YANTAI CHANGYU PIONEER WINE
COMPANY LIMITED
2012 Semi-annual Report
2012.08.07
1
Contents
Ⅰ IMPORTANT……………………………………………………………………………… 3
Ⅱ THE BASIC INFORMATION OF THE COMPANY……………………….………………. 4
SUMMARY OF MAIN ACCOUNTING DATA AND FINANCIAL INDEX……
Ⅲ 5
Ⅳ CHANGES IN SHARE CAPITAL AND SUBSTANTIAL SHAREHOLDERS…. 7
Ⅴ INFORMATION OF THE DIRECTORS, SUPERVISORS AND SENIOR
MANAGEMENT TEAM …………………………………….……………….. ………… 12
Ⅵ THE BOARD OF DIRECTORS’ REPORT….………………………………………. 15
Ⅶ MATERIAL EVENTS……………………………..…………………………………….. 21
Ⅷ FINANCIAL REPORT………………………………………………………………….. 30
Ⅸ CATALOGUE OF DUCUMENTS FOR FUTURE REFERENCE…………………… 127
2
I. IMPORTANT
The Board of Directors, board of Supervisors, senior managers of the Company
collectively and individually accept full responsibility for the truthfulness,
accuracy and completeness of the information contained in this report and
confirm that to the best of their knowledge and belief there are no other facts
the omission of which would make any statement herein misleading.
No directors, supervisors or senior managers have any dissidence to this report.
All the directors of the company have personally attended the Board of
Directors’ meeting for this report.
Audit opinion: The 2012 Semi-annual Financial Report has not been audited.
The chairman of the Board of Directors Mr. Sun Liqiang, the chief accountant Mr.
Leng Bin and the chief of accounting department Mr. Jiang Jianxun assure the
truth and integrity of the financial and accounting statement in this report.
3
II. THE BASIC INFORMATION OF THE COMPANY
1. The Information of the Company
Code Number of A Shares 000869 Code Number of B Shares 200869
Abbreviation of A Shares Changyu A Abbreviation of B Shares Changyu B
Place of listing of the Shares Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Legal Name in Chinese 张裕
Legal Name in English Yantai Changyu Pioneer Wine Company Limited
Abbreviation of Legal Name in English Changyu
Legal Representative Sun Liqiang
Registered Address: 56, Dama Road, Yantai City, Shandong Province
Postal Code for Registered Address 264000
Office Address: 56, Dama Road, Yantai City, Shandong Province
Postal Code for Office Address 264000
Web Site: http://www.changyu.com.cn
E-Mail: webmaster@changyu.com.cn
2. Contact Person and Contact Information
Secretary to the Board of Directors Authorized Representative of the
Securities Affairs
Name Qu Weimin Li Tingguo
Contact Address 56, Dama Road, Yantai City, Shandong 56, Dama Road, Yantai City, Shandong
Province Province
Telephone 0086-535-6633658 0086-535-6633656
Fax 0086-535-6633639 0086-535-6633639
E-Mail quwm@changyu.com.cn stock@changyu.com.cn
3. Information Disclosure and Place to Keep the Reports
The newspapers to disclose the “China Securities News”, “Securities Times” in the PRC and “Hong
Company’s information Kong Commercial Daily” outside the PRC
Web site assigned by CSRC for carrying http://www.cninfo.com.cn
this report
Semi-Annual Report kept at Secretary department to the Board of Directors
4
III. SUMMARY OF MAIN ACCOUNTING DATA AND FINANCIAL INDEX
1. Main Accounting Data and Financial Index
The financial statements in previous report periods were retroactively adjusted or not.
□yes (√) no
Main Accounting Data
During the Report
Same period of last More or less
Main accounting data period (Jan. to June,
year (%)
2012)
Total business income（CNY） 3,012,584,089 3,090,021,567 -2.51%
Operating profit (CNY) 1,220,788,315 1,159,441,095 5.29%
Total profit (CNY) 1,227,288,966 1,162,514,940 5.57%
Net profit attributed to shareholders of listing company
921,143,478 876,955,116 5.04%
(CNY)
Net profit attributed to shareholders of listing company after
916,058,717 874,766,673 4.72%
deducting irregular profit and loss (CNY)
Net cash flow from operating activities（CNY） 584,471,340 1,018,887,265 -42.64%
At end of the report At end of the last More or less
period report period (%)
Total assets (CNY) 6,994,396,317 7,295,944,221 -4.13%
Owner’s equity attributed to
5,133,319,539 5,013,641,661 2.39%
shareholders of listing company（CNY）
Share capital (share) 685,464,000 527,280,000 30.00%
Main Financial Index
During the Report
Same period of last More or less
Main financial index period (Jan. to June,
year (%)
2012)
Basic earnings per share(CNY/share) 1.34 1.66 -19.28%
Diluted earnings per share (CNY/share) 1.34 1.66 -19.28%
Basic earnings per share after deducting irregular profit and
1.34 1.66 -19.45%
loss (CNY/share)
Fully diluted rate of net assets return (%) 17.94% 17.49% 0.45%
Weighted average rate of net assets return (%) 16.83% 21.21% -4.38%
Fully diluted rate of net assets return after deducting irregular
17.85% 17.45% 0.40%
profit and loss (%)
Weighted average rate of net assets return after deducting
16.73% 21.16% -4.43%
irregular profit and loss (%)
Net cash flow per share from operating activities(CNY/share) 0.85 1.93 -55.96%
At end of the report At end of the last More or less
period report period (%)
Net assets per share attributed to shareholders of listing
7.49 9.51 -21.24%
company（CNY/share）
Asset-liability ratio 26.61% 31.28% -4.67%
The explanation on the Company’s previous main accounting data and financial index at end of the
report period (please explain for any retroactive adjustment): No
5
2. The Difference on Accounting Data according to PRC and Foreign Accounting Standards
(1) Differences on net profit and net assets in financial report disclosed in light of the PRC
accounting standards and the international accounting standards
□applicable (√) not applicable
(2) Differences on net profit and net assets in financial report disclosed in light of the PRC
accounting standards and the foreign accounting standards
□applicable (√) not applicable
(3) Item for major difference
□applicable (√) not applicable
(4) Explanation on accounting data difference according to PRC accounting standards and foreign
accounting standards.
During the report period, the Company had no transaction and matter concerning any difference in
light of PRC accounting standards and the foreign accounting standards, the net profit and net
assets were same without any difference, confirmed according to PRC accounting standards and
foreign accounting standards.
3. Item for Irregular Profit and Loss
(√) applicable □not applicable
Item for irregular profit and loss Amount Notes
Gain on disposal of non-current assets -1,782,490
Tax refund or exemption that is either non-recurring or without proper approval 3,265,733
Government grants credited in profit and loss (except for those recurring
government grants that are closely related to the entity's operation, in line with 3,100,355
related regulations and have proper basis of calculation)
Other non-operating income and expenses 1,917,052
Corporate income tax 1,415,890
Total 5,084,761 -
6
IV. CHANGES IN SHARE CAPITAL AND SUBSTANTIAL SHAREHOLDERS
1. Changes in Share Capital
(1) Changes in Share Capital
(√) applicable □not applicable
Amount before this change Change Amount after this change
(+, -)
Allot Transfer other
Percentage Distribute Percentage
Amount new capital to others Sub total Amount
% bonus share %
share share capital
1. restricted shares
(1)State Owned Shares
(2) State owned shares
held through legal
persons
(3) Shares held by
domestic investors
--- Shares held by
domestic legal persons
--- Shares held by
domestic individuals
(4) Shares held by
foreign investors
--- Shares held by
foreign legal persons
--- Shares held by
foreign individuals
(5) top management
shares
2. Unrestricted shares 527,280,000 100% 158,184,000 158,184,000 685,464,000 100%
(1) A shares 348,816,000 66.15% 104,644,800 104,644,800 453,460,800 66.15%
(2) B shares 178,464,000 33.85% 53,539,200 53,539,200 232,003,200 33.85%
(3) Shares listed in
overseas markets
(4) others
3. Total shares 527,280,000 100% 158,184,000 158,184,000 685,464,000 100%
The approval for share change: already approved by the Company’s Board of Directors’ and
Shareholders’ meeting.
The transfer for share change: The transfer of share change this time has completed during the
report period.
The influence by share change on the latest financial data including earning per share and net
assets per share: The latest earning per share and net assets per share declined due to bonus
share this time.
Other information that is necessary to disclose according to the Company or securities
regulatory departments: No
(2) Changes in restricted shares
□applicable (√)not applicable
7
2. Information about the Issuance and Listing of Stocks
(1) The issuing of stocks within preceding three years.
□applicable (√)not applicable
(2) The information on change of total share capital & structure and assets & liabilities structure
concerned
□applicable (√)not applicable
(3) Current internal staff shares
□applicable (√)not applicable
3. Shareholders and Actual Controller
(1) Total shareholders at end of the report period
The total shareholders were 23,453 at end of the report period.
(2) Shareholding of top 10 shareholders
Shareholdings of top 10 shareholders
Name of Shareholders character of the shareholders Percentage Number of Number of pledged or frozen shares
(%) shares hold restricted
Share status Number
shares
Domestic Not pledged 0
YANTAI CHANGYU GROUP CO. LTD. non-state-owned legal 50.4% 345,473,856 0 or freezed
person
Foreign shareholder Not pledged
GAOLING FUND,L.P. 3.54% 24,279,731 0 0
or freezed
HTHK/CMG FSGUFP-CMG FIRST Foreign shareholder Not pledged
3.09% 21,170,586 0 0
STATE CHINA GROWTH FD or freezed
BBH BOS S/A FIDELITY FD - CHINA Foreign shareholder Not pledged
1.95% 13,389,476 0 0
FOCUS FD or freezed
GOVERNMENT OF SINGAPORE INV. Foreign shareholder Not pledged
1.68% 11,483,523 0 0
CORP.- A/C "C" or freezed
BBH LUX-FIDELITY Foreign shareholder Not pledged
0.88% 6,057,462 0 0
FUNDS-EMERGING MARKETS FUND or freezed
BOSERA TERTIARY INDUSTRIAL Domestic non-state-owned Not pledged
GROWTH SECURITIES INVESTMENT legal person 0.82% 5,589,964 0 or freezed 0
FUNDS
Foreign shareholder Not pledged
UBS (LUXEMBOURG) S.A. 0.77% 5,282,135 0 0
or freezed
Foreign shareholder Not pledged
NORGES BANK 0.73% 4,999,356 0 0
or freezed
HTHK-MANULIFE CHINA VALUE Foreign shareholder Not pledged
0.66% 4,540,765 0 0
FUND or freezed
Information about shareholders No
8
The shareholdings of unrestricted shares by top 10 share holders
(√) applicable □not applicable
Name of Shareholders Number of Type and number of shares
unrestricted shares Type number
YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A share 345,473,856
GAOLING FUND,L.P. 24,279,731 B share 24,279,731
HTHK/CMG FSGUFP-CMG FIRST STATE CHINA GROWTH FD 21,170,586 B share 21,170,586
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 13,389,476 B share 13,389,476
GOVERNMENT OF SINGAPORE INV. CORP.- A/C "C" 11,483,523 B share 11,483,523
BBH LUX-FIDELITY FUNDS-EMERGING MARKETS FUND 6,057,462 B share 6,057,462
BOSERA TERTIARY INDUSTRIAL GROWTH SECURITIES INVESTMENT
5,589,964 A share 5,589,964
FUNDS
UBS (LUXEMBOURG) S.A. 5,282,135 B share 5,282,135
NORGES BANK 4,999,356 B share 4,999,356
HTHK-MANULIFE CHINA VALUE FUND 4,540,765 B share 4,540,765
Among the top 10 shareholders, Yantai Changyu
Group Company Limited has no associate relationship
The explanation for the relationship and/or accordant action
or consistent action relationship with the other 9 listed
relationship of the top 10 shareholders
shareholders, and the relationship or consistent action
relationship among the other shareholders is
unknown.
(3) Holding shareholders and the actual controllers
a. Change on holding shareholders and the actual controllers
□applicable (√)not applicable
b. Introduction for the holding shareholders and the actual controllers
Whether there is new actual controller or not
□yes (√)no
Name of actual controllers SASAC Yantai, ILLVA Saronno Investment SRL Italy, International Finance Corporation
and Yantai Yuhua Investment & Development Co., Ltd
Type of actual controllers Joint control
During the report period, there was no change on the Company’s holding shareholders and
actual controllers, while Changyu Group was still the holding shareholder, and the Company
was still actually controlled by four parties, including SASAC Yantai, ILLVA Saronno
Investment SRL Italy, International Finance Corporation and Yantai Yuhua Investment &
Development Co., Ltd
①Legal holding shareholder
Name of the legal holding shareholder: Yantai Changyu Group Company Limited (hereafter called
Changyu Group).
Legal representative: Mr. Sun Liqiang
Registered capital: CNY 50 million
Establishment date: April 27th, 1997
Business scope: wine, health liquor, distillating liquor, drinks, production, distribution, planting of
primary products and the export business under permission.
②Legal actual controllers
9
Changyu Group is finally controlled by four parties, including Yantai Yuhua Investment &
Development Co., Ltd, ILLVA Saronno Investment Italy, International Finance Corporation and
State-owned Assets Supervision and Administration Commission of Yantai Municipal Government
(hereafter called SASAC Yantai). The situation of the four parties is as following:
A. Name of the legal holding shareholder: Yantai Yuhua Investment & Development Co. Ltd
Legal representative: Mr. Jiang Hua
Registered capital: CNY 387,995,000
Establishment date: October 28th, 2004
Business scope: Under state permission, property investment, tenancy of machine and facility,
wholesale and retail of construction material, chemical products (chemical hazard products
excluded), hardware and electronical products, grape planting.
The holding shareholder of Yantai Yuhua Investment & Development Co. Ltd. is Yantai Yusheng
Investment & Development Co. Ltd., which was established on October 27th 2004 with legal
representative Mr. Sun Jian, registered capital CNY 67.333 million and business scope of property
investment under the state permission. There is no shareholder holding 5% more shares in Yantai
Yusheng Investment & Development Co., Ltd.
B. Name of the legal holding shareholder: ILLVA Saronno Investment Italy
Legal representative: Mr. Augusto Reina
Registered capital: EUR 5,160,000
Establishment date: January 24th, 2005 (its name is changed from ARCHIMEDE SRL)
Business scope: receiving the investments and dividends that Italian or overseas businesses
provide or distributed to other companies; controlling the use of and dealing with and buying or
selling and disposing the corporate stocks, public stocks and individual stocks; providing capital
and technical coordination to the company’s joint ventures and performing the duties of a
controlling party; engaging in the activities in terms of providing financial assistance, technical
and R&D and occupational training, shareholding affairs, organizing the storage of raw materials
and warehousing of final products upon the precondition that it is helpful for the joint ventures and
in order to realize the final operation goals; production and sales of food products, alcoholic and
nonalcoholic products as well as any other related industrial, commercial, financial and tertiary
activities via subsidiary companies and joint ventures or directly by itself; conducting business
activities in the fields of acid food and agriculture.
C. Name of the legal holding shareholder: International Finance Corporation
Registered address: 2121 Pennsylvania Avenue, N.W. Washington DC 20433, USA
Registered capital: USD 2.36 billion
Registered date: 1956
Business scope: International Finance Corporation is one of the members of World Bank, mainly
dedicated to investment in private sectors of developing countries while providing technical
support and consultation service. The corporation is a multilateral financial institution that ranks
first in the world in terms of providing capital stock and loans to developing countries. Its purpose
is to promote sustainable investments of private sectors of developing countries in order to
alleviate poverty and improve people’s life.
10
D. State-owned Assets Supervision and Administration Commission of Yantai Municipal
Government
c. Introduction for property right and control relations between the Company and its actual
controllers
Changyu Group and 27 persons for medium-level of the Company
100%
Yantai Yusheng Investment & Development Co. , Ltd.. Changyu Group and 46 common staff of the Company
O
U J F G U T
E H
S A R . E
R 62.22% 37.78%
A P A K R
M
A N A . C
N C 5%
N O REINA REINA REINA REINA
E Y U
AUGUSTO RICCARDO MARINA LODOVICO
N
T
24% 6% 5% 5% 5% R 25%
I 25% 25% 25%
E
S
IFC 55% Yantai Yuhua Investment & Development Illva Saronno Investment SASAC Yantai
10% 45% 33% 12%
current shareholders for A share Changyu Group current shareholders for B share
15.75% 50.40% 33.85%
the Company
Remarks: There was no any single shareholder holding 5% or over of the Company’s share in
Yantai Yuhua Investment & Development Co., Ltd. Reina Augusto is the director of the Company,
Reina Riccardo, Reina Marina and Reina Lodovico are the family members of Reina Augusto.
d. The actual controller controls the Company by trust or other assets management way.
□applicable (√)not applicable
(4) Other corporate shareholders holding 10% more shares
□applicable (√)not applicable
4. Information of Convertible Corporate Bond
applicable (√)not applicable
11
V. INFORMATION OF THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT TEAM
1. Change on shareholdings of Directors, Supervisors and Senior Management
expiry date of Shares hold at beginning of Increased shares Decreased Shares hold Among which: Share options Reason Whether or not draw the
NAME SEX Start date post term the report period hold during the shares hold at the ends restricted hold at end of for salary from shareholder’s
of post term (share) report period during the report of report shares hold report period change company and other related
POST AGE (share ) period (share) period (share ) （share） company
(share)
Sun Chairman to the Board of M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
65
Liqiang Directors
Zhou Vice-chairman to the Board of M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
48
Hongjiang Directors and general manager
Leng Bin Director and vice-general M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
50
manager
Qu Director, Vice-general manager M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
Weimin and Secretary to the Board of 55
Directors
Chen Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
37
Jizong
Augusto Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
72
Reina
Aldino Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
60
Marzorati
Antonio Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
74
Appignani
Jean Paul Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
63
Pinard
Geng Independent Director M 2006.12.07 2009.12.06 0 0 0 0 0 0 --- NO
70
Zhaolin
Xiao Wei Independent Director M 2010.05.13 2013.05.12 0 0 0 0 0 0 ----- NO
52
Wang Independent Director M 48 2010.05.13 2013.05.12 0 0 0 0 0 0 -- NO
12
Zhuquan
Wang Independent Director M 2010.05.13 2013.05.12 0 0 0 0 0 0
47
Shigang
Fu Chairman for the Board of M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
59
Mingzhi supervisors
Zhang supervisor F 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
56
Hongxia
Jiang Supervisor M 2010.05.13 2013.05.12 0 0 0 0 0 0 --- NO
40
Jinqiang
Yang Ming Vice-general manager M 54 --- --- 0 0 0 0 0 0 --- NO
Li Jiming Chief Engineer M 47 --- --- 0 0 0 0 0 0 --- NO
Jiang Hua Vice-general manager M 50 --- --- 0 0 0 0 0 0 --- NO
Sun Jian Vice-general manager M 46 --- --- 0 0 0 0 0 0 --- NO
Jiang Finance manager M --- --- 0 0 0 0 0 0 --- NO
46
Jianxun
Total --- --- -- --- --- --- NO
Information on equity incentives granted to directors, supervisors and senior management during report period
□applicable (√)not applicable
13
2. Information of Directors, Supervisors Who Hold Posts in Shareholder’s
Company
Information for taking post in shareholder’s company
(√)applicable □not applicable
Name Name of shareholder Post in shareholder’s company Term for the post Paid by shareholder’s
company or not
Sun Liqiang Yantai Changyu Group Chairman and general manager 2009.10.28—2013.10.27 No
Company LTD
Zhou Hongjiang Yantai Changyu Group Vice chairman 2009.10.28—2013.10.27 No
Company LTD
Fu Mingzhi Yantai Changyu Group Director and vice general 2009.10.28—2013.10.27 No
Company LTD manager
Leng Bin Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Chen Jizong Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Aldino Marzorati Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Antonio Appignani Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Jean Paul Pinard Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Augusto Reina Yantai Changyu Group Director 2009.10.28—2013.10.27 No
Company LTD
Introduction for taking No
post in shareholder’s
company
Information for taking post in other company
□applicable (√)not applicable
3. Reward of Directors, Supervisors and Senior Management
Decision-making procedures for reward of The reward for independent directors has been deliberated and
directors, supervisors and senior management approved by the shareholders’ meeting of the Company. The reward
of president, directors with administrative posts, managers and other
senior management has been deliberated and approved by emolument
committee and Board of Directors.
Basis for confirming reward of directors, The resolution of shareholders’ meeting and assessment result of
supervisors and senior management “Incentive Scheme of senior management ”deliberated and approved by
Board of Directors
Actual payment of reward of directors, Already paid timely in full amount
supervisors and senior management
4. Changes of Directors, Supervisors and Senior Management
During the report period, there is no any change for the directors, supervisors and senior management
of the Company.
14
5. Staff of the Company
On-the-job employees 5142
Retired employees for whom the company shall offer the charge 0
Professional structure
Category Number
Production staff 1,686
Sales staff 3,074
Technical staff 115
Financial staff 112
administrative staff 155
Education degree
Category Number
Bachelor degree 1,255
College graduate 2,330
Senior middle school graduates and high school diploma or
1,557
below
Explanation about staff: No
V. THE BOARD OF DIRECTOR’S REPORT
1. Discussion and Analysis of Management Team
During the report period, the Company faced rather big pressure on market developing due to the
slowdown of domestic economy development, while the business income was CNY1,912.44million
and net profit attributed to the Company’s shareholders of CNY604.28million in first quarter of this
year, -8.5% and 7.41% up respectively compared with same period of last year. In order to change the
negative situation of first quarter, the Company carried lots of targeted measures in the second quarter,
enhanced the market input, so that made good achievements of CNY1,100.14 million on business
income, 10.01% up compared with same period of last year, thus stopped the slowdown on business
income in previous period, yet because of rapid growth on operating cost and sales expenses , the net
profit attributed to the Company’s shareholders was CNY316.89million, only 0.79% up compared
with same period of last year, so lowered the growth rate of net profit from January till June this year.
Therefore the Company achieved business income for CNY3,012.58million and net profit attributed to
the Company’s shareholders for CNY921.14million during the report period, -2.51% and 5.04% up
respectively compared with same period of last year.
With regard to product structure, during the report period, the sales was declined for the Company’s
own produced wine, while the sales of brandy, sparkling wine and import wine kept large growth.
Thanks to effective production cost control, the general gross profit margin reached to 75.84%, 0.09%
up compared with same period of last year.
During the report period, the Company made efforts mostly in the following aspects:
Firstly, improved three independent product sort systems and set up the management policy for
contact city. The Company furthered the establishment of each product sort system, set up independent
budget, evaluation and marketing system for wine, brandy and import wine，that was also responsible
for each product sort’s R&D and marketing respectively; obviously strengthened the scientificalness
and pertinence on the Company’s decision-making, timely solved the major market problems and
quickly implemented all the policies and measures, by means of establishment of contact city system
between top management, partial competent managers and 31 key domestic cities.
Secondly, well done the marketing and further raised the competitiveness of the Company’s products.
The Company strengthened the evaluation and attendance management of marketing staff at all levels,
15
reinforced the supervision and examination of basic management, perfected the emolument
assessment policy for sales staff, implemented the requirement of new distributor building and reward
policy, speeded up the establishment of exclusive shops system, carried out the marketing scheme
sorted by product variety, so further straightened out the market order of the Company, improved the
sales system, increased cohesion and fighting capacity of all sales and marketing team, thus raised the
competitiveness of the Company’s products.
Thirdly, strengthened the cost management and continued to fight with fake and falsifying products.
The Company set up and improved in production subsidiaries the supervision system on controllable
cost, management and evaluation system on budget assorted by product variety, and control system on
economic evaluation index, lowered the production cost for unit product,; adjusted and improved the
evaluation system for market input, optimized the examination and approval process, further
confirmed the responsible party, thus increased the use efficiency and effects of marketing expenditure;
enforced the fighting with fake and falsifying products, assisted legal operation departments to destroy
several locations for making and selling fake products, so maintained good market environment.
Fourthly, well done a better job for the new construction projects and technical reform, so as to ensure
the engineering quality and lay more solid foundation for medium to long term development of the
Company. Please find the details in Investment of the Company of this report as VI. Board of
Directors’ Report.
Whether the Company’s actual business performance is less than -20% or more than 20% compared
with disclosed estimation on earnings or business plan of this report period.
□yes (√) no
The operations and analysis of major subcompany and sharing company
Sharing Registered Capital Total Assets Net Assets Net Profit
Company Name Business Scope Major Products or Services
Ratio
Yantai To research, produce Dry red wine, dry white
Changyu-Castle Wine 70% and sell wine and wine and sparking wine USD5 million 22876 8133 225
Chateau Co. LTD. sparkling wine of Changyu-Castle
Langfang Castel- To produce Dry red wine,
49% USD3 million 3126 2871 -142
Changyu Wine Co. LTD. and sell wine Dry white wine
Yantai Kylin To produce and sell Cork, aluminum cap,
50% USD1.4 million 6715 4289 360
Packaging Co. LTD. packaging material PVC capsule and so on.
Chateau Changyu To research, produce
Brandy, premium dry red
AFIP Global 70% and sell brandy and CNY110million 17877 12695 229
wine and white wine
wine
Chateau Liaoning
Changyu Ice Wine 51% To produce ice wine Ice wine CNY26.3million 8757 3763 62
Co., Ltd.
Xinjiang Tianzhu To plant grape,
Winery Co., Ltd. produce and sell grape
60% Grape and bulk wine CNY30million 19406 16385 841
juice, bulk wine and
fruit wine
During the report period, the net profit from Yantai Changyu-Castel Chateau Co., Ltd., and
Chateau Changyu AFIP Global dropped by 87.19% and 63.82% respectively compared with last
report period, mainly due to the reduction on those two companies’ internal settlement price by the
Company; The net profit from Langfang Castel Changyu Wine Co., Ltd., dropped from CNY30,000 in
last report period to CNY-1,420,000 during the report period influenced by the stop of production due
to technical reform; The net profit of Chateau Liaoning Changyu Ice Wine Co., Ltd. increased by
191.18% because of its production and sales growth compared with last report period; And the profit
16
from Xinjiang Tianzhu Winery Co. Ltd. dropped by 49.28% compared with same period of last year,
due to decrease of business income and increase of operating cost in the same time.
All potential risks for negative influence on the achievement of future development strategy and
management goal of the Company.
A. Market competition risk
Due to the decline of economic development growth in China, the adverse effect on consumption
demand, and also continuous flooding of import wine, the competition is more and more fierce in
domestic wine market, so that added the difficulties for achievement of the Company’s management
goal. The Company will try to improve the product quality and raise the performance price ratio, in
the same time, continue to perfect sales network, improve the marketing ability, thus enhance the
competitiveness of all products and try to achieve the management goal fixed at beginning of this
year.
B. Risks of fluctuation of raw material prices
Grapes are the main raw materials for the Company to produce wine. The yield and quality of grapes
are closely related to several natural factors such as drought, rains, snow and frost, which will create
impacts on the quantity and price of grapes purchased by the Company and cause the Company’s
production achievement even more unpredictable. Therefore, the Company will lower the fluctuation
risks of grape quality and price by means of continuously extending the area of company vineyards,
optimizing the allocation of vineyards and further improving the grape quality.
C. Risks of input-output ratio uncertainties
Under the circumstances of intensified market competition and needing to meet demands for market
development, the Company has to invest more and more in marketing, thus led to high proportion
covered by operating cost in principle sales, the input-output ratio will greatly affect the Company’s
achievement, so that some investments may not yield predicted returns, especially because the impact
from world economic crisis is not disappeared to China economy yet, the unpredictable factors of
people’s consumption capability will then increase and thus generate more market input-output ratio
uncertainty. Therefore, the Company will try to enhance the accuracy of market forecasting through
intensified market surveys and analysis, and continue to improve its input-output assessment system
to ensure that investment can reach the predicted goals.
D. Risks in product transport
The Company’s products are fragile yet need to be distributed at home and abroad mainly by sea,
railway and highway. Seasonal conditions during peak sales seasons of Spring Festival must contend
with potentially deficient domestic transport capability due to high transportation demands between
passengers and cargo, and also some natural & unnatural factors such as strong wind, snow, frost and
traffic accident etc, which may result in goods not being transported to the markets on time. To
overcome such disadvantages, the Company will make its efforts to lower those risks through more
effective sales prediction linking production to sales, arranging production and transport strategically,
and increasing inventories in the distant markets before the peak sales season.
E. Risks in investment blunder
According to the scheme, the Company will launch more investment projects in future years with
large investment amount, long construction period for few projects and more unpredicted factors.
Although the decision-makers of the Company fulfilled complete demonstration and made the
decision scientifically in strict accordance with relevant regulations of the Company, few projects
might need to increase more investment amount or can not realize the expected revenue due to
different uncertainties.
17
(1) The principal business and its operation
a. Principal business achievements assorted by products and trade type
Unit: CNY
More or less More or less
More or less than
Principal Principal Gross Profit than last year for than last year
Product last year for the
Sales Cost Ratio % the principal for the gross
principal sales %
cost % profit ratio
By trade type
Wine & alcoholic
3,001,455,707 721,877,778 75.95% -2.64% -3.29% 0.16%
beverage
By product
Wine 2,429,357,282 510,014,889 79.01% -5.4% -6.16% 0.17%
Brandy 485,298,545 176,830,549 63.56% 24.63% 17.12% 2.34%
Sparkling Wine 19,269,509 9,096,072 52.8% 4.67% 8.55% -1.69%
Import wine and
67,530,371 25,936,268 61.59% -36.87% -40.48% 2.33%
health liquor
Total 3,001,455,707 721,877,778 75.95% -2.64% -3.29% 0.16%
Explanation on principal business achievements assorted by products and trade type: No
Reason for significant change of gross profit ratio compared with same period of last year: The
Company’s gross profit rate has no significant change compared with same period of last year.
b. Principal business achievements assorted by territory distribution
Unit：CNY
District Principal Sales More or less than same period of last year %
The coastal region 2,550,637,060 -3.34%
The middle region 307,349,064 0.8%
The western region 143,469,583 3.28%
Total 3,001,455,707 -2.64%
Explanation on principal business achievements assorted by territory distribution: No
The explaination for the structure of the principal business: NO.
c. The explanation of the great change in principal business and its structure
applicable √ not applicable
d. The explanation of the great change in profit earning ability(gross profit ratio) of principal business
compared with last year
applicable √ not applicable
e. The analysis of the great change in profit structure compared with last year
applicable √ not applicable
(2) The situation for the internal control system related with the fair value measurement
applicable √ not applicable
18
(3) The situation for holding the foreign currency financial assets and financial liabilities
applicable √ not applicable
2. Investment of the Company
(1) The situation on the total usage of the collected capital
applicable √ not applicable
(2) The situation on the commitments of the collected capital
applicable √ not applicable
(3) The situation on the modification of the collected capital
applicable √ not applicable
(4) The situation on the great investments of the non-collected capital
Unit: CNY 0000’
Project name First Project Project progress Earnings of the
disclosure amount project
date
Construction of 2011.04.20 1,900 To complete the construction of the main structures 0
Tinlot Chateau
Construction 2010.04.16 11,000 To finish the exterior decoration of the reception 0
building, the civil works of the main buildings and
Changyu-Reina
the construction for the dormitory building.
Chateau Sha'anxi
Chateau Changyu 2010.04.16 1,134 To complete all civil construction, the decoration 0
Laurenz XV Co., Ltd. for most of the main buildings and roads, the
Ningxia landscape construction and the installations for the
production system.
Construction of 2010.04.16 27,910 To complete the construction of the main buildings, 0
Changyu Baron decorations and the installations of the production
Balboa Chateau equipments, part of the equipments should be under
XinJiang the commissioning phase.
Expansion of 2012.04.20 152 To complete the base construction of the new 0
Langfang Changyu buildings, house improvements of the workshops
Wine Company’s and the renewal of the equipments.
Production Capacity
Grape-growing Bases 2012.04.20 445 To complete the 1000 mus’ land leveling, the 0
purchase and cultivation of 1 million pieces of
grape.
Procurement of 2012.04.20 4,800 10491 pieces of oak barrels have already been 0
purchased.
Oak Barrels
Total 47,341 -- --
Explaination for major non-raised funds investment projects
Yantai Changyu Chateau Blending and cooling Center, Yantai Changyu Chateau Filling Center,
Yantai Changyu Chateau Logistics Center, Changyu Vinicutlure and Wine Research Institute,
Treasure Wine Chateau, Investment in landscaping all started its construction in July, there are no
funds invested in the reporting period.
3. Modification for the business plan of the Board of Directors in the next half year
applicable √ not applicable
19
4. The expected results of operations from January to September 2012
Caution and explanation for forecasted loss on accumulated net profit from the beginning of this year
to the end of the next report period or any significant change compared with same period of last year
applicable √ not applicable
5. The explanation of the Company’s Board of Directors for the non standard advice to the
report of the accountant affairs office
applicable √ not applicable
6. The explanation of the Company’s Board of Directors for the change and disposal of any
issue involved in the non standard advice of the accountant affairs office in last year
applicable √ not applicable
7. The statement of the Company’s Board of Directors on the discussion results for the reason
and influence of the accounting policy, the estimated changes on accounting and the significant
accounting errors.
8. The formulation and implementation of the cash dividend policy
It was deliberated and passed in the 2008 shareholders’ meeting dated 30th April 2009 that the
dividend policy is as following: the company can distribute dividends either in cash or by stock
dividends. The profit to be distributed each year is not less than 50% of the distributable profit realized
in the same year and the accumulated sum of profit to be distributed in cash in the next three years is
not less than 30% of the yearly average distributable profit to be realized in the next three years. The
Company could conduct an interim cash dividend. The Company strictly complied with the above
dividend policy while carrying out the profit distribution plan of 2009, 2010 and 2011. The detailed
dividend in the past three years is as following:
Unit: CNY
Cash dividend amount Net profit attributed to parent Percentage of net profit attributed
(income tax included ) company’s shareholders in to parent company’s shareholders
consolidated financial in consolidated financial
statements statements
2011 959,649,600 1,907,208,732 50.32%
2010 738,192,000 1,434,218,328 51.47%
2009 632,736,000 1,127,328,843 56.13%
It was deliberated and passed in the 2011 shareholders’ meeting dated 15th May 2012 that the dividend
policy was amended to the following: the company can distribute dividends either in cash or by stock
dividends. The profit to be distributed each year is not less than 25% of the distributable profit realized
in the same year and the accumulated sum of profit to be distributed in cash in the next three years is
not less than 30% of the yearly average distributable profit to be realized in the next three years. The
Company could conduct an interim cash dividend.
9. Pre-plan on profits distribution or turning add of the capital reserve
√ applicable not applicable
Distribute or turn add Yes NO
Bonus of shares for every 10 shares (share) 0
Dividend number for every 10 shares (CNY, tax included) 0
Turning added number for every 10 shares (share) 0
Equity base in the distribution plan (share) 685,464,000
Total cach dividend (CNY, tax included) 0
Distributable profit 3,589,773,867
The details of the pre-plan on profits distribution or turning add of the capital reserve
According to the resolution of the 12th meeting of the 5th session of board of directors, the profits in the first half of 2012
will not be distributed or be turning added for the capital reserve.
20
10. The situation of without making cash dividend plan but the cumulative retained profits
being the positive number in the end of 2011
applicable √ not applicable
11. The establishment and implementation of the managerial system of the internal information
insiders’ registration
The Company has already established the managerial system of the internal information insiders’
registration and also been in a strict implementation.
Whether or not to have the self-examination and investigation for the insiders dealing in the shares of
the Company and its derivatives variety.
√ Yes NO
The Company makes the self-examination and does not find any insiders to break the rules on buying
or selling the Company’s stock.
Whether or not to be taken regulatory measures and administrative penalities by the government
regulators because of the implementation of the listed company and related person on the managerial
system of the internal information insiders’ registration or being alleged insider trading.
Yes √ NO
12. Other disclosures
NO.
13. The Company’s liabilities, credit changes and the arrangements of repaying in the cash in
future years.
applicable √ not applicable
Ⅶ. MATERIAL EVENTS
1. The corporate governance situation
According to the relevant national laws and rules including the “Company Law of the People’s
Republic of China”, “Securities Law of the People’s Republic of China” and “Guidelines on Listed
Companies Governancel”, the Company has already established and constantly improved its
corporate governance structure, legally conducted its activites. Currently, the Company’s governance
structure is in accord with requirements of relevant regulatory documents on listing company’s
governance issued by CSRC, which could be better to adapt to the development of the Company.
2. The implementation of the profit distribution plan, plan for capital reserve converting into
share capital or plan for issuance of new shares, which were prepared in the previous period
and carried out in the reporting period.
√ applicable not applicable
The scheme on profit distribution for 2011 deliberated and passed by “2011 Shareholders’
Meeting” was as following:
The Company’s total 527.28 million shares on Dec. 31rt, 2011 were taken as cardinal number to
distribute CNY15.20 in cash for 3 shares per every 10 shares to all the shareholders (tax included,
the actual after-tax dividend distributed to the individual shareholders for A share, investment fund,
QFII and RQFII is CNY13.38 per 10 shares; to the other non-resident enterprises shareholders
except QFII and RQFII, the Company did not submit the income tax instead of them, the taxpayer
should pay it at the place where it happened; and to the individual shareholders and the
21
non-resident enterprises shareholders for B share is CNY13.38 per 10 shares). According to the
Articles of Associations, the dividends in favor of the foreign-currency shareholders was paid in
HKD at the middle exchange rate of RMB to HKD (1HKD = CNY0.8136) listed by the People’s
Bank of China on the first working day after the day ( May 16th, 2012) when the resolutions of
2011 Shareholders’ Meeting were made.
The execution announcement of the profit distribution was made public in “China Securities News”
and “Securities Times” on June 9th , 2012. The registration date of Share A ownership was June 15th,
2012 and the ex dividend date was June 18th, 2012, and the last trading date of Share B was June
15th, 2012, the ex dividend date was June 18th, 2012 and the registration date of Share B ownership
was June 20th, 2012. The said profit distribution was completed in the last ten-day period of June
2012.
3. Material lawsuit and arbitration
applicable √ not applicable
There are no lawsuit and arbitation in the reporting period.
4. Bankruptcy and reorganization
applicable √ not applicable
5. Share holding of other listed company and holding share equity of other financial enterprise
(1) Securities Investment
applicable √ not applicable
During the report period, there are no securities investments.
(2) Share holding of other listed company
applicable √ not applicable
(3) Holding share equity of other non-listed financial enterprise
applicable √ not applicable
(4) Information about selling or purchasing shares of other listed company
applicable √ not applicable
6. Asset transactions
(1) Acquisition of assets
applicable √ not applicable
(2) Sale of assets
applicable √ not applicable
(3) Assets replacement
applicable √ not applicable
(4) Enterprise combinations
applicable √ not applicable
(5) After the publication of the assets restructuring report or assets sales notice, its progress and the
influence for the business results and financial condition
applicable √ not applicable
22
7. The explanation for proposing and carrying out the plan of increasing sharesholding during
the reporting period by the Company’s major shareholders.
applicable √ not applicable
8. The implementation of the Company’s share equity incentive scheme and its influence
applicable √ not applicable
9. The significant related party transactions
(1) Interrelated deals concerning the daily operation
√applicable not applicable
23
Interrelated party Interrelated Interrelated Interrelated Price fixing Tran- Transaction Percentage in Settlement Influence to Market The reason
relation type content principle saction Amount the similar Method the price for the big
price (CNY 0000’) transaction’ company’s difference
amount profit between the
market price
and the
transaction
price
Yantai Changyu Parent Co. Leased assets Leasing parent Agreement 319.2 100% Cash No.
Group Co. Ltd. company’s price
site and
housing
Yantai Changyu Under the same Purchasing Purchasing Agreement 4.4 0.01% Cash No.
Tour Co. Parent Co. commodity and commodities price
service
Yantai Changyu Under the same Purchasing Purchasing Agreement 30.9 0.04% Cash No.
Window of Wine Parent Co. commodity and commodities price
City Co. service
Yantai Shenma Under the same Purchasing Purchasing Agreement 8,994.5 11.73% Cash No.
Packaging Co. Parent Co. commodity and commodities price Reasonably
service priced,
Yantai Changyu Under the same Selling commodity Selling Agreement 203.7 0.07% Cash without No.
Tour Co. Parent Co. and providing commodities price negative
service influence to
Yantai Changyu Under the same Selling commodity Selling Agreement 172.1 0.06% Cash the No.
Window of Wine Parent Co. and providing commodities price company’s
City Co. service profit
Yantai Shenma Under the same Selling commodity Selling Agreement 375.9 0.12% Cash No.
Packaging Co. Parent Co. and providing commodities price
service
Yantai Changyu Parent Co. Trademark Permission to Agreement 5,571.9 100% Cash No.
Group Co. Ltd. licensing use the price
trademark of
Changyu
Yantai Changyu Parent Co. Patent license Agreement 2.5 100% Cash No.
Group Co. Ltd. contract price
Yantai Changyu Under the same Accounts Receivable Agreement 3.8 0.03% Cash No.
Tour Co. Parent Co. receivable from the price
Yantai Shenma Under the same Accounts day-to-day Agreement 2,405.4 9.21% Cash No.
Packaging Co. Parent Co. receivable business price
Yantai Changyu Under the same Accounts dealings Agreement 0.2 0% Cash No.
Window of Wine Parent Co. receivable price
City Co.
Yantai Changyu Parent Co. Other payables Trademark Agreement 5,571.9 9.89% Cash No.
Group Co. Ltd. usage payables price
Yantai Changyu Parent Co. Other payables Rental and Agreement 321.6 0.57% Cash No.
Group Co. Ltd. patent fee price
payables
Total -- -- 23,978 0% -- -- -- --
24
The details of the large sales returns No.
The necessity, persistence of the related party transaction, the reason to choose the The above related transactions could help the Company to get the stable supply of raw materials and commodity sales, it is
related parties (not the other parties in the market) for the transaction. beneficial for the Company to develop the commodity production, promote the sales of commodity. The price is reasonable and
public, it will not damage the interests of both parties.
The influence to the company’s independency It will not fundamentally affect the company’s independence.
Dependence of the Company to the related parties and the solution No.
The total amount of the transaction will be expected according to its category and its During the reporting period, the Company originally fulfill the relevant related party transactions according to the forecasted
acutal performance during the reporting period amount.
The explaination to the related transaction NO.
Unit: CNY’0000
Interrelated party Sell products and provide serve to interrelated party Purchase products and receive serve from interrelated party
Amount Proportion in same transaction Amount Proportion in same transaction amount
amount
Yantai Changyu Tour Co. 203.7 0.07% 4.4 0.01%
Yantai Changyu Window of Wine
172.1 0.06% 30.9 0.04%
City Co.
Yantai Shenma Packaging Co. 375.9 0.12% 8994.5 11.73%
Total 751.7 0.25% 9029.8 11.78%
Among which, the interrelated deal amount provided by the Company to its holding shareholder and subsidiaries on selling product and service is CNY7.517 million.
(2) Interrelated deals concerning the assets purchased and sold
applicable √ not applicable
(3) The significant related party transactions on common external investment
applicable √ not applicable
(4) Associated credits and debts
applicable √ not applicable
The progress for the funds occupancy and debts clearance during the reporting period
applicable √ not applicable
Until the end of the reporting period, if the listed company does not finish the debts clearance for the non-operating funds occupany, the board of
directors should put forward the responsibility investigation plan.
applicable √ not applicable
(5) Other significant related party transactions: NO.
25
.
10. Material contract and its execution
(1) The trusting, contracting and assets leasing with the profit reaching over 10% (inclduing 10%) than the
company’s total profit in the reporting period.
a. Trusting
applicable √ not applicable
b. Contracting
applicable √ not applicable
c. Leasing
applicable √ not applicable
(2) Warranty Issues
applicable √ not applicable
(3) Trusting of financial management
applicable √ not applicable
(4) The implementation of the major daily operation contracts
NO.
(5) Other major contracts
applicable √ not applicable
11. The explaination of issuance of corporate bonds
applicable √ not applicable
12. The implementation of the commitments
(1) The Execution of Commitments by the Company and Shareholders holding over 5% shares during the
reporting period or continuing to the report period
√ applicable not applicable
Commitment items Committed Commitment Commitment Commitment Performance
person content time period situation
Share reform commitment -- -- -- --
Commitment in the acquisition report or -- -- -- --
report of changes in equity
Commitment in asset replacement -- -- -- --
Commitment in Issuance Yantai Changyu Non-horizontal 1997.09.18 After 1997.09.18 It is always under
Group Co. Ltd. competition performance.
Other commitments to the company’s small -- -- -- -- --
and medium-sized shareholders
Whether or not to carry out the commitment Yes NO
The reason of not finishing the commitment All commitments have already been carried out as promised.
and the plan in the next step
Whether or not to make commitments on Yes NO
horizontal competition and related party
transactions
Promised solution time --
Solution method --
Promised implementation situation --
(2) If there is a profit forecast for the company’s assets and projects, also the reporting period is in the profit
forecast term, the company should make explaination on the reason of reaching the forecast target.
applicable √ not applicable
26
.
13. Other Comprehensive Incomes
√ applicable not applicable
Amount in Amount in
this period last period
0 0
1．Gains or losses on financial assets available for sale
0 0
Less: Income tax affected by financial assets available for sale
0 0
Net amount transferred from other Comprehensive income of last period to current profit and loss account
0 0
Subtotal
0 0
2．Sharing the other Comprehensive income of invested company by equity method
0 0
Less: Income tax affected by sharing the other comprehensive income of invested company by equity method
0 0
Net amount transferred from other Comprehensive income of last period to current Profit and loss account
0 0
Subtotal
0 0
3．Gains or losses from cash flow hedging instruments
0 0
Less: income tax affected on gains or losses from cash flow hedging instruments
0 0
Net amount transferred from other comprehensive income of last period to current Profit and loss account
0 0
Transferred as the adjusted amount of initial recognition of hedging items
0 0
Subtotal
0 0
4. Converting gains and losses on the financial statements in foreign currency
0 0
Less：Net amount transferred from disposal of overseas operation into current gains and loss
0 0
Subtotal
0 0
5．Other
0 0
Less：Income tax affected by other comprehensive income
0 0
Net amount transferred from other comprehensive income of last period to current Profit and loss account
0 0
Subtotal
0 0
Total
27
.
14. The Reception of Investigation, Visit and Communication
Reception place Reception way Reception object Visitor Main topic and material
Reception date
and type provided
Meeting room of Field survey Investment Orient Securities
2012.01.10
the Company institution Hengtai Securities
Meeting room of Field survey Investment Yurenxinchuang Investment
2012.01.16
the Company institution
Meeting room of Field survey Investment Pacific Assets Management Co.
2012.02.09
the Company institution
Meeting room of Field survey Investment Zhongxin Jiantou Securities,
2012.02.15
the Company institution Zhongzai Assets Management Co.
Meeting room of Field survey Investment UBS Securities, Qilu Securities,
2012.02.17
the Company institution Xincheng Fund Management Co.
Meeting room of Field survey Investment Qilu Securities, Guangfa Fund Principal operation and the
2012.02.20
the Company institution Management Co. future development of the
2012.04.18 Meeting room of Field survey Investment Haitong Securities company
the Company institution
2012.04.27 Meeting room of Field survey Investment Taiwan Life Insurance
the Company institution
Meeting room of Field survey Investment Goupland cardiff
2012.05.03
the Company institution
2012.05.10 Meeting room of Field survey Investment Huili Fund
the Company institution
2012.05.14 Meeting room of Field survey Investment Changjiang Pension Insurance
the Company institution
Meeting room of Field survey Investment CITIC Securities, Haitong Securities,
the Company institution First Business International, BOCI
Securities, Taiwan Life Insurance,
2012.05.15 Heying Investment, Universal Fund,
Zhongxin Jiantou Securities, Dacheng
Fund, Fortune Securities, Guangfa
Securities
Meeting room of Field survey Investment Taiwan Life Insurance, China IFC,
2012.05.16
the Company institution Fuhua Securities
Meeting room of Field survey Investment BOCI Securities
2012.05.29
the Company institution
15. Appointment, dismissal of Certified Public Accountants
Whether or not to be audited for the semi-annual report
Yes √No
28
.
16. The punish and rectification for the listed company and its directors, supervisors, senior managers,
shareholders, acutal controller and offerors
applicable √ not applicable
17. Explaination for other significant matters
applicable √ not applicable
18. The great change for profitability, assets condition and credit condition of the company’s convertible
bond guarantor
applicable √ not applicable
19. Information disclosure index
Title Publication address Publication Website
Date
Announcement on “China Securities News” 2012.03.28 http://www.cninfo.com.cn
Resolution of 1st temporary “Securities Times” /information/companyinfo.html
meeting of the Board of
Directors in 2012
Announcement on “China Securities News”, 2012.04.20 http://www.cninfo.com.cn
Resolution of 10th meeting “Securities Times” and “Hong /finalpage/2012-04-20
of 5th Session of Kong Commercial Daily” /60862757.PDF?www.cninfo.com.cn
Board of Directors
Announcement on “China Securities News” 2012.04.20 http://www.cninfo.com.cn
Resolution of 8th meeting of “Securities Times” /finalpage/2012-04-20
4th Session of /60862760.PDF?www.cninfo.com.cn
Board of Supervisors
Notice of opening 2011 “China Securities News”, 2012.04.20 http://www.cninfo.com.cn
shareholders’ meeting “Securities Times” and “Hong /finalpage/2012-04-20
Kong Commercial Daily” /60862758.PDF?www.cninfo.com.cn
Announcement on the related “China Securities News” 2012.04.20 http://www.cninfo.com.cn
transaction 2012 “Securities Times” /finalpage/2012-04-20
/60862751.PDF?www.cninfo.com.cn
Summary for 2011 Annual “China Securities News”, 2012.04.20 http://www.cninfo.com.cn
report “Securities Times” and “Hong /finalpage/2012-04-20
Kong Commercial Daily” /60862752.PDF?www.cninfo.com.cn
2012 First-quarter report “China Securities News” 2012.04.26 http://www.cninfo.com.cn
“Securities Times” /finalpage/2012-04-26
/60910126.PDF?www.cninfo.com.cn
Announcement on the “China Securities News” 2012.05.16 http://www.cninfo.com.cn
resolution of 2011 “Securities Times” /finalpage/2012-05-16
shareholders’ meeting /61001934.PDF?www.cninfo.com.cn
Announcement on the “China Securities News” 2012.06.09 http://www.cninfo.com.cn
implementation of rights “Securities Times” /finalpage/2012-06-09/
distribution in 2011 61114325.PDF?www.cninfo.com.cn
29
.
Financial Report
1. Audit report
Whether the biannual report has been audited
□ Yes √ No
2. Financial statement
Whether the consolidated statement is needed
√ Yes □ No
Unless otherwise specified, the unit in the financial statement of this financial report is: RMB yuan.
The unit in the statement of the financial annotations is: RMB yuan.
30
.
2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd.
Unit: Yuan
Item Note Ending balance Beginning balance
CURRENT ASSETS
Cash and bank 7.1 2,019,281,763 2,532,967,197
Settlement provisions
Lending
Trading financial assets
Bills receivable 7.2 118,836,176 56,268,482
Trade receivables 7.4 132,176,545 126,906,526
Advances to suppliers 7.6 127,886,857 77,252,611
Premium receivable
Reinsurance accounts receivable
Receivable reserves for reinsurance contract
Interest receivable 7.3 17,955,890 15,763,431
Dividends receivable
Other receivables 7.5 74,330,088 75,423,614
Buy-in/sell-out financial assets
Inventories 7.7 1,635,410,297 1,755,964,582
Non-current asset expire in a year
Other current assets
Total current assets 4,125,877,616 4,640,546,443
NON-CURRENT ASSETS
Offering loans and imprest
Available for sale financial assets
Held-to-maturity investment
Long-term receivables
Long-term equity investments 7.8 5,000,000 5,000,000
Investment real estate
Property, plant and equipment 7.9 1,614,238,794 1,609,111,868
Construction in progress 7.10 652,187,693 406,353,081
Construction materials
Fixed assets disposal
Biological assets 7.11 43,585,521 42,355,441
Oil and gas assets
Intangible assets 7.12 260,800,570 263,838,087
Development expenditure
Goodwill
31
.
Item Note Ending balance Beginning balance
Long-term prepaid expense 7.13 148,203,958 148,429,436
Deferred tax assets 7.14 139,994,212 175,528,938
Other non-current assets 7.16 4,507,953 4,780,927
Total non-current assets 2,868,518,701 2,655,397,778
Total assets 6,994,396,317 7,295,944,221
CURRENT LIABILITIES
Short-term loan
Borrowings from the Central Bank
Customer and interbank deposits
Borrowing funds
Trading of financial liabilities
Bills payable
Trade payables 7.17 261,047,106 229,920,729
Advances from customers 7.18 275,386,880 293,655,222
Sales/buyback financial assets
Payable handling fees and commission
Employee benefits 7.19 153,000,814 188,274,937
Taxes payable 7.20 354,072,650 698,459,857
Interest payable
Dividends payable
Other payables 7.21 563,405,485 536,059,000
Dividend payable for reinsurance
Reserves for insurance contracts
Acting trading securities
Acting underwriting securities
Non-current liability expire in a year 7.22 56,479,950 81,081,000
Other current liabilities 7.23 4,490,529 4,744,074
Total current liabilities 1,667,883,414 2,032,194,819
NON-CURRENT LIABILITIES
Long-term borrowings
Bonds payable
Long-term accounts payable
Special accounts payable
Estimated liabilities
Deferred tax liabilities 7.14 5,336,115 5,336,115
Other non-current liabilities 7.24 51,538,762 108,453,139
Total non-current liabilities 56,874,877 113,789,254
Total liabilities 1,724,758,291 2,145,984,073
OWNER’S EQUITY (OR SHAREHOLDERS’ EQUITY)
Paid-in capital (or capital stock) 7.25 685,464,000 527,280,000
Capital surplus 7.26 562,139,042 562,139,042
Less: treasury stock
32
.
Item Note Ending balance Beginning balance
Special reserves
Surplus reserve 7.27 295,942,630 295,942,630
General risk preparation
Retained earnings 7.28 3,589,773,867 3,628,279,989
Converted difference in foreign currency statements
Total owner’s equity attributable to the parent company 5,133,319,539 5,013,641,661
Minority interests 136,318,487 136,318,487
Total owner’s equities (or shareholders’ equities) 5,269,638,026 5,149,960,148
Total liabilities and owner’s equities (or shareholders’ equities) 6,994,396,317 7,295,944,221
The legal representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager:
Jiang Jianxun
2.2 Balance sheet of the parent company
Unit: Yuan
Item Note Ending balance Beginning balance
CURRENT ASSETS
Cash and bank 1,241,592,998 1,568,184,564
Trading financial assets
Bills receivable 33,173,810 25,779,768
Trade receivables 15.1 26,421,692 20,977,065
Advances to suppliers 109,296,023 45,090,601
Interest receivable 17,955,890 15,763,431
Dividends receivable 854,595,884 1,866,646,179
Other receivables 15.2 1,776,017,678 1,685,950,766
Inventories 674,732,073 579,452,383
Non-current asset expire in a year
Other current assets
Total current assets 4,733,786,048 5,807,844,757
NON-CURRENT ASSETS
Available for sale financial assets
Held-to-maturity investment
Long-term receivables
Long-term equity investments 15.3 603,073,363 598,299,363
Investment real estate
Property, plant and equipment 359,127,722 365,152,521
Construction in progress 53,777,735 42,040,898
Construction materials
Fixed assets disposal
Biological assets 10,074,672 9,683,931
Oil and gas assets
33
.
Item Note Ending balance Beginning balance
Intangible assets 88,215,216 89,684,756
Development expenditure
Goodwill
Long-term prepaid expense
Deferred tax assets 25,126,042 31,337,829
Other non-current assets 3,635,953 3,854,796
Total non-current assets 1,143,030,703 1,140,054,094
Total assets 5,876,816,751 6,947,898,851
CURRENT LIABILITIES
Short-term loan
Trading of financial liabilities
Bills payable
Trade payables 188,315,349 134,893,846
Advances from customers
Employee benefits 74,867,704 97,418,899
Taxes payable 48,236,362 115,489,659
Interest payable
Dividends payable
Other payables 1,656,253,831 1,918,592,985
Non-current liability expire in a year
Other current liabilities 786,600 828,000
Total current liabilities 1,968,459,846 2,267,223,389
NON-CURRENT LIABILITIES
Long-term borrowings
Bonds payable
Long-term accounts payable
Special accounts payable
Estimated liabilities
Deferred tax liabilities
Other non-current liabilities 13,545,400 13,918,000
Total non-current liabilities 13,545,400 13,918,000
Total liabilities 1,982,005,246 2,281,141,389
OWNER’S EQUITY (OR SHAREHOLDERS’ EQUITY)
Paid-in capital (or capital stock) 685,464,000 527,280,000
Capital surplus 557,222,454 557,222,454
Less: treasury stock
Appropriative reserve
Surplus reserve 295,942,630 295,942,630
Retained earnings 2,356,182,421 3,286,312,378
Converted difference in foreign currency statements
Total owner’s equities (or shareholders’ equities) 3,894,811,505 4,666,757,462
Total liabilities and owner’s equities (or shareholders’ equities) 5,876,816,751 6,947,898,851
34
.
2.3 Consolidated profit statement
Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Revenue 3,012,584,089 3,090,021,567
Including: Operating income 7.29 3,012,584,089 3,090,021,567
Interest income
Earned premium
Handling fees and commission income
2. Total cost of sales 1,791,795,774 1,930,580,472
Including: Cost of sales 7.29 727,833,473 749,237,629
Interest expenditure
Handling fees and commission expenditure
Premium rebate
Net amount of indemnity expenditure
Net amount of insurance contract reserve
fund withdrawal
Policy bonus payment
Amortized reinsurance expenditures
Taxes and surcharges 7.30 150,023,860 175,702,733
Selling expenses 821,144,459 869,894,366
Administrative expenses 109,340,306 157,485,167
Financial expenses -16,206,681 -21,687,300
Loss for impairment of assets 7.32 -339,642
Add: fair value charge profit (loss is listed with
"-")
Investment profit (loss is listed with "-") 7.31 52,122
Including: investment profit for joint-run
business and joint venture
Exchange income (loss is listed with "-")
3. Operating profit (loss is listed with "-") 1,220,788,315 1,159,441,095
Add: Non-operating income 7.33 8,833,562 4,062,176
Less: Non-operating expenses 7.34 2,332,911 988,331
Including: losses on disposal of
2,049,999 236,937
non-current assets
4. Total profits (total loss is listed with "-") 1,227,288,966 1,162,514,940
Less: Income taxes 7.35 306,145,488 286,320,623
5. Net profit (net loss is listed with "-") 921,143,478 876,194,317
Including: Realized net profit of the consolidated
party before consolidation
Attributable to equity holders of the company 921,143,478 876,955,116
35
.
Item Note Sum of current period Sum of prior period
Minority interests -760,800
6. Earnings per share -- --
(1) Basic earnings per share 7.36 1.34 1.66
(2) Diluted earnings per share 7.36
7. Other Comprehensive Income 7.37 19,679
8. Comprehensive Income 921,143,478 876,213,996
(1) Attributable to equity holders of the company 921,143,478 876,974,795
(2) Attributable to minority interests -760,800
Realized net profit of the combined party before combination accrued for the business combination under common
control in this period: 0 yuan.
The legal representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager:
Jiang Jianxun
2.4 Profit statement of the parent company
Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Revenue 15.4 771,858,410 881,120,226
Less: Cost of sales 15.4 630,970,052 681,420,169
Taxes and surcharges 71,505,753 99,160,797
Selling expenses
Administrative expenses 65,432,098 66,569,261
Financial expenses -17,393,242 -23,747,128
Loss for impairment of assets -339,642
Add: fair value charge profit (loss is listed with "-")
Investment profit ((loss is listed with "-") 15.5 12,000,000 723,374,683
Including: investment profit for joint-run business and joint venture
2. Operating profit (loss is listed with "-") 33,683,390 781,091,810
Add: Non-operating income 985,550 1,574,281
Less: Non-operating expenses 2,075,335 245,922
Including: losses on disposal of non-current assets 2,040,174 134,864
3. Total profits (total loss is listed with "-") 32,593,605 782,420,169
Less: Income tax 3,073,962 14,220,498
4. Net profit (net loss is listed with "-") 29,519,643 768,199,671
5. Earnings per share -- --
(1) Basic earnings per share 0.04 1.46
(2) Diluted earnings per share
6. Comprehensive Income
7. Total comprehensive Income 29,519,643 768,199,671
36
.
2.5 Consolidated statement of cash flow
Unit: Yuan
Item Sum of current period Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services 3,376,086,666 3,615,239,260
Net increase in customer and interbank deposits
Net increase in borrowings from central bank
Net increase in borrowings from other financial institutions
Cash received from receiving insurance premium of original
insurance contract
Net cash received from reinsurance business
Net increase in policy holder deposits and investment funds
Net increase in dealing with trading financial assets
Cash received from collecting interest, handling fees and
commission
Net increase in borrowings
Net increase in repurchasement business funds
Tax refund received 24,650,249 31,895,583
Other cash received related to operating activities 42,554,630 74,339,353
Subtotal of cash flows of operating activities 3,443,291,545 3,721,474,196
Cash paid for goods and services 767,117,458 782,258,636
Net increase in customer loans and advances
Net increase in deposits in central bank and interbank deposits
Cash paid to original insurance contract payments
Cash paid to interest, handling fees and commission
Cash paid to policy bonus
Cash paid to and on behalf of employees 220,843,252 199,782,598
Cash paid for taxes and expenses 1,221,867,315 1,141,618,275
Other cash paid related to operating activities 648,992,180 578,927,423
Sub-total of cash outflows of operating activities 2,858,820,205 2,702,586,931
Net cash flow from operating activities 584,471,340 1,018,887,265
2. Cash flow from investing activities:
Cash received from return of investment
Fixed deposit with the term of over 3 months 342,320,001
Cash received from obtaining investment profit 52,122
Cash received from interest income 18,269,624 21,630,697
Net cash received from disposal of fixed assets, intangible
152,026 519,304
assets and other long-term assets
Net cash received from disposal of branch and other business
unit
37
.
Item Sum of current period Sum of prior period
Other cash received related to investing activities
Subtotal of cash flows of investment activities 360,741,651 22,202,123
Cash paid to acquire fixed assets, intangible assets and other
310,153,049 217,541,724
long-term assets
Cash for investment
Cash paid to buy fixed deposit with the term of over 3 months 71,437,507
Net increase in hypothecated loan
Net cash paid to acquire branch and other business unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities 310,153,049 288,979,231
Net cash flow from investing activities 50,588,602 -266,777,108
3. Cash flow from financing activities
Cash received from acquiring investment
Including: cash received from acquiring minority shareholders
investment by branch
Cash received from acquiring loans
Cash received from issuing bonds
Other cash received related to financing activities
Subtotal cash flows of financing activities 0 0
Cash paid to pay debts
Cash paid to distribute dividend, profit or pay interest 801,465,600 738,192,000
Including: dividend and profit paid to minority shareholders
by branch
Other cash paid related to financing activities
Subtotal of cash outflows of financing activities 801,465,600 738,192,000
Net cash flow from financing activities -801,465,600 -738,192,000
4. Influences of exchange rate fluctuation on cash and
cash equivalents
5. Net Increase in cash and cash equivalents -166,405,658 13,918,157
Add: balance at the beginning of the period of cash and cash
1,256,517,873 998,934,824
equivalents
6. Balance at the end of the period of cash and cash
1,090,112,215 1,012,852,981
equivalents
38
.
2.6 Statement of cash flow of the parent company
Unit: Yuan
Sum of current Sum of prior
Item
period period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services 839,447,070 1,023,172,610
Tax refund received 7,642,578 17,931,445
Other cash received related to operating activities 25,626,302 78,314,429
Subtotal of cash flows of operating activities 872,715,950 1,119,418,484
Cash paid for goods and services 583,262,290 662,332,168
Cash paid to and on behalf of employees 83,043,588 74,164,408
Cash paid for taxes and expenses 202,948,803 245,261,179
Other cash paid related to operating activities 533,878,093 51,618,902
Sub-total of cash outflows of operating activities 1,403,132,774 1,033,376,657
Net cash flow from operating activities -530,416,824 86,041,827
2. Cash flow from investing activities:
Cash received from return of investment
Fixed deposit with the term of over 3 months 342,320,001
Cash received from obtaining investment profit 1,024,050,295 723,374,683
Cash received from interest income 18,269,624 21,630,697
Net cash received from disposal of fixed assets, intangible assets and other
55,926 519,204
long-term assets
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities 1,384,695,846 745,524,584
Cash paid to acquire fixed assets, intangible assets and other long-term assets 32,701,210 23,390,203
Cash for investment 4,424,000 199,688,120
Cash paid to buy fixed deposit with the term of over 3 months 71,437,507
Net cash paid to acquire branch and other business unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities 37,125,210 294,515,830
Net cash flow from investing activities 1,347,570,635 451,008,754
3. Cash flow from financing activities
Cash received from acquiring investment
Cash received from acquiring loans 256,026,059
Other cash received related to financing activities 0
Subtotal cash flows of financing activities 0 256,026,059
Cash paid to pay debts 87,500,000
Cash paid to distribute dividend, profit or pay interest 801,465,600 738,192,000
Other cash paid related to financing activities
Subtotal of cash outflows of financing activities 801,465,600 825,692,000
Net cash flow from financing activities -801,465,600 -569,665,941
4. Influences of exchange rate fluctuation on cash and cash equivalents
5. Net Increase in cash and cash equivalents 15,688,211 -32,615,360
Add: balance at the beginning of the period of cash and cash equivalents 296,735,240 407,619,206
6. Balance at the end of the period of cash and cash equivalents 312,423,451 375,003,846
39
.
2.7 Consolidated owner’s equity changing list
Unit: Yuan
Sum of current period
Shareholders' equity of parent company Minority
Item Less: stockholders' Total
Paid-in capital Capital Special Surplus General risk Undistributed
Treasury Others equity shareholders'
(or capital stock) reserves reserves reserves preparation profits
stock equity
1. Balance at the end of last year 527,280,000 562,139,042 295,942,630 3,628,279,989 136,318,487 5,149,960,148
Plus: Accounting policies changing
Previous error correction
Others
2. Balance at the beginning of this year 527,280,000 562,139,042 295,942,630 3,628,279,989 136,318,487 5,149,960,148
3. Increasing or reducing amount of
this year (reducing amount is listed 158,184,000 -38,506,122 119,677,878
with "-")
3.1 Net profits 921,143,478 921,143,478
3.2 Other Comprehensive Income
Subtotal of above 3.1 and 3.2 921,143,478 921,143,478
3.3 Owners' invested and reduced
0 0 0 0 0 0 0 0 0
capital
3.3.1 Owners' invested capital
3.3.2 Amount of shares paid and
reckoned in owners' equity
3.3.3 Others
3.4 Profit distribution 158,184,000 0 0 0 0 0 -959,649,600 0 0 -801,465,600
3.4.1 Drew surplus reserves
3.4.2 Drew general risk preparation
3.4.3 Distribution to owners (or
158,184,000 -959,649,600 -801,465,600
shareholders)
3.4.4 Others
3.5 Internal transfer of owners' equity 0 0 0 0 0 0 0 0 0 0
3.5.1 Capital reserves transferred and
increased capital (or capital stock)
3.5.2 Surplus reserves transferred and
increased capital (or capital stock)
3.5.3 Surplus reserves covering deficit
3.5.4 Others
40
.
Sum of current period
Shareholders' equity of parent company Minority
Item Less: stockholders' Total
Paid-in capital Capital Special Surplus General risk Undistributed
Treasury Others equity shareholders'
(or capital stock) reserves reserves reserves preparation profits
stock equity
3.6 Special reserves
3.6.1 Withdrawal of this period
3.6.2 Usage of this period
3.7 Others
4. Banlance at the end of this period 685,464,000 562,139,042 295,942,630 3,589,773,867 136,318,487 5,269,638,026
Unit: Yuan
Sum of prior period
Shareholders' equity of parent company
Item Paid-in General
Less:
capital (or Capital Special Surplus risk Undistributed Other Minority Total
Treasury
capital reserves reserves reserves prepara profits s stockholders' shareholders'
stock
stock) tion equity equity
1. Balance at the end of last year 527,280,000 557,222,454 295,942,630 2,459,263,257 156,436,954 3,996,145,295
Plus: Retroactive adjustment accrued for
business combination under common control
Plus: Accounting policies changing
Previous error correction
Others
2. Balance at the beginning of this year 527,280,000 557,222,454 295,942,630 2,459,263,257 156,436,954 3,996,145,295
3. Increasing or reducing amount of this
4,916,588 1,169,016,732 -20,118,467 1,153,814,853
period (reducing amount is listed with "-")
3.1 Net profits 1,907,208,732 1,907,208,732
3.2 Other Comprehensive Income
Subtotal of above 3.1 and 3.2 1,907,208,732 1,907,208,732
3.3 Owners' invested and reduced capital 0 4,916,588 0 0 0 0 0 0 -20,118,467 -15,201,879
3.3.1 Owners' invested capital 190,371 190,371
3.3.2 Amount of shares paid and reckoned in
owners' equity
3.3.3 Others 4,916,588 -20,308,838 -15,392,250
41
.
3.4 Profit distribution 0 0 0 0 0 0 -738,192,000 0 0 -738,192,000
3.4.1 Drew surplus reserves
3.4.2 Drew general risk preparation
3.4.3 Distribution to owners (or shareholders) -738,192,000 -738,192,000
3.4.4 Others
3.5 Internal transfer of owners' equity 0 0 0 0 0 0 0 0 0 0
3.5.1 Capital reserves transferred and
increased capital (or capital stock)
3.5.2 Surplus reserves transferred and
increased capital (or capital stock)
3.5.3 Surplus reserves covering deficit
3.5.4 Others
3.6 Special reserves
3.6.1 Withdrawal of this period
3.6.2 Usage of this period
3.7 Others
4. Banlance at the end of this period 527,280,000 562,139,042 295,942,630 3,628,279,989 136,318,487 5,149,960,148
2.8 Owner’s equity changing list of the parent companyUnit: Yuan
Sum of current period
Less:
Item Paid-in capital (or Capital Special Surplus General risk Undistributed Total owner’s
Treasury
capital stock) reserves reserves reserves preparation profits equity
stock
1. Balance at the end of last year 527,280,000 557,222,454 295,942,630 3,286,312,378 4,666,757,462
Plus: Accounting policies changing
Previous error correction
Others
2. Balance at the beginning of this year 527,280,000 557,222,454 295,942,630 3,286,312,378 4,666,757,462
3. Increasing or reducing amount of this
158,184,000 -930,129,957 -771,945,957
period (reducing amount is listed with "-")
3.1 Net profits 29,519,643 29,519,643
3.2 Other Comprehensive Income
Subtotal of above 3.1 and 3.2 29,519,643 29,519,643
3.3 Owners' invested and reduced capital 158,184,000
3.3.1 Owners' invested capital 158,184,000
3.3.2 Amount of shares paid and reckoned in
42
.
owners' equity
3.3.3 Others
3.4 Profit distribution 158,184,000 -959,649,600 -801,465,600
3.4.1 Drew surplus reserves
3.4.2 Drew general risk preparation
3.4.3 Distribution to owners (or shareholders) 158,184,000 -959,649,600 -801,465,600
3.4.4 Others
3.5 Internal transfer of owners' equity
3.5.1 Capital reserves transferred and
increased capital (or capital stock)
3.5.2 Surplus reserves transferred and
increased capital (or capital stock)
3.5.3 Surplus reserves covering deficit
3.5.4 Others
3.6 Special reserves
3.6.1 Withdrawal of this period
3.6.2 Usage of this period
3.7 Others
4. Banlance at the end of this period 685,464,000 557,222,454 295,942,630 2,356,182,421 3,894,811,505
Unit: Yuan
Sum of prior period
Less:
Item Paid-in capital (or capital Capital Special Surplus General risk Undistributed Total owner’s
Treasury
stock) reserves reserves reserves preparation profits equity
stock
1. Balance at the end of last year 527,280,000 557,222,454 295,942,630 2,615,413,602 3,995,858,686
Plus: Accounting policies changing
Previous error correction
Others
2. Balance at the beginning of this year 527,280,000 557,222,454 295,942,630 2,615,413,602 3,995,858,686
3. Increasing or reducing amount of this
period (reducing amount is listed with 670,898,776 670,898,776
"-")
3.1 Net profits 1,409,090,776 1,409,090,776
3.2 Other Comprehensive Income
Subtotal of above 3.1 and 3.2 1,409,090,776 1,409,090,776
3.3 Owners' invested and reduced capital
3.3.1 Owners' invested capital
43
.
3.3.2 Amount of shares paid and
reckoned in owners' equity
3.3.3 Others
3.4 Profit distribution -738,192,000 -738,192,000
3.4.1 Drew surplus reserves
3.4.2 Drew general risk preparation
3.4.3 Distribution to owners (or
-738,192,000 -738,192,000
shareholders)
3.4.4 Others
3.5 Internal transfer of owners' equity
3.5.1 Capital reserves transferred and
increased capital (or capital stock)
3.5.2 Surplus reserves transferred and
increased capital (or capital stock)
3.5.3 Surplus reserves covering deficit
3.5.4 Others
3.6 Special reserves
3.6.1 Withdrawal of this period
3.6.2 Usage of this period
3.7 Others
4. Banlance at the end of this period 527,280,000 557,222,454 295,942,630 3,286,312,378 4,666,757,462
44
Full Text of 2012 Semiannual Report of Yantai Changyu Pioneer Wine Co., Ltd.
3. Basic information of this company
Yantai Changyu Pioneer Wine Co., Ltd. (the “Company”) was incorporated as a joint stock limited
company in accordance with the Company Law of the People’s Republic of China (the “PRC”) in a
reorganization carried out by Yantai Changyu Group Co., Ltd. (“Changyu Group Company”), in which
Changyu Group Company injected certain assets and liabilities in relation to the brandy, wine, sparkling
wine, and tonic wine production and sales businesses to the Company. The Company and its
subsidiaries (the “Group”) are principally engaged in the production and sales of wine, brandy,
sparkling wine and tonic wine.
Pursuant to the approval from the Government of Shandong Province (Luzheng [1997]119), the
Company was reorganized as a joint stock limited company on April 10, 1997. On September 23, 1997,
the Company was approved by China Securities Regulatory Commission (the “CSRC”) ([1997] No. 52)
to issue 88,000,000 domestically listed foreign investment shares (“B shares”) on Shenzhen Stock
Exchange. On September 18, 1997, the Company obtained the business license with the registered
number No. 26718011-9.
In October 2000, the Company was approved by CSRC Zheng Jian Zi [2000] No.148 to issue
32,000,000 domestically listed Common Shares (“A Shares”). The A shares were listed on Shenzhen
Stock Exchange on October 26, 2000.
Pursuant to the share reform notices issued by the Company in February 2006, Changyu Group
Company transferred its 13,977,600 shares to the shareholders of A share of the Company. After the
reform, percentage of equity attributable to Changyu Group Company decreased from 53.8% to 50.4%.
The holding company of the Group is Changyu Group Company, which was ultimately controlled by
Yantai SASAC, ILLVA Saronno Investment Italy, International Finance Corporation and Yaitai Yuhua
Investment and Development Company Limited.
4. Main accounting policies, accounting estimates and previous error correction
4.1 Basis of preparation of financial statement
These financial statements have been prepared in accordance with Chinese Accounting
Standards---Basic Standards (“CAS”) published by Ministry of Finance in February 2006 and 38
detailed accounting standards, guidelines, interpretations and other regulations (generally called
“Chinese Accounting Standards”).
The financial statements are prepared on a going concern basis.
Except for certain financial instrument, the measurement basis adopted by the group in preparing its
financial statement is historical cost. Subsequently, if the assets are impaired, impairment provisions
are made in accordance with the relevant accounting standards.
45
Full Text of 2012 Semiannual Report of Yantai Changyu Pioneer Wine Co., Ltd.
4.2 Statement on compliance with Cas
The financial statements fulfill the requirement of CAS and give a true and fair view of the financial
position of the Company and of the Group as at June 30, 2012, and of the operating results and cash
flows for January- June 2012.
4.3 Accounting year
The accounting year of the Group is from January 1 to December 31.
4.4 Reporting currency
The Group reporting and presentation currency is the Renminbi (“RMB”). Unless otherwise stated,
the unit of the currency is Yuan.
4.5 Accounting treatment method for business combination under common control and non-common control
4.5.1 Business combination under common control
A business combination involving entities or businesses under common control is a business
combination in which all of the combining entities or businesses are ultimately controlled by
the same party or parties both before and after the business combination, and that control is
not transitory. The combining entity that obtains control of the other combining entities or
businesses is the acquirer, and the other entities involved are the acquirees. The combination
date is when the acquirer effectively obtains the control of the acquiree.
The assets and liabilities obtained by the acquirer shall be measured on the basis of the
carrying amount in the acquiree's accounts as at the date of combination. Where there is a
difference between the carrying amount of the net assets acquired by the acquirer and the
carrying amount of the consideration paid by it (or the total par value of the shares issued), the
balance of stock premium in capital surplus and transfer-in capital surplus under original
policies shall be adjusted. If the amount is not sufficient to offset the value of the net assets
acquired, retained earnings shall be adjusted.
4.5.2 Business combination under non-common control
A business combination involving entities or businesses under non-common control is a
business combination in which all of the combining entities or businesses are ultimately
controlled by the different party or same parties before and after the business combination.
The combining entity that obtains control of the other combining entities or businesses is the
acquirer, and the other entities involved are the acquirees. The acquisition date is when the
46
Full Text of 2012 Semiannual Report of Yantai Changyu Pioneer Wine Co., Ltd.
acquirer effectively obtains the control of the acquiree.
Under business combination under non-common control, the acquiree may recognize the fair
value of assets, liabilities and contingent liabilities.
When the sum of the fair value of paid combination consideration (or the fair value of issued equity
securities) and the fair value of acquiree’s equity held before the acquisition date is larger than
acquiree recognizable net assets fair value acquired in combination, the difference should be
recognized as goodwill, which shall be subsequently measured by subtracting accumulative
depreciation loss from cost. If the sum of the fair value of paid combination consideration (or the fair
value of issued equity securities) and the fair value of acquiree’s equity held before the acquisition
date is smaller than acquiree recognizable net assets fair value acquired in combination, the fair value
of each recognizable assets, liabilities and contingent liabilities of acquiree and the measurement of
the fair value of paid combination consideration (or the fair value of issued equity securities) and the
fair value of acquiree’s equity held before the acquisition date shall be rechecked firstly. After
rechecking, if the sum of the fair value of paid combination consideration (or the fair value of issued
equity securities) and the fair value of acquiree’s equity held before the acquisition date is still smaller
than acquiree recognizable net assets fair value acquired in combination, the difference shall be
counted into current profits and losses.
4.6 Compiling methods of consolidated financial statements
4.6.1 Compiling methods of consolidated financial statements
The consolidation scope of consolidated financial statements is determined on the basis of control. The
consolidated financial statements include the financial statements of the Company and its subsidiaries
for the year ended June 30, 2012. Subsidiary refers to the enterprise or main body controlled by this
company.
Accounting policies adopted by the subsidiaries are in consistency with the policies adopted by the
Company. All intercompany balances, transactions, unrealized profits and losses and dividends within
the Group are eliminated in full on consolidation.
When losses of current period borne by minority shareholders of a subsidiary exceed the shares of
minority shareholders in the shareholders’ equity of such subsidiary at the period beginning, the
balance shall be used to reduce the minority shareholders’ equity. Any changes of minority
shareholders’ equity that do not result loss of control is accounted for as equity transaction.
For the subsidiaries acquired through business combination under non-common control, their operating
result and cash flow shall be included in the Group from the date the parent company obtains the control.
In preparation of the consolidated financial statements, the financial statements of the subsidiary shall be
adjusted on the basis of the fair value of the identifiable assets and liabilities and contingent liabilities
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determined on the acquisition date.
For the subsidiaries acquired through business combination under common control, their operating
result and cash flow shall be included in the opening balances of the Group in the acquisition period.
When compiling comparison consolidated financial statement, related items of previous financial
statement shall be adjusted. It shall be deemed that the reported main body formed by consolidation
exists after the final controlling party begins to control.
4.7 Recognition standards of cash and cash equivalents
Cash comprises cash on hand and demand deposit of this Group. Cash equivalents refers to short term
highly liquid investments which are readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value.
4.8 Foreign currency transactions and foreign currency statement translating
4.8.1 Foreign currency transactions
For any foreign currency transactions, the foreign currency amount shall be translated to booking
standard money.
During the initial recognition of foreign currency transactions, the foreign currency amount shall be
translated to booking standard money by adopting the spot exchange rate on the date that the
transaction occurs. On the balance sheet date, monetary items denominated in foreign currencies are
retranslated by the spot exchange rate on the balance sheet date. All settlements and translating
differences of monetary items are taken to the income statement of current period with the exception of
differences on specified foreign currency borrowings related to the assets in accordance with the
capitalisation conditions which shall be dealed with according to the priciples of borrowing
capitalisation. Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the spot exchange rate on the date that the transaction occurs, and the amount of
booking standard money shall not be changed. Non-monetary items measured at fair value in a foreign
currency are translated using the spot exchange rate on the date when the fair value is determined, and
the accrued difference is accounted into income statement of current period or other comprehensive
income according to the nature of non-monetary items.
Foreign currency cash flows are translated using the spot exchange rate prevailing on the date that the
cash flows occur. The effect of exchange rate changes on cash is separately presented as an
adjustment item in the cash flow statement.
4.9 Financial instruments
Financial instruments refer to the contracts whereby the financial assets of an enterprise are formed,
and whereby the financial liabilities or right instruments of any other entity are formed.
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4.9.1 Classification of financial assets
Financial assets are classified into the following categories when they are initially recognized,
including financial assets at fair value through profits or losses, held to maturity investments, loans and
receivables, financial assets available for sale, and derivative instrument appointed as effective hedging
instrument. The classification of financial assets is confirmed while initial recognition.
Financial liabilities are classified into the following categories when they are initially recognized,
including financial liabilities at fair value through profits or losses, other financial liabilities, and
derivative instrument appointed as effective hedging instrument. The classification of financial
liabilities is confirmed while initial recognition.
4.9.2 Recognition reference and measurement methods of financial instruments
Financial assets of this Group are initially recognized at fair value. For financial assets measured at fair
value through profits or losses, the transaction expenses thereof are directly included in the current
profits or losses; for other categories of financial assets and financial liabilities, the transaction
expenses thereof are included in the initial costs.
The subsequent measurement of financial assets depends on the classification:
Financial assets at fair value through profits and losses
Financial assets at fair value through profit or loss include financial assets held for trading and
financial assets designated upon initial recognition as at fair value through profit or loss. Financial
assets are classified as held for trading if they meet any of the following requirements:
(i) The financial assets being acquired mainly for the purpose of selling or repurchase in the near
future;
(ii) Forming a part of the identifiable combination of financial instruments, which are managed in a
centralized way, and for which there is objective evidence that the enterprise will manage the
combination by way of short-term profit-making in the near future;
(iii) Being a derivative instrument, except for the derivative instrument being appointed as effective
arbitrage tool, derivative instrument that belongs to financial assurance contract and derivative
instrument that links with equity tools with no quoted market price in an active market and the fair
value cannot be reliably measured and be settled by delivering such equity tool. Theses financial assets
are subsequently measured at fair value, and all the realized and unrealized profits and losses are
included in profits and losses of the current period. The dividends and interest income related to
financial assets at fair value through profits and losses are included in profits and losses of the current
period.
Held-to-maturity investments
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Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as
held-to-maturity when the Group has the positive intention and ability to hold to maturity.
Held-to-maturity investments are subsequently measured at carried amortized cost using the effective
interest method. Gains and losses are recognized in the income statement when the investments are through
the amortization or impaired, as well as finally recognized.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are subsequently carried at amortized cost using the effective interest
method. Gains and losses are recognized in the income statement when the loans and receivables are through
the amortization process or impaired.
Available-for-sale financial assets
Available for sale financial assets are non-derivative financial that are initially designated as available for
sale or are not classified into any of the other three categories. After initial recognition, available for sale
financial assets are measured at fair value, with gains or losses recognized as capital surplus reserve until the
investment is derecognized or until the investment is determined to be impaired, at which time the
cumulative gain or loss previously reported in equity are recognized in the income statement. Amortized
cost is calculated taking into account any discount or premium on acquisition and includes fees that are an
integral part of the effective interest rate and transaction costs. Interest and dividends earned are recoded as
interest income and dividend income, respectively and are recognized in the income statement.
Available-for-sale financial assets which have no quoted price and fair value cannot be reliably
measured are measured at cost.
For financial liabilities at fair value through profits and losses of this Group, the transaction expenses
thereof are directly included in the current profits or losses, while the transaction expenses of other
financial liabilities are include in the initially recognized amounts.
The subsequent measurement of financial liabilities depends on the classification:
Financial liabilities at fair value through profits and losses
Financial liabilities at fair value through profits and losses include transaction financial liabilities, and the
designated financial liabilities measured at fair value upon initial recognition, and whose variation is
recognized in the income statement of the current year. Financial liabilities that meet any of the following
requirements are classified as transaction financial liabilities:
(i) The financial liability being undertaken mainly for the purpose of selling or repurchase in the near future;
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(ii) Forming a part of the identifiable combination of financial instruments, which are managed in a
centralized way, and for which there is objective evidence that the enterprise will manage the combination
by way of short-term profit-making in the near future;
(iii) Being a derivative instrument, except for the derivative instrument being appointed as effective
arbitrage tool, derivative instrument that belongs to financial assurance contract and derivative instrument
that links with equity tools with no quoted market price in an active market and the fair value cannot be
reliably measured and be settled by delivering such equity tool. Theses financial liabilities are subsequently
measured at fair value, and all the realized and unrealized profits and losses are recognized in the income
statement of the current year.
Other financial liabilities
The financial liabilities are subsequently measured at amortized cost by adopting effective interest rate
method.
4.9.3 Recognition reference and measurement methods for transfers of financial assets
If the Group has transferred substantially all the risks and rewards of the asset and waived the control of the
asset, the asset is derecognized. If the Group has retained substantially all the risks and rewards of the asset,
the assets are not de recognized.
Where the Group has neither transferred nor retained substantially all the risks and rewards of the asset, if
the Group waived the control of the assets, the financial assets are derecognised and the assets and liabilities
are recognized accordingly; if the Group did not waive the control of the assets, the financial assets are
recognized to the extent of the Group's continuing involvement in the asset, and the liabilities are recognized
accordingly.
4.9.4 Conditions for terminated recognition of financial liabilities
If the following conditions are met, the recognition of financial asset shall be terminated (or
part of financial asset, or part of a group of similar financial assets):
(i) If the right for collecting the cash flow of the said financial asset is terminated; or
(ii) If the right for collecting the cash flow of the said financial asset is transferred, or the obligation
of paying all the collected cash flow to the third party is borne under “handling over” agreement and (a)
almost all the risks and rewards on financial asset ownership are transferred actually, or (b) although
the risks and rewards on financial asset ownership aren’t transferred actually or maintained, the control
to such financial asset has been given up.
A financial liability is finally recognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
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different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a final recognition of the original liability and a recognition of a new liability, and
the difference between the respective carrying amounts is recognized in the income statement.
In a regular way purchase or sale financial instrument, the financial instrument should be recognized
or derecognized on transaction date. A regular way purchase or sale is a purchase or sale of a
financial asset under a contract whose terms require delivery of the asset within the time frame
established generally by regulation of convention in the marketplace concerned. Transaction date is
the date that the Group commits to purchase or disposal a financial instrument.
4.9.5 Recognition methods of fair value of financial assets and financial liabilities
The fair value of investments that are actively traded in organized financial markets is determined by
reference to quoted market prices. For investments where there is no active market, fair value is determined
using valuation techniques. Such techniques include using recent arm’s length market transactions; reference
to the current market value of another instrument, which is substantially the same; a discounted cash flow
analysis; option pricing models and other valuation models.
4.9.6 Accrual of impairment provision of financial assets (excluding accounts receivable)
The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset
or a group of financial assets is impaired. Positive evidences refer to those occurred after the initial
recognition, have effect on estimated future cash flows of the financial assets, and can be measured reliably.
Financial assets carried at amortized cost
If there is objective evidence that an impairment loss on financial assets carried at amortized cost has
been incurred, the amount of the loss is measured as the difference between the assets’ carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have
not been incurred) discounted at the financial asset’s original effective interest rate (namely, the
effective interest rate calculated and determined for initial recognition) after taking into account of the
collateral over these balances. As for floating interest rate, the current effective interest rate regulated
in the contract shall be adopted as the discount rate for calculating the present value of future cash
flow.
The Group first assesses whether objective evidence of impairment exists individually for financial assets
that are individually significant. If it is determined that objective evidence of impairment exists for an
individually assessed financial asset, the impairment losses are recognized in the income statement of the
current year. Not individually significant financial assets are assessed individually or collectively included in
a group of financial assets with similar credit risk characteristics. Assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognized are not included in a
collective assessment of impairment.
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If, in a subsequent period, the amount of impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the
income statement, to the extent that the carrying value of asset does not exceed its amortized cost at the
reversal date.
Available-for-sale financial assets
When a decline in the fair value of an available-for-sale financial asset has been recognized directly in
equity and there is objective evidence that the asset is impaired the cumulative loss that had been
recognized directly in capital surplus are removed from equity and recognized in profit or loss of the
current period. The amount of the cumulative loss that is removed from equity and recognized in the
income statement is be difference between the acquisition cost (net of any principal repayment and
amortization) and current fair value, less any impairment loss on that financial asset previously
recognized in the income statement.
Impairment losses on debt instruments are reversed through the profits or losses, if the increase in fair value
of the instrument can be objectively related to an event occurring after the impairment loss was recognized
in the income statement. Impairment losses on equity instruments classified as available for sale are not
reversed through the income statement. Fair value increase after impairment is directly recognized in other
comprehensive income.
Financial assets carried at cost
If there is objective evidence that the financial assets have been impaired, the amount of the
impairment loss is measured as the difference between the carrying amount of the financial asset and
the present value of estimated future cash flows discounted at the current market rate of return for a
similar financial asset, and recognized in the income statement of the current year. Such impairment
losses will not be reversed.
The impairment on long-term equity investment which are measured by employing cost method in
accordance with CAS2-Long-term equity investments, have no quoted market price in an active market and
the fair value cannot be reliably measured are recorded according to the aforesaid requirements.
4.10 Recognition standards and accrual methods for bad account provision of accounts
receivable
4.10.1 Bad account provision of individually significant accounts receivable
Judgement reference or amount standard for individually On the balance sheet date, this Group carried out
significant accounts impairment provision assessment independently on
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the individual amount with book balance over RMB
4,800,000 yuan among the accounts receivable and
other receivables.
If there is objective evidence that an impairment has
been incurred, the impairment losses are recognized
Accruing method for individually significant accounts
according to the difference between the present
accrued for bad account provision individually
value of future cash flow and the book value, and
impairment provision is accrued.
4.10.2 Individually insignificant accounts receivable accrued for bad account provision
individually
Reasons for accruing for bad account provision individually:
If there is objective evidence that this Group can’t call back the accounts according to original
articles, the individually insignificant accounts receivable can be accrued for bad account provision
individually.
Methods for accruing bad account provision:
The impairment losses are recognized according to the difference between the present value of
future cash flow and the book value, and impairment provision is accrued.
4.11 Inventories
4.11.1 Classification of inventories
Inventories comprises raw materials, goods in process, commodity stocks.
The inventories are initially measured in cost. The cost of inventory consists of purchase costs,
processing costs and other costs. The actual cost of sending out inventories are determined the
weighted average method.
The harvest cost of agricultural products of a productive biological asset are determined on the basis of
the expenses of the materials and labor, indirect expenses to be apportioned, and other necessary
disbursements incurred during the course of output or gathering. The carrying amounts of the
productive biological assets are carried over as the cost of agricultural products on weighted average
basis.
The agricultural products after the harvest are measured in accordance with the CAS. 1- Inventories.
4.11.2 Pricing method for sending out inventories
The weighted average method
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4.11.3 Recognition reference of the net realisable value of inventories and the method for accruing
inventory depreciation provision
Inventories are stated at the lower of cost and net realisable value at the balance sheet date. If the cost
of inventories is higher than the net realizable value, the provision for the loss on decline in value of
inventories are made and be recognized in income statement. If the factors causing any impairment of
the inventories have disappeared, the amount of impairment are resumed and be reversed from the
provision for the loss on decline in value of inventories that has been made. The reversed amount is
recognised in the income statement of current year.
The net realisable value is determined based on the estimated selling prices less any estimated costs to
be incurred to disposal. The inventory provision for finished goods are assessed on the ground of each
item of inventories, and that for raw materials are made on the ground of the categories of inventories.
Inventories that are relevant to products produced and sold in the same region, have the same or similar
end use or purpose and difficult to be measured separately from other items shall be accrued for
inventory depreciation provision.
4.11.4 Inventory system
Perpetual inventory system
4.11.5 Amortization method of low-priced and easily-worn articles and packages
Low-priced and easily-worn articles
Amortization method: One-off amortization method
Packages
Amortization method: One-off amortization method
4.12 Long-term equity investments
4.12.1 Recognition of initial investment cost
Long-term equity investments comprise investments in subsidiaries, investments in joint
ventures, investments in associates and rights and interests investment that has no controls,
has no joint control or significant influence to the invested entity, has no quoted market price
in an active market and the fair value cannot be reliably measured.
Long-term equity investments are initially measured at initial investment cost. For long-term
equity investments acquired from business combination under common control, the initial
investment cost is recorded at the book value of the owner’s equity of the acquiree acquired.
For long-term equity investments acquired from business combination under non-common
control, the initial investment cost is recorded at combination cost (where the business
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combination under non-common control is realized by steps through multiple transactions, the
sum of the book value of the acquiree’s equity investment held before the acquisition date and
the newly increased investment cost on the acquisition date shall be regarded as initial
investment cost). Combination cost includes the sum of the assets paid by the acquirer,
accrued or assumed liabilities, and the fair value of issued equity securities.As for long-term
equity investments acquired from methods other than business combination, the initial
investment cost is recorded at cash paid plus any direct expense, tax or other necessary
expenditures associate with the investment, or the fair value of the equity instruments issued,
or value agreed in the investment contract, except for the value agreed in the investment
contract is not a fair market value.
4.12.2 Subsequent measurement and recognition of loss and profit
Long-term equity investments by which Group has no controls, has no joint control or
significant influence to invested entities, has no quoted market price in an active market and
the fair value cannot be reliably measured are measured on cost method basis. Long-term
equity investments by which the company has control to the invested entities shall be
measured on cost method basis in separate financial statement of this company. The invested
entities over which the Group has joint control or significant influence are measured on equity
method basis.
When cost method is adopted, the long-term equity investments are measured at the initial
investment cost, except that the initial investment cost contains declared and unissued cash
dividend or profit. The dividends or profits declared to distribute by the invested entity are
recognized as the current investment income. Impairment is assessed according to relevant
policies.
Excess of the initial cost of investment over the Group’s interest in the fair value of the identifiable net
assets of the invested entity should be included in the initial cost of long-term equity investment; Excess of
the Group’s interest in the fair value of identifiable net assets of the invested entities over the initial cost of
investment should be recognized in income statement.
The Group will recognize the investment profits or losses and adjust the book value of the
long-term equity investment in accordance with the attributable share of the net profits or
losses of the invested entity on equity method basis. The attributable share of the net profits
and losses of the invested entity should be recognised on the ground of the fair value of all
identifiable assets in accordance with the accounting policy and accounting period of the
Group (recognized in full if the internal transaction loss belongs to assets impairment loss),
and the inter-company transactions between the associate and joint ventures attributable to the
Group on the ground of the interest in invested entities should be eliminated after making
adjustments on the net profits of the invested entities. For the investment in associate and joint
ventures before the first-time adoption date, the debit balance of the investments, if any, also
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should be deducted from the investment income. The Group will reduce the book value of the
long-term equity investment in accordance with the share of profits or cash dividends declared
to distribute by the invested entities.
The net losses of the invested entity should be recognized until the book value of the
long-term equity investment and other long-term rights and interests which substantially form
the net investment made to the invested entities are reduced to zero, unless the Group has the
obligation to assume extra losses. Where any change is made to the owner's equity other than
the net profits and losses of the invested entity, the book value of the long-term equity
investment are adjusted and be included in the owner's equity
Which will be transferred to the income statement when disposing of the long-term equity
investment. While dealing with long-term equity investment on equity method basis, the part
that is accrued into shareholder’s rights and interests shall be transferred into current profits
and losses according to relevant proportion.
4.12.3 Reference for recognizing common control and significant influence on invested unit
Control refers to the right of deciding the financial and operating policies of an enterprise,
and getting interests from the operating activities of such enterprise. Joint control refers to the
mutual control to a certain economic activity according to contract agreement and exists only
when the investing parties who need to share the control power agree unanimously for
making important financial and operating decisions related to such economic activity.
Significant influence refers to the right to take part in decision making of financial and
operating policies of an enterprise, but can’t control the formulation of such policies
independently or with other parties.
4.12.4 Impairment assessment method and method for accruing impairment provision
On each balance sheet date, the Group made assessment on whether or not there is any indication of
potential impairment of long-term equity investment. If there is any evidence that indicates the
possibility of asset impairment, the recoverable amount of the asset is estimated. If the recoverable
amount of the asset is lower than the book value, asset impairment provision shall be accrued
according to the difference and charged to the income statement in the period.
After the impairment loss of long-term equity investment has been recognized, it won’t be reversed in
future accounting periods.
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4.13 Fixed assets
4.13.1 Recognition conditions of fixed assets
No fixed assets may be recognized unless it simultaneously satisfies the following conditions:
(i) The economic benefits relating to the Fixed assets are likely to flow into the Group, and
(ii) The cost of the Fixed assets can be measured reliably.
Expenditure incurred on fixed assets meet the aforesaid recognition standards is capitalised as an
additional cost of that asset, otherwise is normally charged to the income statement in the period in
which it is incurred.
Fixed assets are initially measured at its cost. The cost of purchased fixed assets includes the purchase
price, relevant taxes, freight, loading and unloading fees, professional service fees and other
expenditures attributed to the fixed assets before they have been put into operation.
4.13.2 Depreciation methods of kinds of fixed assets
Depreciation is calculated on the fixed year average method basis. The estimated useful life, residual
value and annual depreciation rate are as follows:
Estimated useful life Estimated residual value Annual depreciation rate
Buildings 30-40years 5%-40% 2%-3.2%
Machinery 10-20years 5% 4.8%-9.5%
Motor vehicles 6-12years 5% 7.9%-15.8%
If the components of fixed assets have different useful lives or provide economic benefits to the Group
in different patterns, different depreciation rates should be used.
The Group reviewed the useful life, expected net salvage value, and the depreciation method of the
fixed assets at least at the end of each year, and made adjustment on if necessary.
4.13.3 Impairment assessment method and method for accruing impairment provision of fixed assets
On each balance sheet date, the Group made assessment on whether or not there is any indication of
potential impairment of fixed assets. If there is any evidence that indicates the possibility of asset
impairment, the recoverable amount of the asset is estimated. The recoverable amount of an asset is
the higher of the asset's or cash-generating unit's value in use and its fair value less costs to sell, and is
determined for an individual asset. If it is difficult to determine the recoverable amount individually,
the recoverable amount is determined for the cash-generating unit to which the asset belongs. Cash
generating unit is determined on the ground of the asset generate cash inflows that are largely
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independent of those from other assets or groups of assets.
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable
amount. An impairment loss is charged to the income statement and provision is made accordingly.
After a loss of asset impairment has been recognized, it is not be reversed in future accounting periods.
4.14 Construction in progress
4.14.1 Classification of construction in progress
Construction in progress are measured on actual construction costs, including the direct costs of
construction, capitalised borrowing costs during the period of construction and other expenditures.
4.14.2 Reclassification standard and time of construction in progress to fixed assets
Construction in progress is reclassified to the fixed assets when completed and ready for use.
4.14.3 Impairment assessment method and method for accruing impairment provision of construction
in progress
On each balance sheet date, the Group made assessment on whether or not there is any indication of
potential impairment of construction in progress. If there is any evidence that indicates the possibility
of asset impairment, the recoverable amount of the asset is estimated. The recoverable amount of an
asset is the higher of the asset's or cash-generating unit's value in use and its fair value less costs to
sell, and is determined for an individual asset. If it is difficult to determine the recoverable amount
individually, the recoverable amount is determined for the cash-generating unit to which the asset
belongs. Cash generating unit is determined on the ground of the asset generate cash inflows that are
largely independent of those from other assets or groups of assets.
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable
amount. An impairment loss is charged to the income statement and provision is made accordingly.
After a loss of asset impairment has been recognized, it is not be reversed in future accounting periods.
4.15 Borrowing costs
4.15.1 Recognition principles of borrowing costs capitalization
Borrowing costs are interest and other costs incurred by the Group in connection with the borrowing
of funds, which includes interests, amortization of discounts or premiums, ancillary costs, and
exchange differences arising from foreign currency borrowings.
Borrowing costs that are directly attributable to the acquisition, construction or production of a
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qualifying asset shall be capitalized as part of the cost of that asset. A qualifying asset is the fixed
asset, investment real estate and inventory that necessarily takes a substantial period of time to get
ready for its intended use or sale.
The capitalization of borrowing costs as part of the cost of a qualifying asset shall commence when:
(i) Expenditures of the asset are being incurred;
(ii) Borrowing costs are being incurred; and
(iii) Activities that are necessary to prepare the asset for its intended use of sale are in progress.
4.15.2 Capitalization period of borrowing costs
Capitalization of borrowing costs shall cease when all the activities necessary to prepare the qualifying
asset for its intended use of sale are substantially complete. Any borrowing costs incurred after this
should be recognized in income statement.
4.15.3 Interruption period of capitalization
When the acquisition, construction or production of a qualifying asset is abnormally interrupted before
it necessarily takes a substantial period of time to get ready for its intended use or sale, and the
interruption period exceed three months, the capitalization of borrowing coasts shall be temporally
ceased. During the cessation of capitalization, the borrowing costs should be recognized in income
statement, until the construction resume.
4.15.4 Calculation method of capitalization amount of borrowing costs
During the capitalization period, the amount of borrowing costs eligible for capitalization on a
qualifying asset for each accounting period shall be determined by:
(i) The actual borrowing costs incurred on that borrowing during the period less any investment
income on the temporary investment of those borrowing for specifically purpose borrowing; or
(ii) Applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be
the weighted average of the borrowing coasts applicable to the borrowings of the entity for
general purpose borrowing.
4.16 Biological assets
The biological assets of the Group are vines.
No biological asset may be recognized unless it satisfies the following conditions simultaneously:
(i) The Group possesses or controls this biological asset due to past transaction or event,
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(ii) The economic benefits or services potential related to this biological asset is likely to flow into
the Group, and
(iii) The cost of this biological asset can be measured reliably.
Biological assets comprise consumptive biological assets, productive biological assets, and public
welfare biological assets. Biological assets are initially measured at its cost.
The Group made deprecation for whose expected production and business purpose has been realized,
and recorded as costs of relevant assets or expenses to the income statement of the current year. The
depreciation method of productive biological asset is yearly average method. The useful life, expected
net residual value and annual depreciation rate are as follows:
Category Estimated useful life Estimated residual value Annual depreciation rate
Vines 20years 5%-40% 5%
Consumptive biological assets and productive biological assets are examined as at each balance sheet
date. If any reliable evidence shows that the realizable net value of any consumptive biological asset or
the recoverable amount of any productive biological asset is lower than its book value due to natural
disaster, plant diseases and insect pests, animal disease or change of market demand, provision should
be made on the basis of the difference between the realizable net value or the recoverable amount and
the book value and be recorded in the income statement of the current period. If the factors which cause
any impairment of a consumptive biological asset have disappeared, the amount of impairment are
resumed and reversed limited to the provision which has been made. The reversed amounts are
recoginised in the income statement of the current period. After accrual, productive biological assets
depreciation preparation shouldn’t be reversed.
No provision should be made for public welfare biological assets.
The Group reviewed the useful life, expected net salvage value, and the depreciation method of the
productive biological assets at the end of each year.
The costs of productive biological assets at the time of harvest are calculated by the total of materials
expenses, labor fee and allocated overheads, and transferred to costs of agriculture products based on
weighted average method. The costs of agriculture products before the harvest of productive biological
asset are measured based on CAS1- Inventories.
At the time of sale, loss, death, damage or destroy of a biological asset, the balance after deducting the
carrying amount and the relevant taxes from the disposal income are recognised in the income
statement of the current period.
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4.17 Intangible assets
4.17.1 Pricing method of intangible assets
Intangible assets would only be recognized when it can bring economic benefits to the group and its
cost could be reliably measured. The opening balance of such intangible assets is measured at its cost.
For those intangible assets that acquired by merger and acquisition and its fair value could be reliably
measured, their book value would be measured by its fair value.
The estimated useful lives are determined on the periods during which it can bring economic benefits to
the Group. If the periods cannot be reliably determined, the intangible assets are classified as intangible
assets with indefinite useful life.
Intangible assets with finite lives are amortized over the useful life on the straight line basis. The useful
life and amortization method for an intangible asset with a finite useful life are reevaluated at the end of
each year and regulated if necessary.
Intangible assets with indefinite lives are assessed for impairment every year whenever there is an
indication that the intangible asset may be impaired. This kind of intangible assets won’t be amortized
and the useful live shall be rechecked at the end of each fiscal year. If there is evidence that the useful
lives of the intangible assets are finite, accounting treatment shall be carried out according to the
policies for intangible assets with finite lives.
The land use rights obtained by this group are recorded as intangible assets. For self-constructed
buildings, the land use rights and plants are recorded as intangible assets and Fixed assets respectively.
Purchased buildings are allocated between land use rights and buildings based on actual payments, and
are totally recorded as fixed assets when it is difficult to allocate.
4.17.2 Estimation of useful life of intangible assets with finite lives
Item Predicted useful life Reference
Land use right 50 years Useful life of land
Software use right 5 years Predicted period of bringing economic benefits
4.17.3 Judgement reference of intangible assets with indefinite lives
If the periods during which it can bring economic benefits to the Group cannot be reliably determined,
the intangible assets are classified as intangible assets with indefinite useful life. However, the Group
doesn’t have this kind of intangible assets.
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4.17.4 Accruing of impairment provision of intangible assets
On each balance sheet date, the Group made assessment on whether or not there is any
indication of potential asset impairment. If there is any evidence that indicates the possibility
of asset impairment, the recoverable amount of the asset is estimated. Independent of whether
there are indication of potential impairment, the goodwill from an enterprise merger and
intangible assets whose useful lives are indefinite are subjected to impairment testing at the
end of each year. Intangible assets which are not ready to use also need perform impairment
test every year.
The recoverable amount of an asset is the higher of the asset's or cash-generating unit's value
in use and its fair value less costs to sell, and is determined for an individual asset. If it is
difficult to determine the recoverable amount individually, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. Cash generating unit is
determined on the ground of the asset generate cash inflows that are largely independent of
those from other assets or groups of assets.
An impairment loss is recognized only if the carrying amount of an asset exceeds its
recoverable amount. An impairment loss is charged to the income statement and provision is
made accordingly.
For the purpose of impairment testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group's cash-generating units, or groups of
cash-generating units, that are expected to benefit from the synergies of the combination, and
not larger than the reportable segment determined by the Group.
When conducting impairment testing on relevant cash-generating units or groups of
cash-generating units that have related goodwill, if there is any evidence indicating that
impairment of the cash-generating units or groups of units has occurred, the enterprise first
carries out impairment testing on the cash-generating units or groups of units excluding
goodwill, calculating the recoverable amount, comparing it with the corresponding carrying
amount and recognizing any resulting impairment loss. Then impairment testing are conducted
on the cash-generating units or groups of units with goodwill included, the carrying amount of
these cash-generating units or combinations of cash-generating units (including the carrying
amount of the goodwill allocated thereto) compared to the recoverable amount; if the
recoverable amount of said cash-generating units or groups of units is below the carrying
amount thereof, The impairment loss are first deducted from the carrying amount of the
corporate assets and goodwill which have been allocated to the cash-generating unit or group
of units, and then deducted from the carrying amount of the remaining assets pro rata with
goodwill excluded from consideration.
After a loss of asset impairment has been recognized, it is not be reversed in future accounting
periods.
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4.18 Amortization methods of long-term prepaid expenses
Long term prepaid expenses are mortized over the useful economic life on a straight line basis.
Amortization period:
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5 years
Others 50 years
4.19 Estimated liabilities
4.19.1 Recognition standards of estimated liabilities
Besides the contingent consideration or liabilities through merger and acquisition, contingent liabilities
should be recognized when and only when:
(i) The group has a present obligation as a result of a past event;
(ii) It is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation; and
(iii) A reliable estimate can be made of the amount of the obligation.
4.19.2 Measurement methods of estimated liabilities
The estimated liabilities are measured at the best estimate of the expenditure required to settle the
present obligation at the balance sheet date, taking into consideration of the risks, uncertainties and time
value of money. The book value of contingent liabilities is reviewed at each balance sheet date.
Whether there is any objective evidence indicating that the book value cannot reflect the best estimated
amount, adjustments should be make to the book value.
The acquiree’s contingent liabilities through business combination is initial recognized at fair value,
and its subsequent measurement is recognized at the higher of estimated value and the initial cost less
any accumulated amortization.
4.20 Revenue
Revenue is recognized when it is probable that the economic benefits will flow to the Group and when the
revenue can be measured reliably, on the following bases:
Revenue from the sale of goods
When the significant risks and rewards of ownership have been transferred to the buyer, provided that
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the Group maintains neither managerial involvement to the degree usually associated with ownership,
nor effective control over the goods sold, and cost of sales can be measured reliably. The amount of
revenue arising on sale of goods is determined by agreement between the entity and the buyer or user
of the asset, except for those without fair value according to the received or receivable contract or
agreement price.The contract or agreement price is collected by the way of deferral. Revenue with
financing nature is measured at the fair value of the consideration received or receivable.
Rendering of service
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction shall be recognized by reference the stage of completion of the
transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the
following conditions are satisfied:
(i) The amount of revenue can be measured reliably;
(ii) It is probable that the economic benefit associated with the transaction will flow to the entity;
(iii) The stage of completion of the transaction at the reporting date can be measured reliably; and
(iv) The costs incurred for the transaction and the costs to complete the transaction can be measured
reliably.
Interest income
Interest income is measured based on the borrowing periods and effective interest rate.
4.21 Government grants
4.21.1 Type
Government grants refers to monetary or non-monetary assets received by an enterprise from the
government, but excludes capital invested in the Group by the government that gives the government
ownership rights. Government grants include grants related with assets and grants related with income.
Government grants are recognized where there is reasonable assurance that the grant will be received
and all attaching conditions will be complied with.
4.21.2 Accounting treatment method
Monetary grants are measured on the basis of the amount received or the amount receivable.
Non-monetary grants are measured based on the fair value of relevant assets, where fair value cannot be
acquired reliably, the grants are measured based on nominal amount. Where the grant relates to an asset,
the fair value is credited to a deferred income account and is released to the income statement over the
expected useful life of the relevant asset by equal annual installments. Those to be used as
compensation for future expenses or losses are recognized as deferred income and are be recorded in
the profit and loss account for the period where the relevant expenses are recognized; or Those to be
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used as compensation for relevant expenses or losses already incurred are recorded directly in the profit
and loss account for the current period. Grant which measured at nominal amount, should be recorded
in income statement.
4.22 Deferred income tax assets and deferred income tax liabilities
Income tax comprises current and deferred tax. Income tax is recognized in the income statement, or in
equity if it relates to goodwill generated from merger or affairs causing recognition to equity.
Current income tax liabilities or assets for the current and prior periods of this group are measured
according to the income tax amount to be paid or returned that calculated as the regulation of tax law.
Deferred income tax is provided, using the liability method, on all temporary differences at the balance
sheet date between the tax bases of assets and liabilities or items not recognized as assets or liabilities
but can be measure at tax bases and their carrying amounts.
4.22.1 Reference for recognizing deferred income tax assets
Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilized except:
(i) where the deferred tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
(ii) in respect of deductible temporary differences associated with interests in subsidiaries, associates
and joint ventures, deferred tax assets are only recognized to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
4.22.1 Reference for recognizing deferred income tax liabilities
Deferred tax liabilities are recognized for all taxable temporary difference, except:
(i) where the deferred tax liability arises from goodwill or the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
(ii) in respect of taxable temporary differences associated with interests in subsidiaries, associates and
joint ventures, where the timing of the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in the foreseeable future.
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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance sheet date.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilized. At each reporting date, the entity re-assesses unrecognized
deferred tax assets. The entity recognizes a previously unrecognized deferred tax asset to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
4.23 Operating leases and financial leases
4.23.1 Accounting treatment of operating leases
Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, are
accounted for as finance leases, otherwise are accounted for as operating leases.
As a lessee to operate leasing business
Rental expenses under the operating leases are credited to related costs of the assets or the
income statement on the straight-line basis over the lease terms. Contingent rentals are
recorded in income statement of the current period upon actual accrual.
4.24 Changes in main accounting policies and accounting estimates
4.24.1 Changes in accounting policies
None
4.24.2 Changes in accounting estimates
None
4.25 Correction of previous accounting errors
4.25.1 Retrospective restatement method
None
4.25.2 Future application method
None
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4.26 Other main accounting policies, accounting estimates and compiling method of financial
statement
Employee benefits
Employee benefits refer to all kinds of remunerations and other relevant reimbursements made by
enterprises to their employees in exchange for services of employees. During accounting periods
wherein an employee renders services to an enterprise, the Group recognized the benefits payable as a
liability. The benefits payable which will be matured over 1 year are discounted when it is material.
Pensions, medical insurance, unemployment insurance, other social insurance and housing fund are
recorded as cost of relevant assets or expenses for the current period.
If an Group terminates the labor relationship with any employee prior to the expiration of the relevant
labor contract or makes a severance package proposal with the purpose of enticing the employees to
willingly accept such a termination, the Group recognized the contingent liabilities to be incurred due
to severance pay, and recorded them in income statement of the current period.
The treatment for the early retirement planning is on the same basis to that of the termination benefits.
The salaries and the social insurance expenses for the period from the employee’s termination of
service and the normal retirement of these staffs are recognized as employee benefits payable when
meeting the above said retirement benefits recognition requirements, and recognized to income
statement of the current period.
5 Taxes
5.1 Main taxes and tax rate of the Company
Taxes Tax basis Tax rate
VAT is levied at 17% on the invoiced amount after deduction of eligible
Value added tax 17%
input VAT.
The consumption tax of the products of the Group, partial brandy, is
levied at quantity and price of gross turnover, namely levied at 20% on
Consumption tax 10%-20%
taxable revenue and RMB 1,000 yuan per ton. For all other products, the
consumption tax is levied at 10% on taxable revenue.
Business tax The Group is subject to a business tax of 5% on its taxable revenue. 5%
City development tax Levied at 7% of total business tax payment. 7%
The Group is subject to a corporate income tax rate of 25% on its taxable
Corporate income tax 25%
income.
5.2 Tax incentives and relative permit
The subsidiaries of the Group Xinjiang Tianzhu Wine Co., Ltd. and Xinjiang Changyu Baron Balboa Chateau
Co., Ltd. are productive enterprises incorporated in Shihezi City, Xinjiang Uygur Autonomous Region. In
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accordance with Notice of Financial & Tax Policies to Improve the Development of Agricultural Product
Manufacturing Industry (Xin Zheng Fa [2010] No. 105) and Implementation Measures for Policies to
Improve the Development of Agricultural Products in Autonomous Region (Xin Cai Fa Shui [2011] No. 8),
from January 1, 2011 to December 31, 2015, the companies shall be exempt from corporate income tax for 5
years, and enjoy some local preferential tax policies with the corporate income tax rate at 15%.
Ningxia Changyu Grape Growing Co., Ltd., a subsidiary of the Group, whose principal activity is grape
growing, is incorporated in Yongjing County, Ningxia Hui Autonomous Region. Beijing Changyu AFIP
Eco-agriculture Development Co., Ltd., a sub-subsidiary of the Group, whose principal activity is grape
growing, is incorporated in Miyun County, Beijing City. According to clause 27 of PRC Corporate Income
Tax and clause 86 of PRC Corporate Income Tax Measures for Implementation, these two companies enjoy
an exemption of corporate income tax.
6 Business combination & consolidated financial statements
6.1 Particulars of the subsidiaries
6.1.1 Subsidiary acquired from a business combination under non-common control
Unit: Yuan
Balance
after the
owner’s
equity in the
parent
Amount for company
Other
counteracting counteracts
balance
minority the losses of
Actual included Whether to
Name of Proportion Proportion Interests of shareholders’ minority
Type of the Registered Business Registered Business investment into the consolidate
the in shares of voting minority profits/losses shareholders
subsidiary place nature capital scope at the end net financial
subsidiary (%) power (%) shareholders in the in this term
of term investment statements
interests of higher than
to the
minority their
subsidiary
shareholders owner’s
equity in the
subsidiaries
at the
beginning
of year
Xinjiang Shihezi City, Production
Wholly-owned
Tianzhu Xinjiang and
subsidiary Manufacturing 75,000,000 60,000,000 60 100 Yes 56,093,912
Wine Co., Uygur sales of
Ltd. Autonomous wine
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(“Xinjiang Region,
Tianzhu”) China
(a)
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6.1.2 Subsidiaries acquired by establishment or investment
Unit: Yuan
Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
Yantai Changyu
Pioneer Vehicular
Wholly-owned Yantai City, Shandong
Transport Co., Ltd. Transportation 300,000 Vehicle transportation service 300,000 100% 100% Yes
subsidiary Province, China
(“Vehicular
Transportation”)
Beijing Changyu Sales
Wholly-owned
and Distribution Co., Beijing City, China Sales 1,000,000 Sales of wine 1,000,000 100% 100% Yes
subsidiary
Ltd. (“Beijing Sales”)
Yantai Kylin Packaging
Wholly-owned Yantai City, Shandong USD Production of packaging
Co., Ltd. (“Kylin Manufacturing 23,176,063 100% 100% Yes
subsidiary Province, China 1,900,000 materials
Packaging”) (b)
Yantai Changyu-Castel
Wine Chateau Co., Ltd. Holding Yantai City, Shandong USD
Manufacturing Production and sales of wine 28,968,100 70% 100% Yes 12,365,016
(“Changyu Chateau”) subsidiary Province, China 5,000,000
(c)
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
Changyu (Jingyang) Jingyang County,
Wholly-owned
Pioneer Wine Co., Shaanxi Province, Manufacturing 1,000,000 Production and sales of wine 1,000,000 100% 100% Yes
subsidiary
Ltd. (“Jingyang Wine”) China
Yantai Changyu
Pioneer Wine Sales Wholly-owned Yantai City, Shandong
Sales 8,000,000 Sales of wine 8,000,000 100% 100% Yes
Co., Ltd. (“Sales subsidiary Province, China
Company”)
Langfang Development
Zone Castel-Changyu Holding Langfang City, Hebei USD
Manufacturing Production and sales of wine 12,142,200 49% 100% Yes 12,640,000
Wine Co., Ltd. subsidiary Province, China 3,000,000
(“Langfang Castel”) (d)
Changyu (Jingyang)
Jingyang County,
Pioneer Wine Sales Wholly-owned
Shaanxi Province, Sales 1,000,000 Sales of wine 1,000,000 100% 100% Yes
Co., Ltd. (“Jingyang subsidiary
China
Sales”)
Langfang Changyu
Pioneer Wine Sales Wholly-owned Langfang City, Hebei
Sales 1,000,000 Sales of wine 1,000,000 100% 100% Yes
Co., Ltd. (“Langfang subsidiary Province, China
Sales”).
Shanghai Changyu Wholly-owned
Shanghai City, China Sales 1,000,000 Sales of wine 1,000,000 100% 100% Yes
Sales and Distribution subsidiary
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
Co., Ltd. (“Shanghai
Sales”)
Beijing Changyu AFIP
Holding
Wine Chateau Co., Ltd. Beijing City, China Manufacturing 110,000,000 Production and sales of wine 77,000,000 70% 100% Yes 35,293,868
subsidiary
(“Beijing Chateau”) (e)
Yantai Changyu Wine
Wholly-owned Yantai City, Shandong
Sales Co., Ltd. Sales 5,000,000 Sales of wine 5,000,000 100% 100% Yes
subsidiary Province, China
( “Wines Sales”)
Yantai Changyu
Pioneer International Wholly-owned Yantai City, Shandong Import and export of goods and
Sales 5,000,000 5,000,000 100% 100% Yes
Co., Ltd. (“Pioneer subsidiary Province, China technologies
International”)
Hangzhou Changyu Hangzhou City,
Wholly-owned Wholesale and retail of
Wine Sales Co., Ltd. Zhejiang Province, Sales 500,000 500,000 100% 100% Yes
subsidiary packaging food
(“Hangzhou Changyu”) China
Ningxia Changyu Yinchuan City,
Grape-Growing Co., Wholly-owned Ningxia Hui
Planting 1,000,000 Planting and purchase of grape 1,000,000 100% 100% Yes
Ltd. (“Ningxia subsidiary Autonomous Region,
Growing”) China
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
Huanren Changyu Huanren Manchu
National Wines Sales Wholly-owned Autonomous County,
Sales 2,000,000 Wholesale and retail of wine 2,000,000 100% 100% Yes
Co., Ltd. (“National subsidiary Liaoning Province,
Wines”) China
Liaoning Changyu Ice
Holding Benxi City, Liaoning
Production and sales of ice
Wine Chateau Co., Ltd. Manufacturing 26,300,000 13,413,000 51% 100% Yes 16,959,292
wine
subsidiary Province, China
(“Ice Chateau”) (f)
Yantai Development
Zone Changyu TradeWholly-owned Yantai City, Shandong
Sales 5,000,000 Wholesale and retail of wine 5,000,000 100% 100% Yes
Co., Ltd. (“Development
subsidiary Province, China
Zone Trade”)
Shenzhen Changyu
Wine Marketing Ltd. Wholly-owned Futian District,
Sales 500,000 Wholesale and retail of wine 500,000 100% 100% Yes
(“Shenzhen subsidiary Shenzhen City, China
Marketing”)
Yantai Fushan District
Changyu Trading Co., Wholly-owned Yantai City, Shandong
Sales 5,000,000 Wholesale and retail of wine 5,000,000 100% 100% Yes
Ltd. (“Fushan subsidiary Province, China
Trading”)
Beijing AFIP Meeting Meeting service, food,
Wholly-owned Miyun District,
Center (“Meeting Service 500,000 accommodation, tourism and 500,000 100% 100% Yes
subsidiary Beijing City, China
Center”) (g) sales of souvenir
Beijing AFIP Tourism Holding Miyun District, Tourism 500,000 Tourism and culture 350,000 70% 100% Yes 2,966,399
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
and Culture Company subsidiary Beijing City, China communication, development
(“AFIP Tourism”) (h) of tourist resources and
meeting service
Production and sales of wine,
Ningxia Changyu Yinchuan Economic
Wholly-owned packaging materials and
Pioneer Wine Co., Ltd. and Technological Manufacturing 1,000,000 1,000,000 100% 100% Yes
subsidiary planting, processing and
(“Ningxia Wine”) Development Zone
purchase of grape
Qingtongxia City,
Qing Tong Xia
Changyu Wine Wholly-owned Ningxia Hui Wholesale and retail of wine
Sales 500,000 500,000 100% 100% Yes
Marketing Ltd. (“Qing
subsidiary Autonomous Region, and business agency
Tong Xia Sales)
China
Yantai Changyu Tinlot
Wholly-owned Wholesale and
Chateau Co., Ltd. YEDA 80,000,000 Pre-packaged food 80,000,000 100% 100% Yes
subsidiary retail
(“Tinlot Chateau”)
Xinjiang Changyu
Shihezi City, Xinjiang
Baron Balboa Chateau Wholly-owned Production and sales of wine
Uygur Autonomous Manufacturing 150,000,000 150,000,000 100% 100% Yes
Co., Ltd. (“Shihezi subsidiary (raw wine)
Region, China
Chateau”)
Ningxia Changyu Ross Wholly-owned Yinchuan Economic Manufacturing 2,000,000 Production, processing and 2,000,000 100% 100% Yes
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
th
15 Chateau Co., Ltd. subsidiary and Technological sales of wine, distilled wine,
(“Ningxia Chateau”) Development Zone, fruit wine, non-alcohol
Ningxia Hui beverage and packaging
Autonomous Region, materials, tourism, meeting
China reception and catering service
Shaanxi Changyu
Xianyang City,
Ruina Chateau Co., Wholly-owned Planting of grape, processing of
Shaanxi Province, Manufacturing 20,000,000 20,000,000 100% 100% Yes
Ltd. (“Changan subsidiary wine, tourism and sightseeing
China
Chateau”)
Yantai Changyu Wine
Research and Manufacturing of brandy, wine
Holding Yantai City, Shandong
Development Co., Ltd. Manufacturing 500,000,000 and sparkling wine and 104,424,000 99% 99% Yes
subsidiary Province, China
(Development Centre) preparation of sales project
(i)
Changyu (Huanren) Beidianzi Town, Preparation for
Wholly-owned Preparation for wine-making
Wine Co., Ltd. Huanren Manchu wine-making 5,000,000 5,000,000 100% 100% Yes
subsidiary project
(“Huanren Wine”) Autonomous County project
Shihezi City, Xinjiang
Xinjiang Changyu Wholly-owned Manufacturing of wine and
Uygur Autonomous Manufacturing 10,000,000 10,000,000 100% 100% Yes
Wine Co., Ltd. subsidiary fruit wine (raw wine)
Region, China
Xinjiang Changyu Wholly-owned Shihezi City, Xinjiang Sales 10,000,000 Wholesale of pre-packaged 10,000,000 100% 100% Yes
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Balance after the owner’s
Amount for
Other balance equity in the parent company
Actual Whether to counteracting minority
included into Proportion Proportion Interests of counteracts the losses of
Type of the Registered investment at consolidate shareholders’
Name of the subsidiary Registered place Business nature Business scope the net in shares of voting minority minority shareholders in this
subsidiary capital the end of financial profits/losses in the
investment to (%) power (%) shareholders term higher than their owner’s
term statements interests of minority
the subsidiary equity in the subsidiaries at the
shareholders
beginning of year
Wine Sales Co., Ltd. subsidiary Uygur Autonomous food
Region, China
Beijing Changyu AFIP
Wholly-owned Miyun County, Beijing
Eco-agriculture Planting 1,000,000 Planting of fruit and flowers 1,000,000 100% 100% Yes
subsidiary City, China
Development Co., Ltd.
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(a) Xinjiang Tianzhu is a subsidiary of the Company by merger and acquisition on August
31, 2009, whose 60% of the shares are held by the Company. Pursuant to an operation
contract signed by the Company and Xinjiang Tianzhu, the Company is entrusted to manage
Xianjiang Chateau by paying contracting fees and therefore has the full power to control its
strategic operating, investing and financing policies. The operation agreement will terminate
on December 31, 2018.
(b) Kylin Packaging is a Sino-foreign joint venture founded on September 29, 1999 by the Company
and a foreign investor. On July 4, 2011, the Company signed the Equity Transfer Agreement with
the foreign investor of Kylin Packaging, holding 50% of Kylin’s shares with RMB 15,392,250
yuan as consideration. By August 23, 2011, the Company has completed the capital contribution
pursuant to the Equity Transfer Contract, and Kylin has become a subsidiary wholly owned by
the Company. On June 30, 2012, the change formalities of relevant business and taxation
registration were completed.
(c) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor. Pursuant to an operation contract signed by the Company and Changyu Chateau, the
Company is entrusted to manage Changyu Chateau by paying contracting fees and therefore has
the full power to control its strategic operating, investing and financing policies. The operation
agreement will terminate on December 31, 2012.
(d) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreign
investor. Pursuant to the agreement signed by the Company and Langfang Castel, the Company is
entrusted to manage Langfang Castel by paying contracting fees and therefore has the full power
to control its strategic operating, investing and financing policies, therefore the financial
statements of Langfang Castel are consolidated in the Group’s financial statements. The operation
agreement will terminate on December 31, 2012.
(e) Beijing Chateau is a limited liability company established by the Company and a domestic
investor. Pursuant to an operation contract signed by the Company and Beijing Chateau, the
Company is entrusted to manage Beijing Chateau by paying contracting fees and therefore has
the full power to control its strategic operating, investing and financing policies. The operation
agreement will terminate on September 2, 2019.
(f) Ice Chateau is a Sino-foreign joint venture established by the Company and a foreign investor.
Pursuant to the agreement signed by the Company, Ice Chateau and the foreign investor, the
Company is entrusted to manage Ice Chateau by paying contracting fees and therefore has the
full power to control its strategic operating, investing and financing policies. The operation
agreement will terminate at December 31, 2016
(g) Conference Center is a subsidiary of Beijing Chateau. Pursuant to an operation contract
signed by the Company and Beijing Chateau, the Company is entrusted to manage Changyu
Chateau by paying contracting fees and therefore has the full power to control its strategic
operating, investing and financing policies. The operation agreement will terminate on September
2, 2019.
(h) AFIP Tourism is a limited liability company established by the Company and a domestic
investor. Pursuant to an operation contract signed by the Company and AFIP, the Company is
entrusted to manage AFIP by paying contracting fees and therefore has the full power to control
its strategic operating, investing and financing policies. The operation contract will terminate on
September 2, 2019.
(i) Development Centre is a joint venture established by the Company and Shandong Yantai
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Brewing Co., Ltd. The registered capital for development centre is RMB500,000,000 yuan.
According to the investment agreement, the company would contribute RMB495,000,000 yuan
while the Shandong Yantai Brewing Co., Ltd would contribute the rest RMB5,000,000 yuan. Up to
June 30, 2012, the contribution of RMB 104,424,000 yuan has been contributed solely by the
Company. The Company has 99% power to control the Development Center and 100% of its
interests.
6.2 Changes in the scope of consolidated financial statements
The scope of consolidated financial statements isn’t changed.
7 Notes to consolidated financial statements
7.1 Monetary fund
Unit: Yuan
Ending sum Beginning sum
Conve
Item Foreign Conversio
Foreign currency rsion RMB RMB
currency n rate
rate
Cash on hand: -- -- -- --
RMB -- -- 73,721 -- -- 74,859
Cash in bank： -- -- -- --
RMB -- -- 2,009,492,493 -- -- 2,508,587,182
Other monetary funds: -- -- -- --
RMB -- -- 9,715,549 -- -- 24,305,156
Total -- -- 2,019,281,763 -- -- 2,532,967,197
As at June 30, 2012, the monetary fund with restricted ownership of the Group is RMB 2,644,828 yuan,
which is the company’s housing fund (December 31, 2011: RMB 2,604,604 yuan).
As at June 30, 2012, the Group has no monetary fund that is deposited beyond the boundaries (December 31,
2011：Nil).
The interest income of bank current deposit shall be calculated according to the interest rate of current
deposit. The maturity terms of short-term time deposit range from 3 months to 1 year, which shall be
determined according to the cash demand of the Group. The interest income shall be calculated according to
the interest rate of time deposit.
The balance of time deposits over three months as at 30 June 2012 of the Group is RMB 926,524,719 yuan
(December 31, 2011: RMB 1,273,844,720 yuan), with maturity terms ranging from 3 months to 1 year, and
the interest rates ranging from 3.10%-3.575%.
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7.2 Bills receivable
7.2.1 Classification of bills receivable
Unit: Yuan
Type Ending sum Beginning sum
Bank acceptance bill 118,836,176 56,268,482
Total 118,836,176 56,268,482
7.2.2 As at June 30, 2012, there is no pledged bills receivable.
7.2.3 As at June 30, 2012, there were no bills receivable were reclassified as accounts receivable due to the
default of drawer.
7.2.4 As at June 30, 2012, the top five bills receivable endorsed to the third parties but not yet
matured by the Company are as follows:
Unit: Yuan
Drawer Issuing date Maturity date Amount Remark
Guoyu Wine (Fujian) Co., Ltd. January 5, 2012 July 5, 2012 700,000
Cixi Daming Plastics Co., Ltd. January 17, 2012 July 17, 2012 450,000
Anqing Shunguan Trading Co., September 29,
March 29, 2012 300,000
Ltd. 2012
Zhangzhou Yisheng Paper
April 12, 2012 October 13, 2012 300,000
Packaging Co., Ltd.
Harbin Pharmaceutical Group
September 14,
No. 2 Chinese Traditional March 14, 2012 300,000
2012
Medicine Factory
Total -- -- 2,050,000 --
7.3 Interest receivable
7.3.1 Interest receivable
Unit: Yuan
Item Beginning sum Increase Decrease Ending sum
Bank fixed deposits
15,763,431 18,699,079 16,506,620 17,955,890
interest
Total 15,763,431 18,699,079 16,506,620 17,955,890
7.3.2 As at June 30, 2012, there is no overdue interest.
7.4 Trade receivable
7.4.1 Trade receivable disclosed by type
Unit: Yuan
Type Ending sum Beginning sum
Book balance Bad debt provision Book balance Bad debt
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provision
Amount Proportio Amount Proportio Amount Proportio Amount Proportio
n (%) n (%) n (%) n (%)
Trade receivable of
significant single
amount and single 68,071,719 51.5% 63,712,485 50.2%
accrued bad debt
provision
Trade receivable of
insignificant single
amount and single 64,104,826 48.5% 63,194,041 49.8%
accrued bad debt
provision
132,176,54
Total -- -- 126,906,526 -- --
5
The credit term of account receivable is normally one month. Major customers can be granted a credit term
up to three months. The trade receivable balances are interest free.
The age of the trade receivable is within 1 year.
As at June 30, 2012, there is no bad debt provision for trade receivable in this Group (December 31, 2011:
Nil).
7.4.2 Trade receivable transferred back or received in this term
Nil
7.4.3 Trade receivable actually cancelled after verification in this term
Nil
7.4.4 Trade receivable due from shareholders with voting rights of 5% (including 5%) or above in this term
Nil
7.4.5 Top 5 units of trade receivable
Unit: Yuan
Relationship with the Percentage of total
Unit Amount Period
Company trade receivable (%)
Yantai Zhongya
Pharmaceutical
Third party 40,487,676 Within 1 year 30.6%
Tonic Wine Co., Ltd.
Sales Branch
Nonggongshang
Supermarket (Group) Third party 11,846,864 Within 1 year 9.0%
Co., Ltd.
Yantai Zhongya
Pharmaceutical Third party 10,434,200 Within 1 year 7.9%
Tonic Wine Co., Ltd.
Jiangsu Hengxing
Third party 5,302,980 Within 1 year 4.0%
Wine Co., Ltd.
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Shanghai RT-Mart
Third party 3,088,699 Within 1 year 2.3%
Co., Ltd.
Total -- 71,160,419 -- 53.8%
7.4.6 Trade receivable from related parties
Unit: Yuan
Relationship with the Percentage of total trade
Unit Amount
Company receivable (%)
Yantai Changyu Under the control of the
38,330 0.03%
Travelling Co., Ltd. same parent company
Total -- 38,330 0.03%
7.4.7 Trade receivable terminating confirmation
Nil
7.5 Other Trade receivable
7.5.1 Other trade receivable disclosed by type
Ending sum Beginning sum
Bad debt
Book balance Bad debt provision Book balance
Type provision
Amount Proportio Amount Proportio Amount Proportio Amount Proportio
n (%) n (%) n (%) n (%)
Other trade receivable
of significant single
8,000,0
amount and single 60,173,485 70.7% 7,660,358 12.7% 16,869,512 18.7% 47.4%
00
accrued bad debt
provision
Other trade receivable
of insignificant single
6,654,7
amount and single 24,937,561 29.3% 3,120,600 12.5% 73,208,894 81.3% 9.1%
92
accrued bad debt
provision
10,780,95 14,654,
Total 85,111,046 -- -- 90,078,406 -- --
8 792
Other trade receivable of significant single amount and single accrued bad debt provision at the end
of term:
Unit: Yuan
Other trade
Book balance Bad debt Accrued proportion Reason
receivable
This company is in
Tiantong Securities
7,660,358 7,660,358 100% bankruptcy
Co., Ltd.
liquidation.
YEDA Management
47,410,000
Committee
Miyun County
Jugezhuang Town 5,103,127
People’s Government
Total 60,173,485 7,660,358 -- --
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Other trade receivable of insignificant single amount and single accrued bad debt provision at the
end of term
Unit: Yuan
Other trade
Book balance Bad debt provision Accrued proportion Accrued reason
receivable
The accounting age is
over three years and
Jingyang County
3,120,600 3,120,600 100% there is little
Finance Bureau
possibility to take it
back.
Penglai Daliuhang
1,749,619
Vineyard
Other 20,067,342
Total 24,937,561 3,120,600 -- --
7.5.2 Other trade receivable transferred back or received in this term
Unit; Yuan
Accumulative
Reason for being Basis for confirming accrued bad debt
Amount transferred
Other trade receivable transferred back or the original bad debt provision before
back or received
received provision being transferred
back or received
Tiantong Securities Co., Liquidation and In bankruptcy
8,000,000 339,642
Ltd. distribution liquidation.
Total -- -- 8,000,000 --
Accrued bad debt provision for other trade receivable of significant single amount and insignificant
single amount with single impairment test at the end of term:
Accrued proportion
Trade receivable Book balance Bad debt Reason
(%)
This company is in
Tiantong Securities
7,660,358 7,660,358 100% bankruptcy
Co., Ltd.
liquidation.
The accounting age is
over three years and
Jingyang County
3,120,600 3,120,600 100% there is little
Finance Bureau
possibility to take it
back.
Total 10,780,958 10,780,958 -- --
7.5.3 Other trade receivable actually cancelled after verification in this term
Unit: Yuan
Nature of other Cancellation Cancellation Whether it is caused
Unit Cancellation time
trade receivable amount reason by related trade
Penglai Failure to take it
Daliuhang Debt January 29, 2012 3,534,192 No
back
Vineyard
Total -- -- 3,534,192 -- --
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7.5.4 Other trade receivable due from shareholders with voting rights of 5% (including 5%) or above in this
term
Nil
7.5.5 Nature or content of other trade receivable of significant amount
Unit: Yuan
Nature or content of Percentage of total other trade
Unit Amount
fund receivable (%)
YEDA Management
47,410,000 Guarantee fund 55.7%
Committee
Tiantong Securities Co.,
7,660,358 Investment fund 9.0%
Ltd.
Miyun County Jugezhuang
Town People’s 5,103,127 Removal fund 6.0%
Government
Penglai Daliuhang
1,749,619 Debt 2.1%
Vineyard
Jingyang County Finance
3,120,600 Seedling tree fund 3.6%
Bureau
Total 65,043,704 -- 76.4%
7.5.6 Top 5 units of other trade receivable
Unit: Yuan
Percentage of total
Relationship with the
Unit Amount Period other trade receivable
Company
(%)
YEDA Management
Third party 47,410,000 1-2 years 55.7%
Committee
Tiantong Securities
Third party 7,660,358 More than 3 years 9.0%
Co., Ltd.
Miyun County
Jugezhuang Town Third party 5,103,127 Within 1 year 6.0%
People’s Government
Penglai Daliuhang
Third party 1,749,619 Within 1 year 2.1%
Vineyard
Jingyang County
Third party 3,120,600 More than 3 years 3.6%
Finance Bureau
Total 65,043,704 -- 76.4%
7.5.7 Other trade receivable from related parties
Nil
7.5.8 Other trade receivable terminating confirmation
Nil
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7.5.9 Securities based on other trade receivable listed in the following assets and liabilities
Nil
7.6 Advanced payment
7.6.1 Advanced payment listed by age
Unit: Yuan
Ending sum Beginning sum
Age
Proportion
Amount Proportion (%) Amount
(%)
Within 1 year 127,886,857 100% 77,252,611 100%
1-2 years
2-3 years
More than 3 years
Total 127,886,857 -- 77,252,611 --
7.6.2 Top 5 units of advanced payment
Unit: Yuan
Relationship
Reason for
Unit with the Amount Time
unsettlement
Company
Shandong Yantai Wine Co., Ltd. Failure to receive
Third party 28,276,621 May 28, 2012
Liquan Branch goods
Failure to receive
Yantai Customs Third party 20,888,437 June 13, 2012
goods
Failure to receive
Italy Donelli Company Third party 10,556,379 May 23, 2012
goods
Failure to receive
Chile RR Company Third party 6,328,595 May 14, 2012
goods
Failure to receive
Shihezi Huiquan Wine Co., Ltd. Third party 6,166,080 June 19, 2012
goods
Total -- 72,216,112 -- --
7.6.3 Advanced payment due from shareholders with voting rights of 5% (including 5%) or above in this
term
Nil
7.7 Inventories
7.7.1 Inventory classification
Unit: Yuan
Item Ending sum Beginning sum
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Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
Raw materials 54,466,804 54,466,804 55,439,304 55,439,304
Goods in process 766,778,260 766,778,260 929,934,459 929,934,459
Commodity
826,766,166 12,600,933 814,165,233 783,191,752 12,600,933 770,590,819
stocks
Turnover
materials
Consumptive
biological assets
Total 1,648,011,230 12,600,933 1,635,410,297 1,768,565,515 12,600,933 1,755,964,582
7.7.2 Inventory depreciation provision
Unit: Yuan
Book balance at Decrease
Book balance at the
Inventory type the beginning of Accrual
Reversal Write off end of term
term
Raw materials
Goods in process
Commodity stocks 12,600,933 12,600,933
Turnover materials
Consumptive
biological assets
Total 12,600,933 12,600,933
7.7.3 Inventory depreciation provision
Proportion of the reversed
Reason for reversal of
Basis of accrued inventory amount in this term in the
Item inventory depreciation
depreciation provision end balance of this
provision in this term
inventory
Raw materials
Predicted daily damage
Goods in process
rate of goods in process
Commodity stocks
Turnover materials
Consumptive biological
assets
As at June 30, 2012, the book value of the inventories with restricted ownership of the Group is
RMB 5,038,686 yuan (December 31, 2011: RMB 18,030,733 yuan), which is the trust scheme for
the Group to transfer the corresponding usufruct to Zhonghai Trust Co., Ltd. Refer to Financial and
Accounting Reports 7.22.
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7.8 Long-term equity investment
7.8.1 Particulars of long-term equity investment
Unit: Yuan
Explanation for
difference between the
Proportion of Proportion of
proportion of Accrued
shareholding in voting power in Impairment Cash
Invest to Calculation method Initial investment Beginning balance Change End balance shareholding and depreciation
the invested unit the invested unit provision dividend
proportion of voting provision
(%) (%)
power in the invested
unit
Yantai Dingtao Construction
Cost method 10,000,000 10,000,000 10,000,000 18% 18% 5,000,000
Development Co., Ltd. (“Yantai Dingt
Total -- 10,000,000 10,000,000 10,000,000 -- -- -- 5,000,000
7.8.2 Restrictions of ability to transfer capitals to the invested company
Nil
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7.9 Fixed assets
7.9.1 Particulars of fixed assets
Unit: Yuan
Book balance at the Book balance at the end
Item Increase Decrease
beginning of term of term
1. Total original book
2,186,258,978 71,582,090 13,985,402 2,243,855,666
value
Including: buildings 1,192,249,068 7,331,264 4,929,637 1,194,650,695
Machineries and
972,547,932 63,471,442 8,641,945 1,027,377,429
equipment
Motor vehicles 21,461,978 779,384 413,820 21,827,542
Book balance at the Book balance at the end
-- Increase Accrual Decrease
beginning of term of term
2. Total accumulated
577,147,110 61,988,228 9,518,466 629,616,872
depreciation:
Including: buildings 156,943,676 17,406,596 3,418,303 170,931,969
Machineries and equipment 404,851,382 43,374,603 5,721,216 442,504,769
Motor vehicles 15,352,052 1,207,029 378,947 16,180,134
Book balance at the Book balance at the end
-- --
beginning of term of term
3. Total net book value of
1,609,111,868 -- 1,614,238,794
fixed assets
Including: buildings 1,035,305,392 -- 1,023,718,726
Machineries and
567,696,550 -- 584,872,660
equipments
Motor vehicles 6,109,926 -- 5,647,408
--
4. Total impairment
--
provision
Including: buildings --
Machineries and
--
equipment
Motor vehicles --
--
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5. Total book value of
1,609,111,868 -- 1,614,238,794
fixed assets
Including: buildings 1,035,305,392 -- 1,023,718,726
Machineries and
567,696,550 -- 584,872,660
equipment
Motor vehicles 6,109,926 -- 5,647,408
--
The depreciation amount of this term is RMB 61,988,228 yuan and the original value of the fixed
assets transferred from goods in process is RMB 38,768,932 yuan.
7.9.2 Temporarily idle fixed assets
Nil
7.9.3 Fixed assets under finance leases
Nil
7.9.4 Fixed assets under operating lease
Nil
7.9.5 Fixed assets for sale at the end of term
Nil
7.9.6 Fixed assets without property certificates
Reason for not receiving property
Item Time to get the property certificate
certificate
Fermentation Centre Office Tower
Waiting for completion report
and Workshop
Xinjiang Tianzhu Comprehensive
Storeroom and Sewage Disposal Waiting for completion report
Station
Xinjiang Tianzhu Fermentation and
Waiting for completion report
Storage Workshop
Kylin Packaging Finish Goods
Waiting for completion report
Warehouse and Workshop
Ice Wine Chateau Office Building
Waiting for completion report
and Packing Workshop
Beijing Chateau European Town Waiting for completion report
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Beijing Chateau Office Town Waiting for completion report
Beijing Chateau Workshop and
Waiting for completion report
Boiler Room
Sales Company Building Office Waiting for completion report
Xinjiang Shihezi Chateau Office
Waiting for completion report
Building and Workshop
Xinjiang Shihezi Chateau South
Door, North Door and Accessory Waiting for completion report
Building
7.10 Construction in progress
7.10.1 Construction in progress
Unit: Yuan
Ending sum Beginning sum
Item
Book Impairment Book Impairment
Book value Book value
balance provision balance provision
West Mountain Factory Construction Project 36,297,701 36,297,701 30,878,151 30,878,151
Brandy Factory Reconstruction Project with Production Capacity of
50,303 50,303 152,609 152,609
200,000 Tons
Champagne Factory Low-alcohol Reconstruction Project with
422,463 422,463 902,463 902,463
Production Capacity of 20,000 Tons
Wine Factory Cabernet Centre Construction Project 5,581,283 5,581,283 5,581,283 5,581,283
Wine Factory West Mountain Cellar Expanding Project 6,691,463 6,691,463 4,491,463 4,491,463
Wine Factory 20,000-ton Tank Construction Project 2,645,843 2,645,843
2nd Phase Project of Wine Factory Cabernet Combination Center 1,933,012 1,933,012
Wine Factory Mixing and Packing Workshop Reconstruction Project
107,831 107,831
(Reconstruction Project with Production Capacity of 200,000 Tons)
Fermentation Centre Machinery Reconstruction Project 47,836 47,836 34,930 34,930
Kylin Packing Workshop Production Line Installation Project 674,174 674,174 1,674,302 1,674,302
Beijing Chateau Display Project 17,400,180 17,400,180 200,512 200,512
Ningxia United Workshop Project 1,456,023 1,456,023 1,743,526 1,743,526
Xinjiang Tianzhu Workshop Reconstruction Project 3,444,934 3,444,934 5,999,376 5,999,376
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Jingyang Ferment Workshop Reconstruction Project 455,768 455,768 505,520 505,520
Sales Company Building Project 40,101,526 40,101,526 34,221,669 34,221,669
Shihezi Chateau Construction Project 94,890,179 94,890,179 47,662,677 47,662,677
Shihezi Chateau Construction Project 169,802,040 169,802,040 102,421,590 102,421,590
Xianyang Chateau Construction Project 186,745,297 186,745,297 118,802,003 118,802,003
R&D Center Construction Project 16,020,042 16,020,042 1,804,810 1,804,810
Tinlot Chateau Construction Project 65,554,033 65,554,033 49,276,197 49,276,197
Langfang Production & Processing Environment Reconstruction
1,865,762 1,865,762
Project
Total 652,187,693 652,187,693 406,353,081 406,353,081
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7.10.2 Changes of major construction in progress
Unit: Yuan
Accumulati Including:
Proportion Capitalizati
Transferred ve capitalizatio
Beginning Other of project on ration of Capital
Item Budget Increase to fixed capitalizatio n amount of Ending sum
sum decrease input in interest in source
assets n amount of interest in
budget (%) this term
interest this term
(%)
West Mountain
Factory Self-financi
Construction 40,000,000 30,878,151 8,650,133 3,230,583 131.4% 36,297,701
ng
Project
Brandy Factory
Reconstruction
Project with Self-financi
Production 7,690,000 152,609 2,055,689 2,157,995 122.8% 50,303
ng
Capacity of
200,000 Tons
Champagne
Factory
Low-alcohol
Reconstruction Self-financi
Project with 45,000,000 902,463 480,000 132.9% 422,463
ng
Production
Capacity of
20,000 Tons
Cabernet Centre Self-financi
Project 21,000,000 5,581,283 36.3% 5,581,283
ng
Wine Factory
Cabernet Centre Self-financi
Construction 50,000,000 4,491,463 2,200,000 13.4% 6,691,463
ng
Project
Wine Plant
20,000-ton Tank Self-financi
Construction 36,480,000 4,000,000 1,354,157 79.5% 2,645,843
ng
Project
2nd Phase Project
of Wine Factory
Self-financi
Cabernet 22,000,000 8,423,012 6,490,000 83.8% 1,933,012
Combination ng
Center
Wine Factory
Mixing and Self-financi
Packing 36,000,000 2,937,831 2,830,000 69.3% 107,831
ng
Workshop
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Accumulati Including:
Proportion Capitalizati
Transferred ve capitalizatio
Beginning Other of project on ration of Capital
Item Budget Increase to fixed capitalizatio n amount of Ending sum
sum decrease input in interest in source
assets n amount of interest in
budget (%) this term
interest this term
(%)
Reconstruction
Project
(Reconstruction
Project with
Production
Capacity of
200,000 Tons)
Fermentation
Centre
Self-financi
Machinery 5,000,000 34,930 12,906 92.9% 47,836
Reconstruction ng
Project
Kylin Packing
Workshop
Self-financi
Production Line 6,200,000 1,674,302 2,136,428 3,136,556 76.4% 674,174
Installation ng
Project
Beijing Chateau Self-financi
Display Project 455,750,000 200,512 20,610,978 3,411,310 105.1% 17,400,180
ng
Ningxia United
Self-financi
Workshop 58,700,000 1,743,526 287,503 97.5% 1,456,023
Project ng
Xinjiang
Tianzhu
Self-financi
Workshop 37,570,000 5,999,376 4,224,040 6,778,482 107.4% 3,444,934
Reconstruction ng
Project
Jingyang
Ferment
Self-financi
Workshop 26,000,000 505,520 829,414 879,166 74.7% 455,768
Reconstruction ng
Project
Sales Company Self-financi
Building Project 53,000,000 34,221,669 5,879,857 150.7% 40,101,526
ng
Shihezi Chateau
Self-financi
Construction 540,000,000 47,662,677 47,227,502 66.9% 94,890,179
Project ng
Ningxia
Chateau Self-financi
Construction 196,000,000 102,421,590 75,113,630 7,733,180 90.6% 169,802,040
ng
Project
Xianyang
Chateau 250,000,000 118,802,003 67,943,294 74.7% Self-financi 186,745,297
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Accumulati Including:
Proportion Capitalizati
Transferred ve capitalizatio
Beginning Other of project on ration of Capital
Item Budget Increase to fixed capitalizatio n amount of Ending sum
sum decrease input in interest in source
assets n amount of interest in
budget (%) this term
interest this term
(%)
Construction ng
Project
R&D Center
Self-financi
Construction 165,000,000 1,804,810 14,215,232 9.7% 16,020,042
Project ng
Tinlot Chateau
Self-financi
Construction 152,400,000 49,276,197 16,277,836 43% 65,554,033
Project ng
Langfang
Production &
Processing Self-financi
Environment 19,727,000 1,865,762 9.5% 1,865,762
ng
Reconstruction
Project
2,223,517,0
Total 406,353,081 284,603,544 38,768,932 -- -- -- 652,187,693
00
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7.10.3 Impairment provision for construction in progress
As at June 30, 2012, there is no indication for impairment in construction in process of the Group,
so no provision is made (December 31, 2011: Nil).
7.11 Productive biological assets
7.11.1 Calculating by cost
Unit: Yuan
Book balance at the Book balance at the
Item Increase Decrease
beginning of term end of term
1. Plantation
Grape Seedling 42,355,441 2,246,980 1,016,900 43,585,521
2. Stock raising
3. Forestry
4. Fishery
Total 42,355,441 2,246,980 1,016,900 43,585,521
As at June 30, 2012, no ownership of the biological asset is restricted (December 31, 2011: Nil).
The productive biological assets of the Group are vines. The vines may suffer from scourge, plant
diseases and insect pests, market demand and other risk factors, which lead to impairment on assets.
The Group will adopt effective procedures to prevent plant diseases and insect pests, and strengthen
the management of trees and soils to safeguard the biological assets.
As at June 30, 2012, there is no indication that biological assets may be impaired, and no provision is
made (December 31 2011: Nil).
7.11.2 Calculating by fair value
Nil
7.12 Intangible assets
7.12.1 Particulars of intangible assets
Unit: Yuan
Book balance at the Book balance at the
Item Increase Decrease
beginning of term end of term
1. Total original book
283,921,211 306,525 284,227,736
value
Land use right 280,441,211 306,525 280,747,736
Software use right 3,480,000 3,480,000
Total 283,921,211 306,525 284,227,736
2. Total accumulated
20,083,124 3,344,042 23,427,166
amortization
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Book balance at the Book balance at the
Item Increase Decrease
beginning of term end of term
Land use right 17,299,124 2,996,042 20,295,166
Software use right 2,784,000 348,000 3,132,000
Total 20,083,124 3,344,042 23,427,166
3. Total net book value
263,838,087 -3,037,517 260,800,570
of intangible assets
Land use right 263,142,087 -2,689,517 260,452,570
Software use right 696,000 -348,000 348,000
Total 263,838,087 -3,037,517 260,800,570
4. Total depreciation
provision
Land use right
Software use right
Total
Total book value of
263,838,087 -3,037,517 260,800,570
intangible assets
Land use right 263,142,087 -2,689,517 260,452,570
Software use right 696,000 -348,000 348,000
Total 263,838,087 -3,037,517 260,800,570
The amortization amount in this term is RMB 3,344,042 yuan.
As at June 30, 2012, there are no restricted intangial assets (December 31, 2011: Nil).
7.13 Long term prepaid expenses
Unit: Yuan
Reason for
Item Beginning sum Increase Amortization Other decrease Ending sum
other decrease
Land lease fees 64,873,456 679,189 64,194,267
Land-use fees 38,340,026 71,604 336,778 38,074,852
Afforestation
43,445,077 5,000,000 4,255,615 44,189,462
fees
Other 1,770,877 25,500 1,745,377
Total 148,429,436 5,071,604 5,297,082 148,203,958 --
7.14 Deferred tax assets and liabilities
7.14.1 Deferred tax assets and liabilities aren’t presented in net amounts after setoff.
Confirmed deferred tax assets and liabilities
Unit: Yuan
Item Ending sum Beginning sum
Deferred tax assets:
Asset impairment provision 7,095,473 8,063,931
Deductible loss 5,249,101 4,572,888
Unrealized profits from inter-company
81,282,211 107,340,177
transactions
Unpaid bonus 31,134,630 39,118,917
Early retirement benefit 7,133,262 7,873,591
Deferred income 8,099,535 8,559,434
Subtotal 139,994,212 175,528,938
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Item Ending sum Beginning sum
Deferred tax liabilities:
Appraisement of trading financial
instruments and derivative financial
instruments
Change of fair value of financial assets for
sale included in the capital reserve
Fair value adjustment in business
5,336,115 5,336,115
combination under non-common control
Subtotal 5,336,115 5,336,115
Unconfirmed deferred tax assets
Unit: Yuan
Item Ending sum Beginning sum
Deductible temporary difference
Deductible loss 21,303,186 20,591,253
Total 21,303,186 20,591,253
Deductible losses not confirmed for deferred tax assets will expire in:
Unit: Yuan
Year Ending sum Beginning sum Remark
2012 85,340 85,340
2013 64,997 64,997
2014 19,077,494 19,077,494
2016 1,363,422 1,363,422
2017 711,932.95
Total 21,303,186 20,591,253 --
Taxable differences and deductible differences
Unit: Yuan
Temporary difference
Item
At the end of term At the beginning of
term
Taxable difference
Fair value adjustment in business combination under non-common
21,344,460 21,344,460
control
Subtotal 21,344,460 21,344,460
Deductible difference
Unrealized profits from inter-company transactions 325,128,845 429,360,708
Unpaid bonus 124,538,521 156,475,668
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Temporary difference
Item
At the end of term At the beginning of
term
Early retirement benefit 28,533,047 31,494,364
Provision for impairment 28,381,891 32,255,725
Deductible loss 20,996,402 18,291,552
Deferred income 44,905,291 47,440,738
Subtotal 572,483,997 715,318,755
7.15 Provision for impairment of assets
Unit: Yuan
Book balance at Decrease Book balance
Item the beginning of Increase at the end of
Reversal Write off
term term
1. Bad debt provision 14,654,792 339,642 3,534,192 10,780,958
2. Inventory impairment
12,600,933 12,600,933
provision
3. Provision for
impairment of financial
assets for sale
4. Provision for
impairment of
held-to-maturity
investment
5. Provision for
impairment of long-term 5,000,000 5,000,000
equity investment
6. Provision for
impairment of investment
real estate
7. Provision for
impairment of fixed
assets
8. Provision for
impairment of project
materials
9. Provision for
impairment of
construction in process
10. Provision for
impairment of productive
biological assets
Including: Provision
for impairment of mature
productive biological
assets
11. Provision for
impairment of oil-and-gas
assets
12. Provision for
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impairment of intangible
assets
13. Provision for
impairment of business
reputation
14. Other
Total 32,255,725 339,642 3,534,192 28,381,891
7.16 Other non-current assets
Unit: Yuan
Item Ending sum Beginning sum
Unconfirmed financing expenses 4,507,953 4,780,927
Total 4,507,953 4,780,927
7.17 Trade payable
7.17.1 Particulars of trade payable
Unit: Yuan
Item Ending sum Beginning sum
Purchase goods and accept services 261,047,106 229,920,729
Total 261,047,106 229,920,729
7.17.2 Trade payable due from shareholders with voting rights of 5% (including 5%) or above in this term
Nil
As at June 30, 2012, the Group has no significant outstanding balances aged more than one year (December
31, 2011: Nil).
7.18 Advances from customers
7.18.1 Particulars of advances from customers
Unit: Yuan
Item Ending sum Beginning sum
Advances from customers for selling goods 275,386,880 293,655,222
Total 275,386,880 293,655,222
7.18.2 Advances from customers due from shareholders with voting rights of 5% (including 5%) or above in
this term
Nil
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As at June 30, 2012, the Group has no significant outstanding balances aged more than one year (December
31, 2011: Nil).
7.19 Employee benefits payable
Unit: Yuan
Book balance at
Book balance at the
Item the beginning of Increase Decrease
end of term
term
1. Salaries and bonus 125,038,715 215,705,187 247,572,914 93,170,988
2. Staff benefit 1,076,258 1,076,258
3. Staff welfare 338,880 16,589,178 16,424,244 503,814
Including:
Medical insurance 74,012 3,942,625 3,906,152 110,485
Pension 254,394 10,719,400 10,613,450 360,344
Unemployment 7,152 1,089,119 1,080,740 15,531
i
Injury insurance 1,734 427,886 420,691 8,929
Maternity insurance 1,588 410,148 403,211 8,525
4. Housing fund 489,288 2,707,530 2,586,708 610,110
5. Dismiss welfare 36,275,292 3,238,667 33,036,625
6. Other 26,132,762 1,324,525 1,778,010 25,679,277
Union fee and
3,786,479 1,324,525 1,749,010 3,361,994
education fee
Subsidy and allowance
22,346,283 29,000 22,317,283
of employees
Total 188,274,937 237,402,678 272,676,801 153,000,814
There is no amount in arrears in the employee compensation payable.
The union fee and education fee is RMB 1,749,010 yuan. Three is no non-monetary welfare. The compensation
for release of employees is RMB 3,238,667 yuan.
7.20 Tax payable
Item Ending sum Beginning sum
Value added tax -45,057,791 22,405,920
Consumption tax 15,298,780 48,064,764
Business tax 389,702 372,616
Corporation income tax 321,572,919 596,777,047
Individual income tax 6,714,903 6,968,982
City construction tax 4,091,242 11,907,032
Urban land use tax 704,374 709,120
Property tax 1,865,334 1,774,578
Other 48,493,187 9,479,798
Total 354,072,650 698,459,857
100
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7.21 Other payables
7.21.1 Particulars of other payables
Unit: Yuan
Item Ending sum Beginning sum
Advertising expenses payable 198,447,767 89,115,832
Distributors deposit payable 156,334,882 152,184,670
Payables for equipment purchases,
construction costs and transportation 64,596,876 86,651,441
charges
Payable for trademark usage of the Group 55,719,625 108,911,034
Payables for deposit of supplies 11,055,361 10,377,751
Other 77,250,974 88,818,272
Total 563,405,485 536,059,000
7.21.2 Other payable due from shareholders with voting rights of 5% (including 5%) or above in this term is
as follows:
Unit: Yuan
Unit Ending sum Beginning sum
Yantai Changyu Group Co., Ltd. 58,936,125 108,911,034
Total 58,936,125 108,911,034
7.21.3 Other payables of significant amount aged more than one year
Other payables of significant amount aged more than one year is distributor’s deposit with amount
of RMB 105,005,428 yuan, which isn’t paid after the preparation of the balance sheet.
7.22 Non-current liability mature within 1 year
7.22.1 Particulars of non-current liability mature within 1 year
Unit: Yuan
Item Ending sum Beginning sum
Long-term loan mature within 1 year
Bond payable mature within 1 year
Long-term account payable mature within
56,479,950 81,081,000
1 year
Total 56,479,950 81,081,000
7.22.2 Long-term payable mature within 1 year
Unit: Yuan
101
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Interest rate Accrued Borrowing
Borrower Period Beginning sum End balance
(%) interest requirement
July
Zhonghai Trust
2011-February 52,785,000 7% 3,694,950 56,479,950 Credit
Co., Ltd.
2013
Pursuant to “Profit Transfer Contract of 1912 Dry Red Wine in One-hundred-year Cellar of
Changyu” signed between the Company and Zhonghai Trust Co., Ltd. in July 2011, the Company
transfers a special wine profit to the special fund set by Zhonghai Trust Co., Ltd. for RMB
52,785,000 yuan. The annual interest rate of this trust scheme is 7%, which will terminate in
February 2013.
7.23 Other current liability
Unit: Yuan
Item Book balance at the end of term Book balance at the beginning of
t
Deferred income 4,490,529 4,744,074
Total 4,490,529 4,744,074
The deferred incomes are as follows:
Deferred income Book balance at the beginning of
Book balance at the end of term
term
Government allowance related to the
assets
Fund supporting major construction 1,260,714 1,334,874
projects
Special fund for the development of 786,600 828,000
emerging industries and key industries
Other 2,443,215 2,581,200
Subtotal 4,490,529 4,744,074
7.24 Other non-current liability
Unit: Yuan
Book balance at the beginning of
Item Book balance at the end of term
term
Employee compensation payable 11,124,000 11,124,000
Fund of trust scheme 52,785,000
Interest of trust fund payable 1,847,475
Deferred income 40,414,762 42,696,664
Total 51,538,762 108,453,139
7.24.1 As at June 30, 2012, the employee compensation payable is the bonus for excess profits and
the guarantee fund for working responsibility accrued on the basis of the operating income of 2011,
which will pay from 2013 to 2015.
7.24.2 The deferred incomes are as follows:
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Book balance at the beginning of
Item Book balance at the end of term
term
Government allowance related to the assets
Fund supporting major construction 11,346,427 12,013,864
projects
Special fund for the development of 7,079,400 7,452,000
emerging industries and key industries
Other 21,988,935 23,230,800
Subtotal 40,414,762 42,696,664
7.25 Share capital
Unit: Yuan
Increase or decrease (+,-)
Share
Beginning Share transferred
Issue new Ending sum
sum premium from Other Subtotal
capital
account accumulation
fund
Total shares 527,280,000 158,184,000 158,184,000 685,464,000
Approved by the Shareholders’ Meeting, based on the total share capital of 527,280,000 shares on
December 31, 2011, the Company transfers 3 bonus shares per 10 shares to all shareholders, totally
of 158,184,000 shares. This capital increase is verified by Shandong Zhengyuan Hexin Certified
Public Accountants Co., Ltd. with the Capital Verification Report No.: Lu Zheng Xin Yan Zi [2012]
No. 2008.
7.26 Capital surplus
Unit: Yuan
Item Beginning sum Increase Decrease Ending sum
Capital premium (Share
557,222,454 557,222,454
capital premium)
Other capital surplus 4,916,588 4,916,588
Total 562,139,042 562,139,042
7.27 Surplus reserve
Unit: Yuan
Item Beginning sum Increase Decrease Ending sum
Legal surplus 295,942,630 295,942,630
Free surplus
Reserve fund
Enterprise expansion fund
Other
Total 295,942,630 295,942,630
103
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In accordance with the Company Law of the People's Republic of China and the Articles of Association of
the Company, the Company is required to appropriate 10% of the net profit to the statutory surplus reserve
until the accumulated balance of the statutory surplus reserve reaches 50% of the registered share capital.
The Company can appropriate discretionary surplus reserve after appropriation of the statutory surplus
reserve. Discretionary surplus reserve can be utilized to offset the deficit or increase the share capital after
approval.
Since 31 December 2006, the statutory surplus reserve of the Company has reached 50% of the registered
share capital. Pursuant to the resolution of the board of directors of the Company, no appropriation of
statutory surplus reserve since 2007.
7.28 Retained profits
Unit: Yuan
At the end of term At the beginning of term
Item Drawing or Drawing or
Amount distribution Amount distribution
percentage percentage
Retained profits at the
end of last year before 3,628,279,989 -- 2,459,263,257 --
adjustment
Total retained profits at
the beginning of the
year before adjustment
-- --
(increase listed with+ ,
and decrease listed with
-)
Retained profits at the
beginning of the year 3,628,279,989 -- 2,459,263,257 --
after adjustment
Plus: Net profit for
owner of the parent 921,143,478 -- 1,907,208,732 --
company
Minus: Drawn legal
surplus
Drawn free surplus
Drawn common risk
provision
Common dividend
801,465,600 738,192,000
payable
Common dividend
transferred to share 158,184,000
capital
Retained profits at the
3,589,773,867 -- 3,628,279,989 --
end of term
7.29 Operating income and costs
7.29.1 Operating income and costs
Unit: Yuan
104
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Item Amount incurred in this term Amount incurred in last term
Major operating income 3,001,455,707 3,082,709,568
Other operating income 11,128,382 7,311,999
Major operation cost 721,877,778 746,406,542
Other operating cost 5,955,695 2,831,087
7.29.2 Major business (products)
Unit: Yuan
Amount incurred in this term Amount incurred in last term
Income Cost Income Cost
Wine 2,429,357,282 510,014,889 2,567,952,146 543,466,388
Brandy 485,298,545 176,830,549 389,376,068 150,987,841
Champagne 19,269,509 9,096,072 18,410,256 8,379,943
Other 67,530,371 25,936,268 106,971,098 43,572,370
Total 3,001,455,707 721,877,778 3,082,709,568 746,406,542
7.29.3 Operating income of top 5 clients of the Company
Unit: Yuan
Proportion of total operating income
Client Major operating income
of the Company (%)
Shanghai RT-Mart Co., Ltd. 16,609,409 0.55%
Wenling Taiping Haoyin Wine
14,544,057 0.49%
Shop
Jinan Guidun Yimou Trading
14,291,760 0.47%
Co., Ltd.
Lianhua Supermarket Holdings
14,142,137 0.47%
Co., Ltd.
Zhenjiang District Youhui Shop 13,938,929 0.46%
Total 73,526,292 2.44%
7.30 Taxes and surcharges
Unit: Yuan
Amount incurred in Amount incurred in
Item Charging standard
this term last term
Partial brandy is levied at quantity
and price of gross turnover. For all
Consumption tax 89,603,762 112,022,461 other products, the consumption
tax is levied at 10% on taxable
revenue.
Business Tax 2,273,845 1,951,821 Charged at 5% of the lease fee
Charges at 7% of the turnover tax
City construction tax 30,493,854 35,639,149
payable
Charged at 3% (5%) of the
Education fee and surcharges 22,900,088 25,486,893
turnover tax payable
Resource tax
105
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Other 4,752,311 602,409
Total 150,023,860 175,702,733 --
7.31 Investment income
7.31.1 Particulars of investment income
Unit: Yuan
Amount incurred in this
Item Amount incurred in last term
term
Income from long-term equity investment by cost
method
Income from long-term equity investment by
equity method
Investment income from disposal of long-term
equity investment
Investment income gained in the period of holding
trading financial assets 0 52,122
Investment income gained from held-to-maturity
investment in the beneficial period
Investment income gained from financial assets
held for sale
Investment income gained from disposal of
trading financial assets
Investment income gained from held-to-maturity
nvestment
Investment income from the financial assets for
sale
Other
Total 0 52,122
7.32 Losses for impairment of assets
Unit: Yuan
Item Amount incurred in this term Amount incurred in last term
1. Losses for bad debts -339,642 0
2. Losses for impairment of inventories
3. Losses for impairment of financial assets for
sale
4. Losses for impairment of held-to-mature
investment
5. Losses for impairment of long-term equity
investment
6. Losses for impairment of investment real
estate
7. Losses for impairment of fixed assets
8. Losses for impairment of project materials
9. Losses for impairment of construction in
progress
106
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10. Losses for impairment of productive
biological assets
11. Losses for impairment of oil-and-gas assets
12. Losses for impairment of intangible assets
13. Losses for impairment of business reputation
14. Other
Total -339,642 0
7.33 Non-operation income
7.33.1 Particulars of non-operative income
Unit: Yuan
Item Amount incurred in this term Amount incurred in last term
Total gains on disposal of non-current assets 267,509 137,072
Including: Gains on disposal of plant property
267,509 137,072
and equipment
Gains on disposal of intangible assets
Gains on debt recombination
Gains on exchange of non-monetary assets
Grains on donations
Government allowance 6,366,089 2,137,979
Other 2,199,964 1,787,125
Total 8,833,562 4,062,176
Government allowance
Unit: Yuan
Item Amount incurred in this term Amount incurred in last term Remark
Funds to support major projects 2,007,004 645,000
Funds to support small and
439,850
Medium-sized Enterprises
Tax refund 3,265,733 1,340,299
Other 653,502 152,680
Total 6,366,089 2,137,979 --
7.34 Non-operation expenses
Unit: Yuan
Item Amount incurred in this term Amount incurred in last
t
Total loss on disposal of non-current assets 2,049,999 236,937
Including: Loss on disposal of fixed assets 2,049,999 236,937
Loss on disposal of intangible assets
Loss on debt recombination
107
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Loss on exchange of non-monetary assets
Donation 210,000
Other 72,912 751,394
Total 2,332,911 988,331
7.35 Income tax
Unit: Yuan
Item Amount incurred in this term Amount incurred in last
Current income tax calculated in accordance with the
270,610,762 269,898,873
tax law and relevant regulations
Adjusted deferred income tax 35,534,726 16,421,750
Total 306,145,488 286,320,623
7.36 Computational process based on basis EPS and diluted EPS
Item Amount incurred in this Amount incurred in last
Earnings
Consolidated profit attributable to ordinary equity shareholders 921,143,478 876,955,116
of the Company
Shares
Weighted average number of ordinary shares issued 685,464,000 527,280,000
Basic earnings per share 1.34 1.66
Diluted earnings per share Not applicable Not applicable
7.37 Other comprehensive earnings
Unit: Yuan
Amount incurred in last
Item Amount incurred in this term
term
1. Gain (loss) on financial assets for sale
Minus: Influence of income tax on financial assets for
sale
Net profit or loss in this term transferred from other
comprehensive earnings before
Subtotal
2. Shares in other comprehensive earnings of the
invested unit by equity method
Minus: Influence of income tax on shares in other
comprehensive earnings of the invested unit by equity
method
Net profit or loss in this term transferred from other
comprehensive earnings before
108
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Amount incurred in last
Item Amount incurred in this term
term
Subtotal
3. Gain (loss) on cash flow hedging tool
Minus: Influence of income tax on cash flow
hedging tool
Net profit or loss in this term transferred from other
comprehensive earnings before
Adjustment on the confirmed amount in the beginning
transferred to hedged project
Subtotal
4. Converting difference from financial statements in
foreign currency
Minus: Net profit or loss in this term transferred from
disposal of overseas operation
Subtotal
5. Other 19,679
Minus: Influence of income tax on other amount
included in other comprehensive earnings
Net profit or loss in this term transferred from other
amount included in other comprehensive earnings
Subtotal 19,679
Total 19,679
7.38 Notes to consolidated cash flow statement
7.38.1 Cash received relating to other operating activities
Unit: Yuan
Item Amount
Government allowance 2,260,000
Distributor deposit 1,579,716
Earnest money 27,852,874
Interest income 4,416,622
Other 6,445,418
Total 42,554,630
7.38.2 Cash paid relating to other operating activities
Unit: Yuan
Item Amount
Selling expenses 494,435,661
General and administrative expenses 55,181,366
Payment for maturity of wine in Zhongrong International Trust
77,543,190
Co., Ltd.
Other 21,831,963
Total 648,992,180
109
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7.39 Supplementary information to consolidated cash flow statement
7.39.1 Supplementary information to consolidated cash flow statement
Unit: Yuan
Supplementary materials Amount incurred in this term Amount incurred in last term
1. Cash flows from operating activities calculated
-- --
by adjusting the net profit:
Net profit 921,143,478 876,194,317
Plus: Provision for impairment of assets -339,642
Depreciation of fixed assets, oil-and-gas assets and
63,005,128 41,265,031
productive biological assets
Intangible assets amortization 3,344,042 1,818,074
Amortization of long term prepaid expenses 5,297,082 1,845,599
Losses on disposal of fixed assets, intangible assets
-225,844 99,865
and other long-term assets (profit listed with “－”)
）Losses on retirement of fixed assets (profit listed
2,008,334
with “－”)
Losses on fair value change (profit listed with
“－”)
Financial costs (profit listed with “－”) -20,462,083 21,630,697
Investment losses (profit listed with “－”) -52,122
Decrease in deferred income tax assets (increase
35,534,726 16,421,750
listed with “-”)
Increase of deferred income tax liabilities
(decrease listed with “－”)
Decrease in inventories (increase listed with “-”) 120,554,286 214,990,710
Decrease in operating receivables (increase listed
-117,038,790 -56,129,075
with “-”)
Increase in operating payable (decrease listed with
-428,349,377 -99,197,581
“-”)
Other
Net cash flows from operating activities 584,471,340 1,018,887,265
2. Significant investment and financing activities
-- --
not involving cash deposit and withdrawal:
Debt transferred into assets
Convertible corporate bond mature within 1 year
Fixed assets under financing lease
3. Changes of cash and cash equivalent: -- --
Ending balance of cash 1,090,112,215 1,012,852,981
Minus: Opening balance of cash 1,256,517,873 998,934,824
Plus: Ending balance of cash equivalent
Minus: Opening balance of cash equivalent
Net increase amount of cash and cash equivalent -166,405,658 13,918,157
7.39.2 Cash and cash equivalents
Unit: Yuan
Item Amount incurred in this term Amount incurred in last term
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1. Cash 1,090,112,215 1,256,517,873
Including: Cash on hand 73,721 74,859
Bank deposits on demand 1,080,322,945 1,234,742,462
Other monetary capital on demand 9,715,549 21,700,552
Due from central bank available for payment
Due from the industry
Inter-bank lending
2. Cash equivalents
Including: Bond investment mature within three
months
3. Balance of cash and cash equivalents at the end
1,090,112,215 1,256,517,873
of term
8. Accounting treatment of asset securitization
Nil
9 Related parties and related transactions
9.1 Particulars of the parent company of the Company
Unit: Yuan
Proportion
Proportion
of
of voting
shareholding
Name of powers of
Association Type of Registered Legal Business Registered of the parent Organization
parent the parent
relationship enterprise place representative nature capital company in code
company company
this
in this
enterprise
enterprise
(%)
(%)
Parent
Joint
Controlling company Yantai
stock Sun Liqiang Manufacturing 50,000,000 50.4% 50.4% 265 645 824
company and City
company
subsidiary
From January to June 2012, there was no fluctuation in registered capital of the parent company and its share of
equity interest and share of voting rights.
9.2 Particulars of the subsidiaries
Unit: Yuan
Type of Proportion of Proportion of
Type of Registered Legal Registered Organization
Name of the subsidiary the Business nature shareholding voting
enterprise place representative capital code
subsidiary (%) powers (%)
Shihezi City,
Xinjiang Tianzhu Wine Holding Limited Xinjiang Uygur Zhou
Manufacturing 75,000,000 60% 100% 787 604 261
Co., Ltd. subsidiary company Autonomous Hongjiang
Region, China
Yantai Changyu Pioneer Yantai City,
Vehicular Transport Co. Holding Limited
Shandong Zhang Lixian Transportation 300,000 100% 100% 165 031 729
subsidiary company
Ltd. Province, China
Beijing Changyu Sales
Holding Beijing City,
and Distribution Co., Limited Sun Liqiang Sales 1,000,000 100% 100% 634 377 029
subsidiary China
Ltd. company
Yantai City,
Yantai Kylin Packaging Holding Limited USD
Shandong Yang Ming Manufacturing 100% 100% 863 052 455
Co., Ltd. subsidiary company 1,900,000
Province, China
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Type of Proportion of Proportion of
Type of Registered Legal Registered Organization
Name of the subsidiary the Business nature shareholding voting
enterprise place representative capital code
subsidiary (%) powers (%)
Sino-foreign Yantai City,
Yantai Changyu-Castel Holding USD
joint Shandong Sun Liqiang Manufacturing 70% 100% 730 682 613
Wine Chateau Co., Ltd. subsidiary 5,000,000
venture Province, China
Jingyang
Changyu (Jingyang) Holding Limited
County, Shaanxi Cai Jianshe Manufacturing 1,000,000 100% 100% 732 663 643
Pioneer Wine Co., Ltd. subsidiary company
Province, China
Yantai City,
Yantai Changyu Pioneer Holding Limited
Shandong Jiang Hua Sales 8,000,000 100% 100% 746 576 380
Wine Sales Co., Ltd. subsidiary company
Province, China
Langfang Development Sino-foreign Langfang City,
Holding USD
Zone Castel-Changyu joint Hebei Province, Mige Balu Manufacturing 49% 100% 735 624 56X
subsidiary 3,000,000
Wine Co., Ltd venture China
Changyu (Jingyang) Jingyang
Holding Limited Zhou
Pioneer Wine Sales County, Shaanxi Sales 1,000,000 100% 100% 735 379 154
subsidiary company Mingqiang
Co., Ltd. Province, China
Langfang Changyu Langfang City,
Pioneer Wine SalesHolding Limited Hebei Province,
Liu
Sales 1,000,000 100% 100% 737 388 150
subsidiary company Wanqiang
Co.,Ltd. China
Shanghai Changyu Sales
Holding Limited Shanghai city, Zhou
and Distribution Co., Sales 1,000,000 100% 100% 749 571 075
subsidiary company China Hongjiang
Ltd.
Beijing Changyu AFIP Holding Limited Beijing city, Sun
Manufacturing 110,000,000 70% 100% 780 953 469
Wine Chateau Co., Ltd. subsidiary company China Liqiang
Yantai City,
Yantai Changyu Wine Holding Limited
Shandong Jiang Hua Sales 5,000,000 100% 100% 783 487 627
Sales Co., Ltd. subsidiary company
Province, China
Yantai City,
Yantai Changyu Pioneer Holding Limited Zhou
Shandong Sales 5,000,000 100% 100% 780 766 161
International Co., Ltd. subsidiary company Hongjiang
Province, China
Hangzhou City,
Hangzhou Changyu Holding Limited
Zhejiang Jiang Hua Sales 500,000 100% 100% 788 283 631
Wine Sales Co., Ltd. subsidiary company
Province, China
Yinchuan City,
Ningxia Changyu Holding Limited Ningxia Hui Shao
Planting 1,000,000 100% 100% 788 200 410
Grape-Growing Co., Ltd. subsidiary company Autonomous Chunsheng
Region, China
Huanren
Manchu
Huanren Changyu
Holding Limited Autonomous
National Wines Sales Leng Bin Sales 2,000,000 100% 100% 794 822 179
subsidiary company County,
Co., Ltd.
Liaoning
Province, China
Sino-foreign Benxi City,
Liaoning Changyu Ice Holding Zhou
joint Liaoning Manufacturing 26,300,000 51% 100% 747 128 301
Wine Chateau Co., Ltd. subsidiary Hongjiang
venture Province, China
Yantai Development Yantai City,
Holding Limited Zhou
Zone Changyu Trade Shandong Sales 5,000,000 100% 100% 796 183 411
subsidiary company Hongjiang
Co., Ltd. Province, China
Futian District,
Shenzhen Changyu Wine Holding Limited
Shenzhen City, Lin Pu Sales 500,000 100% 100% 664 195 20X
Marketing Ltd. subsidiary company
China
Yantai Fushan District Yantai City,
Holding Limited Zhou
Changyu Trading Co., Shandong Sales 5,000,000 100% 100% 660 176 044
subsidiary company Hongjiang
Ltd. Province, China
Miyun District,
Beijing AFIP Meeting Holding Limited
Beijing City, Sun Hongbo Service 500,000 100% 100% 669 926 112
Center subsidiary company
China
Miyun District,
Beijing AFIP Tourism Holding Limited
Beijing City, Liu Shilu Tourism 500,000 70% 100% 676 627 372
and Culture Company subsidiary company
China
Yinchuan
Economic and
Ningxia Changyu Holding Limited
Technological Li Jiming Manufacturing 1,000,000 100% 100% 670 408 275
Pioneer Wine Co., Ltd. subsidiary company
Development
Zone
Qingtongxia
City, Ningxia
Qing Tong Xia Changyu Holding Limited
Hui Cai Jianshe Sales 500,000 100% 100% 694 334 151
Wine Marketing Ltd. subsidiary company
Autonomous
Region, China
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Type of Proportion of Proportion of
Type of Registered Legal Registered Organization
Name of the subsidiary the Business nature shareholding voting
enterprise place representative capital code
subsidiary (%) powers (%)
Yantai Changyu Tinlot Holding Limited Wholesale and
YEDA Liu quan 80,000,000 100% 100% 683 222 859
Chateau Co., Ltd. subsidiary company retail
Shihezi City,
Xinjiang Changyu Baron Holding Limited Xinjiang Uygur
Sun Liqiang Manufacturing 150,000,000 100% 100% 552 414 949
Balboa Chateau Co., Ltd subsidiary company Autonomous
Region, China
Yinchuan
Economic and
Technological
Ningxia Changyu Ross Holding Limited Development Zhou
Manufacturing 2,000,000 100% 100% 694 349 740
15th Chateau Co., Ltd subsidiary company Zone, Ningxia Hongjiang
Hui
Autonomous
Region, China
Xianyang City,
Shaanxi Changyu Ruina Holding Limited
Shanxi Sun Liqiang Manufacturing 20,000,000 100% 100% 552 180 142
Chateau Co., Ltd. subsidiary company
Province, China
Yantai Changyu Wine Yantai City,
Holding Limited
Research and Shandong Sun Liqiang Manufacturing 500,000,000 99% 99% 555 235 76X
subsidiary company
Development Co., Ltd. Province, China
Beidianzi Town,
Huanren Preparation for
Changyu (Huanren) Holding Limited Zhou
Manchu wine-making 5,000,000 100% 100% 587 310 365
Wine Co., Ltd. subsidiary company Hongjiang
Autonomous project
County
Shihezi City,
Xinjiang Changyu Wine Holding Limited Xinjiang Uygur
Lin Pu Manufacturing 10,000,000 100% 100% 58022261-0
Co., Ltd. subsidiary company Autonomous
Region, China
Shihezi City,
Xinjiang Changyu Wine Holding Limited Xinjiang Uygur
Lin Pu Sales 10,000,000 100% 100% 58020829-6
Sales Co., Ltd. subsidiary company Autonomous
Region, China
Beijing Changyu AFIP Miyun County,
Holding Limited
Eco-agriculture Beijing City, Sun Hongbo Planting 1,000,000 100% 100% 58585139-5
subsidiary company
Development Co., Ltd. China
9.3 Other related parties of the Company
Name of other related parties Relationship with the Company Organization code
Company controlled by the same
Yantai Changyu Travelling Co., Ltd. 258 258 654
parent company
Yantai Changyu International
Company controlled by the same
Window of the Wine City Company 672 208 146
parent company
Limited
Company controlled by the same
Yantai Shenma Packaging Co., Ltd. 553 393 350
parent company
9.4 Transactions with related parties
9.4.1 List of purchasing goods and receiving services form related parties
Unit: Yuan
Method of procedure Amount incurred in this
Related parties Transactions Amount incurred in last term
of pricing of the term
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transactions Percentage in
Percentage in similar
similar
Amount Amount transaction amount
transaction
(%)
amount (%)
Yantai Changyu Purchasing
Negotiated price 43,846 0.05% 139,111 0.18%
Travelling Co., Ltd. goods
Yantai Changyu
International
Purchasing
Window of the Wine Negotiated price 309,179 0.34% 6,533 0.01%
goods
City Company
Limited
Yantai Shenma Purchasing
Negotiated price 89,945,256 99.61% 75,477,030 99.81%
Packaging Co., Ltd. goods
List of selling goods and providing services to related parties
Unit: Yuan
Amount incurred in this Amount incurred in last
Method of term term
procedure of Percentage in Percentage in
Related parties Transactions
pricing of the similar similar
Amount Amount
transactions transaction transaction
amount (%) amount (%)
Yantai Changyu Selling
Negotiated price 2,037,510 54.2% 2,504,133 53.8%
Travelling Co., Ltd. goods
Yantai Changyu
International Window of Selling
Negotiated price 1,721,306 45.8% 2,149,862 46.2%
the Wine City Company goods
Limited
9.4.2 Related trusteeship/contracting
Nil
9.4.3 Related lease
Leasing List of the Company
Unit: Yuan
Type of the Confirmed Influence of
Name of the Name of the Beginning Basis for
leased Ending date lease fee in lease income
lessor lessee date lease fee
property this term on the company
Yantai Yantai Warehouse
Changyu Changyu January 1, December Negotiated
and office 3,191,500
Group Co., Wine Co., 2012 31, 2012 price
building
d d
Pursuant to a lease contract signed between the Company and the controlling company, starting from 1 January
2012, the Company may rent properties for operation purposes at a basic annual rental of RMB 6,383,000 yuan,
and the expired date is December 31, 2016. From January to June 2012, the rental expenses payable of the Group
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to the controlling company amounted to RMB 3,191,500 yuan.
From January to June 2012, the leasing expenses paid to related parties accounted for 16.8% of the Group.
9.4.4 Related guarantee
Nil
9.4.5 Inter-bank lending of related parties
Nil
9.4.6 Asset transfer and debt recombination of related parties
Nil
9.4.7 Other related party transactions
Item Note Amount incurred in this term Amount incurred in last term
Trademark (a)
55,719,625 58,899,954
usage fee
Patents fee (b) 25,000 25,000
All related party transactions are based on the negotiated price
(a) Trademark royalty contract
Pursuant to a trademark royalty contract dated May 18, 1997 signed by the Company and the controlling
company, starting from September 18, 1997, the Company may use certain trademark of Changyu Group
Company, which has been registered with the PRC Trademark Office. An annual royalty fee at 2% of the
Group’s annual sales is payable to Changyu Group Company. The license is effective until the expiry of the
registration of the trademarks.
From January to June 2012, royalty fee paid to related parties accounted for 100% of the Group (From
January to June 2012: 100%).
(b) Patent implementation license
Pursuant to a patent implementation license dated May 18, 1997 signed by the Company and the controlling
company, starting from September 18, 1997, the Company may use the patents of Changyu Group Company.
The annual patents usage fee payable by the Company to Changyu Group Company was RMB 50,000 yuan.
The contract was expired on December 20, 2005. The Company renewed the contract on August 20, 2006 for
10 years. The annual patents usage fee payable by the Company to Changyu Group Company remained
RMB 50,000 yuan. From January to June 2012, the patents usage fee payable to Changyu Group Company
amounted to RMB 25,000 yuan (From January to June 2011: RMB 25,000 yuan).
From January to June 2012, patent fee paid to related company accounted for 100% of the Group (From
January to June 2011: 100%)
9.5 Trade receivable and payable of the related parties
Trade receivable from related parties
Unit: Yuan
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Item Related parties Ending sum Beginning sum
Trade receivable Yantai Changyu Travelling Co., Ltd. 38,330 358,020
Yantai Changyu International
Trade receivable Window of the Wine City Company 218,690
Limited
Trade receivable Yantai Shenma Packaging co.,ltd 968,136
Payable to related parties
Unit: Yuan
Item Related parties Ending sum Beginning sum
Trade payable Yantai Shenma Packaging Co., Ltd. 24,053,981 6,213,337
Yantai Changyu International
Advance from
Window of the Wine City Company 1,544
customers
Limited
Other payable Yantai Changyu Group Co., Ltd. 58,936,125 108,911,034
10 Share payment
Nil
11 Contingency
11.1 Contingent liability caused by pending litigation and arbitration and financial influence
Nil
11.2 Contingent liability caused by providing debt guarantee for other units and financial influence
Nil
12 Commitment
End balance Beginning balance
Capital commitment
Approved by the Board of 1,975,580,000 626,590,498
Directors but not contracted
End balance Beginning balance
Investment commitment
Contracted but not fully performed 390,576,000 395,000,000
13 Matters after balance sheet
Nil
14 Other important matters
Nil
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15 Notes to financial statements of the parent company
15.1 Trade receivable
15.1.1 Trade receivable
Unit: Yuan
Ending sum Beginning sum
Book balance Bad debt provision Book balance Bad debt provision
Type
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Trade receivable of
significant single amount
26,421,692 100% 19,185,460 91%
and single accrued bad
debt provision
Trade receivable of
insignificant single amount
1,791,605 9%
and single accrued bad
debt provision
Total 26,421,692 -- -- 20,977,065 -- --
The normal credit term of trade receivable is one month, which can be extended to three months for certain
major customers. The trade receivable is interest free.
The age of the trade receivable is within 1 year.
As at June 30, 2012, there was no account receivable provision (December 31, 2011: Nil).
15.1.2 Trade receivable transferred back or received in this term
Nil
15.1.3 Trade receivable actually cancelled after verification in this term
Nil
15.1.4 Trade receivable due from shareholders with voting rights of 5% (including 5%) or above in this term
Nil
15.1.5 Top 5 units of trade receivable
Unit: Yuan
Relationship
Percentage of total
Unit with the Amount Period
trade receivable (%)
Company
Yantai Zhongya
Pharmaceutical Tonic Third party 15,639,657 Within 1 year 59.2%
Wine Co., Ltd. Sales Branch
Yantai Zhongya
Third party 10,782,035 Within 1 year 40.8%
Pharmaceutical Tonic
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Wine Co., Ltd.
-- 26,421,692 -- 100.0%
15.2 Other trade receivable
15.2.1 Other trade receivable
Unit:
Yuan
Ending sum Beginning sum
Type Book balance Bad debt provision Book balance Bad debt provision
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Trade
receivable of
significant
single amount 1,781,350,909 99.7% 7,660,358 0.4% 1,688,856,669 99.5% 8,000,000 0.5%
and single
accrued bad
debt provision
Trade
receivable of
insignificant
single amount 5,447,727 0.3% 3,120,600 57.3% 8,214,697 0.5% 3,120,600 38%
and single
accrued bad
debt provision
Total 1,786,798,635 -- 10,780,958 -- 1,697,071,366 -- 11,120,600 --
Other trade receivable of significant single amount and single accrued bad debt provision at the end
of term
Other trade
Book balance Bad debt Accrued proportion Reason
receivable
This company is in
Tiantong Securities
7,660,358 7,660,358 100% bankruptcy
Co., Ltd.
liquidation
Other 1,773,690,551
Total 1,781,350,909 7,660,358 -- --
Other trade receivable of insignificant single amount and single accrued bad debt provision at the
end of term:
Other trade
Book balance Bad debt Accrued proportion Reason
receivable
The accounting age is
over three years and
Jingyang County
3,120,600 3,120,600 100% there is little
Finance Bureau
possibility to take it
back
Other 2,327,127
Total 5,447,727 3,120,600 12.5% --
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15.2.2 Trade receivable transferred back or received in this term
Unit: Yuan
Accumulative drawn
Reason for being Basis for confirming bad debt provision
Amount transferred
Other trade receivable transferred back or the original bad debt before being
back or received
received provision transferred back or
received
Tiantong Securities Co., Liquidation and In bankruptcy
8,000,000 339,642
Ltd. distribution liquidation.
Total -- -- 8,000,000 --
Other trade receivable of significant single amount and insignificant single amount with single
impairment test accrued bad debt provision at the end of term:
Accrued proportion
Trade receivable Book balance Bad debt Reason
(%)
This company is in
Tiantong Securities
7,660,358 7,660,358 100% bankruptcy
Co., Ltd
liquidation
7,660,358 7,660,358 -- --
15.2.3 Other trade receivable actually cancelled after verification in this term
Nil
15.2.4 Other trade receivable due from shareholders with voting rights of 5% (including 5%) or above in
this term
Nil
15.2.5 Nature or content of other trade receivable of significant amount
Unit: Yuan
Percentage of total other trade receivable
Unit Amount Nature or content of fund
(%)
Paying fund such as circulating
Beijing Chateau 521,401,100 29.2%
fund
Paying fund such as circulating
Shihezi Chateau 355,273,770 19.9%
fund
Changan Paying fund such as circulating
273,588,700 15.3%
Chateau fund
Paying fund such as circulating
Ningxia Wine 228,655,965 12.8%
fund
Paying fund such as circulating
Ningxia Chateau 207,696,900 11.6%
fund
Total 1,586,616,435 -- 88.8%
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15.2.6 Top 5 units of other trade receivable
Unit: Yuan
Percentage of total
Relationship with the
Unit Amount Period other trade receivable
Company
(%)
Beijing Chateau Related party 521,401,100 Within 1 year 29.2%
Shihezi Chateau Related party 355,273,770 Within 1 year 19.9%
Changan Chateau Related party 273,588,700 Within 1 year 15.3%
Ningxia Wine Related party 228,655,965 Within 1 year 12.8%
Ningxia Chateau Related party 207,696,900 Within 1 year 11.6%
Total -- 1,586,616,435 -- 88.8%
As at June 30, 2012, trade receivables from related parties in other receivables are RMB
1,586,616,435 yuan, which are all funds receivable from subsidiaries of the Company, accounting
for 88.8% of other trade receivables.
15.2.7 There are no other trade receivables inconformity with the termination confirmation
condition transferred.
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15.3 Long-term equity investment
Unit: Yuan
Invest to Explanation for
difference
Proportion
between the
Proportion of of voting
Movement proportion of Accrued
Calculation Initial Beginning Ending shareholding power in Impairment Cash
for the shareholding depreciation
method investment balance balance in the the provision dividend
year and proportion provision
invested unit invested
of voting power
unit (%)
in the invested
unit
Xinjiang Tianzhu
Cost 60,000,000 60,000,000 60,000,000 60 100
(a) Method
Vehicular
Cost 300,000 300,000 300,000 100 100
Transportation Method
Kylin Packaging Cost 23,176,063 23,176,063 23,176,063 100 100
Method
Changyu Cost 28,968,100 28,968,100 28,968,100 70 100 29,387,550
Chateau (a) Method
AFIP Tourism Cost 350,000 350,000 350,000 70 100
(a) Method
Pioneer Cost 3,500,000 3,500,000 3,500,000 70 100
International Method
Ningxia Cost 1,000,000 1,000,000 1,000,000 100 100
Growing Method
National Wines Cost 2,000,000 2,000,000 2,000,000 100 100
Method
Ice Chateau (a) Cost 13,413,000 13,413,000 13,413,000 51 100
Method
Beijing Chateau Cost 77,000,000 77,000,000 77,000,000 70 100
Method
( )
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Sales Company Cost 7,200,000 7,200,000 7,200,000 90 100 957,662,745
Method
Langfang Sales Cost 100,000 100,000 100,000 10 100
Method
Langfang Castel Cost 12,142,200 12,142,200 12,142,200 49 100
(a) Method
Wines Sales Cost 4,500,000 4,500,000 4,500,000 90 100 12,000,000
Method
Shanghai Sales Cost 300,000 300,000 300,000 30 100
Method
Beijing Sales Cost 700,000 350,000 350,000 700,000 70 100
Method
Jingyang Sales Cost 100,000 100,000 100,000 10 100 25,000,000
Method
Jingyang Wine Cost 900,000 900,000 900,000 90 100 -
Method
Ningxia Wine Cost 1,000,000 1,000,000 1,000,000 100 100 -
Method
Yantai Dingtao Cost 10,000,000 10,000,000 10,000,000 18 18 5,000,000 -
Method
Ningxia Chateau Cost 2,000,000 2,000,000 2,000,000 100 100 -
Method
Tinlot Chateau Cost 80,000,000 80,000,000 80,000,000 100 100 -
Method
Shihezi Chateau Cost 150,000,000 150,000,000 150,000,000 100 100 -
Method
Changan
Cost 20,000,000 20,000,000 20,000,000 100 100 -
Chateau Method
Development Cost 104,424,000 100,000,000 4,424,000 104,424,000 99 99 -
centre Method
Huanren Wine Cost 5,000,000 5,000,000 5,000,000 100 100 -
Method
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Total 608,073,363 603,299,363 4,774,000 608,073,363 5,000,000 1,024,050,295
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(a) The Company holds 100% of the voting power and interests of those are not
wholly-owned subsidiaries by contracted operation and paying contracting fees. Refer
to Financial and Accounting Reports 6.1.
From January to June 2012, there was no significant restriction on the remittance of fund from the
invested units to the Company.
15.4 Operating income and costs
15.4.1 Operating income and cost
Unit: Yuan
Item Amount incurred in this term Amount incurred in last term
Major operating income 695,491,695 844,356,340
Other operating income 76,366,715 36,763,886
Operating cost 630,970,052 681,420,169
15.4.2 Operating income of top 5 clients of the Company
Unit: Yua
Proportion of total operating income
Client Total operating income
of the Company (%)
Sales Company
715,555,283 92.7%
Changyu Chateau 30,814,046 4.0%
Wines Sales 15,151,200 2.0%
Pioneer International 761,210 0.1%
AFIP Tourism 707,379 0.1%
Total 762,989,118 98.9%
From January to June 2012, top sales clients of the Company are all subsidiaries.
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15.5 Investment income
15.5.1 Particulars of investment income
Unit: Yuan
Amount incurred in this
Item Amount incurred in last term
term
Income from long-term equity investment by cost
method
Income from long-term equity investment by equity
method
Income from disposal of long-term equity investment
Investment income gained from disposal of financial
assets held for trading 0 52,122
Investment income gained from held-to-maturity
investment in the beneficial period
Investment income gained from financial assets held for
sale
Investment income gained from disposal of trading
financial assets
Investment income gained from held-to-maturity
nvestment
Income from investment in financial assets for sale
Other
Total 0 52,122
15.5.2 Income on long-term equity investment by cost method
Unit: Yuan
Amount incurred in this Amount incurred in last Reason for change in this
Invest to
term term term
Changyu
48,573,146
Chateau
National Wines 53,398,971
Sales Company 617,180,727
Wines Sales 12,000,000 4,169,717
Total 12,000,000 723,322,561 --
15.6 Supplementary information to consolidated cash flow statement
Unit: Yuan
125
Full Text of 2012 Semiannual Report of Yantai Changyu Pioneer Wine Co., Ltd.
Amount incurred in Amount incurred in
Supplementary materials
this term last term
1. Cash flows from operating activities calculated by
-- --
adjusting the net profit:
Net profit 29,519,643 768,199,671
Plus: Provision for impairment of assets -339,642
Depreciation of fixed assets, oil-and-gas assets and
21,120,669 17,192,970
productive biological assets
Intangible assets amortization 1,469,540 1,089,963
Amortization of long term prepaid expenses 0 0
Losses on disposal of fixed assets, intangible assets and
0 0
other long-term assets (profit listed with “－”)
Losses on retirement of fixed assets (profit listed with “－”) 2,008,334 0
Losses on fair value change (profit listed with “－”) 0 0
Financial costs (profit listed with “－”) -20,462,083 -21,630,697
Investment losses (profit listed with “－”) -12,000,000 -723,374,683
Decrease in deferred income tax assets (increase listed with
6,211,787 -1,442,441
“-”)
Increase of deferred income tax liabilities (decrease listed
0 0
with “－”)
Decrease in inventories (increase listed with “-”) -95,279,690 97,551,852
Decrease in operating receivables (increase listed with “-”) -166,771,359 -522,152,036
Increase in operating payable (decrease listed with “-”) -295,894,023 470,607,228
Other 0 0
Net cash flows from operating activities -530,416,824 86,041,827
2. Significant investment and financing activities not
-- --
involving cash deposit and withdrawal:
Debt transferred into assets 0 0
Convertible corporate bond mature within 1 year 0 0
Fixed assets under financing lease 0 0
3. Changes of cash and cash equivalent: -- --
Ending balance of cash 312,423,451 375,003,846
Minus: Opening balance of cash 296,735,240 407,619,206
Plus: Ending balance of cash equivalent 0 0
Minus: Opening balance of cash equivalent 0 0
Net increase amount of cash and cash equivalent 15,688,211 -32,615,360
16 Supplementary materials
16.1 Return on net assets and earnings of per share
Unit: Yuan
126
Full Text of 2012 Semiannual Report of Yantai Changyu Pioneer Wine Co., Ltd.
Weighted average return on Earnings per share
Profit incurred in this term
net assets (%) Basic EPS Diluted EPS
Net profit attributable to common
shareholders of the Company 16.83 1.34 1.34
Net profit attributable to common
shareholders of the Company deducting
non-incidental profits/(losses) 16.73 1.34 1.34
16.2 Abnormalities in main accounting statements of the Company and reason
Ⅸ. CATALOGUE OF DUCUMENTS FOR FUTURE REFERENCE
Catalogue of Ducuments for Future Reference
1. Semi-annual reportes signed by the president; 2. Financial reports signed and affixed the seal by the president,
fiiancial administrator in charge of accounting and chief of accounting department; 3. All documents published
on the newpapers designated by China Securities Regulatory Commission in the reporting term; 4. Articles of
Associatoin; and 5. Other relevant documents.
President: Sun Liqiang
Approved and reported by the Board of Directors on August 3, 2012
127
