ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2022
August 2022
~1~
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□ Yes No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
30 June 2022
Unit: RMB
Item 30 June 2022 1 January 2022
Current assets:
Monetary assets 16,676,787,455.55 11,924,922,771.76
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 203,857,213.38 2,661,103,876.68
Derivative financial assets
Notes receivable
Accounts receivable 78,132,814.03 89,005,804.17
Accounts receivable financing 693,605,704.99 545,204,103.42
Prepayments 113,655,027.34 156,570,970.99
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 87,093,186.66 71,753,212.24
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 5,012,115,960.55 4,663,456,672.30
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 99,086,620.18 178,222,222.56
Total current assets 22,964,333,982.68 20,290,239,634.12
Non-current assets:
~2~
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 9,356,675.30 5,312,600.78
Investments in other equity
56,568,724.15 54,542,418.50
instruments
Other non-current financial assets
Investment property 13,842,600.22 4,075,801.06
Fixed assets 2,174,587,817.92 1,984,063,975.87
Construction in progress 1,579,733,041.46 1,064,134,904.21
Productive living assets
Oil and gas assets
Right-of-use assets 36,636,790.82 43,927,228.97
Intangible assets 1,110,395,361.76 1,063,468,842.61
Development costs
Goodwill 561,364,385.01 561,364,385.01
Long-term prepaid expense 60,534,816.82 55,908,338.03
Deferred income tax assets 436,908,744.55 283,828,000.24
Other non-current assets 2,044,800.00 7,220,318.40
Total non-current assets 6,041,973,758.01 5,127,846,813.68
Total assets 29,006,307,740.69 25,418,086,447.80
Current liabilities:
Short-term borrowings 30,029,027.77 30,035,138.89
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 81,620,172.86 127,114,336.16
Accounts payable 1,165,871,171.40 1,020,437,321.89
Advances from customers
Contract liabilities 3,427,741,695.67 1,825,447,705.85
Financial assets sold under repurchase
agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of securities
Employee benefits payable 735,994,193.50 709,671,787.74
Taxes payable 927,603,919.56 873,270,986.71
Other payables 2,512,044,376.53 2,280,937,078.12
~3~
Including: Interest payable
Dividends payable
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
42,650,446.20 13,190,399.32
liabilities
Other current liabilities 1,628,990,911.86 799,522,562.60
Total current liabilities 10,552,545,915.35 7,679,627,317.28
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 79,874,917.22 172,356,255.83
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 21,151,463.30 28,107,223.18
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 100,322,613.54 91,101,512.05
Deferred income tax liabilities 187,680,514.07 194,033,257.93
Other non-current liabilities
Total non-current liabilities 389,029,508.13 485,598,248.99
Total liabilities 10,941,575,423.48 8,165,225,566.27
Owners’ equity:
Share capital 528,600,000.00 528,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6,224,747,667.10 6,224,747,667.10
Less: Treasury stock
Other comprehensive income -898,924.02 -2,735,058.19
Specific reserve
Surplus reserves 269,402,260.27 269,402,260.27
General reserve
Retained earnings 10,273,276,078.21 9,517,374,574.46
Total equity attributable to owners of the
17,295,127,081.56 16,537,389,443.64
Company as the parent
Non-controlling interests 769,605,235.65 715,471,437.89
Total owners’ equity 18,064,732,317.21 17,252,860,881.53
~4~
Total liabilities and owners’ equity 29,006,307,740.69 25,418,086,447.80
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2022 1 January 2022
Current assets:
Monetary assets 9,355,278,275.11 6,701,949,499.06
Held-for-trading financial assets 203,857,213.38 2,611,037,013.67
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing 466,402,931.56 269,471,899.40
Prepayments 53,743,292.28 85,579,299.60
Other receivables 264,237,544.48 290,480,736.49
Including: Interest receivable
Dividends receivable
Inventories 3,911,253,918.17 3,667,928,608.55
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 84,118,530.21 142,527,867.24
Total current assets 14,338,891,705.19 13,768,974,924.01
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1,551,315,641.38 1,547,415,641.38
Investments in other equity
instruments
Other non-current financial assets
Investment property 13,842,600.22 4,075,801.06
Fixed assets 1,291,057,237.41 1,375,344,792.42
Construction in progress 1,218,297,931.57 692,315,065.86
Productive living assets
Oil and gas assets
Right-of-use assets 34,300,269.79 40,811,867.62
Intangible assets 491,336,853.30 437,919,619.31
~5~
Development costs
Goodwill
Long-term prepaid expense 31,369,575.62 41,319,866.13
Deferred income tax assets 40,276,178.83 28,775,933.22
Other non-current assets
Total non-current assets 4,671,796,288.12 4,167,978,587.00
Total assets 19,010,687,993.31 17,936,953,511.01
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 605,428,096.19 672,018,963.99
Advances from customers
Contract liabilities 1,209,309,528.92 23,438,890.01
Employee benefits payable 177,583,788.13 160,404,100.41
Taxes payable 405,836,935.21 473,881,384.92
Other payables 508,268,839.59 632,857,371.46
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets held for sale
Current portion of non-current
11,026,640.75 11,633,827.85
liabilities
Other current liabilities 225,950,208.16 15,080,461.56
Total current liabilities 3,143,404,036.95 1,989,315,000.20
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 20,326,930.71 26,476,999.19
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 33,816,660.57 27,176,546.19
Deferred income tax liabilities 19,704,071.64 21,499,021.71
Other non-current liabilities
Total non-current liabilities 73,847,662.92 75,152,567.09
Total liabilities 3,217,251,699.87 2,064,467,567.29
Owners’ equity:
Share capital 528,600,000.00 528,600,000.00
~6~
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6,176,504,182.20 6,176,504,182.20
Less: Treasury stock
Other comprehensive income -1,275,460.64 -1,385,311.78
Specific reserve
Surplus reserves 264,300,000.00 264,300,000.00
Retained earnings 8,825,307,571.88 8,904,467,073.30
Total owners’ equity 15,793,436,293.44 15,872,485,943.72
Total liabilities and owners’ equity 19,010,687,993.31 17,936,953,511.01
3. Consolidated Income Statement
Unit: RMB
Item H1 2022 H1 2021
1. Revenue 9,002,005,923.42 7,007,496,467.74
Including: Operating revenue 9,002,005,923.42 7,007,496,467.74
Interest income
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 6,352,382,128.23 5,170,893,817.52
Including: Cost of sales 2,023,003,861.36 1,653,818,347.31
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
Taxes and surcharges 1,276,738,897.80 1,069,811,252.05
Selling expense 2,595,105,420.46 2,028,265,595.93
Administrative expense 559,320,542.66 467,727,393.70
R&D expense 27,837,365.94 19,961,346.26
Finance costs -129,623,959.99 -68,690,117.73
Including: Interest
2,498,008.94 4,457,905.49
expense
Interest 131,378,962.32 72,689,006.99
~7~
income
Add: Other income 26,209,081.15 34,701,412.82
Return on investment (“-” for loss) -17,449,121.42 -5,122,111.50
Including: Share of profit or loss
144,074.52 60,287.04
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
318,569.02 5,237,242.40
for loss)
Credit impairment loss (“-” for
-1,258,781.36 1,945,965.69
loss)
Asset impairment loss (“-” for
4,343,131.74 2,464,519.26
loss)
Asset disposal income (“-” for
191,652.74 1,014,902.90
loss)
3. Operating profit (“-” for loss) 2,661,978,327.06 1,876,844,581.79
Add: Non-operating income 24,988,936.35 25,707,115.31
Less: Non-operating expense 8,351,463.17 3,255,078.91
4. Profit before tax (“-” for loss) 2,678,615,800.24 1,899,296,618.19
Less: Income tax expense 706,053,183.61 478,730,726.66
5. Net profit (“-” for net loss) 1,972,562,616.63 1,420,565,891.53
5.1 By operating continuity
5.1.1 Net profit from continuing
1,972,562,616.63 1,420,565,891.53
operations (“-” for net loss)
5.1.2 Net profit from discontinued
operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to
1,918,821,503.75 1,378,803,828.46
owners of the Company as the parent
5.2.1 Net profit attributable to
53,741,112.88 41,762,063.07
non-controlling interests
6. Other comprehensive income, net of
2,228,819.05 796,619.20
tax
Attributable to owners of the
1,836,134.17 477,971.52
Company as the parent
6.1 Items that will not be
911,837.54 477,971.52
reclassified to profit or loss
6.1.1 Changes caused by
~8~
remeasurements on defined benefit
schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
911,837.54 477,971.52
investments in other equity instruments
6.1.4 Changes in the fair value
arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to
924,296.63 0.00
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit
or loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Other comprehensive
income arising from the reclassification 924,296.63 0.00
of financial assets
6.2.4 Credit impairment
allowance for investments in other debt
obligations
6.2.5 Reserve for cash flow
hedges
6.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
6.2.7 Other
Attributable to non-controlling
392,684.88 318,647.68
interests
7. Total comprehensive income 1,974,791,435.68 1,421,362,510.73
Attributable to owners of the
1,920,657,637.92 1,379,281,799.98
Company as the parent
Attributable to non-controlling
54,133,797.76 42,080,710.75
interests
8. Earnings per share
8.1 Basic earnings per share 3.63 2.74
8.2 Diluted earnings per share 3.63 2.74
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
~9~
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2022 H1 2021
1. Operating revenue 4,472,856,893.79 3,596,233,135.46
Less: Cost of sales 1,613,199,963.51 1,388,312,451.57
Taxes and surcharges 1,082,081,569.06 912,790,380.44
Selling expense 29,981,877.64 26,922,520.17
Administrative expense 371,905,439.74 274,336,727.36
R&D expense 11,378,186.74 12,595,670.28
Finance costs -75,657,865.69 -33,519,413.78
Including: Interest expense 847,873.69 1,102,140.59
Interest income 76,111,832.12 34,468,139.72
Add: Other income 4,509,784.26 4,448,910.21
Return on investment (“-” for loss) -17,430,120.00 -3,772,871.47
Including: Share of profit or loss
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
318,569.02 5,237,242.40
for loss)
Credit impairment loss (“-” for
-165,730.36 1,815,211.93
loss)
Asset impairment loss (“-” for
1,913,585.91 2,968,599.03
loss)
Asset disposal income (“-” for
0.00 1,217,988.71
loss)
2. Operating profit (“-” for loss) 1,429,113,811.62 1,026,709,880.23
Add: Non-operating income 18,141,888.35 17,347,810.40
Less: Non-operating expense 5,121,167.93 1,424,712.54
3. Profit before tax (“-” for loss) 1,442,134,532.04 1,042,632,978.09
Less: Income tax expense 358,374,033.46 260,679,576.97
4. Net profit (“-” for net loss) 1,083,760,498.58 781,953,401.12
4.1 Net profit from continuing
1,083,760,498.58 781,953,401.12
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
109,851.14 0.00
tax
~ 10 ~
5.1 Items that will not be reclassified
to profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
investments in other equity instruments
5.1.4 Changes in the fair value
arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to
109,851.14 0.00
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Other comprehensive income
arising from the reclassification of 109,851.14 0.00
financial assets
5.2.4 Credit impairment allowance
for investments in other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
5.2.7 Other
6. Total comprehensive income 1,083,870,349.72 781,953,401.12
7. Earnings per share
7.1 Basic earnings per share 2.05 1.55
7.2 Diluted earnings per share 2.05 1.55
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2022 H1 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities
10,536,436,947.68 8,064,793,672.94
and rendering of services
~ 11 ~
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 3,593,014.59 3,388,614.96
Cash generated from other operating
416,874,433.62 1,598,870,662.08
activities
Subtotal of cash generated from
10,956,904,395.89 9,667,052,949.98
operating activities
Payments for commodities and
1,429,207,252.95 1,273,004,707.79
services
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans granted
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 1,636,020,699.63 1,492,074,698.56
Taxes paid 2,928,271,586.95 2,121,640,018.53
Cash used in other operating activities 772,158,056.57 4,516,366,392.84
Subtotal of cash used in operating
6,765,657,596.10 9,403,085,817.72
activities
Net cash generated from/used in
4,191,246,799.79 263,967,132.26
operating activities
~ 12 ~
2. Cash flows from investing activities:
Proceeds from disinvestment 4,587,477,639.71 396,849,809.53
Return on investment 1,067,121.16 1,258,176.12
Net proceeds from the disposal of
fixed assets, intangible assets and other 1,244,063.80 1,570,219.30
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
4,589,788,824.67 399,678,204.95
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 714,217,547.21 285,092,874.96
long-lived assets
Payments for investments 1,464,575,094.67 404,900,000.00
Net increase in pledged loans granted
Net payments for the acquisition of
0.00 65,186,333.10
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
2,178,792,641.88 755,179,208.06
activities
Net cash generated from/used in
2,410,996,182.79 -355,501,003.11
investing activities
3. Cash flows from financing activities:
Capital contributions received 0.00 4,962,827,169.81
Including: Capital contributions by
0.00 5,280,000.00
non-controlling interests to subsidiaries
Borrowings raised 20,000,000.00 130,330,000.00
Cash generated from other financing
activities
Subtotal of cash generated from
20,000,000.00 5,093,157,169.81
financing activities
Repayment of borrowings 94,851,054.01 228,437,703.59
Interest and dividends paid 1,166,060,059.13 759,464,406.09
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing activities 9,257,885.61 8,235,784.88
Subtotal of cash used in financing
1,270,168,998.75 996,137,894.56
activities
Net cash generated from/used in
-1,250,168,998.75 4,097,019,275.25
financing activities
4. Effect of foreign exchange rates
~ 13 ~
changes on cash and cash equivalents
5. Net increase in cash and cash
5,352,073,983.83 4,005,485,404.40
equivalents
Add: Cash and cash equivalents,
6,057,550,178.60 5,636,903,693.74
beginning of the period
6. Cash and cash equivalents, end of the
11,409,624,162.43 9,642,389,098.14
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2022 H1 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities
9,789,484,776.84 7,096,307,729.01
and rendering of services
Tax rebates
Cash generated from other operating
849,250,330.86 2,341,213,371.64
activities
Subtotal of cash generated from
10,638,735,107.70 9,437,521,100.65
operating activities
Payments for commodities and
1,357,709,777.54 1,352,698,829.10
services
Cash paid to and for employees 535,086,542.33 501,300,793.46
Taxes paid 1,871,802,206.80 1,342,951,770.60
Cash used in other operating activities 5,008,612,241.81 7,545,117,742.35
Subtotal of cash used in operating
8,773,210,768.48 10,742,069,135.51
activities
Net cash generated from/used in
1,865,524,339.22 -1,304,548,034.86
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 4,436,593,245.00 386,849,809.53
Return on investment 78,111,847.94 438,267.56
Net proceeds from the disposal of
fixed assets, intangible assets and other 0.00 1,475,459.30
long-lived assets
Net proceeds from the disposal of
0.00 3,123,346.37
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
4,514,705,092.94 391,886,882.76
investing activities
Payments for the acquisition of fixed
592,574,549.94 203,961,053.06
assets, intangible assets and other
~ 14 ~
long-lived assets
Payments for investments 713,900,000.00 394,900,000.00
Net payments for the acquisition of
0.00 205,920,000.00
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
1,306,474,549.94 804,781,053.06
activities
Net cash generated from/used in
3,208,230,543.00 -412,894,170.30
investing activities
3. Cash flows from financing activities:
Capital contributions received 0.00 4,957,547,169.81
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from
0.00 4,957,547,169.81
financing activities
Repayment of borrowings
Interest and dividends paid 1,162,518,220.56 755,225,623.63
Cash used in other financing activities 7,907,885.61 7,335,784.88
Subtotal of cash used in financing
1,170,426,106.17 762,561,408.51
activities
Net cash generated from/used in
-1,170,426,106.17 4,194,985,761.30
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
3,903,328,776.05 2,477,543,556.14
equivalents
Add: Cash and cash equivalents,
1,571,949,499.06 4,087,808,756.66
beginning of the period
6. Cash and cash equivalents, end of the
5,475,278,275.11 6,565,352,312.80
period
~ 15 ~
7. Consolidated Statements of Changes in Owners’ Equity
H1 2022
Unit: RMB
H1 2022
Equity attributable to owners of the Company as the parent
Other equity
Item Gener
instruments Less: Other Specifi Non-controlli Total owners’
Capital Surplus al Retained Othe
Share capital Perpetu Treasur comprehensi c Subtotal ng interests equity
Preferre Othe reserves reserves reserv earnings r
al y stock ve income reserve
d shares r e
bonds
1. Balance as
at the end of 528,600,000. 6,224,747,667. -2,735,058.1 269,402,260. 9,517,374,574.4 16,537,389,443. 715,471,437. 17,252,860,881.
the period of 00 10 9 27 6 64 89 53
prior year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
~ 16 ~
Adjustment
for business
combination
under
common
control
Other
adjustments
2. Balance as
at the
beginning of 528,600,000. 6,224,747,667. -2,735,058.1 269,402,260. 9,517,374,574.4 16,537,389,443. 715,471,437. 17,252,860,881.
the 00 10 9 27 6 64 89 53
Reporting
Period
3. Increase/
decrease in
54,133,797.7
the period 1,836,134.17 755,901,503.75 757,737,637.92 811,871,435.68
6
(“-” for
decrease)
3.1 Total
1,918,821,503.7 1,920,657,637.9 54,133,797.7 1,974,791,435.6
comprehensi 1,836,134.17
5 2 6 8
ve income
3.2
Capital
increased
and reduced
by owners
3.2.1
Ordinary
~ 17 ~
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4
Other
3.3 Profit -1,162,920,000. -1,162,920,000. -1,162,920,000.
distribution 00 00 00
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
-1,162,920,000. -1,162,920,000. -1,162,920,000.
Appropriatio
~ 18 ~
n to owners 00 00 00
(or
shareholders
)
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share
capital) from
capital
reserves
3.4.2
Increase in
capital (or
share
capital) from
surplus
reserves
3.4.3
Loss offset
by surplus
reserves
~ 19 ~
3.4.4
Changes in
defined
benefit
schemes
transferred
to retained
earnings
3.4.5
Other
comprehensi
ve income
transferred
to retained
earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
528,600,000. 6,224,747,667. -898,924.02 269,402,260. 10,273,276,078. 17,295,127,081. 769,605,235. 18,064,732,317.
at the end of
~ 20 ~
the 00 10 27 21 56 65 21
Reporting
Period
H1 2021
Unit: RMB
H1 2021
Equity attributable to owners of the Company as the parent
Other equity
Item Gener
instruments Less: Other Specifi Non-controlli Total owners’
Capital Surplus al Retained Othe
Share capital Perpetu Treasur comprehensi c Subtotal ng interests equity
Preferre Othe reserves reserves reserv earnings r
al y stock ve income reserve
d shares r e
bonds
1. Balance as
at the end of 503,600,000. 1,295,405,592. 256,902,260. 7,987,380,161. 10,043,288,013. 405,562,772. 10,448,850,786.
the period of 00 25 27 21 73 65 38
prior year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
~ 21 ~
Adjustment
for business
combination
under
common
control
Other
adjustments
2. Balance as
at the
beginning of 503,600,000. 1,295,405,592. 256,902,260. 7,987,380,161. 10,043,288,013. 405,562,772. 10,448,850,786.
the 00 25 27 21 73 65 38
Reporting
Period
3. Increase/
decrease in
25,000,000.0 4,929,342,074. 623,403,828.4 5,578,223,874.8 140,633,552. 5,718,857,426.8
the period 477,971.52
0 85 6 3 04 7
(“-” for
decrease)
3.1 Total
1,378,803,828. 1,379,281,799.9 42,080,710.7 1,421,362,510.7
comprehensi 477,971.52
46 8 5 3
ve income
3.2
Capital
25,000,000.0 4,929,342,074. 4,954,342,074.8 98,552,841.2 5,052,894,916.1
increased
0 85 5 9 4
and reduced
by owners
3.2.1 25,000,000.0 4,929,342,074. 4,954,342,074.8 4,954,342,074.8
Ordinary 0 85 5 5
~ 22 ~
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4 98,552,841.2
98,552,841.29
Other 9
3.3 Profit -755,400,000.0
-755,400,000.00 -755,400,000.00
distribution 0
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3 -755,400,000.0 -755,400,000.00 -755,400,000.00
~ 23 ~
Appropriatio 0
n to owners
(or
shareholders
)
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset
by surplus
reserves
3.4.4
~ 24 ~
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensi
ve income
transferred to
retained
earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
528,600,000. 6,224,747,667. 256,902,260. 8,610,783,989. 15,621,511,888. 546,196,324. 16,167,708,213.
at the end of 477,971.52
00 10 27 67 56 69 25
the
~ 25 ~
Reporting
Period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2022
Unit: RMB
H1 2022
Other equity instruments Less: Other Specifi
Item Surplus Retained Othe Total owners’
Share capital Preferre Perpetua Othe Capital reserves Treasur comprehensiv c
reserves earnings r equity
d shares l bonds r y stock e income reserve
1. Balance as
at the end of 528,600,000.0 6,176,504,182.2 264,300,000.0 15,872,485,943.7
-1,385,311.78 8,904,467,073.30
the period of 0 0 0 2
prior year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
2. Balance as 528,600,000.0 6,176,504,182.2 264,300,000.0 15,872,485,943.7
-1,385,311.78 8,904,467,073.30
at the 0 0 0 2
~ 26 ~
beginning of
the Reporting
Period
3. Increase/
decrease in
109,851.14 -79,159,501.42 -79,049,650.28
the period (“-”
for decrease)
3.1 Total
comprehensiv 109,851.14 1,083,760,498.58 1,083,870,349.72
e income
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
~ 27 ~
owners’
equity
3.2.4
Other
3.3 Profit -1,162,920,000.0 -1,162,920,000.0
distribution 0 0
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation -1,162,920,000.0 -1,162,920,000.0
to owners (or 0 0
shareholders)
3.3.3
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
~ 28 ~
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset by
surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensiv
e income
transferred to
retained
earnings
3.4.6
Other
3.5 Specific
reserve
3.5.1
Increase in the
~ 29 ~
period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of 528,600,000.0 6,176,504,182.2 264,300,000.0 15,793,436,293.4
-1,275,460.64 8,825,307,571.88
the Reporting 0 0 0 4
Period
H1 2021
Unit: RMB
H1 2021
Other equity instruments Less: Other
Item Specific Surplus Retained Total owners’
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Other
Other reserve reserves earnings equity
shares bonds stock income
1. Balance as at the
end of the period of 503,600,000.00 1,247,162,107.35 251,800,000.00 7,465,059,972.22 9,467,622,079.57
prior year
Add: Adjustment for
change in accounting
policy
Adjustment for
correction of previous
error
Other adjustments
2. Balance as at the
beginning of the 503,600,000.00 1,247,162,107.35 251,800,000.00 7,465,059,972.22 9,467,622,079.57
Reporting Period
~ 30 ~
3. Increase/ decrease
in the period (“-” for 25,000,000.00 4,929,342,074.85 26,553,401.12 4,980,895,475.97
decrease)
3.1 Total
781,953,401.12 781,953,401.12
comprehensive income
3.2 Capital
increased and reduced 25,000,000.00 4,929,342,074.85 4,954,342,074.85
by owners
3.2.1 Ordinary
shares increased by 25,000,000.00 4,929,342,074.85 4,954,342,074.85
owners
3.2.2 Capital
increased by holders
of other equity
instruments
3.2.3 Share-based
payments included in
owners’ equity
3.2.4 Other
3.3 Profit
-755,400,000.00 -755,400,000.00
distribution
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
-755,400,000.00 -755,400,000.00
owners (or
shareholders)
~ 31 ~
3.3.3 Other
3.4 Transfers within
owners’ equity
3.4.1 Increase in
capital (or share
capital) from capital
reserves
3.4.2 Increase in
capital (or share
capital) from surplus
reserves
3.4.3 Loss offset
by surplus reserves
3.4.4 Changes in
defined benefit
schemes transferred to
retained earnings
3.4.5 Other
comprehensive income
transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in
the period
3.5.2 Used in the
period
3.6 Other
~ 32 ~
4. Balance as at the
end of the Reporting 528,600,000.00 6,176,504,182.20 251,800,000.00 7,491,613,373.34 14,448,517,555.54
Period
~ 33 ~
Anhui Gujing Distillery Company Limited
Notes to Financial Statements for H1 2022
(Currency Unit Is RMB Unless Otherwise Stated)
1. BASIC INFORMATION ABOUT THE COMPANY
1.1 Corporate Information
Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property,
Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company with
net assets of RMB377,167,700 and state-owned shares of 155,000,000 shares and considered Anhui Gujing
Company as the only promoter. The registration place was Bozhou Anhui China. The Company was established
on 5 March 1996 by document of WZM (1996) No.42 of Anhui People’s Government. The Company set up
plenary session on 28 May 1996 and registered in Anhui on 30 May 1996.
The Company has issued 60,000,000 domestic listed foreign shares (“B” shares) in June 1996 and 20,000,000
ordinary shares (“A shares) on September 1996, ordinary shares are listed in national and par value is RMB1.00
per share. Those A shares and B shares are listed in Shenzhen Stock exchange.
Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries (the Company)
specialize in producing and selling white spirit.
Registered capitals of the Company were RMB235,000,000 with stocks of 235,000,000, of which 155,000,000
shares were issued in China, B shares of 60,000,000 shares and A shares of 20,000,000 shares. The book value of
the stocks of the Company was of RMB1 per share.
On 29 May 2006, a shareholder meeting was held to discuss and approval a program of equity division of A share,
the program was implement in June 2006. After implementation, all shares are outstanding share, which include
147,000,000 shares with restrict condition on disposal, represent 62.55% of total equity, and 88,000,000 shares
without restrict condition on disposal, represent 37.45% of total equity.
The Company issued
on 27 June 2007, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 29
June 2007. Up to that day, outstanding shares with restrict condition on disposal are 135,250,000, representing
57.55% of total equity, the share without restrict condition are 99,750,000, representing 42.45% of total equity.
The Company issued
on 17 July 2008, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 18
July 2008. Up to that day, outstanding shares with restrict condition on disposal are 123,500,000, representing
52.55% of total equity, the share without restrict condition are 111,500,000, representing 47.45% of total equity.
The Company issued
on 24 July 2009, 123,500,000 outstanding shares with restrict condition on disposal are listed in stock market on
29 July 2009. Up to that day, the Company’s all shares are all tradable.
Approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943, the Company privately offered 16,800,000
ordinary shares (A-shares) to special investors on 15 July 2011, with a par value of RMB1 and the price of
RMB75.00 per share, raising RMB1,260,000,000.00 in total, the net amount of raised funds stood at
RMB1,227,499,450.27 after deducting RMB32,500,549.73 of various issuance expenses. Certified Public
Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi
[2011] No. 1065. After private issuance, the share capital of the Company increased to RMB251.8 million.
Pursuant to the Resolution of The 2011 Annual General Meeting, the Company that considered 251,800,000
shares as base number on 31 December 2011 transferred capital reserve into share capital at a rate of “10 shares
for per 10 shares” accounting for 251,800,000 shares and implemented in the year of 2012. Upon the transference,
the registered capitals increased to RMB503,600,000.
Approved by the China Securities Regulatory Commission under CSRC Permit [2021] No. 1422, the Company
privately issued RMB25,000,000 ordinary shares (A shares) with the par value of RMB1 per share to specific
targets on 22 July 2021 at an issuing price of RMB200.00 per share, raising total proceeds of
RMB5,000,000,000.00. After deducting the expenses related to the issue of RMB45,657,925.15, the actual net
proceeds raised were RMB4,954,342,074.85. RSM (special ordinary partnership) has audited the availability of
the funds raised from the non-public offering of shares of the Company and issued Capital Verification Report
R.C.Y.Z [2021] No. 518Z0050. The share capital of the Company increased to RMB528,600,000 after the
non-public offering.
By 30 June 2022, the Company issued 528,600,000 shares. See Note 5.32 for details.
The Company is registered at Gujing Town, Bozhou City, Anhui Province.
The approved business of the Company including procurement of grain (operating with business license),
manufacture of distilled spirits, wine distilling facilities, packaging material, bottles, alcohol, grease (limited to
byproducts from wine manufacture), and research and development of high-tech, biotechnology development,
agricultural and sideline products deep processing, as well as sale of self-manufacturing products.
Disclosure date of financial statement approved: Financial statement of the Company will be released on 30
August 2022 by the Board of Directors.
1.2 Scope of Consolidation and Changes Thereof
(1) Incorporated subsidiaries of the Company
Proportion of Shareholding (or
No. Name of Subsidiaries Abbreviation similar equity interest) (%)
Direct Indirect
1 Bozhou Gujing Sales Co., Ltd. Gujing Sales 100.00
2 Anhui Jinyunlai Culture & Media Co., Ltd. Jinyunlai 100.00
~ 35 ~
Proportion of Shareholding (or
No. Name of Subsidiaries Abbreviation similar equity interest) (%)
Direct Indirect
3 Anhui Ruisiweier Technology Co., Ltd. Ruisiweier 100.00
4 Anhui Longrui Glass Co., Ltd Longrui Glass 100.00
5 Shanghai Gujing Jinhao Hotel Management Co., Ltd. Jinhao Hotel 100.00
6 Bozhou Gujing Hotel Co., Ltd Gujing Hotel 100.00
Yuanqing
7 Anhui Yuanqing Environmental Protection Co., Ltd. Environmental 100.00
Protection
8 Anhui Gujing Yunshang E-commerce Co., Ltd. Gujing E-commerce 100.00
9 Anhui RunAnXinKe Testing Technology Co., Ltd. RunAnXinKe 100.00
10 Anhui Anjie Technology Co., Ltd. Anjie Technology 70.00
11 Jiuan Mechanical
Anhui Jiuan Mechanical Electrical Equipment Co., Ltd. 100.00
Electrical
12 Anhui Jiudao Culture Media Co., Ltd. Jiudao Culture 100.00
13 Anhui Jiuhao China Railway Construction Engineering
Jiuhao China Railway 52.00
Co., Ltd.
14 Anhui Zhenrui Construction Engineering Co., Ltd Zhenrui Engineering 52.00
15 Yellow Crane Tower
Yellow Crane Tower Distillery Co., Ltd. 51.00
Distillery
16 Yellow Crane Tower
Yellow Crane Tower Distillery (Suizhou) Co., Ltd. 51.00
(Suizhou)
17 Hubei Junlou Cultural Tourism Co., Ltd. Junlou Cultural 51.00
18 Yellow Crane Tower
Hubei Yellow Crane Tower Beverage Co., Ltd. 51.00
Beverage
19 Yellow Crane Tower
Yellow Crane Tower Distillery (Xianning) Co., Ltd. 51.00
(Xianning)
20 Wuhan Yashibo Technology Co., Ltd. Yashibo 51.00
21 Hubei Xinjia Testing Technology Co., Ltd. Xinjia Testing 51.00
22 Wuhan Tianlong Jindi Technology Development Co.,
Tianlong Jindi 51.00
Ltd
23 Wuhan Junya Sales Co., Ltd Junya Sales 51.00
24 Xianning Junhe Sales Co., Ltd. Xianning Junhe 51.00
25 Suizhou Junhe Commercial Co., Ltd. Suizhou Junhe 51.00
26 Huanggang Junya Trading Co., Ltd. Huanggang Junya 51.00
~ 36 ~
Proportion of Shareholding (or
No. Name of Subsidiaries Abbreviation similar equity interest) (%)
Direct Indirect
Renhuai Maotai Town Zhencang Winery Industry Co., Zhencang Winery
27 60.00
Ltd. Industry
28 Anhui Mingguang Wine Co., Ltd. Mingguang Wine 60.00
29 Mingguang Tiancheng Ming Wine Sales Co., Ltd. Tiancheng Sales 60.00
Fengyang Xiaogang Village Ming Wine Distillery Co., Fengyang Xiaogang
30 42.00
Ltd. Village
For details of the subsidiaries mentioned above, please refer to Note 7 INTEREST IN OTHER ENTITIES
(2) Change of the scope of consolidation
Compared with the previous period, the newly incorporated subsidiaries during the reporting period were Anjie
Technology and Huanggang Junya.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis for Preparation
On the basis of continuous operations, the Company shall confirm and measure actual transactions and events in
accordance with the Accounting Standards for Business Enterprises and its Application Guidelines and
Interpretation of the Standards, and prepare financial statements. Besides, the Company also discloses relevant
financial information in accordance with the China Securities Regulatory Commission (CSRC) Rules No. 15 on
the Compilation and Reporting of Corporate Information on Public Offerings -- General Provisions on Financial
Reports (2014 Revision).
2.2 Continuation
The Company has assessed its ability to continually operate for the next twelve months from the end of the
reporting period, and no any matters that may result in doubt on its ability as a going concern were noted.
Therefore, it is reasonable for the Company to prepare financial statements on the going concern basis.
3. Important Accounting Policies and Estimations
The following important accounting policies and estimates of the Company shall be formulated in accordance
with the Accounting Standards for Business Enterprises. The business not mentioned shall be carried out in
accordance with the relevant accounting policies in the Accounting Standards for Business Enterprises.
3.1 Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s financial positions on
30 June 2022, changes of owners’ equity, business results and cash flows and other relevant information for H1
2022.
~ 37 ~
3.2 Fiscal Period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is one year.
3.4 Currency Used in Bookkeeping
The Company's functional currency is RMB, and its overseas subsidiaries are operated in the currency of the main
economic environment in which they operate.
3.5 Accounting Treatment of Business Combinations under and not under Common Control
(a) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common control shall be
measured at their carrying amount of the acquired entity at the combination date. If the accounting policy adopted
by the acquired entity is different from that adopted by the acquiring entity, the acquiring entity shall, according to
accounting policy it adopts, adjust the relevant items in the financial statements of the acquired party based on the
principal of materiality. As for the difference between the carrying amount of the net assets obtained by the
acquiring entity and the carrying amount of the consideration paid by it, the capital reserve (capital premium or
share premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not sufficient to
absorb the difference, any excess shall be adjusted against retained earnings.
For the accounting treatment of business combination under common control by step acquisitions, please refer to
Note 3.6 (6).
(b) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common control shall be
measured at their fair value at the acquisition date. If the accounting policy adopted by the acquired entity is
different from that adopted by the acquiring entity, the acquiring entity shall, according to accounting policy it
adopts, adjust the relevant items in the financial statements of the acquired entity based on the principal of
materiality. The acquiring entity shall recognise the positive balance between the combination costs and the fair
value of the identifiable net assets it obtains from the acquired entity as goodwill. The acquiring entity shall,
pursuant to the following provisions, treat the negative balance between the combination costs and the fair value
of the identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities
it obtains from the acquired entity as well as the combination costs;
(ii) If, after the review, the combination costs are still less than the fair value of the identifiable net assets it
obtains from the acquired entity, the balance shall be recognised in profit or loss of the reporting period.
For the accounting treatment of business combination under the same control by step acquisitions, please refer to
Note 3.6 (6).
~ 38 ~
(c) Treatment of business combination related costs
The intermediary costs such as audit, legal services and valuation consulting and other related management costs
that are directly attributable to the business combination shall be charged in profit or loss in the period in which
they are incurred. The costs to issue equity or debt securities for the consideration of business combination shall
be recorded as a part of the value of the respect equity or debt securities upon initial recognition.
3.6 Method of Preparing the Consolidated Financial Statements
(a) Scope of consolidation
The scope of consolidated financial statements shall be determined on the basis of control. It not only includes
subsidiaries determined based on voting power (or similar) or other arrangement, but also structured entities under
one or several contract arrangements.
Control exists when the Company has all the following: power over the investee; exposure, or rights to variable
returns from the Company’s involvement with the investee; and the ability to use its power over the investee to
affect the amount of the investor’s returns. Subsidiaries are the entities that controlled by the Company (including
enterprise, a divisible part of the investee, and structured entity controlled by the enterprise). A structured entity
(sometimes called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights are
not the dominant factor in deciding who controls the entity.
(b) Special requirement as the parent company is an investment entity
If the parent company is an investment entity, it should measure its investments in particular subsidiaries as
financial assets at fair value through profit or loss instead of consolidating those subsidiaries in its consolidated
and separate financial statements. However, as an exception to this requirement, if a subsidiary provides
investment-related services or activities to the investment entity, it should be consolidated.
The parent company is defined as investment entity when meets following conditions:
a. Obtains funds from one or more investors for the purpose of providing those investors with investment
management services;
b. Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,
investment income or both; and
c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.
If the parent company becomes an investment entity, it shall cease to consolidate its subsidiaries at the date of the
change in status, except for any subsidiary which provides investment-related services or activities to the
investment entity shall be continued to be consolidated. The deconsolidation of subsidiaries is accounted for as
though the investment entity partially disposed subsidiaries without loss of control.
When the parent company previously classified as an investment entity ceases to be an investment entity,
subsidiary that was previously measured at fair value through profit or loss shall be included in the scope of
consolidated financial statements at the date of the change in status. The fair value of the subsidiary at the date of
~ 39 ~
change represents the transferred deemed consideration in accordance with the accounting for business
combination not under common control.
(c) Method of preparing the consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial statements of the
Company and its subsidiaries, and using other related information.
When preparing consolidated financial statements, the Company shall consider the entire group as an accounting
entity, adopt uniform accounting policies and apply the requirements of Accounting Standard for Business
Enterprises related to recognition, measurement and presentation. The consolidated financial statements shall
reflect the overall financial position, operating results and cash flows of the group.
(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are combined with those
of the subsidiaries.
(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against the parent’s
portion of equity of each subsidiary.
(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or between
subsidiaries, and when intragroup transactions indicate an impairment of related assets, the losses shall be
recognised in full.
(iv) Make adjustments to special transactions from the perspective of the group.
(d) Method of preparation of the consolidated financial statements when subsidiaries are acquired or
disposed in the reporting period
(i) Acquisition of subsidiaries or business
Subsidiaries or business acquired through business combination under common control
When preparing consolidated statements of financial position, the opening balance of the consolidated balance
sheet shall be adjusted. Related items of comparative financial statements shall be adjusted as well, deeming that
the combined entity has always existed ever since the ultimate controlling party began to control.
Incomes, expenses and profits of the subsidiary incurred from the beginning of the reporting period to the end of
the reporting period shall be included into the consolidated statement of profit or loss. Related items of
comparative financial statements shall be adjusted as well, deeming that the combined entity has always existed
ever since the ultimate controlling party began to control.
Cash flows from the beginning of the reporting period to the end of the reporting period shall be included into the
consolidated statement of cash flows. Related items of comparative financial statements shall be adjusted as well,
deeming that the combined entity has always existed ever since the ultimate controlling party began to control.
Subsidiaries or business acquired through business combination not under common control
When preparing the consolidated statements of financial position, the opening balance of the consolidated
statements of financial position shall not be adjusted.
~ 40 ~
Incomes, expenses and profits of the subsidiary incurred from the acquisition date to the end of the reporting
period shall be included into the consolidated statement of profit or loss.
Cash flows from the acquisition date to the end of the reporting period shall be included into the consolidated
statement of cash flows.
(ii) Disposal of subsidiaries or business
When preparing the consolidated statements of financial position, the opening balance of the consolidated
statements of financial position shall not be adjusted.
Incomes, expenses and profits incurred from the beginning of the subsidiary to the disposal date shall be included
into the consolidated statement of profit or loss.
Cash flows from the beginning of the subsidiary to the disposal date shall be included into the consolidated
statement of cash flows.
(e) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised as treasury stock of
the Company, which is offset with the owner’s equity, represented as “treasury stock” under “owner’s equity” in
the consolidated statement of financial position.
Long-term equity investment held by subsidiaries between each other is accounted for taking long-term equity
investment held by the Company to its subsidiaries as reference. That is, the long-term equity investment is
eliminated (off- set) against the portion of the corresponding subsidiary’s equity.
(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve, and being different from retained
earnings and undistributed profit, “Specific reserves” and “General risk provision” shall be recovered based on the
proportion attributable to owners of the parent company after long-term equity investment to the subsidiaries is
eliminated with the subsidiaries’ equity.
(iii) If temporary timing difference between the book value of the assets and liabilities in the consolidated
statement of financial position and their tax basis is generated as a result of elimination of unrealized
inter-company transaction profit or loss, deferred tax assets of deferred tax liabilities shall be recognised, and
income tax expense in the consolidated statement of profit or loss shall be adjusted simultaneously, excluding
deferred taxes related to transactions or events directly recognised in owner’s equity or business combination.
(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assets to its
subsidiaries shall be eliminated against “net profit attributed to the owners of the parent company” in full.
Unrealized inter-company transactions profit or loss generated from the subsidiaries selling assets to the Company
shall be eliminated between “net profit attributed to the owners of the parent company” and “non-controlling
interests” pursuant to the proportion of the Company in the related subsidiaries. Unrealized inter-company
transactions profit or loss generated from the assets sales between the subsidiaries shall be eliminated between
“net profit attributed to the owners of the parent company” and “non-controlling interests” pursuant to the
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proportion of the Company in the selling subsidiaries.
(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the proportion of
non-controlling interest in this subsidiary at the beginning of the period, non-controlling interest is still to be
written down.
(f) Accounting for Special Transactions
(i) Purchasing of non-controlling interests
Where, the Company purchases non-controlling interests of its subsidiary, in the separate financial statements of
the Company, the cost of the long-term equity investment obtained in purchasing non-controlling interests is
measured at the fair value of the consideration paid. In the consolidated financial statements, difference between
the cost of the long-term equity investment newly obtained in purchasing non-controlling interests and share of
the subsidiary’s net assets from the acquisition date or combination date continuingly calculated pursuant to the
newly acquired shareholding proportion shall be adjusted into capital reserve (capital premium or share premium).
If capital reserve is not enough to be offset, surplus reserve and undistributed profit shall be offset in turn.
(ii) Gaining control over the subsidiary in stages through multiple transactions
Business combination under common control in stages through multiple transactions
On the combination date, in the separate financial statement, initial cost of the long-term equity investment is
determined according to the share of carrying amount of the acquiree’s net assets in the ultimate controlling
entity’s consolidated financial statements after combination. The difference between the initial cost of the
long-term equity investment and the carrying amount of the long -term investment held prior of control plus book
value of additional consideration paid at acquisition date is adjusted into capital reserve (capital premium or share
premium). If the capital reserve is not enough to absorb the difference, any excess shall be adjusted against
surplus reserve and undistributed profit in turn.
In the consolidated financial statements, the assets and liabilities acquired during the combination should be
recognized at their carrying amount in the ultimate controlling entity’s consolidated financial statements on the
combination date unless any adjustment is resulted from the difference in accounting policies. The difference
between the carrying amount of the investment held prior of control plus book value of additional consideration
paid on the acquisition date and the net assets acquired through the combination is adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference, any excess shall
be adjusted against retained earnings.
If the acquiring entity holds equity investment in the acquired entity prior to the combination date and the equity
investment is accounted for under the equity method, related profit or loss, other comprehensive income and other
changes in equity which have been recognised during the period from the later of the date of the Company
obtaining original equity interest and the date of both the acquirer and the acquiree under common control of the
same ultimate controlling party to the combination date should be offset against the opening balance of retained
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earnings at the comparative financial statements period respectively.
Business combination not under common control in stages through multiple transactions
On the consolidation date, in the separate financial statements, the initial cost of long-term equity investment is
determined according to the carrying amount of the original long-term investment plus the cost of new
investment.
In the consolidated financial statements, the equity interest of the acquired entity held prior to the acquisition date
shall be re-measured at its fair value on the acquisition date. Difference between the fair value of the equity
interest and its book value is recognised as investment income. The other comprehensive income related to the
equity interest held prior to the acquisition date calculated through equity method, should be transferred to
current investment income of the acquisition period, excluding other comprehensive income resulted from the
remeasurement of the net assets or net liabilities under defined benefit plan. The Company shall disclose
acquisition-date fair value of the equity interest held prior to the acquisition date, and the related gains or losses
due to the remeasurement based on fair value.
(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control, when the
Company prepares consolidated financial statements, difference between consideration received from the disposal
and the corresponding share of subsidiary’s net assets cumulatively calculated from the acquisition date or
combination date shall be adjusted into capital reserve (capital premium or share premium). If the capital reserve
is not enough to absorb the difference, any excess shall be offset against retained earnings.
(iv) Disposal of investment in subsidiaries with a loss of control
Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment, when the
consolidated financial statements are prepared, the retained equity interest should be re-measured at fair value at
the date of loss of control. The difference between i) the fair value of consideration received from the disposal
plus non-controlling interest retained; ii) share of the former subsidiary’s net assets cumulatively calculated from
the acquisition date or combination date according to the original proportion of equity interest, shall be recognised
in current investment income when control is lost.
Moreover, other comprehensive income and other changes in equity related to the equity investment in the former
subsidiary shall be transferred into current investment income when control is lost, excluding other
comprehensive income resulted from the remeasurement of the movement of net assets or net liabilities under
defined benefit plan.
Disposal in stages
In the consolidated financial statements, whether the transactions should be accounted for as “a single transaction”
needs to be decided firstly.
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If the disposal in stages should not be classified as “a single transaction”, in the separate financial statements, for
transactions prior of the date of loss of control, carrying amount of each disposal of long-term equity investment
need to be recognized, and the difference between consideration received and the carrying amount of long-term
equity investment corresponding to the equity interest disposed should be recognized in current investment
income; in the consolidated financial statements, the disposal transaction should be accounted for according to
related policy in “Disposal of long-term equity investment in subsidiaries without a loss of control”.
If the disposal in stages should be classified as “a single transaction”, these transactions should be accounted for
as a single transaction of disposal of subsidiary resulting in loss of control. In the separate financial statements, for
each transaction prior of the date of loss of control, difference between consideration received and the carrying
amount of long-term equity investment corresponding to the equity interest disposed should be recognised as
other comprehensive income firstly, and transferred to profit or loss as a whole when control is lost; in the
consolidated financial statements, for each transaction prior of the date of loss of control, difference between
consideration received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed
should be recognised in profit or loss as a whole when control is lost.
In considering of the terms and conditions of the transactions as well as their economic impact, the presence of
one or more of the following indicators may lead to account for multiple transactions as a single transaction:
(a) The transactions are entered into simultaneously or in contemplation of one another.
(b) The transactions form a single transaction designed to achieve an overall commercial effect.
(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.
(d) One transaction, when considered on its own merits, does not make economic sense, but when considered
together with the other transaction or transactions would be considered economically justifiable.
(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by the
subsidiaries’ minority shareholders.
Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the subsidiaries, which
resulted in the dilution of equity interest of parent company in these subsidiaries. In the consolidated financial
statements, difference between share of the corresponding subsidiaries’ net assets calculated based on the parent’s
equity interest before and after the capital injection shall be adjusted into capital reserve (capital premium or share
premium). If the capital reserve is not enough to absorb the difference, any excess shall be adjusted against
retained earnings.
3.7 Classification of Joint Arrangements and Accounting for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. Joint arrangement of the
Company is classified as either a joint operation or a joint venture.
(a) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights
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to the assets, and obligations for the liabilities, relating to the arrangement.
The Company shall recognise the following items in relation to shared interest in a joint operation, and account
for them in accordance with relevant accounting standards of the Accounting Standards for Business Enterprises:
(i) its assets, including its share of any assets held jointly;
(ii) its liabilities, including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses, including its share of any expenses incurred jointly.
(b) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement.
The Company accounts for its investment in the joint venture by applying the equity method of long-term equity
investment.
3.8 Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents include
short-term (generally within three months of maturity at acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
3.9 Foreign Currency Transactions and Translation of Foreign Currency Financial Statements
(a) Determination of the exchange rate for foreign currency transactions
At the time of initial recognition of a foreign currency transaction, the amount in the foreign currency shall be
translated into the amount in the functional currency at the spot exchange rate of the transaction date, or at an
exchange rate which is determined through a systematic and reasonable method and is approximate to the spot
exchange rate of the transaction date (hereinafter referred to as the approximate exchange rate).
(b) Translation of monetary items denominated in foreign currency on the balance sheet date
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The
balance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the
spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded into the
profits and losses at the current period. The foreign currency non-monetary items measured at the historical cost
shall still be translated at the spot exchange rate on the transaction date; for the foreign currency non-monetary
items restated to a fair value measurement, shall be translated into the at the spot exchange rate at the date when
the fair value was determined, the difference between the restated functional currency amount and the original
functional currency amount shall be recorded into the profits and losses at the current period.
(c) Translation of foreign currency financial statements
Before translating the financial statements of foreign operations, the accounting period and accounting policy
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shall be adjusted so as to conform to the Company. The adjusted foreign operation financial statements
denominated in foreign currency (other than functional currency) shall be translated in accordance with the
following method:
(i) The asset and liability items in the statement of financial position shall be translated at the spot exchange rates
at the date of that statement of financial position. The owners’ equity items except undistributed profit shall be
translated at the spot exchange rates when they are incurred.
(ii) The income and expense items in the statement of profit and other comprehensive income shall be translated at
the spot exchange rates or approximate exchange rate at the date of transaction.
(iii)Foreign currency cash flows and cash flows of foreign subsidiaries shall be translated at the spot exchange rate
or approximate exchange rate when the cash flows are incurred. The effect of exchange rate changes on cash is
presented separately in the statement of cash flows as an adjustment item.
(iv) The differences arising from the translation of foreign currency financial statements shall be presented
separately as “other comprehensive income” under the owners’ equity items of the consolidated statement of
financial position.
When disposing a foreign operation involving loss of control, the cumulative amount of the exchange differences
relating to that foreign operation recognised under other comprehensive income in the statement of financial
position, shall be reclassified into current profit or loss according to the proportion disposed.
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a financial liability
or equity instrument of another entity.
(a) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial position when, and only
when, an entity becomes party to the contractual provisions of the instrument.
A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e., when the
obligation specified in the contract is discharged or cancelled or expires. An exchange of the Company (borrower)
and lender of debt instruments that carry significantly different terms or a substantial modification of the terms of
an existing liability are both accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability.
Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade date
accounting. A regular-way purchase or sale of financial assets is a transaction under a contract whose terms
require delivery of the asset within the time frame established generally by regulations or convention in the
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market place concerned. Trade date is the date at which the entity commits itself to purchase or sell an asset.
(b) Classification and measurement of financial assets
At initial recognition, the Company classified its financial asset based on both the business model for managing
the financial asset and the contractual cash flow characteristics of the financial asset: financial asset at amortised
cost, financial asset at fair value through profit or loss (FVTPL) and financial asset at fair value through other
comprehensive income (FVTOCI). Reclassification of financial assets is permitted if, and only if, the objective of
the entity’s business model for managing those financial assets changes. In this circumstance, all affected
financial assets shall be reclassified on the first day of the first reporting period after the changes in business
model; otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets measured at FVTPL,
transaction costs are recognised in current profit or loss. For financial assets not measured at FVTPL, transaction
costs should be included in the initial measurement. Notes receivable or accounts receivable that arise from sales
of goods or rendering of services are initially measured at the transaction price defined in the accounting standard
of revenue where the transaction does not include a significant financing component.
Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised cost
The financial asset at amortised cost category of classification applies when both the following conditions are met:
the financial asset is held within the business model whose objective is to hold financial assets in order to collect
contractual cash flows, and the contractual term of the financial asset gives rise on specified dates to cash flows
that are solely payment of principal and interest on the principal amount outstanding. These financial assets are
subsequently measured at amortised cost by adopting the effective interest rate method. Any gain or loss arising
from derecognition according to the amortization under effective interest rate method or impairment are
recognised in current profit or loss.
(ii)Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following conditions are met: the
financial asset is held within the business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets, and the contractual term of the financial asset gives rise on specified dates to
cash flows that are solely payment of principle and interest on the principal amount outstanding. All changes in
fair value are recognised in other comprehensive income except for gain or loss arising from impairment or
exchange differences, which should be recognised in current profit or loss. At derecognition, cumulative gain or
loss previously recognised under OCI is reclassified to current profit or loss. However, interest income calculated
based on the effective interest rate is included in current profit or loss.
The Company make an irrevocable decision to designate part of non-trading equity instrument investments as
measured through FVTOCI. All changes in fair value are recognised in other comprehensive income except for
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dividend income recognised in current profit or loss. At derecognition, cumulative gain or loss are reclassified to
retained earnings.
(iii)Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair value through
other comprehensive income (FVTOCI), should be classified as financial asset at fair value through profit or loss
(FVTPL). These financial assets should be subsequently measured at fair value. All the changes in fair value are
included in current profit or loss.
(c) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or loss (FVTPL),
loan commitments at a below-market interest rate and financial guarantee contracts and financial asset at
amortised cost.
Subsequent measurement of financial assets will be based on the classification:
(i)Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities
designated at FVTPL are classified as financial liabilities at FVTP. After initial recognition, any gain or loss
(including interest expense) are recognised in current profit or loss except for those hedge accounting is applied.
For financial liability that is designated as at FVTPL, changes in the fair value of the financial liability that is
attributable to changes in the own credit risk of the issuer shall be presented in other comprehensive income. At
derecognition, cumulative gain or loss previously recognised under OCI is reclassified to retained earnings.
(ii)Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified contract terms.
The provision of impairment losses of loan commitments shall be recognised based on expected credit losses
model.
Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the
original or modified terms of a debt instrument. Financial guarantee contracts liability shall be subsequently
measured at the higher of: The amount of the loss allowance recognised according to the impairment principles of
financial instruments; and the amount initially recognised less the cumulative amount of income recognised in
accordance with the revenue principles.
(iii)Financial liabilities at amortised cost
After initial recognition, the Company measured other financial liabilities at amortised cost using the effective
interest method.
Except for special situation, financial liabilities and equity instrument should be classified in accordance with the
following principles:
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(i) If the Company has no unconditional right to avoid delivering cash or another financial instrument to fulfill a
contractual obligation, this contractual obligation meet the definition of financial liabilities. Some financial
instruments do not comprise terms and conditions related to obligations of delivering cash or another financial
instrument explicitly, they may include contractual obligation indirectly through other terms and conditions.
(ii) If a financial instrument must or may be settled in the Company's own equity instruments, it should be
considered that the Company’s own equity instruments are alternatives of cash or another financial instrument, or
to entitle the holder of the equity instruments to sharing the remaining rights over the net assets of the issuer. If the
former is the case, the instrument is a liability of the issuer; otherwise, it is an equity instrument of the issuer.
Under some circumstances, it is regulated in the contract that the financial instrument must or may be settled in
the Company's own equity instruments, where, amount of contractual rights and obligations are calculated by
multiplying the number of the equity instruments to be available or delivered by its fair value upon settlement.
Such contracts shall be classified as financial liabilities, regardless that the amount of contractual rights and
liabilities is fixed, or fluctuate totally or partially with variables other than market price of the entity’s own equity
instruments
(d) Derivatives and embedded derivatives
At initial recognition, derivatives shall be measured at fair value at the date of derivative contracts are signed and
subsequently measured at fair value. The derivative with a positive fair value shall be recognized as an asset, and
with a negative fair value shall be recognised as a liability.
Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into current profit
or loss except for the effective portion of cash flow hedges which shall be recognised in other comprehensive
income and reclassified into current profit or loss when the hedged items affect profit or loss.
An embedded derivative is a component of a hybrid contract with a financial asset as a host, the Company shall
apply the requirements of financial asset classification to the entire hybrid contract. If a host that is not a financial
asset and the hybrid contract is not measured at fair value with changes in fair value recognised in profit or loss,
and the economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host, and a separate instrument with the same terms as the embedded derivative
would meet the definition of a derivative, the embedded derivative shall be separated from the hybrid instrument
and accounted for as a separate derivative instrument. If the Company is unable to measure the fair value of the
embedded derivative at the acquisition date or subsequently at the balance sheet date, the entire hybrid contract is
designated as financial assets or financial liabilities at fair value through profit or loss.
(e) Impairment of financial instrument
The Company shall recognise a loss allowance based on expected credit losses on a financial asset that is
measured at amortised cost, a debt investment at fair value through other comprehensive income, a contract asset,
a lease receivable, a loan commitment and a financial guarantee contract.
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(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the respective
risks of a default occurring as the weights. Credit loss is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the cash flows that the Company expects to receive,
discounted at the original effective interest rate or credit- adjusted effective interest rate for purchased or
originated credit-impaired financial assets.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over the
expected life of a financial instrument.
12-month expected credit losses are the portion of lifetime expected credit losses that represent the expected credit
losses that result from default events on a financial instrument that are possible within the 12 months after the
reporting date (or the expected lifetime, if the expected life of a financial instrument is less than 12 months).
At each reporting date, the Company classifies financial instruments into three stages and makes provisions for
expected credit losses accordingly. A financial instrument of which the credit risk has not significantly increased
since initial recognition is at stage 1. The Company shall measure the loss allowance for that financial instrument
at an amount equal to 12-month expected credit losses. A financial instrument with a significant increase in credit
risk since initial recognition but is not considered to be credit-impaired is at stage 2. The Company shall measure
the loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses. A
financial instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. The
Company shall measure the loss allowance for that financial instrument at an amount equal to the lifetime
expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date and measure the
loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shall be calculated
by applying the effective interest rate to the gross carrying amount of a financial asset. For financial instrument at
stage 3, interest revenue shall be calculated by applying the effective interest rate to the amortised cost after
deducting of impairment loss.
For notes receivable, accounts receivable and accounts receivable financing, no matter it contains a significant
financing component or not, the Company shall measure the loss allowance at an amount equal to the lifetime
expected credit losses.
Receivables
For the notes receivable, accounts receivable, other receivables, accounts receivable financing and long-term
receivables which are demonstrated to be impaired by any objective evidence, or applicable for individual
assessment, the Company shall individually assess for impairment and recognise the loss allowance for expected
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credit losses. If the Company determines that no objective evidence of impairment exists for notes receivable,
accounts receivable, other receivables, accounts receivable financing and long-term receivables, or the expected
credit loss of a single financial asset cannot be assessed at reasonable cost, such notes receivable, accounts
receivable, other receivables, accounts receivable financing and long-term receivables shall be divided into
several groups with similar credit risk characteristics and collectively calculated the expected credit loss. The
determination basis of groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group, the Company calculates expected credit losses through default exposure and the lifetime expected
credit losses rate, taking reference to historical experience for credit losses and considering current condition and
expectation for the future economic situation.
Determination basis of accounts receivable is as following:
Group 1: Accounts receivables due from the company within the scope of consolidation
Group 2: Accounts receivables due from other customers
For each group, the Company calculates expected credit losses through preparing an aging analysis schedule with
the lifetime expected credit losses rate, taking reference to historical experience for credit losses and considering
current condition and expectation for the future economic situation.
Determination basis of other receivables is as following:
Group 1: Other receivables due from the company within the scope of consolidation
Group 2: Other receivables due from others
For each group, the Company calculates expected credit losses through default exposure and the 12-months or
lifetime expected credit losses rate, taking reference to historical experience for credit losses and considering
current condition and expectation for the future economic situation.
Debt investment and other debt investment
For debt investment and other debt investment, the Company shall calculate the expected credit loss through the
default exposure and the 12-month or lifetime expected credit loss rate based on the nature of the investment,
counterparty and the type of risk exposure.
(ii) Low credit risk
If the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cash
flow obligations in the near term and adverse changes in economic and business conditions in the longer term may,
but will not necessarily, reduce the ability of the borrower to fulfill its contractual cash flow obligations.
(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly since initial
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recognition, using the change in the risk of a default occurring over the expected life of the financial instrument,
through the comparison of the risk of a default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of initial recognition.
To make that assessment, the Company shall consider reasonable and supportable information, that is available
without undue cost or effort, and that is indicative of significant increases in credit risk since initial recognition,
including forward-looking information. The information considered by the Company are as following:
Significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception
Existing or forecast adverse change in the business, financial or economic conditions of the borrower that
results in a significant change in the borrower’s ability to meet its debt obligations；
An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory, economic, or technological environment of the borrower；
Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements, which are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments or to otherwise have an effect on the probability of a default occurring;
Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
Expected changes in the loan documentation including an expected breach of contract that may lead to
covenant waivers or amendments, interest payment holidays, interest rate step-ups, requiring additional
collateral or guarantees, or other changes to the contractual framework of the instrument；
Significant changes in the expected performance and behaviour of the borrower；
Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments, the Company shall assess whether the credit risk has
increased significantly since initial recognition on an individual financial instrument or a group of financial
instruments. When assessed based on a group of financial instruments, the Company can group financial
instruments on the basis of shared credit risk characteristics, for example, past due information and credit risk
rating.
Generally, the Company shall determine the credit risk on a financial asset has increased significantly since initial
recognition when contractual payments are more than 30 days past due. The Company can only rebut this
presumption if the Company has reasonable and supportable information that is available without undue cost or
effort, that demonstrates that the credit risk has not increased significantly since initial recognition even though
the contractual payments are more than 30 days past due.
(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for financial asset at
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amortised cost and debt investment at fair value through other comprehensive income. A financial asset is
credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred. Evidences that a financial asset is credit-impaired include observable data about the
following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract, such as a default or past due
event; the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial
difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider；it is
becoming probable that the borrower will enter bankruptcy or other financial reorganisation；the disappearance of
an active market for that financial asset because of financial difficulties；the purchase or origination of a financial
asset at a deep discount that reflects the incurred credit losses.
(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition, the Company shall at
each reporting date remeasure the expected credit loss and recognise in profit or loss, as an impairment gain or
loss, the amount of expected credit losses addition (or reversal). For financial asset at amortised cost, the loss
allowance shall reduce the carrying amount of the financial asset in the statement of financial position; for debt
investment at fair value through other comprehensive income, the loss allowance shall be recognised in other
comprehensive income and shall not reduce the carrying amount of the financial asset in the statement of financial
position.
(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the Company has no
reasonable expectations of recovering the contractual cash flow of a financial asset in its entirety or a portion
thereof. Such write-off constitutes a derecognition of the financial asset. This circumstance usually occurs when
the Company determines that the debtor has no assets or sources of income that could generate sufficient cash
flow to repay the write-off amount.
Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment loss.
(f) Transfer of financial assets
Transfer of financial assets refers to following two situations:
Transfers the contractual rights to receive the cash flows of the financial asset;
Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of
the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset, or neither
transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained
control of the financial asset, the financial asset shall be derecognised.
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Whether the Company has retained control of the transferred asset depends on the transferee’s ability to sell the
asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able
to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer, the
Company has not retained control.
The Company judges whether the transfer of financial asset qualifies for derecognition based on the substance of
the transfer.
If the transfer of financial asset qualifies for derecognition in its entirety, the difference between the following
shall be recognised in profit or loss:
The carrying amount of transferred financial asset;
The sum of consideration received and the part derecognised of the cumulative changes in fair value
previously recognised in other comprehensive income (The financial assets involved in the transfer are
classified as financial assets at fair value through other comprehensive income in accordance with Article 18
of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial
Instruments).
If the transferred asset is a part of a larger financial asset and the part transferred qualifies for derecognition, the
previous carrying amount of the larger financial asset shall be allocated between the part that continues to be
recognised (For this purpose, a retained servicing asset shall be treated as a part that continues to be recognised)
and the part that is derecognised, based on the relative fair values of those parts on the date of the transfer. The
difference between following two amounts shall be recognised in profit or loss:
The carrying amount (measured at the date of derecognition) allocated to the part derecognised；
The sum of the consideration received for the part derecognised and part derecognised of the cumulative
changes in fair value previously recognised in other comprehensive income (The financial assets involved in
the transfer are classified as financial assets at fair value through other comprehensive income in accordance
with Article 18 of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement
of Financial Instruments).
(ii) Continuing involvement in transferred assets
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a transferred
asset, and retains control of the transferred asset, the Company shall continue to recognise the transferred asset to
the extent of its continuing involvement and also recognise an associated liability.
The extent of the Company’s continuing involvement in the transferred asset is the extent to which it is exposed to
changes in the value of the transferred asset
(iii) Continue to recognise the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset, the
Company shall continue to recognise the transferred asset in its entirety and the consideration received shall be
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recognised as a financial liability.
The financial asset and the associated financial liability shall not be offset. In subsequent accounting period, the
Company shall continuously recognise any income (gain) arising from the transferred asset and any expense (loss)
incurred on the associated liability.
(g) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial position and
shall not be offset. When meets the following conditions, financial assets and financial liabilities shall be offset
and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; The Company intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the Company shall not
offset the transferred asset and the associated liability.
(h) Determination of fair value of financial instruments
Determination of financial assets and financial liabilities please refer to Note 3.11
3.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The Company determines fair value of the related assets and liabilities based on market value in the principal
market, or in the absence of a principal market, in the most advantageous market price for the related asset or
liability. The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The principal market is the market in which transactions for an asset or liability take place with the greatest
volume and frequency. The most advantageous market is the market which maximizes the value that could be
received from selling the asset and minimizes the value which is needed to be paid in order to transfer a liability,
considering the effect of transport costs and transaction costs both.
If the active market of the financial asset or financial liability exists, the Company shall measure the fair value
using the quoted price in the active market. If the active market of the financial instrument is not available, the
Company shall measure the fair value using valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, including the market approach, the income approach and the cost approach. The
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Company shall use valuation techniques consistent with one or more of those approaches to measure fair value. If
multiple valuation techniques are used to measure fair value, the results shall be evaluated considering the
reasonableness of the range of values indicated by those results. A fair value measurement is the point within that
range that is most representative of fair value in the circumstances.
When using the valuation technique, the Company shall give the priority to relevant observable inputs. The
unobservable inputs can only be used when relevant observable inputs is not available or practically would not be
obtained. Observable inputs refer to the information which is available from market and reflects the assumptions
that market participants would use when pricing the asset or liability. Unobservable Inputs refer to the information
which is not available from market and it has to be developed using the best information available in the
circumstances from the assumptions that market participants would use when pricing the asset or liability.
Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques
used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs and second to the
Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Inventories
(a) Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business, in the process of
production for such sale, or in the form of materials or supplies to be consumed in the production process or in the
rendering of services, including raw materials, work in progress, semi-finished goods, finished goods, goods in
stock, turnover material, etc.
(b) Measurement method of cost of inventories sold or used
Inventories are initially measured at the actual cost. Cost of inventories includes purchase cost, processing cost,
and other costs. Cost of the issue is measured using the weighted average method.
(c) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year, and surplus or
losses of inventory stocktaking shall be included in current profit and loss.
(d) Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable value of
the inventories is recognised as provision for impairment of inventory, and recognised in current profit or loss.
Net realizable value of the inventory should be determined on the basis of reliable evidence obtained, and factors
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such as purpose of holding the inventory and impact of post balance sheet event shall be considered.
(i) In normal operation process, finished goods, products and materials for direct sale, their net realizable values
are determined at estimated selling prices less estimated selling expenses and relevant taxes and surcharges; for
inventories held to execute sales contract or service contract, their net realizable values are calculated on the basis
of contract price. If the quantities of inventories specified in sales contracts are less than the quantities held by the
Company, the net realizable value of the excess portion of inventories shall be based on general selling prices. Net
realizable value of materials held for sale shall be measured based on market price.
(ii) For materials in stock need to be processed, in the ordinary course of production and business, net realisable
value is determined at the estimated selling price less the estimated costs of completion, the estimated selling
expenses and relevant taxes. If the net realisable value of the finished products produced by such materials is
higher than the cost, the materials shall be measured at cost; if a decline in the price of materials indicates that the
cost of the finished products exceeds its net realisable value, the materials are measured at net realisable value and
differences shall be recognised at the provision for impairment.
(iii) Provisions for inventory impairment are generally determined on an individual basis. For inventories with
large quantity and low unit price, the provisions for inventory impairment are determined on a category basis.
(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date, the amounts
written down are recovered and reversed to the extent of the inventory impairment, which has been provided for.
The reversal shall be included in profit or loss.
(e) Amortization method of low-value consumables
Low-value consumables: One-off writing off method is adopted
Package material: One-off writing off method is adopted
3.13 Contract assets and contract liabilities
Contract assets and contract liabilities are reocgnised on the basis of fulfilment of performance obligations and
payment received from clients. A right to receive a promised consideration from a client resulting from goods
transferred to or services provided to the client (where the right to consideration is dependent on factors other than
the passage of time) is reocgnised a contract asset. A payment received from a client for which goods shall be
transferred to or services shall be provided to the client is recognised as a contract liability.
See Note 3.10 for the determination method and accounting treatment method of impairment of contract assets.
Contract assets and contract liabilities are presentd as line items on the statement of financial position. A contract
asset and contract liability arising from one contract are presented in net; while the net amount is a debit balance,
it is presented in contract assets or other non-current assets depending on liquidity; while the net amount is a
credit balance, it is presented in contract liabilities or other non-current liabilities depending on liquidity. Contract
assets and contract liabilities arising form different contracts are not be offset.
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3.14 Contract costs
Costs for a contract include costs to fulfill the contract and costs to obtain the contract.
An asset is recognised for the costs incurred to fulfill a contract on if those costs meet all of the following criteria:
I. the costs are directly associated with a contract or an anticipated contract, explicitly chargeable to the client
under the contract, incurred only for the contract;
II. the costs generate or enhance resouces of the Company that will be used in satisfying performance
obligations in the future; and
III. the costs are expected to be recovered.
An asset is recognised for the costs incurred to obtained a contract with a client if those costs are expected to be
recovered.
An asset recognised for the costs of a contract are amortised on a systematic basis that is consistent with
recognition of revenue arising from the contract. Where the costs incurred to obtain a contract would be amortised
for a period less than one year should they be recognised as an asset, the costs are recognised in the current profit
or loss as incurred.
An impairment is recognised for an asset recognised for the costs of a contract to the extent that the carrying
amount of the asset exceeds:
I. the remaining amount of consideration that is expected to be received in exchange for the goods or services
to which the asset relates; less
II. the costs that relate directly to providing those goods or services and that have not been recognised as
expenses.
Upon recognition of the impairment, further consideration is given for provision for an onerous contract, in
necessary.
A reversal of some or all of an impairment loss previously recognised for an asset for the costs of a contract when
the impairment conditions no longer exist or have improved. The increased carrying amount of the asset is
cappted by the amount that would have been determined (net of amortisation) if no impairment loss had been
recognised previously.
An asset recognised for the costs to fulfill a contract is presented in inventories if its amortisation is not longer
than 1 year or an operating cycle upon initial recognition; otherwise, it is presented in other non-current assets.
An asset recognised for the costs to obtain a contract is presented in other current assets if its amortisation is not
longer than 1 year or an operating cycle upon initial recognition; otherwise, it is presented in other non-current
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assets.
3.15 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of, or significant influence
over, an investee, as well as equity investments in joint ventures. Associates of the Company are those entities
over which the Company has significant influence.
(a) Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement, and the arranged relevant activity must
be decided under unanimous consent of the parties sharing control. In assessing whether the Company has joint
control of an arrangement, the Company shall assess first whether all the parties, or a group of the parties, control
the arrangement. When all the parties, or a group of the parties, considered collectively, are able to direct the
activities of the arrangement, the parties control the arrangement collectively. Then the Company shall assess
whether decisions about the relevant activities require the unanimous consent of the parties that collectively
control the arrangement. If two or more groups of the parties could control the arrangement collectively, it shall
not be assessed as have joint control of the arrangement. When assessing the joint control, the protective rights are
not considered.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but
is not control or joint control of those policies. In determination of significant influence over an investee, the
Company should consider not only the existing voting rights directly or indirectly held but also the effect of
potential voting rights held by the Company and other entities that could be currently exercised or converted,
including the effect of share warrants, share options and convertible corporate bonds that issued by the investee
and could be converted in current period.
If the Company holds, directly or indirectly 20% or more but less than 50% of the voting power of the investee, it
is presumed that the Company has significant influence of the investee, unless it can be clearly demonstrated that
in such circumstance, the Company cannot participate in the decision-making in the production and operating of
the investee.
(b) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
For a business combination involving enterprises under common control, if the Company makes payment in cash,
transfers non-cash assets or bears liabilities as the consideration for the business combination, the share of
carrying amount of the owners’ equity of the acquiree in the consolidated financial statements of the ultimate
controlling party is recognised as the initial cost of the long-term equity investment on the combination date. The
difference between the initial investment cost and the carrying amount of cash paid, non-cash assets transferred
and liabilities assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be offset,
undistributed profit shall be offset in turn.
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For a business combination involving enterprises under common control, if the Company issues equity securities
as the consideration for the business combination, the share of carrying amount of the owners’ equity of the
acquiree in the consolidated financial statements of the ultimate controlling party is recognised as the initial cost
of the long-term equity investment on the combination date. The total par value of the shares issued is recognised
as the share capital. The difference between the initial investment cost and the carrying amount of the total par
value of the shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be offset,
undistributed profit shall be offset in turn.
For business combination not under common control, the assets paid, liabilities incurred or assumed and the fair
value of equity securities issued to obtain the control of the acquiree at the acquisition date shall be determined as
the cost of the business combination and recognised as the initial cost of the long-term equity investment. The
audit, legal, valuation and advisory fees, other intermediary fees, and other relevant general administrative costs
incurred for the business combination, shall be recognised in profit or loss as incurred.
(ii) Long-term equity investments acquired not through the business combination, the investment cost shall be
determined based on the following requirements:
For long-term equity investments acquired by payments in cash, the initial cost is the actually paid purchase cost,
including the expenses, taxes and other necessary expenditures directly related to the acquisition of long-term
equity investments.
For long-term equity investments acquired through issuance of equity securities, the initial cost is the fair value of
the issued equity securities.
For the long-term equity investments obtained through exchange of non-monetary assets, if the exchange has
commercial substance, and the fair values of assets traded out and traded in can be measured reliably, the initial
cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of
the assets traded out together with relevant taxes. Difference between fair value and book value of the assets
traded out is recorded in current profit or loss. If the exchange of non-monetary assets does not meet the above
criterion, the book value of the assets traded out and relevant taxes are recognised as the initial investment cost.
For long-term equity investment acquired through debt restructuring, the initial cost is determined based on the
fair value of the equity obtained and the difference between initial investment cost and carrying amount of debts
shall be recorded in current profit or loss.
(c) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be accounted for at
cost method. Long-term equity investment to a joint venture or an associate shall be accounted for at equity
method.
(i) Cost method
For Long-term equity investment at cost method, cost of the long-term equity investment shall be adjusted when
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additional amount is invested or a part of it is withdrawn. The Company recognises its share of cash dividends or
profits which have been declared to distribute by the investee as current investment income.
(ii) Equity method
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable assets in the
investee at the date of investment, the difference shall not be adjusted to the initial cost of long-term equity
investment; if the initial cost of the investment is in short of the share of the fair value of the net identifiable assets
in the investee at the date investment, the difference shall be included in the current profit or loss and the initial
cost of the long-term equity investment shall be adjusted accordingly.
The Company recognises the share of the investee’s net profits or losses, as well as its share of the investee’s
other comprehensive income, as investment income or losses and other comprehensive income respectively, and
adjusts the carrying amount of the investment accordingly. The carrying amount of the investment shall be
reduced by the share of any profit or cash dividends declared to distribute by the investee. The investor’s share of
the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other
comprehensive income or profit distribution, shall be recognised in the investor’s equity, and the carrying amount
of the long-term equity investment shall be adjusted accordingly. The Company recognises its share of the
investee’s net profits or losses after making appropriate adjustments of investee’s net profit based on the fair
values of the investee’s identifiable net assets at the investment date. If the accounting policy and accounting
period adopted by the investee is not in consistency with the Company, the financial statements of the investee
shall be adjusted according to the Company’s accounting policies and accounting period, based on which,
investment income or loss and other comprehensive income, etc., shall be adjusted. The unrealized profits or
losses resulting from inter-company transactions between the company and its associate or joint venture are
eliminated in proportion to the company’s equity interest in the investee, based on which investment income or
losses shall be recognised. Any losses resulting from inter-company transactions between the investor and the
investee, which belong to asset impairment, shall be recognised in full.
Where the Company obtains the power of joint control or significant influence, but not control, over the investee,
due to additional investment or other reason, the relevant long-term equity investment shall be accounted for by
using the equity method, initial cost of which shall be the fair value of the original investment plus the additional
investment. Where the original investment is classified as investments in other equity instrument, difference
between its fair value and the carrying value, in addition to the cumulative gains or losses previously recorded in
other comprehensive income, shall be transferred from other comprehensive income and recorded in retained
earnings during the current period using equity method.
If the Company loses the joint control or significant influence of the investee for some reasons such as disposal of
equity investment, the retained interest shall be measured at fair value and the difference between the carrying
amount and the fair value at the date of loss the joint control or significant influence shall be recognised in profit
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or loss. When the Company discontinues the use of the equity method, the Company shall account for all amounts
previously recognised in other comprehensive income under equity method in relation to that investment on the
same basis as would have been required if the investee had directly disposed of the related assets or liabilities.
(d) Equity investment classified as held for sale
Any retained interest in the equity investment not classified as held for sale, shall be accounted for using equity
method.
When an equity investment in an associate or a joint venture previously classified as held for sale no longer meets
the criteria to be so classified, it shall be accounted for using the equity method retrospectively as from the date of
its classification as held for sale. Financial statements for the periods since classification as held for sale shall be
amended accordingly.
(f) Impairment testing and provision for impairment loss
For investment in subsidiaries, associates or a joint venture, provision for impairment loss please refer to Note
3.22.
3.16 Investment Properties
(a) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both, including:
(i)Land use right leased out
(ii)Land held for transfer upon appreciation
(iii)Buildings leased out
(b) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For provision for
impairment please refer to Note 3.22.
The Company calculates the depreciation or amortization based on the net amount of investment property cost less
the accumulated impairment and the net residual value using straight-line method.
3.17 Fixed Assets
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing commodities,
rendering services, renting or business management with useful lives exceeding one year.
(a) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria are
satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.
Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognition criteria of fixed
assets are satisfied, otherwise the expenditure shall be recorded in current profit or loss when incurred.
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(b) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intended use using
the straight-line-method. The estimated useful life and annual depreciation rates which are determined according
to the categories, estimated economic useful lives and estimated net residual rates of fixed assets are listed as
followings:
Depreciation Estimated useful life Residual Annual depreciation rates
Category
method (year) rates (%) (%)
Buildings and constructions straight-line-method 8.00-35.00 3.00-5.00 2.70-12.10
Machinery equipment straight-line-method 5.00-10.00 3.00-5.00 9.50-19.40
Vehicles straight-line-method 4.00 3.00 24.25
Office equipment and others straight-line-method 3.00 3.00 32.33
For the fixed assets with impairment provided, the impairment provision should be excluded from the cost when
calculating depreciation.
At the end of reporting period, the Company shall review the useful life, estimated net residual value and
depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjusted if it is changed
compared to the original estimation.
(c) Recognition criteria, valuation and depreciation methods of fixed assets obtained through a finance
lease
If the entire risk and rewards related to the leased assets have been substantially transferred, the Company shall
recognise the lease as a finance lease. The cost of the fixed assets obtained through a finance lease is determined
at the lower of the fair value of the leased assets and the present value of the minimum lease payment on the date
of the lease. The fixed assets obtained by a finance lease are depreciated in the method which is consistent with
the self-owned fixed assets of the Company. For fixed assets obtained through a finance lease, if it is reasonably
certain that the ownership of the leased assets will be transferred to the lessee by the end of the lease term, they
shall be depreciated over their remaining useful lives; otherwise, the leased assets shall be depreciated over the
shorter of the lease terms or their remaining useful lives.
3.18 Construction in Progress
(a) Classification of construction in progress
Construction in progress is measured on an individual project basis.
(b) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are ready for their
intended use, including construction costs, original price of machinery equipment, other necessary expenses
incurred to bring the construction in progress to get ready for its intended use and borrowing costs of the specific
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loan for the construction or the proportion of the general loan used for the constructions incurred before they are
ready for their intended use. The construction in progress shall be transferred to fixed asset when the installation
or construction is ready for the intended use. For construction in progress that has been ready for their intended
use but relevant budgets for the completion of projects have not been completed, the estimated values of project
budgets, prices, or actual costs should be included in the costs of relevant fixed assets, and depreciation should be
provided according to relevant policies of the Company when the fixed assets are ready for intended use. After the
completion of budgets needed for the completion of projects, the estimated values should be substituted by actual
costs, but depreciation already provided is not adjusted.
3.19 Right-of-use assets
The Company initially measures right-of-use assets at cost, which includes:
(1) The initial measurement amount of the lease obligation.
(2) If a lease incentive exists for lease payments made on or before the commencement date of the lease term, the
amount related to the lease incentive already taken is deducted.
(3) Initial direct costs incurred by the Company.
(4) Costs expected to be incurred by the Company to disassemble and remove the leasehold property, restore the
site where the leasehold property is located, or restore the leasehold property to the condition agreed upon under
the terms of the lease (excluding costs incurred to produce inventory). Subsequent to the commencement date of
the lease term, the Company uses the cost model for subsequent measurement of right-of-use assets.
If it is reasonably certain that ownership of the leasehold property will be obtained at the end of the lease term, the
Company depreciates the leasehold property over its remaining service life.
If it may not be reasonably ascertained that ownership of the leasehold property can be obtained at the end of the
lease term, the Company will depreciate the leasehold property over the shorter of
the lease term or the remaining service life of the leasehold property. Right-of-use assets for which depreciation
reserves have been made are depreciated in future periods at their carrying amounts net of depreciation reserves,
with reference to the above principles.
3.20 Borrowing Costs
(a) Recognition criteria and period for capitalization of borrowing costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition, construction or
production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred, and;
(iii) Acquisition, construction or production activities that are necessary to prepare the assets for their intended use
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or sale are in progress.
Other borrowing cost, discounts or premiums on borrowings and exchange differences on foreign currency
borrowings shall be recognized into current profit or loss when incurred.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production
of a qualifying asset is interrupted abnormally and the interruption is for a continuous period of more than 3
months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired, constructed or produced
become ready for their intended use or sale. The expenditure incurred subsequently shall be recognised as
expenses when incurred.
(b) Capitalization rate and measurement of capitalized amounts of borrowing costs
When funds are borrowed specifically for purchase, construction or manufacturing of assets eligible for
capitalization, the Company shall determine the amount of borrowing costs eligible for capitalisation as the actual
borrowing costs incurred on that borrowing during the period less any interest income on bank deposit or
investment income on the temporary investment of those borrowings.
Where funds allocated for purchase, construction or manufacturing of assets eligible for capitalization are part of a
general borrowing, the eligible amounts are determined by the weighted-average of the cumulative capital
expenditures in excess of the specific borrowing multiplied by the general borrowing capitalization rate. The
capitalization rate will be the weighted average of the borrowing costs applicable to the general borrowing.
3.21 Intangible Assets
(a) Measurement method of intangible assets
Intangible assets are recognised at actual cost at acquisition.
(b) The useful life and amortisation of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 50 years Legal life
The service life is determined by reference to the period that
Patent right 10 years
can bring economic benefits to the Company
The service life is determined by reference to the period that
Software 3-5 years
can bring economic benefits to the Company
The service life is determined by reference to the period that
Trademark 10 years
can bring economic benefits to the Company
For intangible assets with finite useful life, the estimated useful life and amortisation method are reviewed
annually at the end of each reporting period and adjusted when necessary. No change incurred in current year in
the estimated useful life and amortisation method upon review.
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(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are regarded as
intangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every year
end. If the useful lives of those assets are still indefinite, impairment test should be performed on those assets at
the balance sheet date.
(iii) Amortisation of the intangible assets
For intangible assets with finite useful lives, their useful lives should be determined upon their acquisition and
systematically amortised on a straight-line basis over the useful life. The amortisation amount shall be recognized
into current profit or loss according to the beneficial items. The amount to be amortised is cost deducting residual
value. For intangible assets which has impaired, the cumulative impairment provision shall be deducted as well.
The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless: there is a
commitment by a third party to purchase the asset at the end of its useful life; or there is an active market for the
asset and residual value can be determined by reference to that market; and it is probable that such a market will
exist at the end of the asset’s useful life.
Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses the useful lives of
those assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite,
the useful lives shall be estimated and the intangible assets shall be amortised systematically and reasonably
within the estimated useful lives.
(c) Criteria of classifying expenditures on internal research and development projects into research phase
and development phase
Preparation activities related to materials and other relevant aspects undertaken by the Company for the purpose
of further development shall be treated as research phase. Expenditures incurred during the research phase of
internal research and development projects shall be recognised in profit or loss when incurred.
Development activities after the research phase of the Company shall be treated as development phase.
(d) Criteria for capitalization of qualifying expenditures during the development phase
Expenditures arising from development phase on internal research and development projects shall be recognised
as intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be available for use or sale;
(ii) Its intention to complete the intangible asset and use or sell it;
(iii) The method that the intangible assets generate economic benefits, including the Company can demonstrate
the existence of a market for the output of the intangible assets or the intangible assets themselves or, if it is to be
used internally, the usefulness of the intangible assets;
(iv) The availability of adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset; and
(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
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3.22 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries, associates and joint ventures, investment
properties, fixed assets and constructions in progress subsequently measured at cost, intangible assets, shall be
determined according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an asset may be
impaired. If any such indication exists, the Company shall estimate the recoverable amount of the asset and test
for impairment. Irrespective of whether there is any indication of impairment, the Company shall test for
impairment of goodwill acquired in a business combination, intangible assets with an indefinite useful life or
intangible assets not yet available for use annually.
The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and the
present values of the estimated future cash flows of the long-term assets. The Company estimate the recoverable
amounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset, the
Company estimates the recoverable amount of the groups of assets that the individual asset belongs to.
Identification of an group of asset is based on whether the cash inflows from it are largely independent of the cash
inflows from other assets or groups of assets.
If, and only if, the recoverable amount of an asset or a group of assets is less than its carrying amount, the carrying
amount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall be
recognised accordingly.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the acquisition
date, be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevant
group of assets, good will shall be allocated to relevant combination of asset groups. The relevant group of assets
or combination of asset groups is a group of assets or combination of asset groups that is benefit from the
synergies of the business combination and is not larger than the reporting segment determined by the Company.
When test for impairment, if there is an indication that relevant group of assets or combination of asset groups
may be impaired, impairment testing for group of assets or combination of asset groups excluding goodwill shall
be conducted first, and calculate the recoverable amount and recognize the impairment loss. Then the group of
assets or combination of asset groups including goodwill shall be tested for impairment, by comparing the
carrying amount with its recoverable amount. If the recoverable amount is less than the carrying amount, the
Company shall recognise the impairment loss.
The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognised.
3.23 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred, which shall be amortised over current and
subsequent periods with the amortisation period exceeding one year. Long-term deferred expenses are evenly
amortised over the beneficial period
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3.24 Employee Benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for
service rendered by employees or for the termination of employment relationship. Employee benefits include
short-term employee benefits, post-employment benefits, termination benefits and other long-term employee
benefits. Benefits provided to an employee's spouse, children, dependents, family members of decreased
employees, or other beneficiaries are also employee benefits.
According to liquidity, employee benefits are presented in the statement of financial position as “Employee
benefits payable” and “Long-term employee benefits payable”.
(a) Short-term employee benefits
(i) Employee basic salary (salary, bonus, allowance, subsidy)
The Company recognises, in the accounting period in which an employee provides service, actually occurred
short-term employee benefits as a liability, with a corresponding charge to current profit except for those
recognised as capital expenditure based on the requirement of accounting standards.
(ii) Employee welfare
The Company shall recognise the employee welfare based on actual amount when incurred into current profit or
loss or related capital expenditure. Employee welfare shall be measured at fair value as it is a non-monetary
benefit.
(iii) Social insurance such as medical insurance and work injury insurance, housing funds, labor union fund and
employee education fund
Payments made by the Company of social insurance for employees, such as medical insurance and work injury
insurance, payments of housing funds, and labor union fund and employee education fund accrued in accordance
with relevant requirements, in the accounting period in which employees provide services, is calculated according
to required accrual bases and accrual ratio in determining the amount of employee benefits and the related
liabilities, which shall be recognised in current profit or loss or the cost of relevant asset.
(iv) Short-term paid absences
The company shall recognise the related employee benefits arising from accumulating paid absences when the
employees render service that increases their entitlement to future paid absences. The additional payable amounts
shall be measured at the expected additional payments as a result of the unused entitlement that has accumulated.
The Company shall recognise relevant employee benefit of non-accumulating paid absences when the absences
actually occurred.
(v) Short-term profit-sharing plan
The Company shall recognise the related employee benefits payable under a profit-sharing plan when all of the
following conditions are satisfied:
(i) The Company has a present legal or constructive obligation to make such payments as a result of past events;
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and
(ii) A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can be
made.
(b) Post-employment benefits
(i) Defined contribution plans
The Company shall recognise, in the accounting period in which an employee provides service, the contribution
payable to a defined contribution plan as a liability, with a corresponding charge to the current profit or loss or the
cost of a relevant asset.
When contributions to a defined contribution plan are not expected to be settled wholly before twelve months
after the end of the annual reporting period in which the employees render the related service, they shall be
discounted using relevant discount rate (market yields at the end of the reporting period on high quality corporate
bonds in active market or government bonds with the currency and term which shall be consistent with the
currency and estimated term of the defined contribution obligations) to measure employee benefits payable.
(ii) Defined benefit plan
The present value of defined benefit obligation and current service costs
Based on the expected accumulative welfare unit method, the Company shall make estimates about demographic
variables and financial variables in adopting the unbiased and consistent actuarial assumptions and measure
defined benefit obligation, and determine the obligation period. The Company shall discount the obligation arising
from defined benefit plan using relevant discount rate (market yields at the end of the reporting period on high
quality corporate bonds in active market or government bonds with the currency and term which shall be
consistent with the currency and estimated term of the defined benefit obligations) in order to determine the
present value of the defined benefit obligation and the current service cost.
The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognised as the present value of the defined
benefit obligation less the fair value of plan assets (if any).
When the Company has a surplus in a defined benefit plan, it shall measure the net defined benefit asset at the
lower of the surplus in the defined benefit plan and the asset ceiling.
The amount recognised in the cost of asset or current profit or loss
Service cost comprises current service cost, past service cost and any gain or loss on settlement. Other service cost
shall be recognised in profit or loss unless accounting standards require or allow the inclusion of current service
cost within the cost of assets.
Net interest on the net defined benefit liability (asset) comprising interest income on plan assets, interest cost on
the defined benefit obligation and interest on the effect of the asset ceiling, shall be included in profit or loss.
The amount recognised in other comprehensive income
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Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements including:
Actuarial gains and losses, the changes in the present value of the defined benefit obligation resulting from
experience adjustments or the effects of changes in actuarial assumptions;
Return on plan assets, excluding amounts included in net interest on the net defined benefit liability or asset;
Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit
liability (asset).
Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive income shall not be
reclassified to profit or loss in a subsequent period. However, the Company may transfer those amounts
recognised in other comprehensive income within equity.
(c) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefits liability for
termination benefits, with a corresponding charge to the profit or loss of the reporting period, at the earlier of the
following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment
termination plan or a curtailment proposal.
(ii) When the Company recognises costs or expenses related to a restructuring that involves the payment of
termination benefits.
If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual
reporting period, the Company shall discount the termination benefits using relevant discount rate (market yields
at the end of the reporting period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined benefit
obligations) to measure the employee benefits.
(d) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the conditions for
classifying as a defined contribution plan, all those benefits payable shall be accounted for as employee benefits
payable at their discounted value.
(ii) Meet the conditions of the defined benefit plan
At the end of the reporting period, the Company recognised the cost of employee benefit from other long-term
employee benefits as the following components:
Service costs;
Net interest cost for net liability or asset of other long-term employee benefits
Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits
In order to simplify the accounting treatment, the net amount of above items shall be recognised in profit or loss
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or relevant cost of assets.
3.25 Lease Liabilities
The Company initially measures the lease obligation at the present value of the lease payments outstanding at the
commencement date of the lease term. When calculating the present value of lease payments,
the Company uses the interest rate implicit in lease as the rate of discount. If the interest rate implicit in lease
cannot be determined, the Company's incremental lending rate is used as the rate of discount. Lease payments
include:
(1) The amount of fixed payments, net of amounts related to lease incentives, and the amount of substantive fixed
payments.
(2) Variable lease payments that depend on indexation or ratio.
(3) The lease payment amount includes the exercise price of the purchase option if the Company is reasonably
certain that the option will be exercised.
(4) Where the lease term reflects that the Company will exercise the option to terminate the lease, the lease
payment amount includes the amount required to be paid to exercise the option to terminate the lease.
(5) Estimated amount payable based on the residual value of the guarantee provided by the Company.
The Company calculates the interest expense on the lease obligation for each period of the lease term at a fixed
rate of discount and includes it in the current profit or loss or cost of the related assets. Variable lease payments
that are not included in the measurement of the lease obligation should be charged to current profit or loss or the
cost of the related assets when they are actually incurred.
3.26 Estimated Liabilities
(a) Recognition criteria of estimated liabilities
The Company recognises the estimated liabilities when obligations related to contingencies satisfy all the
following conditions:
(i) That obligation is a current obligation of the Company;
(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation; and
(iii) The amount of the obligation can be measured reliably.
(b) Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured at the best estimate of expenses required for the
performance of relevant present obligations. The Company, when determining the best estimate, has had a
comprehensive consideration of risks with respect to contingencies, uncertainties and the time value of money.
The carrying amount of the estimated liabilities shall be reviewed at the end of every reporting period. If
conclusive evidences indicate that the carrying amount fails to be the best estimate of the estimated liabilities, the
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carrying amount shall be adjusted based on the updated best estimate.
3.27 Revenue Recognition Principle and Measurement
3.27.1 General principle
Revenue is the total inflow of economic benefits formed in the company's daily activities that will increase
shareholders' equity and does not relate to the capital invested by shareholders.
The Company has fulfilled the performance obligation in the contract, that is, the revenue is recognised when the
customer obtains the control right of relevant goods. To obtain the control right of the relevant commodity means
to be able to dominate the use of the commodity and obtain almost all the economic benefits from it.
If there are two or more performance obligations in the contract, the Company will allocate the transaction price
to each performance obligation based on the relative proportion of the separate selling price of the goods or
services promised by each performance obligation on the start date of the contract, and measure the income based
on the transaction price allocated to each single performance obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to receive
due to the transfer of goods or services to customers, excluding payments collected on behalf of third parties.
When determining the transaction price of the contract, the Company determines the transaction price according
to the terms of the contract and in combination with its historical practices. When determining the transaction
price, the Company takes into account the influence of variable considerations, significant financing elements in
the contract, the non-cash considerations, the considerations payable to customers and other factors. The
Company determines the transaction price including variable consideration at an amount that does not exceed the
amount at which the accumulated recognized income is unlikely to have a significant reversal when the relevant
uncertainty is eliminated. If there is a significant financing component in the contract, the Company will
determine the transaction price based on the amount payable in cash when the customer obtains the control right
of the commodity. The difference between the transaction price and the contract consideration will be amortised
by the effective interest method during the contract period. If the interval between the control right transfer and
the customer's payment is less than one year, the company will not consider the financing component.
If one of the following conditions is met, the performance obligation shall be fulfilled within a certain period of
time; otherwise, the performance obligation shall be fulfilled at a certain point of time:
(a) The customer obtains and consumes the economic benefits brought by the Company's fulfillment of contract
when the Company performs the obligations;
(b) The customer can control the commodities under construction during the Company's execution of the
contract;
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(c) The commodities produced by the Company during the performance of the contract have irreplaceable uses,
and the Company has the right to collect payment for the cumulative performance part that has been completed
so far during the entire contract period.
For performance obligations fulfilled within a certain period of time, the Company recognises revenue in
accordance with the performance progress during that period, except where the performance progress cannot be
reasonably determined. The Company determines the progress of the performance of services in accordance with
the input method (or output method). When the progress of the contract performance cannot be reasonably
determined, if the cost incurred by the Company is expected to be compensated, the revenue shall be recognised
according to the amount of the cost incurred until the progress of the contract performance can be reasonably
determined.
For performance obligations fulfilled at a certain point in time, the Company recognises revenue at the point when
the customer obtains control of the relevant commodities. The Company considers the following signs when
judging whether a customer has obtained control of goods or services:
(a)The Company has the current right to receive payment for the goods or services, that is, the customer has the
current obligation to pay for the goods;
(b) The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the
legal ownership of the goods;
(c) The Company has transferred the goods in kind to the customer, that is, the customer has possessed the
goods in kind;
(d) The company has transferred the main risks and rewards of the ownership of the goods to the customers, that
is, the customers have obtained the main risks and rewards of the ownership of the goods;
(e) The customer has accepted the goods or services.
(f) Other indications that the customer has obtained control of the product
3.27.2 Specific methods
The specific methods of the Company's revenue recognition are as follows:
(a) Revenue from sale of goods
Revenue from sale of goods shall be recognised when the following criteria are satisfied:
(i) Significant risks and rewards related to ownership of the goods have been transferred to the buyer;
(ii) The Company retains neither continuous management rights associated with ownership of the goods sold nor
effective control over the goods sold;
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(iii) Relevant amount of revenue can be measured reliably;
(iv) It is probable that the economic benefits associated with the transaction will flow into the Company; and
(v) Relevant amount of cost incurred or to be incurred can be measured reliably.
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.
(b) Revenue from rendering of services
When the outcome of rendering of services can be estimated reliably at the balance sheet date, revenue associated
with the transaction is recognised using the percentage of completion method. Percentage of completion is
determined based on the measurement of the work completed
The outcome of rendering of services can be estimated reliably when all of the following conditions are satisfied: i)
the amount of revenue can be measured reliably; ii) it is probable that the associated economic benefits will flow
to the Company; iii) the percentage of completion of the transaction can be measured reliably; iv) the costs
incurred and to be incurred for the transaction can be measured reliably.
The Company shall determine the total revenue from rendering of services based on the received or receivable
price stipulated in the contract or agreement, unless the received or receivable amount as stipulated in the contract
or agreement is unfair. At the end of the reporting period, the Company shall recognise the revenue from
rendering of the services in current period, based on the amount of multiplying the total amount of revenues from
rendering of the services by the percentage of completion then deducting the accumulative revenues from
rendering of the services that have been recognised in the previous accounting periods. At the same time, the
Company shall recognise the current cost incurred for rendering of the services based on the amount of
multiplying the total estimated cost for rendering of the services by the percentage of completion and then
deducting the accumulative costs from rendering of the services that have been recognised in the previous
accounting periods.
If the outcome of rendering of services cannot be estimated reliably at the balance sheet date, the accounting
treatment shall be based on the following circumstances, respectively:
(i) When the costs incurred are expected to be recovered, revenue shall be recognised to the extent of costs
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incurred and charge an equivalent amount of cost to the profit and loss;
(ii) When the costs incurred are not expected to be recovered, revenue shall not be recognised and the costs
incurred are recognised into current profit or loss
(c) Revenue from alienating the right to use assets
When it is probable that the economic benefits associated with the transaction will flow into the Company and
amount of revenue can be measured reliably, the Company shall recognise the amount of revenue from the
alienating of right to use assets based on the following circumstances, respectively:
(i) Interest revenue should be calculated in accordance with the period for which the enterprise's cash is used by
others and the effective interest rate; or
(ii) The amount of royalty revenue should be calculated in accordance with the period and method of charging as
stipulated in the relevant contract or agreement.
3.28 Government Grants
(a) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.
(b) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable, and non-monetary
grants from the government shall be measured at their fair value or at a nominal value of RMB 1.00 when reliable
fair value is not available.
(c) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the Company used for
purchase or construction, or forming the long-term assets by other ways. Government grants pertinent to assets
shall be recognised as deferred income, and should be recognised in profit or loss on a systematic basis over the
useful lives of the relevant assets. Grants measured at their nominal value shall be directly recognised in profit or
loss of the period when the grants are received. When the relevant assets are sold, transferred, written off or
damaged before the assets are terminated, the remaining deferred income shall be transferred into profit or loss of
the period of disposing relevant assets.
(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income. Government
grants related to income are accounted for in accordance with the following principles:
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If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses in
future periods, such government grants shall be recognised as deferred income and included into profit or loss in
the same period as the relevant expenses or losses are recognised;
If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses
incurred, such government grants are directly recognised into current profit or loss
For government grants comprised of part related to assets as well as part related to income, each part is accounted
for separately; if it is difficult to identify different part, the government grants are accounted for as government
grants related to income as a whole.
Government grants related to daily operation activities are recognised in other income in accordance with the
nature of the activities, and government grants irrelevant to daily operation activities are recognised in
non-operating income.
(iii) Loan interest subsidy
When loan interest subsidy is allocated to the bank, and the bank provides a loan at lower-market rate of interest
to the Company, the loan is recognised at the actual received amount, and the interest expense is calculated based
on the principal of the loan and the lower-market rate of interest.
When loan interest subsidy is directly allocated to the Company, the subsidy shall be recognised as offsetting the
relevant borrowing cost.
(iv) Repayment of the government grants
Repayment of the government grants shall be recorded by increasing the carrying amount of the asset if the book
value of the asset has been written down, or reducing the balance of relevant deferred income if deferred income
balance exists, any excess will be recognised into current profit or loss; or directly recognised into current profit
or loss for other circumstances.
3.29 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the statement of
financial position and its tax base at the balance sheet date. The Company recognise and measure the effect of
taxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities or
deferred tax assets using liability method. Deferred tax assets and deferred tax liabilities shall not be discounted.
(a) Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences, the carryforward of unused tax
losses and the carryforward of unused tax credits to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, the carryforward of unused tax losses and the
carryforward of unused tax credits can be utilised at the tax rates that are expected to apply to the period when the
asset is realised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a
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transaction that:
(i) Is not a business combination; and
(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognise a deferred tax asset for all deductible temporary differences arising from
investments in subsidiaries, associates and joint ventures, only to the extent that, it is probable that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.
At the end of each reporting period, if there is sufficient evidence that it is probable that taxable profit will be
available against which the deductible temporary difference can be utilized, the Company recognises a previously
unrecognised deferred tax asset.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The Company
shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient
taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such
reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.
(b) Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that are expected to
apply to the period when the liability is settled.
(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
The initial recognition of goodwill; or
The initial recognition of an asset or liability in a transaction which: is not a business combination; and at the
time of the transaction, affects neither accounting profit nor taxable profit (tax loss)
(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated with
investments in subsidiaries, associates, and joint ventures, except to the extent that both of the following
conditions are satisfied:
The Company is able to control the timing of the reversal of the temporary difference; and
It is probable that the temporary difference will not reverse in the foreseeable future.
(c) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business combination not
under common control, a deferred tax liability or a deferred tax asset shall be recognised, and simultaneously,
goodwill recognised in the business combination shall be adjusted based on relevant deferred tax expense
(income).
(ii) Items directly recognised in equity
Current tax and deferred tax related to items that are recognised directly in equity shall be recognised in equity.
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Such items include: other comprehensive income generated from fair value fluctuation of investments in other
debt obligations; an adjustment to the opening balance of retained earnings resulting from either a change in
accounting policy that is applied retrospectively or the correction of a prior period (significant) error; amounts
arising on initial recognition of the equity component of a compound financial instrument that contains both
liability and equity component.
(iii) Unused tax losses and unused tax credits
Unsused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law that can be
offset against taxable income in future periods. The criteria for recognising deferred tax assets arising from the
carryforward of unused tax losses and tax credits are the same as the criteria for recognising deferred tax assets
arising from deductible temporary differences. The Company recognises a deferred tax asset arising from unused
tax losses or tax credits only to the extent that there is convincing other evidence that sufficient taxable profit will
be available against which the unused tax losses or unused tax credits can be utilised by the Company. Income
taxes in current profit or loss shall be deducted as well.
Unsused tax losses and unused tax credits arising from a business combination
Under a business combination, the acquiree’s deductible temporary differences which do not satisfy the criteria at
the acquisition date for recognition of deferred tax asset shall not be recognised. Within 12 months after the
acquisition date, if new information regarding the facts and circumstances exists at the acquisition date and the
economic benefit of the acquiree’s deductible temporary differences at the acquisition is expected to be realised,
the Company shall recognise acquired deferred tax benefits and reduce the carrying amount of any goodwill
related to this acquisition. If goodwill is reduced to zero, any remaining deferred tax benefits shall be recognised
in profit or loss. All other acquired deferred tax benefits realised shall be recognised in profit or loss.
(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements, if temporary difference between carrying value of the assets
and liabilities in the consolidated financial statements and their taxable bases is generated from elimination of
inter-company unrealized profit or loss, deferred tax assets or deferred tax liabilities shall be recognised in the
consolidated financial statements, and income taxes expense in current profit or loss shall be adjusted as well
except for deferred tax related to transactions or events recognised directly in equity and business combination.
(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment, during the period in which the expenses
are recognised according to the accounting standards, the Company estimates the tax base in accordance with
available information at the end of the accounting period and the temporary difference arising from it. Deferred
tax shall be recognised when criteria of recognition are satisfied. If the amount of estimated future tax deduction
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exceeds the amount of the cumulative expenses related to share-based payment recognised according to the
accounting standards, the tax effect of the excess amount shall be recognised directly in equity.
3.30 Leases
(1) Accounting treatment of operating leases
a) When the Company acts as a lessee under an operating lease, the rental expense of the operating lease is
charged to current profit or loss on a straight-line basis or based on the usage of the leasehold property in each
period of the lease term. If the lessor provides a rent-free period, the Company apportions the total rent on a
straight-line basis or by other reasonable method over the entire lease term without deducting the rent-free period,
and recognizes the rental expense and the corresponding liability during the rent-free period. If the lessor bears
certain expenses of the lessee, the Company apportions the balance of the rental expense over the lease term after
such expenses are deducted from the total rental expense.
The initial direct costs are included in current profit or loss. If the agreement agrees to contingent rentals, they are
included in current profit or loss when they are actually incurred.
b) When the Company acts as a lessor under an operating lease, the rent received is recognized as income over the
lease term using the straight-line method. If the lessor provides a rent-free period, the lessor allocates the total
rentals over the entire lease term without deducting the rent-free period by the straight-line method or other
reasonable method, and the lessor also recognizes rental income during the rent-free period. If certain expenses of
the lessee are borne, the Company allocates the balance of rental income over the lease term after such expenses
are deducted from the gross rental income.
The initial direct costs are included in current profit or loss. Larger amounts are capitalized and recognized in
current profit or loss on the same basis as rental income throughout the term of the operating lease. Contingent
rentals, if agreed, are recognized in current income when they are actually incurred.
(2) Accounting treatment of finance leases
a) When the Company is a lessee under a finance lease, the lower of the fair value of the leasehold property and
the present value of the minimum lease payments at the commencement date of the lease is recorded as the value
of the leasehold property, and the minimum lease payments are recorded as the value of the long-term account
payable, and the difference is recorded as unrecognized financing expense. The effective interest rate method is
used to apportion the amount over each period of the lease term and is recognized as current financing expenses,
which are included in financial expenses.
The initial direct costs incurred are included in the value of the leasehold property.
When depreciating financing leasehold property, the Company adopts a depreciation policy consistent with that of
its own depreciable assets, and the depreciation period is determined by the lease contract. If it may be reasonably
ascertained that the Company will obtain ownership of the leasehold property at the end of the lease term, the life
of the leasehold property at the commencement date of the lease term is used as the depreciation period; if it is not
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reasonably certain that the Company will obtain ownership of the leasehold property at the end of the lease term,
the shorter of the lease term and the life of the leasehold property is used as the depreciation period.
b) When the Company acts as a financing lessor, the sum of the minimum lease receivable and the initial direct
costs as of the lease commencement date is recorded as the recorded value of the finance lease receivable in the
long-term receivables on the balance sheet, and the unguaranteed residual value is also recorded. The difference
between the sum of the minimum lease receivable, the initial direct costs and the unguaranteed residual value and
the sum of their present values is recognized as unrealized financing income and recognized as rental receipt using
the effective interest method in each period of the lease term.
3.31 Changes in Significant Accounting Policies and Accounting Estimates
(1) Changes in accounting polices
□ Applicable Not applicable
(2) Changes in Accounting Estimates
□ Applicable Not applicable
4. Taxation
4.1 Main Taxes and Tax Rate
Category of taxes Basis of tax assessment Tax rate
VAT are paid on added value of
VAT 13%, 9%, 6%
product sales
Consumption taxes are paid Sales of wine RMB1 per 1000 ml or per kg to calculate the amount of
Consumption tax onsales volume of taxable consumption tax, a flat rate, 20% of the annual turnover to calculate the
consumer goods amount of consumption tax at valorem.
Urban maintenance and
Urban maintenance and
construction taxes are paid on 7%、5%
construction tax
turnover taxes
Education expenses Educational surcharges are paid
3%
surcharge on turnover taxes
Local education Local educational surcharges are
2%
surcharge paid on turnover taxes
Business taxes are calculated
Enterprise income tax 25%
and paid on taxable revenues
The basic rate of enterprise income tax of the Company is 25%, and the actual income tax rates of some of its
subsidiaries with different tax rates are as follows:
~ 80 ~
Name of the entities Actual income tax rate
Anhui Longrui Glass Co., Ltd 15.00%
Anhui Ruisiweier Technology Co., Ltd 15.00%
Anhui RunAnXinKe Testing Technology Co., Ltd. 15.00%
Wuhan Yashibo Technology Co., Ltd 2.5%
Bozhou Gujing hotel Co., Ltd 2.5%
Hubei Junlou Cultural Tourism Co., Ltd. 2.5%
Hubei Yellow Crane Tower Beverage Co., Ltd. 2.5%
The portion of the taxable income which does not exceed RMB1 million:
2.5%
Hubei Xinjia Testing Technology Co., Ltd.
The portion of the taxable income which is more than RMB1 million but not
more than RMB3 million: 10%
Huanggang Junya Trading Co., Ltd. 2.5%
Anhui Jiuan Mechanical Electrical Equipment Co.,
2.5%
Ltd.
4.2 Tax Preference
(1) According to Response Letter for the First Batch of High-tech Enterprises to be put on record in Anhui
Province for 2019 (guokehuozi [2019] No.216) issued by Department of Science and Technology of Anhui
province, Department of Finance of Anhui province, and Anhui Provincial Taxation Bureau of State
Administration of Taxation, the subsidiary Longrui Glass was identified as a high-tech enterprise in 2019,
therefore was given High-tech Enterprise Certificate (Certificate Number: GR201934001625) which is valid for 3
years. According to Enterprise Income Tax Law and other relevant regulations, the company is subject to a
national high-tech enterprise income tax rate at 15% for three years from 1 January 2019 to 31 December 2021.
The qualification of high-tech enterprises has expired and is currently being re-recognized. Pursuant to Guidelines
for Management of Accreditation of High-tech Enterprises, the enterprise income tax shall be temporarily prepaid
at a rate of 15% until the re-accreditation is passed.
(2) According to Response Letter for the First Batch of High-tech Enterprises to be put on record in Anhui
Province for 2019 (guokehuozi [2019] No.216) issued by Department of Science and Technology of Anhui
province, Department of Finance of Anhui province, and Anhui Provincial Taxation Bureau of State
Administration of Taxation, the subsidiary Ruisiweier was identified as a high-tech enterprise in 2019, therefore
was given High-tech Enterprise Certificate (Certificate Number: GR201934000355) which is valid for 3 years.
~ 81 ~
According to Enterprise Income Tax Law and other relevant regulations, the company is subject to a national
high-tech enterprise income tax rate at 15% for three years from 1 January 2019 to 31 December 2021. The
qualification of high-tech enterprises has expired and is currently being re-recognized. Pursuant to Guidelines for
Management of Accreditation of High-tech Enterprises, the enterprise income tax shall be temporarily prepaid at a
rate of 15% until the re-accreditation is passed.
(3) According to Notice on Announcing the List of Two Batches of Supplementary Filing High-tech Enterprises in
Anhui Province for 2021 (wankegaomi [2022] No.49) issued by Department of Science and Technology of Anhui
province, Department of Finance of Anhui province, and Anhui Provincial Taxation Bureau of State
Administration of Taxation, the subsidiary Anhui RunAnXinKe Testing Technology Co., Ltd. was identified as a
high-tech enterprise in 2021, therefore was given High-tech Enterprise Certificate (Certificate Number:
GR202134004920) which is valid for 3 years. According to Enterprise Income Tax Law and other relevant
regulations, the company is subject to a national high-tech enterprise income tax rate at 15% for three years from
1 January 2021 to 31 December 2023.
(4) According to the Announcement of the State Taxation Administration and the Ministry of Finance on the
Implementation of Preferential Income Tax Policies for Small- and Micro-sized Enterprises and Individual
Industrial and Commercial Entities (No. 12 of 2021), from 1 January 2021 to 31 December 2022, the portion of
the annual taxable income of small- and micro-sized enterprises not exceeding RMB1 million, the taxable income
shall be reduced by 12.5% and subject to enterprise income tax at a rate of 20%. For the portion of annual taxable
income exceeding RMB1 million but not exceeding RMB3 million, the taxable income shall be reduced by 50%
and subject to enterprise income tax at a rate of 20%. Subsidiaries Gujing Hotel, Junlou Culture, Yellow Crane
Tower Beverage, Xinjia Testing, Jiuan Mechanical Electrical, Yashibo and Huanggang Junya shall observe the
relevant provisions of the preferential income tax policy for small micro-profit enterprises.
5. Notes to Major Items in the Consolidated Financial Statements of the Company
5.1 Monetary Assets
Item Ending balance Beginning balance
Cash on hand 97,411.12 135,129.66
Cash in bank 16,643,370,669.26 11,891,283,646.58
Other monetary assets 33,319,375.17 33,503,995.52
Total 16,676,787,455.55 11,924,922,771.76
~ 82 ~
At 30 June 2022, in cash in bank, the time deposits pledged for opening bank acceptance bills amounted to
RMB100 million and pledged for opening bank guarantees amounted to RMB4 million, the structural deposits
that cannot be withdrawn in advance amounted to RMB5,130 million, and security deposit that cannot be
withdrawn in advance amounted to RMB33.1633 million. Except for that, no other monetary funds are restricted
to use or in some potential risks of recovery due to the mortgage, pledge or freezing.
Liquor manufacturing enterprises shall disclose whether there exists special interest arrangements such as establishing a joint fund
account with related parties
□ Applicable Not applicable
5.2 Trading Financial Assets
Item Ending balance Beginning balance
Financial assets at fair value through profit or
203,857,213.38 2,661,103,876.68
loss
Including: bank financial products 0.00 2,457,565,232.32
Fund investment 203,857,213.38 203,538,644.36
Total 203,857,213.38 2,661,103,876.68
5.3 Accounts Receivable
(1) Disclosure by aging
Aging Ending balance Beginning balance
Within one year 84,107,089.43 97,023,731.05
Of which: 1-6 months 75,210,952.56 92,114,086.85
7-12 months 8,896,136.87 4,909,644.20
1-2 years 2,796,699.67 883,133.28
2-3 years 217,511.61 137,464.27
Over 3 years 1,363,745.97 1,146,581.68
Subtotal 88,485,046.68 99,190,910.28
Less: Bad debt provision 10,352,232.65 10,185,106.11
Total 78,132,814.03 89,005,804.17
(2) Disclosure by withdrawal method of bad debt provision
①Ending balance
Category Ending balance
~ 83 ~
Carrying amount Bad debt provision
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn 7,792,783.72 8.81 7,792,783.72 100.00
separately
Bad debt provision withdrawn by 80,692,262.96 91.19 2,559,448.93 3.17 78,132,814.03
group
Of which: Group 1
Group 2 80,692,262.96 91.19 2,559,448.93 3.17 78,132,814.03
Total 88,485,046.68 100.00 10,352,232.65 11.70 78,132,814.03
②Beginning balance
Beginning balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
7,792,783.72 7.86 7,792,783.72 100.00 0.00
separately
Bad debt provision withdrawn by
91,398,126.56 92.14 2,392,322.39 2.62 89,005,804.17
group
Of which: Group 1
Group 2 91,398,126.56 92.14 2,392,322.39 2.62 89,005,804.17
Total 99,190,910.28 100.00 10,185,106.11 10.27 89,005,804.17
On 30 June 2022, Accounts receivable with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 76,314,305.71 807,277.19 1.06
Of which: 1-6 months 75,210,952.56 752,109.53 1.00
7-12 months 1,103,353.15 55,167.66 5.00
1-2 years 2,796,699.67 279,669.96 10.00
2-3 years 217,511.61 108,755.81 50.00
Over 3 years 1,363,745.97 1,363,745.97 100.00
Total 80,692,262.96 2,559,448.93 3.17
~ 84 ~
On 31 December 2021, Accounts receivable with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 89,230,947.33 1,088,695.25 1.22
Of which: 1-6 months 84,321,303.13 843,213.03 1.00
7-12 months 4,909,644.20 245,482.22 5.00
1-2 years 883,133.28 88,313.32 10.00
2-3 years 137,464.27 68,732.14 50.00
Over 3 years 1,146,581.68 1,146,581.68 100.00
Total 91,398,126.56 2,392,322.39 2.62
(3) Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Beginning
Category Recovery or Ending balance
amount Withdrawal Write-off
reversal
Accounts receivable with
significant amount but bad debt 7,792,783.72 7,792,783.72
provision withdrawn separately
Accounts receivable with
insignificant amount but bad debt
provision withdrawn separately
Group 2: Bad debt provision
2,392,322.39 167,126.54 2,559,448.93
withdrawn by aging group
Total 10,185,106.11 167,126.54 10,352,232.65
(4) Top five ending balances by entity
Proportion to total ending balance Ending balance of
Entity name Ending balance
of accounts receivable (%) bad debt provision
No. 1 12,340,903.80 13.95 123,409.04
No. 2 8,136,180.23 9.19 81,361.80
No. 3 7,792,783.72 8.81 7,792,783.72
No. 4 6,972,251.45 7.88 69,722.51
No. 5 5,134,523.07 5.80 51,345.23
Total 40,376,642.27 45.63 8,118,622.30
5.4 Accounts Receivable Financing
~ 85 ~
Ending balance Beginning balance
Category Bad debt Bad debt
Carrying amount Carrying value Carrying amount Carrying value
provision provision
0.00
Bank acceptance
693,605,704.99 693,605,704.99 545,204,103.42 0.00 545,204,103.42
bills
Commercial
acceptance bills
693,605,704.99 0.00 693,605,704.99 545,204,103.42 0.00 545,204,103.42
Total
(1) The Company’s notes receivable discounted or endorsed to third parties but not yet matured as of 30 June
2022
Items Amount of derecognition Amount of recognition
Bank acceptance bills 3,646,729,061.22 0.00
Total 3,646,729,061.22 0.00
The issuing bank of the bank acceptance bill of the Company presented as accounts receivable financing are
commercial banks with higher credit. Therefore, when the bank acceptance bills are mature, they are likely to get
paid. The interest rate risk related to the bill has been transferred to the bank, so it can be judged that the main
risks and rewards of the bill ownership have been transferred, so need to be derecogised.
(2) The company has no notes receivable transferred to accounts receivable due to drawers’ inability of fulfillment
at 30 June 2022
(3) Notes receivable by bad debt provision method
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision
withdrawn separately
Bad debt provision
693,605,704.99 100.00 0.00 0.00 693,605,704.99
withdrawn by group
Of which: Group 1
Group 2 693,605,704.99 100.00 0.00 0.00 693,605,704.99
Total 693,605,704.99 100.00 0.00 0.00 693,605,704.99
①On 30 June 2022, notes receivable with provision for bad debt recognised by group 1
~ 86 ~
None.
②Notes receivable with provision for bad debt recognised by group 2
On 30 June 2022, the Company measured provision for bad debt of bank acceptance bill according to the lifetime
expected credit loss. The Company believes that no significant credit risk exists in the bank acceptance bills and
no significant losses arise from default risk of banks or other issuer’ failure of fulfillment.
(4) Changes of bad debt provision during the Reporting Period
None.
5.5 Prepayment
(1) Disclosure by aging
Ending balance Beginning balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within one year 111,268,163.22 97.90 156,395,547.90 99.89
1 to 2 years 2,353,867.56 2.07 173,426.53 0.11
2 to 3 years 32,996.56 0.03 1,996.56 0.00
Over 3 years
Total 113,655,027.34 100.00 156,570,970.99 100.00
(2) Top five ending balances by entity
Proportion of the balance to the
Entity name Ending balance
total prepayment (%)
No. 1 13,656,968.49 12.02
No. 2 11,461,931.28 10.08
No. 3 11,341,952.77 9.98
No. 4 8,591,041.73 7.56
No. 5 6,214,000.00 5.47
Total 51,265,894.27 45.11
5.6 Other Receivables
(1) Listed by category
Item Ending balance Beginning balance
Other receivables 87,093,186.66 71,753,212.24
Total 87,093,186.66 71,753,212.24
(2) Other Receivables
~ 87 ~
①Disclosure by aging
Aging Ending balance Beginning balance
Within one year 81,228,985.11 68,887,383.04
Of which:1-6 months 69,062,045.60 62,942,239.54
7-12 months 12,166,939.51 5,945,143.50
1-2 years 7,181,547.37 2,808,217.47
2-3 years 1,399,552.70 2,530,226.11
Over 3 years 44,516,820.56 43,669,449.88
Subtotal 134,326,905.74 117,895,276.50
Less: Bad debt provision 47,233,719.08 46,142,064.26
Total 87,093,186.66 71,753,212.24
②Disclosure by nature
Nature Ending balance Beginning balance
Investment in securities 38,469,339.88 38,857,584.88
Deposit and guarantee 8,409,996.12 8,788,917.25
Borrowing for business trip expenses 822,718.01 1,219,958.15
Rent, utilities and gasoline charges 13,009,438.49 7,910,881.41
Other 73,615,413.24 61,117,934.81
Subtotal 134,326,905.74 117,895,276.50
Less: Bad debt provision 47,233,719.08 46,142,064.26
Total 87,093,186.66 71,753,212.24
③Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2022, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
95,857,565.86 8,764,379.20 87,093,186.66
Stage 1
Stage 2
38,469,339.88 38,469,339.88
Stage 3
134,326,905.74 47,233,719.08 87,093,186.66
Total
A1. As of 30 June 2022, bad debt provision at stage 1:
~ 88 ~
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 95,857,565.86 9.14 8,764,379.20 87,093,186.66
Of which: Group 1
Group 2 95,857,565.86 9.14 8,764,379.20 87,093,186.66
Total 95,857,565.86 9.14 8,764,379.20 87,093,186.66
On 30 June 2022, other receivables with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 81,228,985.11 1,298,967.44 1.60
Of which:1-6 months 69,062,045.60 690,620.46 1.00
7-12 months 12,166,939.51 608,346.98 5.00
1-2 years 7,181,547.37 718,154.73 10.00
2-3 years 1,399,552.70 699,776.35 50.00
Over 3 years 6,047,480.68 6,047,480.68 100.00
Total 95,857,565.86 8,764,379.20 9.14
A2. As of 30 June 2022, bad debt provision at stage 3:
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately 38,469,339.88 100.00 38,469,339.88
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 38,469,339.88 100.00 38,469,339.88
On 30 June 2022, other receivables with bad debt provision withdrawn separately:
Ending balance
Name Withdrawal
Carrying amount Bad debt provision Withdrawal reason
proportion (%)
~ 89 ~
Ending balance
Name Withdrawal
Carrying amount Bad debt provision Withdrawal reason
proportion (%)
28,733,899.24 28,733,899.24 100.00 The enterprise is bankrupt and
Hengxin Securities Co., Ltd.
liquidated
9,735,440.64 9,735,440.64 100.00 The enterprise is bankrupt and
Jianqiao Securities Co., Ltd.
liquidated
Total 38,469,339.88 38,469,339.88 100.00 --
B. As of 31 December 2021, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 79,037,691.62 7,284,479.38 71,753,212.24
Stage 2
Stage 3 38,857,584.88 38,857,584.88 0.00
Total 117,895,276.50 46,142,064.26 71,753,212.24
B1. On 31 December 2021, bad debt provision at stage 1:
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 79,037,691.62 9.22 7,284,479.38 71,753,212.24
Of which: Group 1
Group 2 79,037,691.62 9.22 7,284,479.38 71,753,212.24
Total 79,037,691.62 9.22 7,284,479.38 71,753,212.24
On 31 December 2021, other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 68,887,383.04 926,679.58 1.35
Of which:1-6 months 62,942,239.54 629,422.41 1.00
7-12 months 5,945,143.50 297,257.17 5.00
1-2 years 2,808,217.47 280,821.74 10.00
2-3 years 2,530,226.11 1,265,113.06 50.00
~ 90 ~
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Over 3 years 4,811,865.00 4,811,865.00 100.00
Total 79,037,691.62 7,284,479.38 9.22
B2. As of 31 December 2021, bad debt provision at stage 3:
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately 38,857,584.88 100.00 38,857,584.88
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 38,857,584.88 100.00 38,857,584.88
On 31 December 2021, other receivables with bad debt provision withdrawn separately:
Beginning balance
Name Withdrawal
Carrying amount Bad debt provision Withdrawal reason
proportion (%)
Hengxin Securities Co., Ltd. The enterprise is bankrupt and
28,966,894.41 28,966,894.41 100.00
liquidated
Jianqiao Securities Co., Ltd. The enterprise is bankrupt and
9,890,690.47 9,890,690.47 100.00
liquidated
Total 38,857,584.88 38,857,584.88 100.00 --
④Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Category Beginning balance Recovery or Ending balance
Withdrawal Write-off
reversal
Bad debt provision 388,245.00 38,469,339.88
38,857,584.88
withdrawn separately
Bad debt provision 1,479,899.82 8,764,379.20
7,284,479.38
withdrawn by group
Total 46,142,064.26 1,479,899.82 388,245.00 47,233,719.08
~ 91 ~
⑤Top five ending balances by entity
Proportion of the
balance to the total
Entity name Nature Ending balance Aging Bad debt provision
other receivables
(%)
Other 37,240,944.00 Within 6 27.72 372,409.44
No. 1
months
Securities 28,733,899.24 21.39 28,733,899.24
No. 2
Over 3 years
investment
Securities 9,735,440.64 7.25 9,735,440.64
No. 3
Over 3 years
investment
Other 7,785,312.38 5.80 77,853.12
No. 4 Within 6
months
Other 6,175,822.32 Within 2 years 4.60 315,837.14
No. 5
89,671,418.58 66.76 39,235,439.58
Total
5.7 Inventories
(1) Category of inventories
Ending balance
Item
Carrying amount Falling price reserves Carrying value
181,638,685.48 17,040,834.32 164,597,851.16
Raw materials and package
materials
3,952,454,080.40 0.00 3,952,454,080.40
Semi-finished goods and work
in process
903,435,471.82 8,371,442.83 895,064,028.99
Finished goods
Total 5,037,528,237.70 25,412,277.15 5,012,115,960.55
(Continued)
Beginning balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials and package
236,485,211.32 22,919,192.93 213,566,018.39
materials
Semi-finished goods and work
3,680,675,328.83 0.00 3,680,675,328.83
in process
~ 92 ~
Finished goods 776,158,681.46 6,943,356.38 769,215,325.08
Total 4,693,319,221.61 29,862,549.31 4,663,456,672.30
(2) Falling price reserves of inventories
Increase Decrease
Items Beginning balance Ending balance
Reversal or
Withdrawal Other
recovery
Raw materials and
22,919,192.93 368,561.28 6,246,919.89 17,040,834.32
package materials
Finished goods 6,943,356.38 1,535,226.87 107,140.42 8,371,442.83
Total 29,862,549.31 1,903,788.15 6,354,060.31 25,412,277.15
5.8 Other Current Assets
Item Ending balance Beginning balance
Pledge-style repo of treasury bonds 76,205,000.00
Accrued Interests on deposits 85,565,696.07 54,529,762.09
Deductible tax 13,520,924.11 47,487,460.47
Total 99,086,620.18 178,222,222.56
5.9 Long-term Equity Investment
Changes in the Reporting Period
Profit and loss on Adjustment of
Investees Beginning balance Additional Reduced investments other Changes in
investments investments confirmed according comprehensive other equity
to equity law income
I. Associated enterprises
Beijing Guge Trading
5,312,600.78 144,074.52
Co., Ltd.
Anhui Xunfei Jiuzhi
3,900,000.00
Technology Co., Ltd.
Total 5,312,600.78 3,900,000.00 144,074.52
(Continued)
Investees Changes in the Reporting Period Ending Balance of
~ 93 ~
balance impairment provision
Declaration of cash dividends or Withdrawal of
Other
distribution of profit impairment provision
I. Associated enterprises
Beijing Guge Trading Co.,
5,456,675.30
Ltd.
Anhui Xunfei Jiuzhi
3,900,000.00
Technology Co., Ltd.
Total 9,356,675.30
5.10 Other Equity Instrument Investment
Item Ending balance Beginning balance
Anhui Mingguang Rural Commercial Bank Co.,
Ltd. 56,568,724.15 54,542,418.50
Total 56,568,724.15 54,542,418.50
Disclosure of non-trading equity instrument investment by items
Unit: RMB
Reason for
assigning to
Amount of other Reason for other
measure in fair
comprehensive comprehensive
Dividend income Accumulative Accumulative value and the
Item income income
recognized gains losses changes included
transferred to transferred to
in other
retained earnings retained earnings
comprehensive
income
Assigned to
measure in fair
value and the
Anhui Mingguang changes included
Rural in other
957,949.08 2,720,026.35
Commercial Bank comprehensive
Co., Ltd. income according
to the holding
purpose of the
management
5.11 Investment Property
(1) Investment property adopting cost measurement mode
Items Building and plants Land use rights Total
~ 94 ~
Items Building and plants Land use rights Total
I. Original carrying value
1. Beginning balance 8,680,555.75 2,644,592.00 11,325,147.75
2. Increase during the Reporting Period 11,793,433.36 11,793,433.36
(1) Transfer from fixed assets 11,793,433.36 11,793,433.36
3. Decrease during the Reporting Period
4. Ending balance 20,473,989.11 2,644,592.00 23,118,581.11
II. Accumulated depreciation and amortization:
1. Beginning balance 6,437,593.71 811,752.98 7,249,346.69
2. Increase during the Reporting Period 1,998,620.92 28,013.28 2,026,634.20
(1) Withdrawal or amortization 274,131.47 28,013.28 302,144.75
(2) Transfer from fixed assets 1,724,489.45 - 1,724,489.45
3. Decrease during the Reporting Period
4. Ending balance 8,436,214.63 839,766.26 9,275,980.89
III. Impairment provision
1. Beginning balance
2. Increase during the Reporting Period
3. Decrease during the Reporting Period
4. Ending balance
IV. Carrying value
1. Ending carrying value 12,037,774.48 1,804,825.74 13,842,600.22
2. Beginning carrying value 2,242,962.04 1,832,839.02 4,075,801.06
5.12 Fixed Assets
(1) Listed by category
Item Ending balance Beginning balance
Fixed assets 2,174,587,817.92 1,984,063,975.87
Disposal of fixed assets 0.00 0.00
2,174,587,817.92 1,984,063,975.87
Total
(2) Fixed assets
①General information of fixed assets
Buildings and Machinery Office equipment
Items Vehicles Total
constructions equipments and other
I. Original carrying value
~ 95 ~
Buildings and Machinery Office equipment
Items Vehicles Total
constructions equipments and other
1. Beginning balance 2,227,823,579.11 1,330,919,645.23 71,233,228.12 268,969,064.53 3,898,945,516.99
2. Increase during the 234,912,506.30 75,556,193.86 2,091,172.58 17,466,056.82 330,025,929.56
Reporting Period
(1) Acquisition 3,166,821.70 2,091,172.58 4,650,835.55 9,908,829.83
(2) Transfer from 234,912,506.30 72,389,372.16 12,815,221.27 320,117,099.73
construction in progress
(3) Other increase
3. Decrease during the 14,419,236.63 31,640,359.83 1,081,574.80 1,141,466.78 48,282,638.04
Reporting Period
(1) Disposal or scrap 2,571,178.72 2,154,569.98 1,081,574.80 1,141,466.78 6,948,790.28
(2) Transfer to investment
11,793,433.36 11,793,433.36
property
(3) Other decrease 54,624.55 29,485,789.85 29,540,414.40
4. Ending balance 2,448,316,848.78 1,374,835,479.26 72,242,825.90 285,293,654.57 4,180,688,808.51
II. Accumulated
depreciation
1. Beginning balance 939,955,700.88 756,251,767.51 61,387,409.53 152,316,243.68 1,909,911,121.60
2. Increase during the 42,490,626.86 48,905,727.30 2,615,238.29 19,883,776.34 113,895,368.79
Reporting Period
(1) Withdrawal 42,490,626.86 48,905,727.30 2,615,238.29 19,883,776.34 113,895,368.79
(2) Other increase - - - - -
3. Decrease during the
3,973,037.05 16,911,535.46 770,729.17 981,798.70 22,637,100.38
Reporting Period
(1) Disposal or scrap 2,248,547.60 1,976,008.36 770,729.17 981,798.70 5,977,083.83
(2) Transfer to investment
1,724,489.45 1,724,489.45
property
(3) Other decrease - 14,935,527.10 14,935,527.10
4. Ending balance 978,473,290.69 788,245,959.35 63,231,918.65 171,218,221.32 2,001,169,390.01
III. Impairment provision
1. Beginning balance 3,116,594.39 1,271,091.35 582,733.78 4,970,419.52
2. Increase during the
Reporting Period
(1) Withdrawal
3. Decrease during the 38,818.94 38,818.94
Reporting Period
~ 96 ~
Buildings and Machinery Office equipment
Items Vehicles Total
constructions equipments and other
(1) Disposal or scrap 38,818.94 38,818.94
4. Ending balance 3,116,594.39 1,232,272.41 582,733.78 4,931,600.58
IV. Carrying value
1. Ending carrying value 1,466,726,963.70 585,357,247.50 9,010,907.25 113,492,699.47 2,174,587,817.92
2. Beginning carrying
1,284,751,283.84 573,396,786.37 9,845,818.59 116,070,087.07 1,984,063,975.87
value
②Idle fixed assets
Original carrying Accumulated
Item Impairment provision Carrying value Note
value depreciation
Buildings and
10,582,609.55 7,282,125.83 3,116,594.39 183,889.33
constructions
Machinery equipments 8,925,799.00 7,574,844.36 1,232,272.41 118,682.23
Office equipment and
874,608.18 265,657.69 582,733.78 26,216.71
others
Total 20,383,016.73 15,122,627.88 4,931,600.58 328,788.27
③Fixed assets without certificate of title
Items Carrying value Reason
Buildings and constructions 846,049,099.92 In process
Total 846,049,099.92 --
④Fixed assets with limit on use for mortgage at the end of the Reporting Period
Original carrying Accumulated
Items Impairment provision Carrying value Note
value depreciation
Buildings and 8,580,058.24 4,890,633.18 3,689,425.06
constructions
Total 8,580,058.24 4,890,633.18 3,689,425.06
5.13 Construction in Progress
(1) Listed by category
Item Ending balance Beginning balance
Construction in progress 1,579,733,041.46 1,064,134,904.21
Total 1,579,733,041.46 1,064,134,904.21
(2) Construction in progress
~ 97 ~
①General information of construction in progress
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Smart park project 1,315,499,238.91 1,315,499,238.91 700,794,613.29 700,794,613.29
Theme hotel project 154,688,182.63 154,688,182.63 61,431,126.99 61,431,126.99
Gujing plant
area 12# 23,846,143.28 23,846,143.28 10,666,666.95 10,666,666.95
liquor warehouse
Suizhou new plant project 37,884,903.90 37,884,903.90 266,102,852.17 266,102,852.17
Other individual project 47,814,572.74 47,814,572.74 25,139,644.81 25,139,644.81
Total 1,579,733,041.46 1,579,733,041.46 1,064,134,904.21 1,064,134,904.21
②Changes in significant projects of construction in progress
Decrease
Increase during
Budget Beginning Amount transferred during the
Project the Reporting Ending balance
(RMB’0,000) balance to fixed asset Reporting
Period
Period
Smart park project 828,965.74 700,794,613.29 614,704,625.62 1,315,499,238.91
Theme hotel project 49,900.00 61,431,126.99 93,257,055.64 154,688,182.63
Gujing plant 16,250.00 13,179,476.33 23,846,143.28
area 12# 10,666,666.95
liquor warehouse
Suizhou new plant project 60,000.00 266,102,852.17 101,616,808.42 309,779,677.29 20,055,079.40 37,884,903.90
Other individual project 8,170.48 25,139,644.81 33,086,263.58 10,337,422.44 73,913.21 47,814,572.74
Total 963,286.22 1,064,134,904.21 855,844,229.59 320,117,099.73 20,128,992.61 1,579,733,041.46
(Continued)
Interest
Cumulative Of which: Interest
Proportion of capitalization
amount of capitalized during
Project project input to Schedule (%) during the Source of funds
interest the reporting
budgets (%) Reporting
capitalization period
Period (%)
Self-owned
Smart park project 15.89 18.79 fund and raised
fund
~ 98 ~
Interest
Cumulative Of which: Interest
Proportion of capitalization
amount of capitalized during
Project project input to Schedule (%) during the Source of funds
interest the reporting
budgets (%) Reporting
capitalization period
Period (%)
Self-owned
Theme hotel project 31.00 40.88
fund
Gujing plant
Self-owned
area 12# 14.67 40.00
fund
liquor warehouse
Self-owned
Suizhou new plant project 61.29 61.29 4,422,716.98 1,894,734.25 3.45 fund and
borrowings
Self-owned
Other individual project 71.26 71.26
fund
Total -- -- 4,422,716.98 1,894,734.25 -- --
5.14 Right-of-use Assets
Items Buildings and constructions Machinery equipments Total
I. Original carrying value
1. Beginning balance 57,050,481.74 1,330,929.57 58,381,411.31
2. Increase during the Reporting
Period
3. Decrease during the
Reporting Period
4. Ending balance 57,050,481.74 1,330,929.57 58,381,411.31
II. Accumulated depreciation
1. Beginning balance 14,010,539.12 443,643.22 14,454,182.34
2. Increase during the Reporting 7,068,616.54 221,821.61 7,290,438.15
Period
(1) Withdrawal 7,068,616.54 221,821.61 7,290,438.15
3. Decrease during the
Reporting Period
(1) Disposal
4. Ending balance 21,079,155.66 665,464.83 21,744,620.49
III. Impairment provision
~ 99 ~
1. Beginning balance
2. Increase during the Reporting
Period
(1) Withdrawal
3. Decrease during the
Reporting Period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying value 35,971,326.08 665,464.74 36,636,790.82
2. Beginning carrying value 43,039,942.62 887,286.35 43,927,228.97
5.15 Intangible Assets
(1) General information of intangible assets
Patents and
Item Land use rights Software Total
trademark
I. Original carrying value
1. Beginning balance 1,001,763,740.75 129,251,165.21 253,045,146.19 1,384,060,052.15
2. Increase during the Reporting 67,414,107.25 772,851.32 68,186,958.57
Period
(1) Acquisition 67,414,107.25 772,851.32 68,186,958.57
(2) Transfer from construction in
progress
3. Decrease during the Reporting
Period
(1) Disposal
(2) Other decrease
4. Ending balance 1,069,177,848.00 130,024,016.53 253,045,146.19 1,452,247,010.72
II. Accumulated amortization:
1. Beginning balance 181,669,781.87 69,365,956.76 69,555,470.91 320,591,209.54
2. Increase during the Reporting 10,802,404.45 10,443,034.97 15,000.00 21,260,439.42
Period
(1) Withdrawal 10,802,404.45 10,443,034.97 15,000.00 21,260,439.42
3. Decrease during the Reporting
Period
(1) Disposal
~ 100 ~
Patents and
Item Land use rights Software Total
trademark
4. Ending balance 192,472,186.32 79,808,991.73 69,570,470.91 341,851,648.96
III. Impairment provision
1. Beginning balance
2. Increase during the Reporting
Period
3. Decrease during the Reporting
Period
4. Ending balance
IV. Carrying value
1. Ending carrying value 876,705,661.68 50,215,024.80 183,474,675.28 1,110,395,361.76
2. Beginning carrying value 820,093,958.88 59,885,208.45 183,489,675.28 1,063,468,842.61
(2) Intangible assets used for mortgage at 30 June 2022
Original carrying Accumulated
Item Impairment provision Carrying value Note
value amortization
Land use rights 4,029,919.10 1,289,574.12 2,740,344.98
Total 4,029,919.10 1,289,574.12 2,740,344.98
(3) Intangible assets without certificate of title
Item Carrying value Reason
Land use rights 67,229,531.74 In progress
Total 67,229,531.74 --
5.16 Goodwill
(1) Original carrying value of goodwill
Increase Decrease
Investees or matters that
Beginning balance Formed by Ending balance
goodwill arising from
business Other Disposal Other
combination
Yellow Crane Tower Distillery
478,283,495.29 478,283,495.29
Co., Ltd.
Anhui Mingguang Distillery Co.,
60,686,182.07 60,686,182.07
Ltd.
Renhuai Maotai Town Zhencang
22,394,707.65 22,394,707.65
Winery Industry Co., Ltd.
~ 101 ~
Increase Decrease
Investees or matters that Formed by
goodwill arising from Beginning balance Ending balance
business Other Disposal Other
combination
Total 561,364,385.01 561,364,385.01
5.17 Long-term Deferred Expenses
Beginning Decrease
Item Increase Ending balance
balance
Amortization Other decrease
Experience center 30,453,147.53 6,781,656.11 23,671,491.42
Sewage treatment project 1,922,131.15 461,311.48 1,460,819.67
Yellow Crane Tower chateau and 1,757,322.66 2,712,974.03
4,470,296.69
museum
Gujing party building cultural 590,909.09 1,772,727.28
2,363,636.37
center
Yantai wine museum project 448,182.86 244,463.38 203,719.48
Suizhou new plant project 20,055,079.40 575,894.83 19,479,184.57
Other individual project with 230,831.85 5,247,874.91 0.00 11,233,900.37
16,250,943.43
insignificant amounts
Total 55,908,338.03 20,285,911.25 15,659,432.46 0.00 60,534,816.82
5.18 Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
Ending balance Beginning balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Asset impairment provision 30,343,877.73 7,585,969.43 34,832,968.83 8,597,940.21
Credit impairment provision 57,585,951.73 14,396,487.93 56,327,170.37 14,078,521.69
Unrealized intergroup profit 86,513,941.97 21,628,485.49 89,880,690.08 22,470,172.52
Deferred income 100,322,613.54 25,080,653.39 91,101,512.05 22,355,416.63
Deductible losses 4,395,815.61 683,926.57 3,275,424.29 235,799.84
Carry-over of payroll payables
deductible during the next 0.00 0.00 14,728,894.07 3,682,223.52
period
Accrued expenses and discount 1,466,781,612.20 366,695,403.05 845,357,525.22 211,333,743.87
~ 102 ~
Ending balance Beginning balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Change in fair value of 3,351,274.76 837,818.69
4,296,727.84 1,074,181.96
accounts receivable financing
Total 1,749,295,087.54 436,908,744.55 1,139,800,912.75 283,828,000.24
(2) Deferred tax liabilities before offsetting
Ending balance Beginning balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Difference in accelerated
depreciation of fixed 75,071,625.68 18,767,906.41 74,959,073.18 18,739,768.30
assets
Assets appreciation
arising from business
669,073,190.86 167,268,297.72 689,376,361.16 172,344,090.29
combination not under
the same control
Changes in fair value of
3,857,213.38 964,303.35 11,103,876.68 2,775,969.16
trading financial assets
Changes in fair value of
investments in other 2,720,026.35 680,006.59 693,720.70 173,430.18
equity instruments
Total 750,722,056.27 187,680,514.07 776,133,031.72 194,033,257.93
3.19 Other Non-current Assets
Item Ending balance Beginning balance
Prepayments for equipment 2,044,800.00 7,220,318.40
Total 2,044,800.00 7,220,318.40
3.20 Short-term Borrowings
Category Ending balance Beginning balance
Credit borrowings 20,018,333.33 0.00
Mortgage borrowings 10,010,694.44 10,008,555.55
Guarantee borrowings 0.00 20,026,583.34
Total 30,029,027.77 30,035,138.89
3.21 Notes Payable
(1) Listed by nature
~ 103 ~
Category Ending balance Beginning balance
Bank acceptance bills 81,620,172.86 127,114,336.16
Commercial acceptance bills 0.00 0.00
Total 81,620,172.86 127,114,336.16
(2) At the end of the reporting period, there is no notes payable matured but not yet paid.
5.22 Accounts Payable
(1) Listed by nature
Item Ending balance Beginning balance
Payments for goods 681,236,998.78 605,774,178.94
Payments for constructions and equipment 357,082,380.40 253,893,258.27
Other 127,551,792.22 160,769,884.68
Total 1,165,871,171.40 1,020,437,321.89
(2) Significant accounts payable aging over one year
Item Ending balance Reason
No. 1 2,116,587.78 Final payment
No. 2 505,111.19 Payments for goods
No. 3 490,485.32 Final payment
No. 4 393,392.70 Final payment
No. 5 348,350.03 Other
Total 3,853,927.02 --
5.23 Contract Liabilities
Item Ending balance Beginning balance
Payment for goods 3,427,741,695.67 1,825,447,705.85
Total 3,427,741,695.67 1,825,447,705.85
5.24 Employee Benefits Payable
(1) List of employee benefits payable
Item Beginning balance Increase Decrease Ending balance
I. Short-term employee benefits 709,463,139.46 1,609,106,174.64 1,582,782,548.28 735,786,765.82
II. Post-employment
208,648.28 61,626,130.26 61,627,350.86 207,427.68
benefits-defined contribution plans
~ 104 ~
Item Beginning balance Increase Decrease Ending balance
III. Termination benefits 0.00 222,970.60 222,970.60 0.00
IV. Other benefits due within one
year
Total 709,671,787.74 1,670,955,275.50 1,644,632,869.74 735,994,193.50
(2) List of short-term employee benefits
Item Beginning balance Increase Decrease Ending balance
I. Salaries, bonuses, allowances and
630,779,825.28 1,415,943,168.03 1,390,037,269.04 656,685,724.27
subsidies
II. Employee benefits 0.00 55,280,619.92 55,280,619.92 0.00
III. Social insurance 445,462.22 31,966,481.81 31,979,646.69 432,297.34
Of which: Health insurance 445,427.72 30,587,555.72 30,600,686.10 432,297.34
Injury insurance 34.50 1,378,926.09 1,378,960.59 0.00
IV. Housing accumulation fund 5,653,470.40 49,785,431.25 50,117,418.45 5,321,483.20
V. Labor union funds and employee 16,078,474.69 15,290,275.24 70,308,856.93
69,520,657.48
education funds
VI. Enterprise annuity 3,063,724.08 40,051,998.94 40,077,318.94 3,038,404.08
Total 709,463,139.46 1,609,106,174.64 1,582,782,548.28 735,786,765.82
(3) Defined contribution plans
Item Beginning balance Increase Decrease Ending balance
1. Basic endowment insurance 208,648.28 59,619,935.96 59,621,156.56 207,427.68
2. Unemployment insurance 0.00 2,006,194.30 2,006,194.30 0.00
Total 208,648.28 61,626,130.26 61,627,350.86 207,427.68
5.25 Taxes Payable
Item Ending balance Beginning balance
VAT 145,673,136.60 154,597,583.14
Consumption tax 302,009,359.14 406,331,487.38
Enterprise income tax 415,380,422.84 255,882,481.65
Individual income tax 2,452,254.07 2,674,057.91
~ 105 ~
Item Ending balance Beginning balance
Urban maintenance and construction tax 25,382,340.74 20,431,543.35
Stamp duty 3,165,739.64 2,882,861.65
Educational surcharge 22,312,116.57 18,506,770.12
Other 11,228,549.96 11,964,201.51
Total 927,603,919.56 873,270,986.71
5.26 Other Payables
(1) Listed by category
Item Ending balance Beginning balance
Other payables 2,512,044,376.53 2,280,937,078.12
Total 2,512,044,376.53 2,280,937,078.12
(2) Other payables
①Listed by nature
Item Ending balance Beginning balance
Security deposit and guarantee 2,080,003,170.95 1,845,795,843.02
Warranty 43,565,423.05 48,556,830.53
Personal housing fund paid by company 5,386,711.90 4,722,066.45
Other 383,089,070.63 381,862,338.12
Total 2,512,044,376.53 2,280,937,078.12
②Significant other payables aging over one year
Other payables balance aging over one year are mainly security deposit and warranty not yet matured.
5.27 Non-current Liabilities due within one year
Item Ending balance Beginning balance
Lease liabilities due within one year 12,619,612.87 13,190,399.32
Long-term borrowings due within one
30,030,833.33
year
Total 42,650,446.20 13,190,399.32
5.28 Other Current Liabilities
Item Ending balance Beginning balance
Accrued expenses 1,183,621,837.78 562,547,100.62
The VAT tax liability has not yet occurred and 445,369,074.08 236,975,461.98
~ 106 ~
Item Ending balance Beginning balance
needs to be recognized as the value-added tax of
the output tax in the subsequent periods
Total 1,628,990,911.86 799,522,562.60
5.29 Long-term Borrowings
Item Ending balance Beginning balance
Credit Loan 0.00 60,000,000.00
Accrued interest 84,917.22 176,255.83
Guarantee loan 79,790,000.00 112,180,000.00
Total 79,874,917.22 172,356,255.83
5.30 Lease Liabilities
Item Ending balance Beginning balance
Lease liabilities 21,151,463.30 28,107,223.18
Total 21,151,463.30 28,107,223.18
5.31 Deferred Income
(1) General information of deferred income
Item Beginning balance Increase Decrease Ending balance Reason
Government 12,350,000.00 3,128,898.51 100,322,613.54 Grants received from
91,101,512.05
grants government
Total 91,101,512.05 12,350,000.00 3,128,898.51 100,322,613.54 --
(2) Items involved with government grants:
Recognized in
Increase during other income Related to
Beginning
Item the Reporting during the Other changes Ending balance assets/related to
balance
Period Reporting income
Period
Subsidy for Suizhou new
35,338,000.00 373,947.06 34,964,052.94 Related to assets
factory infrastructure
Refund of Land payment 42,700,310.29 489,459.12 42,210,851.17 Related to assets
Funds for strategic
emerging industry
1,752,640.06 311,359.98 1,441,280.08 Related to assets
agglomeration
development base
Comprehensive subsidy 2,085,104.67 147,182.40 1,937,922.27 Related to assets
~ 107 ~
fund for air pollution
prevention and control
Instrument subsidy 1,279,705.79 160,133.94 1,119,571.85 Related to assets
Subsidy funds for strong
manufacturing province
and private economy 1,250,183.41 154,327.14 1,095,856.27 Related to assets
development projects in
2019
Anhui province subsidy of
innovative province
487,030.00 365,272.50 121,757.50 Related to assets
construction capacity for
independent innovation
Subsidy for technical
transformation of No.2 759,259.24 111,111.12 648,148.12 Related to assets
boiler
Equipment subsidy 668,907.24 104,104.56 564,802.68 Related to assets
Gujing Zhangji wine
cellar optimization and 740,208.51 23,749.98 716,458.53 Related to assets
reconstruction project
Subsidy for food safety
413,793.25 68,965.50 344,827.75 Related to assets
improvement project
Anhui province
development of direct 209,756.36 146,341.44 63,414.92 Related to assets
funds of service industry
Specific funds for side
management of power 228,000.00 72,000.00 156,000.00 Related to assets
demand
Automation of check and
storage, on-line
78,125.32 46,875.32 31,250.00 Related to assets
monitoring of product
quality
Wine production system
2,180,720.63 145,786.08 2,034,934.55 Related to assets
technical transformation
Intelligent solid brewing
technology innovation 57,291.45 15,625.02 41,666.43 Related to assets
project
Specific funds for
transformation of gas-fired 197,500.00 15,000.00 182,500.00 Related to assets
boilers
~ 108 ~
Recognition awards for
Industrial enterprise
552,622.31 34,821.86 517,800.45 Related to assets
technical transformation
investments
Government grants from
Technology and Quality 122,353.52 10,274.26 112,079.26 Related to assets
Department
Provincial special Fund
for high-quality
2,850,000.00 2,850,000.00 Related to assets
development of
manufacturing industry
Deep treatment project of
1,050,000.00 267,407.61 782,592.39 Related to assets
VOCSc
Liquor industry Internet
7,000,000.00 - 7,000,000.00 Related to assets
Platform
Project of Robot
450,000.00 15,153.64 434,846.36 Related to assets
Development
Upgrading project of
intelligent and automatic 1,000,000.00 49,999.98 950,000.02 Related to assets
liquor production
Total 91,101,512.05 12,350,000.00 3,128,898.51 100,322,613.54 --
5.32 Share Capital
Changes during the Reporting Period (+,-)
Item Beginning balance Bonus Capitalization Ending balance
New issues Others Subtotal
issues of reserves
The sum of
528,600,000.00 528,600,000.00
shares
5.33 Capital Reserves
Item Beginning balance Increase Decrease Ending balance
Capital premium (share 6,191,894,530.90
6,191,894,530.90
premium)
Other capital reserves 32,853,136.20 32,853,136.20
~ 109 ~
Item Beginning balance Increase Decrease Ending balance
Total 6,224,747,667.10 6,224,747,667.10
5.34 Other Comprehensive Income
Reporting Period
Less: Less:
Recorded in Recorded in
other other
Income comprehensive comprehensive Attributable
Attributable to
Beginning before income in income in Less: to owners of Ending
Item non-controlling
balance taxation in prior period prior period Income tax the Company balance
interests after
the Current and transferred and transferred expense as the parent
tax
Period to profit or to retained after tax
loss in the earnings in the
Current Current
Period Period
I. Other comprehensive income that
may not subsequently be 312,174.31 2,026,305.65 506,576.41 911,837.54 607,891.70 1,224,011.85
reclassified to profit or loss
Of which: Changes caused by
remeasurements on defined benefit
schemes
Other comprehensive
income that will not be reclassified
to profit or loss under the equity
method
Changes in fair value of
312,174.31 2,026,305.65 506,576.41 911,837.54 607,891.70 1,224,011.85
other equity instrument investment
Changes in the fair value
arising from changes in own credit
risk
II. Other comprehensive income
that may subsequently be -3,047,232.50 945,453.08 236,363.27 924,296.63 -215,206.82 -2,122,935.87
reclassified to profit or loss
Of which: Other comprehensive
income that will be reclassified to
profit or loss under the equity
method
Changes in the fair value
of investments in other debt
obligations
~ 110 ~
Other comprehensive
income arising from the -3,047,232.50 945,453.08 236,363.27 924,296.63 -215,206.82 -2,122,935.87
reclassification of financial assets
Credit impairment
allowance for investments in other
debt obligations
Reserve for cash flow
hedges
Differences arising from
translation of foreign
currency-denominated financial
statements
Total of other comprehensive
-2,735,058.19 2,971,758.73 742,939.68 1,836,134.17 392,684.88 -898,924.02
income
5.35 Surplus Reserves
Item Beginning balance Increase Decrease Ending balance
Statutory surplus reserve 269,402,260.27 269,402,260.27
Total 269,402,260.27 269,402,260.27
Note: In accordance with provisions of Company Law and Articles of Association, the statutory surplus reserve
shall be withdrawn at 10% of net profits by the Company. The accumulated amount of statutory surplus reserve
can no longer be withdrawn when it is more than 50% of the Company’s registered capital.
5.36 Retained Earnings
Item Reporting Period Same period of last year
Beginning balance of retained earnings before adjustments 9,517,374,574.46 7,987,380,161.21
Total beginning balance of retained earnings before
adjustment (increase+, decrease-)
Beginning balance of retained earnings after adjustments 9,517,374,574.46 7,987,380,161.21
Add: Net profit attributable to owners of the Company as 1,918,821,503.75
2,297,894,413.25
the parent
Less: withdrawal of statutory surplus reserve 12,500,000.00
Dividend of ordinary shares payable 1,162,920,000.00 755,400,000.00
Ending retained earnings 10,273,276,078.21 9,517,374,574.46
5.37 Operating Revenue and Cost of Sales
Item Reporting Period Same period of last year
~ 111 ~
Operating revenue Costs of sales Operating revenue Costs of sales
Main operations 8,962,507,998.25 2,007,802,802.77 6,962,693,789.52 1,637,770,675.38
Other operations 39,497,925.17 15,201,058.59 44,802,678.22 16,047,671.93
Total 9,002,005,923.42 2,023,003,861.36 7,007,496,467.74 1,653,818,347.31
Information on operating revenue:
Contract category Liquor sales Total
Commodity type 8,696,974,044.24 8,696,974,044.24
Including:
Original Vintage 6,704,950,952.54 6,704,950,952.54
Gujinggong Liquor 901,386,716.35 901,386,716.35
Yellow Crane Tower 630,980,727.47 630,980,727.47
Other 459,655,647.88 459,655,647.88
By operating segment 8,696,974,044.24 8,696,974,044.24
Including:
North China 608,718,399.33 608,718,399.33
Central China 7,600,428,712.12 7,600,428,712.12
Southern China 480,154,959.01 480,154,959.01
Overseas 7,671,973.78 7,671,973.78
Contract type 8,696,974,044.24 8,696,974,044.24
Including:
Commodity sales contract 8,696,974,044.24 8,696,974,044.24
By sales channel 8,696,974,044.24 8,696,974,044.24
Including:
Online 279,538,527.37 279,538,527.37
Offline 8,417,435,516.87 8,417,435,516.87
Total 8,696,974,044.24 8,696,974,044.24
5.38 Taxes and Surcharges
Item Reporting Period Same period of last year
Consumption tax 1,047,706,042.57 879,116,923.82
Urban maintenance and construction tax and 191,118,110.88 159,895,059.56
educational surcharge
Urban land use tax 10,644,741.02 9,091,340.70
Property tax 8,962,556.19 9,172,552.52
~ 112 ~
Item Reporting Period Same period of last year
Stamp duty 9,277,618.92 5,877,488.03
Other 9,029,828.22 6,657,887.42
Total 1,276,738,897.80 1,069,811,252.05
5.39 Selling Expense
Item Reporting Period Same period of last year
Employment benefits 499,313,896.40 385,703,329.21
Travel fees 77,211,414.12 79,727,177.78
Advertisement fees 557,349,666.49 467,467,773.39
Comprehensive promotion costs 1,057,068,152.23 685,618,164.57
Service fees 352,084,304.93 359,748,787.06
Other 52,077,986.29 50,000,363.92
Total 2,595,105,420.46 2,028,265,595.93
5.40 Administrative Expenses
Item Reporting Period Same period of last year
Employee benefits 332,926,047.23 284,582,789.99
Office fees 21,699,298.12 25,800,540.36
Maintenance expenses 88,287,928.43 33,180,815.29
Depreciation 34,878,234.93 41,487,748.11
Amortization of intangible assets 17,052,302.25 17,277,135.76
Pollution discharge 12,080,582.54 10,238,085.66
Travel expenses 4,611,573.45 5,959,737.83
Water and electricity charges 5,701,410.83 3,949,046.33
Other 42,083,164.88 45,251,494.37
Total 559,320,542.66 467,727,393.70
5.41 Development Costs
Item Reporting Period Same period of last year
Labor cost 17,578,443.61 13,713,853.14
Direct input costs 4,038,177.88 2,156,217.53
Depreciation expense 1,250,539.87 1,666,681.97
Other 4,970,204.58 2,424,593.62
~ 113 ~
Item Reporting Period Same period of last year
Total 27,837,365.94 19,961,346.26
5.42 Finance Costs
Item Reporting Period Same period of last year
2,498,008.94 4,457,905.49
Interest expenses
131,378,962.32 72,689,006.99
Less: Interest income
-128,880,953.38 -68,231,101.50
Net interest expenses
-429,484.32 -171,646.25
Net foreign exchange losses
-313,522.29 -287,369.98
Bank charges and others
-129,623,959.99 -68,690,117.73
Total
5.43 Other Income
Same period of last
Item Reporting Period Related to assets /income
year
I. Government grants recorded to other income
Of which: Government grant related to deferred 3,128,898.51 2,839,284.13
Related to assets
income
Government grant recorded to current 23,080,182.64 31,862,128.69
Related to income
profit or loss
Total 26,209,081.15 34,701,412.82 --
5.44 Investment Income
Item Reporting Period Same period of last year
Investment income from long-term equity
144,074.52 60,287.04
investments under equity method
Investment income from disposal of financial
assets at fair value through profit or loss
Investment income from holding of debt
obligations
Investment income from holding of other
957,949.08 809,860.62
equity instrument investments
Investment income from disposal of financial
assets at fair value through other -18,654,353.22 -6,415,106.49
comprehensive income
Investment income from holding of trading
1,625.42
financial assets
~ 114 ~
Other 103,208.20 421,221.91
Total -17,449,121.42 -5,122,111.50
5.45 Gains on Changes in Fair Values
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss 318,569.02 5,237,242.40
Of which: gains on changes in fair value of derivatives 0.00 0.00
Total 318,569.02 5,237,242.40
5.46 Credit Impairment Loss
Item Reporting Period Same period of last year
Bad debt of notes receivable
Bad debt of accounts receivable -167,126.54 34,837.84
Bad debt of other receivables -1,091,654.82 1,911,127.85
Total -1,258,781.36 1,945,965.69
5.47 Asset Impairment Loss
Item Reporting Period Same period of last year
I. Inventory falling price loss 4,343,131.74 2,464,519.26
II. Impairment loss of fixed assets
Total 4,343,131.74 2,464,519.26
5.48 Gains on Disposal of Assets
Item Reporting Period Same period of last year
Gains/losses from disposal of fixed assets, construction in
progress, productive biological assets and intangible assets not 191,652.74 1,014,902.90
classified as held for sale
Of which: Fixed assets 191,652.74 1,014,902.90
Total 191,652.74 1,014,902.90
5.49 Non-operating Income
(1) Details of non-operating income
Recognized in current
Item Reporting Period Same period of last year non-recurring profit or
loss
Gains from damage or scrapping of
368,223.18 0.00 368,223.18
non-current asset
Government grants irrelevant to daily 0.00 14,857.64 0.00
~ 115 ~
Recognized in current
Item Reporting Period Same period of last year non-recurring profit or
loss
operation activities
Income from penalties and compensation 18,655,281.74 17,701,583.38 18,655,281.74
Sales of wastes 2,007,451.66 3,289,554.24 2,007,451.66
Other 3,957,979.77 4,701,120.05 3,957,979.77
Total 24,988,936.35 25,707,115.31 24,988,936.35
(2) Government grants irrelevant to daily operation activities
Related to assets/related to
Item Reporting Period Same period of last year
income
Other rewards 0.00 14,857.64 Related to income
Total 0.00 14,857.64 --
5.50 Non-operating Expenses
Recognized in current
Item Reporting Period Same period of last year
non-recurring profit or loss
Loss from damage or scrapping of 516,064.41 516,064.41
3,132,257.94
non-current assets
Donations 5,480,000.00 0.00 5,480,000.00
Other 2,355,398.76 122,820.97 2,355,398.76
Total 8,351,463.17 3,255,078.91 8,351,463.17
5.51 Income Tax Expenses
(1) Details of income tax expenses
Item Reporting Period Same period of last year
Current tax expenses 866,229,611.46 464,320,327.02
Deferred tax expenses -160,176,427.85 14,410,399.64
Total 706,053,183.61 478,730,726.66
(2) Reconciliation of accounting profit and income tax expenses
Item Reporting Period
Profit before taxation 2,678,615,800.24
Current income tax expense accounted at applicable tax rate of the
669,653,950.06
Company as the parent
Influence of applying different tax rates by subsidiaries -6,170,014.49
~ 116 ~
Influence of income tax before adjustment 48,451,759.72
Influence of non-taxable income
Influence of non-deductable costs, expenses and losses 358,495.84
Influence of deductable losses of unrecognized deferred income
0.00
tax at the beginning of the Reporting Period
Influence of deductable temporary difference or deductable
losses of unrecognized deferred income tax in the Reporting 0.00
Period
Influence of development expense deduction -6,241,007.52
Tax rate adjustment to the beginning balance of deferred income
0.00
tax assets/liabilities
Income tax credits 0.00
Total 706,053,183.61
5.52 Notes to the Statement of Cash Flows
(1) Other cash received relating to operating activities
Item Reporting Period Same period of last year
Security deposit, guarantee and warranty 210,649,471.58 101,445,152.98
Government grants 35,430,182.64 51,606,278.86
Interest income 100,343,028.34 81,668,119.12
Release of restricted monetary assets 0.00 1,331,277,878.92
Other 70,451,751.06 32,873,232.20
Total 416,874,433.62 1,598,870,662.08
(2) Other cash payments relating to operating activities
Item Reporting Period Same period of last year
Cash paid in sales and distribution expenses and
614,584,443.16 856,443,548.71
general and administrative expense
Security deposit, guarantee and warranty 73,317,371.12 90,125,562.91
Time deposits or deposits pledged for the
0.00 884,394.71
issuance of notes payable
Structured time deposits that cannot be
0.00 3,498,000,000.00
withdrawn in advance
Others 84,256,242.29 70,912,886.51
Total 772,158,056.57 4,516,366,392.84
(3) Other cash payments relating to financing activities
~ 117 ~
Item Reporting Period Same period of last year
Rental fee 9,257,885.61 8,235,784.88
Total 9,257,885.61 8,235,784.88
5.53 Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
Supplementary information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities:
Net profit 1,972,562,616.63 1,420,565,891.53
Add: Provisions for impairment of assets -3,084,350.38 -4,410,484.95
Depreciation of fixed assets, oil and gas
114,197,513.54 116,285,870.21
assets and productive biological assets
Depreciation of right-of-use assets 7,290,438.15 7,221,332.24
Amortization of intangible assets 21,260,439.42 21,521,021.91
Amortization of long-term deferred expenses 15,659,432.46 15,623,953.64
Losses from disposal of fixed assets,
intangible assets and other long-term assets -191,652.74 -1,014,902.90
(gains: negative)
Losses on scrapping of fixed assets (gains:
147,841.23 3,132,257.94
negative)
Losses on changes in fair value (gains:
-318,569.02 -5,237,242.40
negative)
Finance costs (gains: negative) -429,484.32 -171,646.25
Investment losses (gains: negative) 17,449,121.42 5,122,111.50
Decreases in deferred tax assets (increase:
-153,080,744.31 -29,849,019.59
negative)
Increases in deferred tax liabilities (decrease:
-6,352,743.86 44,524,958.97
negative)
Decreases in inventories (increase: negative) -344,209,016.09 -553,051,541.47
Decreases in operating receivables (increase:
-111,211,423.56 -437,729,347.99
negative)
Increases in operating payables (decrease:
2,661,557,381.22 1,829,040,435.66
negative)
~ 118 ~
Other*1 -2,167,606,515.79
Net cash flows from operating activities 4,191,246,799.79 263,967,132.26
2. Significant investing and financing
activities without involvement of cash
receipts and payments
Conversion of debt into capital
Current portion of convertible corporate
bonds
Fixed assets acquired under finance leases
3. Net increase/decrease of cash and cash
equivalents:
Ending balance of cash 11,409,624,162.43 9,642,389,098.14
Less: Beginning balance of cash 6,057,550,178.60 5,636,903,693.74
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 5,352,073,983.83 4,005,485,404.40
*1: Refer to impact of restricted funds on net cash flow generated from operating activities of the reporting period.
(2) The components of cash and cash equivalents
Item Reporting Period Same period of last year
I. Cash 11,409,624,162.43 9,642,389,098.14
Including: Cash on hand 97,411.12 175,509.59
Bank deposit on demand 11,409,370,669.26 9,641,953,541.32
Other monetary assets on demand 156,082.05 260,047.23
II. Cash equivalents
Of which: Bond investments maturing within three months
III. Ending balance of cash and cash equivalents 11,409,624,162.43 9,642,389,098.14
Of which: cash and cash equivalents with restriction to use in the
subsidies of the Company as the parent or Group
5.54 Assets with Restricted Ownership or Right of Use
Item Ending carrying value Reason
Structured deposits which cannot be
withdrawn in advance, time deposits
Cash and cash equivalents 5,267,163,293.12
pledged for opening bank acceptance
bills and security deposit
~ 119 ~
Fixed assets 3,689,425.06 Mortgaged for guarantee loans
Intangible assets 2,740,344.98 Mortgaged for guarantee loans
Total 5,273,593,063.16 --
5.55 Government Grants
(1) Government grants related to assets
Item Recognized in current profit or loss or
Presented item
presented in as deduct of related cost
recorded to current
Item Amount the statement
Same period of last profit or loss or as
of financial Reporting Period
year deduct of related cost
position
Suizhou new plant infrastructure Deferred
34,964,052.94 373,947.06 0.00 Other income
subsidy income
Deferred
Refund for land payment 42,210,851.17 489,459.12 265,135.86 Other income
income
Funds for strategic emerging
Deferred
industry agglomeration 1,441,280.08 311,359.98 311,359.98 Other income
income
development base
Comprehensive subsidy fund for
Deferred
air pollution prevention and 1,937,922.27 147,182.40 145,928.39 Other income
income
control
Deferred
Equipment subsidy 1,119,571.85 160,133.94 119,531.68 Other income
income
Subsidy funds for strong
manufacturing province and Deferred
1,095,856.27 154,327.14 155,581.14 Other income
private economy development income
projects in 2019
Subsidy for the construction of
Deferred
independent innovation capacity 121,757.50 365,272.50 365,272.50 Other income
income
of Anhui Province
Subsidy for technical Deferred
648,148.12 111,111.12 111,111.12 Other income
transformation of No.2 boiler income
Deferred
Equipment subsidy 564,802.68 104,104.56 144,706.83 Other income
income
Optimization and reconstruction
Deferred
project of Gujing Zhangji liquor 716,458.53 23,749.98 23,749.98 Other income
income
store
Subsidy for key technology
Deferred
cooperation project of important 0.00 0.00 600,000.00 Other income
income
food isotope authenticity
~ 120 ~
Item Recognized in current profit or loss or
Presented item
presented in as deduct of related cost
recorded to current
Item Amount the statement
Same period of last profit or loss or as
of financial Reporting Period
year deduct of related cost
position
Subsidy for food safety Deferred
344,827.75 68,965.50 68,965.50 Other income
improvement project income
Anhui province development of Deferred
63,414.92 146,341.44 146,341.44 Other income
direct funds of service industry income
Specific funds for side Deferred
156,000.00 72,000.00 72,000.00 Other income
management of power demand income
Whole process online monitoring
Deferred
of hook and store automation and 31,250.00 46,875.32 46,875.00 Other income
income
product quality
Electric motor and boiler energy
Deferred
saving technology transformation 0.00 0.00 68,749.98 Other income
income
project
Wine production system technical Deferred
2,034,934.55 145,786.08 114,743.94 Other income
transformation income
Intelligent solid brewing Deferred
41,666.43 15,625.02 15,625.02 Other income
technology innovation project income
Specific fund for transformation Deferred
182,500.00 15,000.00 20,000.00 Other income
of gas-fired boilers income
Recognition awards for industrial
Deferred
enterprise technical 517,800.45 34,821.86 43,605.77 Other income
income
transformation investments
Governmant grants from
Deferred
Technology and Quality 112,079.26 10,274.26 Other income
income
Department
Provincial special Fund for
Deferred
high-quality development of 2,850,000.00 Other income
income
manufacturing industry
Deferred
Deep treatment project of VOCSc 782,592.39 267,407.61 Other income
income
Deferred
Liquor industry Internet Platform 7,000,000.00 Other income
income
Deferred
Project of Robot Development 434,846.36 15,153.64 Other income
income
~ 121 ~
Item Recognized in current profit or loss or
Presented item
presented in as deduct of related cost
recorded to current
Item Amount the statement
Same period of last profit or loss or as
of financial Reporting Period
year deduct of related cost
position
Upgrading project of intelligent Deferred
950,000.02 49,999.98 Other income
and automatic liquor production income
Total 100,322,613.54 -- 3,128,898.51 2,839,284.13 --
(2) Government grants related to income
Item presented Recognized in current profit or loss or Presented item
in the as deduct of related cost recorded to
Item Amount statement of current profit or
Same period of
financial Reporting Period loss or as deduct
last year
position of related cost
Tax refund 4,798,088.43 Other income 4,798,088.43 4,775,517.47 Other income
Rewards for supporting
high-quality
development of 720,000.00 Other income 720,000.00 Other income
intellectual property
rights
Subsidy for
7,437,183.00 Other income 7,437,183.00 Other income
commending industry
Municipal rewards and
subsidies for supporting
800,000.00 Other income 800,000.00 Other income
technological
innovation
Manufacturing Power
Province Subsidies for
Intelligent and 1,140,000.00 Other income 1,140,000.00 Other income
Automatic Liquor
Production
The third special fund
from Bureau for
Promoting Economy
and Technology of 558,760.00 Other income 558,760.00 Other income
High-tech Zone of
Xianning for carriers
with characteristics of
~ 122 ~
Item presented Recognized in current profit or loss or Presented item
in the as deduct of related cost recorded to
Item Amount statement of current profit or
Same period of
financial Reporting Period loss or as deduct
last year
position of related cost
innovation and
entrepreneurship
VAT add-on deduction 2,650,735.41 Other income 2,650,735.41 2,615,664.17 Other income
Others 4,975,415.80 Other income 4,975,415.80 4,019,147.05 Other income
Hubei University of
Science and
Other income 9,541,000.00 Other income
Technology
Industrialization Funds
Manufacturing Power
Province Construction
Fund and Digital Other income 1,000,000.00 Other income
Economy Development
Policy Incentives
2020 Provincial
Manufacturing
High-Quality
Other income 1,000,000.00 Other income
Development Projects
Special Fund of
Suizhou
Relocation Project Tax
Incentives of State
Treasury Section of
Other income 6,946,300.00 Other income
Finance Bureau of the
High-tech Industrial
Park of Suizhou
Wuhan Financial
Special Fund to Work Other income 664,500.00 Other income
for Training Subsidies
Financial Contribution
Other income 500,000.00 Other income
Progress Award
2021 Standardization
Incentives of Bozhou
Municipal Market Other income 400,000.00 Other income
Supervision and
Administration Bureau
~ 123 ~
Item presented Recognized in current profit or loss or Presented item
in the as deduct of related cost recorded to
Item Amount statement of current profit or
Same period of
financial Reporting Period loss or as deduct
last year
position of related cost
Wuhan 2021 Special
Funds for
Technological
Transformation of
Science and Other income 400,000.00 Other income
Technology and
Economic Information
Bureau of Hanyang
District
Other not related to Non operating Non operating
14,857.64
daily operation income income
Finance
Discounted loans 9,666.66 9,666.66 94,491.13 Finance expense
expense
Total 23,089,849.30 -- 23,089,849.30 31,971,477.46 --
6. Changes of Consolidation Scope
6.1 Changes in Combination Scope for Other Reasons
Compared with the previous period, the Company added subsidiaries Huanggang Junya Trading Co., Ltd. and
Anhui Anjie Technology Co., Ltd.
7. Equity in Other Entities
7.1 Equity in Subsidiaries
(1) Composition of corporate group
Main Holding percentage (%)
Registration Nature of
Name operating Way of gaining
place business Directly Indirectly
place
Anhui Commercial Investment
Bozhou Gujing Sales Co., Ltd. Anhui Bozhou 100.00
Bozhou trade establishment
Anhui Investment
Anhui Longrui Glass Co., Ltd Anhui Bozhou Manufacture 100.00
Bozhou establishment
Anhui Jiuan Mechanical Electrical Anhui Equipment Investment
Anhui Bozhou 100.00
Equipment Co., Ltd. Bozhou manufacturing establishment
~ 124 ~
Main Holding percentage (%)
Registration Nature of
Name operating Way of gaining
place business Directly Indirectly
place
Anhui Jinyunlai Culture & Media Advertisement Investment
Anhui Hefei Anhui Hefei 100.00
Co., Ltd. marketing establishment
Anhui Ruisiweier Technology Co., Anhui Technical Investment
Anhui Bozhou 100.00
Ltd. Bozhou research establishment
Shanghai Gujing Jinhao Hotel Business
Management Co., Ltd. Hotel combination
Shanghai Shanghai 100.00
management under common
control
Bozhou Gujing Hotel Co., Ltd Business
Anhui combination
Anhui Bozhou Hotel operating 100.00
Bozhou under common
control
Anhui Yuanqing Environmental Anhui Sewage Investment
Anhui Bozhou 100.00
Protection Co., Ltd. Bozhou treatment establishment
Anhui Gujing Yunshang Electronic Investment
Anhui Hefei Anhui Hefei 100.00
E-commerce Co., Ltd commerce establishment
Anhui RunAnXinKe Testing Anhui Investment
Anhui Bozhou Food testing 100.00
Technology Co., Ltd. Bozhou establishment
Anhui Technology Investment
Anhui Anjie Technology Co., Ltd. Anhui Bozhou 70.00
Bozhou research establishment
Anhui Jiudao Culture Media Co., Advertisement Investment
Anhui Hefei Anhui Hefei 100.00
Ltd. marketing establishment
Business
Yellow Crane Tower Distillery Co., combination not
Hubei Wuhan Hubei Wuhan Manufacture 51.00
under common
Ltd.
control
Business
Yellow Crane Tower Distillery Hubei Hubei combination not
Manufacture 51.00
(Xianning) Co., Ltd. Xianning Xianning under common
control
Business
Yellow Crane Tower Distillery Hubei Hubei combination not
Manufacture 51.00
(Suizhou) Co., Ltd. Suizhou Suizhou under common
control
Business
Hubei Junlou Cultural Tourism Co., Hubei Hubei Advertising
51.00 combination not
Ltd. Wuhan Wuhan marketing
under common
~ 125 ~
Main Holding percentage (%)
Registration Nature of
Name operating Way of gaining
place business Directly Indirectly
place
control
Hubei Yellow Crane Tower Beverage Hubei Hubei Investment
Manufacture 51.00
Co., Ltd Xianning Xianning establishment
Wuhan Yashibo Technology Co., Technology Investment
Hubei Wuhan Hubei Wuhan 51.00
Ltd. development establishment
Hubei Xinjia Testing Technology Hubei Hubei Investment
Food testing 51.00
Co., Ltd. Xianning Xianning establishment
Business
Wuhan Tianlong Jindi Technology Commercial combination not
Hubei Wuhan Hubei Wuhan 51.00
Development Co., Ltd trade under common
control
Business
Hubei Hubei Commercial combination not
Xianning Junhe Sales Co., Ltd 51.00
Xianning Xianning trade under common
control
Commercial Investment
Wuhan Junya Sales Co., Ltd Hubei Wuhan Hubei Wuhan 51.00
trade establishment
Hubei Hubei Commercial Investment
Suizhou Junhe Commercial Co., Ltd. 51.00
Suizhou Suizhou trade establishment
Huanggang Huanggang Commercial Investment
Huanggang Junya Trading Co., Ltd. 51.00
Hubei Hubei trade establishment
Business
Anhui Mingguang Distillery Co., Anhui Anhui combination not
Manufacture 60.00
Ltd. Chuzhou Mingguang under common
control
Business
Mingguang Tiancheng Ming Wine Anhui Anhui Commercial combination not
60.00
Sales Co., Ltd. Chuzhou Mingguang trade under common
control
Business
Fengyang Xiaogang Village Ming Anhui Anhui combination not
Manufacture 42.00
Wine Distillery Co., Ltd. Chuzhou Chuzhou under common
control
Anhui Jiuhao China Railway Anhui 52.00 Investment
Anhui Bozhou Construction
Construction Engineering Co., Ltd. Bozhou establishment
Anhui Zhenrui Construction Anhui 52.00 Investment
Anhui Bozhou Construction
Engineering Co., Ltd Bozhou establishment
~ 126 ~
Main Holding percentage (%)
Registration Nature of
Name operating Way of gaining
place business Directly Indirectly
place
Business
Renhuai Maotai Town Zhencang Renhuai Renhuai combination not
Manufacture 60.00
Winery Industry Co., Ltd. Guizhou Guizhou under common
control
(2) Significant non-wholly owned subsidiaries
Shareholding
The profit or loss Declaring dividends Balance of
proportion of
Name attributable to the distributed to non-controlling interests
non-controlling
non-controlling interests non-controlling interests at the period-end
interests
Yellow Crane Tower 50,060,747.14 0.00 536,571,863.08
49.00
Distillery Co., Ltd.
(3) Main financial information of significant non-wholly owned subsidiaries
Ending balance
Name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liability
Yellow Crane
Tower Distillery 1,037,357,103.48 1,085,933,308.23 2,123,290,411.71 795,415,410.06 232,830,383.12 1,028,245,793.18
Co., Ltd.
(Continued)
Beginning balance
Name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liability
Yellow Crane Tower
1,106,087,761.34 1,004,277,608.57 2,110,365,369.91 792,402,887.81 324,643,456.05 1,117,046,343.86
Distillery Co., Ltd.
(Continued)
Reporting Period
Name Total comprehensive Cash flows from operating
Operating revenue Net profit
income activities
Yellow Crane Tower Distillery 886,104,927.21 102,164,790.08 101,725,592.48 -32,042,974.64
Co., Ltd.
(Continued)
Name Same period of last year
~ 127 ~
Total comprehensive Cash flows from
Operating revenue Net profit
income operating activities
Yellow Crane Tower Distillery
690,959,858.06 90,586,663.75 90,586,663.75 196,719,144.40
Co., Ltd.
7.2 Equity in joint ventures or associated enterprises
There was no significant joint venture or associated enterprise.
8. The Risk Related to Financial Instruments
Risks related to the financial instruments of the Company arise from the recognition of various financial assets
and financial liabilities during its operation, including credit risk, liquidity risk and market risk.
Management of the Company is responsible for determining risk management objectives and policies related to
financial instruments. Operational management is responsible for the daily risk management through functional
departments. Internal audit department is responsible for the daily supervision of implementation of the risk
management policies and procedures, and report their findings to the audit committee in a timely manner.
Overall risk management objective of the Company is to establish risk management policies to minimize the risks
without unduly affecting the competitiveness and resilience of the Company.
8.1 Credit Risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the other party of the
financial instrument fails to fulfill its obligation. The credit risk of the Company is related to cash and equivalent,
notes receivable, accounts receivables, other receivables, and long-term receivables. Credit risk of these financial
assets is derived from the counterparty’s breach of contract. The maximum risk exposure is equal to the carrying
amount of these financial instruments.
Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited in such financial
institutions as commercial bank, of which the Company thinks with higher reputation and financial position.
Notes receivable held by the Company are mainly bank acceptance bills, which have strong liquidity. The
Company has formulated corresponding bill management and control procedures and has been effectively
implemented, which greatly ensures the safety of bill storage and use to ensure the low credit risks. The Company
only conducts business with customers with good credit rating, and will continue to monitor the balance of
accounts receivable to ensure that the Company avoids the risk of major bad debt losses. The company's largest
credit risk exposure is the book value of each financial asset (including derivative financial instruments) in the
balance sheet, and the overall credit risk evaluation is low.
~ 128 ~
8.2 Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering cash or
other financial assets. The Company is responsible for the capital management of all of its subsidiaries, including
short-term investment of cash surplus and dealing with forecasted cash demand by raising loans. The Company’s
policy is to monitor the demand for short-term and long-term floating capital and whether the requirement of loan
contracts is satisfied so as to ensure to maintain adequate cash and cash equivalents.
8.3 Market Risk
The market risk of financial instruments refers to the risk that the fair value or future cash flows of financial
instruments will fluctuate due to changes in market prices. Market risks mainly include foreign exchange risk and
interest rate risk.
(1) Foreign currency risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The core business of
the Company is on the mainland of China and trading with CNY. Foreign exchange risk is minimal.
(2) Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows will fluctuate due
to changes in market interest rates. The Company's interest rate risk mainly comes from long-term and short-term
bank borrowings. As of 30 June 2022, the Company has no liabilities calculated with floating interest rates.
(3) Other price risk
The Held-for-trading financial assets of the Company are measured by fair value. As a result of that, the Company
bears the risk of the change of security market. To decrease the risk, the management decided that the Company
held a combination of several equities and securities.
9. The Disclosure of Fair Value
The inputs used in the fair value measurement in its entirety are to be classified in the level of the hierarchy in
which the lowest level input that is significant to the measurement is classified:
Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either directly or
indirectly observable.
Level 3: Inputs are unobservable inputs for the assets or liabilities
9.1. Assets and liabilities measured at fair value on 30 June 2022
~ 129 ~
Fair value on 30 June 2022
Item
Level 1 Level 2 Level 3 Total
Recurring fair value measurements
(a) Held-for-trading financial assets
203,857,213.38 203,857,213.38
(i) Financial assets at fair value through
203,857,213.38 203,857,213.38
profit or loss
Debt instruments
-
Bank financial products -
Fund investment 203,857,213.38 203,857,213.38
(ii) Financial assets measured at fair
56,568,724.15 693,605,704.99 750,174,429.14
value through other comprehensive
income
Accounts receivable financing
693,605,704.99 693,605,704.99
Investments in other equity instrument 56,568,724.15 56,568,724.15
Total assets measured at fair value on a 260,425,937.53 693,605,704.99 954,031,642.52
recurring basis
The fair value of financial instruments traded in an active market is based on quoted market prices at the reporting
date. The fair value of financial instruments not traded in an active market is determined by using valuation
techniques. Specific valuation techniques used to value the above financial instruments include discounted cash
flow and market approach to comparable company model. Inputs in the valuation technique include risk-free
interest rates, benchmark interest rates, exchange rates, credit spreads, liquidity premiums, discount for lack of
liquidity.
9.2 Valuation Technique(s), Qualitative and Quantitative Information about the Significant Inputs Used for
Fair Value Measurement in Level 2 on a Recurring or Nonrecurring Basis
The items of fair value measurement in Level 2 of the Company are mainly about fund investments and other
equity instrument investments. For fund investment, the Company shall determine the gains or losses arising from
changes in fair value and the value of held-for-trading financial assets according to the valuation table of securities
investment fund provided by the asset management company. For other equity instrument investments, the
Company shall determine the fair value thereof according to the carrying net assets provided by investees.
9.3 Valuation Technique(s), Qualitative and Quantitative Information about the Significant Inputs Used for
Fair Value Measurement in Level 3 on a Recurring or Nonrecurring Basis
The items of fair value measurement in Level 3 of the Company are mainly about received bank acceptance bills
~ 130 ~
with high credit rating. We shall account the recoverable amount thereof according to the prevailing discounting
rate on the balance sheet date and determine the fair value thereof.
10. Related Party and Related-party Transactions
Recognition of related parties: The Company has control or joint control of, or exercise significant influence over
another party; or the Company is controlled or jointly controlled, or significant influenced by another party.
10.1 General Information of the Parent Company
Proportion of
Proportion of share
voting rights
held by the
Registration owned by the
Name Nature of business Registered capital Company as the
place Company as the
parent against the
parent against the
Company (%)
Company (%)
Beverages, construction
Anhui Gujing Group Anhui
materials, manufacturing 1,000,000,000.00 51.34 51.34
Co., Ltd.
Bozhou
plastic production
The ultimate controller of the Company: The ultimate controller is State-owned Assets Supervision and
Administration Commission of the Government of Bozhou City, Anhui Province.
10.2 General Information of Subsidiaries
Refer to Note 7.1 Equity in joint ventures or associated enterprises for details.
10.3 Joint ventures and associated enterprises of the Company
(1) General information of significant joint ventures and associates
Refer to Note 7.2 Equity in joint ventures or associated enterprises for details.
10.4 Other Related Parties of the Company
Name Relationship with the Company
An affiliate of the actual controller and controlling
Anhui Haochidian Catering Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Ruijing Business Travel (Group) Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Bozhou Hotel Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Dongfang Ruijing Business Investment Development Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Hengxin Pawn Co., Ltd.
shareholder
Hefei Gujing Holiday Hotel Co., Ltd. An affiliate of the actual controller and controlling
~ 131 ~
shareholder
An affiliate of the actual controller and controlling
Anhui Gujing Hotel Development Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Ruixin Pawn Co. Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Zhongxin Finance Leasing Co. Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Huixin Finance Investment Group Co., Ltd
shareholder
An affiliate of the actual controller and controlling
Hefei Longxin Business Management Consulting Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Bozhou Anxin Micro Finance Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Youxin Financing Guarantee Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Gujing Huishenglou Catering Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Gujing Health Industry Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Lejiu Home Tourism Management Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Shenglong Commercial Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Gujing International Development Co., Ltd.
shareholder
An affiliate of the actual controller and controlling
Anhui Jiuan Engineering Management Consulting Co., Ltd.
shareholder
Enterprise controlled by Zhang Guiping, who is an
Nanjing Suning Real Estate Development Co., Ltd.
independent director of the Company
10.5 Related Party Transactions
(1) Purchases or sales of goods, rendering or receiving of services
Purchases of goods, receiving of services:
Reporting Same period of last
Related party Content
Period year
Catering and accommodation
Anhui Gujing Hotel Development Co., Ltd. 93,310.05 526,809.78
service
Anhui Haochidian Catering Co., Ltd. Purchase of materials 0.00 13,998,153.74
Anhui Haochidian Catering Co., Ltd. Purchase of assets 0.00 135,398.23
Catering and accommodation
Anhui Haochidian Catering Co., Ltd. 1,507,790.81 1,524,737.60
service
Anhui Jiuan Engineering Management Consulting Consultation and assurance 4,012,244.33 1,762,765.33
~ 132 ~
Reporting Same period of last
Related party Content
Period year
Co., Ltd.
Catering and accommodation
Anhui Ruijing Business Travel (Group) Co., Ltd. 138,089.91 251,426.22
service
Anhui Ruijing Business Travel (Group) Co., Ltd. Purchase of materials 101,061.95 46,390.00
Catering and accommodation
Bozhou Hotel Co., Ltd. 298,619.87 2,767,466.43
service
Catering and accommodation
Bozhou Gujing Huishenglou Catering Co., Ltd. 54,578.00 1,016,638.00
service
Hefei Gujing Holiday Hotel Co., Ltd. Purchase of materials 288,237.40 511,520.21
Catering and accommodation
Hefei Gujing Holiday Hotel Co., Ltd. 33,214.85 79,499.36
service
Total -- 6,527,147.17 22,620,804.90
Sales of goods and rendering of services:
Related party Content Reporting Period Same period of last year
Catering and
Anhui Gujing Group Co., Ltd. accommodation 66,730.00 64,573.00
service
Sales of small
Anhui Gujing Group Co., Ltd. 17,907.56 17,892.09
materials
Anhui Gujing Health Industry Co., Ltd. Sales of liquor 0.00 -690,974.69
Anhui Gujing Hotel Development Co., Ltd. Sales of liquor 0.00 104,830.09
Anhui Gujing Hotel Development Co., Ltd. Utilities 67,699.91 117,827.75
Anhui Haochidian Catering Co., Ltd. Sales of liquor 0.00 19,115.04
Anhui Hengxin Pawn Co., Ltd. Sales of liquor 15,440.71 5,925.67
Anhui Huixin Finance Investment Group Co., Ltd Sales of liquor 42,022.13 20,692.03
Catering and
Anhui Jiuan Engineering Management Consulting Co., Ltd. accommodation 7,190.00 630.00
service
Anhui Jiuan Engineering Management Consulting Co., Ltd. Sales of liquor 60,220.35 3,568.14
Anhui Lejiu Home Tourism Management Co., Ltd. Utilities 3,404.52 3,433.85
Anhui Lejiu Home Tourism Management Co., Ltd. Sales of liquor 11,155.76 4,890.26
Catering and
Anhui Ruijing Business Travel (Group) Co., Ltd. accommodation 7,061.78 38,145.75
service
Anhui Ruijing Business Travel (Group) Co., Ltd. Sales of liquor 0.00 587,517.41
Anhui Ruixin Pawn Co. Ltd. Sales of liquor 7,720.35 3,703.54
~ 133 ~
Related party Content Reporting Period Same period of last year
Catering and
Anhui Shenglong Commercial Co., Ltd. accommodation 1,940.00 2,470.00
service
Anhui Shenglong Commercial Co., Ltd. Sales of liquor 1,243,492.90 624,187.6
Anhui Youxin Financing Guarantee Co., Ltd. Sales of liquor 3,010.63 1,712.39
Anhui Zhongxin Finance Leasing Co. Ltd. Sales of liquor 9,650.45 8,147.79
Bozhou Anxin Micro Finance Co., Ltd. Sales of liquor 40,457.53 7,407.08
Bozhou Hotel Co., Ltd. Sales of liquor 0.00 32,973.46
Bozhou Gujing Huishenglou Catering Co., Ltd. Sales of liquor 0.00 30,106.20
Hefei Gujing Holiday Hotel Co., Ltd. Sales of liquor 0.00 44,442.47
Hefei Longxin Business Management Consulting Co., Ltd Sales of liquor 1,930.09 509.73
Anhui Gujing Hotel Development Co., Ltd. Catering and
accommodation 14,266.98 0.00
service
Dongfang Ruijing Business Investment Development Co., Ltd. Catering and
accommodation 82,528.93 0.00
service
Total -- 1,703,830.58 1,053,726.65
(2) Related-party leases
The Company as lessor:
Category of leased The lease income confirmed in The lease income confirmed in
Name of lessee
assets the Reporting Period the same period of last year
Anhui Gujing Hotel Development Co., Ltd. Houses and buildings 420,957.38 543,941.93
Total -- 420,957.38 543,941.93
The Company as lessee:
Category of leased The lease fee confirmed in the The lease fee confirmed in
Name of lessor
assets Reporting Period the same period of last year
Anhui Gujing Group Co., Ltd. Houses and buildings 523,451.01 594,333.78
Nanjing Suning Real Estate Development Co., Ltd. Houses and buildings 1,050,000.00 1,290,102.21
Total -- 1,573,451.01 1,884,435.99
10.6 Receivables and Payables with Related Parties
(1) Payables
Item Related party Ending balance Beginning balance
Contract Anhui Gujing Health Industry Co., Ltd. 0.00 617,959.73
~ 134 ~
Item Related party Ending balance Beginning balance
liabilities
Contract 221.13
Anhui Ruijing Business Travel (Group) Co., Ltd. 92.04
liabilities
Contract 58,849.56
Anhui Gujing International Development Co., Ltd. 164,675.75
liabilities
Other payables Anhui Gujing Group Co., Ltd. 90,517.88 0.00
Other payables Anhui Ruijing Business Travel (Group) Co., Ltd. 115,533.60 115,533.60
Other payables Anhui Gujing Hotel Development Co., Ltd. 100,000.00 50,000.00
Other payables Bozhou Gujing Huishenglou Catering Co., Ltd. 79,712.00 0.00
11. Commitments and Contingency
11.1 Significant Commitments
As of 30 June 2022, the Company has no significant commitments need to be disclosed.
11.2 Contingencies
As of 30 June 2022, The Company has no contingencies need to be disclosed.
12. Events after Balance Sheet Date
As 30 June 2022, except as aforesaid, the Company has no other events after balance sheet date need to be
disclosed.
13. Other Significant Events
The Company did not determine the operating segment in accordance with the internal organizational structure,
management requirements, and internal reporting system, so there was no need to disclose segment information
report based on the operating segments.
14. Notes of Main Items in the Financial Statements of the Company as the Parent
14.1 Other Receivables
(1) Listed by category
Item Ending balance Beginning balance
Other receivables 264,237,544.48 290,480,736.49
Total 264,237,544.48 290,480,736.49
(2) Other receivables
①Disclosure by aging
Aging Ending balance Beginning balance
~ 135 ~
Aging Ending balance Beginning balance
Within one year 263,942,601.97 289,632,069.08
Of which:1-6 months 262,565,669.48 289,213,314.37
7-12 months 1,376,932.49 418,754.71
1-2 years 743,888.35 763,921.03
2-3 years 167,431.14 797,227.20
Over 3 years 39,645,419.08 39,383,584.88
Subtotal 304,499,340.54 330,576,802.19
Less: Bad debt provision 40,261,796.06 40,096,065.70
Total 264,237,544.48 290,480,736.49
②Disclosure by nature
Nature Ending balance Beginning balance
Related parties within the scope of consolidation 223,623,075.63 267,559,576.83
Security investment 38,469,339.88 38,857,584.88
Security deposit and guarantee 2,227,658.09 3,330,794.09
Rent, water, electricity and gas 652,653.00 472,547.89
Other 39,526,613.94 20,356,298.50
Total 304,499,340.54 330,576,802.19
③Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2022, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
266,030,000.66 1,792,456.18 264,237,544.48
Stage 1
Stage 2
38,469,339.88 38,469,339.88
Stage 3
304,499,340.54 40,261,796.06 264,237,544.48
Total
A1. As of 30 June 2022, bad debt provision at stage 1:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn 266,030,000.66 0.67 1,792,456.18 264,237,544.48
~ 136 ~
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
by group-
Of which: Group 1 223,623,075.63 223,623,075.63
Group 2 42,406,925.03 4.23 1,792,456.18 40,614,468.85
Total 266,030,000.66 0.67 1,792,456.18 264,237,544.48
On 30 June 2022, other receivables with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 40,319,526.34 458,272.57 1.14
Of which:1-6 months 38,942,593.85 389,425.94 1.00
7-12 months 1,376,932.49 68,846.63 5.00
1-2 years 743,888.35 74,388.84 10.00
2-3 years 167,431.14 83,715.57 50.00
Over 3 years 1,176,079.20 1,176,079.20 100.00
Total 42,406,925.03 1,792,456.18 4.23
A2. As of 30 June 2022, bad debt provision at stage 3:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn 38,469,339.88 100.00 38,469,339.88
separately
Bad debt provision withdrawn
by group
Of which: Group 1
Group 2
Total 38,469,339.88 100.00 38,469,339.88 -
On 30 June 2022, other receivables with bad debt provision withdrawn separately:
Ending balance
Withdrawal
Name
Carrying amount Bad debt provision proportion Withdrawal reason
(%)
~ 137 ~
Ending balance
Withdrawal
Name
Carrying amount Bad debt provision proportion Withdrawal reason
(%)
28,733,899.24 28,733,899.24 100.00 The enterprise has gone bankrupt
Hengxin Securities Co., Ltd.
and liquidated
9,735,440.64 9,735,440.64 100.00 The enterprise has gone bankrupt
Jianqiao Securities Co., Ltd.
and liquidated
Total 38,469,339.88 38,469,339.88 100.00 --
B. As of 31 December 2021, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 291,719,217.31 1,238,480.82 290,480,736.49
Stage 2
Stage 3 38,857,584.88 38,857,584.88 0.00
Total 330,576,802.19 40,096,065.70 290,480,736.49
B1. On 31 December 2021, bad debt provision at stage 1:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
291,719,217.31 0.42 1,238,480.82 290,480,736.49
by group
Of which: Group 1 267,559,576.83 0.00 0.00 267,559,576.83
Group 2 24,159,640.48 5.13 1,238,480.82 22,921,159.66
Total 291,719,217.31 0.42 1,238,480.82 290,480,736.49
On 31 December 2021, other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 22,072,492.25 237,475.12 1.08
Of which:1-6 months 21,653,737.54 216,537.38 1.00
7-12 months 418,754.71 20,937.74 5.00
~ 138 ~
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
1-2 years 763,921.03 76,392.10 10.00
2-3 years 797,227.20 398,613.60 50.00
Over 3 years 526,000.00 526,000.00 100.00
Total 24,159,640.48 1,238,480.82 5.13
B2. As of 31 December 2021, bad debt provision at stage 3:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
38,857,584.88 100.00 38,857,584.88 0.00
separately
Bad debt provision withdrawn
by group
Of which: Group 1
Group 2
Total 38,857,584.88 100.00 38,857,584.88 0.00
On 31 December 2021, other receivables with bad debt provision withdrawn separately:
Beginning balance
Withdrawal
Name
Carrying amount Bad debt provision proportion Withdrawal reason
(%)
Hengxin Securities Co., Ltd. The enterprise has gone bankrupt
28,966,894.41 28,966,894.41 100.00
and liquidated
Jianqiao Securities Co., Ltd. 100.00 The enterprise has gone bankrupt
9,890,690.47 9,890,690.47
and liquidated
Total 38,857,584.88 38,857,584.88 100.00 --
④Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Category Beginning balance Reversal or Ending balance
Withdrawal Write-off
recovery
Bad debt provision withdrawn 38,857,584.88 0.00 388,245.00 38,469,339.88
separately
Bad debt provision withdrawn by 1,238,480.82 553,975.36 0.00 1,792,456.18
~ 139 ~
Changes in the Reporting Period
Category Beginning balance Reversal or Ending balance
Withdrawal Write-off
recovery
group
Total 40,096,065.70 553,975.36 388,245.00 40,261,796.06
⑤ On 30 June 2022, top five ending balance by entity
Proportion of
the balance to
Bad debt
No. Nature Ending balance Aging the total other
provision
receivables
(%)
Current accounts within the
No. 1 90,000,000.00 1-2 years 29.56 0.00
scope of consolidation
Current accounts within the
No. 2 81,471,561.36 Within 6 months 26.76 0.00
scope of consolidation
Current accounts within the
No. 3 51,207,352.12 Within 6 months 16.82 0.00
scope of consolidation
No. 4 Other 37,240,944.00 Within 6 months 12.23 372,409.44
No. 5 Securities Investment 28,733,899.24 Over 3 years 9.44 28,733,899.24
Total -- 288,653,756.72 94.81 29,106,308.68
14.2 Long-term Equity Investments
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment in
1,547,415,641.38 1,547,415,641.38 1,547,415,641.38 1,547,415,641.38
subsidiaries
Investment in
3,900,000.00 3,900,000.00 0.00 0.00
associates
Total 1,551,315,641.38 1,551,315,641.38 1,547,415,641.38 1,547,415,641.38
(1) Investments in subsidiaries
Impairmen
Increase Decrease
t provision Provision for
Beginning during the during the
Investees Ending balance during the impairment at 30
balance Reporting Reporting
Reporting June 2022
Period Period
Period
~ 140 ~
Impairmen
Increase Decrease
t provision Provision for
Beginning during the during the
Investees Ending balance during the impairment at 30
balance Reporting Reporting
Reporting June 2022
Period Period
Period
Bozhou Gujing Sales Co.,
68,949,286.89 68,949,286.89
Ltd.
Anhui Longrui Glass Co.,
85,267,453.06 85,267,453.06
Ltd.
Shanghai Gujing Jinhao Hotel
49,906,854.63 49,906,854.63
Management Co., Ltd.
BozhouGujing Hotel Co.,
648,646.80 648,646.80
Ltd.
Anhui Ruisiweier Technology
40,000,000.00 40,000,000.00
Co., Ltd.
Anhui Yuanqing
Environmental Protection 16,000,000.00 16,000,000.00
Co., Ltd.
Anhui Gujing Yunshang
5,000,000.00 5,000,000.00
E-commerce Co., Ltd.
Yellow Crane Tower
816,000,000.00 816,000,000.00
Distillery Co., Ltd.
Anhui Jinyunnlai Cultural
15,000,000.00 15,000,000.00
Media Co., Ltd.
Anhui RunanXinke Testing
10,000,000.00 10,000,000.00
Technology Co., Ltd.
Anhui Jiuan Mechanical
Electrical Equipment Co., 10,000,000.00 10,000,000.00
Ltd.
Anhui Mingguang Distillery
200,200,000.00 200,200,000.00
Co., Ltd.
Renhuai Maotai Town
Zhencang Winery Industry 224,723,400.00 224,723,400.00
Co., Ltd.
~ 141 ~
Impairmen
Increase Decrease
t provision Provision for
Beginning during the during the
Investees Ending balance during the impairment at 30
balance Reporting Reporting
Reporting June 2022
Period Period
Period
Anhui Jiuhao China Railway
Construction Engineering 5,720,000.00 5,720,000.00
Co., Ltd.
Total 1,547,415,641.38 1,547,415,641.38
（2）Investment in associates and joint ventures
Increase / decrease in the current period
Investm Ending
Beginni ent
Declarat balance
ng make an profit Other Other Ending
ion of Provisio of
balance additiona Reduce and loss comprehen equit balance
Investor cash n for Oth impairm
（Carry l investm recogni sive y （Carryi
dividen impairm er ent
ing investme ent zed income chang ng value）
ds or ent provisio
value） nt under adjustment es
profits n
equity
method
一、Joint venture
二、Consortium
Anhui
Xunfei
Jiuzhi 3,900,00 3,900,00
0.00 0.00
Technol 0.00 0.00
ogy Co.,
Ltd
3,900,00 3,900,00
Subtotal 0.00 0.00
0.00 0.00
3,900,00 3,900,00
Total 0.00 0.00
0.00 0.00
14.3 Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 4,421,424,122.12 1,580,664,788.57 3,545,448,721.46 1,360,995,592.21
Other operations 51,432,771.67 32,535,174.94 50,784,414.00 27,316,859.36
Total 4,472,856,893.79 1,613,199,963.51 3,596,233,135.46 1,388,312,451.57
14.4 Investment Income
Item Reporting Period Same period of last year
Investment income from long-term equity investments under cost 2,228,838.58
~ 142 ~
Item Reporting Period Same period of last year
method
Gains on disposal of financial assets at fair value through other
-17,533,328.20 -6,415,106.49
comprehensive income
Investment income from trading financial assets during the holding
1,625.42
period
Other investment income 103,208.20 411,771.02
Total -17,430,120.00 -3,772,871.47
15. Supplementary Materials
15.1 Items and Amounts of Non-recurring Profit or Loss
Unit: RMB
Item Amount Note
Gains/losses on the disposal of non-current
43,811.51
assets
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 26,209,081.15
certain quotas or amounts according to the
government’s unified standards
Gain/loss from change of fair value of
trading financial assets and liabilities, and
investment gains from disposal of trading
financial assets and liabilities as well as 1,379,726.30
available-for-sale financial assets, other than
valid hedging related to the Company’s
common businesses
Depreciation reserves returns of receivables
388,245.00
with separate depreciation test
Other non-operating income and expense
16,785,314.41
other than the above
Other gains and losses that meet definition of
exceptional gains and losses
Less: Income tax effects 10,758,647.04
Non-controlling interests effects 4,253,078.64
Total 29,794,452.69 --
15.2 Return on Net Assets and Earnings Per Share
Profit as of Reporting Period Weighted average ROE EPS (Yuan/share)
~ 143 ~
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
10.97 3.63 3.63
Company
Net profit attributable to ordinary shareholders of the
Company after deduction of non-recurring profit and 10.80 3.57 3.57
loss
15.3 Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and
Chinese Accounting Standards
□ Applicable Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and Chinese
Accounting Standards
□ Applicable Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting
Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing Agent,
Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
15.4 Other
Chairman of the Board: (Liang Jinhui)
Anhui Gujing Distillery Company Limited
30 August 2022
~ 144 ~
