通讯地址： 北京市东城区永定门西滨河路 8 号院 7 号楼中海地产广场西塔 5-11 层
PostalAddress:5-11/F,West Tower of China Overseas Property Plaza, Building 7,NO.8,Yongdingmen Indep
Xibinhe Road, Dongcheng District, Beijing enden
邮政编码（Post Code）： 100077 t
电话（Tel）：+86(10)88095588 传真（Fax）：86(10)88091190
Audit
or’s
Report
RuiHua Shen Zi [2017] No 48380010
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), which comprise the consolidated and separate statements of financial
position as at 31 December 2016, and the consolidated and separate statements of comprehensive
income, the consolidated and separate statements of cash flows, and the consolidated and
separate statements of changes in shareholders' equity for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
I Management’s responsibility for the financial statements
Management of the Company 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.
II Auditors’ 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 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 controls 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, but not the purpose of expressing an opinion on the effectiveness of the internal
controls. 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 the Company 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 the Company as at 31 December 2016 and its
consolidated and separate result of operation and cash flows for the year then ended.
Ruihua Certified Public Accountants Certified Public Accountants
Beijing. China Certified Public Accountants
26 April 2017
1. Consolidated balance sheet
Prepared by Anhui Gujing Distillery Company Limited
December 31, 2016
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 532,909,026.07 1,087,319,158.77
Settlement reserves
Intra-group lendings
Financial assets measured at
fair value of which changes are
429,190.68 322,223.28
recorded in current profits and
losses
Derivative financial assets
Notes receivable 534,386,586.59 539,442,903.31
Accounts receivable 12,287,262.88 4,948,074.84
Accounts paid in advance 74,784,221.59 80,373,083.59
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance contract
reserves
Interest receivable 2,843,178.08 0.00
Dividend receivable
Other accounts receivable 10,765,397.03 8,617,955.68
Financial assets purchased
under agreements to resell
Inventories 1,786,433,036.50 1,396,712,050.87
Assets held for sale
Non-current assets due within 1
year
Other current assets 1,750,278,829.24 1,500,970,860.37
Total current assets 4,705,116,728.66 4,618,706,310.71
Non-current assets:
Loans by mandate and
advances granted
Available-for-sale financial
404,029,552.27 313,881,190.47
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment
Investing real estate 8,402,944.74 9,715,451.89
Fixed assets 1,865,691,585.06 1,691,028,804.32
Construction in progress 71,771,324.26 62,562,971.78
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 700,684,529.08 298,372,239.96
R&D expense
Goodwill 478,283,495.29 0.00
Long-term deferred expenses 93,588,397.35 127,815,668.37
Deferred income tax assets 107,654,597.15 61,065,003.63
Other non-current assets 300,982,000.00 0.00
Total of non-current assets 4,031,088,425.20 2,564,441,330.42
Total assets 8,736,205,153.86 7,183,147,641.13
Current liabilities:
Short-term borrowings
Borrowings from Central Bank
Customer bank deposits and
due to banks and other financial
institutions
Intra-group borrowings
Financial liabilities measured at
fair value of which changes are
recorded in current profits and
losses
Derivative financial liabilities
Notes payable 11,298,583.00 93,768,583.00
Accounts payable 340,972,366.21 378,187,452.07
Accounts received in advance 623,990,614.91 608,565,152.50
Financial assets sold for
repurchase
Handling charges and
commissions payable
Payroll payable 288,027,136.09 253,901,700.72
Tax payable 486,959,651.85 358,087,353.80
Interest payable
Dividend payable
Other accounts payable 641,472,271.53 452,193,188.94
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting
underwriting of securities
Liabilities held for sale
Non-current liabilities due
within 1 year
Other current liabilities 241,487,812.54 138,135,604.82
Total current liabilities 2,634,208,436.13 2,282,839,035.85
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 43,978,795.45 46,123,314.33
Deferred income tax liabilities 117,287,002.52 20,463,660.87
Other non-current liabilities
Total non-current liabilities 161,265,797.97 66,586,975.20
Total liabilities 2,795,474,234.10 2,349,426,011.05
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,295,405,592.25 1,294,938,493.19
Less: Treasury stock
Other comprehensive income 36,144,477.95 54,481,886.51
Specific reserves
Surplus reserves 256,902,260.27 256,902,260.27
Provisions for general risks
Retained profits 3,503,069,053.49 2,723,798,990.11
Total equity attributable to owners
5,595,121,383.96 4,833,721,630.08
of the Company
Minority interests 345,609,535.80 0.00
Total owners’ equity 5,940,730,919.76 4,833,721,630.08
Total liabilities and owners’ equity 8,736,205,153.86 7,183,147,641.13
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye
Changqing
Chief of the accounting division: Zhu Jiafeng
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 225,792,686.26 548,650,832.84
Financial assets measured at
fair value of which changes are
429,190.68 322,223.28
recorded in current profits and
losses
Derivative financial assets
Notes receivable 449,016,169.03 288,101,188.68
Accounts receivable 6,377,346.00 4,350,437.24
Accounts paid in advance 11,815,064.19 5,876,678.41
Interest receivable
Dividend receivable
Other accounts receivable 105,514,906.34 107,625,019.85
Inventories 1,549,397,565.11 1,374,311,894.88
Assets held for sale
Non-current assets due within 1
year
Other current assets 1,750,000,000.00 1,500,000,000.00
Total current assets 4,098,342,927.61 3,829,238,275.18
Non-current assets:
Available-for-sale financial
403,547,952.27 313,881,190.47
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 1,155,089,408.32 354,089,408.32
Investing real estate 30,846,736.84 9,715,451.89
Fixed assets 1,375,089,823.91 1,471,584,047.66
Construction in progress 68,022,146.66 62,355,022.07
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 186,370,081.28 187,468,810.92
R&D expense
Goodwill
Long-term deferred expenses 92,695,064.02 127,815,668.37
Deferred income tax assets 36,366,330.90 42,154,627.44
Other non-current assets 982,000.00 0.00
Total of non-current assets 3,349,009,544.20 2,569,064,227.14
Total assets 7,447,352,471.81 6,398,302,502.32
Current liabilities:
Short-term borrowings
Financial liabilities measured at
fair value of which changes are
recorded in current profits and
losses
Derivative financial liabilities
Notes payable 28,583.00 828,583.00
Accounts payable 307,649,868.02 371,636,772.06
Accounts received in advance 1,003,521,896.65 659,484,624.07
Payroll payable 90,742,908.53 88,513,920.05
Tax payable 320,037,309.94 237,459,964.06
Interest payable
Dividend payable
Other accounts payable 282,570,379.80 268,035,753.60
Liabilities held for sale
Non-current liabilities due
within 1 year
Other current liabilities 37,589,367.67 61,660,494.13
Total current liabilities 2,042,140,313.61 1,687,620,110.97
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 42,745,851.74 46,123,314.33
Deferred income tax liabilities 15,385,289.84 20,463,660.87
Other non-current liabilities
Total non-current liabilities 58,131,141.58 66,586,975.20
Total liabilities 2,100,271,455.19 1,754,207,086.17
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,247,162,107.35 1,247,162,107.35
Less: Treasury stock
Other comprehensive income 37,315,555.64 54,481,886.51
Specific reserves
Surplus reserves 251,800,000.00 251,800,000.00
Retained profits 3,307,203,353.63 2,587,051,422.29
Total owners’ equity 5,347,081,016.62 4,644,095,416.15
Total liabilities and owners’ equity 7,447,352,471.81 6,398,302,502.32
3. Consolidated income statement
Unit: RMB
Item 2016 2015
I. Total operating revenues 6,017,143,660.56 5,253,411,479.40
Including: Sales income 6,017,143,660.56 5,253,411,479.40
Interest income
Premium income
Handling charge and
commission income
II. Total operating costs 4,997,581,551.14 4,392,354,606.21
Including: Cost of sales 1,523,585,779.51 1,509,536,099.28
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 charges 955,988,399.10 790,205,631.87
Selling and distribution
1,980,127,377.89 1,557,800,618.96
expenses
Administrative expenses 556,513,607.99 543,822,606.51
Financial expenses -30,253,967.33 -20,334,406.40
Asset impairment loss 11,620,353.98 11,324,055.99
Add: Gain/(loss) from change in
-5,598.43 42,203.41
fair value (“-” means loss)
Gain/(loss) from investment
97,837,461.25 69,256,030.30
(“-” means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (“-”
means loss)
III. Business profit (“-” means loss) 1,117,393,972.24 930,355,106.90
Add: non-operating income 41,914,946.46 44,974,004.61
Including: Gains on
420,864.59 68,505.82
disposal of non-current assets
Less: non-operating expense 8,554,634.67 9,059,670.65
Including: Losses on
6,740,484.31 1,059,201.01
disposal of non-current assets
IV. Total profit (“-” means loss) 1,150,754,284.03 966,269,440.86
Less: Income tax expense 300,436,186.51 250,691,071.18
V. Net profit (“-” means loss) 850,318,097.52 715,578,369.68
Net profit attributable to
829,630,063.38 715,578,369.68
owners of the Company
Minority shareholders’ income 20,688,034.14 0.00
VI. After-tax net amount of other
-18,337,408.56 37,812,282.44
comprehensive incomes
After-tax net amount of other
comprehensive incomes
-18,337,408.56 37,812,282.44
attributable to owners of the
Company
(I) Other comprehensive
incomes that will not be
reclassified into gains and losses
1. Changes in net
liabilities or assets with a defined
benefit plan upon re-measurement
2. Enjoyable shares in
other comprehensive incomes in
investees that cannot be reclassified
into gains and losses under the
equity method
(II) Other comprehensive
incomes that will be reclassified -18,337,408.56 37,812,282.44
into gains and losses
1. Enjoyable shares in
other comprehensive incomes in
investees that will be reclassified
into gains and losses under the
equity method
2. Gains and losses on
fair value changes of -18,337,408.56 37,812,282.44
available-for-sale financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging
gains and losses on cash flows
5. Foreign-currency
financial statement translation
difference
6. Other
After-tax net amount of other
comprehensive incomes
attributable to minority
shareholders
VII. Total comprehensive incomes 831,980,688.96 753,390,652.12
Attributable to owners of the
811,292,654.82 753,390,652.12
Company
Attributable to minority
20,688,034.14 0.00
shareholders
VIII. Earnings per share
(I) Basic earnings per share 1.65 1.42
(II) Diluted earnings per share 1.65 1.42
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye
Changqing
Chief of the accounting division: Zhu Jiafeng
4. Income statement of the Company
Unit: RMB
Item 2016 2015
I. Total sales 3,308,399,250.03 3,007,068,150.18
Less: cost of sales 1,436,794,457.51 1,536,318,251.80
Business taxes and
857,620,971.74 748,278,391.57
surcharges
Distribution expenses 271,599,513.92 194,497,701.34
Administrative expenses 390,774,681.63 393,964,851.14
Financial costs -12,139,559.51 -19,235,711.99
Impairment loss 13,749,391.73 8,555,178.79
Add: gain/(loss) from change
-5,598.43 53,028.41
in fair value (“-” means loss)
Gain/(loss) from investment
507,037,614.00 574,517,573.20
(“-” means loss)
Including: income from
investment on associates and joint
ventures
II. Business profit (“-” means 857,031,808.58 719,260,089.14
loss)
Add: non-operating income 35,019,767.09 32,153,857.76
Including: Gains on
disposal of non-current assets
Less: non-operating expense 6,151,343.05 6,944,814.78
Including: Losses on
6,135,718.34 494,461.74
disposal of non-current assets
III. Total profit (“-” means loss) 885,900,232.62 744,469,132.12
Less: Income tax expense 115,388,301.28 46,777,999.81
IV. Net profit (“-” means loss) 770,511,931.34 697,691,132.31
V. After-tax net amount of other
-17,166,330.87 37,812,282.44
comprehensive incomes
(I) Other comprehensive
incomes that will not be
reclassified into gains and losses
1. Changes in net liabilities
or assets with a defined benefit
plan upon re-measurement
2. Enjoyable shares in other
comprehensive incomes in
investees that cannot be
reclassified into gains and losses
under the equity method
(II) Other comprehensive
incomes that will be reclassified -17,166,330.87 37,812,282.44
into gains and losses
1. Enjoyable shares in other
comprehensive incomes in
investees that will be reclassified
into gains and losses under the
equity method
2. Gains and losses on fair
value changes of -17,166,330.87 37,812,282.44
available-for-sale financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes 753,345,600.47 735,503,414.75
VII. Earnings per share
(I) Basic earnings per share 1.53 1.39
(II) Diluted earnings per share 1.53 1.39
5. Consolidated cash flow statement
Unit: RMB
Item 2016 2015
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 7,031,888,740.85 6,316,130,596.88
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
financial assets measured at fair
value of which changes are
recorded into current gains and
losses
Cash received from interest,
handling charges and
commissions
Net increase of intra-group
borrowings
Net increase of funds in
repurchase business
Tax refunds received 16,218,721.25 13,999,000.00
Other cash received relating to
345,789,490.57 175,581,055.15
operating activities
Subtotal of cash inflows from
7,393,896,952.67 6,505,710,652.03
operating activities
Cash paid for goods and
1,761,253,852.47 1,758,283,730.78
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 1,130,548,519.54 1,000,365,212.81
Various taxes paid 2,041,224,545.61 1,872,063,119.51
Other cash payment relating to
1,277,638,226.99 1,084,889,053.92
operating activities
Subtotal of cash outflows from
6,210,665,144.61 5,715,601,117.02
operating activities
Net cash flows from operating
1,183,231,808.06 790,109,535.01
activities
II. Cash flows from investing
activities:
Cash received from withdrawal
3,325,502,933.15 2,205,995,542.82
of investments
Cash received from return on
78,724,727.77 63,870,974.91
investments
Net cash received from disposal
of fixed assets, intangible assets 4,761,778.98 87,371.84
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
Other cash received relating
2,481,400.00 9,384,300.00
to investing activities
Subtotal of cash inflows from
3,411,470,839.90 2,279,338,189.57
investing activities
Cash paid to acquire fixed
assets, intangible assets and other 172,716,601.62 237,769,057.80
long-term assets
Cash paid for investment 3,973,944,183.44 2,372,945,376.50
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business 805,830,032.45 0.00
units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
4,952,490,817.51 2,610,714,434.30
investing activities
Net cash flows from investing
-1,541,019,977.61 -331,376,244.73
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received
from minority shareholder
investments by subsidiaries
Cash received from
1,000,000.00 0.00
borrowings
Cash received from issuance
of bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from
1,000,000.00 0.00
financing activities
Repayment of borrowings 1,000,000.00 0.00
Cash paid for interest
expenses and distribution of 50,360,000.00 100,720,000.00
dividends or profit
Including: dividends or
profit paid by subsidiaries to
minority shareholders
Other cash payments relating
104,376,537.45 0.00
to financing activities
Sub-total of cash outflows from
155,736,537.45 100,720,000.00
financing activities
Net cash flows from financing
-154,736,537.45 -100,720,000.00
activities
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents
V. Net increase in cash and cash
-512,524,707.00 358,013,290.28
equivalents
Add: Opening balance of
1,040,373,733.07 682,360,442.79
cash and cash equivalents
VI. Closing balance of cash and
527,849,026.07 1,040,373,733.07
cash equivalents
6. Cash flow statement of the Company
Unit: RMB
Item 2016 2015
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 4,048,263,462.34 3,095,958,832.08
service
Tax refunds received 15,009,167.60 13,999,000.00
Other cash received relating to
44,493,823.06 83,789,843.81
operating activities
Subtotal of cash inflows from
4,107,766,453.00 3,193,747,675.89
operating activities
Cash paid for goods and
1,629,164,465.68 1,750,534,302.48
services
Cash paid to and for employees 491,016,401.44 439,242,793.90
Various taxes paid 1,345,928,486.58 1,069,706,330.70
Other cash payment relating to
89,125,570.51 58,446,169.89
operating activities
Subtotal of cash outflows from
3,555,234,924.21 3,317,929,596.97
operating activities
Net cash flows from operating
552,531,528.79 -124,181,921.08
activities
II. Cash flows from investing
activities:
Cash received from retraction
3,271,955,614.05 2,152,485,489.19
of investments
Cash received from return on
492,653,360.82 569,743,711.19
investments
Net cash received from disposal
of fixed assets, intangible assets 3,995,766.04
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
Other cash received relating to
1,167,400.00 9,384,300.00
investing activities
Subtotal of cash inflows from
3,769,772,140.91 2,731,613,500.38
investing activities
Cash paid to acquire fixed
assets, intangible assets and other 157,553,414.54 219,472,454.26
long-term assets
Cash paid for investment 3,621,248,401.74 2,323,189,828.98
Net cash paid to acquire
subsidiaries and other business 816,000,000.00 0.00
units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
4,594,801,816.28 2,542,662,283.24
investing activities
Net cash flows from investing
-825,029,675.37 188,951,217.14
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from
borrowings
Cash received from issuance
of bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from
financing activities
Repayment of borrowings
Cash paid for interest
expenses and distribution of 50,360,000.00 100,720,000.00
dividends or profit
Other cash payments relating
to financing activities
Sub-total of cash outflows from
50,360,000.00 100,720,000.00
financing activities
Net cash flows from financing
-50,360,000.00 -100,720,000.00
activities
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents
V. Net increase in cash and cash
-322,858,146.58 -35,950,703.94
equivalents
Add: Opening balance of
548,650,832.84 584,601,536.78
cash and cash equivalents
VI. Closing balance of cash and 225,792,686.26 548,650,832.84
cash equivalents
7. Consolidated statement of changes in owners’ equity
2016
Unit: RMB
2016
Equity attributable to owners of the Company
Other equity
Less: Specifi Gener
Item instruments Other Minority Total owners’
treasur c Surplus al risk
Share capital Perpetu Capital reserve comprehensi Retained profit interests equity
Preferre Othe y reserv reserve reserv
al ve incomes
d shares r stock e e
bonds
I. Balance at
the end of 503,600,000. 1,294,938,493. 54,481,886.5 256,902,260. 2,723,798,990. 4,833,721,630.
the previous 00 19 1 27 11 08
year
Add:
change of
accounting
policy
Correction
of errors in
previous
periods
Business
18
mergers
under the
same control
Other
II. Balance
at the 503,600,000. 1,294,938,493. 54,481,886.5 256,902,260. 2,723,798,990. 4,833,721,630.
beginning of 00 19 1 27 11 08
the year
III. Increase/
decrease in
-18,337,408. 779,270,063.3 345,609,535. 1,107,009,289.
the period 467,099.06
56 8 80 68
(“-” means
decrease)
(I) Total
-18,337,408. 829,630,063.3 20,688,034.1 831,980,688.9
comprehensi
56 8 4 6
ve incomes
(II)
Capital
increased
and reduced
by owners
1.
Common
shares
increased by
shareholders
2.
19
Capital
increased by
holders of
other equity
instruments
3.
Amounts of
share-based
payments
recognized
in owners’
equity
4. Other
(III) Profit
-50,360,000.00 -50,360,000.00
distribution
1.
Appropriatio
ns to surplus
reserves
2.
Appropriatio
ns to general
risk
provisions
3.
Appropriatio -50,360,000.00 -50,360,000.00
ns to owners
20
(or
shareholders
)
4. Other
(IV)
Internal
carry-forwar
d of owners’
equity
1. New
increase of
capital (or
share
capital) from
capital
public
reserves
2. New
increase of
capital (or
share
capital) from
surplus
reserves
3.
Surplus
reserves for
21
making up
losses
4. Other
(V) Specific
reserve
1.
Withdrawn
for the
period
2. Used
in the period
324,921,501. 325,388,600.7
(VI) Other 467,099.06
66 2
IV. Closing 503,600,000. 1,295,405,592. 36,144,477.9 256,902,260. 3,503,069,053. 345,609,535. 5,940,730,919.
balance 00 25 5 27 49 80 76
2015
Unit: RMB
2015
Equity attributable to owners of the Company
Minorit
Other equity
Item Less: Other Specifi Genera y Total owners’
instruments Surplus
Share capital Capital reserve treasur comprehensi c l risk Retained profit interest equity
Preferre Perpetu Othe reserve
y stock ve incomes reserve reserve s
d shares al bonds r
I. Balance at
503,600,000. 1,294,938,493. 16,669,604.0 256,902,260. 2,108,940,620. 4,181,050,977.
the end of the
00 19 7 27 43 96
previous year
Add:
22
change of
accounting
policy
Correction of
errors in
previous
periods
Business
mergers
under the
same control
Other
II. Balance at
503,600,000. 1,294,938,493. 16,669,604.0 256,902,260. 2,108,940,620. 4,181,050,977.
the beginning
00 19 7 27 43 96
of the year
III. Increase/
decrease in
37,812,282.4
the period 614,858,369.68 652,670,652.12
4
(“-” means
decrease)
(I) Total
37,812,282.4
comprehensi 715,578,369.68 753,390,652.12
4
ve incomes
(II) Capital
increased and
23
reduced by
owners
1.
Common
shares
increased by
shareholders
2.
Capital
increased by
holders of
other equity
instruments
3.
Amounts of
share-based
payments
recognized in
owners’
equity
4. Other
(III) Profit -100,720,000.0 -100,720,000.0
distribution 0 0
1.
Appropriatio
ns to surplus
reserves
24
2.
Appropriatio
ns to general
risk
provisions
3.
Appropriatio
-100,720,000.0 -100,720,000.0
ns to owners
0 0
(or
shareholders)
4. Other
(IV)
Internal
carry-forwar
d of owners’
equity
1. New
increase of
capital (or
share capital)
from capital
public
reserves
2. New
increase of
capital (or
share capital)
25
from surplus
reserves
3.
Surplus
reserves for
making up
losses
4. Other
(V) Specific
reserve
1.
Withdrawn
for the period
2. Used
in the period
(VI) Other
IV. Closing 503,600,000. 1,294,938,493. 54,481,886.5 256,902,260. 2,723,798,990. 4,833,721,630.
balance 00 19 1 27 11 08
8. Statement of changes in owners’ equity of the Company
2016
Unit: RMB
2016
Other equity instruments Less: Other
Item Specific Total owners’
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve Retained profit
Other reserve equity
shares bonds stock incomes
26
I. Balance at the
end of the 503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
previous year
Add: change
of accounting
policy
Correction
of errors in
previous periods
Other
II. Balance at the
beginning of the 503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
year
III. Increase/
decrease in the
-17,166,330.87 720,151,931.34 702,985,600.47
period (“-” means
decrease)
(I) Total
comprehensive -17,166,330.87 770,511,931.34 753,345,600.47
incomes
(II) Capital
increased and
reduced by
owners
1. Common
shares increased
by shareholders
27
2. Capital
increased by
holders of other
equity
instruments
3. Amounts
of share-based
payments
recognized in
owners’ equity
4. Other
(III) Profit
-50,360,000.00 -50,360,000.00
distribution
1.
Appropriations to
surplus reserves
2.
Appropriations to
-50,360,000.00 -50,360,000.00
owners (or
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
increase of capital
(or share capital)
28
from capital
public reserves
2. New
increase of capital
(or share capital)
from surplus
reserves
3. Surplus
reserves for
making up losses
4. Other
(V) Specific
reserve
1.
Withdrawn for
the period
2. Used in
the period
(VI) Other
IV. Closing
503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
balance
2015
Unit: RMB
2015
Other equity instruments Less: Other
Item Specific Total owners’
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve Retained profit
Other reserve equity
shares bonds stock incomes
29
I. Balance at the
end of the 503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
previous year
Add: change
of accounting
policy
Correction
of errors in
previous periods
Other
II. Balance at the
beginning of the 503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
year
III. Increase/
decrease in the
37,812,282.44 596,971,132.31 634,783,414.75
period (“-” means
decrease)
(I) Total
comprehensive 37,812,282.44 697,691,132.31 735,503,414.75
incomes
(II) Capital
increased and
reduced by
owners
1. Common
shares increased
by shareholders
30
2. Capital
increased by
holders of other
equity
instruments
3. Amounts
of share-based
payments
recognized in
owners’ equity
4. Other
(III) Profit
-100,720,000.00 -100,720,000.00
distribution
1.
Appropriations to
surplus reserves
2.
Appropriations to
-100,720,000.00 -100,720,000.00
owners (or
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
increase of capital
(or share capital)
31
from capital
public reserves
2. New
increase of capital
(or share capital)
from surplus
reserves
3. Surplus
reserves for
making up losses
4. Other
(V) Specific
reserve
1.
Withdrawn for the
period
2. Used in
the period
(VI) Other
IV. Closing
503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
balance
32
Anhui Gujing Distillery Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2016
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
Note 1: Company Profile
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.
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 235 million, the total amount of shares were 235 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
33
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 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 2016, the accumulated total amount of issued capital was 503.6 million shares, see Note
6.27.
The company registered in Gujing town, Bozhou city, Anhui province.
The approved business scope of the Company: 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 26 April, 2017. According to the
articles of association, the financial statements will be submitted to the shareholders meeting for consideration.
The combination scope includes total 21 subsidiaries in 2016, please see Note 8 “Interest in other entities” for
details. The combination scope increase 10 subsidiary than prior year and please see Note 7 “Changes of scope
of consolidated financial statements” for details.
34
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 (Ministry of Finance issued order No.33, the Ministry of
Finance revised order No.76) on15 February 2006, and revised Accounting Standards (order 41 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 (2014 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.
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 2016. 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 (2014 Revision) issued by China Securities Regulatory
Commission (CSRC) in 2014.
Note 4: Signaficant accounting policies and accounting estimates
The company and subsidiaries are mainly engaged in liquor production and sales. The company formulates the
specific accounting policies and accounting estimates for revenue recognition and other transactions and events
in accordance with the actual business operation characteristics of the company and subsidiaries, and provisions
of the relevant accounting standard for business enterprises, please see Note 4.23 “Revenue” for details. The
description of significant account judgment and estimates made by management please see Note 4.28
“Significant accounting judgment and 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 1 January to 31 December.
35
4.2 Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets for
processing until. The company has a 12 -month operating cycle, and its assets and liabilities as liquidity criteria
for the classification.
4.3 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.
4.4 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.
4.4.1 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
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.
4.4.2 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
36
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
adjusted.
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.
For a business combination not involving enterprise under common control, which achieved in stages that
involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of
Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) and Article 51 of “Accounting Standards for
Business Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion (see Note
4.5.2), to judge the multiple exchange transactions whether they are the "package deal". If it belong to the
37
“package deal” in reference to the preceding paragraphs of this section and the Notes described in 4.13
“long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the
individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's equity investment before
the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment,
the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the
disposal of the investment will be in other comprehensive income associated with the use of infrastructure and
the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is,
except in accordance with the equity method of accounting in the defined benefit plan acquiree is remeasured
net changes in net assets or liabilities other than in the corresponding share of the lead, and the rest into the
current investment income).
In the combination financial statements, the equity interest 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 previously-held equity interest in the acquiree involved in
other comprehensive income and other comprehensive income associated with the purchase of the foundation
should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that
is, except in accordance with the equity method of accounting in the acquiree is remeasured defined benefit
plans other than changes in net liabilities or net assets due to a corresponding share of the rest of the acquisition
date into current investment income).
4.5 Preparation of the consolidated financial statements
4.5.1 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.
Once the change in the relevant facts and circumstances leading to the definition of the relevant elements
involved in the control of the change, the company will be re-evaluated.
4.5.2 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
38
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.
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’/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. Other comprehensive income related to the former subsidiary's equity
investment, using the foundation and the acquiree directly related to the disposal of the same assets or liabilities
are accounted when the control is lost (ie, in addition to the former subsidiary is remeasured at the net defined
benefit plan or changes in net assets and liabilities resulting from, the rest are transferred to the current
39
investment income). 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 4.13 Long-term equity investments and Note 4.9 Financial instruments for details.
Where loss of control over a subsidiary results from multiple transactions (agreements), asssessment shall be
made as to whether the multiple agreements shall be viewed as a whole as a single transaction. Multiple
agreements giving rise to loss of control over a subsidiary is generally viewed as a whole as a single transaction
if the terms, conditions and economic implications of the multiple agreements satisfy one or more of the following
conditions: 1) the agreements are entered into simultaneously or taking into account the implication of each other;
2) the business objective cannot be achieved without successful completion of all the agreements; 3)the
occurrance of one agreement is dependent on the result of at least another one agreement; and/or 4) any one
single agreement is not recognised as economic and the agreements as a whole is economic. Where multiple
agreements do not satisfy the conditions of being viewed as a single transaction, each agreement shall be
treated and accounted for in accordance with the provisions of disposal of long-term equity investments not
resulting loss of control (see Note 4.13.2.4) or loss of control due to disposal of shares or other events (see the
previous paragraph). Where nultiple agreements satisfy the conditions of being viewed as a single transaction,
each agreement shall be treated and accounted for as a transaction which results in loss of control; differences
between the consideration for disposals prior to loss of control and the net assets proportionate to the shares
disposed prior to loss of control are recognised as other comprehensive income in the consolidated financial
statements and transfered to profit or loss at the time of loss of control.
4.6 Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control. A joint arrangement is
either a joint operation or a joint venture, depending of the rights and obligation of the Company in the joint
arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets,
andobligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the
Company has rights to the net assets of the arrangement.
The Company accounts for joint ventures using the equity method, see Note 4.13.2.2 for details.
The company, a joint operator, recognizes in relation to its interest in a joint operation:(a)its assets, including its
share of any assets held jointly;(b)its liabilities, including its share of any liabilities incurred jointly;(c)its revenue
from the sale of its share of the output arising from the joint operation;(d)its share of the revenue from the sale of
the output by the joint operation; and (e)its expenses, including its share of any expenses incurred jointly.
When the Company enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, the Company, prior to disposal of the assets to a third party by the joint operation,
recognizes gains and losses resulting from such a transaction only to the extent of the other parties' interests in
40
the joint operation. When there is evidence of a reduction in the net realizable value of the assets to be sold or
contributed to the joint operation, or of an impairment loss of those assets which is in line with provision
stipulated by CAS 8, those losses are recognized fully by the Company. When there is evidence of a reduction in
the net realizable value of the assets to be purchased or of an impairment loss of those assets, the Company
shall recognize its share of those losses.
4.7 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.
4.8 Foreign exchange
4.8.1 Translation in foreign exchange transactions
Transactions denominated in foreign currencies are translated into the functional currency using the
transaction-date spot exchange rates. Where a transaction is conducted purely for the purpose of exchange one
currency into another currency, the exchange rate used to translate the foreign currency into the functional
currency is the exchange rate that is actually used for the currency exchange.
4.8.2 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 ①those
relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are
capitalized in accordance with the principle of capitalization of borrowing costs, ②hedging 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.
4.9 Financial instruments
4.9.1 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
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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.
4.9.2 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.
4.9.2.1 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;
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.
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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.
4.9.2.2 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
discounts, etc.
4.9.2.3 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.
4.9.2.4 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.
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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.
4.9.3 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.
4.9.3.1 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.
4.9.3.2 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.
4.9.4 Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
a. the rights to receive cash flows from the asset have expired;
b. the enterprise has transferred its rights to receive cash flows from the asset to a third party under a
pass-through arrangement; or
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c. 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 norretained 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
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.
4.9.5 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.
4.9.5.1 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.
4.9.5.2 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 is recognized in profit or loss for the current period.
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4.9.6 Derecognition of financial liabilities
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
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.
4.9.7 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 gain or loss caused by
the fair value change of the hedging instrument which the hedging is highly efficiency will be recorded into
specific period in accordance with the hedging accounting according the hedging relationship. Except for the
hedging above, the resulting gain and loss of other derivatives 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.
4.9.8 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.
4.9.9 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 Company does not recognize any
changes in the fair value of equity instruments.
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4.10 Receivables
The receivables by the Company include account receivables, and other receivables.
4.10.1 Impairment of receivables
Receivables are assessed for impairment on balance sheet dates. An impairment allowance for receivables is
recognised if any of the following is present upon assessment:
a. significant financial difficulty of the issuer or obligor; or
b. a breach of contract, such as a default or delinquency in interest or principal payments; or
c. it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
d. other objective evidence indicating impairment.
4.10.2 Impairment allowance for receivables
4.10.2.1 Receivables of individual significance subject to individual assessment and the relevant impairment
allowance
Individual receivables equal to or over CNY 2,000,000.00 are classified as receivables of individual significance.
Receivables of individual significance are individually assessed for impairment. Receivables of individual
significance assessed as non-impaired upon individual assessment are incorporated into portfolios of financial
assets of similar credit risk characteristics for assessment for impairment by portfolio. Receivables of individual
significance assessed as impaired upon individual assessment are no longer subject to assessment for
impairment by portfolio.
4.10.2.2 Portfolios of receivables of similar credit risk characteristics and the relevant impairment allowance
A. Classification of portfolios
Receivables of individual insignificance and non-impaired receivables of individual significance upon individual
assessment are classified into portfolios of financial assets on the basis of similarity and relevance of credit risk
characteristics. Credit risk characteristics represent the ability of the issuers or obligors to make payments in
accordance with contracts and future cash flows of the relevant assets.Evidence of portfolios：
Portfolio Criteria
Portfolio by age Age of receivables
Related party portfolios Entities within the scope of the consolidation.
B. Impairment allowance for portfolios
Impairment allowance for portfolios is measured with reference to portfolio structure, credit risk characteristics
(the ability of the issuers or obligors to make payments in accordance with contracts) of each portfolio, historical
experience, current market economic conditions, and recognised impairment in each portfolio.
Measurement method for impairment allowance for portfolios
Portfolio Measurement method
Portfolio by age Age analysis method
Related party portfolios No allowance for bad debt
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a. Impairment allowance measured by age analysis
Proportion to accounts receivable Proportion to other receivables
Age group
(%) (%)
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 3 years 100.00 100.00
4.10.2.3 Receivables of individual insignificance subject to individual assessment
Receivables of individual insignificance are individually assessed for impairment is any of the following is
present:
there is disagreement with the issuer or obligor; or are subject to litigation; or it is clearly evidential that the
issuer or obligor is very likely not capable of fulfilling its commitments.
When a receivable of individual insignificance is impaired upon individual assessment for impairment,
impairment loss is recognised as the excess of its carrying amount over the present value of its future cash
flows and an impairment allowance of the same amount is recognised.
4.10.3 Reversal of impairment allowance for receivables
After the impairment is recognised, if events subsequent to the recognition of the impairment are objectively
evidential that the impairment no longer exists, the impairment allowance and impairment loss are reversed;
however, the reversal shall not cause the carrying amount of the receivable exceeds its carrying amount as at
the reversal date as if no impairment allowance was recognised.
4.11 Inventories
4.11.1 Classification of inventory
The Company’s inventory mainly includes raw materials, semi-finished product, work-in-progress and finished
products.
4.11.2 Costing of inventories
Inventories are initially carried at the actual cost. Cost of inventories includes purchase cost, conversion cost
and other cost. Cost of issue is measured using the weighted average method.
4.11.3 Determination of net realisable value of inventories and impairment allowance for 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
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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.
4.11.4 Physical inventories are managed by the perpetual inventory taking system.
4.11.5 Amortisation of low value consumables and packaging materials
Low value consumables and packaging materials are fully amortised at the time of issuance.
4.12 Held-for-sale assets
A non-current asset is classified as held-for-sale if all of the following conditions are satisfied:
a. the asset is immediately sellable at its current condition per usual sales term applicable to the type of assets to
which it belongs;
b. the Company's has completed official decision to dispose the asset;
c. the Company has entered into irrevokable sales contract with the purchaser; and
d. the sales will be completed within one year.
Amortisation or depreciation of the held-for-sale asset ceases at the time of classification. The asset is measured
at the lower of its book value and its classification date fair value minus disposal costs upon classification.
Held-for-sale non-current assets include individual assets and disposal groups. If a disposal group satisfy the
conditions of the asset group defined by CAS 8 - Asset Impairment and includes goodwill arising from business
combination allocated in accordance with CAS 8 or the disposal group is an operation with an asset group, the
disposal group include goodwill arising from business combination.
Individual non-current assets held for sale and assets of disposal groups held for sale are collectively presented
on the (consolidated) statement of financial position as a line item of current assets. Liabilities of disposal groups
held for sale are collectively presented on the (consolidated) statement of financial position as a line item of
current liabilities.
A held-for-sale asset or held-for-sale disposal group is reclassified from held-for-sale when the conditions for
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classification of the asset (disposal group) as held-for-sale are no longer satisfied and is measured at the lower
of its classification date book value minus cumulative depreciation, amortisation and impairment as if it has not
been reclassified as held-for-sale and it recoverable amount as of the date on which the conditions for
classification of the asset (disposal group) as held-for-sale are no longer satisfied.
4.13 Long-term equity investments
Long-term equity investments in this section refers to the long-term investment through which the Company has
control, joint control, or material influence on the investee. Long-term equity investments through which the
Company does not have control, joint control or material influence on the investee shall be recognised as
available-for-sale financial assets or financial assets measured by fair value with changes in fair value
recognised in profit or loss. See Note 4.9 for details.
Joint control is the contractually agreed sharing of control over an economicactivity, and exists only when the
strategic financial and operating decisionsrelating to the activity require the unanimous consent of the parties
sharingcontrol. Significant influence is the power to participate in the financial and operatingpolicy decisions of
the investee but is not control or joint control over thosepolicies.
4.13.1 Determination of Investment cost
Long-term equity investment acquired through business combination under common control are measured at the
acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's
consolidated financial statements. The difference between the initial cost and cash paid, non-monetary assets
transferred and liabilities assumed by is adjusted to capital reserves, and to retained earnings if capital reserves
are insufficient. If the consideration is paid by issuing equity instruments, the initial cost is measured at the
acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's
consolidated financial statements, with the face value of the equity instruments issued recognised as share
capital and the difference between the intial cost and the face value of the equity instruments issued adjusted to
capital reserves, and to retained earnings if capital reserves is insufficient.For business combination involving
entities under common control achieved through multiple transactions (acquistion in stages), the multiple
agreements are assessed to determine whether they should be viewed as a lump-sum purchase. Where multiple
agreements of an acquisition in stages are viewed as a lump-sum purchase, the transactions are viewed as one
transation that acquire the control power. Where multiple agreements of an acquisition fail the conditions of a
lump-sum purchase, long-term equity investment acquired through business combination under common control
are measured at the acquirer's share of the combination date book value of the acquiree's net equity in the
ultimate controller's consolidated financial statements. The difference between the initial cost, and the book value
of the long-term equity investment before combination date and considerations paid to acquire new shares on the
combination date, is adusted to capital reserves, and toretained earnings if capital reserves are insufficient.
Long-term equity investment acquired through business combination not under common control is measured at
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combination cost on the combination date. The combination cost includes assets contributed by the purchaser,
lialilities iccurred or assumed by, and fair value of the equity instruments issued by the acquirer. For business
combination involving entities not under common control achieved through multiple transactions (acquistion in
stages), the multiple agreements are assessed to determine whether they should be viewed as a lump-sum
purchase. Where multiple agreements of an acquisition in stages are viewed as a lump-sum purchase, the
transactions are viewed as one transation that acquire the control power. Where multiple agreements of an
acquisition fail the conditions of a lump-sum purchase, long-term equity investment acquired through business
combination not under common control are measured at the sum of the original book value of the equity
investment on the investee and the new investment cost, which is regarded as the new initial cost of the
long-term investment when transferred to cost method. If the original equity is measured by equity method, not
accounting treatment is applied to relevant other comprehensive income temporarily.
Audit, legal services, valuation, and other directly associated administrative expenses incurred by the acquirer
are recognised in profit or loss on the transaction dates.
Long-term equity investments acquired not through business combination are measured at cost on initial
recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash paid, the fair value
of equity instrument issued, the contract price, the fair value or book value of the assets given away in the case
of non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost of
acquisition of a long-term equity investment acquired not through business combination also includes all directly
associated expenses, applicable taxes and fees, and other necessary expenses. When the Company increase
investment to have material influence or joint control, but not control over the investee, long-term investments are
measured at the sum of fair value of initial equity investment and cost of new investment as defined in
CAS22-Recognition and Measurement of Financial Assets.
4.13.2 Subsequent measurement and recognition and measurement of gain or loss
Where a long-term equity investment gives the Company either joint control or significant influence over the
respective investee, the investment is subsequently measured using the equity method.
Where a long-term equity investment gives the Company control over the respective investee, the investment is
subsequently measured at cost.
4.13.2.1 Long-term equity investments measured at cost
A long-term equity investment is measured at cost of investment, excluding declared cash dividends or profit
pending distribution included in the consideration paid. Investment income for the relevant period from a
long-term equity investment measured at cost is recognised as the Company's share of the cash dividends or
profit declared for distribution by the investee.
4.13.2.2 Long-term equity investments measured using the equity method
When the cost of a long-term equity investment measured using the equity method on initial recognition exceeds
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the Company's share of the fair value of the respective investee's net identifiable assets, no adjustment is made
to the cost of the investment for the excess. When the Company's share of the fair value of an investee's net
identifiable assets exceeds the cost of the respective long-term equity investment measured using the equity
method on initial recognition, adjustment is made to the cost of the investment for the difference and the
difference is carried to profit or loss for the period during which the investment is recognised.
Investment income or loss and other comprehensive income for the relevant period from a long-term equity
investment measured using the equity method is measured at the Company's share of the net profit or loss and
other comprehensive income of the respective investee for the relevant period, and the book value of long-term
equity investments is adjusted accordingly. If the investee declares profit distribution or cash dividends, long-term
equity investments are reduced by the Company’s share of declared profit distribution or cash dividends in the
investee.Long-term equity investments will be adjusted and capital reserves are recognised with variationsother
than net profit or loss, other comprehensive income, and profit distribution. When computing the Company's
share of the net profit or loss of the investee for the relevant period, net profit or loss of the investee for the
relevant period is adjusted, if necessary, for the fair value of the investee's identifiable assets and identifiable
liabilities on acquisition and the Company's accounting policies and accounting period. Investment income and
other comprehensive income is recognised accordingly. The computation of the Company's share of the net profit
or loss of the investee for the relevant period also eliminates unrealised profit and lossarising from transactions
between the Company and the investee (a joint venture or associate, whichever is applicable) and contributing or
selling assets to the investee which forms an operation,to the extent of the Company's share calculated by the
Company's shareholding in the investee for the relevant period, except for the unrealised loss resulted from
impairment of transferred assets. When contributing assets to the joint venture or associate by the Company
forms an operation and the investor acquires the long-term equity investment without control, long-term equity
investments are measured at fair value of the contributed operations, with the difference between initial
investment cost and book value of the contributed operation fully recognised in profit or loss for the period. When
selling assets to the joint venture or associate by the Company forms an operation, the difference between
considerations received and book value of the operation is fully recognised in profit and loss for the period. When
purchasing assets from the joint venture or associate by the Company belongs to an operation, income and
losses are fully recognised as specified in CAS20-Business Combination.
When the Company's share of an investee's net loss exceeds the sum of the carrying amount of the respective
long-term equity investment measured using the equity method and other investments in the investee, the
carrying amount of the long-term equity investment and other investments in the investee is reduced to zero. If
the Company is obliged to share loss of the investee after its long-term equity investment and other investments
have been reduced to zero, an investment loss and provision is recognised to the extent of the estimated
obligation. If the investee reports profit in subsequent periods, the Company only recognises its share of profit
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after its share of profit equals the share of loss not recognised.
For long-term equity investments in associates and joint ventures which had been held by the Company before
its first time adoption of new accounting standards, where the initial investment cost of a long-term equity
investment exceeds the Company’s share in the investee’s net assets at the time of acquisition, the excess is
amortised and is recognised in profit or loss on a straight line basis over the original remaining life.
4.13.2.3 Acquisition of minority interests
If minority interests in an investee is acquired by the Company, during the Company's preparation of the
consolidated financial statements, the difference between the Company's cumulative share of the investees net
assets calculated on the basis of the new shareholding in the investee from the acquisition date (or combination
date) and the Company's investment in the investee following the minority interest acquisition is adjusted to
capital reserves, and to retained earnings if capital reserves is insufficient.
4.13.2.4 Disposal of long-term equity investments
On the consolidated financial statements, when partly disposal of a long-term equity investment in a subsidiary
which does not cause loss of control over the subsidiary, the difference between the consideration for disposal
and the net identifiable asset given away proportionate to the disposed shares in the subsidiary is recognised in
equity; partly disposal of a long-term equity investment in a subsidiary which cause loss of control over the
subsidiary is accounted for in accordance with Note 4.5.2.
The difference between the consideration for disposal of long-term equity investments and the carrying amount
of the long-term equity investments disposed is recognised in profit or loss for the period during which the
investments are disposed.
When a long-term equity investment measured using the equity method is disposed and the residual equity after
disposal is still measured using equity method, the respective cumulative other comprehensive income
recognised in equity proportionate to the disposed investment shall adopt the same accounting treatment as the
investee disposes relevant assets or liabilities directly. Movement in invstee’s equity other than changes in net
profit or loss, other comprehensive income, and profit distribution is recognised in profit or loss proportionally.
When a long-term equity investment measured using the cost method is disposed and the residual equity after
disposal is still measured using cost method, other comprehensive income,which is recognised by equity method
or recognition and measurement applicable to financial instruments prior to the Company's acquisition of control
over the investee, shall adopt the same accounting treatment as the the investee disposes relevant assets or
liabilities directly on the date of loss of control, and profit or loss is recognised proportionally. Movement in
invstee’s equity other than changes in net profit or loss, other comprehensive income, and profit distribution is
recognised in profit or loss proportionally.
Where the Company's control over an investee is lost due to partial disposal of investment in the investee and
the Company continues to have significant influence over the investee after the partial disposal, the investment is
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measured by equity method in the Company's separate financial statements; where the Company's control over
an investee is lost due to partial disposal of investment in the investee and the Company ceases to have
significant influence over the investee after the partial disposal, the investment is measured in accordance with
the recognition and measurement principles applicable to financial instruments in the Company's separate
financial statements and the difference between the fair value and book value of the remaining investment at the
date of loss of control is recognised in profit or loss. Cumulative other comprehensive income relevant to the
investment, which is recognised by equity method or recognition and measurement principles applicable to
financial instruments prior to the Company's acquisition of control over the investee,shall adopt the same
accounting treatment as the the investee disposes relevant assets or liabilities directly on the date of loss of
control, The investee's equity movement other than changes in net profit or loss, other comprehensive income
and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss when control is
lost. Where the remaining investment is measured by equity method, the fore-mentioned other comprehensive
income and other equity movement are recognised in profit or loss proportionate to the disposal; Where the
remaining investment is measured in accordance with the recognition and measurement principles applicable to
financial instruments, the fore-mentioned other comprehensive income and other equity movement are fully
recognised in profit or loss.
Where the Company's joint control or significant influence over an investee is lost due to partial disposal of
investment in the investee, the remaining investment in the investee is measured in accordance with the
recognition and measurement principles applicable to financial instruments, the difference between the fair value
and the book value of the remaining investment at the date of loss of joint control or significant influence is
recognised in profit or loss.Cumulative other comprehensive income relevant to the investment, which is
recognised by equity method or recognition and measurement principles applicable to financial instruments prior
to the Company's acquisition of control over the investee, shall adopt the same accounting treatment as the the
investee disposes relevant assets or liabilities directly on the date of loss of control, The investee's equity
movement other than changes in net profit or loss, other comprehensive income and profit distribution, as a
result of accounting by equity method, is reocgnised in profit or loss when control is lost.
Where the Company's control over an investee is lost through multiple disposals and the multiple disposals can
be viewed as a lum-sum transaction, the multiple disposals is accounted for one single transaction which results
in the Company's loss of control over the investee. Difference between the consideration received and the book
value of the investment disposed at each time of disposal is recognised in other comprehensive income and
reclassified in full to profit or loss at the period when control over the investee is lost.
4.14 Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes
leased or ready to transfer after capital appreciation land use rights and leased buildings. Investment property is
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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 it 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 20 “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.
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.
4.15 Fixed assets
4.15.1 Definition
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.
4.15.2 Depreciation of fixed assets
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 8.00-35.00 3.00-5.00 2.70-12.10
Machineries 5.00-10.00 3.00-5.00 9.50-19.40
Vehicles 4.00 3.00 24.25
Administrative equipment and others 3.00 3.00 32.33
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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.
4.15.3 Assessment for impairment and impairment allowance
Impairment and provisions of fixed assets are disclosed on Note 4.20 Impairment of non-current and
non-financial assets.
4.15.4 Recognition and measurement of fixed assets held under financial lease
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.
Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the
fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets
can be obtained at the end of the lease period, the leased assets are depreciated over their useful lives;
otherwise, the leased assets are depreciated over the shorter of the lease terms and the useful lives of the
leased assets.
4.15.5 Other relevant information
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.
4.16 Construction in progress
The cost of construction in progress is measured at the actual expenditure incurred, including construction
expenditure and capitalisation of borrowing costs and other applicable costs incurred prior to the completion. An
item of construction in progress is reclassified to fixed asset upon completion.
See Note 4.20 for details of assessment for impairment of construction in progress and impairment allowance
for construction in progress.
4.17 Borrowing costs
Borrowing costs include interests on loans, amortisation of discount or premium, ancillary expenses, and foreign
exchange difference on loans denominated in foreign currencies. Borrowing costs directly associated with the
acquisition of construction of a qualifying asset are eligible for capitalisation. Capitalisation starts when
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expenditure on the qualifying asset is incurred, borrowing costs are incurred, or production or construction of the
qualifying asset for its intended use or sales is started, whichever is later. Capitalisation stops when the
qualifying assets reach the condition of its intended use or sales. All other borrowing costs are recognised in
profit or loss for the period during which they are incurred.
When a loan is taken out specifically for the construction of a particular qualifying asset, the interest expense
capitalised for a particular period is the residual amount after deducting interest income from unused facilities
for the period and/or income from temporary investment of the unused facilities for the period from the interest
expense incurred for the period. Borrowing costs on general purpose financing is calculated by multiplying the
weighted average of the excess of cumulative capital expenditure over the designated financing facilities with
the capitalisation rate of general purpose financing. Capitalisation rate of general purpose financing is
calculated as the weighted average of the interest rates of general purpose financing.
Foreign exchange difference on designated financing denominated in foreign currencies incurred during the
capitalisation period is wholly capitalised. Foreign exchange difference on general purpose financing
denominated in foreign currencies is recognised in profit or loss for the period during which it is incurred.
A qualifying asset is an item of fixed assets, investment property, inventories, etc. which requires substantial
period of time for the construction or production for its intended use of sales.
If the construction or production of a qualifying asset stops for a period longer than three months, capitalisation
of borrowing costs is suspended until the construction or production is resumed.
4.18 Intangible assets
4.18.1 Intangible asset
An intangible asset is an identifiable non-monetary asset without a physical form which is owned or control by
the Company.
Intangible assets are measured at cost on initial recognition. If it is probable that economic benefits associated
with expenditure directly associated with an item of intangible assets will flow to the Company and the cost of
the expenditure can be reliably measured, the expenditure is measured as part of the intangible asset's initial
cost; all other expenditure is recognised in profit or loss for the period during which it is incurred.
Land use rights acquired are generally recognised as intangible assets. In the case of self-constructed building,
the costs of acquiring the respective land use right(s) and the costs of building construction are separately
recognised and measured as intangible assets and fixed assets respectively. In the case of purchased building,
the costs of acquisition are allocated to land use right(s) and building; if the reasonable allocation is impossible,
the costs of acquisition as a whole are recognised and measured as fixed assets.
For an item of intangible assets which is with a finite useful life, the residual amount after deducting its
estimated residual value and previously recognised impairment from its cost is amortised over its estimated
remaining useful life using the straight-line method starting from the month in which it reaches the conditions of
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its intended use of sales. Intangible assets with infinite useful life are not amortised.
Useful lives of intangible assets are review on each balance-sheet date. If circumstances indicate that there is a
change in the useful life of an item of intangible assets with a finite useful life, a change in accounting estimates
is carried out. If circumstances indicate that the useful life of an item of intangible assets with infinite useful life
becomes finite, the useful life of the intangible asset is estimated and the intangible asset is amortised
accordingly.
4.18.2 Research and development expenditure
A research and development project is divided into research stage and development stage.
Expenditure incurred during the research stage is recognised in profit or loss for the period during which it is
incurred.
Expenditure incurred during the development stage is recognised as intangible assets if all of the following
conditions are satisfied:
a. it is technically feasible to complete the intangible asset so that it can be used or sold; and
b. the Company has clear intention to complete the intangible asset and to use it or sell it; and
c. it is evidential that the intangible asset will generate economic benefits either by selling the intangible asset
itself or the goods produced by the intangible asset or by using it internally; and
d. there are sufficient technical, financial and other resources to complete the intangible asset and the Company
is able to use it or sell it, and
e. expenditure incurred in the development stage of the intangible asset can be reliably measured.
Where a research and development project cannot be separated into the research stage and development
stage, all expenditure incurred for the project is recognised in profit or loss for the period during which it is
incurred.
4.18.3 Assessment for impairment and impairment allowance
See Note 4.20 for details of assessment for impairment of intangible assets and impairment allowance for
intangible assets.
4.19 Deferred charges
An item of deferred charges is an expense incurred which brings economic benefits to the Company for a period
exceeding one year starting from transaction date. An item of deferred charges is amortised over its estimated
useful life using the straight-line method.
4.20 Impairment of non-current assets
Non-current non-monetary assets, such as fixed assets, construction in progress, intangible assets with finite
useful life, investment property measured by cost, and long-term equity investments in subsidiaries, joint
ventures and associates, are assessed for impairment on each balance-sheet date. If circumstances on a
balance-sheet date indicate that a non-current non-monetary asset is impaired, the recoverable amount of the
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asset is estimated. The recoverable amounts of goodwill, intangible assets with infinite useful live and intangible
assets which have not yet reached the conditions of their intended use or sales are estimated at least once a
year regardless of whether there is indication of impairment.
If the carrying amount of a non-current non-monetary asset exceeds its estimated recoverable amount, the
excess of the carrying amount over the estimated recoverable amount is recognised as impairment allowance
and an impairment loss of the same amount is recognised. The estimated recoverable amount of an asset is the
higher of the residual amount after deducting disposal expense of the asset from its fair value and the present
value of its future cash flows. Where there is a sales contract for an asset and the contract is entered into for an
arm's length transaction, the fair value of the asset is the contract price; where there isn't a sales contract for an
asset but there is an active market for it, the fair value of the asset is price offered by the buyer; where there is
neither a sales contract nor an active market for an asset, the fair value of the asset is best estimate based on
all available information. The disposal cost of an asset includes legal expenses, applicable taxes and fees and
transportation costs directly associated with the asset's disposal and all direct costs necessary to bring the
asset to its sellable condition. The present value of an asset's future cash flows is calculated by multiplying the
cash flows arising from continual use of the asset and its disposal by an appropriate discount rate. Impairment
allowance is generally calculated on the basis of individual assets. If it is not possible to estimate the
recoverable amount of an individual asset, the recoverable amount of a cash-generating unit to which the asset
belongs is estimated. A cash-generating unit is the smallest combination of assets that is capable of cash flow
generation.
Goodwill separately presented on the (consolidated) financial statements is allocated to cash-generating units
or groups of units that are expected to benefit from the synergy of business combination for impairment testing.
Where the recoverable amount a cash-generating unit (or group of units) is lower than its carrying amount, an
impairment loss is recognised. The impairment loss is firstly allocated to the goodwill allocated to the unit (or
group of units) and then to individual assets pro rota on the basis of the carrying amount of each asset in the
unit (or group of unites)
Impairment loss recognised in accordance with this section is irreversible in subsequent periods.
4.21 Employee Benefits
The employee benefits of the company include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits:
Short-term employee benefits includes wages, bonuses, allowances and subsidies, welfare, health insurance ,
maternity insurance, work injury insurance, housing funds, labor union funds, employee education funds,
non-monetary benefits and etc. Short-term employee benefits are recognised as liabilitiesand profit or loss
account or the costs associated with the asset during the accounting period when employees actually provide
services.The non -monetary benefits are measured at fair value.
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Post-employment benefits include defined contribution plans and defined benefit plans. Defined contribution
plan which includes the basic pension, unemployment insurance and annuities shall be recognised as cost of
related assets or profit or loss.
When the Company terminates the labor relationship with employees prior to the employment contracts, or
encourages employees to accept voluntary redundancy compensation proposals in this company, a provision
shall be recognised for the compensation arising from the termination of employment relationship with
employees at the time when the Company can not unilaterally withdraw layoff proposal termination benefits
provided due to termination of employment, or the company ensures the costs related to the payment for
termination benefits related to the restructuring, which one is early to confirm employee benefits liabilities, and
recorded as profit or loss. However, if termination benefits can not be fully paid after twelve months of the
reporting date the liability shall be processed in accordance with other long-term employee benefits.
Retirement plan adopts the same principles as the termination benefits. The salaries and insurance to be paid
from the date when employees stop providing services to the date of normal retirementshall be recognised in
profit or loss (termination benefits) when satisfying the requirements of a provision.
Other long-term employee benefits provided by the company to employees that is in line with defined
contribution plans shall adopt the accounting treatment in accordance with defined contribution plans, otherwise
the accounting treatment of defined benefit plans.
4.22 Provisions
A contingent liability is recognised as provision if all or the following conditions are satisfied:
a. it is a present obligation assumed by the Company; and
b. it is probable that the fulfillment of the obligation will cause economic benefit flows from the Company; and
c. the amount of the obligation can be reliably measured.
A provision is measured on a balance-sheet date as the best estimate of the amount that is required for the
fulfillment of the present obligation after taking into account of the risks and uncertainty associated with the
respective contingent events and the time value of money.
If the amount required for settlement of a provision is wholly or partly reimbursed by a third party, the
reimbursement is recognised separately as an asset to the extent of the carrying amount of the provision if it is
probable that the reimbursement becomes receivable.
4.23 Revenue
4.23.1 Revenue from sales of goods
Revenue arising from sales of goods are recognised if all of the following conditions are satisfied: significant
risks and rewards attached to the ownership of the goods have been transferred to the buyer; and the Company
neither retains continual involvement with management generally associated with the ownership of the goods
nor exercise effective control over the goods sold; and the amount of revenue can be reliably measured; and it
60
is probable that economic benefits arising from the sales will flow to the Company; and expenses incurred or to
be incurred associated with the goods sold can be reliably measured.
Revenue arising from domestic sales of goods is recognized 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
recognized when goods are loaded on board and when the export clearance with the custom is completed.
4.23.2 Revenue from rendering of services
When the outcome of service rendered can be reliably estimated, revenue arising from rendering of the service
is recognised based on percentage of completion on the respective balance-sheet date. The percentage of
completion of service rendered is determined by the proportion that costs incurred to date bear to the estimated
total costs.
The outcome of service rendered can be reliably estimated if all of the following conditions are satisfied: a. the
amount of revenue can be reliably measured; b. it is probable that associated economic benefits will flow to the
Company; c. the percentage of completion of service rendered can be reliably measured; and d. costs incurred
to date and to be incurred can be reliably measured.
When the outcome of service rendered cannot be reliably estimated, revenue is recognised to the extent that
costs incurred to date and to be incurred are expected to be reimbursed and costs incurred to date are
recognised in profit or loss for the periods during which they are incurred. When costs incurred are not expected
to be reimbursed, no revenue is recognised.
If a contract entered into by the Company and a counter party involves both sales of goods and rendering of
services and revenue arising from goods sold and services rendered can be distinguished, revenue from sales
of goods and rendering of services are separately accounted for; if, however, revenue arising from goods sold
and services rendered cannot be distinguished or can be distinguished but cannot be separately measured, all
revenue is accounted for as revenue arising from sales of goods.
4.23.3 Royalty income
Royalties are recognised on an accrual basis in accordance with the substance of the relevant agreement.
4.23.4 Interest income
Interest income is determined by the length of time over which the Company's finance resources are used by
other parties using the effective interest rate method.
4.24 Government Grants
A government grant is a transfer of monetary and non-monetary assets from the government to the Company for
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no consideration, excluding resources transferred to the Company by the government in the capacity of
shareholder. Government grants include grants related to assets and grants related to income.
Government grants obtained by the Company which are relevant to construction or acquisition of long-term
assets are classified as asset-related government grants; all other government grants are classified as
revenue-related government grants. For government grants without speficied beneficiary, the Company performs
classification in accordance with the following criteria.
a. Where a grant is obtained for a specified project, the grant is spitted into asset-related and revenue related
portions proportionate to the project's investment to expense ratio; the classification is reviewed on each balance
sheet date and revised if necessary.
b. Where a grant is obtained for general purpose, the grant as a whole is classified as a revenue-related
government grant.
If a government grant is in the form of monetary assets, it is measured at the amount received or receivable. If a
government grant is in the form of non-monetary assets, it is measured by fair value of the assets; if the fair value
of the assets granted cannot be reliably measured, the grant is measured by nominal value of the assets and is
recognised immediately in profit or loss for the relevant period.
In general, the Company recognises a government grant when it is actually received and measures at the
amount actually received. However, a government grant may be recognised as receivable if it is objectively
evidential on the reporting date that conditions for the grant receipt are satisfied and that the grant is receivable.
A government grant is recognised as receivable if all following conditions are satisfied:
a. the amount of the grant is expressly stipulated in official publication by the authorised governmental agency or
can be reasonably estimated in accordance with fiscal pronouncement issued by the authorised governmental
agency and the estimate is not subject to significant uncertainty;
b. the grant is offcially disclosed as part of publicly disclosed fiscal subsidised projects by the local fiscal
government bodies in accordance with the Government Information Disclosure Directives and is managed in
accordance with the fiscal plan published and the management of the grant if not entity specific, ie. every eligible
entity is entitled to apply;
c. the term for payment is expressly stipulated in the offical pronouncement and the payment is backed by fiscal
planning so that it is reasonable to expect receipt within the term of the payment; and
d. other conditions (in applicable) need to be satisfied taking into account the Company's circumstances.
Grants related to assets are recognised as deferred income and amortised over the useful life of the relevant
assets using the straight-line method. A grant related to income is recognised as deferred income if it is related to
expenses or loss to be incurred in the future and is carried to profit or loss for the period during which the
relevant expenses or loss are recognised; it is recognised in profit or loss for the period during which it is
received or becomes receivable if it is related to expenses or loss already incurred.
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Where a recognised grant becomes repayable, the amount repayable is firstly charged to the remaining deferred
income (if any); the remaining amount after charge to deferred income is recognised in profit or loss for the
period during which it becomes repayable.
4.25 Deferred tax assets and deferred tax liabilities
4.25.1 Current income tax
The current income tax liability (asset) on a balance-sheet date is measured at the amount of current income tax
payable (receivable) computed in accordance with the relevant tax law. Current income tax expense is computed
on the basis of taxable profit (loss) which is the amount after the adjustment of the relevant accounting profit
(loss) in accordance with the relevant tax law.
4.25.2 Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are recognised on an accrual basis for the temporary difference
between the carrying amounts of assets and liabilities and their tax bases and the temporary difference arising
from difference in recognition criteria for assets and liabilities between CAS and relevant tax provisions.
No deferred tax liability is recognised for the taxable temporary difference arising from the initial recognition of
goodwill and the initial recognition of assets and liabilities acquired or assumed resulting from transactions which
are not business combination and which do not have impact on both accounting profit and taxable profit
(deductable tax loss) at the time of their occurrence. Similarly, deferred tax liability is not recognised for taxable
temporary difference associated with investments in subsidiaries, associates and joint ventures if the Company
can control the reverse of the temporary difference and it is probable that the temporary difference is not
expected to reverse in the foreseeable future. Except for the circumstances described hereabove, deferred tax
liability is recognised for all other taxable temporary difference.
No deferred tax asset is recognised for the deductable temporary difference arising from the initial recognition of
assets and liabilities acquired or assumed resulting from transactions which are not business combination and
which do not have impact on both accounting profit and taxable profit (deductable tax loss) at the time of their
occurrence. Similarly, deferred tax asset is not recognised for deductable temporary difference associated with
investments in subsidiaries, associates and joint ventures if the Company can control the reverse of the
temporary difference and it is probable that the temporary difference is not expected to reverse in the
foreseeable future. Except for the circumstances described hereabove, deferred tax asset is recognised for all
other deductable temporary difference to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilised.
Deferred tax asset is recognised for deductable tax loss and tax credit carrying forward to the extent that it is
probable that taxable profit will be available against which the deductable tax loss and tax credit carrying forward
can be utilised.
Deferred tax assets and deferred tax liabilities are measured on a balance-sheet date on the basis of tax rates
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expected to be applicable in accordance with relevant tax law at the time when the relevant assets are recovered
or relevant liabilities settled.
The carrying amount of deferred tax assets is reviewed on each balance-sheet date. If it is probable that
insufficient taxable profit is available to utilise the deferred tax assets, the carrying amount of deferred tax assets
is reduced. When it is probable that sufficient taxable profit becomes available after the carrying amount of
deferred tax assets has been reduced, the reduction is reversed.
4.25.3 Income tax expenses
Income tax expenses include current income tax expenses and deferred income tax expenses.
All current income tax expenses (credit) and deferred income tax expenses (gains) are recognised in profit or
loss for the relevant period except for a. current income tax and deferred income tax on transactions and events
which are accounted for in other comprehensive income or directly in equity, which are included in other
comprehensive income or directly recognised in equity depending on the treatment of its underlying transactions
and events, and b. deferred income tax arising from business combination, which is accounted for as an
adjustment to the carrying amount of the respective goodwill.
4.25.4 Offsetting of income tax
A current income tax liability and current income tax asset are presented on (consolidated) financial statements
after netting only if the Company is permitted by law to settle the asset and liability net in cash and is planning to
do so or to simultaneously recover the asset and settle the liability.
A deferred tax asset and deferred tax liability are presented on (consolidated) financial statements after netting
only if all of the following conditions are satisfied: the Company is permitted by law to settle the current asset and
liability related to an income tax net in cash; and the deferred tax asset and deferred tax liability arising from that
income tax is levied by the same tax authority on the same entity or on different entities but the relevant entities
are planning to settle the underlying income tax net in cash or simultaneously recover the relevant assets and
settle the relevant liabilities during each future period during which significant deferred tax assets and deferred
tax liabilities are reversed.
4.26 Lease
A financial lease is a lease which in substance transfers all risks and rewards attached to the ownership of the
leased asset to the leasee although the ownership of the leased asset ultimately may or may not be transferred.
An operating lease is any lease that does not fall within the meaning of a financial lease.
4.26.1 Operating lease to which the Company is the leasee
Lease payments for a operating lease to which the Company is the leasee is amortised over the lease term using
the straight-line method and recognised in the cost of the relevant asset or as expense, whichever is applicable.
Initial expenses incurred for activities directly attributable to the lease are recognised in profit or loss for the
period during which they are incurred. Contingent rental payments are recognised in profit or loss when they are
incurred.
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4.26.2 Operating lease to which the Company is the leasor
Rental income from an operating lease to which the Company is the leasor is amortised over the lease term
using the straight-line method. Significant initial expenses incurred for activities directly attributable to the lease
are capitalised at the time when they are incurred and amortised over the lease term in the same manner as the
amortisation of rental income; insignificant expenses initial expenses incurred for activities directly attributable to
the lease are recognised in profit or loss for the period during which they are incurred. Contingent rental income
is recognised in profit or loss when it is received or becomes receivable.
4.26.3 Financial lease to which the Company is the leasee
At the commencement of a financial lease to which the Company is the Leasee, the lower of the
lease-commencement-date fair value of the leased asset and the present value of the minimum lease payment is
recognised as the cost of the leased asset; the minimum lease payment is recognised as a long-term payable;
and the excess of the long-term payable over the amount recognised as the cost of the leased asset is
recognised as unrecognised lease expenditure. Expenses incurred during the negotiation and signing of the
lease contract for activities directly attributable to the lease are recognised as part of the cost of the leased asset.
The residual amount after deducting the unrecognised lease expenditure from the long-term payable is divided
into non-current liability and non-current liability due within one year depending on maturity and presented on
(consolidated) financial statements separately.
The unrecognised lease expenditure is amortised over the lease term using the effective interest rate method
and the amortisation is recognised as lease expense in profit or loss for the relevant period. Contingency lease
rental is recognised in profit or loss when it is incurred.
4.26.4 Financial lease to which the Company is the leasor
At the commencement of a financial lease to which the Company is the leasor, the sum of the minimum lease
rental receivable and the initial expenses incurred for activities directly attributable to the lease is recognised as
the initial amount of the respective financial lease rental receivable; unguaranteed residual value is recorded, if
any; the excess of the present value of the sum of the minimum lease rental receivable, the initial expenses
incurred for activities directly attributable to the lease and the unguaranteed residual value over the sum itself is
recognised as unrecognised lease income. The residual amount after deducting the unrecognised lease income
from the financial lease rental receivable is divided into non-current receivable and non-current receivable due
within one year depending on maturity and presented on (consolidated) financial statements separately.
The unrecognised lease income is amortised over the lease term using the effective interest rate method and the
amortisation is recognised as lease income in profit or loss for the relevant period. Contingency lease rental
income is recognised in profit or loss when it is received or becomes receivable.
65
4.27 Changes in major accounting policies and accounting estimates
4.27.1 Change of accounting policies
There is no significant change of accounting policies for the company during the reporting period.
4.27.2 Change of accounting estimates
There is no significant change of accounting estimates for the company during the reporting period.
4.28 Significant account judgment and estimates
During the application of accounting policies, judgements, estimates and presumption need to be made for
elements of financial statements which cannot be precisely measured due to inherent uncertainty existing in
operation activities. The judgements, estimates and presumption are made on the basis of the Company's past
experience and other relevant factors. The exercise of judgements, estimates and presumption has impact on
the measurement of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities on the
balance-sheet date. However, the inherent uncertainty of the judgements, estimates and presumption may result
in future significant adjustments to be made to the measurement of the affected assets and liabilities.
The judgements, estimates and presumption are reviewed regularly on the basis of going concern. Where a
change in accounting estimates is applicable, its impact on financial statements is recognised in the period
during which the change occurs if the change has impact on the financial statements for that period only; and in
subsequent periods if the change also has impact on the financial statements for subsequent periods.
Significant elements of financial statements and areas that are subject to judgements, estimates and
presumption on the balance-sheet date include the following.
4.28.1 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.
4.28.2 Recognition of impairment allowance for receivables
In accordance with accounting policies applicable to receivables, loss arising from impairment of receivables is
accounted for by allowance. Impairment of receivables are assessed on the basis of the collectability of
receivables and the assessment requires judgements and estimates exercised by the management. Difference
between actual results and the estimates will have impact on the carrying amount of receivables and the
recognition and reverse of impairment allowance for receivable for the period during which the estimates are
changed.
4.28.3 Recognition of impairment allowance for inventories
In accordance with accounting policies applicable to inventories, impairment allowance for inventories is
recognised for inventories of which the carrying amount exceeds the net realisable value and inventories which
66
are obsolete or have impaired salability. Loss arising from impairment of inventories is measured on the basis of
the salability and net realisable value of the respective inventories. Judgements and estimates regarding
impairment allowance for inventories require conclusive evidence obtained by the management and
consideration of the purpose of inventory holding, impact of post balance-sheet-date events and other relevant
factors. Difference between actual results and the estimates will have impact on the carrying amount of
inventories and the recognition and reverse of impairment allowance for inventories for the period during which
the estimates are changed.
4.28.4 Fair value of financial instruments
Fair value of financial instruments which are not quoted in an active market are measured by valuation
techniques such as the discounted cash flow model, etc. Estimates of future cash flows, credit risks, market
movement and relevance and choice of the appropriate discount rates are required for the measurement.
Inherent uncertainty is inevitable in making these estimates and the change of estimates will have impact of the
fair value of the respective financial instruments.
4.28.5 Impairment of financial assets available-for-sale
Impairment of available-for-sale financial assets and hence recognition of impairment loss recognised in profit or
loss general depend on estimates and presumption made by the management. In making the judgements and
estimates, the Company assesses the extent and duration that the cost of an available-for-sale financial asset
exceeding its fair value and considers the investee's financial position and short-term prospects, including factors
such as industry environment, technology advances, credit rating, default rates, and risks faced by peer entities.
4.28.6 Impairment of non-financial, non-current assets
Non-current assets are assessd for indication of impairment on each balance-sheet date. In addition, intangible
assets with infinite useful life are subject to impairment testing on each balance-sheet date and whenever there
is evidence indicating impairment; other non-financial non-current assets are subject to impairment testing only if
there evidence indicating that the carrying amount becomes non-collectible.
Impairment exists when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
which is higher of the residual amount after deducting necessary expenses for disposal from its fair value and the
present value of its future cash flows.
An asset's residual amount after deducting necessary expenses for disposal is determined by reference to the
residual amount after deducting the incremental costs to dispose the asset from the selling price provided by
contracts for sales of similar assets or the observable market price of similar assets.
When estimating the present value of future cash flows of an asset or cash-generating unit, significant
judgements have to be made regarding the production capacity, selling price, relevant operating costs of the
asset or cash-generating unit and relevant discount rates for discounting the cash flows. The Company considers
all available relevant information when determining the recoverable amount, including estimates regarding future
67
production capacity, selling price and relevant operating costs made on the basis of reasonable and supportive
presumption.
Goodwill is assessed for impairment at least annually. The assessment involves estimate of the present value of
the future cash flows associated with the assets or groups of assets to which goodwill has been allocated. The
estimate takes into account the future cash flows associated with the assets or groups of assets to which
goodwill has been allocated and the applicable discount rates for cash flow discounting.
4.28.7 Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated (amortised) over their useful lives using
the straight-line method after taking into account of their residual value. Useful lives of these assets are reviewed
regularly for the purpose of determining the depreciation and amortisation recognised for each period. Useful
lives are determined on the basis of the Company's past experience on similar assets and expected new
technology development. If existing estimates change significantly, adjustment is made to the depreciation and
amortisation for future periods.
4.28.8 Deferred tax assets
All unutilised tax loss are recognised as deferred tax assets to the extent it is probable that taxable profit will be
available against which the deductable tax loss can be utilised. Significant judgements are required to estimate
the timing and amount of future taxable profit and to consider tax planning strategy so as to determine the
amount of deferred tax assets to be recognised.
4.27.9 Income tax
During the ongoing operation of the Company, there is uncertainty in the treatment for and amounts of certain
transactions for income tax purpose. For example, the deductibility of certain expenses for income tax purpose is
subject to the approval by relevant tax authority. If the ultimate outcome of the uncertainty differs from the original
estimate, the difference will have impact on the current income tax expenses and deferred income tax expenses
for the relevant period.
4.28.10 Accrued liabilities
Provision is recognised for product warranty, onerous contract, buy-back obligation, etc. on the basis of contract
terms, current knowledge and past experiences. A provision is recognised when a contingent event has resulted
in a present obligation, the fulfillment of the present obligation will result in outflow of economic benefits. The
amount recognised is the best estimate of expenses that would be incurred to fulfill the present obligation. The
recognition and measurement of provisions significantly depend on judgements of the management. In
exercising judgement, the Company assesses risks and uncertainty associated with the contingent events and
time value of money, etc.
Note 5: Taxation
5.1 Major taxes and tax rate
68
Tax Tax rate (%)
Out put VAT is charged at 6% or 17% on taxable income; VAT payable is
Value added tax
calculated at the excess of output VAT over input VAT.
The consumption taxes have been provided at the rate of CNY 1.00 yuan
Consumption tax per kg or 1,000 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.
Sum of VAT payable, consumption duty payable and business tax payable
Urban maintenance
for the reporting period, and exempt and deductible tax at the rate of 1, 5,
and construction surcharge
7%.
Sum of VAT payable, consumption duty payable and business tax payable
Education surcharge
for the reporting period, and exempt and deductible tax at the rate of 3%.
Sum of VAT payable, consumption duty payable and business tax payable
Local education surcharge
for the reporting period, and exempt and deductible tax at the rate of 2%.
Corporate income tax See the table below.
The income tax rate of entites:
Entity Income tax rate
Anhui Longrui Glass Co.,Ltd 15%
Anhui Ruisiweier Technology Co., Ltd 15%
Bozhou Gujing waste recycling limited liability
10%
company
Anhui Gujing Distillery Co.,Ltd and other subsidiaries 25%
5.2 Tax incentives and approval
5.2.1 Anhui Longrui Glass Co., Ltd., a subsidiary of the Company, was granted the High-tech Enterprise
Certificate (No. GR201634001204) on December 5, 2016 upon qualification of high-tech enterprise. The
certificate valids for three years and the applicable income tax rate in 2016 is 15%.
5.2.2 Anhui Ruisiweier Technology Co., Ltd, a subsidiary of the Company, was granted the High-tech Enterprise
Certificate (No. GR201634000832) on October 21, 2016 upon qualification of high-tech enterprise. The certificate
valids for three years and the applicable income tax rate in 2016 is15%.
Note 6: Notes to significant elements of the financial statements
Unless otherwise stated (incl. notes to significant elements of the financial statements is), the current year is
2016, prior year is 2015 respectively.
6.1 Monetary funds
Items Balance as at 31/12/2016 Balance as at 31/12/2015
69
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Cash in hand 323,885.02 373,724.24
Bank deposit 527,379,498.81 1,040,000,008.83
Other monetary fund 5,205,642.24 46,945,425.70
Total 532,909,026.07 1,087,319,158.77
Including: The total amount of deposit abroad 0.00 0.00
Note: Other monetary fund frozen by the Court for litigation amounted to CNY 5,060,000.00 as at the reporting
date. There was no other restrictions on the use of money due to mortgages, pledges etc. as at the reporting
date; there was no restriction on cross-border remittance of cash deposited in banks outside China..
6.2 Financial assets measured by fair value with changes in fair value recognised in profit or loss
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Held for trading financial assets 429,190.68 322,223.28
Including: invest in equity instrument 429,190.68 322,223.28
Total 429,190.68 322,223.28
6.3 Notes receivable
6.3.1 Disclosure by classification
Classification Balance as at 31/12/2016 Balance as at 31/12/2015
Bank acceptance 534,386,586.59 539,442,903.31
Total 534,386,586.59 539,442,903.31
6.3.2 Pledged notes receivable at the end of current year
Item Amount
Bank acceptance 33,483,200.00
Total 33,483,200.00
6.3.3 Immature notes receivable transferred at the end of current year
Amount derecognised as at Amount not derecognised as at
Item
31/12/2016 31/12/2016
Bank acceptance 308,579,773.03 0.00
Total 308,579,773.03 0.00
6.4 Accounts receivable
6.4.1 Disclosure by classification
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
70
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject to
14,155,948.37 100.00 1,868,685.49 13.20 12,287,262.88
impairment by credit risk:
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 14,155,948.37 100.00 1,868,685.49 13.20 12,287,262.88
(Continued)
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject to
6,226,590.29 100.00 1,278,515.45 20.53 4,948,074.84
impairment by credit risk:
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 6,226,590.29 100.00 1,278,515.45 20.53 4,948,074.84
Disclosure by age:
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
Within 1 year 11,813,549.50 122,713.18 1.04
Including: within 6 months 11,699,433.48 117,007.38 1.00
7– 12 months 114,116.02 5,705.80 5.00
1-2years 658,012.07 65,801.21 10.00
2-3years 8,431.41 4,215.71 50.00
71
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
Over3years 1,675,955.39 1,675,955.39 100.00
Total 14,155,948.37 1,868,685.49 13.20
6.4.2 Recognisation, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognised during the year is CNY 590,170.04.
6.4.3 Accounts receivable written off during the current reporting period.
There has no accounts receivable written off during the current reporting period.
6.4.4 Details of top five accounts receivable
The total amount of top five accounts receivables summaried by debtors as at the end of current year is CNY
4,659,103.58, accounting for 32.91% of the total accounts receivable as at the end of current year, the total
corresponding allowance for bad debts is CNY326,042.07.
6.5 Advances to suppliers
6.5.1 Disclosure by age
Balance as at 31/12/2016 Balance as at 31/12/2015
Age
Amount % of total Amount % of total
Within 1 year 73,928,796.23 98.86 80,083,715.48 99.64
1 to 2 years 853,434.06 1.14 285,694.11 0.36
2 to 3 years 1,991.30 0.00 0.00 0.00
Over 3 years 0.00 0.00 3,674.00 0.00
Total 74,784,221.59 100.00 80,373,083.59 100.00
6.5.2 Details of top five advance to suppliers
The total amount of top five advance to suppliers as at the end of current year is CNY 69,715,246.69,
accounting for 93.22% of the total advance to suppliers.
6.6 Interest recveivables
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Interests on certified savings 2,843,178.08 0.00
Total 2,843,178.08 0.00
6.7 Other receivables
6.7.1 Disclosure by classification
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual 41,342,938.53 78.14 41,342,938.53 100.00 0.00
72
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
significance subject to individually
assessment for impairment
Other receivable portfolio subject to
11,564,231.44 21.86 798,834.41 6.91 10,765,397.03
impairment by credit risk:
Other receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 52,907,169.97 100.00 42,141,772.94 79.65 10,765,397.03
(Continued)
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual
significance subject to individually 41,342,938.53 81.90 41,342,938.53 100.0 0.00
assessment for impairment
Other receivable portfolio subject to
9,134,457.26 18.10 516,501.58 5.65 8,617,955.68
impairment by credit risk:
Other receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 50,477,395.79 100.00 41,859,440.11 82.93 8,617,955.68
6.7.1.1 Other receivables of individual significance and subject to individual impairment assessment
Balance as at 31/12/2016
Debtor Carrying Allowance for Rate of
Reason for allowance
amount bad debt Allowance (%)
Enterprise is in the proceeding
Jianqiao Securities 11,840,500.00 11,840,500.00 100.00
of liquidation bankruptcy
Enterprise is in the proceeding
Hengxin Securities 29,502,438.53 29,502,438.53 100.00
Of liquidation bankruptcy
Total 41,342,938.53 41,342,938.53 100.00
6.7.1.2 Accounts receivable using the age analysis method for measurement of impairment allowances:
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
73
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
Within 1 year 12,229,096.23 225,204.96 1.84
Including: within 6 months 9,648,695.33 96,184.91 1.00
7-12 months 530,400.90 26,520.05 5.00
1-2 years 269,727.60 26,972.76 10.00
2-3 years 932,501.84 466,250.92 50.00
Over 3years 182,905.77 182,905.77 100.00
Total 11,564,231.44 798,834.41 6.91
6.7.2 Recognization, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognized during the current year is CNY 282,332.83.
6.7.3 The situation of other receivable the is written off in current year
There has no other receivable written off during the current reporting period.
6.7.4 The classification of other receivable
Nature Balance at 31/12/2016 Balance at 31/12/2015
Investment in securities 41,342,938.53 41,342,938.53
Deposit and guarantee 1,457,444.95 1,642,346.71
Loan for business trip 2,024,382.20 2,789,864.26
Rent and water, electric and gas expense 4,242,987.61 2,432,526.57
Others 3,839,416.68 2,269,719.72
Total 52,907,169.97 50,477,395.79
6.7.5 Details of top five other receivable:
Allowance
% of total
Debtor nature Carrying amount age balance at the
amount
year end
The first Investment in securities 29,502,438.53 Over 3 years 55.76 29,502,438.53
The second Investment in securities 11,840,500.00 Over 3 years 22.38 11,840,500.00
The third Prepaid for oil fee 2,754,767.41 Within 6 months 5.21 27,547.67
The forth Prepaid for oil fee 558,145.20 Within 6 months 1.05 5,581.45
The fifth Deposit 500,000.00 Within 6 months 0.95 5,000.00
Total 45,155,851.14 85.35 41,381,067.65
6.8 Inventories
6.8.1 Disclosure by classification
74
Balance as at 31/12/2016
Items Carrying amount before
Impairment allowance Net carrying amount
impairment allowance
Raw material 122,173,639.41 8,897,753.50 113,275,885.91
Work in progress 1,426,282,016.97 0.00 1,426,282,016.97
Finished goods 255,258,344.54 8,383,210.92 246,875,133.62
Total 1,803,714,000.92 17,280,964.42 1,786,433,036.50
(Continued)
Balance as at 31/12/2015
Items Carrying amount before
Impairment allowance Net carrying amount
impairment allowance
Raw material 102,293,838.52 6,976,129.27 95,317,709.25
Work in progress 1,130,825,408.23 0.00 1,130,825,408.23
Finished goods 177,900,253.21 7,331,319.82 170,568,933.39
Total 1,411,019,499.96 14,307,449.09 1,396,712,050.87
6.8.2 Impairment allowance for inventories
Increase in current year Decrease in current year
Items Balance as at 31/12/2015 Recovered or Balance as at 31/12/2016
Accrual Other Other
Written off
Raw material 6,976,129.27 5,872,712.72 0.00 3,951,088.49 0.00 8,897,753.50
Finished goods 7,331,319.82 5,585,052.45 0.00 4,533,161.35 0.00 8,383,210.92
Total 14,307,449.09 11,457,765.17 0.00 8,484,249.84 0.00 17,280,964.42
6.8.3 Reason for impairment recognition and reversal or written-off
The reason of recovering The reasons for inventory
The basis of recognition of impairment allowance
Items impairment allowance for impairment writen-off at current
for inventories
inventories year
Raw Market prices decrease, and resulting in raw
Material scrap and application
material material’s net realizable value lower than cost
Finished Market prices decrease, and resulting in Finished
Scrap of the product
goods goods’ net realizable value lower than cost
6.9 Other current assets
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Financial products 1,750,000,000.00 1,500,000,000.00
75
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Deductible tax 278,829.24 970,860.37
Total 1,750,278,829.24 1,500,970,860.37
6.10 Available-for-sale financial assets
6.10.1 The situation of available-for-sale financial assets
Balance as at 31/12/2016 Balance as at 31/12/2015
Items Carrying Carrying Net carrying
Impairment Net carrying amount Impairment
amount amount amount
Available for sale equity
404,029,552.27 0.00 404,029,552.27 213,881,190.47 0.00 213,881,190.47
instruments
Including: measured by
404,029,552.27 0.00 404,029,552.27 213,881,190.47 0.00 213,881,190.47
fair value
Measured by cost 0.00 0.00 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 100,000,000.00 0.00 100,000,000.00
Total 404,029,552.27 0.00 404,029,552.27 313,881,190.47 0.00 313,881,190.47
6.10.2 The available for sale financial asset which is measured by fair value at the year end
Equity instrument Debt instrument
Classification of the available for sale financial asset Total
available for sale available for sale
The cost of the equity instrument or the amortized cost of the debt
355,836,914.98 0.00 355,836,914.98
instrument
Fair value 404,029,552.27 0.00 404,029,552.27
The amount of the fair value change recognized intocomprehensive
48,192,637.29 0.00 48,192,637.29
income
Impairment allowance 0.00 0.00 0.00
6.10.3 The measurement of the cost of available for sale financial assets at the end of current year
Balance as at 31/12/2016 Impairment
Increase Increase
Balance as Balance as Balance as Decrease Balance as
Investee in Decrease in in
at at at in current ‘’at
current current year current
31/12/2015 31/12/2016 31/12/2015 year 31/12/2016
year year
Hongtai No.55 assembled funds trust plan 100,000,000.00 0.00 100,000,000.00 0.00 0.00 0.00 0.00 0.00
Total 100,000,000.00 0.00 100,000,000.00 0.00 0.00 0.00 0.00 0.00
6.11 Investment property
6.11.1 Investment property measured using the historical cost
76
Items Houses and buildings Land use rights Total
1. Cost:
1.1 Balance as at 31/12/2015 23,148,813.75 2,644,592.00 25,793,405.75
1.2 Increased in current year 0.00 0.00 0.00
1.3 Decreased in current year 10,196,437.59 0.00 10,196,437.59
1.3.1 Disposal 0.00 0.00 0.00
1.3.2 Other transfer out 10,196,437.59 0.00 10,196,437.59
1.4 Balance as at 31/12/2016 12,952,376.16 2,644,592.00 15,596,968.16
2. Accumulated Depreciation and
accumulated amortization
2.1Balance as at 31/12/2015 15,583,897.24 494,056.62 16,077,953.86
2.2 Increased in current year 842,185.11 62,014.56 904,199.67
2.2.1 Accrual or amortization 842,185.11 62,014.56 904,199.67
2.3 Decreased in current year 9,788,130.11 0.00 9,788,130.11
2.3.1 Disposal 0.00 0.00 0.00
2.3.2 Other decrease 9,788,130.11 0.00 9,788,130.11
2.4 Balance as at 31/12/2016 6,637,952.24 556,071.18 7,194,023.42
3. Impairment allowance
3.1Balance as at 31/12/2015 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00
3.2.1 Accrual 0.00 0.00 0.00
3.3 Decreased in current year 0.00 0.00 0.00
3.3.1 Disposal 0.00 0.00 0.00
3.3.2 Other transfer out 0.00 0.00 0.00
3.4 Balance as at 31/12/2016 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2016 6,314,423.92 2,088,520.82 8,402,944.74
4.2 Carrying amount as at 31/12/2015 7,564,916.51 2,150,535.38 9,715,451.89
6.12 Fixed assets
6.12.1 Circumstance of fixed assets
Houses and Office equipment and
Items Machineries Vehicles Total
buildings other
1. Cost:
77
Houses and Office equipment and
Items Machineries Vehicles Total
buildings other
1.1 Balance as at 31/12/2015 1,661,241,240.92 774,600,299.46 52,684,498.92 60,208,697.42 2,548,734,736.72
1.2 Increased in current year 308,554,631.99 93,696,820.20 13,447,873.06 66,808,288.36 482,507,613.61
1.2.1 Purchase 475,610.15 2,627,685.03 2,814,502.54 11,776,191.04 17,693,988.76
1.2.2 Transferred from
1,335,840.52 36,836,650.82 0.00 30,842,626.14 69,015,117.48
construction in-progress
1.2.3 Increase from business
296,546,743.73 54,232,484.35 10,633,370.52 24,189,471.18 385,602,069.78
combination
1.2.4 Recovered from rental housing 10,196,437.59 0.00 0.00 0.00 10,196,437.59
1.3 Decreased in current year 14,756,095.73 25,256,040.34 6,589,193.50 7,121,671.02 53,723,000.59
1.3.1 Disposal or scrap 14,756,095.73 25,256,040.34 6,589,193.50 7,121,671.02 53,723,000.59
1.4 Balance as at 31/12/2016 1,955,039,777.18 843,041,079.32 59,543,178.48 119,895,314.76 2,977,519,349.74
2. Accumulated Depreciation
2.1 Balance as at 31/12/2015 475,454,089.21 288,129,635.62 42,255,683.05 45,592,394.27 851,431,802.15
2.2 Increased in current year 128,471,414.37 109,435,349.31 12,485,592.88 45,630,148.86 296,022,505.42
2.2.1 Accrual 51,873,989.94 86,686,409.28 6,349,374.10 35,307,308.92 180,217,082.24
2.2.2 Increase from business
66,809,294.32 22,748,940.03 6,136,218.78 10,322,839.94 106,017,293.07
combination
2.2.3 Recovered from rental housing 9,788,130.11 0.00 0.00 0.00 9,788,130.11
2.3 Decreased in current year 9,949,057.72 19,951,368.96 6,390,107.37 5,381,328.80 41,671,862.85
2.3.1 Disposal or scrap 9,949,057.72 19,951,368.96 6,390,107.37 5,381,328.80 41,671,862.85
2.4 Balance as at 31/12/2016 593,976,445.86 377,613,615.97 48,351,168.56 85,841,214.33 1,105,782,444.72
3. Impairment allowance
3.1Balance as at 31/12/2015 4,133,377.10 2,140,753.15 0.00 0.00 6,274,130.25
3.2 Increased in current year 58,893.76 94,642.28 7,047.07 580,345.64 740,928.75
3.2.1 Accrual 58,893.76 94,642.28 7,047.07 580,345.64 740,928.75
3.3 Decreased in current year 0.00 969,739.04 0.00 0.00 969,739.04
3.3.1 Disposal or scrap 0.00 969,739.04 0.00 0.00 969,739.04
3.4 Balance as at 31/12/2016 4,192,270.86 1,265,656.39 7,047.07 580,345.64 6,045,319.96
4. Carrying amount
4.1 Carrying amount as at 31/12/2016 1,356,871,060.46 464,161,806.96 11,184,962.85 33,473,754.79 1,865,691,585.06
4.2 Carrying amount as at 31/12/2015 1,181,653,774.61 484,329,910.69 10,428,815.87 14,616,303.15 1,691,028,804.32
6.12.2 Temporarily idle fixed assets
Carrying
Item Depreciation Impairment Book value Notes
value
78
Houses and buildings 15,969,525.54 11,633,943.26 4,192,270.86 143,311.42
Machineries 8,175,846.51 6,857,209.57 1,265,656.39 52,980.55
Vehicles 58,119.66 49,329.00 7,047.07 1,743.59
Office equipment and
873,232.11 266,689.51 580,345.64 26,196.96
other
Total 25,076,723.82 18,807,171.34 6,045,319.96 224,232.52
6.12.3 Fixed assets with pending ownership registration
Item Book value The reason of pending ownership registration
Houses and buildings 835,438,702.80 In the process
Total 835,438,702.80
6.13 Construction in progress
6.13.1 Details of construction in progress
Balance as at 31/12/2016 Balance as at 31/12/2015
Carrying Carrying
Items amount before impairment Net carrying amount before impairment Net carrying
impairment allowance amount impairment allowance amount
allowance allowance
Based liquor relocation of
the transformation and 903,846.31 0.00 903,846.31 32,051.44 0.00 32,051.44
facilities projects
Gujing operating network
4,932,008.56 0.00 4,932,008.56 3,305,555.56 0.00 3,305,555.56
system
Information integration
2,828,626.03 0.00 2,828,626.03 1,186,500.00 0.00 1,186,500.00
system
Gujing CRM system 0.00 0.00 0.00 769,230.77 0.00 769,230.77
Renovation project of
47,819,516.27 0.00 47,819,516.27 47,025,894.49 0.00 47,025,894.49
potential safety concerns
Wine culture museum
4,449,398.37 0.00 4,449,398.37 2,167,605.55 0.00 2,167,605.55
remould
Light and shadow show
0.00 0.00 0.00 3,657,367.52 0.00 3,657,367.52
digital demonstration project
Automation transformation 0.00 0.00 0.00 965,000.00 0.00 965,000.00
Shanghai experience centre 0.00 0.00 0.00 2,299,961.53 0.00 2,299,961.53
Xianning Huanghelou 20MT 1,785,629.19 0.00 1,785,629.19 0.00 0.00 0.00
79
Balance as at 31/12/2016 Balance as at 31/12/2015
Carrying Carrying
Items amount before impairment Net carrying amount before impairment Net carrying
impairment allowance amount impairment allowance amount
allowance allowance
filling depot project
Hefei experience centre
design and integration 2,822,179.84 0.00 2,822,179.84 0.00 0.00 0.00
project
Process pipeline and Gujing
mixing and storage 1,133,754.23 0.00 1,133,754.23 0.00 0.00 0.00
automatic control system
Other individual project with
5,096,365.46 0.00 5,096,365.46 1,153,804.92 0.00 1,153,804.92
small amounts
Total 71,771,324.26 0.00 71,771,324.26 62,562,971.78 0.00 62,562,971.78
6.13.2 Movement of significant construction in progress
Transferred to
Increase during Other decrease
Including: fixed assets
the current during the
Balance as at increase from during the Balance as at
Items Budgeted cost reporting current
31/12/2015 business current 31/12/2016
period reporting
combination reporting
period
period
Based liquor relocation of
the transformation and 800,000,000.00 32,051.44 903,846.15 0.00 32,051.28 0.00 903,846.31
facilities projects
Gujing operating network
8,350,000.00 3,305,555.56 1,626,453.00 0.00 0.00 0.00 4,932,008.56
system
Information integration
6,000,000.00 1,186,500.00 1,642,126.03 0.00 0.00 0.00 2,828,626.03
system
Gujing CRM system 8,000,000.00 769,230.77 1,794,871.79 0.00 0.00 2,564,102.56 0.00
Renovation project of
180,107,581.00 47,025,894.49 51,172,814.03 0.00 50,379,192.25 0.00 47,819,516.27
potential safety concerns
Wine culture museum
6,900,000.00 2,167,605.55 2,281,792.82 0.00 0.00 0.00 4,449,398.37
remould
Light and shadow show 5,500,000.00 3,657,367.52 914,341.88 0.00 4,571,709.40 0.00 0.00
80
Transferred to
Increase during Other decrease
Including: fixed assets
the current during the
Balance as at increase from during the Balance as at
Items Budgeted cost reporting current
31/12/2015 business current 31/12/2016
period reporting
combination reporting
period
period
digital demonstration
project
Automation transformation 5,880,000.00 965,000.00 0.00 0.00 643,333.33 321,666.67 0.00
Winery landscape upgrade 3,000,000.00 0.00 2,912,621.36 0.00 0.00 2,912,621.36 0.00
Steaming palnt 5,340,000.00 0.00 2,885,470.14 0.00 2,885,470.14 0.00 0.00
Zhengzhou experience
8,500,000.00 0.00 4,723,099.95 0.00 0.00 4,723,099.95 0.00
Centre
Video conferencing system 6,200,000.00 0.00 3,409,312.06 0.00 3,409,312.06 0.00 0.00
Shanghai experience
16,000,000.00 2,299,961.53 2,199,418.52 0.00 0.00 4,499,380.05 0.00
centre
Xianning Huanghelou 20MT
5,000,000.00 0.00 1,785,629.19 137,471.83 0.00 0.00 1,785,629.19
filling depot project
Hefei experience centre
design and integration 9,000,000.00 0.00 2,822,179.84 0.00 0.00 0.00 2,822,179.84
project
Process pipeline and
Gujing mixing and storage 4,388,251.25 0.00 1,133,754.23 0.00 0.00 0.00 1,133,754.23
automatic control system
Other individual project with
23,614,868.39 1,153,804.92 12,934,633.65 16,000.00 7,094,049.02 1,898,024.09 5,096,365.46
small amounts
Total 1,101,780,700.64 62,562,971.78 95,142,364.64 153,471.83 69,015,117.48 16,918,894.68 71,771,324.26
(Continued)
Including:
Weight of The Capitalisation
interests
cost to date cumulative rate applicable
Stage of capitalised Source of
Items in amount of to the current
completion during the finance
budgeted interest reporting
current
cost capitalized period %
reporting
81
period
Based liquor relocation of the transformation
92.73 100.00 0.00 0.00 0.00 Owned fund
and facilities projects
Gujing operating network system 62.58 95.00 0.00 0.00 0.00 Owned fund
Information integration system 47.14 97.00 0.00 0.00 0.00 Owned fund
Gujing CRM system 32.05 100.00 0.00 0.00 0.00 Owned fund
Renovation project of potential safety concerns 56.24 91.61 0.00 0.00 0.00 Owned fund
Wine culture museum remould 64.48 90.00 0.00 0.00 0.00 Owned fund
Light and shadow show digital demonstration project 83.12 100.00 0.00 0.00 0.00 Owned fund
Automation transformation 48.60 100.00 0.00 0.00 0.00 Owned fund
Winery landscape upgrade 97.00 100.00 0.00 0.00 0.00 Owned fund
Steaming palnt 54.00 100.00 0.00 0.00 0.00 Owned fund
Zhengzhou experience Centre 56.00 100.00 0.00 0.00 0.00 Owned fund
Video conferencing system 55.00 100.00 0.00 0.00 0.00 Owned fund
Shanghai experience centre 28.11 100.00 0.00 0.00 0.00 Owned fund
Xianning Huanghelou 20MT filling depot project 35.71 30.00 0.00 0.00 0.00 Owned fund
Hefei experience centre design and integration project 31.36 32.30 0.00 0.00 0.00 Owned fund
Process pipeline and Gujing mixing and storage automatic control
26.00 30.00 0.00 0.00 0.00 Owned fund
system
Other individual project with small amounts 50.00 80.00 0.00 0.00 0.00 Owned fund
Total - - 0.00 0.00 0.00
6.14 Intangible assets
Items Land rights Patents Software Trademark Total
1. Cost:
1.1 Balance as at 31/12/2015 351,249,420.80 38,150,000.00 4,869,402.68 0.00 394,268,823.48
1.2 Increased in current year 277,029,881.76 7,716,942.63 5,189,552.28 169,116,600.00 459,052,976.67
1.2.1 Purchase 0.00 0.00 196,581.20 0.00 196,581.20
1.2.2 Internal research and development 0.00 0.00 0.00 0.00 0.00
1.2.3 Transferred from construction in progress 0.00 0.00 3,993,658.18 0.00 3,993,658.18
1.2.4 Increase from business combination 277,029,881.76 7,716,942.63 999,312.90 169,116,600.00 454,862,737.29
1.3 Decreased in current year 0.00 0.00 0.00 0.00 0.00
1.3.1 Disposal 0.00 0.00 0.00 0.00 0.00
1.4 Balance as at 31/12/2016 628,279,302.56 45,866,942.63 10,058,954.96 169,116,600.00 853,321,800.15
82
Items Land rights Patents Software Trademark Total
2. Accumulated amortization
2.1 Balance as at 31/12/2015 54,759,386.45 38,150,000.00 2,987,197.07 0.00 95,896,583.52
2.2 Increased in current year 47,247,075.03 7,564,910.47 1,928,702.05 0.00 56,740,687.55
2.2.1 Accrual 10,894,606.38 34,013.69 1,255,663.35 0.00 12,184,283.42
2.2.2 Increase from business combination 36,352,468.65 7,530,896.78 673,038.70 0.00 44,556,404.13
2.3 Decreased in current year 0.00 0.00 0.00 0.00 0.00
2.3.1 Disposal 0.00 0.00 0.00 0.00 0.00
2.4 Balance as at 31/12/2016 102,006,461.48 45,714,910.47 4,915,899.12 0.00 152,637,271.07
3. Impairment allowance
3.1 Balance as at 31/12/2015 0.00 0.00 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00 0.00 0.00
3.2.1 Accrual 0.00 0.00 0.00 0.00 0.00
3.3 Decreased in current year 0.00 0.00 0.00 0.00 0.00
3.3.1 Disposal 0.00 0.00 0.00 0.00 0.00
3.4 Balance as at 31/12/2016 0.00 0.00 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2016 526,272,841.08 152,032.16 5,143,055.84 169,116,600.00 700,684,529.08
4.2 Carrying amount as at 31/12/2015 296,490,034.35 0.00 1,882,205.61 0.00 298,372,239.96
6.15 Goodwill
Decreased in current
Increased in current year
The name of the investee or the formation of Balance as at year Balance as at
goodwill 31/12/2015 Business 31/12/2016
Others Disposal Others
combination
Wuhan Tianlong Yellow Crane Tower Wine
0.00 478,283,495.29 0.00 0.00 0.00 478,283,495.29
Co., Ltd
Total 0.00 478,283,495.29 0.00 0.00 0.00 478,283,495.29
Note: According to the actual financial data and budget information, the Company estimated net cash flow of the
assets to determine the recoverable amount and according to the “Asset appraisal report” (Huaxin Zhonghe
Pingbao Zi [2017] S1008 Hao) issued by Beijing Huaxin Public Assets Appraisal Co., Ltd. Shenzhen Branch, the
future net cash flow is greater than the book value and there is no impairment of the goodwill.
6.16 Long-term deferred charge
83
The
Amortisation for Other
Balance as at Increase in Balance as at reason
Items the current decrease in
31/12/2015 current year 31/12/2016 for other
reporting period current year
decrease
Mold culture shelf and Mold culture
2,918,368.91 0.00 1,523,358.84 0.00 1,395,010.07
bed
Transformation of high - quality base
7,305,261.80 0.00 3,721,401.72 0.00 3,583,860.08
liquor
Wine library shelves 1,408,903.13 0.00 563,561.25 0.00 845,341.88
Decoration works of exclusive Shop 17,226,636.96 17,414.87 12,691,861.97 0.00 4,552,189.86
Decoration works of Beijing
17,455,429.04 4,729,106.90 2,426,832.57 0.00 19,757,703.37
experience center
Relocation compensation of Beijing
11,366,500.00 258,500.00 1,500,000.00 0.00 10,125,000.00
experience center
Pottery jars storeage 19,216,518.59 226,467.95 4,382,499.68 0.00 15,060,486.86
Decoration works of spirits culture
1,041,359.68 0.00 430,925.57 0.00 610,434.11
Museum
improvement project of Sewage
4,850,000.00 0.00 600,000.00 0.00 4,250,000.00
Treatment Plant
Green cost 27,703,158.38 0.00 15,618,953.18 323,044.10 11,761,161.10
Decoration project of Gujing villa 4,941,948.33 0.00 4,941,948.33 0.00 0.00
Potential safety hazard transfermation 3,607,861.23 424,433.74 1,614,493.88 0.00 2,417,801.09
Shenzhen experience center 6,217,336.14 0.00 1,332,286.32 0.00 4,885,049.82
Other 2,556,386.18 1,052,811.47 1,150,318.56 0.00 2,458,879.09
Winery landscape upgrade 0.00 2,912,621.36 80,906.15 0.00 2,831,715.21
Zhengzhou experience centre 0.00 4,723,099.95 43,732.41 0.00 4,679,367.54
Shanghai experience centre 0.00 4,499,380.05 124,982.78 0.00 4,374,397.27
Total 127,815,668.37 18,843,836.29 52,748,063.21 323,044.10 93,588,397.35
6.17 Deferred tax assets and deferred tax liabilities
6.17.1 Details of Rrecognized deferred tax assets
Balance as at 31/12/2016 Balance as at 31/12/2015
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
difference assets difference assets
84
Allowance for bad debt 44,010,458.43 10,996,043.87 43,137,779.39 10,784,271.97
Allowance for inventories
17,280,964.42 4,268,065.64 14,307,449.09 3,576,862.28
impairment
Allowance for fixed
6,017,322.50 1,504,126.30 6,246,132.79 1,561,533.20
assets impairment
Deferred income 43,978,795.45 10,964,946.75 46,123,314.33 11,530,828.58
Accrued expenses 241,487,812.54 60,371,953.14 134,446,030.45 33,611,507.60
Recoverable tax loss 74,310,846.55 18,577,711.64 0.00 0.00
Not realized internal profit 3,886,999.22 971,749.81 0.00 0.00
Total 430,973,199.11 107,654,597.15 244,260,706.05 61,065,003.63
6.17.2 Details of Rrecognized deferred tax liabilities
Balance as at 31/12/2016 Balance as at 31/12/2015
Taxable Taxable
Items Deferred tax Deferred tax
temporary temporary
liabilities liabilities
differences differences
Changes in fair value of tradable financial asset 157,639.98 39,410.00 163,238.41 40,809.60
Changes in fair value of available-for-sale
48,192,637.29 12,048,159.32 72,642,515.35 18,160,628.84
financial assets
Difference in addional deduction of fixed assets 11,629,445.21 2,907,361.30 9,048,889.73 2,262,222.43
Appreciation of assets by business
409,168,287.60 102,292,071.90 0.00 0.00
combination under non-common control
Total 469,148,010.08 117,287,002.52 81,854,643.49 20,463,660.87
6.17.3 Unrecognized deferred tax assets
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Deductible temporary difference 27,997.46 28,173.63
Taxable temporary differences 3,504,550.14 2,059,849.97
Total 3,532,547.60 2,088,023.60
6.17.4 The deductible losses of unrecognized deferred tax assets will be expired in the following year
Year Balance as at 31/12/2016 Balance as at 31/12/2015 Note
Year 2017 0.00 0.00
Year 2018 0.00 0.00
Year 2019 0.00 0.00
85
Year 2020 2,059,849.97 2,059,849.97
Year 2021 1,444,700.17 0.00
Total 3,504,550.14 2,059,849.97
6.18 Other non-current assets
Balance as Balance as at
Items Content
at 31/12/2016 31/12/2015
Certified saveings Certified savings 300,000,000.00 0.00
Prepayments for equipment Prepayments for equipment 982,000.00 0.00
Total 300,982,000.00 0.00
6.19 Notes payable
Type Balance as at 31/12/2016 Balance as at 31/12/2015
Bankers' acceptance 11,270,000.00 92,940,000.00
Trade acceptance 28,583.00 828,583.00
Total 11,298,583.00 93,768,583.00
Note: The unpaid matured notes payable is amount CNY 28,583.00, as at year ended and due to the
supplayer do not make the solution pay on matured note.
6.20 Accounts payable
6.20.1 Detail for accounts payable
Item Balance as at 31/12/2016 Balance as at 31/12/2015
Within 1 year 278,284,194.09 299,081,452.13
Over 1 year 62,688,172.12 79,105,999.94
Total 340,972,366.21 378,187,452.07
6.20.2 The details of significant accounts payable remaining unsettled for more than 1 year
Creditors Balance as at 31/12/2016 Reason(s) for unsettlement
A company 7,507,940.81 Residual project balance
B company 1,246,379.45 Residual project balance
C company 1,090,000.00 Residual equipment balance
D company 1,068,404.82 Residual project balance
E company 820,826.60 Payment for material
Total 11,733,551.68
6.21 Advances from customers
Item Balance as at 31/12/2016 Balance as at 31/12/2015
Payment for goods 623,990,614.91 608,565,152.50
Total 623,990,614.91 608,565,152.50
86
6.22Employment benefits payable
6.22.1 Disclosure by classification
Increase upon
Balance as at Increase during the Decrease during the Balance as
Items business
31/12/2015 current year current year at 31/12/2016
combination
1. Short-term employee benefits 253,376,275.54 3,347,004.08 1,087,110,918.12 1,056,306,787.63 287,527,410.11
2. Post-employment benefits 525,425.18 0.00 73,030,936.63 73,056,635.83 499,725.98
3. Termination benefits 0.00 0.00 0.00 0.00 0.00
4. Other benefits due within one year 0.00 0.00 0.00 0.00 0.00
Total 253,901,700.72 3,347,004.08 1,160,141,854.75 1,129,363,423.46 288,027,136.09
6.22.2 Disclosure by classification of short-term employee benefits
Increase upon
Balance as at Increase during the Decrease during Balance as at
Category business
31/12/2015 current year the current year 31/12/2016
combination
1. Wages, salaries and subsidies 202,138,836.94 3,347,004.08 940,346,847.39 913,911,554.95 231,921,133.46
2. Employee welfare 0.00 0.00 51,260,447.30 51,260,447.30 0.00
3. Social insurance: 36,873.97 0.00 22,470,017.28 22,439,836.66 67,054.59
Including: Medical insurance 27,079.95 0.00 21,271,964.59 21,245,068.14 53,976.40
Employment injury insurance 4,771.50 0.00 763,193.66 761,260.89 6,704.27
Maternity insurance 5,022.52 0.00 434,859.03 433,507.63 6,373.92
4. Housing provident fund 12,784,777.20 0.00 49,944,795.56 54,348,610.36 8,380,962.40
5. Labour union fee and employee
38,415,787.43 0.00 23,088,810.59 14,346,338.36 47,158,259.66
education fee
6. Short-term paid absence 0.00 0.00 0.00 0.00 0.00
7. Short-term profit sharing plan 0.00 0.00 0.00 0.00 0.00
Total 253,376,275.54 3,347,004.08 1,087,110,918.12 1,056,306,787.63 287,527,410.11
6.22.3 Disclosure by defined contribution plan
Increase upon
Balance as Increase during Decrease during Balance as
Items business
at 31/12/2015 the current year the current year at 31/12/2016
combination
1. Basic pension 499,446.46 0.00 69,833,408.93 69,861,758.45 471,096.94
2. Unemployment insurance 25,978.72 0.00 3,197,527.70 3,194,877.38 28,629.04
Total 525,425.18 0.00 73,030,936.63 73,056,635.83 499,725.98
87
6.23 Taxes and fees payable
Tax (Fee) Balance as at 31/12/2016 Balance as at 31/12/2015
VAT 118,133,291.16 87,099,637.75
Consumption tax 219,571,438.66 137,743,836.68
Business tax 0.00 1,567,227.74
Enterprise income tax 94,273,743.45 70,375,692.68
Personal income tax 1,562,260.59 2,747,356.67
Urban construction and maintenance tax 19,129,378.01 10,339,184.61
Stamp duty 871,395.56 1,096,999.83
Education surcharge 18,650,757.21 10,327,628.89
Others 14,767,387.21 36,789,788.95
Total 486,959,651.85 358,087,353.80
6.24 Other payables
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Security deposit 587,919,286.15 349,397,678.43
Business trip borrowing 2,207,592.61 1,369,843.17
Guarantee 10,478,503.90 42,153,589.56
Personal housing provident fund paid by company 8,380,962.40 12,784,777.20
Others 32,485,926.47 46,487,300.58
Total 641,472,271.53 452,193,188.94
6.25 Other current liabilities
Items Balance as at 31/12/2016 Balance as at 31/12/2015
Accrued expense 241,487,812.54 138,135,604.82
Total 241,487,812.54 138,135,604.82
6.26 Deferred income
Increase Decrease
Balance as at Balance as at
Items during the during the Reasons
31/12/2015 31/12/2016
current year current year
Receive government
Government grants 46,123,314.33 2,481,400.00 4,625,918.88 43,978,795.45
grants concerning assets
Total 46,123,314.33 2,481,400.00 4,625,918.88 43,978,795.45 —
Involving government grants’ project:
88
Amount
Recognised
Balance as at recognised as Other Balance as at Related to asset or
Items during
31/12/2015 non-operating movement 31/12/2016 income
current year
income
Wine production system technical
442,708.37 0.00 62,500.02 0.00 380,208.35 Related to asset
transformation
Instrument subsidies 1,653,750.00 0.00 220,500.00 0.00 1,433,250.00 Related to asset
Intelligent solid brewing technology
244,791.66 0.00 31,250.01 0.00 213,541.65 Related to asset
innovation project
Anhui province development of direct
1,965,853.62 0.00 292,682.86 0.00 1,673,170.76 Related to asset
funds of service industry
Anhui provience subsidies of
innovative province construction 4,870,300.00 0.00 730,545.00 0.00 4,139,755.00 Related to asset
capacity for independent innovation
Energy efficiency renovation project
for coal industrial boiler and glass 471,750.00 0.00 153,000.00 0.00 318,750.00 Related to asset
furnace
Bozhou Logistics Center Project 240,000.00 0.00 60,000.00 0.00 180,000.00 Related to asset
Equipment subsidy 0.00 1,314,000.00 81,056.29 0.00 1,232,943.71 Related to asset
Finance subsidy for energy saving
1,529,204.04 0.00 531,623.59 0.00 997,580.45 Related to asset
projects
Finance subsidy for technical
2,018,595.46 0.00 534,221.52 0.00 1,484,373.94 Related to asset
reconstruction
Within financial budget, interest
subsidy for deposit technical 3,333.45 0.00 3,333.45 0.00 0.00 Related to asset
reconstruction
Within financial budget, Enterprise
142,500.00 0.00 30,000.00 0.00 112,500.00 Related to asset
development funds
IOT traceability system project 6,311,250.00 0.00 1,113,750.00 0.00 5,197,500.00 Related to asset
Rebate of land 24,763,652.65 0.00 550,206.18 0.00 24,213,446.47 Related to asset
Electric machine improvement for
825,000.08 0.00 137,499.96 0.00 687,500.12 Related to asset
energy saving project
Product quality online monitor 640,625.00 0.00 93,750.00 0.00 546,875.00 Related to asset
89
Amount
Recognised
Balance as at recognised as Other Balance as at Related to asset or
Items during
31/12/2015 non-operating movement 31/12/2016 income
current year
income
Subsidy for intelligent distillery yeast
0.00 217,400.00 0.00 0.00 217,400.00 Related to asset
research
Gujing Zhangji wine tank optimization
0.00 950,000.00 0.00 0.00 950,000.00 Related to asset
upgrade project
Total 46,123,314.33 2,481,400.00 4,625,918.88 0.00 43,978,795.45
6.27 Share capital
Movements during the current reporting period (+、－)
Balance as at Balance as
Items Share Conversion from
31/12/2015 Bonus issue Others Subtotal at 31/12/2016
issue reserves
Total shares 503,600,000.00 0.00 0.00 0.00 0.00 0.00 503,600,000.00
6.28 Capital reserves
Balance as at Increase during Decrease during Balance as at
Items
31/12/2015 the current year the current year 31/12/2016
Share premium 1,262,552,456.05 0.00 0.00 1,262,552,456.05
Other capital reserves 32,386,037.14 467,099.06 0.00 32,853,136.20
Total 1,294,938,493.19 467,099.06 0.00 1,295,405,592.25
6.29 Other comprehensive income
Items Balance as at Total amount in current year Balance as at
90
31/12/2015 Less: 31/12/2016
previously
recognized in After tax After tax
Amount for the other Less: Income attributable to attributable
year before tax comprehensive tax expense the parent to minority
income company shareholders
transferred into
profit or loss
1.Other
comprehensive
income that will
not be 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reclassified into
income or loss in
the future
2.Other
comprehensive
income that will
54,481,886.51 -24,449,878.06 0.00 -6,112,469.50 -18,337,408.56 0.00 36,144,477.95
be reclassified
into income or
loss in the future
Including: fair
value change of
54,481,886.51 -24,449,878.06 0.00 -6,112,469.50 -18,337,408.56 0.00 36,144,477.95
financial asset
available for sale
Total of other
comprehensive 54,481,886.51 -24,449,878.06 0.00 -6,112,469.50 -18,337,408.56 0.00 36,144,477.95
income
6.30 Surplus reserves
Increase during Decrease during
Items Balance as at 31/12/2015 Balance as at 31/12/2016
the current year the current year
Statutory surplus
256,902,260.27 0.00 0.00 256,902,260.27
reserve
Total 256,902,260.27 0.00 0.00 256,902,260.27
Note: In accordance with the Company Lows and regulations in PRC, statutory surplus reserve is accrued at 10 %
of net profit of the Company until accumulated amount of such reserve balance reaches 50% of the Company’s
91
registered capital.
After the company draws the statutory surplus reserve, it may, upon a resolution made by the shareholders'
meeting or the shareholders’ assembly, draw a discretionary surplus reserve from the after-tax profits.
Discretionary surplus reserve as approved by the shareholders in our shareholders' meeting can be used to
make good previous years’ losses or to increase the capital.
6.31 Retained earning
Items Current year Prior year
Pre-adjustment balance brought forward 2,723,798,990.11 2,108,940,620.43
Total adjustment to retained earnings b/f (+, -) 0.00 0.00
Retained earnings b/f after adjustment 2,723,798,990.11 2,108,940,620.43
Add: Net profit attributable to shareholders of the parent 829,630,063.38 715,578,369.68
Less: Appropriation to statutory surplus reserve 0.00 0.00
Appropriation to discretionary surplus reserve 0.00 0.00
General reserve 0.00 0.00
Ordinary dividends declared 50,360,000.00 100,720,000.00
Ordinary dividends transformed into capital share 0.00 0.00
Balance carrying forward 3,503,069,053.49 2,723,798,990.11
6.32 Operating revenues and costs
Current year Prior year
Items
Operating revenues Operating costs Operating revenues Operating costs
Principal operating income 5,979,035,166.48 1,491,385,954.17 5,217,544,152.04 1,479,038,970.28
Other operating income 38,108,494.08 32,199,825.34 35,867,327.36 30,497,129.00
Total 6,017,143,660.56 1,523,585,779.51 5,253,411,479.40 1,509,536,099.28
6.33 Business tax and surcharges
Items Current year Prior year
Consumption tax 762,768,550.26 650,932,115.38
Business tax 1,287,301.81 5,550,244.99
Urban maintenance and construction tax, Education surcharge 165,783,127.78 132,834,880.86
Urban land used tax 8,708,036.38 0.00
Property tax 10,499,272.17 0.00
Stamp duty 3,831,107.79 0.00
Other 3,111,002.91 888,390.64
Total 955,988,399.10 790,205,631.87
Note: The provision standards for taxes and surcharges refer to Note 5 Taxation.
6.34 Sales expenses
92
Items Current year Prior year
Employment benefits 262,525,597.79 192,032,269.16
Travel 74,878,606.52 72,490,928.96
Advertisement 465,688,890.38 397,458,962.42
Transportation charges 32,209,900.34 26,799,503.76
Sales promotion costs 602,532,363.04 421,404,543.74
Sample wine 226,433,506.70 151,639,742.58
Service fee 235,762,832.21 241,596,791.54
Other sales expenses 80,095,680.91 54,377,876.80
Total 1,980,127,377.89 1,557,800,618.96
6.35 General and administrative expenses
Items Current year Prior year
Employment benefits 316,223,141.03 279,870,693.46
Office fees 13,542,347.24 16,719,397.83
Taxes and surcharges 16,703,686.11 39,314,997.74
Maintenance expenses 27,222,700.92 31,218,976.13
Depreciation 56,518,251.81 48,065,605.86
Amortization of intangible assets 12,184,283.42 8,520,464.58
Pollution discharge 8,262,877.02 14,585,009.71
Spillage of material 36,189,753.39 44,837,410.39
Travel expenses 2,313,349.72 2,216,750.98
Water and electricity charges 9,409,893.23 9,692,830.19
Others 57,943,324.10 48,780,469.64
Total 556,513,607.99 543,822,606.51
6.36 Financial costs
Items Current year Prior year
Interest expenses 915,880.51 0.00
Less: Interest income 32,844,024.42 28,676,438.02
Less: Capitalised interest 0.00 0.00
Exchange gain or loss 87,679.59 367,172.57
Less: Capitalised exchange gain or loss 0.00 0.00
Others 1,586,496.99 7,974,859.05
Total -30,253,967.33 -20,334,406.40
6.37 Impairment loss on assets
Items Current year Prior year
93
Items Current year Prior year
Allowance for bad debt -578,339.94 468,227.39
Allowance for inventory impairment 11,457,765.17 10,691,127.79
Allowance for intangible assets impairment 740,928.75 164,700.81
Total 11,620,353.98 11,324,055.99
6.38 Gain from changes in fair value
Source of fair value change Current year Prior year
Financial assets measured by fair value with changes in fair value recognised
-5,598.43 42,203.41
in profit or loss
Including: Derivative financial assets 0.00 0.00
Total -5,598.43 42,203.41
6.39 Investment income
Items Current year Prior year
Investment income from financial assets measured by fair value with
0.00 0.00
changes in fair value recognized in profit or loss during the holding period
Investment income from disposal of financial assets measured by fair
15,987,963.26 7,800,070.97
value with changes in fair value recognised in profit or loss
Investment income from available for sale financial asset during the holding period 78,724,727.77 61,455,959.33
Investment income from disposal of financial assets available for sale 281,592.14 0.00
Other 2,843,178.08 0.00
Total 97,837,461.25 69,256,030.30
6.40 Non-operating income
Recognized into
current year
Items Current year Prior year
non-recurring
profit and loss
Gain on non-current asset disposals 420,864.59 68,505.82 420,864.59
Including : Gain on fixed asset disposals 420,864.59 68,505.82 420,864.59
Government grants (See details of government grants) 25,336,275.56 19,931,320.03 25,336,275.56
Income from penalties 3,699,832.32 13,447,521.81 3,699,832.32
Sales of wastes 5,262,867.74 5,824,298.47 5,262,867.74
Accounts payable no need to pay back 376,663.74 232,103.59 376,663.74
Others 6,818,442.51 5,470,254.89 6,818,442.51
Total 41,914,946.46 44,974,004.61 41,914,946.46
Details of government grant:
94
Government assistance Current year Prior year Related to assets or income
Energy-saving subsidies 0.00 105,000.00 Related to income
Science and technology innovation award 680,000.00 258,400.00 Related to income
Standardization of the government reward 0.00 120,000.00 Related to income
Gujing industrial park land use tax, house
15,009,167.60 13,999,000.00 Related to income
property tax refund
River water pollution prevention and control
0.00 590,000.00 Related to income
of special funds
Technology innovation demonstration funds 0.00 300,000.00 Related to income
Trademark reward 0.00 100,000.00 Related to income
Business development special funds 0.00 64,800.00 Related to income
Business bureau subsidies 0.00 59,000.00 Related to income
Social security subsidies 320,700.00 208,750.00 Related to income
Assets amortization related government for deferred revenue 4,625,918.88 4,100,947.53 Related to assets
Anhui long-leave brand honorary title award 100,000.00 0.00 Related to income
Patent award 728,400.00 0.00 Related to income
Anhui industrial boutique award 100,000.00 0.00 Related to income
National Quality Benchmark Award 200,000.00 0.00 Related to income
Provincial industrial design center awards 100,000.00 0.00 Related to income
Income break bonus 500,000.00 0.00 Related to income
Air Pollution Control Subsidy 900,000.00 0.00 Related to income
City Federation of Trade Unions technical
5,000.00 0.00 Related to income
contest award
Environmental company tax refund 1,209,553.65 0.00 Related to income
Wuhan Hanyang District Economic and
4,000.00 0.00 Related to income
Information Bureau subsidy
Hanyang” Excellence plan” subsidy 400,000.00 0.00 Related to income
Hanyang made quality award 300,000.00 0.00 Related to income
Employment stablisation subsidies 47,500.00 0.00 Related to income
Other awards 106,035.43 25,422.50 Related to income
Total 25,336,275.56 19,931,320.03
6.41 Non-operating expenses
95
Recognized in current
Items Current year Prior year year non-recurring
profit and loss
Loss on non-current asset disposals 6,740,484.31 1,059,201.01 6,740,484.31
Within: Loss on fixed asset disposals 6,740,484.31 1,059,201.01 6,740,484.31
Late fee 0.00 6,245,908.75 0.00
Others 1,814,150.36 1,754,560.89 1,814,150.36
Total 8,554,634.67 9,059,670.65 8,554,634.67
6.42 Income tax expenses
6.42.1 Classification
Items Current year Prior year
Current tax calculated in accordance with relevant tax law 331,596,712.46 246,239,548.03
Deferred tax -31,160,525.95 4,451,523.15
Total 300,436,186.51 250,691,071.18
6.42.2 The adjustment process of accounting profit and income tax expenses
Items Current year
Profit before tax 1,150,754,284.03
According to the statutory/applicable tax rate calculation of the income tax
287,688,571.01
expenses
Influence of different tax rates of subsidiaries -3,905,409.41
The effect of adjustment prior period income tax 2,016,966.69
The influence of the untaxable income -898,049.82
The influence of the undeduction of costs, expenses and losses 18,213,035.02
The influence of using the preliminary period deductible losses of unconfirmed
0.00
deferred income tax assets
The influence of the unconfirmed deferred income tax assets attributable to the
361,377.00
deductible temporary difference or deductible losses
Tax rate adjustment to the beginning balance of deferred income tax
-202,347.52
assets/liabilities
Income tax credits 0.00
Collectively deductions -2,837,956.46
Income tax expenses 300,436,186.51
6.43 Other comprehensive income
96
Please see Note 6.29 for detail.
6.44 Notes to the statement of cash flows
6.44.1 Other cash received relating to operating activities
Items Current year Prior year
Guarantee deposit 238,706,509.48 77,505,284.21
Government grants 4,491,635.43 1,831,372.50
Interest income 32,844,024.42 30,890,237.41
Withdrawn pledged deposit 0.00 36,100,000.00
Release of restricted monetary funds 51,945,425.70 0.00
Others 17,801,895.54 29,254,161.03
Total 345,789,490.57 175,581,055.15
6.44.2 Other cash payments relating to operating activities
Items Current year Prior year
Cash paid in sales expenses and general and administrative expense 1,275,520,798.23 1,029,809,058.13
To issue notes payable and the pledge of deposit or store paper margin 0.00 46,945,425.70
Others 2,117,428.76 8,134,570.09
Total 1,277,638,226.99 1,084,889,053.92
6.44.3 Other cash received relating to investing activities
Items Current year Prior year
Government grants related to assets 2,481,400.00 9,384,300.00
Total 2,481,400.00 9,384,300.00
6.44.4 Other cash payments relating to financing activities
Items Current year Prior year
Repayment of the original shareholder funds 104,376,537.45 0.00
Total 104,376,537.45 0.00
6.45 Supplementary information to the statement of cash flows
6.45.1 Reconciliation of cash flows from operating activities to net profit
Items Current year Prior year
① Reconciliation of cash flows from operating activities to net
profit:
Net profit 850,318,097.52 715,578,369.68
97
Items Current year Prior year
Add: Loss on asset impairment 11,620,353.98 -7,804,074.59
Depreciation of fixed assets, oil and gas assets, biological assets
180,217,082.24 160,229,665.09
held for production
Amortisation of Investment properties 904,199.67 732,249.62
Amortisation of intangible assets 12,184,283.42 8,520,464.58
Amortisation of Long-term deferred expenditure 52,748,063.21 44,946,646.26
Loss on non-current assets disposal (gain presented by "-"
6,319,619.72 990,695.19
prefix)
Loss on scrap of fixed assets (gain presented by "-" prefix) 0.00 0.00
Loss on fair value changes (gain presented by "-" prefix) 5,598.43 -42,203.41
Financial costs (gain presented by "-" prefix) 915,880.51 -2,060,867.27
Investment loss (gain presented by "-" prefix) -97,837,461.25 -69,256,030.30
Decrease of deferred tax assets (increase presented by "-"
-30,599,267.22 2,178,749.87
prefix)
Increase of deferred tax liabilities (increase presented by "-"
-561,258.73 2,272,773.28
prefix)
Decrease of inventories (increase presented by "-" prefix) -148,841,752.05 -170,547,934.01
Decrease of operating receivables (increase presented by "-"
98,273,049.63 -73,439,119.87
prefix)
Increase of operating payables (decrease presented by "-" prefix) 252,191,237.86 181,911,098.42
Amortization of deferred income -4,625,918.88 -4,100,947.53
Net cash flows generated from operating activities 1,183,231,808.06 790,109,535.01
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 31/12/2016 527,849,026.07 1,040,373,733.07
Less: Cash as at 1/1/2016 1,040,373,733.07 682,360,442.79
Add: Cash equivalents as at 31/12/2016 0.00 0.00
Less: Cash equivalents as at 1/1/2016 0.00 0.00
Net increase of cash and cash equivalents -512,524,707.00 358,013,290.28
6.45.2 Composition of cash and cash equivalents
98
Balance as at Balance as at
Items
31/12/2016 31/12/2015
① Cash 527,849,026.07 1,040,373,733.07
Including: Cash at hand 323,885.02 373,724.24
Demand bank deposit 527,379,498.81 1,040,000,008.83
Demand other monetary funds 145,642.24 0.00
② Cash equivalents 0.00 0.00
Including: Debt instrument matured within three months 0.00 0.00
③ Cash and cash equivalents as at 31/12/2016 527,849,026.07 1,040,373,733.07
6.46 Asses of which using rights are limited
Items Balance at 31/12/2016 Reasons for limited
Monetary funds 5,060,000.00 Frozen by the Court
Notes receivable 33,483,200.00 Pledged
Total 38,543,200.00
Note 7: Changes of scope of consolidated financial statements
7.1 Business combination involving entities not under common control
7.1.1 Business combination involving entities not under common control during the current year
The acquiree’s
The way The acquiree’s net
The time The cost of % of the The evidence to income from
of the Purchase profit from purchase
The name of acquiree of equity equity equity determine the purchase date
equity date date to the end of the
acquisition acquisition acquisition purchase date to the end of
acquisition year
the year
Payment of funds,
equity and
Wuhan Tianlong Yellow
2016-5-31 816,000,000.00 51.00 purchase 2016-5-31 property 354,950,364.64 42,220,477.84
Crane Tower Wine Co., Ltd
management
rights transfer.
7.1.2 Merger costs and goodwill
Wuhan Tianlong Yellow Crane Tower
Item
Wine Co., Ltd
Merger costs
-Cash 816,000,000.00
Total of the merger costs 816,000,000.00
Less:fair value of the identifiable net assets obtained 337,716,504.71
Goodwill / the merger costs less than the fair value of the identifiable 478,283,495.29
99
Wuhan Tianlong Yellow Crane Tower
Item
Wine Co., Ltd
net assets obtained
7.1.3 Identifiable assets and liabilities of the acquiree on the purchase date
Wuhan Tianlong Yellow Crane Tower Wine Co., Ltd
Item Fair value on purchase date Book value on purchase date
Assets：
Monetary funds 20,229,967.55 20,229,967.55
Accounts receivable 34,760,201.56 34,760,201.56
Advances from suppliers 4,407,727.79 4,407,727.79
Other receivables 9,738,404.96 9,738,404.96
Inventories 243,852,748.91 243,852,748.91
Fixed assets 279,584,776.71 243,277,198.99
Construction in progress 153,471.83 153,471.83
Intangible asets 410,306,333.16 32,625,633.17
Deferred tax assets 15,990,326.30 15,990,326.30
Liabilities:
Notes payable 5,000,000.00 5,000,000.00
Accounts payable 52,341,472.38 52,341,472.38
Advances from customers 52,282,383.20 52,282,383.20
Employment benefits payable 3,347,004.08 3,347,004.08
Taxes and fees payable 21,780,839.62 21,780,839.62
Other payables 111,712,680.59 111,712,680.59
Other current liabilities 6,873,284.08 6,873,284.08
Deferred tax liabilities 103,497,069.90 0.00
Net assets 662,189,224.92 351,698,017.11
Less: minority interests 324,472,720.21 172,332,028.38
The net assets obtained 337,716,504.71 179,365,988.73
7.2 Other changes
The Company has newly incorporated direct subsidiaries Anhui Gujing Yunshang Electronic Commerce Co., Ltd.
and Anhui Zhenrui Construction Engineering Co., Ltd.A direct subsidiary Bozhou Gujing Packing Co., Ltd was
liquidated during the current reporting year.
Note 8: Interest in other entities
8.1 Interest in subsidiaries
100
8.1.1 The construction of the group
Place Holding
Place of Nature
Subsidiaries of proportion % Acquired method
operation of business
registration Directly Indirectly
Bozhou Gujing Sales Co., Ltd. Anhui Anhui Commercial
100.00 Set up
(hereafter Gujing Sales) Bozhou Bozhou trade
Bozhou Gujing Transportation
Anhui Anhui Motor
Co., Ltd. (hereafter Gujing 99.00 1.00 Set up
Bozhou Bozhou transport
Transportation)
Anhui Longrui Glass Co., Ltd Anhui Anhui
Manufacture 99.00 1.00 Set up
(hereafter Longrui Glass) Bozhou Bozhou
Bozhou Gujing Waste
Anhui Anhui
Reclamation Co., Ltd. Waste recycle 100.00 Set up
Bozhou Bozhou
(hereafter Gujing Waste)
Anhui Jinyunlai Culture &
Anhui Anhui Advertisement
Media Co.,Ltd. (hereafter 100.00 Set up
Hefei Hefei marketing
Jinyunlai)
Anhui Ruisiweier Technology Anhui Anhui Technical
100.00 Set up
Co., Ltd. Bozhou Bozhou research
Anhui colorful taste wine co., Anhui Anhui
Manufacture 100.00 Set up
Ltd. Bozhou Bozhou
Bussiness
Shanghai Gujing Jinhao hotel Combinations
Shanghai Shanghai Hotel manage 100.00
management company Under the Same
control
Bussiness
Anhui Anhui Hotel Combinations
Bozhou Gujing hotel Co.Ltd 100.00
Bozhou Bozhou operating Under the Same
control
Anhui Yuanqing environmental Anhui Anhui Sewage
100.00 Set up
protection Co., Ltd. Bozhou Bozhou treatment
Anhui Gujing Yunshang Anhui Anhui Electronic
100.00 Set up
Electronic Commerce Co., Ltd Hefei Hefei commerce
Anhui Zhenrui Construction Anhui Anhui
Construction 100.00 Set up
Engineering Co., Ltd Bozhou Bozhou
101
Place Holding
Place of Nature
Subsidiaries of proportion % Acquired method
operation of business
registration Directly Indirectly
Bozhou Gujing Distillery Anhui Anhui Commercial
100.00 Set up
Mrketing Co., Ltd Bozhou Bozhou trade
Bussiness
Wuhan Tianlong Yellow Crane Hubei Hubei Combinations Not
Manufacture 51.00
Tower Wine Co., Ltd Wuhan Wuhan Under the Same
control
Bussiness
Tianlong Yellow Crane Tower Hubei Hubei Combinations Not
Manufacture 51.00
Wine Xianning Co., Ltd Xianning Xianning Under the Same
control
Bussiness
Hubei Yellow Crane Tower Hubei Hubei Combinations Not
Manufacture 51.00
Wine Co., Ltd Suizhou Suizhou Under the Same
control
Bussiness
Wuhan Tianlong Jindi
Hubei Hubei Commercial Combinations Not
Technology Development Co., 51.00
Wuhan Wuhan trade Under the Same
Ltd
control
Bussiness
Hubei Hubei Commercial Combinations Not
Xianning Junhe Sales Co., Ltd 51.00
Xianning Xianning trade Under the Same
control
Bussiness
Hubei Junhe Advertising Co., Hubei Hubei Advertisement Combinations Not
51.00
Ltd Wuhan Wuhan marketing Under the Same
control
Wuhan Yashibo Technology Hubei Hubei Technology
51.00 Set up
Co., Ltd. Wuhan Wuhan development
Hubei Hubei Commercial
Wuhan Junya Sales Co., Ltd 51.00 Set up
Wuhan Wuhan trade
Note 9: The risk associated with financial instruments
The main financial instruments of the Company include equity investments, financial products, trust investment,
102
accounts receivable, accounts payable and etc., please see Note 6 for detail of related items. The risk associated
with financial instruments, and risk management policies which the company uses to reduce these risks are
described below. The management of the Company manages and supervises the risks to ensure that the risks
can be controlled within a limited range.
9.1 The targets and policies of risks management
The target of risks management is to obtain the proper balance between the risks and benefits, to reduce the
negative impact that is caused by the risk of the Company to the lowest level, and to maximize the benefits of
shareholders and other equity investors. Based on the targets of risk management, the basic strategy of the
Company’s risk management is to identify and analyze the risks which are faced by the Company, establish
suitable risk tolerance baseline and proceed the risk management, and supervise a variety of risks timely and
reliably, and control the risk within a limited range.
9.1.1 Market Risk
9.1.1.1 Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The main business of
the company is in the mainland of China and trading with RMB, the market risk is very small
9.1.1.2 Interest rate risk - the risk of changes in cash flow
The operating fund of the company is sufficient and there is no loan in recent years, so that the risk of interest is
very small for the company.
9.1.1.3 Other price risk
The financial asset available for sale and financial asset for trading of the company are measured by fair value.
So the company bears the risk of the change of security market. To decrease the risk, the company hold a
combination of several equities and securities.
9.1.2. Credit Risk
The maxmum risk exposure that could cause the Company’s financial losses is associated with the default by the
other party of a transation and the financial guarantee provided by the Company as at 31 December 2016. The
detail is listed below:
The carrying value of the Financial assets that is recognized in the consolidated financial statement. For the
financial instrument measured by fair value, the carrying value only represents the risk exposre, but the maxmum
risk exposure will change with the future fair value.
The company only trade with authorized company with high credit record and large scale. According to the
policies of the company, the client needs to pay first then receive the goods. Only a few companies are provided
with credit. Credit review is performed for customers trading with credit.
The current asset of the company is deposited in the bank with the high credit record. So the credit risk of the
current asset is low
103
9.1.3 Liquidity risk
When managing liquidity risk, the Companymaintains and monitors adequate cash and cash equivalents decided
by the management in order to meet the needs of operation of the Company, and to reduce the impact of
fluctuations in cash flows.
Note 10: Disclosure of the fair value
10.1 The fair value at the end of current year of assets and liabilities which are measured by fair value
The fair value at the end of current year
The second
The first level The third level
Items level
measured by measured by Total
measured by
fair value fair value
fair value
1. Continuous measurement by fair
value
1.1 The financial assets are measured
by fair value and the changes are 429,190.68 429,190.68
recognized into current profit or loss
1.1.1 Trading financial assets 429,190.68 429,190.68
Equity instruments investment 429,190.68 429,190.68
1.2 Financial asset available for sale 404,029,552.27 404,029,552.27
Equity instruments investment 404,029,552.27 404,029,552.27
Total amount of liabilities continuous
404,458,742.95 404,458,742.95
measurement by fair value
10.2 Determined on the basis of continuous first level for fair value measurement of the market of project
The sustaining fair value measurement project is the stock that publicly traded in Shanghai stock exchange or
Shenzhen stock exchange, and the price is confirmed based on the stock’s closing price on the balance sheet
date. If the holdings of shares in a restricted period, in accordance with the securities and futures commission as
stated in the KUAIJI ZI [2007] 21 HAO related valuation method to determine the value.
Note 11: Related parties and related party transaction
11.1 Details of the parent
Shareholding Voting right
Registered
Parents Relationship Nature of business in the in the
capital
Company % Company %
Gujing Group Anhui Drink, building materials, 1,000,000,000.00 53.89 53.89
104
Shareholding Voting right
Registered
Parents Relationship Nature of business in the in the
capital
Company % Company %
manufacture plastic products
Note: The ultimate controller is the government of Bozhou, Anhui province.
11.2 Subsidiaries
See Note 8.1 The equity in subsidiaries for details.
11.3 Details of other related parties
Other related parties Relationship
Anhui Ruifuxiang Food Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruijing catering management Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Haochidian Catering Co., Ltd. Affiliate of the actual controller and controlling shareholder
Shanghai Ruiyao Hotel Management Co., Ltd. Affiliate of the actual controller and controlling shareholder
Shanghai Beihai Hotel Co., Ltd Affiliate of the actual controller and controlling shareholder
Anhui Ruijing Business Travel (Group) Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Hotel Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Real Estate Group Co., Ltd. Affiliate of the actual controller and controlling shareholder
Orient Ruijing Enterprise Investment
Affiliate of the actual controller and controlling shareholder
Development Co., Ltd.
Anhui Hengxin Pawn Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Ruineng Thermal Power Co., Ltd. Affiliate of the actual controller and controlling shareholder
Hefei Gujing Holiday Hotel Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Furuixiang high protein feed Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruijing restaurant management Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruixin pawn Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Zhongxin finance lease Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Huixin finance invest group Co.Ltd. Affiliate of the actual controller and controlling shareholder
Hefei Longxin Financial Management Consulting
Affiliate of the actual controller and controlling shareholder
Co., Ltd
Bozhou Anxin Micro Finance Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Ecological industrial park
Affiliate of the actual controller and controlling shareholder
management Co.Ltd.
Dazhongyuan Wine valley culture tourism
Affiliate of the actual controller and controlling shareholder
development Co., Ltd.
105
Other related parties Relationship
Anhui Xinyuan Municipal Garden Engineering
Affiliate of the actual controller and controlling shareholder
Co., Ltd
Anhui gujing hotel management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Youxin Financing guarantee Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Aoxin Real estate development Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Lixin Electronic commerce Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Xinxin Property management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Huishenglou Catering Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Gujing Junlai Hotel management Co.,Ltd Affiliate of the actual controller and controlling shareholder
Anhui Gujing Property management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Real estate development Co.,Ltd. Affiliate of the actual controller and controlling shareholder
11.4 Transactions with related parties
11.4.1 Transactions through purchase or sell goods and accept or supply services
11.4.1.1 The situation of purchases goods or accepts services
Content Total amount during Total amount during
Related parties
of transaction current year prior year
Anhui Ruifuxiang Food Co., Ltd Purchase of material 1,827,574.51 2,852,022.30
Accept catering and
Bozhou Hotel Co., Ltd. 2,495,522.44 1,217,174.90
accommodation service
Anhui Ruijing Catering management Co., Ltd Accept catering 65,282.00 0.00
Anhui Xinyuan Municipal Garden Engineering Co., Ltd Afforestation fees 377,811.42 0.00
Hefei Gujing Holiday Hotel Purchase of goods 608,321.93 3,359,534.47
Accept restaurant and hotel
Hefei Gujing Holiday Hotel 33,317.89 141,502.71
service
Accept restaurant and hotel
Anhui gujing hotel management Co.,Ltd. 210,415.00 121,487.00
service
Accept restaurant and hotel
Bozhou Gujing Junlai Hotel management Co.,Ltd 459,023.00 552,171.00
service
Accept restaurant and hotel
Anhui Gujing Huishenglou Catering Co.,Ltd. 3,559,381.00 4,378,795.00
service
Total 9,636,649.19 12,622,687.38
11.4.1.2 The situation of sells goods or rendering services
106
Total amount during Total amount during
Related parties Content of transaction
current year prior year
Gujing Group Sales of micro metrail 62,081.16 200,364.98
Provide catering and
Gujing Group 338,828.62 294,505.60
accommodation service
Provide advertising
Gujing Group 5,849.06 0.00
service
Anhui Ruifuxiang Food Co., Ltd Sales of distilled spirit 362,589.75 199,461.54
Bozhou Hotel Co., Ltd. Sales of distilled spirit 79,658.12 131,538.47
Bozhou Gujing Hotel Co., Ltd. Sales of distilled spirit 30,094.36 10,153.85
Anhui Gujing Real Estate Group Co., Ltd. Sales of distilled spirit 53,125.12 44,692.31
Provide advertising
Anhui Gujing Real Estate Group Co., Ltd. 28,301.88 0.00
service
Provide catering and
Anhui Gujing Real Estate Group Co., Ltd. 0.00 5,550.00
accommodation service
Anhui Ruijing catering Co., Ltd. Sales of distilled spirit 3,076.92 109,786.32
Anhui Haochidian Catering Co., Ltd. Sales of distilled spirit 3,051.28 0.00
Shanghai Ruiyao Hotel Management Co., Ltd. Sales of distilled spirit 4,461.54 0.00
Shanghai Beihai Hotel Co., Ltd Sales of distilled spirit 8,153.85 0.00
Hefei Longxin Financial Management Consulting Co., Ltd Sales of distilled spirit 6,923.08 0.00
Bozhou Ruineng Thermal Power Co., Ltd. Sales of distilled spirit 168,252.32 132,923.07
Provide advertisement
Bozhou Ruineng Thermal Power Co., Ltd. 0.00 14,245.28
service
Anhui Hengxin Pawn Co., Ltd. Sales of distilled spirit 9,300.51 4,692.31
Bozhou Anxin Micro fiannce Co., Ltd Sales of distilled spirit 7,081.03 2,230.77
Provide catering and
Bozhou Anxin Micro fiannce Co., Ltd 1,960.00 0.00
accommodation service
Anhui Ruijing Business Travel (Group) Co., Ltd Sales of distilled spirit 3,058,386.32 1,045,620.52
Provide catering and
Anhui Ruijing Business Travel (Group) Co., Ltd 5,500.00 0.00
accommodation service
Anhui Xinyuan Municipal Garden Engineering Co., Ltd Sales of micro metrail 5,461.03 0.00
Anhui Xinyuan Municipal Garden Engineering Co., Ltd Sales of distilled spirit 10,341.88 0.00
Hefei Gujing Holiday Hotel Co., Ltd Sales of distilled spirit 0.00 703,846.16
107
Total amount during Total amount during
Related parties Content of transaction
current year prior year
Provide catering and
Hefei Gujing Holiday Hotel Co., Ltd 4,369.31 0.00
accommodation service
Anhui gujing hotel management Co.,Ltd. Sales of distilled spirit 55,384.64 453,495.71
Provide catering and
Anhui Zhongxin finance lease Co. Ltd. 3,000.00 0.00
accommodation service
Anhui Zhongxin finance lease Co. Ltd. Sales of distilled spirit 7,157.96 1,999.99
Anhui Ruixin pawn Co. Ltd. Sales of distilled spirit 27,363.09 2,153.85
Anhui Huixin finance invest group Co.Ltd. Sales of distilled spirit 17,841.03 17,307.69
Provide advertisment
Anhui Huixin finance invest group Co.Ltd. 0.00 5,566.04
service
Bozhou Furuixiang high protein feed Co. Ltd. Sales of micro metrail 0.00 45,853.01
Bozhou Furuixiang high protein feed Co. Ltd. Sales of distilled spirit 23,641.03 15,073.07
Anhui Youxin Financing guarantee Co.,Ltd. Sales of distilled spirit 14,335.39 3,445.57
Provide catering and
Anhui Youxin Financing guarantee Co.,Ltd. 580.00 0.00
accommodation service
Provide advertisment
Anhui Youxin Financing guarantee Co.,Ltd. 0.00 2,830.19
service
Dazhongyuan Wine valley culture tourism development Co., Ltd. Sales of distilled spirit 370,904.61 2,230.77
Dazhongyuan Wine valley culture tourism development Co., Ltd. Sales of micro metrail 36,044.26 43,506.53
Provide catering and
Dazhongyuan Wine valley culture tourism development Co., Ltd. 42,840.00 0.00
accommodation service
Water and electricity
Dazhongyuan Wine valley culture tourism development Co., Ltd. 62,374.00 0.00
fees
Anhui Aoxin Real estate development Co.,Ltd. Sales of distilled spirit 7,581.55 1,230.76
Anhui Lixin Electronic commerce Co.,Ltd. Sales of distilled spirit 7,021.54 1,076.92
Anhui Xinxin Property management Co.,Ltd. Sales of distilled spirit 31,998.97 10,615.39
Anhui Gujing Huishenglou Catering Co.,Ltd. Sales of distilled spirit 26,794.87 151,598.29
Bozhou Gujing Junlai Hotel management Co.,Ltd Sales of distilled spirit 5,076.92 6,153.85
Anhui Gujing Property management Co.,Ltd. Sales of distilled spirit 43,230.77 14,538.46
Anhui Gujing Real estate development Co.,Ltd. Sales of distilled spirit 95,537.44 180,923.07
Anhui Gujing Real estate development Co.,Ltd. Provide catering and 1,220.00 0.00
108
Total amount during Total amount during
Related parties Content of transaction
current year prior year
accommodation service
Anhui Gujing Ecological industrial park management Co.Ltd. Sales of micro metrail 0.00 251,503.76
Total 5,136,775.21 4,110,714.10
11.4.2 Lease between related parties
11.4.2.1 The Company is as the Leasee
Lease rental recognized in Lease rental recognized
leasor Classification
current year in prior year
Gujing Group Buildings and constructions 2,190,476.25 2,300,000.00
Bozhou Hotel Co.Ltd. Buildings and constructions 20,000.00 0.00
11.4.2.2 The Company is as the leasor
Lease rental recognized in Lease rental recognized
Leasee Classification
current year in prior year
Anhui gujing hotel management Buildings and
347,402.13 201,055.54
Co.,Ltd. constructions
11.5 The balance of payables and receivables among related parties
11.5.1 Receivables owed by related parties
Related party Balance as at 31/12/2016 Balance as at 31/12/2015
Other receivables:
Dazhongyuan Wine valley culture tourism development
0.00 6,186.47
Co., Ltd.
Total 0.00 6,186.47
11.5.2 Payables owed to related parties
Related party Balance as at 31/12/2016 Balance as at 31/12/2015
Receivable in advance:
Anhui Ruijing catering management Co., Ltd. 599,136.01 299,280.01
Hefei Gujing Holiday Hotel Co., Ltd. 0.00 16,100.00
Bozhou Hotel Co., Ltd. 36,000.00 10,000.00
Anhui Gujing Real Estate Group Co., Ltd. 0.00 5,015.00
Anhui Lixin Electronic commerce Co.,Ltd. 0.00 2,419.20
Bozhou Furuixiang high protein feed Co. Ltd. 13,200.00 0.00
Anhui Haochidian catering Co., Ltd. 115,200.00 0.00
Anhui Ruifuxiang Food Co., Ltd 195,200.00 0.00
109
Related party Balance as at 31/12/2016 Balance as at 31/12/2015
Total 958,736.01 332,814.21
Accounts payable
Anhui Gujing Huishenglou Catering Co.,Ltd. 0.00 10,000.00
Total 0.00 10,000.00
Other payable:
Anhui Gujing Huishenglou Catering Co.,Ltd. 15,500.00 24,500.00
Anhui Ruifuxiang Food Co., Ltd. 0.00 2,000.00
Hefei Gujing Holiday Hotel Co., Ltd. 0.00 24,000.00
Anhui gujing hotel management Co.,Ltd. 0.00 3,600.00
Anhui Ruijing restaurant management Co., Ltd. 0.00 1,200.00
Anhui Ruijing Business Travel (Group) Co., Ltd 38,043.40 69,568.74
Bozhou Hotel Co., Ltd. 0.00 23,400.00
Total 53,543.40 148,268.74
Note 12: Commitments and contingencies
12.1 Important commitments
Irrevocable lease contracts under performance and their financial effects as at the end of current year.
Items Balance as at 31/12/2016 Balance as at 31/12/2015
The minimum lease payments of irrevocable
operating lease contracts:
1st year after the balance sheet date 2,300,000.00 2,300,000.00
2nd year after the balance sheet date 2,300,000.00 2,300,000.00
3rd year after the balance sheet date 2,300,000.00 2,300,000.00
Subsequent years 23,958,333.33 26,258,333.33
Total 30,858,333.33 33,158,333.33
12.2 Contingencies
12.2.1 Because of the infringement of the Company’s trademark rights in the market, the Company filed
lawsuits against the behavior of infringement. Since the claimed amounts are insignificant individually or in
aggregate, it is not expected to have a significant impact on the Company.
12.2.2 Other than the above matters, the Company has no other contingencies.
Note 13: Post reporting date events
On 26 April 2017, the Company held 8th meeting of seventh session board of directors which approved profit
distribution plan for the year of 2016. The company plan to use the total share of 503,600,000.00 of the company
at 31/12/2016 as a base, to distribute CNY 6.00 (before tax) for every 10 shares, and as result to distribute CNY
302,160,000.00to the all shareholder. The profit distribution plan is pending resolution by the shareholders’
110
meeting.
Note 14: Other signification events
Operation division information
The company donot confirmed the operation division in accordance with the internal organizational structure,
management requirements and internal reporting system, so that there has no need to disclose division
information report on the basis of the operation division.
Note 15: Notes to the main elements of the separate financial statement of the Company
15.1 Accounts receivable
15.1.1 Disclosure by classification
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject
6,979,229.19 100.00 601,883.19 8.62 6,377,346.00
to impairment by credit risk
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 6,979,229.19 100.00 601,883.19 8.62 6,377,346.00
(Continued)
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject 4,940,776.33 100.00 590,339.09 11.95 4,350,437.24
111
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
to impairment by credit risk
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 4,940,776.33 100.00 590,339.09 11.95 4,350,437.24
15.1.1.1 Accounts receivable using the age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
Within 1 year 0.00 0.00 0.00
Include：within 6 months 0.00 0.00 0.00
7-12 months 0.00 0.00 0.00
1 to 2 year 141,121.87 14,112.19 10.00
2 to 3 year 0.00 0.00 0.00
Over 3 years 587,771.00 587,771.00 100.00
Total 728,892.87 601,883.19 82.57
15.1.1.2 Accounts receivable using the other method for measurement of allowance for bad debt
Balance as at 31/12/2016
Related parties
Carrying amount Allowance for bad debt % of total
Related parties 6,250,336.32 0.00 0.00
Total 6,250,336.32 0.00 0.00
15.1.2 Recognization, recovery and reversal of allowance for bad debt
Reversal of the allowance is CNY 11,544.10.
15.1.3 Accounts receivable written off during the current year
There is no accounts receivable written off during the current year.
15.1.4 Details of top five accounts receivable
The total amount of top five accounts receivables which are summaried by the balance as at the end of current
year is CNY6,716,483.19, accounting for 96.24% of the total accounts receivable balance as at the end of
current year, the total amount of corresponding allowence for bad debts is CNY 506,657.19.
15.2 Other receivable
112
15.2.1 Disclosure by classification
Balance as at 31/12/2016
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual
significance subject to individually 41,342,938.53 28.07 41,342,938.53 100.00 0.00
assessment for impairment
Other receivable portfolio subject to
105,925,699.86 71.93 410,793.52 0.39 105,514,906.34
impairment by credit risk
Other receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 147,268,638.39 100.00 41,753,732.05 28.35 105,514,906.34
(Continued)
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual
significance subject to individually 41,342,938.53 27.69 41,342,938.53 100.00 0.00
assessment for impairment
Other receivable portfolio subject to
107,957,715.78 72.31 332,695.93 0.31 107,625,019.85
impairment by credit risk
Other receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 149,300,654.31 100.00 41,675,634.46 27.91 107,625,019.85
15.2.1.1 Other receivable of individual significance subject to individually assessment for impairment
Balance at 31/12/2016
Other receivable
Other receivable Allowance % of total Reasons
Jiaoqiao securities 11,840,500.00 11,840,500.00 100.00 Company went through bankrupt
Hengxin securities 29,502,438.53 29,502,438.53 100.00 Company went through bankrupt
113
Balance at 31/12/2016
Other receivable
Other receivable Allowance % of total Reasons
Total 41,342,938.53 41,342,938.53 ——
15.2.1.2 Other receivables using the age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2016
Age
Carrying amount Allowance for bad debt % of total
Within 1 year 1,088,982.87 12,358.67 1.13
Include：within 6 months 1,052,261.97 10,522.62 1.00
7 to 12 months 36,720.90 1,836.05 5.00
1 to 2 years 19,870.70 1,987.07 10.00
2 to 3 years 704,476.40 352,238.20 50.00
Over 3 years 44,209.58 44,209.58 100.00
Total 1,857,539.55 410,793.52 22.11
15.2.1.3 Accounts receivable using the other method for measurement of allowance for bad debt
Balance as at 31/12/2016
Related parties
Carrying amount Allowance for bad debt % of total
Related parties 104,068,160.31 0.00 0.00
Total 104,068,160.31 0.00 0.00
15.2.2 Recognition, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognized during the current year is CNY 78,097.59.
15.2.3 Accounts receivable written off during the current year
There has no other receivable written off during the current reporting period.
15.2.4 Classification of other receivable
Nature Balance at 31/12/2016 Balance at 31/12/2015
Related party balance in consolidation 104,068,160.31 105,475,000.00
Investment in securities 41,342,938.53 41,342,938.53
Deposit and Assurant 1,191,658.09 1,295,081.09
Employee borrowing 72,924.00 209,766.20
Rent, water and gas 296,244.71 327,679.52
Others 296,712.75 650,188.97
Total 147,268,638.39 149,300,654.31
15.2.5 Details of top five other receivable:
Related party Balance as at % of total Allowance balance
Debtor Nature Age
relationships 31/12/2016 amount at the year end
114
Related party Balance as at % of total Allowance balance
Debtor Nature Age
relationships 31/12/2016 amount at the year end
The first Subsidiary Related party balance 87,465,000.00 Within 3 years 59.39 0.00
The second Third party Invest in securities 29,502,438.53 Over 3 years 20.03 29,502,438.53
The third Subsidiary Related party balance 16,171,003.05 Within 6 months 10.98 0.00
The forth Third party Invest in securities 11,840,500.00 Over 3 years 8.04 11,840,500.00
The fift Third party Prepaid electricity fee 102,265.55 Within 6 months 0.07 1,022.66
Total — 145,081,207.13 — 98.51 41,343,961.19
15.3 Long-term equity investments
15.3.1 Disclosure by classification
Balance as at 31/12/2016 Balance as at 31/12/2015
Items Carrying allowance for Net carrying Carrying allowance for Net carrying
amount bad debts amount amount bad debts amount
Invest to
1,155,089,408.32 0.00 1,155,089,408.32 354,089,408.32 0.00 354,089,408.32
subsidiaries
Total 1,155,089,408.32 0.00 1,155,089,408.32 354,089,408.32 0.00 354,089,408.32
15.3.2 Details of long-term equity investments
Carrying
amount of
Decrease
Balance as at Increase during Balance as at Impairment impairment
Name during current
31/12/2015 current year 31/12/2016 allowance allowance
year
as at
31/12/2016
Gujing Sales 84,864,497.89 0.00 0.00 84,864,497.89 0.00 0.00
Longrui Glass 85,793,666.00 0.00 0.00 85,793,666.00 0.00 0.00
Shanghai Gujing Jinhao 49,906,854.63 0.00 0.00 49,906,854.63 0.00 0.00
Gujing Hotel 648,646.80 0.00 0.00 648,646.80 0.00 0.00
Gujing Transportation 6,875,743.00 0.00 0.00 6,875,743.00 0.00 0.00
Gujing Packaging 30,000,000.00 0.00 30,000,000.00 0.00 0.00 0.00
Anhui Ruisiweier 50,000,000.00 0.00 0.00 50,000,000.00 0.00 0.00
Anhui colorful taste
30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Co.Ltd
Anhui Yuanqing 16,000,000.00 0.00 0.00 16,000,000.00 0.00 0.00
115
Carrying
amount of
Decrease
Balance as at Increase during Balance as at Impairment impairment
Name during current
31/12/2015 current year 31/12/2016 allowance allowance
year
as at
31/12/2016
environmental protection
Co., Ltd.
Anhui Gujing Yunshang
Electronic Commerce 0.00 5,000,000.00 0.00 5,000,000.00 0.00 0.00
Co., Ltd.
Anhui Zhenrui
Construction Engineering 0.00 10,000,000.00 0.00 10,000,000.00 0.00 0.00
Co., Ltd
Wuhan Tianlong Yellow
Crane Tower Wine Co., 0.00 816,000,000.00 0.00 816,000,000.00 0.00 0.00
Ltd
Total 354,089,408.32 831,000,000.00 30,000,000.00 1,155,089,408.32 0.00 0.00
15.4 Operating revenues and costs
Current year Prior year
Items
Revenue Costs Revenue Costs
Revenue from principal operating activities 3,255,168,021.47 1,396,232,148.48 2,964,146,832.70 1,505,986,199.51
Revenue from other operating activities 53,231,228.56 40,562,309.03 42,921,317.48 30,332,052.29
Total operating revenue 3,308,399,250.03 1,436,794,457.51 3,007,068,150.18 1,536,318,251.80
15.5 Investment income
Items Current year Prior year
Investment income from long term equity investment using cost mothed 415,883,385.13 505,901,386.51
Investment income from disposal of financial assets measured by fair value
13,091,633.55 7,160,227.36
with changes in fair value recognised in profit or loss
Investment income from available for sale financial asset during the holding
77,779,247.77 61,455,959.33
period
Investment income from disposal of available for sale financial assets 283,347.55 0.00
Total 507,037,614.00 574,517,573.20
Note 16: Supplementary information
116
16.1 Extraordinary gains or losses for current year
Supplemental information Total amount Explanation
Gains or losses arising from disposal of non-current assets -6,319,619.72
Tax repayments or waiving of taxes not officially authorized or not with proper
0.00
authorization
Government grants accounted for through profit or loss for the current
reporting period (excl. grants directly associated with the Company’s 25,336,275.56
operations and subject to national quotas)
Cost of monetary funds charged on non-financial institutions accounted for
0.00
through profit or loss for the current reporting period
Gains from the investment costs paid less than the acquirer’s interest in the
fair value of the bargainor’s identifiable net assets( During acquire subsidiary、 0.00
joint venture and associates)
Gains or losses arising from non-monetary assets exchange 0.00
Gains or losses arising from entrusted assets and investments 0.00
Impairment allowances arising from force majeure, such as natural disasters 0.00
Gain or loss arising from debt restructuring 0.00
Restructuring expenses, such as employee settlement and relocation costs
0.00
and costs of integration
Gains or losses arising from transactions of which the prices are deemed
0.00
unfair (the difference between the price and the fair value)
Net profit or loss of subsidiaries acquired through business combination under
common control from the beginning of the current reporting period to the 0.00
combination dates.
Gains or losses arising from contingent events not associated with the
0.00
Company’s operating activities
Gains or losses arising from changes in the fair values of financial instruments
held for trading (excl. effective hedging instruments associated with the
Company’s operating activities) or disposal of financial instruments held for 16,263,956.97
trading and available-for-sale financial assets (excl. effective hedging
instruments associated with the Company’s operating activities)
Recovery of impairment allowance for receivables subject to individual
0.00
assessment for impairment
Gains or losses arising from entrusted borrowings 0.00
117
Supplemental information Total amount Explanation
Gains or losses arising from changes in the fair values of investment property
0.00
measured at fair value
Impact of one-off adjustment required by tax laws, accounting standards and
0.00
relevant regulations on the profit or loss for the current reporting period
Revenue arising from entrusted operation 0.00
Other non-operating revenue and non-operating expenses not listed above 14,343,655.95
Other gains or losses satisfying the definition of extraordinary gains or losses 0.00
Subtotal 49,624,268.76
Less: Effect of corporate income tax 12,229,198.63
Less: Net amount attributable to minority interests (after tax) 299,105.29
Total 37,095,964.84
Note: Extraordinary gains or losses event use “+”express revenue and income, “-” express loss and expenditure.
The Company recognized 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 (ZhengjianhuiGonggao [2008] No.43).
16.2 Yield Rate of Net Assets and Earnings per Share
Earnings Per Share(Yuan per share)
Profits for the reporting period Weighted average yield rate of net assets%
Basic EPS Diluted EPS
Net profits attributable to
15.88 1.65 1.65
ordinary shareholders
Net profits attributable to
ordinary shareholders (excl. 15.17 1.57 1.57
extraordinary gains or losses)
118
119
