market. Financial assets classified as loans and receivables by the Company include note receivables,
account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or
loss arising from derecognition, impairment or amortization is recognized in profit or loss.
4) Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial
recognition as available for trade, and financial assets that are not classified as financial assets at fair value
through profit or loss, loans and receivables or investment held-to-maturity.
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 included in the capital reserve,
except that impairment losses and exchange differences related to amortized cost of monetary financial assets
denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at
which time the gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial assets
available-for-trade are held, are recognized in investment gains.
(3) Impairment of financial assets
The Group 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.
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 impairment loss reversed shall not exceed the amortized cost of the financial assets without
provisions of impairment loss on the reserving date.
46
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
2) Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to
the integrated relevant factors, an available-for-trade financial asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value
that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the
cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable
amount less amortized cost, current fair value and any impairment loss on that financial asset previously
recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset
is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the
initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument
is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in
the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably
measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an
unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset,
the asset is recognized according to the extent it exists as financial asset, and correspondent liability is
recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of
the financial asset transferred; and (b) the sum of the consideration received from the transfer and any
47
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred
financial asset is allocated between the part that continues to be recognized and the part that is derecognized,
based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the
part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative
gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive
income, is recognized in profit or loss.
(5) Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through
profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant
transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating
to other financial liabilities are included in the initial recognition amounts.
1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial
recognition to be measured by the fair value follows the same criteria as the classification by which financial
assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and
their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are
adopted for subsequent measurement. All the gains or losses on the change of fair value and the expenses on
dividends or interests related to these financial liabilities are recognized in profit or loss for the current period.
2) Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active
market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial
liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses
arising from derecognition or amortization are recognized in profit or loss for the current period.
(6) Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is
discharged or cancelled or has expired. An agreement between the Company (an existing borrower) and existing
lender to replace original financial liability with a new financial liability with substantially different terms is
48
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the
carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid
(including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
(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.
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 consideration received from issuing equity instruments, net of transaction costs,
are added to shareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to
holders of equity instruments are deducted from shareholders’ equity. The Group does not recognize any
changes in the fair value of equity instruments.
4.8 Accounts receivable
The receivables by the Company includes account receivables, and other receivables.
49
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
(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
1) Provisions of bad debts in account receivables that is individually significant.
Individual receivables equal to or higher than 5% of total receivables are classified as receivables of individual
significance.
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 items 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 The companies which are in the scope of the consolidation.
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
50
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
receivables according to the set of account receivables and credit risk characteristic.
Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Related party portfolios No allowance for bad debt
a. Portfolio by age analysis
Percentage of carrying amount for Percentage of carrying amount for
recognition of allowance for bad recognition of allowance for bad
Category
debt applicable to accounts debt applicable to other
receivable receivable
Less than 1 year (inclusive, same
applies to the following)
Including: 1 to 6 months 1.00 1.00
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 2 years 100.00 100.00
3) Provisions of bad debts that is individually insignificant.
For the account receivables not individually significant, the Company assesses the account receivables
individually for impairment when are of following characteristics: if there is objective evidence indicating the
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. For examples: receivables of individual
insignificance bears differing credit risk characteristics to other receivables of individual insignificance account
receivables with related parties; account receivables under litigations or arbitrations, or account receivables with
obvious indication that debtor cannot fulfill the obligation of repayment.
(3) The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an
event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and
recognized in profit or loss. However, the reversal shall not result in a carrying amount that exceeds what the
amortized cost would have been had the impairment loss not been recognized at the date the impairment is
reversed.
51
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
4.9 Inventories
(1) Classification of inventory
The Company’s inventory mainly include air materials and low-value consumables.
(2) Valuation method of inventories
Inventories are initially carried at the actual cost. Cost of inventories include purchase cost, conversion cost and
other cost. Cost of issue is measured using the weighted average method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of
inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is
determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding
inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The
provision for inventories decline in value is determined normally by the difference of the cost of individual item
less its realizable value. For large quantity and low value items of inventories,
provision for decline in value is made based on categories of inventories. For items of inventories relating to a
product line that are produced and marketed in the same geographical area, have the same or similar end users
or purposes, and cannot be practicably evaluated separately from other items in that product line provision for
decline in value is determined on an aggregate basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher
than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss
for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method; packaging materials
are amortized using immediate write-off method.
4.10 Long-term equity investments
52
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
(1) Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of the
long-term equity investment shall be carrying value of the absorbing party’s share of the shareholder’s equity
of the party being absorbed at the date of combination.
For a business combination not involving enterprise under common control, the combination cost including the
sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities
issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services,
valuation and consultancy services etc and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in the business
combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially measured by cost.
The cost shall be recognized to the difference in the way of acquisition of long-term equity investment. Theses
ways include the cash purchase price the Companythe Company actually paid, the fair value of equity security
issued by the Companythe Company, value specified in the investment contract or agreement, the fair value or
carrying value of the asset out in the transaction of non-monetary asset exchanges, and the fair value of the
long-term equity investment.
Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term equity
investment are taken into investment cost.
(2) Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have
common control or significant influence over the investee, the investment is not quoted in an active market and
its fair value cannot be measured reliably.
Where an investing enterprise can exercise common control or significant influence over the investee,
a long-term investment shall be accounted for using the equity method.
When an investing enterprise can no longer exercise joint control or common control nor significant influence
over the investee, and its fair value cannot be measured reliably, a long-term investment shall be counted as
financial asset ready-for trade.
A long-term equity investment where cost method is adopted in the Company’s financial statements
53
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
can exercise controls over the investee.
1) Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash
dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon
acquisition of the long-term equity investment, investment income is recognized in the period in accordance with
the attributable share of cash dividends or profit distributions declared by the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in
the fair values of the investee’s identifiable net assets at the time of acquisition, no adjustment shall be made to
the initial investment cost.
Where the initial investment cost of a long-term equity investment is less than the investing enterprise’s interest
in the fair values of investee’s identifiable net assets at the time of acquisition, the difference shall be charged to
profit or loss for the current period, and the cost of the long-term equity investment shall adjusted accordingly.
Under the equity method, the Company recognizes its share of the net profit or loss of the investee for the period
as investment income or loss for the period. The Group recognizes it share of the investee’s net profit or loss
based on the fair value of the investee’s individual separately indentible assets, etc at the acquisition date after
making appropriate adjustments to confirm with the Company’s accounting policies and accounting period.
Unrealized profits or losses resulting from the Company’s transactions with its associates and joint ventures are
recognized as investment income or loss to the extent that those attributable to the Company’s equity interest
are eliminated. However, unrealized losses resulting from the Company’s transactions with its investees on the
transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", are
not eliminated. Changes in owners’ equity of the investee other than net profit or loss are correspondingly
adjusted to the carrying amount of the long-term equity investment, and recognized as other compressive
income which is included in the capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments and
long-term equity of net investment (in substance) in investee to zero. In addition, the Company has the
obligations on additional losses, then the expected obligation as estimated liabilities and included in the current
investment losses. Where the net profit from investee units, restoration confirm the amount of revenue sharing
after offset the amount of unrecognized loss sharing.
54
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
For long-term equity investments in associates and joint ventures which had been held by the Company before
its first time adoption of Accounting Standards for Business Enterprises, where the initial investment cost of a
long-term equity investment exceeds the Company’s interest in the investee’s net assets at the time of
acquisition, the excess is amortized and is recognized in profit or loss on a straight line basis over the original
remaining life.
3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of
net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is
not sufficient to absorb the difference, the excess are adjusted against returned earnings.
4) Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the
difference in the net asset between the amount of disposed long-term investment and the amount of the
consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term investment in a
subsidiary involves loss of control over the subsidiary, the related accounting policies in Note 4.2(2) applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period. For along-term equity investment
accounted for using the equity method, the amount included in the owners’ equity attributable to the percentage
interest disposed is transferred to profit or loss for the period.
For any retained interest, it shall be subsequently measured according to the related accounting policies in
regard of long-term equity investments or financial assets as described above if its carrying amount is recognized
as long-term equity investments or other related financial assets. Retroactive adjustment is made on the basis of
relevant policies if the retained interests are settled from cost method to equity method.
(3) Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from
its operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and exists only when
the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties
sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but
55
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over an
investee, the effect of potential voting rights of the investee held be the investing enterprise or other parties that
are currently exercisable or convertible shall be considered.
(4) Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any
indication of impairment. If any indication exists that an asset may be impaired, the enterprise shall
estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying amount,
a provision for impairment loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
4.11 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. 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 expenditure in the profit or loss when incurred .
The Group 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 17 “Non-current
and non-financial assets impairment ".
Occupied real estate for investment property or investment property is transferred to owner-occupied real estate
or stock conversion as the recorded value after the conversion, according to the book value before the
conversion.
Investment property change into the Owner-occupied real estate , since the change of date for the investment
property is transferred to fixed assets or intangible assets. Change the owner-occupied property held to earn
rentals or for capital appreciation, since the change of date, the fixed assets or intangible assets to investment
property. Conversion occurs when converted to investment property using the cost model, as the book value
before the conversion of the recorded value after the conversion; converted to investment property measured at
fair value model, the fair value of the conversion date as the recorded value after conversion.
56
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Derecognised when the investment property is disposed of or permanently withdrawn from use and the expected
economic benefits can not be obtained from the disposal of investment property. Proceeds on disposal of
investment property is sold, transferred, retired or damaged through profit or loss after deducting the book value
and related taxes.
4.12 Fixed assets
(1) The conditions of recognition
Fixed assets refers to the tangible assets that 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) The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement.
From the following month of state of intended use, depreciation method of the straight-line method is used for
different categories of fixed assets to take depreciation. The recognition of the classification, useful life and
estimated residual rate are as follows:
Estimated residual
Category Expected useful life Depreciation(%)
value(%)
Houses and building 8-35 3-5 2.7-12.1
Machineries 8-10 3-5 9.5-12.1
Vehicles 4 3 24.25
Administrative equipments and
3 3 32.33
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 service life in the end.
(3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note 4.17 Impairment of non-current and
non-financial assets.
(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
57
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
4.13 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 4.17.
4.14 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 to get ready for their
intended use or sale.
58
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
4.15 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 are accounted for as fixed assets.
59
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
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 recognised 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 recognised 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 recognised 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 4.17.
4.16 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
60
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
subsequent reporting periods. An item of long-term deferred expenses is recognised at the actual amount of the
expense incurred and allocated in each month of the beneficial period using the straight line method.
4.17 Impairment of non-current and non-financial assets
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 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.
61
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
4.18 Accrued 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:
①This obligation is current obligation of the Company; and,
② The performance of this obligation will probably cause economic benefits outflow of the
Company; and,
③The amount of this obligation can be reliably measured.
Loss contracts and restructuring obligations of the Company meet the above conditions shall be recognized as
accrued liabilities.
Measurement of accrued liabilities
Accrued liabilities would be measured initial according to the optimum evaluation of outflow of economic benefit,
and the Company perform relate obligation that consider risk, incertitude, time value of currency of contingency
factor. Discount future cash flow to present value to determine the optimum evaluation if the time value of
currency has great impact. On balance sheet date, check the carry amount of accrued liabilities, and make
adjustment to carry amount to reflect the optimum evaluation. The increase amount in carry amount of accrued
liabilities cause by time process would be determined as interest fee.
Optimum evaluation of accrued liabilities
If the necessary payments have scopes, the optimum evaluation shall be determined based on the average
amount between the upper and lower limit amount of scope ; if the necessary payments do not have such
scopes, then the optimum evaluation shall be determined in the following method:
① If the contingent event is involved in an individual project, the optimum evaluation amount will be determined
base on the most possible amount;
② If the contingent event is involved more than one project, the optimum evaluation amount shall be
determined base on possible amount and occurrence probability. In case of all or part of payments about the
confirmed liquidation liabilities are expected to be compensated by the third parties or other parties, and the
compensation amounts are surely received, then such amounts shall be separately recognized as assets. The
confirmed compensation amounts shall not exceed book values of confirmed liabilities.
62
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
4.19 Revenue
(1) Revenue from sales of goods
Revenue from sales of goods is recognised when significant risks and rewards attached to the ownership of the
goods sold are passed to the buyer, when neither continual involvement in the rights normally associated with
the ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising
from the goods sold is reliably measurable, when inflow of future economic benefits is probable, and when cost
incurred or to be incurred associated with the goods sold is reliably measurable.
Revenue arising from domestic sales of goods is recognised when goods are dispatched and delivered to the
buyer, when significant risks and rewards attached to the ownership of the goods sold are passed to the buyer,
when neither continual involvement in the rights normally associated with the ownership of the goods sold nor
effective control over the goods controls are retained, when revenue arising from the goods sold is reliably
measurable, when inflow of future economic benefits is probable, and when cost incurred or to be incurred
associated with the goods sold is reliably measurable. Revenue arising from non-domestic sales of goods is
recognised when goods are loaded on board and when the export clearance with the custom is completed.
(2) Revenue from rendering of service
Revenue arising from rendering of services is recognised on the balance date using the percentage of
completion method when the outcome of the services rendered can be reliably estimated. The percentage of
completion of the services rendered is calculated by dividing the cost to date by the budgeted total cost.
The outcome of the services rendered can be reliably estimated when revenue from the services render can be
reliably measured, when the inflow of associated future economic benefits is probable, when the percentage of
completion can be reliably measure, and when the cost incurred or to be incurred associated with the services
can be reliably measured.
When the outcome of the services rendered cannot be reliably estimate, revenue is recognised as cost
reimbursement received or to be received, if any, and cost incurred is recognised in profit or loss for the period in
which the cost is incurred. No revenue is recognised if cost reimbursement is not probable.
When a contract between the group and another entity involves both sales of goods and rendering for services,
the sales of goods and rendering of services are accounted for separately if they are distinguishable and
separately measurable; the contract is accounted for as if it is a contract involves only sales of goods if the sales
of goods and rendering of services are either indistinguishable or distinguishable but not separately measurable.
63
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
(3) Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
(4) Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of time for
which the enterprise's cash is used by others and the actual interest rate.
4.20 Government Grants
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.
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.
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss
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.
4.21 Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws.
The measurement of deferred tax assets and deferred tax liabilities reflects
the tax consequences that would follow from the manner in which the Company expects at the balance sheet
64
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
date, to recover the assets or settle the liabilities.
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 temporary
differences to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences can be utilized.
65
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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,
that 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.
4.22 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
66
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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
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 lesser 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
67
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
rent shall be credited into profit or loss in which actually incurred.
4.23 Assets held-for-sale
The Company has made decision on disposal of some non-current assets, and signed irrecoverable transferring
agreements with buyers. The transaction is probably to be completed with one year. If so, the non-current asset
shall be counted as an asset ready-for-sale, not depreciated or amortized, and shall be measured by the lower of
carrying amount and faire value less net value of disposal expenses. Non-current assets ready-for-sale includes
individual asset and disposal Group. If disposal Group is an asset Group, and has allocated goodwill acquired
during the combination according to the Accounting Standard for Business Enterprises No. 8 - Impairment, or.
the disposal Group is an operation in the asset Group, the disposal Group includes goodwill in the business
combination.
Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the condition of non-current
asset ready-for-trade, the Company shall derecognize it as held-for-trade, and measure it by the lower of the
followings:
(1) the carrying amount of the asset or disposal Group before it is classified as held-for-trade, the value after the
adjustment of depreciation, amortization or impairment recognized under the assumption that it is not classified
as held-for-trade;
(2) the recoverable value on the date when decided not to trade any more.
4.24 Employee Benefits
During the accounting period of an employee’ providing services to the Company, the Company recognizes the
compensation payable as liabilities.
The Company participates in the employees social security system set up by government agencies, including
pensions, medical insurance, housing fund and other social security system, and the corresponding expenditures
are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the employment
contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a
provision shall be recognized for the compensation arising from termination of employment relationship with
employees, with a corresponding charge to the profit or loss for the current period. The enterprise cannot
unilaterally withdraw from the termination plan or the redundancy offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social insurance (from
68
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
the date of ceasing services to the date of normal retirement) are paid by the Company, subject to the conditions
to be recognized in profit or loss (termination benefits).
4.25 Changes in major accounting policies and accounting estimates
(1) change of accounting policies
There is no significant change of accounting policies for the Company during the reporting period.
(2) change of accounting estimates
The name of the
Content, reason and applicable point in time of change of Affected
Approval procedures affected statement
accounting estimates amount
items
To harmonize and refine the management of fixed assets
and the accounting rules, more objective and fair response Consideration and Fixed Assets,
to the depreciation of fixed assets situation reflects the approval by the 8th General and admini
3,691,833.96
accounting principle of prudence, change the depreciation of meeting of the Sixth strative expenses,
fixed assets of the Company with effect from January 1, Board of Directors Financial costs
2012 . (See Note as follow)
Note: The classification of fixed assets estimated useful lives, the annual depreciation rate and the residual
rate before the change of accounting estimates.
Classification Expected useful life Estimated residual value(%) Depreciation(%)
Houses and building 8-35 years 3-5 2.7-12.1
Machineries 8-10 years 3-5 9.5-12.1
Vehicles 8 years 3 12.1
Office equipments and others 8 years 3 12.1
The classification of fixed assets estimated useful lives, the annual depreciation rate and the residual rate after
the change of accounting estimates.
Classification Expected useful life Estimated residual value(%) Depreciation(%)
Houses and building 8-35 years 3-5 2.7-12.1
Machineries 8-10 years 3-5 9.5-12.1
Vehicles 4 years 3 24.25
Office equipments and others 3 years 3 32.33
4.26 Correction of prior period errors
There is no significant change of previous accounting errors for the Company during the reporting period.
4.27 Significant account judgment and estimates
69
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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 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 is made if the cost is higher
70
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
(5) Held-to-maturity investments
The Company will comply with the conditions of a fixed or determinable payments and fixed maturities that the
Company has the positive intention and ability to hold to maturity are non-derivative financial assets are
classified as held-to-maturity investments. This classification requires significant judgment. In the process of
this judgment, the Company should make the assessment of its maturity willingness and ability to hold such
investments. Except in specified circumstances (for example, towards the maturity date of the sale amount is
not significant investment), if the Company is unable These investments held-to-maturity, shall be all the class
investments classified as available-for-sale financial assets and in the current fiscal year and the next two fiscal
year shall not classify any financial assets as held-to-maturity investments. in this theoretical situation, there
have a significant impact on the financial statements listed on the reported value of financial assets, and affect
the Company's financial instruments risk management strategy.
(6) Held-to-maturity investments impairment
The Company to determine the held-to- maturity investments are impaired in dependent on management's
judgment. Occurred objective evidence of impairment including the disappearance of severe financial
difficulties that financial asset cannot continue to be traded in an active market, unable to fulfill the terms of the
contract (for example, interest or principal payments as a default ) . In processing of judgment, the Company is
required to assess the occurred objective evidence of impairment of the investment in expected future cash
flows.
(7) Impairment of financial assets available-for-sale
71
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
(8) 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.
(9) 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
72
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
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.
(10 ) The development expenditure
In determining the amount of capitalization, the Company 's management needs to make the relevant asset the
estimated future cash flows, applicable discount rate assumptions of the estimated benefit period.
(11) Deferred tax assets
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.
(12) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the
Company’s everyday operation. Whether it is possible for some items to make expenditure before tax needs
approval 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.
(13) 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 a 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.
The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service
commitment is accrued liabilities. Accrued liabilities have considered the recent experience in the maintenance
73
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
data, but recent maintenance experience may not reflect future maintenance. Any increase or decrease in t
accrued liabilities may affect the profit or loss in future.
Note 5: Taxation
5.1 Major taxes and tax rate
Tax Tax rate (%)
Value added tax Revenues from sales of products and raw materials at the rate of 17%.
The consumption taxes have been provided at the rate of CNY 1.00 yuan per kg or 1,000
Consumption tax ml follow the quantity, and the consumption tax have been provided at the rate of 20% of
the taxable sales.
Business tax Business tax rate is the 5% of taxable income
Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable for the
and construction surcharge reporting period, and exempt and deductible tax at the rate of 1, 5, 7%.
Sum of VAT payable, consumption duty payable and business tax payable for the
Education surcharge
reporting period, and exempt and deductible tax at the rate of 3%.
Sum of VAT payable, consumption duty payable and business tax payable for the
Local education surcharge
reporting period, and exempt and deductible tax at the rate of 2%.。
Corporate income tax Income tax is calculated with the ratio of 25%.
The Group is engaged advertising revenue, previously calculated and paid business tax at the rate of 5%.
According to “the notice of Ministry of Finance, State Administration of Taxation on the transportation industry
and modern service industry business tax reform VAT pilot in Shanghai “--Cai Shui [2011] No.111 ( 财 税
[2011]111号) and other relevant, the subsidiary Shanghai Hong Bang Culture Communication Co., Ltd of the
Group is located in Shanghai is engaged advertising revenue and from the date of establishment impose
value-added tax at the rate of 6%. According to the “notice of the Ministry of Finance, the State Administration
of Taxation on the transportation industry and modern service industry business tax reform VAT pilot in Beijing
and other 8 provinces and cities”--Cai Shui [2012] No.71 ( 财 税 [2012]71 号 ) and other relevant, the
sub-subsidiary Anhui JinYunLai Culture and Media Co., Ltd. of the Group is located in Hefei city Anhui
Province is engaged advertising revenue and from 1 September, 2012 impose value-added tax at the rate of
6%.
74
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Note 6: Business combination and the consolidated financial statements
6.1 Circumstance of subsidiaries
6.1.1 Subsidiaries acquired through incorporation or investment
The monetary unit is ten thousand unless otherwise stated.
Nature Organization
Type Place Registered Type of Corporate
Subsidiaries of Business scope Registration
of incorporation of registration capital business representative
business Code
Wholesales of
distilled spirit,
Bozhou Gujing
Trade construction limited
Sales Co., Ltd. wholly-owned Bozhou,
and 8,486.00 materials, feeds liability Liang Jinhui 151944818
(hereafter Gujing subsidiary Anhui
business and company
Sales)
assistant
materials
Bozhou Gujing
Transportation,
Transportation limited
wholly-owned Bozhou, Transport Sales,
Co., Ltd 695.00 liability Bai Yun 151940067
subsidiary Anhui ation maintenance
(hereafter Gujing company
service
Transportation)
Bozhou Gujing
Manufacture and limited
Glass Co., Ltd wholly-owned Bozhou, Manufact
6,646.00 sales of glass liability Qian Zhenhai 151946047
(hereafter Gujing subsidiary Anhui uring
products company
Glass)
Bozhou Gujing
Collect and sale of
Waste
Subsidinary of recycled glass limited
Reclamation Co., Bozhou,
wholly-owned Recycled 100.00 bottle, glass, and liability Qian Zhenhai 151946522
Ltd Anhui
subsidiary other company
(hereafter Gujing
wastebaskets
Waste)
Domestic
advertising
Anhui Jinyunlai Advertise production,
Subsidinary of limited
Culture & Media Hefei, ment publish, design
wholly-owned 200.00 liability Yan Lijun 562165325
Co.,Ltd. (hereafter Anhui marketin and agency;
subsidiary company
Jinyunlai) g conference
etiquette service,
craft gifts sales
Approved
Bozhou Gujing
operating limited
Packaging Co., wholly-owned Bozhou, Manufact
3,000.00 business:None. liability Huai Huiying 58886276X
Ltd. (hereafter subsidiary Anhui uring
General operating company
Gujing Packaging)
business: Provide
75
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Nature Organization
Type Place Registered Type of Corporate
Subsidiaries of Business scope Registration
of incorporation of registration capital business representative
business Code
packaging
services for
Gujing distilled
spirit, Gujing
Gong series
distilled spirit,
vegetable and fruit
wine, health wine
and mixed wine
Domestic
advertising
production,
publish, design
and agency;
Shanghai Hong conference
bang Culture Advertise etiquette service,
Subsidinary of limited
Communication ment craft gifts sales
wholly-owned Shanghai 500.00 liability Yan Lijun 593139218
Co., Ltd (hereafter marketin （Except the
subsidiary company
Shanghai g special projects）
Hongbang) (Business
involving
administrative
licensing, need to
get the operating
permit）
(Continued)
Actual amount of The balance of other items that,
Voting rights
Subsidiaries investment as at substantially constitute the net Holding proportion %
proportion %
31/12/201 investment in subsidiary
Gujing Sales 8,486.00 0.00 100.00 100.00
Gujing Transportation 695.00 0.00 100.00 100.00
Gujing Glass 6,646.00 0.00 100.00 100.00
Gujing Waste 100.00 0.00 100.00 100.00
Jinyunlai 200.00 0.00 100.00 100.00
Gujing Packaging 3,000.00 0.00 100.00 100.00
Shanghai Hongbang 500.00 0.00 100.00 100.00
(Continued)
76
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
The balance of parent company’s equity, that is
Whether The amount of minority
equal to the parent shareholders’ equity less the
consolidate Minority equity used for decrease
Subsidiaries subsidiary’s current loss undertaken by the Notes
d equity the profits and losses of
minority shareholders according their quotient of
statements minority shareholders
the beginning of the period
Gujing Sales Yes 0.00 0.00 0.00
Gujing Transportation Yes 0.00 0.00 0.00
Gujing Glass Yes 0.00 0.00 0.00
Gujing Waste Yes 0.00 0.00 0.00
Jinyunlai Yes 0.00 0.00 0.00
Gujing Packaging Yes 0.00 0.00 0.00
Shanghai Hongbang Yes 0.00 0.00 0.00
6.1.2 Subsidiaries acquired through business combination under common control
The monetary unit is ten thousand unless otherwise stated.
Type Place
Registere Corporate Organization
of of Nature Type of
Subsidiaries d Business scope representat Registration
incorporatio registratio of business business
capital ive Code
n n
Hotel management（Except
for catering management、
Shanghai Gujing Except for hotel operation）
Jinhao Hotel Self-owned housing rental; limited
wholly-owne Hotel
Management Shanghai 5,400.00 establish branch（If there is liability Gong lei 134565998
d subsidiary Management
Co.,Ltd.(hereafter need administrative company
Shanghai Jinhao) licensing,
operating based on the
license.）
Accommodation, parking
Bozhou Gujing
services；Chinese limited
Hotel Co., wholly-owne Bozhou, Zhao Yufe
Hotel operation 62.80 meal process, sales of liability 151944834
Ltd.(hereafter d subsidiary Anhui ng
cigarette and wine and company
Gujing Hotel)
commodities
(Continued)
Actual amount of investment The balance of other items that, substantially Holding Voting rights
Subsidiaries
as at 31/12/201 constitute the net investment in subsidiary proportion % proportion %
Shanghai Jinhao 4,990.69 0.00 100.00 100.00
Gujing Hotel 64.86 0.00 100.00 100.00
Continued:
77
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
The balance of parent company’s equity, that is equal
The amount of minority
Whether to the parent shareholders’ equity less the
Minority equity used for decrease
Subsidiaries consolidated subsidiary’s current loss undertaken by the minority Notes
equity the profits and losses of
statements shareholders according their quotient of the
minority shareholders
beginning of the period
Shanghai Jinhao Yes 0.00 0.00 0.00
Gujing Hotel Yes 0.00 0.00 0.00
6.2 New subsidiaries included in the consolidated financial statement and the subsidiaries no longer
included in the consolidated financial statement during current reporting period
6.2.1 New subsidiaries included in the consolidated financial statement and the subsidiaries no longer included
in the consolidated financial statement during current reporting period.
6.2.1.1 New subsidiaries included in the scope of consolidation, special purpose entities formed by the trustee
or leasing the right to control the operating entity.
Subsidiaries Net assets value as at 31/12/2012 Net profit for the current reporting period
Shanghai Hongbang Culture
5,423,313.71 837,512.46
Communication Co., Ltd
Note: Shanghai Hongbang is the subsidiary acquired through incorporation or investment.
6.2.1.2 The subsidiaries no longer included in the scope of consolidation, special purpose entities formed by the
trustee or leasing the right to control the operating entity.
Net profit for the beginning of the year to the
Subsidiaries The net assets of the disposal date
disposal date
Hefei Gujing Trade Co., Ltd 0.00 -789,080.51
Note: The Hefei Gujing Trade Co., Ltd. finished cancellation during this year, which is no longer included in the
scope of consolidation.
Note 7: Notes to significant elements of the financial statements
Unless otherwise stated (incl. notes to significant elements of the financial statements is ), the year ended
is 31st December 2012, the year beginning is 31st December 2011, this year is 2012, prior year is 2011
respectively.
7.1 Monetary funds
Balance as at 31/12/2012 Balance as at 31/12/2011
Foreign
Items Foreign
Original amount exchange Translated amount Original amount Translated amount
exchange rate
rate
78
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Balance as at 31/12/2012 Balance as at 31/12/2011
Foreign
Items Foreign
Original amount exchange Translated amount Original amount Translated amount
exchange rate
rate
Cash in hand: 205,736.37 101,826.09
-CNY — — 205,736.37 — — 101,826.09
Bank deposit: 2,609,444,615.72 2,081,930,665.24
-CNY — — 2,609,440,918.78 — — 2,081,911,723.03
-USD 588.17 6.2855 3,696.94 3,006.27 6.3009 18,942.21
Total 2,609,650,352.09 2,082,032,491.33
Note: On 31 December, 2012, the carrying amount of CNY 200,000,000.00 fixed deposit pledged for bank
acceptance.
7.2 Notes receivable
7.2.1 Disclosure by classification
Classification Balance as at 31/12/2012 Balance as at 31/12/2011
Bank acceptance 156,449,495.65 490,543,018.49
Total 156,449,495.65 490,543,018.49
Note: On 31 December, 2012, the carrying amount of CNY 17,000,000.00 bills pledged for bank acceptance.
7.2.2 The top five pledged of notes receivable amount at the end of the year
Issuer Issuer Date of maturity Amount Remarks
Bozhou Gujing Distillery Co., Ltd. 2012/11/15 2013/4/15 2,000,000.00
Anhui Jingqiao Business Co., Ltd. 2012/11/15 2013/4/15 2,000,000.00
Anhui Jingqiao Business Co., Ltd. 2012/11/15 2013/4/15 2,000,000.00
Anhui Jingqiao Business Co., Ltd. 2012/11/15 2013/4/15 2,000,000.00
Anhui Jingqiao Business Co., Ltd. 2012/11/15 2013/4/15 2,000,000.00
Total 10,000,000.00
7.2.3 There has no due to inability of the notes transferred to accounts receivable bills .
7.2.4 The end of the year has been endorsed to other parties but not yet due bills (the largest amount of the top
five )
Whether
Issuer Issuer Date of maturity Amount Notes
derecognition
Huangshan China Trading Co., Ltd. 2012/8/16 2013/2/16 2,300,000.00 Yes
Shangqiu Xintiandi Sugar & Alcohol Co., Ltd. 2012/7/5 2013/1/5 2,000,000.00 Yes
79
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Whether
Issuer Issuer Date of maturity Amount Notes
derecognition
Fujian Daren Trade Co., Ltd. 2012/9/3 2013/3/2 2,000,000.00 Yes
Huainan Jindingcheng Trading Co., Ltd. 2012/10/8 2013/1/8 1,500,000.00 Yes
Huainan Jindingcheng Trading Co., Ltd. 2012/10/8 2013/1/8 1,500,000.00 Yes
Total 9,300,000.00
7.3 Accounts receivable
7.3.1 Disclosure by classification
Balance as at 31/12/2012
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Accounts receivable belong to individual
significance and individually assessed for 0.00 0.00 0.00 0.00
impairment
Accounts receivable belong to recognition of
impairment allowances by group:
Age group 8,727,847.44 100.00 840,840.19 9.63
Total of Group 8,727,847.44 100.00 840,840.19 9.63
Accounts receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 8,727,847.44 100.00 840,840.19 9.63
(Continued)
Balance as at 31/12/2011
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Accounts receivable belong to individual
significance and individually assessed for 0.00 0.00 0.00 0.00
impairment
Accounts receivable belong to recognition of
impairment allowances by group:
Age group 39,013,882.35 100.00 1,328,051.13 3.40
80
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Balance as at 31/12/2011
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Total of Group 39,013,882.35 100.00 1,328,051.13 3.40
Accounts receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 39,013,882.35 100.00 1,328,051.13 3.40
7.3.2 Disclosure by age:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Within 1 year 6,983,110.97 80.01 36,424,344.52 93.36
Including: within 6 months 6,194,326.53 70.97 32,023,338.50 82.08
6 months - 1year 788,784.44 9.04 4,401,006.02 11.28
1-2 years 1,066,990.07 12.23 1,994,998.68 5.12
2-3 years 89,975.40 1.03 12,543.15 0.03
Over 3years 587,771.00 6.73 581,996.00 1.49
Total 8,727,847.44 100.00 39,013,882.35 100.00
7.3.3 Allowance for bad debt:
① Accounts receivable using the age analysis method for measurement of allowance for bad debt:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age Carrying amount Allowance for Carrying amount Allowance for
Amount % of total bad debt Amount % of total bad debt
Within 1 year 6,983,110.97 80.01 101,382.49 36,424,344.52 93.36 540,283.68
Including: within 6 months 6,194,326.53 70.97 61,943.27 32,023,338.50 82.08 320,233.38
6 months - 1year 788,784.44 9.04 39,439.22 4,401,006.02 11.28 220,050.30
1-2 years 1,066,990.07 12.23 106,699.00 1,994,998.68 5.12 199,499.87
2-3 years 89,975.40 1.03 44,987.70 12,543.15 0.03 6,271.58
Over 3years 587,771.00 6.73 587,771.00 581,996.00 1.49 581,996.00
Total 8,727,847.44 100.00 840,840.19 39,013,882.35 100.00 1,328,051.13
7.3.4 There has no major impairment allowance of accounts receivable has been recovered/received during
current reporting period.
81
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
7.3.5 There has no accounts receivable written off during the current reporting period.
7.3.6 There has no accounts receivable owed by entities which own 5% or more of the shares of the Company
during the current reporting period.
7.3.7 Details of top five accounts receivable:
Relationship with Carrying amount % of total
Debtors Age
the Company as at 31/12/2012 accounts receivable
Franchiser A Non-related party 2,195,121.20 Within 6 Months 25.15
Franchiser B Non-related party 1,508,018.65 Within 2 years 17.28
Franchiser c C Non-related party 1,497,959.60 Within 6 Months 17.16
Franchiser D Non-related party 1,413,111.78 Within 6 Months 16.19
Franchiser F Non-related party 373,010.01 Within 2 years 4.27
Total 6,987,221.24 80.05
7.3.8 There has no accounts receivable balance due from related parties during the current reporting period.
7.4 Advances to suppliers
7.4.1 Disclosure by age:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Within 1 year 85,184,699.47 99.86 233,258,065.73 100.00
1-2 years 121,274.00 0.14 4,645.00 0.00
Total 85,305,973.47 100.00 233,262,710.73 100.00
7.4.2 Details of top five advance to suppliers:
Relationship with Carrying amount Reason(s)
Suppliers Age
the Company as at 31/12/2012 for unsettlement
Payment in advance for
CCTV Non-related party 41,545,188.00 Within 1 year
advertising expense for 2013
Payment in advance for
Shenzhou Television Co., Ltd. Non-related party 7,392,875.00 Within 1 year
advertising expense for 2013
Anhui Jin Juan International Payment in advance for
Non-related party 5,330,000.00 Within 1 year
Advertisement advertising expense for 2013
Nanjing Luda Advertisement and media Payment in advance for
Non-related party 5,017,004.56 Within 1 year
Co., Ltd. advertising expense for 2013
The Beijing Zhicheng tang Non-related party 2,620,000.00 Within 1 year Payment in advance for
82
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
advertisement Co., Ltd. advertising expense for 2013
Total 61,905,067.56
7.4.3 There has no advances to entities which own 5% or more of the shares of the Company.
7.5 Interests receivable
7.5.1 Interests receivable
Items Balance as at 31/12/2012 Balance as at 31/12/2011
Fixed deposit receipt 7,253,858.34 4,451,540.35
Total 7,253,858.34 4,451,540.35
7.5.2 There has no overdue interests receivable.
7.6 Other receivables
7.6.1 Disclosure by classification
Balance as at 31/12/2012
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Other receivable belong to individual
significance and individually assessed for 51,109,940.55 69.51 51,109,940.55 100.00
impairment
Other receivable belong to recognition of
0.00 0.00 0.00 0.00
impairment allowances by group:
Age group 22,424,206.84 30.49 865,059.86 3.86
Total of Group 22,424,206.84 30.49 865,059.86 3.86
Other receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 73,534,147.39 100.00 51,975,000.41 70.68
(Continued)
Balance as at 31/12/2011
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Other receivable belong to individual 54,205,281.87 90.99 51,109,940.55 94.29
83
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Balance as at 31/12/2011
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
significance and individually assessed for
impairment
Other receivable belong to recognition of
impairment allowances by group:
Age group 5,368,699.28 9.01 581,622.74 10.83
Total of Group 5,368,699.28 9.01 581,622.74 10.83
Other receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 59,573,981.15 100.00 51,691,563.29 86.77
7.6.2 Disclosure by age:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Within 1 year 21,567,003.41 29.33 4,630,889.38 7.77
Including: within 6 months 20,250,146.49 27.54 4,387,567.89 7.36
6 months - 1year 1,316,856.92 1.79 243,321.49 0.41
1-2 years 206,998.42 0.28 235,809.90 0.40
2-3 years 148,205.01 0.20 0.00 0.00
Over 3years 51,611,940.55 70.19 54,707,281.87 91.83
Total 73,534,147.39 100.00 59,573,981.15 100.00
7.6.3 Allowance for bad debt:
① Other receivables of individual significance and subject to individual impairment assessment
Rate of
Carrying Allowance for
Debtor allowance Reason for allowance
amount bad debt
(%)
Enterprise is in the proceeding of
Jianqiao Securities 12,223,000.00 12,223,000.00 100.00
liquidation bankruptcy
Enterprise is in the proceeding of
Hengxin Securities 29,502,438.53 29,502,438.53 100.00
liquidation bankruptcy
Minfa Securities 9,384,502.02 9,384,502.02 100.00 Enterprise is in the proceeding of
84
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Rate of
Carrying Allowance for
Debtor allowance Reason for allowance
amount bad debt
(%)
liquidation bankruptcy
Total 51,109,940.55 51,109,940.55 100.00
② Accounts receivable using the age analysis method for measurement of impairment allowances:
Accounts receivable using the age analysis method for measurement of impairment allowances:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age Carrying amount Allowance for bad Carrying amount Allowance for
Amount % of total debt Amount % of total bad debt
Within 1 year 56,041.75
21,567,003.41 96.18 268,257.51 4,630,889.38 86.25
Including: within 6 months 20,250,146.49 90.31 202,414.67 4,387,567.89 81.72 43,875.68
6 months - 1year 1,316,856.92 5.87 65,842.84 243,321.49 4.53 12,166.07
1-2 years 206,998.42 0.92 20,699.84 235,809.90 4.40 23,580.99
2-3 years 148,205.01 0.66 74,102.51 0.00 0.00 0.00
Over 3years 502,000.00 2.24 502,000.00 502,000.00 9.35 502,000.00
Total 22,424,206.84 100.00 865,059.86 5,368,699.28 100.00 581,622.74
7.6.4 The major impairment allowance of other receivables has been recovered/received during current
reporting period
Sum of impairment
Original basis of impairment
Debtors Reason(s) for recover allowance recognised Recovered amount
allowance
before recovered
Bankruptcy liquidation Enterprise is in the proceeding of
Minfa Securities 9,384,502.02 3,095,341.32
repayment liquidation bankruptcy
Total 9,384,502.02 3,095,341.32
7.6.5 There has no other receivable written off during the current reporting period.
7.6.6 There has no other receivable owed by entities which own 5% or more of the shares of the Company
during the current reporting period.
7.6.7 Details of top five other receivable:
Relationship with the Carrying amount % of total
Debtors Age
Company as at 31/12/2012 accounts receivable
Hengxin securities Non-related party 29,502,438.53 Over 3 years 40.12
85
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Relationship with the Carrying amount % of total
Debtors Age
Company as at 31/12/2012 accounts receivable
Jianqiao securities Non-related party 12,223,000.00 Over 3 years 16.62
Minfa securities Non-related party 9,384,502.02 Over 3 years 12.76
Beijing light manufacturing (Group) Co., Ltd. Non-related party 3,000,000.00 Within 6 months 4.08
Daqing Mei Ying Trade Co., Ltd. Non-related party 500,000.00 Over 3 years 0.68
Total 54,609,940.55 74.26
7.6.8 There has no other receivable balance due from related parties during the current reporting period.
7.7 Inventories
7.7.1 Disclosure by classification
As at 31/12/2012
Items
Carrying amount Impairment allowance Net carrying amount
Raw material and packaging
98,182,927.82 3,692,051.40 94,490,876.42
materials
Work in progress and
self-manufactured 582,438,096.08 0.00 582,438,096.08
semi-finished goods
Finished goods 106,632,198.17 1,161,671.82 105,470,526.35
Total 787,253,222.07 4,853,723.22 782,399,498.85
(Contiuned)
As at 31/12/2011
Items
Carrying amount Impairment allowance Net carrying amount
Raw material and packaging
80,384,897.21 3,021,570.96 77,363,326.25
materials
Work in progress and
self-manufactured 407,663,001.44 0.00 407,663,001.44
semi-finished goods
Finished goods 94,891,327.59 1,760,585.85 93,130,741.74
Total 582,939,226.24 4,782,156.81 578,157,069.43
7.7.2 Impairment allowance for inventories
Items Carrying amount as Recognised Decrease in the current reporting period Carrying
86
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
at 31/12/2011 during the current Carried to profit and amount as at
Recovered
reporting period loss 31/12/2012
Raw material and packaging
3,021,570.96 2,709,793.31 0.00 2,039,312.87 3,692,051.40
materials
Finished goods 1,760,585.85 258,136.63 517,983.45 339,067.21 1,161,671.82
Total 4,782,156.81 2,967,929.94 517,983.45 2,378,380.08 4,853,723.22
7.8 Available - for - sale financial assets
Items Fair value as at 31/12/2012 Fair value as at 31/12/2011
Available-for-sale equity assets 27,991,376.84 0.00
Less: Impairment allowance 0.00 0.00
Total 27,991,376.84 0.00
Note: The Company holds available-for-sale equity instruments are the stocks of Lipeng shares, restricted
period are 12 months and the beginning date was 8 November, 2012.
7.9 Investment property
7.9.1 Detial of investment property
Decrease in the
Carrying amount as Increase in the current Carrying amount as at
Item current reporting
at 31/12/2011 reporting period 31/12/2012
period
Using the cost model for subsequent
61,126,470.85 4,178,314.04 0.00 65,304,784.89
measurement of investment property
Less: Accumulated depreciation or
28,568,060.59 5,285,454.81 0.00 33,853,515.40
amortization of investment property
Less: Impairment allowance of investment
0.00 0.00 0.00 0.00
property
Net value of investment property 32,558,410.26 31,451,269.49
7.9.2 Investment property measured using the historical cost convention
Increase in the Decrease in the
Carrying amount as at Carrying amount as at
Item current reporting current reporting
31/12/2011 31/12/2012
period period
1.Cost: 61,126,470.85 4,178,314.04 0.00 65,304,784.89
Houses and buildings 58,481,878.85 4,178,314.04 0.00 62,660,192.89
Land use right 2,644,592.00 0.00 0.00 2,644,592.00
2.Accumulated depreciation and amortization 28,568,060.59 5,285,454.81 0.00 33,853,515.40
87
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Increase in the Decrease in the
Carrying amount as at Carrying amount as at
Item current reporting current reporting
31/12/2011 31/12/2012
period period
Houses and buildings 28,327,867.04 5,221,597.01 0.00 33,549,464.05
Land use right 240,193.55 63,857.80 0.00 304,051.35
3.Accumulated impairment
0.00 0.00 0.00 0.00
allowance
Houses and buildings 0.00 0.00 0.00 0.00
Land use right 0.00 0.00 0.00 0.00
4.Net carrying amount
32,558,410.26 31,451,269.49
Houses and buildings
Houses and buildings 30,154,011.81 29,110,728.84
Land use right 2,404,398.45 2,340,540.65
7.9.3 The houseing which the original book value is CNY 4,178,314.04 and accumulated depreciation is CNY
2,400,764.46 transferred into rental, since the change in use the accounting from the corresponding fixed asset
transferred into investment property.
7.9.4 The accumulated depreciation and amortization of investment property amounting to CNY 2,884,690.35.
7.9.5 Investment property with pending ownership registration
Estimated time of
The reason of without certificate of
Item gone through the Book value
title
certificate of title
Feed mill renovation project The certificate of title is in proceeding 2013 9,193,414.03
Filling workshop building ( third floor ) The certificate of title is in proceeding 2013 9,650,548.86
Filling workshop building ( second floor ) The certificate of title is in proceeding 2013 2,993,560.76
Total 21,837,523.65
7.10 Fixed assets
7.10.1 Circumstance of fixed assets
Decrease in the
Carrying amount as Increase in the current reporting Carrying amount as at
Item current reporting
at 31/12/2011 period 31/12/2012
period
1.Cost 859,712,029.43 482,494,573.06 25,235,888.58 1,316,970,713.91
530,798,978.04 311,890,855.76 4,539,751.00 838,150,082.80
Houses and buildings
88
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Decrease in the
Carrying amount as Increase in the current reporting Carrying amount as at
Item current reporting
at 31/12/2011 period 31/12/2012
period
Machineries 250,184,316.46 156,948,266.45 16,843,076.33 390,289,506.58
Vehicles 34,483,720.04 10,987,730.99 1,979,577.17 43,491,873.86
Administrative equipments and others 44,245,014.89 2,667,719.86 1,873,484.08 45,039,250.67
Newly Recognition for
2. Accumulated depreciation
increased current year
Accumulated depreciation 489,981,848.17 0.00 57,660,637.40 21,249,206.69 526,393,278.88
Houses and buildings 283,687,804.12 0.00 22,348,532.03 2,708,104.77 303,328,231.38
Machineries 161,378,514.05 0.00 18,881,699.89 15,051,161.85 165,209,052.09
Vehicles 14,289,697.93 0.00 10,105,664.99 1,738,182.06 22,657,180.86
Administrative equipments and others 30,625,832.07 0.00 6,324,740.49 1,751,758.01 35,198,814.55
3. Carrying amount before impairment
369,730,181.26 790,577,435.03
allowance
Houses and buildings 247,111,173.92 534,821,851.42
Machineries 88,805,802.41 225,080,454.49
Vehicles 20,194,022.11 20,834,693.00
Administrative equipments and others 13,619,182.82 9,840,436.12
4.Accumulated impairment allowance 6,951,990.42 0.00 114,760.54 6,837,229.88
Houses and buildings 4,264,099.10 0.00 0.00 4,264,099.10
Machineries 2,020,210.96 0.00 114,760.54 1,905,450.42
Vehicles 0.00 0.00 0.00 0.00
Administrative equipments and others 667,680.36 0.00 0.00 667,680.36
5.Net carrying amount 362,778,190.84 783,740,205.15
Houses and buildings 242,847,074.82 530,557,752.32
Machineries 86,785,591.45 223,175,004.07
Vehicles 20,194,022.11 20,834,693.00
Administrative equipments and others 12,951,502.46 9,172,755.76
Notes: The accumulated depreciation during the current reporting period is CNY 57,660,637.40,
cost of fixed assets transferred from construction in progress during the current reporting period
amounting to CNY 446,324,803.51 ( please see the Note 7.9 Investment property).
89
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
7.10.2 There has no restriction on ownership of fixed assets.
7.10.3 Details of temporary idle assets as at the end of the period
Accumulated
Accumulated Net carryting
Items Cost impairment Notes
depreciation amount
allowance
Houses and buildings 15,646,500.09 11,190,960.05 4,264,099.10 191,440.94
Machineries 11,428,316.96 9,408,106.00 2,020,210.96 0.00
Administrative equipments
1,772,209.55 1,104,529.19 552,919.82 114,760.54
and others
Total 28,847,026.60 21,703,595.24 6,837,229.88 306,201.48
7.10.4 Details of fixed assets let under operating leases as at the end of the period
Classification Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Machineries 1,202,652.55 1,522,294.56
Electronic equipments and others 141,334.83 226,104.58
Total 1,343,987.38 1,748,399.14
7.10.5 There has no fixed assets held for sale as at the end of the period.
7.10.6 Fixed assets with pending ownership registration.
Estimated time of gone through
Item The reason of without certificate of title Book value
the certificate of title
Boiler room Registration of ownership in progress 2013 1,321,165.28
Turbine house Registration of ownership in progress 2013 561,764.42
35KV substation room Registration of ownership in progress 2013 90,739.95
West district the liquor warehouse Registration of ownership in progress 2013 3,372,301.74
Packaging Building works (including the
Registration of ownership in progress 2013 2,383,237.88
package of seven workshops)
West district packaging materials
Registration of ownership in progress 2013 4,393,900.03
warehouse
West district the liquor steel mesh
Registration of ownership in progress 2013 3,673,199.09
warehouse
West district precision filtration steel
Registration of ownership in progress 2013 649,509.84
structure platform
Filling house Registration of ownership in progress 2013 5,023,172.46
Pooled registration upon
No.1 mold culture building Registration of ownership in progress 14,391,375.78
industrial park completion
90
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Estimated time of gone through
Item The reason of without certificate of title Book value
the certificate of title
Pooled registration upon
No.2 mold culture building Registration of ownership in progress 14,391,375.78
industrial park completion
Pooled registration upon
No.3 mold culture building Registration of ownership in progress 14,391,375.79
industrial park completion
Pooled registration upon
No.1 distillery workshop Registration of ownership in progress 24,117,790.69
industrial park completion
Pooled registration upon
No.2 distillery workshop Registration of ownership in progress 24,445,037.74
industrial park completion
Pooled registration upon
No.3 distillery workshop Registration of ownership in progress 24,797,358.57
industrial park completion
Pooled registration upon
No.4 distillery workshop Registration of ownership in progress 24,744,798.40
industrial park completion
Pooled registration upon
Husk warehouse, mold culture house Registration of ownership in progress 42,116,603.90
industrial park completion
Pooled registration upon
No.1 distillery filling house Registration of ownership in progress 40,255,619.38
industrial park completion
Total 245,120,326.72
7.11 Construction in progress
7.11.1 Details of construction in progress
As at 31/12/2012 As at 31/12/2011
impairme
Carrying amount Carrying amount
Items impairment nt Net carrying
before impairment Net carrying amount before impairment
allowance allowanc amount
allowance allowance
e
Marketing network
134,984,829.10 0.00 134,984,829.10 0.00 0.00 0.00
construction
Bottle water filtration
1,170,773.54 0.00 1,170,773.54 0.00 0.00 0.00
equipment
Digital mold culture houses 2,148,230.00 0.00 2,148,230.00 0.00 0.00 0.00
High - quality base liquor
brewing technological 29,315,006.20 0.00 29,315,006.20 7,117,925.85 0.00 7,117,925.85
transformation projects
91
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
The base liquor hook storage,
filling and supporting facilities 147,924,721.89 0.00 147,924,721.89 40,493,357.07 0.00 40,493,357.07
construction projects
Based liquor relocation of the
transformation and facilities 105,640,963.16 0.00 105,640,963.16 84,455,897.59 0.00 84,455,897.59
projects
Gujing operating network 1,875,172.70 0.00 1,875,172.70 915,000.00 0.00 915,000.00
Technological transformation
0.00 0.00 0.00 24,920.00 0.00 24,920.00
project – No.1 workshop
Fine processing work building 0.00 0.00 0.00 10,000.00 0.00 10,000.00
Others 612,584.95 0.00 612,584.95 0.00 0.00 0.00
Total 423,672,281.54 0.00 423,672,281.54 133,017,100.51 0.00 133,017,100.51
7.11.2 Movement of significant construction in progress
Other decrease
Carrying
Increase during Transferred to
fixed assets during the Carrying amount
the current
Items Budgetedcost amountasat during the current as at
reporting current
reporting 31/12/2012
31/12/2011 period reporting period
period
High - quality base liquor
brewing technological 102,000,000.00 7,117,925.85 69,286,533.00 28,482,444.03 18,607,008.62 29,315,006.20
transformation projects
The base liquor hook
storage, filling and
586,000,000.00 40,493,357.07 253,653,748.23 146,222,383.41 0.00 147,924,721.89
supporting facilities
construction projects
Based liquor relocation of
the transformation and 550,000,000.00 84,455,897.59 268,079,453.39 242,880,794.61 4,013,593.21 105,640,963.16
facilities projects
Gujing operating network 3,050,000.00 915,000.00 960,172.70 0.00 0.00 1,875,172.70
Technological
transformation project – 9,940,000.00 24,920.00 9,242,064.94 9,266,984.94 0.00 0.00
No.1 workshop
Fine processing work
20,200,000.00 10,000.00 19,406,619.00 19,416,619.00 0.00 0.00
building
92
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Other decrease
Carrying
Increase during Transferred to
fixed assets during the Carrying amount
the current
Items Budgetedcost amountasat during the current as at
reporting current
reporting 31/12/2012
31/12/2011 period reporting period
period
West district new
55,577.52 0.00 55,577.52 55,577.52 0.00 0.00
warehouse
Marketing network
275,000,000.00 0.00 137,870,187.10 0.00 2,885,358.00 134,984,829.10
construction
Bottle water filtration
1,369,805.00 0.00 1,170,773.54 0.00 0.00 1,170,773.54
equipment
Digital mold culture
3,068,900.00 0.00 2,148,230.00 0.00 0.00 2,148,230.00
houses
Others 1,025,000.00 0.00 612,584.95 0.00 0.00 612,584.95
Total 1,551,709,282.52 133,017,100.51 762,485,944.37 446,324,803.51 25,505,959.83 423,672,281.54
(Continued)
Capitalisation
The cumulative Including: interests Weight of cost to
rate applicable Stage of
amount of capitalised date in budgeted
Items to the current completion Source of finance
interest during the current cost
reporting %
capitalized reporting period %
period %
High - quality base liquor The fund of rising
brewing technological 0.00 0.00 0.00 59.88 74.91 shares, Other
transformation projects sources
The base liquor hook
The fund of rising
storage, filling and
0.00 0.00 0.00 33.93 50.20 shares, Other
supporting facilities
sources
construction projects
Based liquor relocation of
the transformation and 0.00 0.00 0.00 58.60 64.10 Other sources
facilities projects
Gujing operating network 0.00 0.00 0.00 61.48 61.48 Other sources
Technological
transformation project 0.00 0.00 0.00 93.23 100.00 Other sources
–workshop
93
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Capitalisation
The cumulative Including: interests Weight of cost to
rate applicable Stage of
amount of capitalised date in budgeted
Items to the current completion Source of finance
interest during the current cost
reporting %
capitalized reporting period %
period %
Fine processing work
0.00 0.00 0.00 96.12 100.00 Other sources
building
West district new warehouse 0.00 0.00 0.00 100.00 100.00 Other sources
The fund of rising
Marketing network
0.00 0.00 0.00 50.20 50.20 shares, Other
construction
sources
Bottle water filtration
0.00 0.00 0.00 85.47 85.47 Other sources
equipment
Digital mold culture houses 0.00 0.00 0.00 70.00 70.00 Other sources
Others 0.00 0.00 0.00 59.76 59.76 Other sources
Total 0.00 0.00 0.00
Note: Other decreases CNY25,505,959.86 is transferred into the Long-term deferred expenses.
7.11.3 The progressof major construction in progress
Items Stage of completion% Notes
High - quality base liquor brewing technological
74.91 Estimated according to project progressing
transformation projects
The base liquor hook storage, filling and supporting facilities
50.20 Estimated according to project progressing
construction projects
Based liquor relocation of the transformation and facilities
64.10 Estimated according to project progressing
projects
Gujing operating network 61.48 Estimated according to project progressing
Marketing network construction 50.20 Estimated according to project progressing
Bottle water filtration equipment 85.47 Estimated according to project progressing
Digital mold culture houses 70.00 Estimated according to project progressing
Others 59.76 Estimated according to project progressing
7.12 Intangible assets
Carrying amount as at Current year Current year Carrying amount as
Category
31/12/2011 increase decrease at 31/12/2012
1. Historical cost 311,997,360.74 80,507,299.32 0.00 392,504,660.06
Land rights 270,793,360.80 80,456,060.00 0.00 351,249,420.80
94
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Carrying amount as at Current year Current year Carrying amount as
Category
31/12/2011 increase decrease at 31/12/2012
trademark right 38,150,000.00 0.00 0.00 38,150,000.00
software 3,053,999.94 51,239.32 0.00 3,105,239.26
2. Cumulative depreciation 63,403,128.70 7,827,150.13 0.00 71,230,278.83
Land rights 24,582,620.60 7,137,928.63 0.00 31,720,549.23
trademark right 37,910,000.00 74,160.44 0.00 37,984,160.44
software 910,508.10 615,061.06 0.00 1,525,569.16
3. Impairment allowance 0.00 558,155.56 0.00 558,155.56
Land rights 0.00 0.00 0.00 0.00
trademark right 0.00 0.00 0.00 0.00
software 0.00 558,155.56 0.00 558,155.56
4. NBV 248,594,232.04 320,716,225.67
Land rights 246,210,740.20 319,528,871.57
trademark right 240,000.00 165,839.56
software 2,143,491.84 1,021,514.54
Amortisation recognised during the current year amounted to 7,827,150.13.
7.13 Long-term deferred charge
Amortisation for
Carrying amount Current year Current year Carrying amount Other decreases
Items the current
reasons
as at 31/12/2011 increase decrease as at 31/12/ 2012
reporting period
Hall of Fame 3,650,877.17 0.00 1,251,729.27 0.00 2,399,147.90
Breweries industrial park
743,422.33 0.00 743,422.33 0.00 0.00
decoration
Fine filter tanks overhaul 141,965.72 0.00 141,965.72 0.00 0.00
House leasing in Zhengzhou 3,063,200.32 0.00 1,312,800.12 0.00 1,750,400.20
Compensation
Renovation works of 2011 of Beijing
Gujing Distillery Zhengzhou 2,079,000.00 233,015.00 520,435.86 660,000.00 1,131,579.14 Yuanzhou
experience club building Decoration
Company
Hangzhou experience club
0.00 1,022,630.23 284,063.83 0.00 738,566.40
project
95
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Exclusive Shop 0.00 529,212.00 17,772.56 0.00 511,439.44
Image shop of sales
0.00 2,356,146.03 126,796.12 0.00 2,229,349.91
company
Transformation of high -
0.00 18,607,008.62 0.00 0.00 18,607,008.62
quality base liquor
Mold culture shelf and Mold
0.00 4,013,593.21 421,542.15 0.00 3,592,051.06
culture bed
Total 9,678,465.54 26,761,605.09 4,820,527.96 660,000.00 30,959,542.67
7.14 Deferred tax assets and deferred tax liabilities
7.14.1 Recognized deferred tax assets and deferred tax liabilities
① Recognized deferred tax assets
Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Deductible temporary Deductible temporary
Item
Deferred tax assets difference and tax loss Deferred tax assets difference and tax loss
carried forwards carried forwards
Allowance for bad debt 13,203,667.18 52,814,668.70 13,254,903.61 53,019,614.42
Impairment allowance for
1,213,430.81 4,853,723.22 1,195,539.20 4,782,156.81
inventories
Impairment allowance for fixed
1,709,307.47 6,837,229.88 1,737,997.61 6,951,990.42
assets
Unrealized internal buying and
174,624.28 698,497.12 155,725.48 622,901.90
selling profit
Deferred income 2,630,830.79 10,523,323.14 3,137,903.51 12,551,614.04
Accrued expenses 0.00 0.00 1,577,905.34 6,311,621.33
Deductible loss 19,837.63 99,188.13 118,096.95 512,867.42
Intangible assets 139,538.89 558,155.56 0.00 0.00
Total 19,091,237.05 76,384,785.75 21,178,071.70 84,752,766.34
② Recognized deferred tax liabilities:
Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Category Deferred tax Taxable temporary Taxable temporary
Deferred tax liabilities
liabilities differences differences
Changes in fair value of available - for - sale
697,845.96 2,791,383.84 0.00 0.00
financial assets
Total 697,845.96 2,791,383.84 0.00 0.00
96
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
7.14.2 Unrecognized deferred tax assets
Category Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Allowance for bad debt 1,171.90 0.00
Deductible loss 576,916.99 0.00
Total 578,088.89 0.00
7.15 Allowance for asset impairment
Carrying amount Current year Current decrease Carrying amount
Category
as at 31/12/2011 recognition Reversal Expanded as at 31/12/2012
1. Allowance for bad debt 53,019,614.42 289,927.61 493,701.43 0.00 52,815,840.60
2. Impairment allowance for inventories 4,782,156.81 2,967,929.94 517,983.45 2,378,380.08 4,853,723.22
3. Impairment allowance for fixed assets 6,951,990.42 0.00 0.00 114,760.54 6,837,229.88
4. Impairment allowance for intangible assets 0.00 558,155.56 0.00 0.00 558,155.56
Total 64,753,761.65 3,816,013.11 1,011,684.88 2,493,140.62 65,064,949.26
7.16 The restriction on ownership or use right of fixed assets
Carrying amount as at
Item The reason of restriction
31/12/2012
Subtotal of assets for pledge:
Bank deposit 200,000,000.00 Pledged for bank acceptance
Note receivable 17,000,000.00 Pledged for bank acceptance
Total 217,000,000.00
7.17 Notes payable
Type Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Bankers' acceptance 224,460,000.00 0.00
Total 224,460,000.00 0.00
Note: Notes payable due in the next reporting period amounts to 224,460,000.00.
7.18 Accounts payable
7.18.1 Detail for accounts payable
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Within 1 year 455,187,252.75 214,665,021.65
Over 1 year 5,925,322.51 5,158,834.80
Total 461,112,575.26 219,823,856.45
7.18.2 There has no accounts payable owed to investors investors holding 5% or more of the shares of the
97
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Company during the current period.
7.18.3 The details of significant accounts payable remaining unsettled for more than one year
Reason(s) for Post balance sheet date
Creditors Total amount
unsettlement repayment
Xinle city Renjie Glass Products Co., Ltd. 234,289.47 rest payment 0.00
ASDC Glass Group Co., Ltd. 148,797.22 rest payment 0.00
Shenzhen Gome packaging Co., Ltd. 155,801.66 rest payment 0.00
Shanghai Tianshi Printing Co., Ltd. 474,696.76 rest payment 0.00
Shenzhen Tianshi Printing Co., Ltd. 243,732.61 rest payment 0.00
Total 1,257,317.72 0.00
7.19 Advances from customers
7.19.1 General information
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Within 1 year 108,264,258.06 128,698,731.68
Over 1 year 6,345,977.75 6,898,456.20
Total 114,610,235.81 135,597,187.88
7.19.2 Advances from customers owed to investors investors holding 5% or more of the shares of the
Company
See Note 8.5 Related party balances for details.
7.19.3 The details of significant Advances from customers due for more than one year
creditors Total amount Reason(s) for unsettlement
Zhuhai Lijing Trading and Development Co., Ltd. 29,753.35 rest payment
Gansu Hengshengyuan Trading Co., Ltd. 89,885.00 rest payment
Yongcheng Shenhuo Lida Trading Co., Ltd. 79,857.23 rest payment
Zhoukou Yixin Subsidiary foodstuff Co., Ltd. 22,872.00 rest payment
Xi'an Lintong District Yonghong firm 25,200.00 rest payment
Total 247,567.58
7.20 Employment benefits payable
Carrying amount as at Current year Current year Carrying amount as
Category
31/12/2011 increase decrease at 31/12/2012
(1) Wages and salaries, bonuses, subsidies
145,431,983.11 602,117,399.21 600,593,210.01 146,956,172.31
and allowances
98
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Carrying amount as at Current year Current year Carrying amount as
Category
31/12/2011 increase decrease at 31/12/2012
(2) Employee benefits 0.00 20,442,359.04 20,442,359.04 0.00
(3) Social insurance 10,208,973.40 58,692,209.01 68,407,167.18 494,015.23
Within: ①Medical insurance 2,436,498.16 10,971,654.10 13,243,547.25 164,605.01
②Basic retirement insurance 6,447,583.35 39,655,850.03 45,824,517.04 278,916.34
③Unemployment fee 638,916.29 4,399,194.74 5,005,701.51 32,409.52
④Work injury insurance 374,575.79 2,036,926.36 2,401,231.54 10,270.61
⑤Pregnancy insurance 311,399.81 1,628,583.78 1,932,169.84 7,813.75
(4) Housing provident fund 25,044,636.37 25,436,860.57 36,879,730.57 13,601,766.37
(5) dismission welfare 0.00 0.00 0.00 0.00
(6) Labor union fee and employee
12,076,484.39 13,749,023.44 8,150,879.06 17,674,628.77
education fee
(7) Non-monetary benefits Redemption of
0.00 6,414,502.19 6,414,502.19 0.00
termination of labor contract
(8) Redemption of termination of labor
0.00 0.00 0.00 0.00
contract
(9) Others 0.00 0.00 0.00 0.00
Total 192,762,077.27 726,852,353.46 740,887,848.05 178,726,582.68
Note: ① In the amounts outstanding as at 31 December 2012, no amount belongs to default, and the
amounts has been paid in May 2013.
② To provide the workers with non-monetary benefits including festival liquor, self-produced and processed
bottle of liquor for the collective welfare regarded as sales, in accordance with external price to pay taxes
regarded as revenue credited employees welfare, to provide the festival liquor to Employees is CNY
6,414,502.19 during current period.
7.21 Taxes and fees payable
Tax (Fee) Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
VAT 127,424,001.36 145,921,550.30
consumption tax 155,841,940.75 195,847,812.80
Business tax 541,563.17 733,221.63
99
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Tax (Fee) Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Urban construction and maintenance tax 25,478,732.45 25,868,592.02
Enterprise income tax 310,881,145.20 267,060,470.99
Personal income tax 12,215,372.29 4,739,780.86
Stamp duty 1,390,318.84 1,777,727.97
Education surcharge 9,400,238.21 25,773,125.40
Others 2,236,709.30 3,357,229.46
Total 645,410,021.57 671,079,511.43
7.22 Other payables
7.22.1 Detail for other payable
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Within 1 year 189,386,469.81 186,943,937.99
Over 1 year 107,712,308.17 61,946,080.79
Total 297,098,777.98 248,890,018.78
7.22.2 Other payables owed to investors investors holding 5% or more of the shares of the Company,
See Note 8.5 Related party balances for details.
7.22.3 Details of significant other payables remaining unsettled for more than one year
Reason for pending Post reporting date
Creditor Amount
settlement repayment
Shandong Taishan Hengxin Machinery Co., Ltd. 1,018,000.00 Rest payment of equipments 0.00
Guangxi Construction Engineering The first Installation Co., Ltd. 2,265,300.00 Rest payment of project 0.00
Bozhou Chengda Distillery Co., Ltd. 1,000,000.00 Deposit 0.00
Wenzhou Nanhu Commercial Group Co. , Ltd. 650,000.00 Deposit 0.00
Anhui Gujing Danya Wine Sales Co. , Ltd. 500,000.00 Deposit 0.00
Total 5,433,300.00 0.00
7.22.4 The explanation of the significant other payables
Carrying amount as at
Creditors Nature or content
31/12/2012
Guangxi Construction Engineering The first Installation Co., Ltd. 2,265,300.00 Rest payment of project
Total 2,265,300.00
7.23 Other current liabilities
100
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Item Contents Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Deferred income government grant 2,120,250.11 2,075,708.75
Total 2,120,250.11 2,075,708.75
The details of deferred income:
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
The government assistance related to assets
Energy efficiency renovation project for coal industrial
153,000.00 430,708.75
boiler and glass furnace
Bozhou Logistics Center Project 60,000.00 60,000.00
Special funds for finance prevention and treatment
650,000.04 650,000.00
sewage
Finance subsidy for energy saving projects 531,623.52 370,000.00
Finance subsidy for technical reconstruction 534,221.52 525,000.00
Within financial budget, interest subsidy for deposit
39,999.96 40,000.00
technical reconstruction
Within financial budget, Enterprise development funds 30,000.00 0.00
Energy-saving technologies reward 121,405.07 0.00
Total 2,120,250.11 2,075,708.75
7.24 Other non-current liabilities
Item Contents Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Deferred income government grant 8,403,073.03 10,475,905.29
Total 8,403,073.03 10,475,905.29
The details of deferred income:
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
The government assistance related to assets
Energy efficiency renovation project for coal industrial
777,750.00 1,052,155.08
boiler and glass furnace
Bozhou Logistics Center Project 360,000.00 420,000.00
Special funds for finance prevention and treatment
1,300,000.16 1,950,000.21
sewage
Finance subsidy for energy saving projects 2,592,451.00 3,299,166.67
Finance subsidy for technical reconstruction 3,087,038.50 3,631,250.00
101
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Within financial budget, interest subsidy for deposit
83,333.37 123,333.33
technical reconstruction
Within financial budget, Enterprise development funds 202,500.00 0.00
Total 8,403,073.03 10,475,905.29
7.25 Share capital
Amount as at Amount as at
Movements during the current reporting period (+、－)
31/12/2011 31/12/2012
Item New Conversion Perce
Percent Bonus
Total amount shares from Others Subtotal Total amount ntage
age % issue
issue reserves %
1. Shares with restriction on
disposal
1.1 State-held shares
1.2 Shares held by state-owned
entities
1.3 Shares held by other
16,800,000 6.67 16,800,000 -33,599,100 -16,799,100 900 0.00
domestic investors
Within: Held by institutional
16,800,000 6.67 16,800,000 -33,600,000 -16,800,000
investors
Held by non-institutional
900 900 900 0.00
investors
1.4 Shares held by foreign
investors
Within: Held by institutional
investors
Held by non-institutional
investors
Subtotal of shares with restriction
16,800,000 6.67 16,800,000 -33,599,100 -16,799,100 900 0.00
on disposal
2. Floating shares
2.1 Ordinary shares issued in
175,000,000 69.50 175,000,000 33,599,100 208,599,100 383,599,100 76.17
CNY
2.2 Shares issued in domestic
60,000,000 23.83 60,000,000 60,000,000 120,000,000 23.83
stock market in foreign currency
2.3 Shares issued in foreign
market in foreign currency
2.4 Others
102
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Amount as at Amount as at
Movements during the current reporting period (+、－)
31/12/2011 31/12/2012
Item New Conversion Perce
Percent Bonus
Total amount shares from Others Subtotal Total amount ntage
age % issue
issue reserves %
Subtotal of floating shares 235,000,000 93.33 251,800,000 33,599,100 268,599,100 503,599,100 100.00
Total 251,800,000 100.00 251,800,000 251,800,000 503,600,000 100.00
Note: According to the resolution of 2011 annual general meeting of stockholders, every 10 shares transferred to
increase 10 shares by capital reserves used the base of the 251.8 million shares on 31 December, 2011, the
total amount of increase by transferring were 251.8 million shares and has been implemented in 2012. After
increase by transferring the registered capital was increased to CNY 503.6 million.
7.26 Capital reserves
Amount as at Current year Current year Amount as at
Item
31/12/2011 increase decrease 31/12/2012
Share premium 1,514,352,456.05 0.00 251,800,000.00 1,262,552,456.05
Other capital reserves 32,386,037.14 2,093,537.88 0.00 34,479,575.02
Total 1,546,738,493.19 2,093,537.88 251,800,000.00 1,297,032,031.07
Note: ① According to the resolution of 2011 annual general meeting of stockholders, every 10 shares
transferred to increase 10 shares by capital reserves used the base of the 251.8 million shares on 31
December, 2011, the total amount of increase by transferring were 251.8 million shares and has been
implemented in 2012.
② Other capital reserves for the current movements are the assets available-for-sale changes in fair value .
7.27 Surplus reserves
Amount as at Current year Current year Amount as at
Item
31/12/2011 increase decrease 31/12/2012
Statutory surplus reserve 147,070,297.60 71,666,667.13 0.00 218,736,964.73
Total 147,070,297.60 71,666,667.13 0.00 218,736,964.73
7.28 Retained earnings
Rate of
Item Current year Prior year
appropriation
Pre-adjustment balance brought forward 815,506,493.66 381,153,314.20
Total adjustment to retained earnings b/f (+, -) 0.00 0.00
103
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Rate of
Item Current year Prior year
appropriation
Retained earnings b/f after adjustment 815,506,493.66 381,153,314.20
Add: Net profit attributable to shareholders of the parent 725,589,286.31 566,390,286.36
Loss set off by surplus reserves 0.00 0.00
Others 0.00 0.00
10% of parent
Less: Appropriation to statutory surplus reserve 71,666,667.13 49,787,106.90
company net profit
Appropriation to discretionary surplus reserve 0.00 0.00
Ordinary dividends declared 113,310,000.00 82,250,000.00
Bonus issue 0.00 0.00
Balance carrying forward 1,356,119,112.84 815,506,493.66
7.29 Revenue and operating costs
7.29.1 General information
Item Current year Prior year
Principal operating income 4,148,697,033.94 3,277,533,563.45
Other operating income 48,360,281.32 30,445,672.55
Total 4,197,057,315.26 3,307,979,236.00
Principal operating cost 1,193,727,937.33 833,047,568.58
Other operating cost 27,103,204.17 27,965,196.12
Total 1,220,831,141.50 861,012,764.70
7.29.2 Revenues from principal operating activities by products
Current year Prior year
Products
operating revenues operating costs operating revenues Costs
Distilled spirit 4,045,542,438.97 1,138,829,249.65 3,178,683,815.08 765,457,373.60
Revenues from hotel 71,252,072.61 39,515,901.20 71,632,235.61 45,935,143.61
Others 31,902,522.36 15,382,786.48 27,217,512.76 21,655,051.37
Total 4,148,697,033.94 1,193,727,937.33 3,277,533,563.45 833,047,568.58
7.29.3 Principal operating activities by territories
Current year Prior year
Area
operating revenues operating costs operating revenues operating costs
Northern of mainland 568,399,645.44 151,656,054.70 580,662,250.61 139,829,006.96
Middle of mainland 3,148,329,457.17 927,072,746.35 2,203,318,287.36 574,366,286.72
Southern of mainland 426,771,503.96 113,527,787.01 490,513,802.78 118,120,401.09
104
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Current year Prior year
Area
operating revenues operating costs operating revenues operating costs
International 5,196,427.37 1,471,349.27 3,039,222.70 731,873.81
Total 4,148,697,033.94 1,193,727,937.33 3,277,533,563.45 833,047,568.58
7.29.4 Operating income from top five customers
Year Operating income % of total operating income
2012 852,756,890.47 20.32
2011 451,226,530.68 13.64
7.30 Business tax and surcharges
Item Current year Prior year
Consumption tax 519,680,798.77 422,730,548.03
Business tax 5,149,740.18 5,062,777.71
Urban maintenance and construction tax,
114,078,873.02 94,561,951.36
Education surcharge
Embankment fee 35,855.04 34,777.83
Total 638,945,267.01 522,390,054.93
Note: The provision standards for taxes and surcharges refer to Note 5 Taxation.
7.31 Sales expenses
Item Current year Prior year
Employment benefits 66,643,650.94 76,826,712.64
Travel 39,576,202.36 34,243,626.56
Advertisement 372,150,734.27 205,228,902.67
Transportation charges 20,887,209.07 17,232,626.61
Sales promotion costs 201,908,242.79 147,813,975.79
Sample wine 191,450,136.63 186,510,506.38
Service fee 177,453,272.82 115,792,599.63
Meeting expenses 249,536.00 5,273,474.70
Other sales expenses 5,658,249.99 9,144,654.41
Total 1,075,977,234.87 798,067,079.39
7.32 General and administrative expenses
Item Current year Prior year
Employment benefits 232,327,021.50 224,805,779.16
105
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Item Current year Prior year
Office 26,821,119.45 19,341,431.30
Taxes and surcharges 13,516,285.73 11,374,904.66
Maintenance expenses 12,702,125.87 10,011,740.54
Depreciation 23,524,928.58 16,358,400.98
Amortization of intangible assets 7,657,076.06 5,479,919.79
Pollution discharge 5,670,578.37 3,874,640.53
Spillage of material 28,644,387.38 20,329,192.18
Travel expenses 7,838,738.24 6,151,946.21
Water and electricity charges 6,034,998.04 5,507,959.34
Others 30,593,245.87 22,380,042.89
Total 393,028,645.85 345,615,957.58
7.33 Financial costs
Item Current year Prior year
Interest expenses 1,400,816.93 0.00
Less: Interest income 76,739,005.96 41,040,473.83
Less: received bills charges 14,101,612.67 10,844,157.80
Exchange gain or loss -162.90 683.56
Bank charges 1,008,783.43 12,543.92
Others 200.00 0.00
Total -88,430,981.17 -51,871,404.15
7.34 Impairment loss on assets
Item Current year Prior year
Allowance for bad debt -203,773.82 -4,266,716.00
Impairment allowance for inventory 2,449,946.49 2,905,125.30
Impairment allowance for intangible assets 558,155.56 0.00
Total 2,804,328.23 -1,361,590.70
7.35 Non-operating income
Included in current
Item Current year Prior year year non-recurring
profit and loss
Gain on non-current asset disposals 976,430.18 582,925.02 976,430.18
Within: Gain on fixed asset disposals 976,430.18 582,925.02 976,430.18
106
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Included in current
Item Current year Prior year year non-recurring
profit and loss
Government assistance (See details of government assistance) 3,603,355.00 2,755,614.88 3,603,355.00
Income from penalties 5,599,396.91 6,127,862.85 5,599,396.91
Sales of wastes 5,618,885.72 4,342,385.46 5,618,885.72
Unable pay for the overdue accounts payable 927,341.44 408,462.40 927,341.44
Amortization of deferred tax 2,268,290.90 1,356,287.98 2,268,290.90
Others 2,978,377.73 1,337,764.32 2,978,377.73
Total 21,972,077.88 16,911,302.91 21,972,077.88
Details of government grant:
Government assistance Current year Prior year Description
Subsidy revenue 3,603,355.00 1,779,000.00
Tax refunds 0.00 976,614.88
Total 3,603,355.00 2,755,614.88
7.36 Non-operating expenses
Included in current year
Category Current year Prior year
non-recurring profit and loss
Loss on non-current asset disposals 511,271.68 396,678.97 511,271.68
Within: Loss on fixed asset disposals 511,271.68 396,678.97 511,271.68
Abandonment loss 672,811.62 1,757,080.92 672,811.62
Overdue fine 434,979.78 0.00 434,979.78
Indemnity paid 307,789.45 130,000.00 307,789.45
Charitable donation 100,000.00 0.00 100,000.00
Others 1,419,843.56 335,593.98 1,419,843.56
Total 3,446,696.09 2,619,353.87 3,446,696.09
7.37 Income tax expenses
Category Current year Prior year
Current tax calculated in accordance with relevant tax law 244,750,939.80 282,249,054.69
Deferred tax 2,086,834.65 1,435,563.90
Total 246,837,774.45 283,684,618.59
7.38 Computation of basic earnings per share and diluted earnings per share
Basic earnings per share is calculated by dividing net profit attributable to shareholders of the parent by the
weighted average number of issued shares. The start date of ordinary shares issued in the period for the
107
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
purpose of calculation of basic earnings per share is the date on which subscription becomes receivable per
contract of issuance.
Diluted earnings per share is calculated by dividing the results of adjustment of net profit attributable to
shareholders of the parent for the interest expense for the dilutive convertible instruments, the expected gain or
expense at the time of conversion and their related income tax implication by the sum of the weighted average
number of issued shares for calculation of basic earnings per shares and the weighted average number of
potential shares from convertible instruments.
For the purpose of calculation of the weighted average number of potential shares from convertible instruments,
the conversion date for dilutive convertible instruments issued in prior period and dilutive convertible
instruments issued in the period is the 1st date of the period and the issue date respectively.
7.38.1 General disclosure
Current year Prior year
Category of earning
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 1.44 1.44 1.17 1.17
Recurring profit or loss attributable to ordinary shareholders 1.41 1.41 1.14 1.14
7.38.2 Calculation
During the reporting period, the Company does not have dilutive potential ordinary shares, diluted earnings per
share therefore is equal to the basic earnings per share.
① Net profit attributable for ordinary shareholders for the calculation of basic EPS
Category Current year Prior year
Net profit attributable for ordinary shareholders
725,589,286.31 566,390,286.36
Within: From continuing operation 726,378,366.82 566,390,286.36
From curtailed operation -789,080.51 0.00
Recurring profit or loss attributable to ordinary shareholders 711,934,788.75 553,567,092.68
Within: From continuing operation 711,980,505.70 553,567,092.68
From curtailed operation -45,716.95 0.00
② When calculating the basic earnings per share, the denominator is the weighted average number of
outstanding ordinary shares, calculated as follows
Category Current year Prior year
Number of ordinary shares issued as at 31/12/2011
503,600,000.00 470,000,000.00
108
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Category Current year Prior year
Add: the number of ordinary shares issued this year
0.00 14,000,000.00
Less: the number of ordinary shares bought back this year
0.00 0.00
Number of ordinary shares as at 31/12/2012
503,600,000.00 484,000,000.00
In according to the principle of the "Accounting Standards for Business Enterprises No. 34 - Earnings per
share", the payment of stock dividends, public accumulated fund transferred to increase capital, splits or
reverse stock occurred during the balance sheet date to the financial report date, should use the re-adjusted
number of shares to recalculate the earnings per share for all periods. During the year, the company 's total
share capital of 251,800,000 shares as the base, to paid-in capital of 10 shares for every 10 shares to all
shareholders. In according with the principle to recalculated the previous year earnings per share and diluted
earnings per share.
7.39 Other comprehensive income
Category Current year Prior year
The amount of gains (losses) on available-for-sale financial assets 2,791,383.84 0.00
Less: Tax effect from available-for-sale financial assets 697,845.96 0.00
Net amount which recognized in other comprehensive income previously reclassified
0.00 0.00
into profit or loss during current period
Total 2,093,537.88 0.00
7.40 Notes to the statement of cash flows
7.40.1 Other cash received relating to operating activities
Category Current year Prior year
Guarantee deposit 42,383,087.63 138,613,744.77
Government assistance 3,603,355.00 1,779,000.00
Interest income 88,038,300.64 36,588,933.48
Other 18,235,261.87 36,891,291.24
Total 152,260,005.14 213,872,969.49
7.40.2 Other cash payments relating to operating activities
Category Current year Prior year
Cash paid in sales expenses and general and administrative expense 722,967,136.75 448,726,046.33
The fixed deposit pledged for Notes payable 200,000,000.00 0.00
Others 3,271,396.22 1,484,273.09
109
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Category Current year Prior year
Total 926,238,532.97 450,210,319.42
7.40.3 Other cash received relating to investing activities
Category Current year Prior year
Government assistance related to assets 240,000.00 8,100,000.00
Total 240,000.00 8,100,000.00
7.40.4 Other cash received relating to financing activities
Category Current year Prior year
The payment of the cost associated with shares issuance 0.00 3,211,800.00
Total 0.00 3,211,800.00
7.41 Supplementary information to the statement of cash flows
7.41.1 Reconciliation of cash flows from operating activities to net profit
Category Current year Prior year
① Reconciliation of cash flows from operating activities to net profit:
Net profit
725,589,286.31 566,390,286.36
Add: Loss on asset impairment 425,948.15 -8,579,878.92
Depreciation of fixed assets, oil and gas assets, biological assets held for production 57,660,637.40 45,377,730.01
Amortisation of Investment properties 2,884,690.35 3,537,860.03
Amortisation of intangible assets 7,827,150.13 5,479,919.79
Amortisation of Long-term deferred expenditure 4,820,527.96 2,053,899.07
Loss on non-current assets disposal (gain presented by "-" prefix) -465,158.50 -186,246.05
Loss on scrap of fixed assets (gain presented by "-" prefix) 672,811.62 638,191.45
Loss on fair value changes (gain presented by "-" prefix) 0.00 0.00
Financial costs (gain presented by "-" prefix) -162.90 683.56
Investment loss (gain presented by "-" prefix) 0.00 -1,656,581.66
Decrease of deferred tax assets (increase presented by "-" prefix) 2,086,834.65 1,435,563.90
Increase of deferred tax liabilities (increase presented by "-" prefix) 0.00 0.00
Decrease of inventories (increase presented by "-" prefix) -204,313,995.83 -120,964,419.83
Decrease of operating receivables (increase presented by "-" prefix) 148,886,768.63 -477,342,793.89
Increase of operating payables (decrease presented by "-" prefix) 343,060,317.39 611,073,541.51
Others -2,268,290.90 -1,356,287.98
110
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Category Current year Prior year
Net cash flows generated from operating activities 1,086,867,364.46 625,901,467.35
② Significant investing and financing activities involve no cash:
Debt-to-capital conversion 0.00 0.00
Convertible loan due within one year 0.00 0.00
Fixed assets acquired under financial lease 0.00 0.00
③ Movement of cash and cash equivalents:
Cash as at 31/12/2012 2,409,650,352.09 2,082,032,491.33
Less: Cash as at 31/12/2011 2,082,032,491.33 643,231,404.42
Add: Cash equivalents as at 31/12/2012 0.00 0.00
Less: Cash equivalents as at 31/12/2011 0.00 0.00
Net increase of cash and cash equivalents 327,617,860.76 1,438,801,086.91
7.41.2 Compostion of cash and cash equivalents
Category Current year Prior year
① Cash 2,409,650,352.09 2,082,032,491.33
Including: Cash at hand 205,736.37 101,826.09
Demand bank deposit 2,409,444,615.72 2,081,930,665.24
Demand other monetary funds 0.00 0.00
Demand deposit in the Central Bank 0.00 0.00
Deposit in peer firms 0.00 0.00
Loan to peer firms 0.00 0.00
② Cash equivalents
Including: Debt instrument matured within three months 0.00 0.00
③ Cash and cash equivalents as at 31/12/2012 2,409,650,352.09 2,082,032,491.33
Note 8: Related parties and related party transaction
8.1 Details of the parent
Name of Type of Place of Legal
Relationship Nature of business
parent incorporation registration representative
111
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Controlling Drink, building materials,
Gujing Group Limited liability company Anhui Yulin
shareholders manufacture plastic products
(Continued)
Name of Registered Shareholding Voting right Ultimate controller
Organisation code
paren capital in the Company % in the Company % of the Company
Anhui Province Bozhou City
Gujing Group 353,380,000.00 53.89 53.89 151947437
the People’s Government
8.2 Subsidiaries
See Note 6.1 Subsidiaries.
8.3 Other related parties
Other related party Relationship to the Company Institution code
Anhui Ruifuxiang Food Co., Ltd Affiliate of the actual controller and controlling shareholder 77908892-2
Anhui Ruijing Business Travel (Group) Co., Ltd Affiliate of the actual controller and controlling shareholder 14912443-1
Bozhou Guesthouse Co., Ltd. Affiliate of the actual controller and controlling shareholder 554599270
Anhui Orient Taiji Travel Development Co., Ltd. Affiliate of the actual controller and controlling shareholder 771139617
Bozhou Gujing Hotel Co., Ltd. Affiliate of the actual controller and controlling shareholder 151940032
Anhui Gujing Real Estate Group Co., Ltd. Affiliate of the actual controller and controlling shareholder 697383485
Orient Ruijing Enterprise Investment
Affiliate of the actual controller and controlling shareholder 768363191
Development Co., Ltd.
Anhui Hengxin Pawn Co., Ltd. Affiliate of the actual controller and controlling shareholder 752994458
Bozhou Ruineng Thermal Power Co., Ltd. Affiliate of the actual controller and controlling shareholder 560699980
8.4 Related party transactions
8.4.1 Goods and services purchase
Current year Prior year
Pricing principle % in total % in total
Related party Transaction
transaction of transaction of
Amount Amount
the same the same
category category
Anhui Ruifuxiang Food Co.,
Procurement alcohol Market price 46,869,135.05 49.31 45,785,065.26 62.12
Ltd
Accept catering and
Bozhou Guesthouse Co.,
accommodation Market price 1,419,862.30 2.72 562,530.92 1.29
Ltd.
service
112
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Current year Prior year
Pricing principle % in total % in total
Related party Transaction
transaction of transaction of
Amount Amount
the same the same
category category
Total 48,288,997.35 46,347,596.18
8.4.2 Sales of goods and vendering of services
Current year Prior year
% in total % in total
Related party Transaction Pricing principle
transaction of transaction of
Amount Amount
the same the same
category category
Sales of mini
Gujing Group Market price 33,035.63 1.40 10,462.85 0.46
materialss
Provide catering
Gujing Group Market price 237,582.16 9.42 328,564.71 12.69
services
Anhui Ruijing Famous Wine Sales of distilled
Market price 0.00 0.00 16,149,989.74 0.46
Marketing Co., Ltd spirit
Sales of distilled
Anhui Ruifuxiang Food Co., Ltd Market price 136,538.47 0.00 1,517,718.81 0.05
spirit
Anhui Ruijing Business Travel Advertising
Market price 8,100.00 0.00 5,549.90 0.01
(Group) Co., Ltd service
Sales of distilled
Bozhou Guesthouse Co., Ltd. Market price 81,461.54 0.00 32,153.85 0.00
spirit
Provide catering
Bozhou Guesthouse Co., Ltd. Market price 0.00 0.00 4,000.00 0.35
services
Anhui Orient Taiji Travel Sales of distilled
Market price 35,897.44 0.00 170,119.66 0.01
Development Co., Ltd spirit
Sales of distilled
Anhui Ruijing Real Estate Co., Ltd Market price 7,692.31 0.00 615.38 0.00
spirit
Sales of distilled
Bozhou Gujing Hotel Co., Ltd. Market price 70,769.24 0.00 123,076.94 0.00
spirit
Anhui Gujing Real Estate Group
Sales of distilled Market price 110,153.83 0.00 93,107.36 0.00
Co., Ltd.
113
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Current year Prior year
% in total % in total
Related party Transaction Pricing principle
transaction of transaction of
Amount Amount
the same the same
category category
spirit
Sales of distilled
Anhui Ruijing Food Co., Ltd. Market price 149,384.62 0.01 0.00 0.00
spirit
Orient Ruijing Enterprise Sales of distilled
Market price 0.00 0.00 36,444.73 0.00
Investment Development spirit
Bozhou Ruineng Thermal Power Sales of distilled
Market price 75,538.46 0.00 90,000.00 0.00
Co., Ltd. spirit
Sales of distilled
Anhui Hengxin Pawn Co., Ltd. Market price 8,461.53 0.00 7,999.99 0.00
spirit
Total 954,615.23 18,569,803.92
8.4.3 Lease between related parties
Pricing Lease rental
Leasor Leasee Leased asset Start date Expiry date
principle recognised
Gujing Group The Company Buildings and constructions 2010-6-1 2020-5-31 Market price 1,800,000.00
Gujing Group Gujing Hotel Buildings and constructions 2010-6-1 2020-5-31 Market price 500,000.00
Total 2,300,000.00
8.5 Related party balance
8.5.1 Receivables owed by and advances paid to related parties
Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Related party Allowance for Allowance for bad
Carrying amount Carrying amount
bad debt debt
Accounts receivable:
Gujing Group 0.00 0.00 38,485.49 384.85
Anhui Ruifuxiang Food Co., Ltd 0.00 0.00 2,000.00 20.00
Total 0.00 0.00 40,485.49 404.85
Other receivables:
Orient Ruijing Enterprise Investment Development 0.00 0.00 5,704.00 57.04
Total 0.00 0.00 5,704.00 57.04
114
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
8.5.2 Payables owed to and advances received from related parties
Related party Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Advances received:
Anhui Orient Taiji Travel Development Co., Ltd 0.00 10,000.00
Anhui Ruijing Business Travel (Group) Co., Ltd 18,000.00 0.00
Ruijing Business Travel (Group) Co., Ltd Shanghai branch 1,700.00 0.00
Total 19,700.00 10,000.00
Other payable:
Anhui Ruijing Business Travel (Group) Co., Ltd 83,996.92 105,999.42
Gujing Group 4,964.37 180,311.93
Anhui Ruifuxiang Food Co., Ltd 2,000.00 200.00
Bozhou Guesthouse Co., Ltd. 0.00 10,360.00
Anhui Orient Taiji Travel Development Co., Ltd 3,000.00 8,000.00
Anhui Ruijing Food Co., Ltd. 27,000.00 0.00
Total 120,961.29 304,871.35
Note 9: Contingencies
No contingency is subject to disclosure as at 31 December 2012.
Note 10: Commitments
On the reporting date, the non-cancellable operating lease contracts which were signed by the Group are as
following:
Item Carrying amount as at 31/12/2012 Carrying amount as at 31/12/2011
Minimum lease payments under non-cancellable
operating leases:
The first year after reporting date 2,300,000.00 2,300,000.00
The second year after reporting date 2,300,000.00 2,300,000.00
The third year after reporting date 2,300,000.00 2,300,000.00
After years 33,158,333.33 35,458,333.33
Total 40,058,333.33 42,358,333.33
No financial commitment is required for disclosure as at 31 December 2012.
Note 11: Post reporting date events
115
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
The Proposal for Profit Appropriation for the Year ended 31 December 2012 proposing cash dividend amounting
to CNY 5.00 (gross) per 10 shares for the 503.60 million shares outstanding as at the reporting date which in
total amounts to CNY 251.80 million was approved by the 16th Meeting of the 6th Term of Board of Directors of
the Company held on 21 April 2013; the Proposal was pending the approval of the General Meeting of the
Company.
No other post-balance-sheet-date event is required for disclosure as at the balance sheet date.
Note 12: Other significant events
12.1 Assets and liabilities measured by fair value
Carrying Cumulative fair value
Current year fair Current year Carrying amount
Item amount as at movement recognised
value movement impairment as at 31/12/2012
31/12/2011 in equity
Financial assets
Available-for-sale financial assets 0.00 0.00 2,791,383.84 0.00 27,991,376.84
Total
12.2 Termination of operation
Item Current year Prior year
Revenue of termination of operation 0.00 0.00
Less: Expense of termination of operation 789,080.51 0.00
Gross profit of termination of operation -789,080.51 0.00
Less: Income tax expense of termination of operation 0.00 0.00
Net profit of termination of operation -789,080.51 0.00
Note 13: Notes to the separate financial statements
13.1 Accounts receivable
13.1.1 Classification
Balance as at 31/12/2012
Carrying amount before impairment
Items Allowance for bad debt
allowanc
Amount % of total Amount % of total
Accounts receivable belong to individual
significance and individually assessed for 0.00 0.00 0.00 0.00
impairment
116
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Accounts receivable belong to recognition of
impairment allowances by group:
Related party group 1,293,202.89 68.75 0.00 0.00
Age group 587,771.00 31.25 587,771.00 100.00
Total of Group 1,880,973.89 100.00 587,771.00 31.25
Accounts receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 1,880,973.89 100.00 587,771.00 31.25
(Continued)
Balance as at 31/12/2011
Carrying amount before impairment
Items Allowance for bad debt
allowanc
Amount % of total Amount % of total
Accounts receivable belong to individual
significance and individually assessed for 0.00 0.00 0.00 0.00
impairment
Accounts receivable belong to recognition of
impairment allowances by group:
Related party group 0.00 0.00 0.00 0.00
Age group 2,461,104.32 100.00 603,616.83 24.53
Total of Group 2,461,104.32 100.00 603,616.83 24.53
Accounts receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 2,461,104.32 100.00 603,616.83 24.53
13.1.2 Disclosure by age
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Within 1 year 1,293,202.89 68.75 1,873,333.32 76.12
Including: within 6 months 1,293,202.89 68.75 1,873,333.32 76.12
1-2 years 0.00 0.00 0.00 0.00
2-3 years 0.00 0.00 5,775.00 0.23
117
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Over 3years 587,771.00 31.25 581,996.00 23.65
Total 1,880,973.89 100.00 2,461,104.32 100.00
13.1.3 Allowance for bad debt
Accounts receivable using the age analysis method for measurement of allowance for bad debt:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age Carrying amount Allowance for Carrying amount Allowance for
Amount % of total bad debt Amount % of total bad debt
Within 1 year 0.00 0.00 0.00 1,873,333.32 76.12 18,733.33
Including: within 6 months 0.00 0.00 0.00 1,873,333.32 76.12 18,733.33
1-2 years 0.00 0.00 0.00 0.00 0.00 0.00
2-3 years 0.00 0.00 0.00 5,775.00 0.23 2,887.50
Over 3years 587,771.00 100.00 587,771.00 581,996.00 23.65 581,996.00
Total 587,771.00 100.00 587,771.00 2,461,104.32 100.00 603,616.83
13.1.4 There has no major impairment allowance of accounts receivable has been recovered/received during
current reporting period.
13.1.5 There has no accounts receivable written off during the current reporting period.
13.1.6 There has no accounts receivable owed by entities which own 5% or more of the shares of the
Company during the current reporting period.
13.1.7 There has no accounts receivable from related party during current period.
13.2 Other receivable
13.2.1 Disclosure by classification
Balance as at 31/12/2012
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Other receivable belong to individual
significance and individually assessed for 51,109,940.55 23.97 51,109,940.55 100.00
impairment
Other receivable belong to recognition of
impairment allowances by group:
Related party group 155,455,734.86 72.91 0.00 0.00
118
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Age group 6,659,008.94 3.12 146,921.11 2.11
Total of Group 162,114,743.80 76.03 146,921.11 0.09
Other receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 213,224,684.35 100.00 51,256,861.66 24.04
(Continued)
Balance as at 31/12/2011
Items Carrying amount Allowance for bad debt
Amount % of total Amount % of total
Other receivable belong to individual
significance and individually assessed for 54,205,281.87 17.22 51,109,940.55 94.29
impairment
Other receivable belong to recognition of
impairment allowances by group:
Related party group 259,356,157.03 82.39 0.00 0.00
Age group 1,212,166.81 0.39 27,726.20 2.29
Total of Group 260,568,323.84 82.78 27,726.20 0.01
Other receivable belong to individually
insignificant but individually assessed for 0.00 0.00 0.00 0.00
impairment
Total 314,773,605.71 100.00 51,137,666.75 16.25
13.2.2 Disclosure by age:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age
Amount % of total Amount % of total
Within 1 year 161,623,896.90 75.80 260,482,608.54 82.75
Including: within 6 months 161,082,945.80 75.55 260,330,354.49 82.70
7 months - 12 months 540,951.10 0.25 152,254.05 0.05
1-2 years 457,055.02 0.22 83,715.30 0.03
2-3 years 31,791.88 0.01 0.00 0.00
Over 3years 51,111,940.55 23.97 54,207,281.87 17.22
Total 213,224,684.35 100.00 314,773,605.71 100.00
119
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
13.2.3 Allowance for bad debt:
① Other receivables of individual significance and subject to individual impairment assessment
Rate of
Carrying Allowance for
Debtor allowance Reason for allowance
amount bad debt
(%)
Enterprise is in the proceeding of
Jianqiao Securities 12,223,000.00 12,223,000.00 100.00
liquidation bankruptcy
Enterprise is in the proceeding of
Hengxin Securities 29,502,438.53 29,502,438.53 100.00
liquidation bankruptcy
Enterprise is in the proceeding of
Minfa Securities 9,384,502.02 9,384,502.02 100.00
liquidation bankruptcy
Total 51,109,940.55 51,109,940.55 100.00
② Accounts receivable using the age analysis method for measurement of impairment allowances:
Accounts receivable using the age analysis method for measurement of impairment allowances:
Balance as at 31/12/2012 Balance as at 31/12/2011
Age Carrying amount Allowance for bad Carrying amount Allowance for
Amount % of total debt Amount % of total bad debt
Within 1 year 6,168,162.04 92.63 83,319.67 1,126,451.51 92.93 17,354.67
Including: within 6 months 5,627,210.94 84.51 56,272.11 974,197.46 80.37 9,741.97
6 months - 12 months 540,951.10 8.12 27,047.56 152,254.05 12.56 7,612.70
1-2 years 457,055.02 6.86 45,705.50 83,715.30 6.91 8,371.53
2-3 years 31,791.88 0.48 15,895.94 0.00 0.00 0.00
Over 3years 2,000.00 0.03 2,000.00 2,000.00 0.16 2,000.00
Total 6,659,008.94 100.00 146,921.11 1,212,166.81 100.00 27,726.20
13.2.4 The major impairment allowance of other receivables has been recovered/received during current
reporting period
Sum of impairment
Original basis of impairment
Debtors Reason(s) for recover allowance recognised Recovered amount
allowance
before recovered
Bankruptcy liquidation Enterprise is in the proceeding of
Minfa Securities 9,384,502.02 3,095,341.32
repayment liquidation bankruptcy
Total 9,384,502.02 3,095,341.32
13.2.5 There has no other receivable written off during the current reporting period.
120
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
13.2.6 There has no other receivable owed by entities which own 5% or more of the shares of the Company
during the current reporting period.
13.2.7 Details of top five other receivable:
Relationship with the Carrying amount % of total
Debtors Age
Company as at 31/12/2012 accounts receivable
Shanghai Gujing Jinhao Hotel Management Co. ,
Subsidiary 154,500,000.00 Within 6 months 72.46
Ltd.
Hengxin securities Non-related party 29,502,438.53 Over 3 years 13.84
Jianqiao securities Non-related party 12,223,000.00 Over 3 years 5.73
Minfa securities Non-related party 9,384,502.02 Over 3 years 4.40
Beijing light manufacturing (Group) Co., Ltd. Non-related party 3,000,000.00 Within 6 months 1.41
Total 208,609,940.55 97.84
13.2.8 There has no other receivable balance due from related parties during the current reporting period.
13.3 Long-term equity investments
13.3.1 Disclosure by classification
Carrying amount Current year Current year Carrying amount
Classification
as at 31/12/2011 increase decrease as at 31/12/2012
Investment in subsidiaries 247,991,408.32 19,998,000.00 9,900,000.00 258,089,408.32
Less: Impairment allowance 0.00 0.00 0.00 0.00
Total 247,991,408.32 19,998,000.00 9,900,000.00 258,089,408.32
13.3.2 Details of long-term equity investments
Measurement Carrying amount Current year Carrying amount
Investee Cost of investment
method as at 31/12/2011 movement as at 31/12/2012
Gujing Sales Cost method 84,864,497.89 84,864,497.89 0.00 84,864,497.89
Hefei Trading Cost method 9,900,000.00 9,900,000.00 -9,900,000.00 0.00
Gujing Glass Cost method 85,793,666.00 65,795,666.00 19,998,000.00 85,793,666.00
Shanghai Gujing Jinhao Cost method 49,906,854.63 49,906,854.63 0.00 49,906,854.63
Gujing Hotel Cost method 648,646.80 648,646.80 0.00 648,646.80
Gujing Transportation Cost method 6,875,743.00 6,875,743.00 0.00 6,875,743.00
Gujing Packaging Cost method 30,000,000.00 30,000,000.00 0.00 30,000,000.00
267,989,408.32
Total 247,991,408.32 10,098,000.00 258,089,408.32
(Continued)
121
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Impairment
Shareholding Voting right Reason for disagreement
Impairment allowance Cash dividend in
Investee between shareholding and
(%) (%) allowance recognised in current year
voting right
current year
Gujing Sales 100.00 100.00 0.00 0.00 556,622,552.59
Hefei Trading 100.00 100.00 0.00 0.00 14,171,979.58
Gujing Glass 100.00 100.00 0.00 0.00 0.00
Shanghai Gujing Jinhao 100.00 100.00 0.00 0.00 0.00
Gujing Hotel 100.00 100.00 0.00 0.00 0.00
Gujing Transportation 100.00 100.00 0.00 0.00 0.00
Gujing Packaging 100.00 100.00 0.00 0.00 0.00
Total 100.00 100.00 0.00 0.00 570,794,532.17
13.3.3 There has no impairment allowance for long-term equity investments
13.4 Revenue and operating costs
13.4.1 General information
Item Current year Prior year
Principal operating income 2,481,871,826.30 1,917,609,583.10
Other operating income 53,443,771.39 39,554,898.14
Total 2,535,315,597.69 1,957,164,481.24
Principal operating cost 1,180,750,152.74 793,593,712.17
Other operating cost 26,527,784.07 34,268,638.45
Total 1,207,277,936.81 827,862,350.62
13.4.2 Revenues from principal operating activities by products
Current year Prior year
Products
operating revenues operating costs operating revenues Costs
Distilled spirit 2,481,871,826.30 1,180,750,152.74 1,917,609,583.10 793,593,712.17
Total 2,481,871,826.30 1,180,750,152.74 1,917,609,583.10 793,593,712.17
13.4.3 Principal operating activities by territories
Current year Prior year
Area
operating revenues operating costs operating revenues operating costs
Middle of mainland 2,476,675,398.93 1,179,278,803.47 1,914,570,360.40 792,861,838.36
International 5,196,427.37 1,471,349.27 3,039,222.70 731,873.81
Total 2,481,871,826.30 1,180,750,152.74 1,917,609,583.10 793,593,712.17
13.4.4 Operating income from top five customers
122
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Year Operating income % of total operating income
2012 2,512,094,975.22 99.08
2011 1,911,340,585.72 97.65
13.5 Investment income
13.5.1 Detail of investment income
Item Current year Prior year
Income from long-term equity investments measured at cost 570,794,532.17 363,057,695.16
Income from holding of financial assets held for trading 0.00 7,952,929.36
Total 570,794,532.17 371,010,624.52
13.5.2 Income from long-term equity investments measured at cost
Investee Current year Prior year
Gujing Sales 556,622,552.59 361,371,205.06
Hefei Trading 14,171,979.58 1,686,490.10
Total 570,794,532.17 363,057,695.16
13.6 Supplementary information to the statement of cash flows
Category Current year Prior year
① Reconciliation of cash flows from operating activities to net profit:
Net profit
716,666,671.34 497,871,069.01
Add: Loss on asset impairment 1,251,054.50 -6,252,359.76
Depreciation of fixed assets, oil and gas assets, biological assets held for production 29,326,801.07 20,334,221.18
Amortisation of intangible asset 2,744,049.39 2,226,930.48
Amortisation of long-term deferred expenses 4,574,160.85 989,698.98
Amortisation of investment property 2,703,228.15 3,537,860.03
Loss on non-current assets disposal (gain presented by "-" prefix) -424,108.26 -197,160.24
Loss on scrap of fixed assets (gain presented by "-" prefix) 567,010.97 467,406.18
Loss on fair value changes (gain presented by "-" prefix) 0.00 0.00
Financial costs (gain presented by "-" prefix) 0.00 0.00
Investment loss (gain presented by "-" prefix) -570,794,532.17 -371,010,624.52
Decrease of deferred tax assets (increase presented by "-" prefix) 1,670,742.05 1,020,722.13
Increase of deferred tax liabilities (increase presented by "-" prefix) 0.00 0.00
Decrease of inventories (increase presented by "-" prefix) -203,488,199.77 -128,101,562.29
123
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Category Current year Prior year
Decrease of operating receivables (increase presented by "-" prefix) 342,206,537.07 -428,193,878.47
Increase of operating payables (decrease presented by "-" prefix) 240,787,983.12 632,358,586.18
Others -1,990,582.13 -961,499.80
Net cash flows generated from operating activities 565,800,816.18 224,089,409.09
② Significant investing and financing activities involve no cash:
Debt-to-capital conversion 0.00 0.00
Convertible loan due within one year 0.00 0.00
Fixed assets acquired under financial lease 0.00 0.00
③ Movement of cash and cash equivalents:
Cash as at 31/12/2012 2,290,346,607.43 1,885,937,555.53
Less: Cash as at 31/12/2011 1,885,937,555.53 480,737,398.56
Add: Cash equivalents as at 31/12/2012 0.00 0.00
Less: Cash equivalents as at 31/12/2011 0.00 0.00
Net increase of cash and cash equivalents 404,409,051.90 1,405,200,156.97
Note 14: Supplementary information
14.1 Non-recurring profit and loss
Category Current year Prior year
Gains from disposals of non-current assets after expending impairment provisions 465,158.50 186,246.05
Exceeded-authority approved, non-official approved or accidental tax repayment and
0.00 0.00
relief
Government grants recognised through profit or loss for the current reporting period,
excluding grants which are closely related to the Company’s operating activities and of
5,871,645.90 4,111,902.86
which the quota or approval is eligible for automatic renewal in accordance with relevant
regulations
Financial resource usage fees charged on non-financial institution recognised through
0.00 0.00
profit or loss for the current reporting period
Gains arising from bargain purchase in business combination and investments in
0.00 0.00
associates and joint ventures
Non-monetary asset exchange 0.00 0.00
124
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Category Current year Prior year
Consigned investment and asset management 0.00 0.00
Impairment provision resulting from force majeure, eg. natural desasters 0.00 0.00
Debt reorganisation 0.00 0.00
Entity eorganisation expenditure 0.00 0.00
Unfair transactions 0.00 0.00
Net profits or losses achieved by an acquired under-common-control entity during the
0.00 0.00
period from the start of the period to the acquisition date
Gains or losses arising from contingent events unconnected with the Company’s daily
0.00 0.00
operating activities
Fair value changes of tradable financial assets and tradable financial liabilities held
and gains or losses arising from disposals of tradable financial assets, tradable financial
0.00 0.00
liabilities and available-for-sale financial assets, excluding hedging contracts relevant to the
Company’s daily operating activities
Reversal of impairment provision for accounts receivables eligible for individual
0.00 4,106,508.26
impairment assessment
Gains or losses arising from consigned borrowings 0.00 0.00
Fair value changes of property investments subsequently measured at fair value 0.00 0.00
One-off adjustment of profit or loss for the current reporting period in accordance with
0.00 0.00
tax and accounting laws and regulations
Consignment income arising from consigned operations 0.00 0.00
Income and expenses other than items listed above 12,188,577.39 9,993,800.13
Other gains or losses satisfying the definition of extraordinary gains or losses 0.00 0.00
Subtotal 18,525,381.79 18,398,457.30
Less: Impact of income tax 4,870,884.23 5,575,263.62
Less: Impact on non-controlling interest 0.00 0.00
Total 13,654,497.56 12,823,193.68
Note: Positive amounts and negative amounts in non-recurring categories mean income and expense or loss respectively.
The Company recognised non-recurring categories of activities in accordance with the Explanatory
Announcement regarding Information Disclosure by Publicly Listed Company No. 1 - Non-recurring Profit and
Loss (Zhengjianhui Gonggao [2008] No.43).
14.2 Rate of return on net assets and earnings per share
125
Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
Weighted average rate of Earnings per share (CNY/share)
Profit catetory
RONA Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 23.80 1.44 1.44
Recurring profit or loss attributable to ordinary
23.35 1.41 1.41
shareholders
Note: The calculation of Basic EPS and Diluted EPS please see Note 7.38.
14.3 Significant change of major element of the consolidated financial statements
14.3.1 Elements of the consolidated statement of financial position
14.3.1.1 Monetary funds amounting to CNY 2,609,650,352.09 as at the reporting date: 25.34% increase from
last year mainly resulted from recovery of accounts receivable.
14.3.1.2 Notes receivable amounting to CNY 156,449,495.65 as at the reporting date: 68.11% decrease from
last year mainly resulted from bankers' acceptances maturing collection.
14.3.1.3 Accounts receivables amounting to CNY 7,887,007.25 as at the reporting date: 79.07% decrease from
last year mainly resulted from the company strengthen the accounts receivable management and collection of
overdue receivables in time.
14.3.1.4 Advances to suppliers amounting to CNY 85,305,973.47 as at the reporting date: 63.43% decrease
from last year mainly resulted from the advance payment for purchase of equipment, land acquisition
compensation, purchase of house in last year
14.3.1.5 Interest receivables amounting to CNY 7,253,858.34 as at the reporting date: 62.95% increase from
last year mainly resulted from increase of monetary funds transferred into bank saving deposit.
14.3.1.6 Other receivables amounting to CNY 21,559,146.98 as at the reporting date: 1.73 times increase from
last year mainly resulted from increase of prepayments of adverting fee during current year.
14.3.1.7 Inventories amounting to CNY 782,399,498.85 as at the reporting date: 35.33% increase from last year
mainly resulted from increase input to additional production facilities in Gujing industrial park.
14.3.1.8 Fixed assets amounting to CNY 783,740,205.15 as at the reporting date: 1.16 times increase from last
year mainly resulted from part of the projects and equipments ready for use and transferred into fixed assets.
14.3.1.9 Construction in progress amounting to CNY 423,672,281.54 as at the reporting date: 2.19 times
increase from last year mainly resulted from the company’s self investment project have started construction.
14.3.1.10 Long-term deferred charge amounting to CNY 30,959,542.67 as at the reporting date: 2.2 times
increase from last year mainly resulted from the expense of the part of investment projects transferred into
long-term deferred expenses.
14.3.1.11 Accounts payable amounting to CNY 461,112,575.26 as at the reporting date: 1.10 times increase
from last year mainly resulted from increase of expand the scale of production, increase in procurement, project
payment.
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Anhui Gujing Distillery Co., Ltd. Notes to the financial statements for the year ended 31 December 2012
14.3.1.12 Taxes and fees payable amounting to CNY 645,410,021.57 as at the reporting date: 3.83% decrease
from last year mainly resulted from decreased taxes on revenue and tax surcharges due to decreased revenue
at the year-end.
14.3.1.13 Other payable amounting to CNY 297,098,777.98 as at the reporting date: 19.37% increase from last
year mainly resulted from increase of the margin deposit received from dealers.
14.3.1.14 Share capital amounting to CNY 503,600,000.00 as at the reporting date: 1 time increase from last
year mainly resulted from capital reserve transferred into share capital.
14.3.2 Elements of the consolidated statement comprehensive income and the consolidated statement
of cash flows
14.3.2.1 Revenue amounting to CNY 4,197,057,315.26 for the period: 26.88% increase from last year mainly
resulted from increase of sales.
14.3.2.2 Cost amounting to CNY 1,220,831,141.50 for the period: 41.79% increase from last year mainly
resulted from increase of sales, labor costs and raw material costs.
14.3.2.3 Sales expenses amounting to CNY 1,075,977,234.87 for the period: 34.82% increase from last year
mainly resulted from strengthen promotional efforts, increase labor fees, promotional fees and advertising fees.
14.3.2.4 Financial costs amounting to CNY -88,430,981.17 for the period: CNY 36,559,577.02 decrease from
last year mainly resulted from increase of bank charges, and increase of interest income of fixed deposits and
structured deposits
14.3.2.5 Impairment loss on assets amounting to CNY 2,804,328.23 for the period: 3.06 times increase from last
year mainly resulted from recognition of impairment allowance of inventories, impairment allowance of intangible
assets.
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