Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
Yantai Changyu Pioneer Wine Co. Ltd.
2014 Annual Report
2015 Final 01
April, 2015
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
Contents
I、Important Notice and Definition................................................................................................. 3
II、Brief Introduction for the Company ....................................................................................... 6
III、Summary of Accounting Datas and Financial Indicators ....................................................9
IV、Board of Directors’ Report ................................................................................................... 12
V、Major Issues ............................................................................................................................. 36
VI、Changes in Shares and the Shareholders’ Situation ...........................................................44
VII、Related Situation for perferred shares ...............................................................................53
VIII、Situation for Directors, Supervisors, Senior Managers and staffs...................................54
IX、Corporate Governance .......................................................................................................... 63
X、Internal Control .......................................................................................................................72
XI、Financial Report .....................................................................................................................75
XII、Reference Documents .........................................................................................................178
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
I. Important Notice and Definition
The Board of Directors，the Board of Supervisors，directors, 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 unfaithful facts, significant omissions or
misleading statements.
Except the following directors, other directors all personally attended the meeting for
deliberating the annual report.
Absent directors Directors’ post Absent reason Authorized person
Mr. Augusto Reina Director Due to working Mr. Sun Liqiang
Mr. Aldino Marzorati Director Due to working Mr. Zhou Hongjiang
Mr.AntonioAppignani Director Due to working Mr. Leng Bin
Mr. Xiao Wei Independent Due to working Mr. Wang Zhuquan
Director
The Company’s preliminary scheme of profit distribution deliberated and passed by the
board of the directors is as following: “Based on 685,464,000 shares，we plan to pay CNY 4.40
in cash as dividends for every 10 shares (including tax) to the Company’s all shareholders,
send 0 bonus(including tax) and capital reserve will not be transferred to equity. ”
Mr. Sun Liqiang (Chairman of the Company), Mr. Leng Bin (Chief Financial Officer) and Mr.
Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the
financial report in the annual report.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company Refers to Yantai Changyu Pioneer Wine Co. Ltd.
Changyu Group/Controlling Refers to
Yantai Changyu Group Co. Ltd.
Shareholder
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
Refers to Deloitte Hua Yong Certified Public Accountants
Deloitte Hua Yong
Co., LTD (special general partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
Significant Risk Warning
1. The Company may face significant risks in production and operation, please refer to
“8.expectation for the Company’s future development” sector of “5. Risks likely to occur”
part in the chapter four named “Board of Directors’ Report”. We advise investors to read
carefully and pay attention to the investment risks.
2. The business plan and target in the report do not represent the earnings forecast of the
listed company in 2015, which depends on several factors including the changes of market
conditions and the effort extent of managing team etc. with a great uncertainty, so the
investors should be in a special attention.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
II、Brief Introduction for the Company
1、Company’s information
Abbreviation of the Code number of the
Changyu A、Changyu B 000869、200869
Shares: Shares
Abbreviation of the
Shares after alteration _
(if have)
Place of listing of the
Shenzhen Stock Exchange
Shares
Legal Name in
烟台张裕葡萄酿酒股份有限公司
Chinese
Abbreviation of
张裕
Chinese name
Legal Name in English YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
Abbreviation of
CHANGYU
English name
Legal Representative Mr. Sun Liqiang
Registered Address 56 Dama Road, Yantai, Shandong, China
Postal Code 264000
Office Address 56 Dama Road, Yantai, Shandong, China
Postal Code 264000
Website http://www.changyu.com.cn
E-mail webmaster@changyu.com.cn
2、Contact person and information
Secretary to the Board of Authorized Representative of
Directors the Securities Affairs
Name Mr. Qu Weimin Mr. Li Tingguo
56 Dama Road, Yantai, 56 Dama Road, Yantai,
Address
Shandong, China Shandong, China
Tel 0086-535-6633656 0086-535-6633656
Fax 0086-535-6633639 0086-535-6633639
E-mail quwm@changyu.com.cn stock@changyu.com.cn
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
3、Information disclosure and filing location
The newspapers in which the “China Securities Newspaper” , “Securities Times” and
Company’s information is disclosed “Hong Kong Commercial Daily”
Web Site assigned by CSRC to carry
http://www.cninfo.com.cn
the annual report
Board of Directors’ Office of the Company,
Filing location
56 Dama Road, Yantai, Shandong
4、Registration changes
Registration Registration Business License Organization
Tax No.
Date Place No. Code
State Taxation
the Business
Bureau
Administration
First September 37060216500338-1
th Bureau of 3700001806012 26710003－5
registration 18 , 1997 Local Taxation
Shandong
Bureau
Province
370601267100035
State Taxation
the Business
Registration Bureau
st Administration
at the end of 1 August, 37060216500338-1
Bureau of 370000018060122 26710003－5
the report 2012 Local Taxation
Shandong
period Bureau
Province
370601267100035
On 18th September 1997 the Company’s operating scope was the
production, processing and sales of wine, distilled liquor, healthy liquor,
fruit liquor, non-alcohol beverages, fruit jam, packing materials and
winemaking machines.
On 17th April 2008, after the deliberation of 2007 shareholders’ meeting,
the Company’s operating scope is amended to “the Company, legally
Changes for the main registered, is in business of production, processing and sales of wine,
distilled liquor, medicated liquor, fruit liquor, non-alcohol beverages,
business of the Company fruit jam, packing materials and winemaking machines; licensed import
since it was listed and export.”
(if have) On 12th May 2010, after the deliberation of 2009 shareholders’ meeting,
the Company revised its operating scope to “the Company, legally
registered, is in business of production, processing and sales of wine,
distilled liquor, medicated liquor, fruit liquor, non-alcohol beverages,
fruit jam, packing materials and its products, winemaking machines;
licensed import and export; external investments according to
governmental policies.
Changes for all previous
controlling shareholders No.
(if have)
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report
5、Other documents
The accountant appointed by the Company
Deloitte Hua Yong Certified Public Accountants Co., LTD (special
Name
general partnership)
Address No. 1 East Chang'an Avenue, Dongcheng District, Beijing
Name of signatory
Xu Zhaohui, Li Xu
accountants
The sponsor agency the Company appointed to perform the duty of continuous supervision during
the report period
□Available V Not available
The financial adviser the Company appointed to perform the duty of continuous supervision during
the report period
□Available V Not available
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
III、Summary of Accounting Datas and Financial Indicators
1、Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years because of changes of accounting policy and/or accounting errors.
□Yes V No
Unit：CNY
More or
less than
Item 2014 2013 2012
Last year
(%)
Business revenue 4,156,727,525 4,320,948,572 -3.80% 5,643,530,553
Net profit attributed to
the shareholders of the 977,707,711 1,048,185,927 -6.72% 1,700,928,117
listed company
Net profit attributed to
the shareholders of the
listed company after 950,191,379 1,017,348,285 -6.60% 1,675,956,428
deducting the irregular
profit and loss
Net cash flows from the
1,070,083,296 735,074,307 45.57% 1,302,041,322
operating activities
Basic earnings per share 1.43 1.53 -6.54% 2.48
Diluted earnings per
1.43 1.53 -6.54% 2.48
share
Weighted average for
earning rate of the net 13.96% 16.45% -2.49% 31.13%
assets
More or less
Dec. 31st than
Dec. 31st 2013 Dec. 31st 2012
2014 Last year
(%)
Total assets 8,912,232,640 7,997,930,542 11.43% 8,123,134,580
Net Assets attributed to
the shareholders of the 6,840,452,145 6,208,279,705 10.18% 5,913,104,178
listed company
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
2 、 Differences in accounting data under PRC accounting standards and international
accounting standards
(1) Differences of net profit and net asset in the financial report disclosed according to both
international accounting standards and PRC accounting standards
□Available V Not available
There are no differences of net profit and net asset in the financial report disclosed according to
both international accounting standards and PRC accounting standards during the report period.
(2) Differences of net profit and net asset in the financial report disclosed according to both foreign
accounting standards and PRC accounting standards
□Available V Not available
There are no differences of net profit and net asset in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards during the report period.
3、Item and amount of irregular profit and loss
V Available □Not available
Unit：CNY
Item 2014 2013 2012 Explanation
Gain on disposal of non-current
assets, including the reversal of -5,086,545.00 271,989.00 -1,940,260.00
accrued impairment provision
Tax refund or exemption that is either
non-recurring or without proper 13,405,520.00 - -
approval
Government grants credited in profit
and loss (except for those recurring
government grants that are closely
27,140,194.00 36,659,754.00 23,393,756.00
related to the entity's operation, in line
with related regulations and have
proper basis of calculation)
Other non-operating income and
non-operating expenses except the 166,987.00 3,302,760.00 10,953,355.00
aforementioned items
Reversal of impairment loss for
receivables which was separately 192,908.00
undertaken impairment test
Less. Income tax effect 8,302,732.00 9,396,861.00 7,435,162.00
Total 27,516,332.00 30,837,642.00 24,971,689.00 --
The reasons shall be made clear and definitely as to the irregular profit and loss that the Company
has defined by virtue of the Explanatory Announcement on Public Company’s Information
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular profit and loss as
recurrent profit and loss as specified in the Explanatory Announcement on Public Company’s
Information Disclosure No.1 - Irregular Profit and Loss.
□Available V Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and
loss in accordance with the Explanatory Announcement on Public Company’s Information
Disclosure No.1 - Irregular Profit and Loss during the report period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
IV、Board of Directors’ Report
1、Summarization
In 2014，continuously influenced by the multiple negative factors such as the slowdown of domestic
economic growth, overwhelming flow of foreign wine into Chinese market and the relative national
policies as so on, the effective demands for premium wine products in domestic wine is weakness,
the medium level wine suitable for mass consumption maintains a sound momentum of growth. But
the whole market competition is still fierce, which brought a strong pressure to the Company’s
operation growth. Facing quite a lot of external disadvantages, the Company insists to focus on the
market, adjust the marketing tactics and product structure, strive to develop medium and low level
products, optimize the market layout, perfect the marketing channels and effort to promote product
sales, Preliminary control the unfavorable situation of the sharp decline in sales revenue
year-on-year. In the year, the Company realized business income of CNY 4156.73 million, 3.8%
down on year-on-year basis; but due to the impact of decreasing the proportion of the sales in the
products with high gross profit margin and increasing the proportion of the sales in the products
with the low profit margin, the Company realized net profit of CNY 977.71 million, 6.72% down on
year-on-year basis.
2、Analysis to main business
(1)、Summarization
Description Increase or decrease of Cause of major changes
the end of the period
over the end of last year
Operating revenue -0.38%Mainly because of decline of sales volume in the high
price products
Operating cost 1.07%Mainly because of the increase of sales volume,
especially the proportion of sales in medium-low
price products increased
Sales expense -11.82%Mainly because of reduction of advertising expense in
2014
Management expense 4.68%Mainly because of increase of wage & welfare,
depreciation and Property tax in 2014 over the last
year before
R&D investment 7.47%Mainly because of increase of expenses for the
development of technology research in 2014
Financial expense 7.72%Mainly because of reduction of interest income due to
decrease of time deposit balance, and the increase
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
of loan interest expenditure.
Net amount of cash flow 45.57%Mainly because of the decline of sales expenditure
generated in operating activities that makes inflow of cash in operating activities
decrease
Net amount of cash flow -75.53%Mainly because of increase of cash expenditure for
generated in investment the investment projects
activities
Net amount of cash flow 90.22%Mainly because of the increase of cash received
generated in capital-raising which gains via debt
activities
Review and summary for the early disclosed development strategy and the progress of the
Company’s business plan during the report period.
During the report period, influenced by the decelerated growth on the demand for domestic wine,
market competition intensifies and the great recession on the demand for the premium wines, the
business income of the Company completed CNY 4.2 billion, decreased by 3.8 % compared by last
year, and far from the target fixed in the beginning of the year of realizing business income no less
than CNY 4.6 billion. In order to deal with the unfavorable business environment, the Company
carried out the operation strategy of steady development in the medium and high-end wines, and
vigorous expansion for the low-level wines, brandy and imported wines with own brands. While
making efforts to promote the development of medium and high-end wines, the Company made an
appropriate tilt on marketing resources to the medium and low level wines, brandy and imported
wines with own brands for meeting the market demand, which played an important part in
reversing the decline on the business income. The main work in the report period is as following:
Firstly, to adjust and neaten sales system, optimize and perfect marketing modes. The Company
established three-level human recourses management system, regulate and establish the
management system of classification and decentralization of authority. To perfect the assessment
methods of Province manager, city manager, and professional manager, basic formations for
Dynamic management mechanism ‘selected, promotion, talent pool, quit’. External assignment
marketers being fully neatened and readjusted, a part of staffs being settled down via the
distributaried method. To further perfect the sales organization system consisted by three channels
such as medium-high channel, medium-small channel, county-level channel and some companies
such as direct-supplying company, pioneer monopoly shops, VIP Group purchase Company,
tourism sales company, E-commerce, medium-small restaurant sales company as so on. To strive to
develop various sales modes such as direct-supplying and semi-direct supplying etc. To reinforce
the terminal development and control abilities, promote terminal sales. to further clear and definite
the main push area and channels of different liquor, improve the pertinence and effectiveness of
marketing. To strengthen the efforts for each basic management assessment, to evaluate the
professional management work for different channel, company and province which focus on
‘terminal work’, ‘marketing program’ , and ‘the team construction of distributors and delivery
dealers’, to promote every marketing strategy and measure being implement faster and better.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Secondly, to accelerate the informatization, standardization construction and management
innovation. The Company has implemented the second phase of SAP system project, which has
been completely constructed and used in the sales system, in order to reinforce the abilities of
marketing prediction, response and controlling. Logistic management has achieved products’
palletization for warehouse, management and transport, improve and optimize warehouse materials,
and achieved the target of unified storage and delivery all over the country. Open video conference
system coverage of the provincial areas, improve conference efficiency, save conference cost.
Continuous to around the future development purpose and current major issue to be addressed in
management, production, technology and marketing, proposed and completed over 500 items of the
innovative and reasonable projects, which brought the related works and management level to a
new step.
Thirdly, to reinforce the construction of the vineyard bases, regulate the vineyard bases
management, the successful completion of the work on grape purchase, further improve the
research and development ability on new product and new technology. the Company purchased 37
sets of machinery equipments, took construction and management for Yantai vineyard bases in
accordance with the criterion of scalization, standardization and mechanization. In accordance with
different vineyard bases, which implement the classified management, make the vineyard
management more scientisfic and standards. Strictly follow the price forming mechanism for raw
material of grape as the market-set price, better quality better price, price on quality and the linkage
mechanism for grape price to integrate with the world market and domestic market, which brought
more fair and reasonable price for the Company’s purchased grapes. Not only to make sure that the
Company can purchases enough raw material of grape with best quality, further improve the
Company’s products’ cost performance and competitiveness, but also to promote the technology
upgrading of grape cultivating in the domestic vineyards which helps lower cultivated cost and
achieve better economic benefit. During the report period, the Company carried out over 20 items
for new technology and new processes and technologies, applied for three key Provincial
Technology Innovation project, obtained one item for Scientific and Technological Progress Award
issued by China National Light Industry in 2014 annual year. Newly-introduced products of
‘zuishixian’serial have been generally welcomed by consumers, the market reflects well.
Fourthly, to steadily carry out the capital investment projects, increase development’s aftereffect.
During the report period, the Company has overcome the various problems and difficulties, steadily
carry forward the construction of 10 investment projects which were defined at the beginning of the
year, the key investment projects run smoothly.
The cause of difference that the Company’s actual operating result is 20% lower or higher than the
already disclosed annual profiting estimates.
□ Available √ Not available
the situation changes of main operation model
□ Available √ Not available
(2)、Incomes
During the report period, the sales from brandy products is at a relatively stable; both sales volume
and sales revenue of ordinary red wine, sweet wine and sparkling wine has a slight increase on
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
year-on-year basis. The sales volume and sales revenue of chateau wine with high selling-price
continues to decrease in different degree. Comprehensively Influenced by the aforementioned
factors, the operating revenue of the Company has a slight drop on year-on-year basis.
Whether the Company’s sales revenue for material object is more than labor income
√Yes □ No
Unit: Ton
Year-on-year increase
Sector Description 2014 2013
or decrease (%)
Wine Sales volume 71,854 67,978 5.70%
Brandy Sales volume 37,462 37,713 -0.67%
Explanation on the causes of over 30% year-on-year changes of the related comparison data.
□Available√ Not available
The Company’s big orders in hand
□ Available √ Not available
Major changes or adjustments of the Company’s products or services during the report period.
□ Available √ Not available
The Company’s important customers
The total sales amount of the top five customers（CNY） 142,440,887
Total sales of the top five customers accounting for the
3.43%
proportion in total sales for the year（%）
Information on the Company’s 5 biggest customers
√available □Not available
Sales Amount Proportion in Total Sales for
No. Customer Name
（CNY） the year（%）
ChangyueXin trade company in Shenzhen
1 36,611,149 0.88%
city
Dali Qianxingrong wine shop at Nanhai
2 35,104,002 0.84%
district of Foshan city
Quanxing wine shop in Luocheng village,
3 26,583,492 0.64%
Hui’an town
4 Xiyu trade company in Nanjing city 22,961,125 0.55%
5 Chuxin trade company in Guangzhou city 21,181,120 0.51%
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Total — 142,440,887 3.43%
Other situation explanation of main customers
□ Available √ Not available
(3)、 Costs
Sector category
Unit: CNY
2014 2013
Proportion in Proportion in Year-on-year
Sector Description increase or
Amount the operating Amount the operating
decrease(%)
cost (%) cost (%)
Liquor for
bottling 749,104,077 55.29% 681,263,276 51.27% 4.02%
Liquor and Packing
alcoholic material 446,560,533 32.96% 500,978,025 37.70% -4.74%
beverages Wages 53,632,561 3.96% 50,892,703 3.83% 0.13%
Production
cost 105,480,406 7.79% 95,663,454 7.20% 0.59%
Product category
Unit: CNY
2014 2013
Proportion
Proportion in Year-on-year
Product Description in the increase or
Amount Amount the operating
operating decrease(%)
cost (%)
cost (%)
Liquor for
537,755,135 53.20% 475,798,429 49.57% 3.63%
bottling
Wine
Packing
344,532,740 34.08% 365,596,609 38.09% -4.00%
material
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Wages 39,214,439 3.88% 37,909,423 3.95% -0.07%
Production
89,361,588 8.84% 80,584,406 8.40% 0.44%
cost
Liquor for
161,946,222 58.37% 168,174,140 56.48% 1.88%
bottling
Packing
88,601,388 31.93% 103,136,386 34.64% -2.71%
Brandy material
Wages 13,099,354 4.72% 12,262,608 4.12% 0.60%
Production
13,822,841 4.98% 14,181,985 4.76% 0.22%
cost
Note:
Comparing with the same period of last year, there is no great changes for the products’ cost
structure.
Information on the Company’s important suppliers
The total purchase amount of the top 5 suppliers 451,075,314
The proportion of the total purchase amount of the top 5 suppliers in the annual
33.28%
purchase amount
Information on the Company’s top 5 biggest suppliers
√Available □Not available
Purchase Amount Proportion in Total Purchase
No. Supplier Name
(CNY) for the year（%）
1 Yantai Shenma Packaging Co., Ltd. 149,536,913 11.03%
2 Yantai Changyu Glass Co.,Ltd. 126,295,616 9.32%
152 regiment of the eighth
3 67,846,664 5.01%
agriculture production division
Liquan subsidiary of Shandong
4 55,142,494 4.07%
Yantai Winery Co.,Ltd.
5 Yantai Wanfutai Winery Co., Ltd 52,253,626 3.86%
Total 451,075,314 33.28%
Other situation explanation of main customers
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
□ Available √ Not available
(4)、Expenses
During the report period, the Company’s sales expense reduced 11.82% on year-on-year basis,
mainly due to the decrease of advisement promotion，the management expenses with a year-on-year
growth of 4.68%,mainly due to the increase on wages and welfare, depreciation and administration;
financial expense rises 7.72%, mainly due to the reduction of deposit interest income and the
increase of loan interest expenditure.
(5)、R&D expenditure
In 2013 the Company’s R&D expenditure was totally CNY 13.23 million, respectively take up
0.19% of net asset and 0.31% of operating revenue which are the latest financial data being audited ,
there are no major changes generated on year-on-year basis.
(6)、 Cash flow
Unit: CNY
Year-on-year
Item 2014 2013 increase or
decrease (%)
Subtotal of cash inflow in
4,830,092,384.00 4,836,656,367.00 -0.14%
operating activities
Subtotal of cash outflow in
3,760,009,088.00 4,101,582,060.00 -8.33%
operating activities
Net amount of cash flow
1,070,083,296.00 735,074,307.00 45.57%
generated in operating activities
Subtotal of cash inflow in
333,107,299.00 1,326,601,601.00 -74.89%
investment activities
Subtotal of cash outflow in
1,315,841,068.00 1,886,457,048.00 -30.25%
investment activities
Net amount of cash flow
-982,733,769.00 -559,855,447.00 -75.53%
generated in investment activities
Subtotal of cash inflow in
644,550,372.00 259,530,444.00 148.35%
capital-raising activities
Subtotal of cash outflow in
720,926,810.00 1,040,484,398.00 -30.71%
capital-raising activities
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Net amount of cash flow
generated in capital-raising -76,376,438.00 -780,953,954.00 90.22%
activities
Net increase of cash and cash
3,913,342.00 -605,735,094.00 100.65%
equivalents
Explanation on the causes of over 30% year-on-year changes of the related data.
√Available □Not available
Comparing with the same period of last year, subtotal of cash inflow in investment activities was
reduced by 74.89%, mainly due to the significant decrease in the fixed deposit whose duration is
more than 3 months; subtotal of cash outflow in investment activities was reduced by 30.25%,
mainly due to the significant decrease in cash paid for purchasing fixed deposit whose duration is
more than 3 months; net amount of cash flow generated in investment activities was reduced by
75.53%, mainly due to the increase of cash paid for purchasing and constructing fixed assets,
intangible assets and other long-term assets; subtotal of cash inflow in financing activities increased
by 148.35%, mainly due to the increase of cash received from borrowing, net amount of cash
outflow generated in financing activities was reduced by 30.71%， mainly due to the decrease in
cash paid for dividends distribution; Net amount of cash flow generated in financing activities was
increased 90.22%, mainly due to the growth of cash inflow but the decrease in cash outflow in
investment activities; net increased amount of cash and cash equivalents increased by 100.65%,
mainly due to the significant growth of net amount of cash flow generated both in operating
activities and in financing activities.
Explanation on the causes of the major differences between the cash inflow in the Company’s
operating activities and the years’ net profit during the report period.
□Available √Not available
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
3、Structure of main businesses
Unit: CNY
Increase or Increase or
Increase or
decrease of decrease of
decrease of
Operating Operating Gross profit operating operating
gross profit
revenue cost (%) revenue over cost over the
over the year
the year year before
before (%)
before (%) (%)
Sector
Liquor and
alcoholic
beverages 4,113,169,270 1,354,777,577 67.06% -3.76% 1.36% -1.66%
Product
Wine 3,201,368,831 1,010,863,902 68.42% -3.91% 5.31% -2.76%
Brandy 813,417,868 277,469,806 65.89% -0.64% -6.81% 3.55%
Region
Domestic 4,072,037,577 1,342,584,579 67.03% -4.33% 1.14% -1.78%
In case the Company’s statistical calibre of main business data is adjusted during the report period,
the main business data adjusted at the end of the report period will be taken for the recent one year.
□ Available √Not available
4、Analysis to assets and liabilities
(1)、Major changes of assets
Unit: CNY
At the end of 2014 At the end of 2013 Proportion
increase
Proportion Proportion Explanation on major
or
Amount in the total Amount in the total changes
decrease
assets (%) assets (%)
(%)
Monetary
1,145,365,071 12.85% 1,367,818,182 17.10% -4.25% —
funds
Receivables 145,672,411 1.63% 177,109,516 2.21% -0.58% —
Inventory 2,087,376,398 23.42% 2,121,117,437 26.52% -3.10% —
Investment — — — — — —
real estate
Long-term — — — — — —
equity
investments
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Fixed assets 2,532,682,355 28.42% 1,917,641,344 23.98% 4.44% —
Construction —
1,700,466,500 19.08% 1,423,654,530 17.80% 1.28%
in progress
(2)、Major changes of liabilities
Unit: CNY
2014 2013 Proportion
Proportion Proportion increase or Explanation on major
Amount in the total Amount in the total decrease changes
assets (%) assets (%) (%)
Short-term 300,000,000 3.37% 243,170,674 3.04% 0.33%
--
borrowings
Long-term 209,380,000 2.35% 0 0% 2.35%
--
borrowings
(3)、 Measuring assets and Liabilities at Fair Value
□Available √Not available
(4)、Main oversea assets situation
□ Available √ Not available
21
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
5、Analysis to core competitiveness
Compared with the participants in the arena of the Chinese wine sector, we believe that the
Company is provided with the following advantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years,
“Changyu” ,“Jiebaina” and “AFIP” are Chinese famous trademarks that have strong influence and
good reputation.
Secondly, the Company has set up a nationwide marketing network, formed a “three-level”
marketing network system mainly composed of the company’s salesmen and distributors, possessed
the strong marketing ability and market exploitation ability.
Thirdly, the Company has already had strong research strength and a product R&D system, owned a
one and only “State-level Wine R&D Center”, made mastery of advanced winemaking technology
and production processes, been powerful enough in product innovation and established a perfect
quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases to meet its future
development, having developed a great deal of vineyards in the most suitable areas for wine grape
growing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Sha’anxi, whose scales and
structures have generally met the Company’s needs for development.
Fifthly, the Company has a great variety of products composed of all grades, its wine and brandy of
over 100 sorts can meet different consumers’ demands. The Company has taken the lead in the
domestic wine sector through rapid development in the past 10-odd years and has possessed
comparative superiority in the future competition.
All in all, the Company has built up a strong core competitive edge and obtained and maintained a
relatively dominant position in the long-term market competition.
6、 Investment situation analysis
(1)、Information on Oversea equity investment situation
a) Information on Oversea investment
√Available □Not available
22
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Information on Oversea equity investment
Investment amount during the Investment amount compared Amount of variation
report period with the same period of last
year
69,216,634.00 0.00 100.00%
Information on the invested company
Company Name Main business The listed Company occupied
by the equity proportion of the
invested company
Francs Champs Participations Engage in investment, merger 100%
&acquisition, production &
distribution of liquor such as
wine and brandy, as well as
import and export trade
b) the situation of holding financial company equity
□Available √Not available
There is no holding financial company equity for the Company during the report period.
c) Security Investment situation
□Available √Not available
There is no security investment for the Company during the report period.
d) The explanation of the situation which related to hold other listed company’s equity.
□Available √Not available
There is no holding other listed company’s equity for the Company during the report period.
(2)、The situation of Entrust financing, derivatives investment and entrust loans
a) Entrust financing situation
□Available √Not available
There is no entrust financing for the Company during the report period.
b) Derivatives investment
□Available √Not available
23
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
There is no derivatives investment for the Company during the report period.
c) Entrust loans
□Available √Not available
There is no entrust loans for the Company during the report period.
(3)、The usage situation of the raised capital
□Available √Not available
There is no usage situation of the raised capital for the Company during the report period.
(4)、Analysis to the major subsidiaries and joint stock companies
√Available □Not available
Information about the major subsidiaries and joint stock companies
24
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Unit: CNY
Operating
Company Main products or Registered Total assets Net asset Operating Net profit
Company name Industry revenue
type services capital (CNY) (CNY) profit (CNY) (CNY)
(CNY)
Yantai To research, 170,314,549 82,093,628 110,684,738 2,666,152 1,887,415
Wine and
Changyu-Castle produce and sell
alcoholic USD 5
Wine Chateau Co. Subsidiary wine and sparkling
beverages million
LTD. wine as well as the
industry
tourism service
Langfang Castel- Wine and 54,216,381 46,463,060 50,335,802 -2,073,597 -507,895
Changyu Wine Co. Joint stock alcoholic To produce and sell USD
LTD. company beverages wine 6,108,818
industry
Chateau Changyu Subsidiary Wine and 658,167,387 105,905,166 160,547,230 23,833,92320,881,532
To research,
AFIP Global alcoholic CNY 110
produce and sell
beverages million
brandy and wine
industry
Chateau Liaoning Subsidiary Wine and 74,220,870 64,046,876 51,973,176 -1,607,474 1,599,580
Changyu Ice Wine alcoholic To produce ice CNY 26.30
Co., Ltd. beverages wine million
industry
Xinjiang Tianzhu Subsidiary Wine and To plant grape, 176,011,481 163,510,352 86,483,652 2,223,269 1,470,239
Winery Co., Ltd. alcoholic produce and sell CNY 75
beverages grape juice, bulk million
industry wine and fruit wine
Explanation on the major subsidiaries and joint stock companies
25
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
During the report period, the operating income and net profit of Yantai Changyu Castel Chateau Co. Ltd. respectively increased 30.43% and 49.53%
over the same period last year; the operating income and net profit of Chateau Changyu AFIP Global respectively increased 99.36% and 161.99% over
the same period last year; the operating income and net profit of Chateau Liaoning Changyu Ice Wine Co., Ltd. respectively increased 109.55% and
144.52% over the same period last year; the operating income and net profit of Xinjiang Tianzhu Winery Co., Ltd. respectively increased 32.52% and
88.95% over the same period last year; operating income of the aforementioned companies were increased, mainly because of the increase of internal
sales volume, the growth reason of net profit is mainly due to the increase of internal sales volume and internal clearing price. The operating income
and net profit of Langfang Castel-Changyu Wine Co. respectively decreased by 17.05% and 451.36% over the same period last year, its operating
income was decreased, mainly because of the reduction of internal sales volume, the reduction reason of net profit is mainly due to the decrease of
internal sales volume and internal clearing price. Because of the aforementioned companies belonging to productive organization, its products need to
be firstly sold to internal sales organization in the Company, then the internal sales organization will sale those products to external customers via
internal sales organization in the Company, therefore, theirs operating income and net profit come from internal sales only.
Acquisition and disposal of subsidiaries during the report period
□Available √Not available
26
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
(5)、Important projects financed with non-raised capital
√Available □Not available
Unit: CNY’0000
Total Investment Actual investment
Project
Project Name Investm in the repo until the end of the Project benefits Disclosure date Disclosure index(if have)
progress
ent period report period
Changyu Reina Chateau Sha'anxi 31,074 2,655 31,655 97% Being completed 2014.04.26 http://www.cninfo.com.cn/finalpage
and put into /
Changyu Moser XV Chateau Ningxia 24,415 6,503 30,503 98% 2014.04.26
production for the 2014-04-26/63928624.PDF
Changyu Baron Balboa Chateau XinJiang 23,343 4,097 31,097 98% 2014.04.26
main building
Changyu International Wine City blending and 65,331 13,863 40,863 57% 2014.04.26
0
cooling Center
Changyu International Wine City Bottling 46,736 3,669 29,169 60% 2014.04.26
0
Center
Changyu International Wine City Logistics Cente12,095 5,544 11,344 85% 0 2014.04.26
Changyu Vine and Wine Research Institute 20,000 882 4,082 20% 0 2014.04.26
Treasure Wine Chateau 14,545 473 3,078 20% 0 2014.04.26
Koyac brandy chateau 16,530 7,300 9,800 40% 0
Greening investment 5,000 2,597 3,690 70% 0 2014.04.26
Pioneer Monopoly Shop 10,000 1,755 1,755 50% 0 2014.04.26
Total 269,069 49,338 197,036 -- --
27
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
28
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
7、Forecast on the business achievement from January to March of 2015
Caution and explanation for the forecast on the accumulated net profit from the beginning of
the year to the end of the next report period, which could probably be in a loss or in a great
change comparing with the same period of last year.
□Available √Not available
8、Main part situation of the special purpose being controlled by the Company
□Available √Not available
9、Expectation for the Company’s future development
On the basis of our limited experience and special skills, we make the following estimation of
the wine sector and the Company’s future development.
(1)The sector competition setup and development trend
Due to the continuous limitation for the domestic consumption of premium wine in the future
long time, the continuing entrance of imported wines to Chinese market, and the great impact
for the traditional sales channels caused by the new channels such as E-commerce, the
competition in the domestic wine industry will still be awfully fierce in the current and future
long time, the consumption for high-end wine maybe continue to remain weak. But in the
long run, thanks to increase of their incomes, people’s pursuits to health and fashion life, the
people are favoring wines which fit well with the trend of consumption, it will ceaselessly
stimulate their demand for quality wine. That’s to say, the Chinese wine sector still has huge
potential to tap. Especially the medium-low level wine with high performance-to-price ratio
can have a faster growth. In such a case of long-term coexistence of opportunities and
challenges, only those enterprises that possess strong branding influence and marketing
ability, catch the opportunities, actively take adjustments and make full use of oncoming and
traditional sales channels, can timely get the run of the consumers’ demands and provide
products of high performance-to-price ratio will have an opportunity to be the final winners
of competition and form a new structure of the future Chinese wine market.
(2)The Company’s development strategy
The Company will continue to adhere to the strategy of taking wine as pillar product while
developing all kinds of products, actively expand the scope of consumption and marketing mode,
revise the sales decreased trend of high-end wine; develop middle-level wines and brandy,
strengthen the promotion of sparkling wine, make efforts to provide consumers with a rich
variety of products in high cost performance.
(3) Management plan in a new year
In 2015, the Company will try its best to realize business income of not less than CNY4.4 billion
and control the main operating costs and three period charges below CNY2.9 billion.
(4) The measures the Company will take
The Company will emphasize the following aspects in 2015, so as to better catch the
opportunities and face with the challenges:
Firstly, to focus on the market, perform every marketing jobs effectively, strengthen
marketing ability. The Company will further perfect the marketing system for chateau wine,
enhance the marketing for chateau wine, the Company will cement the high ground position
of brands in the domestic wine market. Increase the media publicity and marketing promotion
efforts of medium-low level brands such as ‘jiebaina’, ‘zuishixian’ and ‘Nobel Wine’ as so
on, improve the market share of medium-low level products. Accelerate the construction of
brandy extension system, assure to put in place for ‘two teams’, ‘marketing plan’, ‘terminal
29
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
construction’ in brandy’s major channels, further expand brandy’s market-coverage and
brand awareness, promote the sales of brandy in the national market. Combine their own
characteristics of distributors and delivery dealer, establish and improve the access institution
of distributors and delivery dealer, the institution of communication, motivation and quit,
continue to push the construction of Pioneer monopoly shops forward, strengthen the training,
communication and assessment jobs of each level marketers, promote the overall quality of
cradres, reinforce the marketing ability of sales system.
Secondly, to further strengthen the control for production cost and major operation expenses,
further compress production cost. The Company will optimize pricing mechanism of grapes
purchase price, in order that gradually make the wine-making grapes price convergence
between domestic market and international market. Continue to adhere the centralized
purchase for the main raw materials, control purchase cost of bulk raw material. Reinforce to
monitor the production in the warehouse, reduce capital charges. Perfect productions’
identification system, ensure the trouble-free operation in the palletization system applied to
the processes of producing, transporting, and storage. Strengthen the management of fuel cost,
transport cost, maintenance cost and landscaping cost, perfect wage system for every ton of
wine, improve producing efficiency, reduce production cost.
Thirdly, to strengthen the construction and management for vineyards, continually increase
the research & development ability and products quality. The Company will carry out the
normalization construction and management for the vineyards in accordance with the
criterion of scalization, standardization and mechanization, continue to practice the tracking
and management of winemakers for the vineyards, build the vineyards at Xinjiang and Yantai
for promotion and demonstration on mechanization management, greatly promote the
machinery works. Continue to neaten contract vineyard and the training of grape’s growers,
strictly control the area of contract vineyards, constantly generalize advanced planting
technology. Perfect project management, prediction management and assessment system of
the vineyards, strengthen the assessment and management of the person in charge of special
area, try to reduce the cost on planting grapes and improve the grape quality. The Company
will perfect the classification standards for bulk wine, the quality tracking of bulk wine whole
usage process and assessment mechanization, optimize winemaking technology, reinforce the
applied research on oak barrels, further improve production quality, strengthen to develop
new products, constantly enrich products variety. Further distinguish and clear the products
characteristic of general wine in different varieties, form the products line with distinctive
and unique style.
Fourthly, to steadily carry forwards investment projects construction, scientific arrange the
progress of construction, guarantee the engineering quality. The Company will continuously
promote the projects of Yantai Changyu International Wine City (namely Yantai Changyu
Industrial Park) and the construction for pioneer monopoly shops, reinforce the management
of construction budget to investment projects, strengthen projects’ cost review and
completion audit, strictly control the investment amount on projects, make sure to finish the
construction for all projects and put them into operation on the basis of scheduled progress
and quality.
(5) Risks likely to occur
A) Risks in price fluctuation of raw materials
Grapes are the Company’s main raw materials. The grape’s yield and quality are affected to a
certain extent by the natural factors such as drought, wind, rain, frost and snow. These force
30
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
majeure factors greatly influence the quantity and price of the grapes in this Company orders
and add the uncertainty to the Company’s production and operation. Therefore, the Company
will lower the risks that are likely to affect grape quality and result in price fluctuation by
means of expanding the self-run vineyards, strengthening the vineyard management and
optimizing the layout of vineyards.
B) Risks in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development,
the Company has input more and more capital in the market and the sales expense has taken
up a higher percentage point in the business revenue. The input-output ratio will affect the
Company’s operating results to a great extent and the risk that some investments may not
reach the expectations is likely to occur. Therefore, the Company will strengthen market
research and analysis, enhance market forecast accuracy and continue to perfect the
input-output evaluation system to ensure the investments in market to be satisfactory as
expected.
C) Risks in product transport
The Company’s products are fragile and sent to different places all over the world, mostly by
sea, railway and expressway. The peak season of sales is usually in cold winter and close to the
spring festival when market has a great demand. At that time, the natural and human factors
such as serious shortage of transport capacity resulting from busy flow of people and goods,
wind, snow, freezing as well as traffic accidents make the transport departments difficult to
send products to markets in time and safely. As a result, it makes this Company have to face the
risks of missing the peak season of sales. Therefore, the Company will adopt all methods
possible like making precise sales prediction and well designed connection of production and
sales, reasonably arranging production and transport means and making use of more available
warehouses in different places to lower these kinds of risks.
D) Risks in investment faults
According to the plan, currently the Company has finished the production layout at home, and the
next step is to pay more attention to the overseas merge and acquisition in the same industry.
Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park)
has those features such as the big investment amount, long-term construction period and many
uncertain factors; more unforeseeable factors for the overseas merge and acquisition projects in the
progress of M&A, it is difficult to make sure the fair and reasonable transaction price, the
integration and management after M&A is also hard. Under the influence of uncertain factors for
individual projects, It leads to have the risks of facing with the investment amount out of budget or
hardly taking back the expected investment earnings. The Company will take an adequate argument
and scientific decision-making for investment projects, try hard to reduce and avoid investment
risks.
10 、 The Board of Directors’ and the Board of Supervisor give the explanation for ‘no
standard auditing report’ issued by the accounting firm during this report period.
□Available √Not available
11、Compared with the previous year’s financial report, explanation for the changes of
accounting policy , accounting estimation and accounting method.
√Available □Not available
During the report period, the Company changes the accounting policy about Long-term
Equity Investment. About the detailed contents, please see ‘‘25. Changes in significant
31
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
accounting policy’’ in ‘‘3. Significant accounting policy and accounting estimate’’ of
foot-notes to financial statements in this report.
12. During the report period, the situation explanation for the correction of major accounting
errors which need to be retrospect and restated.
□Available √Not available
There is no situation for the correction of major accounting errors which need to be retrospect and
restated.
13、Compared with the previous year’s financial report, explanation for the changes of
the consolidated statements scope.
□Available √Not available
There is no situation for the changes of the consolidated statement scope.
14、The Company’s profit and dividend distribution
Promulgation, implementation or adjustment of profit distribution policies during the report
period.
V Available □Not available
According to the auditing result made by Ernst & Young Hua Ming Certified Public
Accounts Co. Ltd., the net profit that the Company made in 2013 was
CNY1,048.185927million. After deducting the minority shareholders’ profit and loss, the net
profit belong to the Company’s shareholders is CNY 1,048.185927 million. After the
deliberation of the Company’s Board of Directors and the Shareholders’ Meeting, the profit
plan of 2013 is as following: Because the left amount of legal earned surplus reserve is less
than 50% of the registered capital, while making profit distribution, the legal earned surplus
reserve will not be drawn. Then based on the Company’s 685,464,000 shares at total up to
December 31, 2013, we plan to pay CNY 5 in cash as dividends for every ten shares
(including tax) to the Company’s all shareholders, totaling up to CNY342.732 million,
accounting for 32.7% of the net profit CNY 1048.185927 million attributable to the
shareholders of the parent company in the consolidated statement, the retained and
undistributed profit of CNY 705.453927 million will be reserved for the distribution of next
year. This plan is in line with the provisions of the Company’s Articles of Association. On
July 5, 2014, the Company released the Implementation Announcement of 2013 Annual
Equity Distribution, determining that the share registration day of A Stock was on July 10,
2014 and the ex-dividend day was on July 11, 2014, the last trading day of B Stock was on
July 10, 2014, the share registration day was on July 15, 2014 and the ex-dividend day was
on July 11, 2014. The Company also distributed equity before July 30, 2014 to the
Company’s all A Stock holders registered after closing of Shenzhen Stock Exchange on the
afternoon of July 10, 2014 at China Securities Depository and Clearing Corporation Limited
Shenzhen Company and the Company’s all B Stock holders registered after closing of
Shenzhen Stock Exchange on the afternoon of July 15, 2014 at China Securities Depository
and Clearing Corporation Limited Shenzhen Company.
Special explanation
Whether it is in accordance with the requirements of the regulation in the Articles Yes
of Association and the resolution of shareholders
Whether the distribution standard and proportion is clear and definite Yes
Whether the relative decision process and mechanism is complete Yes
32
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Whether the independent directors perform their responsibilities and play the roles. Yes
Whether the small and middle shareholders have the chance to express their Yes
advices and appeals, as well as their lawful right and interest is in an enough
protection.
Whether it is legal and transparent for the condition and process while adjusting Yes
and amending the cash dividends distribution policy.
The Company’s preliminary scheme of profit distribution and preliminary scheme of
increasing equity with capital reserve in the recent three years (including the report period).
The profit distribution plan of 2012 is as following: Because the left amount of legal earned
surplus reserve is less than 50% of registered capital, while making profit distribution, the
legal earned surplus reserve of CNY46.78937 million will be drawn firstly. Based on the
Company’s 685.464 million shares at total up to December 31, 2012, we plan to pay CNY 11
in cash as dividends for every ten shares (including tax) to the Company’s all shareholders,
totaling up to CNY 754.0104 million, take up 44.33% of net profits CNY1700.928117
million attributable to shareholders of parent company in the consolidated statements. The
retained and undistributed profit of CNY 900.128347 million will be reserved for distribution
in the next year.
The Company’s profit distribution plan in 2013 is as following: Because the left amount of
legal earned surplus reserve reaches 50% of the registered capital, while making profit
distribution, the legal earned surplus reserve will not be drawn. Then based on the
Company’s 685,464,000 shares at total up to December 31, 2013, we plan to pay CNY 5 in
cash as dividends for every ten shares (including tax) to the Company’s all stockholders,
totaling up to CNY 342.732 million, accounting for 32.70% of the net profit CNY
1048.185927 million attributable to the shareholders of the parent company in the
consolidated statement, the retained and undistributed profit of CNY 705.453927 million will
be reserved for the distribution of next year.
The Company’s preliminary scheme of profit distribution in 2014 is as following: Because
the left amount of legal earned surplus reserve reaches 50% of registered capital, while
making profit distribution, the legal earned surplus reserve will be not drawn. Based on the
Company’s 685.464 million shares at total up to December 31, 2014, we plan to pay CNY 4.4
in cash as dividends for every ten share (including tax) to the Company’s all shareholders,
totaling up to CNY 301.60416 million accounted for 30.85% of net profits CNY977.707711
million attributable to shareholders of parent company in the consolidated statements. The
retained and undistributed profit of CNY 676.103551 million will be reserved for distribution
in the next year.
The Company’s cash dividend record in recent three years
Unit: CNY
Net profit belonging to Proportion in the net
Amount of cash the listed company’s profit belonging to the
Year of distribution dividend (including stockholders in the listed company’s
tax) consolidated statement stockholders in the
of the distribution year consolidated statement
33
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
(%)
2014 301,604,160 977,707,711 30.85%
2013 342,732,000 1,048,185,927 32.70%
2012 754,010,400 1,700,928,117 44.33%
During the report period the Company earned profit, the undistributed profit of the parent
company was positive but without proposing cash dividend distribution.
□Available V Not available
15、The Company’s preliminary scheme of profit distribution and preliminary scheme of
increasing equity with capital reserve
V Available □Not available
Number of sending bonus shares per ten shares (share) 0
Number of dividend payout per ten shares (CNY) (including tax) 4.40
Number of transferring per ten shares(share) 0
The cardinal number of the capital stocks for the preliminary distribution 685,464,000
scheme (shares)
Total cash dividend distribution （CNY）(including tax) 301,604,160
Distributable profit (CNY) 977,707,711
The proportion of cash dividend distribution in the total profit distribution 100%
Cash dividend distribution policy
Others
Policy of cash dividend
The stage of Company development belongs to growth period, while making profit
distribution, Distribute dividends in cash takes up not less than 20% proportion in the
distributable profit.
Detailed explanation for the profit distribution or preliminary scheme of increasing equity
with capital reserve
According to the audit result from Deloitte Hua Yong, The net profit belonging to the parent
company’s stockholders in the consolidated statement is CNY977.707711million, the net
profit of the parent company in financial statement is CNY 1151.762045 million in 2014.
According to PRC accounting standard, the situation for the attributable profit of
consolidation and parent company in 2014 is as following:
Unit: CNY
Consolidation Parent company
Undistributable profit at the end the year 5,251,920,374 4,620,476,137
Including: net profit in 2014 977,707,711 1,151,762,045
34
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Distributable profit carried over to the 4,616,944,663 3,811,446,092
beginning of the year
Distribution for 2013 dividend 342,732,000 342,732,000
Withdrawing for the legal earned surplus 0 0
reserve
According to regulation of 157th item in the Articles of Association, which is that the
Company can distribute dividends either in cash or by stock, 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, meanwhile,
considering the large amount on the capital expenditure in 2015, under the condition of not
influencing the normal production and operation, the Company put forward preliminary
scheme on profit distribution in 2014 as following:
Because the left amount of legal earned surplus reserve reaches 50% of registered capital,
while making profit distribution, the legal earned surplus reserve will be not drawn. Based on
the Company’s 685.464 million shares at total up to December 31, 2014, we plan to pay CNY
4.4 in cash as dividends for every ten share (including tax) to the Company’s all shareholders,
totaling up to CNY 301.60416 million accounted for 30.85% of net profits CNY977.707711
million attributable to shareholders of parent company in the consolidated statements. The
retained and undistributed profit of CNY 676.103551 million will be reserved for distribution
in the next year. The cash dividend for the shareholders of B share listed overseas was paid in
Hongkong dollar according to the middle rate between CNY and Hongkong dollar issued by
the People’s Bank of China on the first working day after the resolution date of 2014
shareholders’ meeting.
16、Social Responsibility
V Available □Not available
During the report period, considering the fulfillment of the Company’s social responsibility,
please see 2014 Annual Social Responsibility Report disclosed on www.cninfo.com.cn on
28th April 2015.
The listed company and its subsidiaries are whether or not to belong to the heavy pollution
industry stipulated by the state environmental protection department.
Yes No V Not available
The listed company and its subsidiaries are whether or not to exist major social security
problems.
Yes No V Not available
The Company is whether or not to be in an administrative penalty.
Yes No V Not available
17、The Company’s Receptions, Studies and Visits
V Available □Not available
35
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Reception Reception Reception Main context of
Reception place method object type communication
Reception object
Time and supplied
material
Meeting Field Others E-commerce
room of the survey advanced
Company experience
Huangwei from CITIC
2014.03.06 introduction and
Securities
communication for
consumer
products’ industry
Meeting Field Institution Shuaihu from China
room of the survey International Fund
Company management Co.Ltd Chenyu current business
from operation
2014.05.20
AEGON-INDUSTRIAL situation and
Fund Management Co.Ltd other issues
Cao Liyan from BOCI
Securities Limited
Meeting Field Institution Wang Jiandong from
room of the survey Sunshine Insurance Group current business
Company Sunshine Asset Management operation
2014.09.19
Corporation Limited Jia situation
tingting from Springs Capital
(Beijing) Co.Ltd
Shanghai other Institution Deng Xiaofeng from
BOSERA FUNDS
management limited Ai jing
current business
from BOCOM & Schroders
operation
2014.11.25 fund management limited Li
situation and
Yan from China Asset
other issues
Management Co.,Ltd Qi
Ying from China Pacific
Insurance Company Ltd
Number of 4
Reception
Number of 9
institution
Number of 1
other object
Whether No
disclose,
reveal or
betray
no-public
import
information
36
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
V、Major Issues
1、Material litigation and arbitration
□ Available √Not Available
There are no material litigation and arbitration during the report period.
2、Media’s doubts
□ Available √Not Available
There are no common doubts issued by Media during the report period.
3、Non-business capital occupying of listed company by controlling shareholder and its related parties
□ Available √Not Available
There are no non-business capitals occupying of listed company by controlling shareholder and its related parties during the report period.
4、Bankruptcy reorganization
□ Available √Not Available
There is no bankruptcy reorganization during the report period.
5、Transaction in assets
(1)、Acquisition of assets
37
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
□ Available √Not Available
There is no acquisition of assets during the report period.
(2)、Sale of assets
□ Available √Not Available
There is no sale of assets during the report period.
(3)、Combination of enterprises
□ Available √Not Available
There is no combination of enterprises during the report period.
6、Implementation and its influence of Company’s share incentive
□ Available √Not Available
There are no share incentive plan and its implementation situation during the report period.
7、Significant related transactions
(1)、Related transactions in relation to routine operations
√ Available □ Not Available
Proportion
Pricing Amount of Settlement
Type of Content of Price of in the same
Interrelation principle of related method of Market Date of Disclosure
Related party related related related kind of
ship related transaction related price disclosure index
transaction transaction transaction transaction
transaction (CNY ‘0000) transaction
(%)
Yantai Shenma Under the Related Procurement
Agreement 14,954
Packing Co., same parent party’s of － 10.76% Check －
price
Ltd. company commodity commodity
38
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
and labor and
transaction acceptance
of labor
from related
party
Total -- -- 14,954 -- -- -- -- --
Details of rejection of big sales No
The Company will sign a processing contract with and purchase packing materials from Yantai
Necessity and continuity as well as cause to transact Shenma Packing Materials Co., Ltd. under Changyu Group, which is helpful for the Company, as a
with related party (but not with other dealer in the prerequisite of fair price, to acquire sustainable, quality and stable supply of packing materials and to
market) save the Company’s procurement and transport costs of packing materials so as to strengthen its
product competitiveness.
The Company’s independency will not be affected by related transactions because the Company has
Influence of related transaction on listed company’s
lower requirements for production technology of packing materials and there are too many qualified
independency
producers ready for selection.
The level of Company’s dependency on related party as
No
well as solutions
If a prediction is made to the total amount of routine
related transactions to occur during this period by type,
No
what is the actual implementation result during the
report period.
Cause of bigger differences in between transaction price
The transaction price is fixed in reference to market price, no obvious difference.
and market reference price
(2)、Related transactions in relation to acquisition and sales of assets
□ Available √Not Available
39
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
There are no related transactions in relation to acquisition or sales of assets during the report period.
(3)、Related transactions in relation to common foreign investment
□ Available √Not Available
There are no related transactions in relation to common foreign investment during the report period.
(4)、Related current credit and debt
√ Available □ Not Available
Whether or not to exist non-business related current credit and debt
□ yes √no
There are no non-business related current credit and debt.
(5)、Other related transactions
√ Available □ Not Available
Detailed information about other related routine transactions among Company, Company’s controlling shareholder Yantai Changyu Group Company
Limited and its subsidiaries, please see Part 7 ‘‘Relation Among Related Parties and Their Transactions’’ in the financial statement of this report.
40
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
8. Major and important contracts and execution results
(1)、Trusteeship, contract and leasehold issues
A) Trusteeship situation
□ Available √Not Available
There is no trusteeship situation during the report period.
B) Contract situation
√ Available □ Not Available
Contract situation description
During the report period, about the Company’s contract operation situation, please see ‘‘1.
Subsidiary’’ in Annex 5 ‘‘The Consolidation Scope of Consolidated Financial Statements’’ in the
financial report of this report.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□ Available √ Not Available
There are no contract projects in gains and losses for the Company to achieve more than 10% of the
total profit during the report period.
C) Leasehold situation
√ Available □ Not Available
Leasehold situation description
On 1st January 2012, the Company renewed the Space Lease Agreement with the controlling
shareholder Changyu Group, the Company leased the space with 57749.77 square meters located at
174 Shihuiyao Road, Zhifu District,Yantai City and the space with 3038 square meters located at 56
Dama Road, Zhifu District, Yantai City, which are all under the name of controlling shareholder.
The rent of the above spaces per year is CNY 5.858 million with a period of 5 years from 1st
January 2012 to 31st December 2016.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□ Available √ Not Available
There are no leasehold projects in gains and losses for the Company to achieve more than 10% of
the total profit during the report period.
(2)、Guarantee situation
□ Available √ Not Available
There is no guarantee situation during the report period.
(3)、Other important contracts
□ Available √ Not Available
There are no other important contracts during the report period.
(4)、Other important deals
□ Available √ Not Available
There are no other important deals during the report period.
9. Implementation of commitments
41
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
(1) 、 The commitments of the Company or its shareholders holding more than 5% in the report
period or until the report period
√ Available □ Not Available
Commitment Commitment Commitment Commitment
Commitments Implementation
party content time period
Commitments at share reform － － － － －
Commitments made in － － － － －
acquisition report or equity
changes report
Commitments at asset － － － － －
restructuring
Yantai Non-horizontal 18thMay 1997 Has been
performing
Changyu competition strictly
Commitments at the initial Forever
public offering or refinancing Group Co.
Ltd.
Yantai According to
Changyu Trademark
Group Co. License
Ltd. Contract, the
Company will
pay trademark
royalty for the
‘‘Changyu’’
products of
Yantai Changyu
Group Co., Ltd Has been
every year, 18thMay 1997 Forever performing
Yantai Changyu strictly
Group Co., Ltd
will use
trademark
royalty to
advertise
‘‘Changyu’’
trademarks and
Contracted
products in this
contract.
Commitments at middle and
small shareholders of the － － － －
Company
Commitment under timely Yes
42
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
implementation or not
Whether or not to have specific
reasons of the unimplemented
No
commitment and next steps(if
any)
(2) 、 The Company should make a statement on the achieved original profit forecast of assets or
projects and its reason if there is profit forecast of Company’s assets or projects and the report
period is still in the profit forecast period.
□ Available √ Not Available
10、The appointment and dismissal of certified public accountants
Currently appointed accounting firm
Deloitte Hua Yong Certified Public Accountants Co., Ltd.
Domestic accounting firm name
(special general partnership)
Reward for domestic accounting firm
190
(CNY‘0000)
Consecutive period for the audit
2
services of domestic accounting Firm
Name of Certified public accountant
for the audit services of domestic Xu Zhaohui, Li Xu
accounting Firm
Whether or not to dismiss the accounting firm during the report period
□Yes √ No
To employ internal control audit accounting firms, financial adviser or sponsor.
√ Available □Not Available
The Company will appoint Deloitte Hua Yong as certified public accountants of the Company’s
2014 internal control, and continue appointing this company as certified public accountants of the
Company’s 2015 internal control.
11、Explanation of Non-standard Audit Report given by accounting firm in the report period
from Board of Supervisors and independent directors (where applicable)
□ Available √ Not Available
12 、Penalty and rectification
□ Available √ Not Available
There are no penalty or rectification during the report period.
13、 Face of suspension and termination of listing after the disclosure of annual report
□ Available √ Not Available
14 、Other explanation of major issues
□ Available √ Not Available
43
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
There are no other major issues need to be explained during the report period.
15 、Major issues of Company’s subsidiary
□ Available √ Not Available
16 、Corporation bonds issued by the Company
□ Available √ Not Available
44
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI、Changes in Shares and the Shareholders’ Situation
1、Changes in shares
(1)、Changes in shares
Unit: share
Amount before this change Change (+, -) Amount after this change
Transfer
Percentage Allot Distribute bonus other to others Sub total Percentage
Amount new capital Amount
% share %
share share
capital
1、Unrestricted shares 685,464,000 100% 685,464,000 100%
(1)、A shares 453,460,800 66.15% 453,460,800 66.15%
(2)、B shares 232,003,200 33.85% 232,003,200 33.85%
2、Total shares 685,464,000 100% 685,464,000 100%
Cause of share change
□ Available √ Not Available
Approval of share change
□ Available √ Not Available
Transfer of changed shares
45
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
□ Available √ Not Available
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the latest
period, net asset per share belonging to the Company’s common shareholders, etc.
□ Available √ Not Available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□ Available √ Not Available
(2)、Changes in restricted shares
□ Available √ Not Available
2、Securities issuance and listing situation
(1)、Securities issuance in the recent three years at the end of report period
□ Available √ Not Available
(2)、Explanation of change in Company’s total shares and shareholding structure and change in Company’s assets and liability structure
□ Available √ Not Available
(3)、Current employee shares
□ Available √ Not Available
3、Situation for shareholders and the actual controllers
(1)、The number of shareholders of the Company and the shareholdings
Unit：share
46
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
43,151, including
Total number of shareholders 43,593, including Total number of preferred
28,531
Total shareholders in the report until the end of the 5th trading 29,146 A sharehold shareholder recovering
A shareholders 0
period days before the disclosure day ers, and 14,447 B voting power at the end of
and 14,620
of the annual report Shareholders report period
B shareholders
Shareholders holding more than 5% or the top 10 shareholders holding situation
Number Pledged or frozen
Changes Number of
Character of Percentage Shares held until the end of
Name of Shareholders shareholders (%) of the report period during the unrestricted Share
restricted Amount
report period shares status
shares
Domestic
YANTAI CHANGYU GROUP
non-state-owned 50.4% 345,473,856 0 0 345,473,856 0
CO. LTD.
legal person
GAOLING FUND,L.P. Foreign shareholder 3.53% 24,176,997 0 0 24,176,997 0
BBH BOS S/A FIDELITY FD -
Foreign shareholder 2.35% 16,106,326 0 0 16,106,326 0
CHINA FOCUS FD
GIC PRIVATE LIMITED Foreign shareholder 1.45% 9,913,484 -9307489 0 9,913,484 0
NORGES BANK Foreign shareholder 0.66% 4,511,246 2823258 0 4,511,246
VALUE PARTNERS
HIGH-DIVIDEND STOCKS Foreign shareholder 0.62% 4,280,146 -1686735 0 4,280,146 0
FUNDS
FIDELITY FUNDS Foreign shareholder 0.58% 3,997,933 3997933 0 3,997,933
BBH A/C VANGUARD
EMERGING MARKETS STOCK Foreign shareholder 0.58% 3,950,987 -756079 0 3,950,987
INDEX FUND
FIDELITY CHINA SPECIAL
Foreign shareholder 0.55% 3,779,202 3779202 0 3,779,202
SITUATIONS PLC
47
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
AGRICULTURAL BANK OF
Domestic
CHINA-HUAXIA STEADY
non-state-owned 0.53% 3,624,745 2324745 0 3,624,745
GROWTH MIXED SECURITIES
legal person
INVESTMENT FUND
Strategic investors or legal result of the placement of new
NO
shares to become a top 10 shareholders(if have)(see note3)
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no
The explanation for the associated relationship and
associated relationship or accordant action relationship with the other 9 listed shareholders,
accordant action
and the relationship among the other shareholders is unknown.
The top 10 shareholders with unrestricted shares
Number of unrestricted Type of share
Name of Shareholders shares held until the
Type of share Amount
end of the year
YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A 345,473,856
GAOLING FUND,L.P. 24,176,997 B 24,176,997
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 16,106,326 B 16,106,326
GIC PRIVATE LIMITED 9,913,484 B 9,913,484
NORGES BANK 4,511,246 B 4,511,246
VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS 4,280,146 B 4,280,146
FIDELITY FUNDS 3,997,933 B 3,997,933
BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND 3,950,987 B 3,950,987
FIDELITY CHINA SPECIAL SITUATIONS PLC 3,779,202 B 3,779,202
AGRICULTURAL BANK OF CHINA-HUAXIA STEADY GROWTH MIXED
3,624,745 A 3,624,745
SECURITIES INVESTMENT FUND
The explanation for the associated relationship and accordant action of the top 10 Among the top 10 shareholders, Yantai Changyu Group
shareholders with unrestricted shares, the the associated relationship and accordant Company Limited has no associated relationship or accordant
48
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
action between the top 10 shareholders with unrestricted shares and the top 10 action relationship with the other 9 listed shareholders, and the
shareholders relationship among the other shareholders is unknown.
Explanation for the top 10 shareholders who involved in financing activities and The top 10 shareholders do not involve in financing activities
stock trading business and stock trade business.
Whether or not the Company’s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the report
period
□ Yes √ No
There is no agreed repurchase trading taken by the Company’s top 10 common shareholders and shareholders with unrestricted shares during the report
period.
(2)、Situation for the controlling shareholders of the Company
Legal representative
Legal Establishment Organization
Name of controlling shareholder Registered capital Main business
representative date code
Production and distribution of wine,
healthy liquor, distilled liquor and
non-alcohol beverages, planting of
Yantai Changyu Group Co. Ltd. Sun Liqiang 1997.04.27 26564582－4 CNY 50 million
agricultural products and export
business under the scope of
permission.
Continue centralizing superior resources, focusing on wine business, reasonably developing relevant
Future development strategy
supporting industries and industriously promoting harmonious development of various of industries
Through the audit, at the end of 2014, total asset of controlling shareholder Yantai Changyu Group Co.
Operating results, financial condition, cash Ltd. amounts to CNY 9.5 billion, net liability amounts to CNY 2.1 billion, net asset amounts to CNY
flow and future development strategy etc. 7.4 billion, 2014 operating income amounts to CNY 4.2 billion, net profit amounts to CNY 1.1 billion,
net cash flows generated from operating activities amount to CNY1.2 billion.
49
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Equity situation for the other domestic listed
companies controlled or shared by the
No.
controlling shareholders during the report
period
Changes in the controlling shareholder during the report period
□ Available √ Not Available
There are no changes in the controlling shareholder during the report period.
(3)、Situation for the actual controllers of the Company
Legal representative
Name of actual Legal Establishment Organization Registered
Main business
controllers representative date code capital
Under state permission, property investment, tenancy of machine and facility,
CNY
Yantai Yuhua Investment wholesale and retail of construction material, chemical products (chemical
Jiang Hua 2004.10.28 76779294－7 387.995
& Development Co. Ltd hazard products excluded), hardware and electronical products, grape
million
plantation.
Directly or indirectly conduct the production and distribution of food
ILLVA Saronno Augusto EUR products (alcoholic products included) as well as industrial, commercial,
1984.07.25 －
Investment Italy Reina 50,416,000 financial and service activities of any other kinds through joint-stock
companies and organizations
International Finance International Finance Corporation is one of the members of World Bank,
USD 2.36
Corporation Cai Jinyong 1956.07.25 － mainly dedicated to investment in private sectors of developing countries
billion
while providing technical support and consultation service. The corporation
50
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
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.
Operating management of state-owned property right (stock right) authorized
by State-owned Assets Supervision and Administration Commission of
Yantai Municipal Government; Financing, investment and operating
management of government projects, such as strategic investment and
industrial investment and so on; Capital operation (including acquisition,
reintegration and transfer, etc) of state-owned property right and state-owned
stock right within the scope of authorization; Venture capital investment
Yantai Guofeng
CNY business; Agency of venture capital investment business of other venture
Investment Holdings Co., Chen Dianxin 2009.02.12 00426068-6
220million investment enterprises or individuals; Participation in the establishment of
Ltd
venture capital investment enterprises and venture capital investment
management consultant institutions; Investment and financing service
business; Investment and financing consultant business; Other business
authorized by State-owned Assets Supervision and Administration
Commission of Yantai Municipal Government.(Projects need to be
authorized in accordance with the law could carry out business activities only
after the approval of relevant departments )
Future development
No
strategy
Operating results,
financial condition and No
cash flow and so on
Equity situation for the
No
other domestic listed
51
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
companies controlled by
the actual controller
during the report period
Changes of the actual controllers during the report period
√Available □Not Available
Names of new actual controllers ILLVA Saronno Investment Italy and Yantai Guofeng Investment Holdings Co., Ltd
Changing date 2014.04.30
Query indexes on the appointed website http://www.cninfo.com.cn/finalpage/2014-05-06/63971775.PDF
Disclosure date on the appointed website 2014.05.06
52
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Introduction for property right and control relations between the Company and its actual controllers
Actual controller controls the Company through a trust or other asset management ways
□ Available √ Not Available
(4)、Other institutional shareholders holding more than 10% shares
□ Available √ Not Available
4 、 Situation of plan to increase held shares proposed or implemented by the Company’s
shareholders and its persons acting in concert during the report period
□ Available √ Not Available
Within the scope known by the Company, there are no Company’s shareholders or its persons
acting in concert proposing or implementing the plan to increase held shares during the report
period.
53
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VII、Related situation of preferred shares
□ Available √ Not Available
There are no preferred shares during the report period.
54
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VIII、Situation for Directors, Supervisors, Senior Management and Staffs
1、Changes in shareholdings of directors, supervisors and senior management
Shares held Decreased Shares held
Beginning Increased
Ending date at the shares at the end
Name Post Status Gender Age date of the shares during
of the post beginning of during the of the
post the period
the period period period
Chairman to the Board of present
Sun Liqiang M 67 2013.05.14. 2016.05.13 0 0 0 0
Directors incumbent
Vice-chairman to the present
Zhou Hongjiang Board of Directors and M 50 2013.05.14. 2016.05.13 0 0 0 0
general manager incumbent
Director and vice-general present
Leng Bin M 52 2013.05.14. 2016.05.13 0 0 0 0
manager incumbent
Director, Vice-general present
Qu Weimin manager and Secretary to M 57 2013.05.14. 2016.05.13 0 0 0 0
the Board of Directors incumbent
present
Chen Jizong Director M 39 2013.05.14. 2016.05.13 0 0 0 0
incumbent
present
Augusto Reina Director M 74 2013.05.14. 2016.05.13 0 0 0 0
incumbent
present
Aldino Marzorati Director M 62 2013.05.14. 2016.05.13 0 0 0 0
incumbent
Antonio present
Director M 76 2013.05.14. 2016.05.13 0 0 0 0
Appignani incumbent
55
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Jean Paul Pinard Director leave post M 65 2013.05.14. 2014.05.23 0 0 0 0
present
Dai Hui Director F 49 2014.05.23 2016.05.13 0 0 0 0
incumbent
present
Xiao Wei Independent director M 54 2013.05.14. 2016.05.13 0 0 0 0
incumbent
present
Wang Zhuquan Independent director M 50 2014.05.23 2016.05.13 0 0 0 0
incumbent
Present
Wang Shigang Independent director M 49 2013.05.14. 2016.05.13 0 0 0 0
incumbent
Chairman for the Board of present
Kong Qingkun M 42 2013.05.14. 2016.05.13
Supervisors incumbent
present
Zhang Lanlan Supervisor F 45 2013.05.14. 2016.05.13
incumbent
present
Guo Ying Supervisor F 40 2013.05.14. 2016.05.13
incumbent
present
Yang Ming Vice-general manager M 56 － － 0 0 0 0
incumbent
present
Li Jiming Chief engineer M 48 － － 0 0 0 0
incumbent
present
Jiang Hua Vice-general manager M 51 － － 0 0 0 0
incumbent
present
Sun Jian Vice-general manager M 48 － － 0 0 0 0
incumbent
present
Jiang Jianxun Finance manager M 48 － － 0 0 0 0
incumbent
Total － － － － － － 0 0 0 0
56
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
2、Situation for work experience
The main work experiences of the Company’s directors, supervisors and senior management in the
recent 5 years.
(1)、Members of Board of Directors
Mr. Sun Liqiang, a college graduate and senior economist, was the representative of 10th and 11th
National People’s Congress. Now he is the Party Secretary, Chairman and General Manager of
Changyu Group. He began serving as chairman of the Company on September 18th , 1997 and has
held the position ever since.
Mr. Zhou Hongjiang, a doctoral graduate and senior engineer, now is the vice chairman of Changyu
Group ,and the representative of 12th National People’s Congress. He began serving as general
manager of the Company on December 28th , 2001, Director, Vice Chairman and concurrently as
General Manager of the Company on May 20th , 2002, he has held the position ever since.
Mr. Leng Bin, a postgraduate and senior accountant and now is the Director of Changyu Group. He
began serving as a director of the Company on June 15th, 2000 and held the position ever since.
Mr. Qu Weimin, a bachelor of engineering and senior economist, has been serving as director, vice
General Manager and concurrently as Secretary to the board of directors of the Company since
September 18th , 1997.
Mr. Chen Jizong, a university graduate, the qualifications of statistician and accountant, now is the
union director of property management department of SASAC Yantai and Director of Changyu
Group. He has been director of the Company since May 13th 2010.
Mr. Augusto Reina is serving as chief executive officer of several companies including Illva
Saronno Holding SpA and Illva Saronno Investment SRL, member of the board of directors of
Barberini Spa, director of Federvini (Italian Alcohols Production and Export Association), director
of Istituto Del Liquore (Wine Research Institute), director of Assovini (Sicily Viniculture and Wine
Production Association) and director of Changyu Group. He has been director of the Company
since April 27th, 2006.
Mr. Aldino Marzorati, a university graduate, is the General Manager of Illva Saronno Holding SpA
and director of the board of directors of some branches under the group company and the director of
Changyu Group. He has been director of the Company since April 27th, 2006.
Mr. Antonio Appignani, a university graduate, is vice chairman of Italian Business Consultation
Committee, chief of Professional Ethics Committee, teacher of vocational training course of
Industrial and Commercial Consultation Committee, member of Economic and Commercial
Committee of the public university “G. D Annunzio” and concurrently serving as member of the
board of directors of different companies and member of the board of directors of several
companies under Illva Group and the director of Changyu Group. He has been director of the
Company since April 27th, 2006.
Mr. Dai Hui, born in 1965, MBA, former project manager of Government Transfer Loan
Department in China FOTIC (staying in Beijing), former manager assistant of High Net Worth
Center in First Pacific Bank (staying in Hongkong), representative of Rabobank Beijing Office
(staying in Beijing) and chief representative of Rabobank Beijing Office (staying in Beijing), is now
consultant of IFC, director of Changyu Group Company and director of Listed Company.
Mr. Xiao Wei, a postgraduate and a lawyer, now is the partner of Jun He Law Office. He has been
serving as independent director of the Company since September 1st, 2010.
57
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Mr. Wang Zhuquan, doctor of management (accountancy), first batch of national accounting
academic leading personals of Financial Department, top-notch personal in Qingdao, consultant
expert of Enterprise Internal Control Standard Committee of Financial Department, Government
Special Allowance expert, acted as independent director from13th May 2010 to 12th May 2013. Now
he is the vice-president of School of Management and the accounting department head in the Ocean
University of China as well as independent director of some listed companies which could be
exemplified as Qingdao TGOOD electric Co., Ltd. He acts as the independent director again from
23rd May 2014.
Mr. Wang Shigang, MBA and qualification of China Certified Public Accountant, now is the board
chairman of Shandong Tianhengxin Construction Cost Consultion Co. Ltd., He previously served as
independent director of the Company. He acts as the independent director again from 14th May
2013.
(2)、 Members of board of supervisors
Mr. Kong Qingkun, MBA and economist, used to be the section member of production department
in the healthy liquor branch; the clerk and vice manager of general manager office, now he is the
manager of general manager office.
Ms. Zhang Lanlan, a university graduate and economist, used to be vice-manager of import/export
company, manager of import department; she is manager of board of directors office now.
Ms. Guo Ying, a university graduate and senior accountant, used to be the member of financial
audit department of Yantai Yiqing Industry Company; senior staff of operating supervision
department of SASAC Yantai, senior staff and vice director of directors & supervisor office; now
she is vice director of directors & supervisor office of SASAC Yantai.
(3)、Other senior managers
Mr. Yang Ming, a university graduate and applied researcher, has been serving as Vice General
Manager of the Company since August 12th, 1998.
Mr. Li Jiming, a doctor and applied researcher, has been serving as Chief Engineer of the Company
since September 14th, 2001.
Mr. Jiang Hua, a postgraduate and senior engineer has been serving as Vice General Manager of the
Company since September 14th, 2001.
Mr. Sun Jian, an MBA and economist, has been serving as Vice General Manager of the Company
since March 22nd, 2006.
Mr. Jiang Jianxun, an MBA and accredited accountant, has been serving as Financial Manager of
the Company since May 20th, 2002.
58
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Post in the shareholder’s company
√ Available □ Not Available
Paid by
Beginning date Ending date of
Name Shareholder’s Company Post shareholder’s
of the post the post
company or not
Chairman and
Sun Liqiang Yantai Changyu Group Co. Ltd. general manager 2013.10.08 2017.10.07 No
Zhou Hongjiang Yantai Changyu Group Co. Ltd. Vice chairman 2013.10.08 2017.10.07 No
Li Jiming Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Sun Jian Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Chen Jizong Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Augusto Reina Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Aldino Marzorati Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Antonio Appignani Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Dai Hui Yantai Changyu Group Co. Ltd. Director 2014.03.06 2017.10.07 No
Explanation for the post in the
No.
shareholder’s company
Post at other companies
√ Available □ Not Available
Name Other’s Company Post at other company Beginning Ending date of Paid by other
59
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
date of the the post company or not
post
Yantai Changyu Zhongya
Director and
Leng Bin Medicine & Healthy Liquor Co., 2012.09.10 No
legal representative
Ltd
Explanation for the post in the
No.
shareholder’s company
3、Salary of directors, supervisors and senior management
Decision-making process, the basis for determining, the actual payments of directors, supervisors and senior management
The salary for the independent directors is paid according to the resolution of shareholders’ meeting. The salary for the chairman, directors with
administration duty, supervisors, managers and other senior management should be paid on basis of the evaluation result according to the Evaluation
and Incentives Scheme for Senior Management of the Company which was passed during the Board of Directors’ meeting.
Salary of directors, supervisors and senior management during the report period.
Unit: CNY’0000
Total reward
Total reward Actual reward at
from the
Name Post Gender Age Status from the the end of the
shareholder’s
company report period
company
Chairman to the Board of M present
Sun Liqiang 67 120.8 90
Directors incumbent
Vice-chairman to the Board present
Zhou Hongjiang of Directors and general M 50 117.9 87.8
manager incumbent
Director and vice-general M present
Leng Bin 52 84.1 55.6
manager incumbent
Director, Vice-general
Qu Weimin manager and Secretary to the M 57 present 86.5 66.7
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Board of Directors incumbent
present
Chen Jizong Director M 39
incumbent
present
Augusto Reina Director M 74
incumbent
present
Aldino Marzorati Director M 62
incumbent
present
Antonio Appignani Director M 76
incumbent
Jean Paul Pinard Director M 65 leave post
present
Dai Hui Director F 49
incumbent
present
Xiao Wei Independent Director M 54 5 5
incumbent
present
Wang Zhuquan Independent Director M 50 5 5
incumbent
present
Wang Shigang Independent Director M 49 5 5
incumbent
Chairman for the Board of M present
Kong Qingkun 42 59.9 47.9
supervisors incumbent
present
Zhang Lanlan supervisor F 45 18.5 17.3
incumbent
present
Guo Ying supervisor F 40
incumbent
present
Yang Ming Vice-general manager M 56 75.3 56.6
incumbent
61
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
present 56.6
Li Jiming Chief Engineer M 48 83.3
incumbent
present 56.6
Jiang Hua Vice-general manager M 51 86
incumbent
present 56.6
Sun Jian Vice-general manager M 48 79.6
incumbent
present
Jiang Jianxun Finance manager M 48 61.5 38.8
incumbent
Total -- -- -- -- 888.4 645.5
The awarded equity incentives for the directors, supervisors and senior management of the Company during the report period
□Available √ Not Available
4、Changes in Company’s directors, supervisors, Senior Management
Name Post Type Date Reason
Application for resign
Jean Paul Pinard Director Leave post 2014.05.23
from director
Dai Hui Director Be elected 2014.05.23
Wang Zhuquan Independent director Be elected 2014.05.23
5、Changes in core technical team or key technical personnel during the report period (non-directors, supervisors and senior management)
During the report period, there are no changes in core technical team or key technical personnel.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
6、Staff of the Company
Up to December 31st 2014, the total registered staff number of the Company (including the Company’s headquarter and main controlling subsidiary
companies) was 4868, consisting of :
Classification Category Number Percentage of total staff
Specialty constitution Production and service staff 1,445 29.68%
Sales staff 2,286 46.97%
Technical staff 157 3.22%
Financial and administrative staff 980 20.13%
Education degree Bachelor or above 1,329 27.3%
College graduate 2,136 43.88%
Vocational school 768 15.78%
Senior high school diploma or below 635 13.04%
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
IX、Corporate Governance
1. Current Corporate Governance Situation of the Company
The Company has, according to 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, Guidelines on Corporate Governance of Listed Companies,
Listing Guidelines at Shenzhen Stock Exchange and also other laws and rules issued
by CSRC and Shenzhen Stock Exchange, and combining the own actual situation,
established Articles of Associations and other internal governance regulations,
constantly improved its legal entity structure and internal management rules, legally
conducted its activities and strengthened the information disclosure. The Company’s
governance structure is in accord with requirements of relevant regulatory documents
on listing company’s governance issued by CSRC.
(1)、About shareholders and shareholders’ meeting
The Company has already set up the Deliberation Rules of Shareholders’ Meeting,
and convened the shareholders’ meetings in strict accordance with requirements of
standard opinion of shareholders’ meeting, made the great effort to provide
convenient conditions for more shareholders to participate the shareholders’ meeting,
and ensured all shareholders to enjoy same equity and well exercised their rights. The
Company drew great attention to the communication and exchange with shareholders,
actively responded the shareholders’ inquiry and questions, and widely listened to the
suggestions and comments from shareholders.
(2)、About the Company and holding shareholder
The Company has independent power on business and self-management, and also be
independent of its holding shareholder on business, staff, assets, organization and
finance. The Board of Directors, Board of Supervisors, management team and also
internal organizations operated independently in the Company. The holding
shareholder of the Company could regulate its activities, no other behavior was found
that surpassed the shareholders’ meeting to directly or indirectly interfere with the
decision-making and business activities of the Company, or occupied any assets of
the Company which damaged the Company’s and medium & small shareholders’
interests.
(3)、About the director and board of directors
The Company strictly appoints all directors in light of Company Law and Articles of
Associations. The qualifications of all directors are in line with the requirements of
laws and regulations. In accordance with the requirements of Corporate Governance
Guidelines, the Company has already carried out the cumulative voting system. At
present, the Company has three independent directors accounting for one fourth of all
directors, and the number and composition of board of directors was basically in
accord with requirements of regulations and also Articles and Associations. All
directors of the Company could work in the light of regulations including Rules of
Board of Directors’ Procedure and Working Rules for Independent Directors,
punctually attended board of directors’ and shareholders’ meetings, actively took part
in relevant knowledge training, knew very well about the laws and regulations
concerned, had a deep knowledge and long experience of practitioners, and
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
performed their duties according to the law and regulations. The Board of Directors
convened the meetings in accordance with related rules and regulations.
(4)、About supervisor and board of supervisors
The Company strictly elected all supervisors in light of Company Laws and Articles
of Associations. At present, board of supervisors has three people among which one
supervisor is representative for staff, the number and composition of board of
supervisor was in accord with requirements of regulations and rules. All supervisors
of the Company could follow the requirement of Rules of Board of Supervisors’
Procedure, insist the principle of responsibility to all shareholders, seriously perform
their duties, effectively supervise and present their independent opinion on important
issues, interrelated deals, financial status, the duty performance of directors and
managers of the Company.
(5)、 About performance evaluation and incentive system
The engagement of managers was open and transparent, and accorded with laws and
regulations. The Company has established and gradually improved the performance
evaluation standard and formed efficient incentive system, so as to ensure the salary
of staff to be linked with job performance.
(6)、 About the party with relevant benefit
The Company could fully respect and safeguard the legal rights of the party with
relevant benefit, cooperate actively with the stakeholders, jointly drive the Company
to develop continually and stably, pay great attention to the issues such as local
environmental protection and public utilities etc., and assume full responsibilities for
the social responsibility.
(7)、 About the information disclosure and transparency
The Company has appointed the secretary to Board of Directors to be responsible for
investor relation management including information disclosure, investor relations
management and reception of shareholders’ visit and consultation. The Company has
also assigned China Securities Newspaper, Securities Times, Honkong Commercial
Daily and web site http://www.cninfo.com.cn/ to disclose information, punctually,
accurately and truly disclosed any information in the light of requirement of relevant
laws and rules, and also ensured all shareholders to have same opportunity to acquire
any information.
In order to further perfect the Company’s governance system, during the report
period, the Company formulates Opinion about Strengthening Sales Human Resource
Management, Opinion about Financial Management of Sales Secondary Enterprise,
Opinion about Strengthening the Products’ Internal Cost, 2014 Annual Assessment
Management Methods for Bulk Wine Consumption in the Bulk Wine Warehouse, in
the Oak Aging Warehouse and in the Bottle Wine Warehouse, 2014 Annual
Assessment Methods for Liquor Yield of Bulk Wine Fermentation, Reasonable
Suggestion for Methods of Project Approval, Implementation, Examination and
Assessment and Management Methods for Acquisition of Oversea Enterprises. In
addition, the Company also modify and perfect some management systems, such as
Assessment Methods for Innovation Projects of More Than Middle-level Managers
and Examination and Assessment Methods for Innovation Work of Every Secondary
Enterprise and so on .
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Whether the Company’s corporate governance is not in compliance with the Company
Law and the relevant provisions of China Securities Regulatory Commission
□ Yes √ No
The Company’s corporate governance is in compliance with the Company Law and
the relevant provisions of China Securities Regulatory Commission.
Progress of the Company’s special activities in terms of corporate governance as well
as formulation and implementation of inside information source registration and
management rules
In order to strengthen management of inside information source and prevent
occurrence of backstage deals, the Company’s 5th session of Board of Directors’ 10th
meeting deliberated and passed the Inside Information Source Registration and
Management Rule on April 18, 2012. The founding of the system standardized the
approval process of insid e information reporting, defined the scope of inside
information source, and set up a prevention and punishment mechanism of inside
information. During the report period, the Company has strictly managed staffs who
contact with inside information Source against material inside information of the
sensitive disclosure etc such as reporting information insiders’ registration, and
informing timely to supervisory department. During the report period, there were no
in the Company the information insiders’ transactions of the Company’s shares by
taking advantage of the sensitive inside information that affects the Company’s share
price before it was disclosed and no supervisory departments’ punishment records,
either.
2、Information for the shareholders’ meeting and temporary shareholders’
meeting held during the report period
(1)、Information for the shareholders’ meeting during the report period
Disclosure
Session Date Proposals name Resolution Disclosure Index
date
2013 Annual Board of
Directors’ Working
Report,
2013 Annual Board of
Supervisors Working
Report,
2013 Annual 23rd 2013Annual Report,
2013 Annual Profit
All 24th May http://www.cninfo.com.cn/final
Shareholders’ May deliberated page/2014-05-24/64059965.PD
Distribution 2014
and passed F
Meeting 2014 Scheme,
Proposal on the
Appointment of
Directors,
Proposal on the
Appointment of
Independent Directors,
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Proposal on Renewal of
Accounting Firm
(2)、Information for the temporary shareholders’ meeting during the report period
There is no temporary shareholders’ meeting during the report period.
(3)、Request for convening temporary shareholders’ meeting by priority shareholders
owing recovered voting right
□Available √ Not Available
3、Performance of independent directors during the report period
(1) 、 Attendance of independent directors for the board of directors and the
shareholders’ meeting
Attendance of independent directors for the board of directors
Whether or
not to attend
Required the meetings
Personal Communication Authorized
Name attendance Absence personally
attendance attendance attendance
time for
successive
twice
Wang
2 1 1 0 0 No.
Zhuquan
Xiao Wei 4 3 1 0 0 No.
Wang
4 3 1 0 0 No.
Shigang
Attendance time of
independent directors
1
for the shareholders’
meeting
Explanation for not personally attending the Board of Directors’ meetings for
successive twice.
There are no independent directors absent of personally attending the Board of
Directors’ meetings for successive twice.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
(2)、Any objections for the Company’s projects from the independent directors
Whether or not the independent directors raised any objections for the Company’s
projects.
□Yes √No.
During the report period, the independent directors did not raise any objections for the
Company’s projects.
(3)、Other explanations on independent directors’ performance
The independent directors’ propositions are accepted by the Company or not
√ Yes □ No
Explanation on acceptance or refusal of the independent directors’ propositions
Regarding the investment project involved in the industrial tourism, the independent
director raised a suggestion ‘Taking full advantage of existing production and
management facilities and avoiding overlapping investment’ and the Company adopted
this suggestion.
4、Performance of the special committees under the Board of Directors during
the report period
(1)、Summary report of the Board of Directors’ Audit Committee
(A) On March 18th , 2014, after the certified public accountants responsible for annual
audits had introduced their preliminary opinions, the independent directors on behalf
of the Audit Committee communicated with them and made written comments which
read that “we communicated in detail with the certified public accountants responsible
for auditing of the Company’s 2013 Annual Report who expounded the main
standards, main emphasis audited field, the problems and the matters necessary to
adjust that were found during the auditing. We’ve noticed that the Company has
adjusted the matters as the accountants suggested. On the basis of our communication
with the accountants, the production and operation results that the Company’s
management reported to us as well as the progress of important events, we believe
that we have no objection to the Company’s 2013 Annual Financial Statement
preliminarily examined by Deloitte Hua Yong Certified Public Accounts Co., Ltd. and
the preliminary audit opinions of that Services.”
(B) On 23rd April 2014, the Board of Directors’ Audit Committee deliberated and
passed 2013 Annual Auditing Report issued by Deloitte Hua Yong Certified Public
Accounts Co., Ltd., Proposal on 2013 Annual Profit Distribution, Proposal on
68
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Appointment for Certified Public Accountants Firm, 2013 Annual Self Assessment
Report on the Company's Internal Control and 2014 Annual Internal Audit Plan.
All of committee members unanimously agree to submit the above proposals to the
Company’s 6th Session Board of Directors’ 4th Meeting for deliberation.
The meeting reached the following consensus:
1 The clean-opinion auditing report on the Company’s 2013 Annual Financial
Statement issued by Deloitte Hua Yong Certified Public Accounts Co., Ltd reflects
the Company’s financial condition, operating results and cash flow truly, objectively
and correctly.
2 The profit distribution scheme that the Company formulated is relatively
acceptable, taking the shareholders’ interest into account while paying attention to the
Company’s long-term development.
③ Considering the strict maintenance of objective and fair standpoint as well as the
high audit quality and reasonable arrangement for audit progress during the process of
the Company’s 2013 annual financial audit and internal control audit taken by
Deloitte Hua Yong Certified Public Accounts Co., Ltd, it is proposed that the
Company will reappoint Deloitte Hua Yong Certified Public Accounts Co., Ltd as the
2014 annual auditor of the Company. The employment period is one year and the
audit will be taken from two aspects shown as follows.
On one hand, Deloitte will take the audit of 2014 annual financial report and issue a
Financial Audit Report. On the other hand, Deloitte will take the audit of 2014 annual
internal control audit and issue an Internal Control Audit Report.
The annual auditing fee for the above parts are CNY 1.9million, including travel
expense and all service charges.
④ The Company’s 2013 Annual Self Assessment Report on the Company's Internal
Control has truly and objectively mirrored out the present standing of the Company’s
internal control and can basically ensure the effective implementation of its policies
and realization of its strategic goals.
⑤ The Company’s 2014 Annual Internal Audit Plan is comparatively perfect and
practicable, based on which the Company’s Audit Department will conduct the 2014
annual internal audit.
(C) On 25th August 2014, the Board of Directors’ Audit Committee deliberated and
passed 2014 Semiannual Report and 2014 Semiannual Profit Distribution. The
meeting reached the following consensus:
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
① The Company’s 2014 Semiannual Financial Statements reflected the Company’s
financial condition, operating results and cash flow truly, objectively and correctly.
② As the Company just realized 2013 Annual Profit Distribution Scheme in middle
July, we propose neither to distribute profits for the first half of 2014 nor to increase
the Company’s capital stock with accumulated public fund. The net profit made in the
first half of this year will be reserved and distributed at the end of the year. Our
Auditing Committee considers the suggestion to be reasonable.
③All of Committee members unanimously agree to submit the above proposals to the
Company’s 6th Session Board of Directors’ 6th Meeting for deliberation.
(2)、Summary report of the Board of Directors’ Emolument Committee
The Board of Directors’ Emolument Committee is responsible for assessment of the
economic responsibilities of the directors and the senior managers who receive
salaries from the Company and examination of the salary policy and scheme designed
for the Company’s directors and senior managers.
Propose on Company’s 2013 Annual Senior Executive’s Performance Assessment
Results and Performance Assessment Methods for Company’s Senior Executive from
2014 to 2017 were deliberated and passed by the Board of Directors’ Emolument
Committee on 23th April 2014, who thought that these two documents were in
compliance with assessment methods stipulated in the Incentive Scheme for the
Company’s Senior Executive approved by the Company’s 4th Session Board of
Directors’ 20th Meeting. All committee members unanimously agree to submit the
above proposals to the Company’s 6th Session Board of Directors’ 4th Meeting for
deliberation.
During the report period, the Board of Directors’ Emolument Committee also
examined the 2013 annual payroll records of the directors and the senior managers
who receive salaries from the Company. The committee believes that the Company’s
directors, supervisors and senior managers got paid completely in line with the
processes of the Company’s economic responsibility assessment system and the
salaries the Company made public were in conformity with the actually paid amount.
5、The work of the Board of Supervisors
During the report period, whether the board of supervisors found any existence of risk
for the Company during their oversight activities.
□Yes √No
70
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
During the report period, the board of supervisors has no objection during their
oversight activities.
6、Relative to the controlling shareholder, independence and completeness of the
Company on business, personnel, assets, organization and finance
(1)、Personnel Arrangement: the Company’s general manager, vice general managers
and other senior officers, all of whom were paid by the Company did not hold any
post in the controlling parties. The Company was entirely independent in personnel
arrangement, conclusion and adjustment of labor contracts thanks to its sound and
independent system for labor, personal and salary management.
(2) 、 Assets: Tangible assets and Intangible assets including trademark, industrial
property right and non-patent technologies were all clearly divided between the
Company and the controlling shareholder, and all legal formalities were completed.
The Company being a legal independent entity consistently conducted business
activities legally and provided no guarantee in any form with its assets for its
shareholders or individuals’ liabilities or any other legal persons or natural persons.
The Company has already transferred free the trademarks to the Company including
‘‘黄金冰谷’’, ‘‘爱斐堡’’, ‘‘爱菲堡’’, ‘‘爱斐’’ and ‘‘AFIP’’ etc trademarks. However,
due to some issues from the past, the Company permitted to use “Changyu” etc the
intangible assets such as part of trademark ownership and patent still held by the
controlling shareholders.
(3)、Finance: The Company has independent finance department, chief account and
financial staff, and also complete, independent and standardized accounting system.
The Company has also established its own bank accounts, duly and legally paying
taxes, workers insurance fund. All financial individuals do not hold any concurrent
posts in associated companies and are able to make financial decisions independently.
The Company has its own audit department, which is especially responsible for the
internal audit work of the Company.
(4)、Offices: The Company has set up a sound organizational framework, in which the
Board of Directors and Board of Supervisors operate independently, no superior and
subordinate relationship exists between the functional departments of the controlling
shareholder. The Company has its own independent production & business offices, all
functional departments are independent to exercise their powers and carry out the
production and business activities independently.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
(5) 、 Operations: the operations of the Company are independent of the controlling
shareholder, the Company owns itself completely independent systems covering
research and development, accounting, workforce and labor, quality control, raw
materials purchase, production and sales, and is possessed of self-run capabilities, and
has neither relationship with the controlling shareholder in terms of supply and sales
by proxy nor competition with the other.
7、Situation for Horizontal Competition
□Available √ Not Available
8、Performance Evaluation and Incentive to Senior Management
The Company has already established a sound system for evaluation of achievement
of senior management and the related incentive system which linked the reward with
the Company’s benefit and personal achievement. The Emolument Committee under
Board of Directors assumed the responsibility of stipulating the policy and appraising
the scheme for salaries and rewards. Based on the Company’s annual production and
business goals, this committee examined senior personals and also their responsible
subsidiaries or departments according to their management achievement and index,
and took these as a criteria of awards or penalties. During the report period, because
of not finishing the annual business plan deliberated and passed in the Board of
Directors’ meeting at the beginning of the year, the total salaries and rewards of the
senior management will be 6.6 % less than last year.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
X、Internal Control
1、Internal control construction
During the report period and as the requirement of General Criteria of Company’s
Internal Control and its corresponding guidelines jointly issued by the Ministry of
Finance and other four ministries, the Company confirms its strategic development
target and internal control target. Based on the internal and external surroundings,
through the comprehensive and systemic risk assessment in combination with
characteristics of wine industry, the Company keeps perfecting and deepening internal
control construction. The Company mainly formulates and perfects the rules and
regulations about marketing, overseas acquisition as well as grape base construction
and management. The Company also takes many measures to ensure the
implementation of every internal control system.
Based on the relevant law and regulations, such as Corporation Law, Securities Law
and Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, the Company
has already built an intact and effective internal control system covering the company
and each critical business circulation, which is in accordance with the requirements of
General Criteria of Company’s Internal Control and its corresponding guidelines.
The built system provides essential theoretical foundation and institutional guarantee
for the legal compliance of operating management, safety of assets, authenticity and
integrity of Financial Report and relevant information as well as the accomplishment
of strategic target.
2、The Board of Directors’ statement on the internal control responsibilities
It is the responsibility of the Board of Directors to establish, perfect and effectively
execute the internal control, evaluate its efficiency and disclose truthfully the
assessment report on internal control as requested by Company’s internal control
standard system. The board of supervisors should supervise the establishment and
implementation of board of directors on the internal control. Managers should take in
charge of organizing and leading the daily operation of Company’s internal control.
The board of directors ， the board of supervisors ， directors, supervisors & senior
management of the Company collectively and individually accepted full responsibility
for the truthfulness，accuracy and completeness of the information contained in the
report and confirm that to the best of their knowledge and belief there are no
73
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
unfaithful facts, significant omissions or misleading statements. The target of the
Company’s internal control is to reasonably guarantee the lawfulness and compliance
on operation management, the safety of assets, the truthfulness and completeness of
financial report and its related information, so as to improve business efficiency and
result and promote the realization of development strategy. Due to the inherent
limitations, internal control only can provide the reasonable guarantee for realizing
the above mentioned targets. Besides, owing to the changed situation which could
probably cause the irrelevancy of internal control or reduce the compliance for the
control policy and formality, there is a certain risk to calculate the efficiency of the
future internal control according to the assessment result of internal control.
3、Basis of establishing internal control for financial report
Basis of establishing internal control for financial report is in accordance with the
rules of General Criteria of Company’s Internal Control with its corresponding
guidelines and Internal Control Guideline of Listed Company on Shenzhen Stock
Exchange.
4、Self-assessment report on internal control
The specific circumstances for the significant defects of the internal control found during the report
period in the internal control self assessment report.
During the report period, the significant defects of internal control haven’t been found.
Disclosure date for the full text of the
28th April 2015
internal control self assessment report
Disclosure index for the full text of the
www.cninfo.com.cn
internal control self assessment report
5、Internal control audit report or authentication report
Internal control audit report issued by Deloitte Hua Yong certified public accountants
Co., Ltd.
Audit opinions of the internal control audit report
We believe that Yantai Changyu Pioneer Wine Co., Ltd. is in accordance with the rules of General
Criteria of Company’s Internal Control and other related rules, all significant aspects keep effective
internal control in the financial report.
Disclosure date for the full text of the
28th April 2015
internal control audit report
74
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
Disclosure index for the full text of the Document name: 2014 Annual Internal Control Report
internal control audit report on Self Assessment. Website address: www.cninfo.com.cn
Whether or not the certified public accountants issued a non-standard advice for the
audit report of internal control.
□Yes √ No.
Whether the audit report of internal control issued by the certified public accountants
is in consistency with the self-assessment report of the board of directors.
√ Yes □ No.
6 、 The establishment and implementation of responsibility ascertainment rules
for the significant errors in the annual report
Accountability System for Significant Errors in the Annual Report of the Company
has already been deliberated and passed by the 5th session of Board of Directors’ 4th
meeting on 7th April, 2011 and also been in strict performance. During the report
period, there are no big errors in 2013 Annual Report and 2014 Semi-annual Report
issued and disclosed by the Company.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XI、Financial Report
1、Audit Report
Type of audit opinion Standard unqualified audit opinion
Date signed on audit report 25th April, 2015
Deloitte Hua Yong certified public accountants co.,
Audit agency name
Ltd. (special general partnership)
Certified public accountant's name Xu Zhaohui Li Xu
De Shi Bao (Shen) Zi (15) No. P1560
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
We have audited the accompanying financial statements of Yantai Changyu Pioneer Wine
Company Limited and its subsidiaries which comprise the consolidated and company's balance
sheets as at 31 December 2014, and the consolidated and company's income statements, the
consolidated and company's cash flow statements and the consolidated and company's statements
of changes in shareholders' equity for the year then ended, and the notes to the financial
statements.
1. Management' responsibility for the financial statements
Management of the Company is responsible for the preparation and fair presentation of these
financial statements. This responsibility includes: (1) preparing the financial statements in
accordance with Accounting Standards for Business Enterprises to achieve fair presentation of the
financial statements; (2) designing, implementing and maintaining internal control which is
necessary to enable that the financial statements are free from material misstatement, whether due
to fraud or error.
2. Auditor's responsibility
Our responsibility is to express an audit opinion on these financial statements based on our audit.
We conducted our audit in accordance with China Standards on Auditing. China Standards on
Auditing require that we comply with the Code of Ethics for Chinese Certified Public
Accountants and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing audit procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, Certified Public
Accountants consider the internal control relevant to the preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the internal control. An
76
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
77
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED - continued
3. Opinion
In our opinion, the financial statements of Yantai Changyu Pioneer Wine Company Limited
present fairly, in all material respects, the consolidated and company's financial position as of 31
December 2014, and the consolidated and company's results of operations and cash flows for the
year then ended in accordance with Accounting Standards for Business Enterprises.
Deloitte Touche Tohmatsu Chinese Certified Public Accountant
Certified Public Accountants LLP Xu Zhao Hui (Signature and seal)
Shanghai, China Li Xu (Signature and seal)
25 April 2015
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Yantai Changyu Pioneer Wine Co. Ltd. 2013 Annual Report.
CONSOLIDATED BALANCE SHEETS
YEAR ENDED 31 DECEMBER 2014
ASSETS Notes 2014 2013
RMB RMB
CURRENT ASSETS
Cash and bank balances VI-1 1,145,365,071 1,367,818,182
Notes receivable VI-2 138,315,319 79,702,753
Accounts receivable VI-3 145,672,411 177,109,516
Prepayments VI-4 8,073,786 45,997,863
Interest receivable VI-5 3,619,429 8,417,995
Other receivables VI-6 31,362,302 99,331,794
Inventories VI-7 2,087,376,398 2,121,117,437
Other current assets 29,662,076
____________ -
____________
Total current assets 3,589,446,792
____________ 3,899,495,540
____________
NON-CURRENT ASSETS
Available-for-sale financial assets VI-8 - -
Fixed assets VI-9 2,532,682,355 1,917,641,344
Construction in progress VI-10 1,700,466,500 1,423,654,530
Materials for construction of fixed assets - 676,539
Bearer biological assets VI-11 151,723,241 101,794,515
Intangible assets VI-12 452,951,194 296,129,754
Goodwill VI-13 13,112,525 13,112,525
Long-term prepaid expenses VI-14 201,911,605 165,521,803
Deferred tax assets VI-15 254,186,823 158,533,090
Other non-current assets VI-16 15,751,605
____________ 21,370,902
____________
Total non-current assets 5,322,785,848
____________ 4,098,435,002
____________
Total assets 8,912,232,640 7,997,930,542
____________ ____________
79
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
CONSOLIDATED BALANCE SHEETS
YEAR ENDED 31 DECEMBER 2014 - continued
LIABILITIES AND EQUITY Notes 2014 2013
RMB RMB
CURRENT LIABILITIES
Short-term borrowings VI-17 300,000,000 243,170,674
Notes payable VI-18 10,000,000 5,765,694
Accounts payable VI-19 357,811,822 258,116,331
Receipts in advance VI-20 215,127,598 188,651,254
Employee benefits payable VI-21 158,948,592 130,720,235
Taxes payable VI-22 87,504,048 194,413,430
Interest payable 3,475,641 2,152,059
Deferred income VI-23 12,398,718 12,915,801
Other payables VI-24 469,804,317
____________ 497,301,630
____________
Total current liabilities 1,615,070,736
____________ 1,533,207,108
____________
NON-CURRENT LIABILITIES
Long-term borrowings VI-25 209,380,000 -
Deferred income VI-23 76,024,992 83,611,041
Deferred tax liabilities VI-15 4,565,636 5,336,115
Other non-current liabilities VI-26 3,998,352
____________ 4,755,794
____________
Total non-current liabilities 293,968,980
____________ 93,702,950
____________
Total liabilities 1,909,039,716
____________ 1,626,910,058
____________
EQUITY
Share capital VI-27 685,464,000 685,464,000
Capital reserve VI-28 563,139,042 563,139,042
Other comprehensive income VI-29 (2,803,271) -
Surplus reserve VI-30 342,732,000 342,732,000
Retained earnings VI-31 5,251,920,374
____________ 4,616,944,663
____________
Equity attributable to shareholders
of the Company 6,840,452,145 6,208,279,705
Non-controlling interests 162,740,779
____________ 162,740,779
____________
Total equity 7,003,192,924
____________ 6,371,020,484
____________
Total liabilities and equity 8,912,232,640 7,997,930,542
____________ ____________
The accompanying notes form an integral part of these financial statements.
The financial statements on pages 3 to 95 were signed by the following:
Legal Representative: _________________________________
Person in Charge of the Accounting Body: _________________
Chief Accountant: ____________________________________
80
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
BALANCE SHEET OF THE COMPANY
YEAR ENDED 31 DECEMBER 2014
ASSETS Notes 2014 2013
RMB RMB
CURRENT ASSETS
Cash and bank XIV-1 496,138,263 602,444,243
Notes receivable XIV-2 98,158,251 32,594,381
Accounts receivable XIV-3 1,516,518 1,600,968
Prepayments XIV-4 1,710,787 24,824,672
Interest receivable XIV-5 3,580,811 8,417,995
Dividend receivable XIV-6 402,596,884 752,595,884
Other receivables XIV-7 4,708,836,276 3,709,583,949
Inventories XIV-8 681,696,774 781,284,189
Other current assets 14,996,807
____________ -
____________
Total current assets 6,409,231,371
____________ 5,913,346,281
____________
NON-CURRENT ASSETS
Available-for-sale financial assets VI-8 - -
Long-term equity investments XIV-9 1,093,437,027 1,048,208,923
Fixed assets XIV-10 403,210,655 425,294,116
Construction in progress XIV-11 182,765 269,802
Bearer biological assets XIV-12 83,631,722 60,851,409
Intangible assets XIV-13 76,760,678 79,139,831
Deferred tax assets XIV-14 27,053,571
____________ 22,956,747
____________
Total non-current assets 1,684,276,418
____________ 1,636,720,828
____________
Total assets 8,093,507,789 7,550,067,109
____________ ____________
81
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
BALANCE SHEET OF THE COMPANY
YEAR ENDED 31 DECEMBER 2014 - continued
LIABILITIES AND EQUITY Notes 2014 2013
RMB RMB
CURRENT LIABILITIES
Short-term borrowings VI-17 300,000,000 243,170,674
Accounts payable XIV-15 228,052,722 166,453,563
Employee benefits payable XIV-16 70,233,251 66,416,387
Taxes payable XIV-17 18,205,124 37,578,670
Interest payable 3,475,641 2,152,059
Deferred income 3,017,898 2,559,227
Other payables XIV-18 1,030,604,819
____________ 1,612,596,521
____________
Total current liabilities 1,653,589,455
____________ 2,130,927,101
____________
NON-CURRENT LIABILITIES
Long-term borrowings VI-25 209,380,000 -
Deferred income 22,747,915 20,095,300
Other non-current liabilities 1,895,828
____________ 2,180,162
____________
Total non-current liabilities 234,023,743
____________ 22,275,462
____________
Total liability 1,887,613,198
____________ 2,153,202,563
____________
EQUITY
Share capital VI-27 685,464,000 685,464,000
Capital reserve XIV -19 557,222,454 557,222,454
Surplus reserve VI-30 342,732,000 342,732,000
Retained earnings 4,620,476,137
____________ 3,811,446,092
____________
Total equity 6,205,894,591
____________ 5,396,864,546
____________
Total liabilities and equity 8,093,507,789 7,550,067,109
____________ ____________
82
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2014
Notes 2014 2013
RMB RMB
I. Revenue VI-32 4,156,727,525 4,320,948,572
Less: Cost of sales VI-32 1,372,444,612 1,357,897,999
Taxes and surcharges VI-33 269,446,774 236,394,164
Selling expenses VI-34 1,006,009,364 1,140,836,150
Administrative expenses VI-35 256,980,018 245,498,950
Impairment loss of assets VI-36 1,995,877 2,149,438
Financial expenses VI-37 (17,256,721)
____________ (18,700,357)
____________
II. Operating profit 1,267,107,601 1,356,872,228
Add: Non-operating income VI-38 43,996,405 42,108,726
Including: gains from disposal
of non-current assets 121,113
271,989
Less: Non-operating expenses VI-39 8,370,249 1,874,223
Including: losses from disposal
of non-current assets 5,207,658
678,016 ____________ ____________
III. Profit before tax 1,302,733,757 1,397,106,731
Less: Income tax VI-40 325,026,046
____________ 348,920,804
____________
IV. Profit for the year and attributable
to shareholders of the Company 977,707,711 1,048,185,927
____________ ____________
V. Other comprehensive income (post-tax)
Other comprehensive income
to be reclassified to profit and loss
Foreign currency statement
translation difference (2,803,271)
____________ -
____________
Other comprehensive income (post-tax) (2,803,271)
____________ -
____________
VI. Total comprehensive income
attributable to owners of the Company 974,904,440 1,048,185,927
____________ ____________
VII. Earnings per share
(I) Basic earnings per share VI-41 1.43 1.53
____________ ____________
(II) Diluted earnings per share VI-41 N/A N/A
____________ ____________
83
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
INCOME STATEMENT OF THE COMPANY
YEAR ENDED 31 DECEMBER 2014
Notes 2014 2013
RMB RMB
I. Revenue XIV -20 1,647,825,652 1,730,694,774
Less: Cost of sales XIV -20 1,406,987,744 1,473,772,762
Taxes and surcharges XIV -21 157,026,901 135,046,585
Administrative expenses XIV -22 112,051,545 109,664,952
Impairment loss/(reverse) of assets XIV -23 (192,908) 4,392,429
Financial expenses XIV -24 (11,053,553) (25,948,141)
Investment income XIV -25 1,164,089,666
____________ 1,126,019,415
____________
II. Operating Profit 1,147,095,589 1,159,785,602
Add: Non-operating income 6,371,028 4,266,595
Including: gains from disposal
of non-current assets 105,236
1,374
Less: Non-operating expenses 5,801,396 1,019,467
Including: losses from disposal
of non-current assets 5,181,727
663,565 ____________ ____________
III. Profit before tax 1,147,665,221 1,163,032,730
Less: Income tax (4,096,824)
____________ 8,345,452
____________
IV. Profit for the year
and total comprehensive income 1,151,762,045 1,154,687,278
____________ ____________
84
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2014
Notes 2014 2013
RMB RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods
and the rendering of services 4,787,289,147 4,766,532,032
Receipts of tax refunds 18,259,690 22,163,624
Other cash receipts relating to operating activities VI-42(1) 24,543,547
__________ 47,960,711
__________
Sub-total of cash inflows from operating activities 4,830,092,384
__________ 4,836,656,367
__________
Cash payments for goods purchased and services received (1,255,567,298) (1,293,320,336)
Cash payments to and on behalf of employees (358,415,330) (379,880,613)
Payment of various types of taxes (1,301,077,872) (1,368,825,802)
Other cash payments relating to operating activities VI-42(2) (844,948,588)
__________ (1,059,555,309)
__________
Sub-total of cash outflows from operating activities (3,760,009,088)
__________ (4,101,582,060)
__________
Net cash flows from operating activities VI-43(1) 1,070,083,296
__________ 735,074,307
__________
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in term deposits over 3 months 307,694,951 1,292,524,719
Proceeds from return on investments 24,230,453 33,050,471
Proceeds from disposal of fixed assets 1,181,895
__________ 1,026,411
__________
Sub-total of cash inflows from investing activities 333,107,299
__________ 1,326,601,601
__________
Cash paid for acquisition of properties, plants and equipment,
intangible assets and other long-term assets (1,238,293,585) (962,180,456)
Cash paid for term deposits over 3 months (77,547,483) (907,392,728)
Other cash paid for the purchase of non-controlling interest __________- (16,883,864)
__________
Sub-total of cash outflows from investing activities (1,315,841,068)
__________ (1,886,457,048)
__________
Net cash flows from investing activities (982,733,769)
__________ (559,855,447)
__________
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from Non-controlling interest - 16,359,770
Cash receipts from borrowings 515,368,080 243,170,674
Other cash received from financing activities 129,182,292
__________ -
__________
Sub-total of cash inflows from financing activities 644,550,372
__________ 259,530,444
__________
Cash paid for dividends, profits and interests (353,707,371) (764,539,398)
Cash paid for borrowings (242,219,439)
Cash paid from other financing activities VI-42(3) (125,000,000)
__________ (275,945,000)
__________
Sub-total of cash outflows from financing activities (720,926,810)
__________ (1,040,484,398)
__________
Net cash flows from financing activities (76,376,438)
__________ (780,953,954)
__________
Effect of foreign exchange rate changes
on cash and cash Equivalents (7,059,747) -
NET INCREASE OF CASH AND CASH EQUIVALENTS 3,913,342 (605,735,094)
ADD: CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR VI-43(2) 956,558,932
__________ 1,562,294,026
__________
CASH AND CASH EQUIVALENTS AT END OF THE YEAR VI-43(2) 960,472,274 956,558,932
__________ __________
85
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
CASH FLOW STATEMENT OF THE COMPANY
YEAR ENDED 31 DECEMBER 2014
Notes 2014 2013
RMB RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods
and the rendering of services 1,827,219,301 1,993,219,656
Other cash receipts relating to operating activities 12,168,205
__________ 9,194,891
__________
Sub-total of cash inflows from operating activities 1,839,387,506
__________ 2,002,414,547
__________
Cash payments for goods purchased and services received (1,302,377,275) (1,385,474,499)
Cash payments to and on behalf of employees (151,732,255) (162,425,829)
Cash payment of various types of taxes (257,237,660) (206,446,458)
Other cash payment relating to operating activities (1,594,026,341)
__________ (1,459,407,016)
__________
Sub-total of cash outflows from operating activities (3,305,373,531)
__________ (3,213,753,802)
__________
Net cash flows from operating activities XIV-26 (1,465,986,025)
__________ (1,211,339,255)
__________
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from deposits over 3 months 295,694,951 1,292,524,719
Cash receipts from return on investments 1,530,610,338 1,395,495,286
Cash receipts from disposals of fixed assets 550,824
__________ 4,000
__________
Sub-total of cash inflows from investing activities 1,826,856,113
__________ 2,688,024,005
__________
Cash payments for acquisition of fixed assets,
intangible assets and other long-term assets (52,003,088) (131,396,826)
Cash payments for term deposits over 3 months (53,547,483) (907,392,728)
Cash payments for subsidiary investment (37,980,500)
__________ (29,988,530)
__________
Sub-total of cash outflows from investing activities (143,531,071)
__________ (1,068,778,084)
__________
Net cash flows from investing activities 1,683,325,042
__________ 1,619,245,921
__________
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings 515,368,080 243,170,674
Other cash received from financing activities 129,182,292
__________ -
__________
Cash inflows from financing activities 644,550,372
__________ 243,170,674
__________
Cash paid for dividends, profits and interests (351,636,158) (754,010,400)
Cash paid for borrowings (242,219,439) -
Cash paid from other financing activities (125,000,000)
__________ (125,000,000)
__________
Cash outflows from financing activities (718,855,597)
__________ (879,010,400)
__________
Net cash flows from financing activities (74,305,225)
__________ (635,839,726)
__________
Effect of foreign exchange rate changes
on cash and cash Equivalents (6,939,315) (635,839,726)
INCREASE/(DECREASE) OF CASH
AND CASH EQUIVALENTS 136,094,477 (227,933,060)
ADD: CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR XIV-27 197,150,989
__________ 425,084,049
__________
CASH AND CASH EQUIVALENTS AT END OF THE YEAR XIV-27 333,245,466 197,150,989
__________ __________
86
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
CONSOLIDATED SATATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2014
2014
Attributable to shareholders of the Company
Issued Capital Other comprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total
RMB RMB RMB RMB RMB RMB RMB
I. Opening balance
of the current year _______
685,464,000 _______
563,139,042 _______ ________ ________
- 342,732,000 4,616,944,663 _______
162,740,779 ________
6,371,020,484
II. Changes for the year
(I) Total comprehensive income - - (2,803,271) - 977,707,711 - 974,904,440
(II) Profit distribution
Distributions to
shareholders (VI-31) _______
- _______
- _______ ________ ________
- - (342,732,000) _______
- ________
(342,732,000)
III. Closing balance of
the current year 685,464,000 563,139,042 (2,803,271) 342,732,000 5,251,920,374 162,740,779 7,003,192,924
_______ _______ _______ ________ ________ _______ ________
2013
Attributable to shareholders of the Company
Issued Capital Other comprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total
RMB RMB RMB RMB RMB RMB RMB
I. Opening balance
of the current year _______
685,464,000 _______
562,139,042 _____
- ________ ________
342,732,000 4,322,769,136 _______
146,381,009 ________
6,059,485,187
II. Changes for the year
(I) Total comprehensive income - - - - 1,048,185,927 - 1,048,185,927
(II)Shareholders' injection
Injection of non-controlling
interest - - - - - 16,359,770 16,359,770
(III) Profit distribution
Distributions to
shareholders (VI-31) - - - - (754,010,400) - (754,010,400)
(IV) Others (Notes VI-28) _______
- _______
1,000,000 _____
- ________ ________
- - _______
- ________
1,000,000
III. Closing balance
of the current year 685,464,000 563,139,042 - 342,732,000 4,616,944,663 162,740,779 6,371,020,484
_______ _______ _____ ________ ________ _______ ________
87
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
STATEMENT OF CHANGES IN EQUITY OF THE COMPANY
YEAR ENDED 31 DECEMBER 2014
2014
Issued capital Capital reserve Surplus reserve Retained earnings Total
RMB RMB RMB RMB RMB
I. Opening balance
of the current year 685,464,000
________ 557,222,454
________ 342,732,000
________ 3,811,446,092
_________ 5,396,864,546
_________
II. Changes for the year
(I) Total comprehensive income - - - 1,151,762,045 1,151,762,045
(II) Profit distribution
Distributions to shareholders (VI-31) -
________ -
________ -
________ (342,732,000)
_________ (342,732,000)
_________
III. Closing balance
of the current year 685,464,000 557,222,454 342,732,000 4,620,476,137 6,205,894,591
________ ________ ________ _________ _________
2013
Issued capital Capital reserve Surplus reserve Retained earnings Total
RMB RMB RMB RMB RMB
I. Opening balance
of the current year 685,464,000
________ 557,222,454
________ 342,732,000
________ 3,410,769,214
_________ 4,996,187,668
_________
II. Changes for the year
(I) Total comprehensive income - - - 1,154,687,278 1,154,687,278
(II) Profit distribution
Distributions to shareholders (VI-31) -
________ -
________ -
________ (754,010,400)
_________ (754,010,400)
_________
III. Closing balance
of the current year 685,464,000 557,222,454 342,732,000 3,811,446,092 5,396,864,546
________ ________ ________ _________ _________
88
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2014
I. CORPORATE INFORMATION
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, and sparkling 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. Registration place of the Company is Yantai, Shandong.
Headquarter of the Company is located at No. 56 Da Ma Lu, Zhifu District, Yantai, Shandong,
PRC.
As at 31 December 2014, the total shares issued by the Company amounts to 685,464,000 shares.
Please refer to Notes VI-27 in detail.
The holding company of the Group is Changyu Group Company, which is jointly controlled by
Yantai SASAC, ILLVA Saronno Investment Italy, International Finance Corporation and Yantai
Yuhua Investment and Development Company Limited.
The financial statements have been authorized by the board of directors on 25 April 2015.
According to the Company's articles of association, the financial statements will be reviewed by
shareholders on the shareholder's meeting.
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in detail.
For detail of changes in consolidation scope of the year, please refer to Notes VII "Change in
consolidation scope".
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
1. Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by
the Ministry of Finance ("MoF") (also including the 2014 new issued and revised accounting
standards). In addition, the Group has disclosed relevant financial information in accordance
with Information Disclosure and Presentation Rules for Companies Offering Securities to the
Public No. 15 - General Provisions on Financial Reporting (Revised in 2014).
89
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS - continued
2. Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. The Group adopts the historical cost as
the principle of measurement in the financial statements. Where assets are impaired, provisions
for asset impairment are made in accordance with relevant requirements.
Under the historical cost measurement, an asset is measured at the fair value of consideration paid
in cash and cash equivalents at the date of the purchase. Liability is measured at the value of asset
received through taking current obligation, the contract value for taking current obligation, or the
cash and cash equivalents value estimated for repaying debt in daily business activity.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. Fair value for
measurement and/or disclosure purposes in these consolidated financial statements is determined
on such a basis.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
2) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
3) Level 3 inputs are unobservable inputs for the asset or liability.
3. Going concern
As at 31 December 2014, the Group evaluated the profitability ability in the foreseeable 12
months and did not notice any event or circumstance that would constitute significant doubt on
going concern ability of the Group. Therefore, the financial statements have been prepared on a
going concern basis.
90
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
1. Declaration for implementing CAS
The financial statements are prepared in accordance with CAS, which showing a true and fair
view of the financial position on 31 December 2014, financial performance and cash flow in 2014
of the Company and the Group.
2. Accounting year
The accounting year of the Group is from 1 January to 31 December of each calendar year.
3. Business cycle
Business cycle refers to the period from purchasing assets to be processed to receiving cash or
cash equivalents by the Company. The business cycle of the Company is 12 months.
4. Reporting currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Company
and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries
choose RMB as their functional currency. The Company's foreign subsidiary chooses Currency
Euro as its functional currency on the basis of the primary economic environment in which it
operates. The Group adopts RMB to prepare its financial statements.
5. Business combination
5.1Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for
control of the acquiree. The intermediary expenses incurred by the acquirer in respect of
auditing, legal services, valuation and consultancy services, etc. and other associated
administrative expenses attributable to the business combination are recognised in profit or loss
when they are incurred.
Qualified identifiable assets, liabilities and contingent liabilities obtained by acquirer in the
acquisition are measured using fair value at the acquisition date.
The cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is
measured at cost on initial recognition.
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements. It is tested for
impairment at least at the end of each year.
91
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
6. Preparation of consolidated financial statements
6.1 Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as
to obtain benefits from its operating activities. The Group will reevaluate if changes in relevant
facts and circumstances results in changes in relevant factors involved in the above definition of
control.
Consolidation of subsidiary starts from the control on the subsidiary by the Group and ends at the
loss of control on the subsidiary by the Group.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of
disposal (the date when control is lost) are included in the consolidated income statement and
consolidated statement of cash flows, as appropriate.
For a subsidiary acquired through a business combination not involving enterprises under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative
figures in the consolidated financial statements.
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as
non-controlling interests and presented as "non-controlling interests" in the consolidated balance
sheet within shareholders' equity. The portion of net profits or losses of subsidiaries for the
period attributable to non-controlling interests is presented as "non-controlling interests" in the
consolidated income statement below the net profit line item.
When the amount of loss for the period attributable to the non-controlling shareholders of a
subsidiary exceeds the non-controlling shareholders' portion of the opening balance of owners'
equity of the subsidiary, the excess amount are still allocated against non-controlling interests.
7. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
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8. Translation of transactions and financial statements denominated in foreign currencies
8.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot
exchange rates at the balance sheet date. Exchange differences arising from the differences
between the spot exchange rates prevailing at the balance sheet date and those on initial
recognition or at the previous balance sheet date are recognised in profit or loss for the period,
except that (1) exchange differences related to a specific-purpose borrowing denominated in
foreign currency that qualify for capitalisation are capitalised as part of the cost of the qualifying
asset during the capitalisation period; (2) exchange differences related to hedging instruments for
the purpose of hedging against foreign currency risks are accounted for using hedge accounting;
(3) exchange differences arising from available-for-sale non-monetary items denominated in
foreign currencies and changes in the carrying amounts of available-for-sale monetary items are
recognised as other comprehensive income and included in capital reserve.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions and the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate) and is
recognised in profit and loss or as other comprehensive income included in capital reserve.
8.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for retained earnings are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the distribution of profits are translated at the spot exchange rates on the
dates of the transactions; the opening balance of retained earnings is the translated closing balance
of the previous year's retained earnings; the closing balance of retained earnings is calculated and
presented on the basis of each translated income statement and profit distribution item. The
difference between the translated assets and the aggregate of liabilities and shareholders' equity
items is separately presented as the exchange differences arising on translation of financial
statements denominated in foreign currencies of other comprehensive income under the
shareholders' equity in the balance sheet.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign
subsidiary are translated at the spot exchange rate on the date of the cash flows. The effect of
exchange rate changes on cash and cash equivalents is regarded as a reconciling item and
presented separately in the cash flow statement as "effect of exchange rate changes on cash and
cash equivalents".
The opening balances and the comparative figures of previous year are presented at the translated
amounts in the previous year's financial statements.
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9. Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial liabilities are initially
measured at fair value. For other financial assets and financial liabilities, transaction costs are
included in their initial recognised amounts.
9.1 Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability (or a group of financial assets or financial liabilities) and of allocating the
interest income or interest expense over the relevant period, using the effective interest rate. The
effective interest rate is the rate that exactly discounts estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to
the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group estimates future cash flows considering all
contractual terms of the financial asset or financial liability (without considering future credit
losses), and also considers all fees paid or received between the parties to the contract giving rise
to the financial asset and financial liability that are an integral part of the effective interest rate,
transaction costs, and premiums or discounts, etc.
9.2 Classification, recognition and measurement of financial assets
On initial recognition, the Group's financial assets are classified into one of the four categories,
including financial assets at fair value through profit or loss, held-to-maturity investments, loans
and receivables, and available-for-sale financial assets. All regular way purchases or sales of
financial assets are recognised and derecognised on a trade date basis. Financial assets of the
Group are loans and receivables and available-for-sale financial assets.
9.2.1 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Financial assets classified as loans and receivables by
the Group include cash and bank, notes receivable, accounts receivable, interest receivable,
dividends receivable, and other receivables.
Loans and receivables are subsequently measured at amortised cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortisation is recognised in
profit or loss.
9.2.2 Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on
initial recognition as available for sale, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.
For investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be reliably measured, they are measured at cost.
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9. Financial instruments - continued
9.3 Impairment of financial assets
The Group assesses at each balance sheet date the carrying amounts of financial assets other than
those at fair value through profit or loss. If there is objective evidence that a financial asset is
impaired, the Group determines the amount of any impairment loss. Objective evidence that a
financial asset is impaired is evidence that, arising from one or more events that occurred after the
initial recognition of the asset, the estimated future cash flows of the financial asset, which can be
reliably measured, have been affected.
Objective evidence that a financial asset is impaired includes the following observable events:
(1) Significant financial difficulty of the issuer or obligor;
(2) A breach of contract by the borrower, such as a default or delinquency in interest or
principal payments;
(3) The Group, for economic or legal reasons relating to the borrower's financial difficulty,
granting a concession to the borrower;
(4) It becoming probable that the borrower will enter bankruptcy or other financial
reorganisations;
(5) The disappearance of an active market for that financial asset because of financial
difficulties of the issuer;
(6) Upon an overall assessment of a group of financial assets, observable data indicates that
there is a measurable decrease in the estimated future cash flows from the group of
financial assets since the initial recognition of those assets, although the decrease cannot
yet be identified with the individual financial assets in the group. Such observable data
includes:
- Adverse changes in the payment status of borrower in the group of assets;
- Economic conditions in the country or region of the borrower which may lead to a
failure to pay the group of assets;
(7) Significant adverse changes in the technological, market, economic or legal environment in
which the issuer operates, indicating that the cost of the investment in the equity
instrument may not be recovered by the investor;
(8) A significant or prolonged decline in the fair value of an investment in an equity instrument
below its cost;
(9) Other objective evidence indicating there is an impairment of a financial asset.
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9. Financial instruments - continued
9.3 Impairment of financial assets - continued
- Impairment of financial assets measured at amortised cost
If financial assets carried at amortised cost are impaired, the carrying amounts of the financial
assets are reduced to 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. The amount of reduction is recognised as an impairment loss in profit or loss. If,
subsequent to the recognition of an impairment loss on financial assets carried at amortised cost,
there is objective evidence of a recovery in value of the financial assets which can be related
objectively to an event occurring after the impairment is recognised, the previously recognised
impairment loss is reversed. However, the reversal is made to the extent that the carrying
amount of the financial asset at the date the impairment is reversed does not exceed what the
amortised cost would have been had the impairment not been recognised.
For a financial asset that is individually significant, the Group assesses the asset individually for
impairment. For a financial asset that is not individually significant, the Group assesses the asset
individually for impairment or includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. If the Group determines that
no objective evidence of impairment exists for an individually assessed financial asset (whether
significant or not), it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively reassesses them for impairment. Assets for which an impairment
loss is individually recognised are not included in a collective assessment of impairment.
- Impairment of available for sale assets measured at cost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without
a quoted price in an active market) whose fair value cannot be reliably measured, or on a
derivative financial asset that is linked to and must be settled by delivery of such an unquoted
equity instrument, the carrying amount of the financial asset is reduced to the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial
asset. The amount of reduction is recognised as an impairment loss in profit or loss. The
impairment loss on such financial asset is not reversed once it is recognised.
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III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
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9. Financial instruments - continued
9.4 Transfer of financial assets
The Group derecognises a financial asset if one of the following conditions is satisfied: (1) the
contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has
been transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (3) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the
difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of
the consideration received from the transfer and any cumulative gain or loss that has been
recognised in other comprehensive income, is recognised in profit or loss.
9.5 Classification, recognition and measurement of financial liabilities
Debt and equity instruments issued by the Group are classified into financial liabilities or equity
on the basis of the substance of the contractual arrangements and definitions of financial liability
and equity instrument.
On initial recognition, financial liabilities are classified into financial liabilities at fair value
through profit or loss and other financial liabilities. The financial liabilities in group are other
financial liabilities, including short-term borrowings, notes payables, account payables, interest
payables, other payables and long-term borrowings etc.
9.5.1 Other financial liabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with gain or loss arising from derecognition or amortisation recognised in profit or loss.
9.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged. An agreement between the Group (an existing borrower)
and an existing lender to replace the original financial liability with a new financial liability with
substantially different terms is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
When the Group derecognises a financial liability or a part of it, it recognises the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognised and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
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9. Financial instruments - continued
9.7 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial
assets and financial liabilities, and intends either to settle on a net basis, or to realise the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall
not be offset.
9.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. The Group does not recognise any changes in the fair value of
equity instruments. The equity instruments transaction expenses deducted from equity.
The Group treats distribution to equity instrument holders as profit distributions. Shareholder
equity is not affected by share dividend distributed.
10. Account Receivables
10.1 Receivables that are individually significant and for which bad debt provision is individually
assessed
A receivable that exceeds RMB 3,000,000 is deemed as an individually significant receivable by
the Group.
For receivables that are individually significant, the Group assesses the receivables individually
for impairment. For a financial asset that is not impaired individually, the Group includes the asset
in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Receivables for which an impairment loss is individually recognised are not
included in a collective assessment of impairment.
10.2 Receivables that are not individually significant but for which bad debt provision is
individually assessed
For receivables that are not individually significant but for which bad debt provision is
individually assessed, when objective evidence suggests that the Group cannot collect receivables
in accordance with original clauses, the Group would recognize impairment loss and provide bad
debts according to the difference between carrying amount and present value of future cash flows.
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11. Inventories
11.1 Categories of inventories
The Group's inventories mainly include raw materials, work in progress and finished goods.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other expenditures incurred in bringing the inventories to their present
location and condition.
11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
Agricultural products harvested are reported in accordance with the CAS 1 Inventories.
11.3 Basis for determining net realisable value of inventories and provision methods for decline in
value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value.
If the net realisable value is below the cost of inventories, a provision for decline in value of
inventories is made. Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion, the estimated costs necessary to make the sale and
relevant taxes. Net realisable value is determined on the basis of clear evidence obtained, and
takes into consideration the purposes of holding inventories and effect of post balance sheet
events.
Provision for decline in value of other inventories is made based on the excess of cost of
inventory over its net realisable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that the net
realisable value of inventories is higher than their cost, the original provision for decline in value
is reversed and the reversal is included in profit or loss for the period.
11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
11.5 Amortisation method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortised using the
immediate write-off method.
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12. Long term equity investments
12.1 Basis for determining control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Joint control is the contractually agreed sharing of control over an
economic activity, and exists only when the strategic financial and operating policy decisions
relating to the activity require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies. When determining whether an investing
enterprise is able to exercise control or significant influence over an investee, the effect of
potential voting rights of the investee (for example, warrants and convertible debts) held by the
investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
12.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, the
investment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition are
expensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognised using
original cost.
12.3 Subsequent measurement and recognition of profit or loss
12.3.1 Long-term equity investment accounted for using the cost method
The Group accounts for long-term equity investment using the cost method. A subsidiary is an
investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Long-term equity investment is adjusted when capital is added or recollected. Investment income
is recognised in the period in accordance with the attributable share of cash dividends or profit
distributions declared by the investee.
12.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognised in profit or loss for the period.
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13. Fixed assets
13.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognised only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognised. Other subsequent expenditures are recognised in profit or loss in
the period in which they are incurred.
13.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net
residual value rate and annual depreciation rate of each category of fixed assets are as follows:
Estimated Estimated Annual
useful life residual rate depreciation rate
Buildings 20-40years 0-5% 2.4%-5.0%
Machinery 10-20years 0-5% 4.8%-10.0%
Motor Vehicles 4-12years 0-5% 7.9%-25.0%
Estimated net residual value assumes the situation where a fixed asset expire for its estimated
useful life and is in its expected final status. Estimated net residual value is the amount that the
Group can obtain from the disposal less expected disposal fees.
13.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognised in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and account for any change
as a change in an accounting estimate.
14. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalised before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
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15. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalised when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalisation of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is suspended abnormally and when
the suspension is for a continuous period of more than 3 months. Capitalisation is suspended
until the acquisition, construction or production of the asset is resumed. Other borrowing costs
are recognised as an expense in the period in which they are incurred.
16. Biological assets
The biological assets of the Group are bearer biological assets.
16.1 Bearer biological assets
Bearer biological assets are biological assets, for example, held for the production of agricultural
produce, provision of services or rental, Bearer biological assets in the Group are vines. A bearer
biological asset is initially measured at cost. The cost of a bearer biological asset self-grown or
self-bred comprises those costs necessarily incurred and directly attributable to the asset before
the asset becomes available for its intended production and operating purposes, and any
borrowing cost meeting the capitalisation criteria.
The Group charge deprecation for productive biological assets which satisfy expected production,
and record the deprecation in balance sheet and income statement. The Group uses straight line
method to calculate the deprecation, and details as follows:
Estimated Estimated Annual
Category useful life residual rate depreciation rate
Vines 20 years - 5%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biologial assets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and
the depreciation method applied at least once at each financial year-end, and account for any
change as a change in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological
asset, the proceeds on disposal net of the carrying amount and relevant taxes is recognised in
profit or loss for the current period.
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17. Intangible assets
17.1 Intangible assets
Intangible assets include land use rights, software, etc.
An intangible asset is measured initially at cost. When an intangible asset with a finite useful
life is available for use, its original cost less net residual value and any accumulated impairment
losses is amortised over its estimated useful life using the straight-line method. An intangible
asset with an indefinite useful life is not amortised. The useful lives of the intangible assets are as
follows:
Annual
Item Useful life Net residual value amortization rate
Land use rights 40-50 years - 2-2.5%
Software 5-10 years - 10-20%
For an intangible asset with a finite useful life, the Group reviews the useful life and amortisation
method at the end of the period, and makes adjustments when necessary.
18. Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixed
assets, construction in progress, bearer biological asset and intangible assets with finite useful life
at the end of each year. If the assets exist impairment, the Group estimates the recoverable amount
of the assets. An intangible asset with an indefinite useful life and intangible assets not yet
available for use are tested for impairment annually, irrespective of whether there is any
indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which the
asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value
less costs of disposal and the present value of the future cash flows expected to be derived from
the asset.
If recoverable amount of assets is less than book value, the difference is recognised as impairment
provision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets group (s), i.e., goodwill is
reasonably allocated to the related assets group (s) or each of assets group (s) expected to benefit
from the synergies of the combination. An impairment loss is recognised if the recoverable
amount of the assets group or sets of assets groups (including goodwill) is less than its carrying
amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill
allocated to such assets group or sets of assets groups, and then to the other assets of the group
pro-rata on the basis of the carrying amount of each asset (other than goodwill) in the group.
The impairment is recognised in profit or loss for the period in which it is incurred and will not be
reversed in any subsequent period.
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19. Long term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortised over
the current and subsequent periods (together of more than one year). Long-term prepaid
expenses are amortised using the straight-line method over the expected periods in which benefits
are derived.
Long term prepaid expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5 years
Leasehold improvement 3-5years
Others 3 years
20. Employee benefits
20.1 Short-term employee benefits
In an accounting period in which an employee has rendered service to the Group, the Group
recognises the actual employee benefits for that service as a liability. The employee benefits of
the Group are either included in cost of related assets or charged to profit or loss in the period
when they are incurred. Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing
funds, labor union and employee education fees paid by the Group for employees, are recognised
as relevant liability in the period in which the employees provide service, in accordance with the
regulated recognition basis and percentage. The related expenditures are either included in cost of
related assets or charged to profit or loss in the period when they are incurred.
20.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
In the period in which the employees provide service, the Group recognise liability in accordance
with the amounts to be paid calculated according to the predetermined provision plan, and the
related expenditures are either included in cost of related assets or charged to profit or loss in the
period when they are incurred.
20.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognise employee benefits
payroll resulting from termination benefits at the earlier of: the Group cannot unilaterally
withdraw from the termination plan or the redundancy offer; the Group recognise relevant costs
and expenses related to the payment of termination benefits in reconstructuring.
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21. Revenue
21.1 Revenue from sale of goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods. The Group retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold. The amount of revenue can be measured reliably and it is probable that the
associated economic benefits will flow to the Group. The associated costs incurred or to be
incurred can be measured reliably.
21.2 Revenue from rendering of services
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 the outcome of the transaction involving the rendering of services cannot be estimated
reliably, revenue is recognised only to the extent of the costs incurred that will be recoverable,
and the costs incurred are recognised as expenses for the period. When it is not probable that the
costs incurred will be recovered, revenue is not recognised.
22. Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government
to the Group at no consideration. The income is accounted for as either a government grant related
to an asset or a government grant related to income based on its nature.
A government grant is recognised only when the Group can comply with the conditions attaching
to the grant and the Group will receive the grant. Monetary government grants are measured by
the amount received or receivable.
22.1 Government grant related to an asset
A government grant related to an asset is recognised as deferred income, and evenly amortised to
profit or loss over the useful life of the related asset.
22.2 Government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, the grant is recognised as deferred income, and
recognised in profit or loss over the periods in which the related costs are recognised. If the grant
is a compensation for related expenses or losses already incurred, the grant is recognised
immediately in profit or loss for the period.
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III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
23. Deferred tax assets/deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
23.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
23.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognised as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognised using the balance sheet liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for
deductible temporary differences are recognised to the extent that it is probable that taxable
profits will be available against which the deductible temporary differences can be utilised.
However, for temporary differences associated with the initial recognition of goodwill and the
initial recognition of an asset or liability arising from a transaction (not a business combination)
that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognised to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group
is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be taxable profits against which to utilise
the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates,
according to tax laws, that are expected to apply in the period in which the asset is realised or the
liability is settled.
106
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
23. Deferred tax assets/ deferred tax liabilities - continued
23.2 Deferred tax assets and deferred tax liabilities - continued
Current and deferred tax expenses or income are recognised in profit or loss for the period, except
when they arise from transactions or events that are directly recognised in other comprehensive
income or in shareholders' equity, in which case they are recognised in other comprehensive
income or in shareholders' equity; and when they arise from business combinations, in which case
they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilised. Such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
23.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously,
in each future period in which significant amounts of deferred tax assets or liabilities are expected to
be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
24. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
24.1 Operating leases
24.1.1 The Group as lessee under operating leases
Operating lease payments are recognised on a straight-line basis over the term of the relevant
lease, and are either included in the cost of related asset or charged to profit or loss for the period.
Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are
charged to profit or loss in the period in which they are actually incurred.
107
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
25. Other significant accounting policies, accounting estimates and preparation of financial statements
From 1 July 2014, the Group has adopted a series of new accounting standards issued by The
Ministry of Finance, including Accounting Standard for Business Enterprises No.39-Fair value
measurement, Accounting Standard for Business Enterprises No.40-Joint Arrangements,
Accounting Standard for Business Enterprises No.41-Disclosure of interests in other entities,
Accounting Standard for Business Enterprises No.2-Long-term equity investment, Accounting
Standard for Business Enterprises No.9-Employee benefit, Accounting Standard for Business
Enterprises No.30- Presentation of financial statement, Accounting Standard for Business
Enterprises No.33-Consolidated Financial Statements Accounting Standard for Business
Enterprises No.37-Financial instrument disclosures.These changes in accounting policies were
approved in the No.8meeting by the No.6 board of directors of the Company.
Long-term equity investment
Before adopting Accounting Standard for Business Enterprises No.2-Long-term equity investment
(Revised), the Group treated as long-term investment for investment with neither control nor
significant influence to investee, no quoted market price in an active market and whose fair value
cannot be reliably measured at cost.
After adopting Accounting Standard for Business Enterprises No.2-Long-term equity investment
(Revised), the Group treated as available-for-sale financial assets for the investment with neither
control nor significant influence to investee, no quoted market price in an active market and
whose fair value cannot be reliably. The Group undertakes retrospective adjustments for the
changes in accounting policy, resulting the change from long-term equity investment to as
available-for-sale financial assets for investment with neither control nor significant influence to
investee, no quoted market price in an active market and whose fair value cannot be reliably. As
full bad debts provision has been made for the asset on 31 December 2013, the amount in blance
sheet is not affected.
Employee benefit
Before adopting Accounting Standard for Business Enterprises No.9-Employee benefit (Revised),
for retired benefits, when the Group terminates employment relationship with employees before
the expiry of the employment contracts or provides compensation as an offer to encourage
employees to accept voluntary redundancy, if the Group has a formal plan for termination of
employment relationship or has made an offer for voluntary redundancy which will be
implemented immediately, and the Group cannot unilaterally withdraw from the termination plan
or the redundancy offer, a provision for the compensation payable arising from the termination of
employment relationship with employees is recognised with a corresponding charge to the profit
or loss for the period.
After adopting Accounting Standard for Business Enterprises No.9-Employee benefit (Revised),
please see Notes III 20(3)-Accounting treatments for retired benefits for its accounting policies.
Management of the Group believes that adopting the accounting standard does not have a material
impact on the financial statements.
108
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III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
25. Other significant accounting policies, accounting estimates and preparation of financial statements
- continued
Joint Arrangements
Accounting Standard for Business Enterprises No.40-Joint Arrangement classifies joint
arrangements as joint operations and joint ventures. An entity determines the type of joint
arrangement in which it is involved by considering its rights and obligations. An entity assesses its
rights and obligations by considering the structure and legal form of the arrangement, the
contractual terms agreed to by the parties to the arrangement. A joint operation is a joint
arrangement whereby the parties that have joint control of the arrangement have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the net assets of the
arrangement. Management of the Group believes that adopting the accounting standard does not
have a material impact on the financial statements.
Consolidated Financial Statements
Accounting Standard for Business Enterprises No.33-Consolidated Financial Statements (Revised)
has revised the definition of control, the "control" is defined as "investor owns the power to
investee, earns changeable return through participating relevant activities of the investee, has the
power to affect the changeable return through utilizing the power to the investee and makes
explicit accounting rules about the special transaction. Management of the Group believes that
adopting the accounting standard does not have a material impact on the financial statements.
Financial instrument disclosures
Accounting Standard for Business Enterprises No.37-Financial instrument disclosures (Revised)
adds rules relating to offset and disclosure requirements, adds disclosure requirements about
financial asset transfer and modifies disclosure requirements about the maturity of financial assets
and liabilities. This financial statement has been prepared in accordance with the standard, and
with comparable annual financial statements disclosure adjusted accordingly.
Presentation of financial statement
Accounting Standard for Business Enterprises No.30- Presentation of financial statement (Revised)
separates other comprehensive income into following two categories: (1) Other comprehensive
income items which will not be reclassified subsequently to profit or loss; (2) Other
comprehensive income items which will be reclassified subsequently to profit or loss when
specific conditions are met. This financial statement has been prepared in accordance with the
standard, and with comparable annual financial statements disclosure adjusted accordingly.
109
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III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
25. Other significant accounting policies, accounting estimates and preparation of financial statements
- continued
Fair value measurement
Accounting Standard for Business Enterprises No.39-Fair value measurement regulates
measurement and disclosure of fair value. Adopting the standard does not have a significant impact
on measurement of financial statement items, but will lead to more extensive disclosures on fair
value by the Group. This financial statement has been prepared in accordance with the standard.
Disclosure of interests in other entities
Accounting Standard for Business Enterprises No.41-Disclosure of interests in other entities
applies to the disclosure of an enterprise's interest in subsidiaries, joint arrangements, associates
and unconsolidated structured entities. Adopting the standard will lead to more extensive
disclosures on financial statements by the Group. This financial statement has been prepared in
accordance with the standard, and with comparable annual financial statements disclosure adjusted
accordingly.
IV. CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES
In the application of accounting policies as set out in Note III, the Group is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainties of the operating
activities. These judgments, estimates and assumptions are based on historical experience of the
Group's management as well as other factors that are considered to be relevant. Actual results
may differ from these estimates.
The Group periodically review the judgments, estimates and assumptions above on a going
concern basis. For those changes in accounting policies that only affect current financial
statements, the influences are recognized in current period. For those changes in accounting
policies that affect both current and future financial statements, the influences are recognized in
both current and prospective periods.
Significant accounting judgments and accounting estimates
The following are key assumptions for after balance sheet date event and other factors of
uncertain estimation. They may cause material adjustment on balance sheet in following
accounting period.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilized. Significant management
judgment is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and level of future taxable profits together with future tax planning
strategies.
110
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IV. CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Significant accounting judgments and accounting estimates - continued
Depreciation
As set out in Note III-13, the depreciation is calculated on the straight line basis to write-off the
cost of each item of fixed assets to its residual value over its estimated useful life. The Group's
management determines the estimated useful lives for its fixed assets. This estimate is based on
the historical experience of the actual useful lives of fixed assets of similar nature and functions.
If the previous estimates have significant changes, and depreciation expenses will be adjusted in
the future periods.
Useful life of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical
experience of the actual useful lives of intangible assets of similar nature and functions as well as
considering the contractual rights and statutory rights applicable to the intangible assets.
When the estimated useful lives of finite intangible assets are shortened or extended, the
amortization periods should be adjusted accordingly. When there is evidence indicating the
useful lives of intangible assets with indefinite useful lives becomes finite, the useful lives should
be estimated and the intangible assets should be accounted for in accordance with the standards
for the intangible assets with finite useful lives.
Impairment of non-current assets
The Group assesses whether the recoverable amount is lower than the book value. If there are
any indicators that the book value of non-current assets cannot be fully recoverable, impairment
losses should be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value
of the future cash flows expected to be derived from an asset. As it is difficult for the Group to
obtain the quoted market price of the assets (or assts group), the fair value of the assets cannot be
reliably estimated. When the management make estimation on the expected future cash flows
from the asset or cash generating unit, estimates should be made on choosing a suitable
production volume, selling price and related operating costs discount rate in order to calculate the
present value of those cash flows. When recoverable amounts are undertaken, management may
use all available for use information, including the forecast on production volume, selling price
and related operating costs in reasonable and supportable assumptions.
Estimated provision for accounts receivable
A provision for impairment of trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the original terms of
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy are considered indicators that the trade receivable is impaired. The provision is
reassessed at the end of each year.
111
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IV. CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Significant accounting judgments and accounting estimates - continued
Inventory provision based on net realizable value
The inventory are measured on the lower of carrying value and net realizable value, and provision
should be made for impairment on obsolete and slow moving inventories. The group will
reassess whether the net realizable value is lower than the carrying cost at the end of each year.
V. TAXES
1. The main taxes and tax rate are as follows:
Value added tax VAT is levied at 17% on the invoiced amount after deduction
of eligible input VAT.
Consumption tax The consumption tax of the group is levied on gross revenue
at rates ranging from 10% to 20%.
Business tax The Group is subject to a business tax of 5% on its taxable revenue.
City development tax Levied at 7% of total business tax payment.
Corporate income tax The Group is subject to a corporate income tax rate of 25% or 33%
on its taxable income.
Other than tax incentives stated in Notes-V (2), applicable tax rates of the Group in 2014 and
2013 are all stated as above.
2. Tax incentives and relative permit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group,
whose principal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region.
According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income
Tax Measures for Implementation, Ningxia Changyu Grape Growing Co., Ltd. enjoys an
exemption of corporate income tax.
A subsidiary of the Company, Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu") which is a wine
production enterprise incorporated in Xinjiang Weizu Autonomous. In accordance with (Caishui
[2011] No.60) and (Xinzhengfa [2010] No.105), which is from 2012 to 2016, the company enjoys
a favorable corporate income tax rate of 15% besides the exemption of corporate income tax
which belongs to local government. The corporate income tax applicable for current year is 9%.
A subsidiary of the Company, Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau")
which is a wine production enterprise incorporated in Xinjiang Weizu Autonomous. In
accordance with (Caishui [2011] No.60) and (Xinzhengfa [2010] No.105), which is from 2011 to
2015, the company enjoys a favorable corporate income tax rate of 15% besides the exemption of
corporate income tax which belongs to local government. The corporate income tax applicable
for current year is 9%.
112
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank
Closing balance Opening balance
RMB RMB
Cash 101,660 772,817
Bank balance 1,010,259,393 1,235,788,080
Other currency fund 135,004,018
____________ 131,257,285
____________
Total 1,145,365,071 1,367,818,182
____________ ____________
As at 31 December 2014, the balance of restricted cash of the Group is RMB 2,643,519 (31
December 2013: RMB 2,609,237), which is the Group's housing fund.
As at 31 December 2014, the Group's other monetary assets include security of RMB125,000,000
018 (31 December 2013: RMB125,000,000)s pledged for a short-term borrowing from HSBC of
HKD152,000,000 (translated as RMB119,912,800), refundable deposit for notes payable of Shi
He Zi Chateau of RMB10,000,000 (31 December 2013: RMB 5,965,996)and company cards
deposit guarantee of RMB4,018 (31 December 2013: RMB 291,289).
As at 31 December 2014, the Group's overseas cash and bank deposit is RMB 43,746,008 (31
December 2013: RMB 13,104,666).
As at 31 December 2014, The Group's term deposits with original maturity of more than three
months when acquired is RMB 47,245,260 (31 December 2013: RMB 277,392,728) with interest
rates ranging from 3.25%-4.13%, which will mature from 3 months to 1 year.
2. Notes receivable
(1) Categories of notes receivable
Closing balance Opening balance
RMB RMB
Bank acceptances 138,315,319 79,702,753
__________ _________
(2) Notes receivable which have been pledged as security at the end of the period:
As of 31 December 2014, there was no pledged notes receivable (31 December 2013: Nil).
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VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Notes receivable - continued
(3) Notes endorsed by the Group to other parties which are not yet due at the end of the period
Closing balance Opening balance
RMB RMB
Bank acceptances 47,805,224 19,167,830
__________ _________
As at 31 December 2014, notes endorsed by the Group to other parties which are not yet due at
the end of the period is RMB47,805,224 (31 December 2013: RMB19,167,830). The notes are
used for payment to suppliers. The Group believes that due to good reputation of bank, the risk of
notes not accepting by bank on maturity is very low, and almost all the risks and rewards on
ownership of the notes receivable have been transferred to the supplier, therefore derecognise the
note receivables endorsed. If the bank is unable to pay the notes on maturity, according to the
relevant laws and regulations of China, the Group would undertake limited liability for the notes.
(4) Notes receivable reclassified to accounts receivable due to the drawers' inability to settle the note on
maturity
No notes receivable were reclassified as accounts receivable due to the default of drawer (31
December 2013: Nil).
3. Accounts receivable
(1) Disclosure of accounts receivable by categories:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount
RMB % RMB % RMB RMB % RMB % RMB
Accounts receivable that are
individually significant and
for which bad debt provision
has been assessed individually 67,557,319 46.4 - - 67,557,319 72,118,959 40.7 - - 72,118,959
Accounts receivable that are
not individually significant but
for which bad debt provision
has been assessed individually ______ ___
78,115,092 53.6 ____
- ____ ______ ______ ___
- 78,115,092 104,990,557 59.3 ____
- ____ ______
- 104,990,557
Total 145,672,411 100.0 - - 145,672,411 177,109,516 100.0 - - 177,109,516
______ ___ ____ ____ ______ ______ ___ ____ ____ ______
114
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Accounts receivable - continued
(1) Disclosure of accounts receivable by categories: - continued
The Group determines that accounts receivable of more than RMB3,000,000 is considered as
individually significant trade receivable.
The normal credit term is one month, which can be extended to one year for certain major
customers. The accounts receivable are interest-free.
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 145,672,411 174,141,205
1 to 2 years -
__________ 2,968,311
__________
145,672,411 177,109,516
__________ __________
(2) Recognitions, collections and reversals during the current period:
As at 31 December 2014, there was no bad debt provision for accounts receivable (31 December
2013: Nil). There was no bad debt provision made, reversed or written-off by management in
2014 (2013: Nil).
(3) Top five entities with the largest balances of accounts receivable:
Relationship Percentage of
with the Group Amount Aging total receivables
RMB %
Nonggongshang Supermarket
(Group) Co., Ltd Third party 13,983,913 Within 1 year 9.6
Wal-Mart (China) Investment Co., Ltd. Third party 9,764,215 Within 1 year 6.7
Suguo Supermarket Co., Ltd Third party 8,979,267 Within 1 year 6.2
Kunshan Runhua Business Co. Ltd
Huangpu branch Third party 8,363,514 Within 1 year 5.7
Wumart Stores, Inc. Third party 7,864,077
________ Within 1 year 5.4
___
48,954,986 33.6
________ ___
115
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Prepayments
(1) The aging analysis is as follows:
Closing balance Opening balance
Amount Ratio Amount Ratio
RMB % RMB %
Within 1 year 8,073,786 100.0 45,997,863 100.0
_________ _____ _________ _____
(2) As at 31 December 2014, the top 5 of prepayments are as follows:
Reason Percentage of
Relationship for being total advances
with the Group Amount Aging outstanding to suppliers
RMB %
Austria Lawrence
Fine Wines V Co. Ltd Third party 2,828,300 Within 1 year goods not received 35.0
Shandong Electricity Company
Yantai branch Third party 677,389 Within 1 year electricity purchase 8.4
Beijing Diaoyutai Wine Co. Third party 400,800 Within 1 year prepaid deposits 5.0
Liu, Yuling Third party 348,124 Within 1 year goods not received 4.3
Yu, Zhihai Third party 328,194
________ Within 1 year goods not received 4.1
___
4,582,807 56.8
________ ___
5. Interest receivable
(1) Categories of interest receivable
Closing balance Opening balance
RMB RMB
Interests of term deposits 3,619,429 8,417,995
________ ________
(2) Overdue interest
As at 31 December 2014, there was no overdue interest receivable (31 December 2013: Nil).
116
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables
(1) Disclosure of other receivables by categories
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount
RMB % RMB % RMB RMB % RMB % RMB
Other receivables that are
individually significant and
for which bad debt provision
has been assessed individually 16,540,213 42.9 (7,199,521) 43.5 9,340,692 65,272,429 61.2 (7,392,429) 11.3 57,880,000
Other receivables that are
not individually significant but
for which bad debt provision
has been assessed individually ______ ___ _____
22,021,610 57.1 - ___- ______ ______ ___ _____
22,021,610 41,451,794 38.8 - ___- ______
41,451,794
38,561,823 100.0
______ ___ (7,199,521) ___ ______ ______ ___ (7,392,429)
18.7 31,362,302 106,724,223 100.0 99,331,794
___6.9 ______
合计
_____ _____
The Group determines that other receivables of more than RMB 3,000,000 are considered as
individually significant other receivables.
Other receivables that are individually significant and for which bad debt provision has been
assessed individually:
As at 31 December 2014, the bad debt provision for individually significant balance is as follows:
Balance Bad debts provision Percentage Reason for provision
RMB RMB %
The debtor is in the
process of
liquidation
Tiantong Security Co., Ltd. 7,199,521 7,199,521 100 Unable to repay
_______ _______
As at 31 December 2013, the bad debt provision for individually significant balance is as follows:
Balance Bad debts provision Percentage Reason for provision
RMB RMB %
The debtor is in the
process of
liquidation
Tiantong Security Co., Ltd. 7,392,429 7,392,429 100 Unable to repay
_______ _______
The aging analysis is as follows:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Amount Amount Proportion Amount Amount
RMB % RMB RMB RMB % RMB RMB
Within 1 year 22,513,054 58.4 - 22,513,054 96,808,614 90.7 - 96,808,614
1 to 2 years 7,422,977 19.3 - 7,422,977 1,936,191 1.8 - 1,936,191
2 to 3 years 976,083 2.5 - 976,083 221,072 0.2 - 221,072
Over 3 years _______
7,649,709 ____
19.8 _______
(7,199,521) _______
450,188 _______
7,758,346 ____7.3 _______
(7,392,429) _______
365,917
38,561,823 100.0 (7,199,521) 31,362,302 106,724,223 100.0 (7,392,429) 99,331,794
_______ ____ _______ _______ _______ ____ _______ _______
117
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VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
(2) Accrual, reversal and written-off during the current period
Opeing balance Accrual Reversal Written-off Closing balance
RMB RMB RMB RMB RMB
2014 7,392,429 (192,908) 7,199,521
_______ _______ _______ ________ ________
No bad debt accrued in 2014, and bad debt reversed in 2014 is RMB 192,908.
Reasons for Basis of determining Accumulated bad debt Amount of
reversal or the original provision prior to reversals or
Content of other receivables collections bad debt provision reversals or collections collections
RMB RMB
Tiantong Security Co., Ltd. Collected Exceed credit period (7,392,429) 192,908
________ ______
(3) Other receivables written off in the reporting period
No other receivable written off in 2014.
(4) Disclosure of other receivables by categories
Closing balance Opening balance
RMB RMB
Deposit 8,651,139 8,794,120
Petty cash receivable 3,138,780 3,657,944
Refund of consumption tax, real estate tax 8,772,123 6,927,183
Land purchase deposit - 52,880,000
Others 10,800,260
__________ 27,072,547
_________
31,362,302 99,331,794
__________ _________
(5) Top five entities with the largest balances of other receivables
As at 31 December 2014, the top 5 of other receivables are as follows:
Percentage of total Bad debt
Nature Amount Aging other receivable Amount
RMB % RMB
Tiantong Security Co., Ltd. Investment fund 7,199,521 Over 3 years 18.7 7,199,521
Yantai Economic and Technological
Development Zone Construction
Industry Association Deposit 5,000,000 1-2 years 13.0 -
Shihezi National Tax Bureau Refund tax 4,340,692 Within 1 year 11.2 -
Yantai National Tax Bureau Refund tax 2,407,934 Within 1 year 6.2 -
Liaoning Administration of
Foreign Experts Affairs Reimbursed expenses ________
1,894,055 1-2 years ___4.9 _______
-
20,842,202 54.0 7,199,521
________ ___ _______
118
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VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Inventories
(1) Disclosure of inventories by categories
Closing balance Opening balance
Net carrying Net carrying
Balance Provision amount Balance Provision amount
RMB RMB RMB RMB RMB RMB
Raw material 74,820,215 - 74,820,215 85,025,169 - 85,025,169
Work in progress 919,070,983 - 919,070,983 930,137,624 - 930,137,624
Finished goods 1,108,809,575
_________ (15,324,375)
_______ 1,093,485,200
_________ _________ (13,135,590)
1,119,090,234 _______ 1,105,954,644
_________
2,102,700,773 2,087,376,398 2,134,253,027
(15,324,375) (13,135,590) 2,121,117,437
_________ _______ _________ _________ _______ _________
(2) Inventory provision
2014 Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Finished goods 13,135,590 2,188,785 - 15,324,375
________ _______ ________ ________
8. Available-for-sale financial assets
(1) Available-for-sale financial assets
Closing balance Opening balance
Amount Impairment Carrying amount Amount Impairment Carrying amount
RMB RMB RMB RMB RMB RMB
Available-for-sale
equity instruments
measured at cost 10,000,000 (10,000,000) - 10,000,000 (10,000,000) -
_________ _______ ______ _________ _______ ______
(2) Available-for-sale financial assets measured at cost
Carrying amount Provision for impairment losses Proportion of
voting power in Cash dividend
Investee Opening Increase Decrease Closing Opening Increase Decrease Closing the investee (%) for the period
RMB RMB RMB RMB RMB RMB RMB RMB RMB
Yantai Dingtao
Construction and
Development Co., Ltd. 10,000,000 - - 10,000,000 10,000,000 - - 10,000,000 18 -
119
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Fixed assets
(1) Details of fixed assets
Buildings Machinery Motor Vehicles Total
RMB RMB RMB RMB
I. Total original carrying amount
1. Opening balance 1,464,646,808 1,236,192,126 24,325,489 2,725,164,423
2. Increase
Purchase 4,823,315 47,752,763 2,129,517 54,705,595
Transfer from CIP 590,228,245 98,432,128 - 688,660,373
3. Decrease
Disposal -
__________ (8,402,917)
__________ (680,303)
________ (9,083,220)
__________
4. Closing balance 2,059,698,368 1,373,974,100 25,774,703 3,459,447,171
__________ __________ ________ __________
II. Total accumulated depreciation
1. Opening balance 222,433,019 565,658,995 19,431,065 807,523,079
2. Increase
Additions 47,202,827 78,071,524 1,875,434 127,149,785
3. Decrease
Disposal -
__________ (7,560,146)
__________ (347,902)
________ (7,908,048)
__________
4. Closing balance 269,635,846 636,170,373 20,958,597 926,764,816
__________ __________ ________ __________
III. Total carrying amount of
fixed assets
1. Closing carrying amount 1,790,062,522 737,803,727 4,816,106 2,532,682,355
__________ __________ ________ __________
2. Opening carrying amount 1,242,213,789 670,533,131 4,894,424 1,917,641,344
__________ __________ ________ __________
As at 31 December 2014, there was no fixed assets with ownership restricted (31 December 2013:
Nil).
As at 31 December 2014, there was no temporary idle fixed assets, no fixed assets leased under
finance leases , no leased out under operating leases and no held for sale at the end of the period.
(2) Fixed assets of which certificates of title have not been obtained
As at 31 December 2014, buildings without property certificate are as follows:
Reasons why certificates
Items Amount of title have not been obtained
RMB
Xinjiang Shihezi Chateau factory building 256,981,006 Processing
Beijing Chateau European town, main, service building 233,407,559 Processing
Ningxia Wine production factory and office building 77,789,345 Processing
Sales Company office buildings 44,351,379 Processing
Xinjiang Tianzhu fermentations and storage warehouse 28,325,121 Processing
Ice Wine Chateau office building and packing workshop 10,429,634 Processing
Fermentation center office, experiment building and workshop 6,556,657 Processing
Jingyang factory fermentation building 4,969,078 Processing
Kylin Packaging finished goods warehouse and workshop 2,759,562 Processing
__________
120
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Construction in progress
(1) Construction in progress
Closing balance Opening balance
RMB RMB
The Company's reconstruction project 182,767 269,802
Xinjiang Tianzhu workshop reconstruction project 317,758 1,018,309
Kylin Packing production line project - 19,800
Yantai Chateau vineyard project - 10,619,000
AFIP plaza reconstruction project 28,000 -
Ningxia Chateau road project 4,083,378 600,000
Ice Wine Chateau project 69,840 -
Sales Company construction project 39,316,089 66,682,027
Langfang Castel reconstruction project 271,057 -
Jingyang Wine fermentation workshop
reconstruction project 794,385 158,569
Ningxia united workshop - 1,464,202
Shi He Zi Chateau construction project 69,298,865 152,871,244
Xinjiang Sales Co. construction project 6,513,350 -
Ningxia Chateau construction project 127,432,353 92,062,210
Xianyang Chateau construction project 222,927,964 403,657,745
Research, development and manufacturing center
Construction Project 1,127,641,913 558,716,989
Ding Luo Te Chateau Project 73,517,357 119,074,949
Huanren factory construction project 26,261,424 16,439,684
Chang'an Chateau tourism project 1,810,000
____________ -
____________
1,700,466,500 1,423,654,530
____________ ____________
(2) Changes in significant construction in progress
Accumulated
Opening Transfer to Opening expenditure/b
Budget balance Addition PPE balance udget Status Financed by
RMB RMB RMB RMB RMB %
Xinjiang Tianzhu technology
innovation and reconstruction project 3,500,000 1,018,309 2,018,462 (2,719,013) 317,758 92.7 92.7 Self-raised
Yantai Chateau vineyard project 30,000,000 10,619,000 9,916,359 (20,535,359) - 68.5 68.5 Self-raised
Sales Company construction project 161,350,000 66,682,027 18,011,481 (45,377,419) 39,316,089 88.2 88.2 Self-raised
Shihezi Chateau Construction Project
(include Xinjiang Sales) 780,000,000 152,871,244 80,212,788 (157,271,817) 75,812,215 82.4 82.4 Self-raised
Ningxia Chateau Construction Project
(include Ningxia Growing) 414,150,000 92,662,210 79,015,348 (40,161,827) 131,515,731 90.7 90.7 Self-raised
XianyangChateauConstructionProject
(include Shanxi Tourism) 620,740,000 403,657,745 150,024,525 (328,944,306) 224,737,964 89.2 89.2 Self-raised
Research, development and
manufacturing center 1,693,970,000 558,716,989 568,924,924 - 1,127,641,913 66.6 66.6 Self-raised
Ding Luo Te Chateau project 192,400,000 119,074,949 47,238,806 (92,796,398) 73,517,357 86.4 86.4 Self-raised
Huanren factory construction project 16,439,684 9,821,740 - 26,261,424
31,000,000 84.7 84.7 Self-raised
1,421,742,157 965,184,433 (687,806,139) 1,699,120,451
There was no interest capitalized in construction in progress in 2014.
As at 31 December 2014, there was no indication of impairment, therefore no provision was
made.
121
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Bearer biological assets
Measured at cost
Planting RMB
I. Total original carrying amount
1. Opening balance 110,589,680
2. Increase
Self cultivated 55,887,849
3. Decrease
Disposal (5,093,268)
__________
4. Closing balance 161,384,261
__________
II. Total accumulated depreciation
1. Opening balance 8,795,165
2. Increase
Accrual 865,855
__________
3. Closing balance 9,661,020
__________
III. Total net carrying amount
1. Closing net carrying amount 151,723,241
__________
2. Opening net carrying amount 101,794,515
__________
As at 31 December 2014, there is no biological asset with ownership restricted.
As at 31 December 2014, biological assets of the Group include mature bearer biological assets of
RMB 23,758,058 (2013: RMB 13,994,402) and immature bearer biological assets of RMB
127,965,183. (2013: RMB 87,800,113)
As at 31 December 2014, there is no indication that biological assets may be impaired, and no
provision was made.
122
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Intangible assets
(1) Intangible asset
Land use rights Microsoft use rights Total
RMB RMB RMB
I. Total original carrying amount
1. Opening balance 301,043,015 27,123,447 328,166,462
2. Increase
Purchase 158,324,359
__________ 9,893,577
_________ 168,217,936
__________
3. Closing balance 459,367,374
__________ 37,017,024
_________ 496,384,398
__________
II. Total accumulated depreciation
1. Opening balance 27,687,916 4,348,792 32,036,708
2. Increase
Accrual 8,595,240
__________ 2,801,256
_________ 11,396,496
__________
3. Closing balance 36,283,156
__________ 7,150,048
_________ 43,433,204
__________
III. Total net carrying amount
1. Closing net carrying amount 423,084,218 29,866,976 452,951,194
__________ _________ __________
2. Opening net carrying amount 273,355,099 22,774,655 296,129,754
__________ _________ __________
As at 31 December 2014, there was no intangible asset with restricted ownership.
(2) Intangible asset with restricted ownership
Amount Reasons
RMB
Yantai Development District A
- 48、49、51、52 151,895,607 Processing
__________
123
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Goodwill
Investee Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Etablissements Roullet
Fransac (Fransac Sales) 13,112,525 - - 13,112,525
________ ________ ______ ________
The Group recognised a goodwill of RMB13,112,525 in regard to the acquisition of Fransac Sales,
and the Goodwill has been allocated to relevant asset groups to undertake impairment test.
The recoverable amount of an asset group is determined based on the present value of expected
future cash flows. Future cash flow projections are made based on financial budgets approved by
management covering a 5-year period (projecting period) and presume that cash flows after the
projecting period (subsequent period) remain unchanged. Discount rate used in calculating
recoverable amount is 9.9%. One key assumption in projecting future cash flows is the growth
rate in projecting period, which is computed based on the expected growth rate of the industry.
Growth rate of sales in subsequent period is 2%. Management of the Group believes that any
reasonable changes in the above assumptions will not cause book value of the subsidiary exceeds
its recoverable amount.
According to the assessment, the Group confirms that no impairment provision need to be made
for goodwill in the reporting period.
14. Long-term prepaid expenses
2014 Opening balance Increase Amortization Closing balance
RMB RMB RMB RMB
Land lease prepayments 62,501,074 - (1,690,886) 60,810,188
Land requisition fee 48,391,000 - (884,630) 47,506,370
Greening fee 43,693,264 8,133,342 (11,230,548) 40,596,058
Leasehold improvement - 38,022,896 (1,289,211) 36,733,685
Others 10,936,465
_________ 6,033,442
________ (704,603)
________ 16,265,304
_________
165,521,803 52,189,680 (15,799,878) 201,911,605
_________ ________ ________ _________
124
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Deferred tax assets/liabilities
Deferred tax assets and deferred tax liabilities are not related to income tax of the same tax
authorities of the same tax subjects, thus not presented with the net amount after netting.
(1) Recognised deferred tax assets not presented at the net amount after offset：
Closing balance Opening balance
Temporary Temporary
Items differences Deferred tax assets differences Deferred tax assets
RMB RMB RMB RMB
Unrealized profit from intra
- company transactions 632,127,732 158,031,933 337,972,433 84,493,108
Unpaid bonus 95,326,160 23,831,540 78,542,951 19,635,738
Retirement benefit 15,936,065 3,984,016 19,509,959 4,877,490
Asset impairment provision 32,523,896 8,130,974 30,528,019 7,632,005
Deductable losses 160,950,941 44,093,889 97,387,257 24,346,814
Deferred income 88,423,710 16,114,471 96,526,843 17,547,935
1,025,288,504 254,186,823 660,467,462 158,533,090
(2) Recognised deferred tax liabilities not presented at the net amount after offset：
Closing balance Opening balance
Taxable temporary Deferred Taxable temporary Deferred
Item difference tax liability difference tax liability
RMB RMB RMB RMB
Revaluation surplus in
business combination
Not under common control 18,262,543 4,565,636 21,344,460 5,336,115
(3) Deferred tax assets and liabilities not recognized:
Closing balance Opening balance
RMB RMB
Deductable losses 1,363,422 20,440,916
_________ _________
(4) Deductable losses not recognized as deferred tax assets will expire in:
Closing balance Opening balance
RMB RMB
2014 - 19,077,494
2015 1,363,422
_________ 1,363,422
_________
1,363,422 20,440,916
_________ _________
125
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Other non-current assets
Closing balance Opening balance
RMB RMB
Receivable from transfer of
Ningxia Growing's biological assets 15,751,605 21,370,902
__________ _________
17. Short-term borrowings
Categories of short-term borrowings
Closing balance Opening balance
RMB RMB
Secured loans with securities under the custody of lenders - 243,170,674
Unsecured and non-guaranteed loans 300,000,000
__________ -
__________
300,000,000 243,170,674
__________ __________
As at 31 December 2014, unsecured loans detail is as follows:
Bank Amount Repayment date Interest rate
RMB %
HSBC China Qingdao branch 100,000,000 18 July 2014 - 19 January 2015 5.4
HSBC China Qingdao branch 100,000,000 27 November 2014 - 26 November 2015 5.0
ICBC Yantai branch 100,000,000 10 July 2014 - 9 July 2015 5.4
_________ ____
As at 31 December 2014, short-term borrowing of the Group are all fixed interest rate borrowings.
18. Notes payables
Closing balance Opening balance
RMB RMB
Bank acceptances 10,000,000 5,765,694
_________ _________
As at 31 December 2014, there was no due notes payable unpaid (31 December 2013: Nil).
126
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Accounts payable
The aging analysis of accounts payable are as follows
Closing balance Opening balance
RMB RMB
Within 1 year 357,811,822 258,116,331
__________ __________
20. Advances from customers
The aging analysis of advances from customers are as follows
Closing balance Opening balance
RMB RMB
Within 1 year 208,769,108 182,757,182
1 to 2 years 1,898,868 5,894,072
2 to 3 years 4,459,622
__________ -
__________
215,127,598 188,651,254
__________ __________
21. Employee benefit payable
(1) Employee benefit payable
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Short-term payroll 111,190,545 353,791,940 (322,027,521) 142,954,964
Post-demission benefits
- predetermined provision plan 23,672 30,609,765 (30,575,874) 57,563
Termination benefits 19,506,018
_________ 2,241,982
_________ (5,811,935)
_________ 15,936,065
_________
130,720,235 386,643,687 (358,415,330) 158,948,592
_________ _________ _________ _________
(2) Short-term payroll
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Salaries and bonus 108,645,022 320,261,874 (288,988,942) 139,917,954
Staff benefit - 10,809,302 (10,803,334) 5,968
Staff welfare 153,590 10,665,428 (10,657,529) 161,489
Includes:
Medical insurance 153,590 9,123,499 (9,118,602) 158,487
Injury insurance - 816,511 (814,939) 1,572
Maternity insurance - 725,418 (723,988) 1,430
Housing fund 9,932 8,150,367 (8,090,063) 70,236
Union fee and education fee 2,382,001
_________ 3,904,969
_________ (3,487,653)
_________ 2,799,317
_________
111,190,545 353,791,940 (322,027,521) 142,954,964
_________ _________ _________ _________
127
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Employee benefit payable - continued
(3) Predetermined provision plan
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Pension 23,449 29,060,721 (29,028,207) 55,963
Unemployment insurance 223
_____ 1,549,044
________ (1,547,667)
________ 1,600
_____
23,672 30,609,765 (30,575,874) 57,563
_____ ________ ________ _____
The Group participates in pension insurance and unemployment insurance plans established by
government institution. According to those plans, the Group pays pension and unemployment
insurance each month on the basis of 18% and 1% last period salary respectively. Apart from
these monthly expenses, the Group does not bear any further payment obligation. This year the
Group should pay RMB 29,060,721 and RMB 1,549,044 (In 2013: RMB 30,598,636 and RMB
1,637,364) respectively into pension insurance and unemployment insurance. At 31 December
2014, the Group has unpaid pension and unemployment insurance of RMB 55,963 and RMB
1,600 respectively (At 31 December 2013: RMB 23,499 and RMB 223), which is due to the
pension insurance and unemployment insurance plan at the end of the reporting period. These
payments have been paid after the end of the reporting period.
22. Taxes payable
Closing balance Opening balance
RMB RMB
Value added tax (62,755,555) 862,414
Consumption tax 18,849,955 26,658,283
Business tax 1,005,135 4,348,055
Corporation income tax 109,836,980 142,079,369
Urban land use tax 1,519,318 878,982
Individual income tax 6,644,281 6,824,553
City construction tax 4,831,936 6,016,703
Property tax 898,914 655,545
Others 6,673,084
__________ 6,089,526
__________
87,504,048 194,413,430
__________ __________
128
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Deferred income
Closing balance Opening balance
RMB RMB
Government grants
Current liabilities 12,398,718 12,915,801
Non-current liabilities 76,024,992
_________ 83,611,041
_________
88,423,710 96,526,842
_________ _________
Government grants
Recognized in Related to
Opening Addition non-operating income Closing Assets/Income
RMB RMB RMB RMB
Luxury wine culture industry
construction specific funds 2,520,000 - (2,520,000) - Income
Miyun Propaganda Department transfer 4,444,725 - (888,945) 3,555,780 Assets
Grape base project specific funds 740,000 - (740,000) - Assets
Ningxia industry revitalization and
technology reconstruction funds 14,360,000 - (3,295,000) 11,065,000 Assets
Industry revitalization and technology
reconstruction specific funds 21,330,000 - - 21,330,000 Assets
Wine base liquor brewage project 10,478,990 - (1,434,874) 9,044,116 Assets
WuYouYiXin industrial cluster specific funds 180,000 - (60,000) 120,000 Assets
Changyu chateau project funds 19,818,600 - (3,702,000) 16,116,600 Assets
Wine electronic tracking system
specific funds 5,860,527 - (667,053) 5,193,474 Assets
Wine industry specific funds 930,000 - - 930,000 Assets
Shandong Peninsula Blue Economic
Area construction funds 10,000,000 - - 10,000,000 Assets
863 Program subsidy funds for scientific research 64,000 - (1,100) 62,900 Assets
Information system construction
project technology funds 5,800,000 - (580,000) 5,220,000 Assets
Integration projects subsidies - 100,000 - 100,000 Income
Cross-border e-Business projects subsidies - 2,200,000 (20,560) 2,179,440 Income
Wine grape subsidies - 470,000 - 470,000 Income
Modern agriculture grape production
development subsidies - 324,000 - 324,000 Income
Agricultural technology subsidies - 750,000 (117,600) 632,400 Income
Grape base construction project _______ - ______
2,600,000 _______
(520,000) _______
2,080,000 Assets
Total 96,526,842 6,444,000 (14,547,132) 88,423,710
_______ ______ _______ _______
Less: Non-current liabilities due within one year _______
12,915,801 _______
12,398,718
Other non-current liabilities 83,611,041 76,024,992
_______ _______
As at 31 December 2014, the Group recognise current liability for deferred income to be
accounted in profit or loss within one year, and recognise non-current liability for deferred income
to be accounted in profit or loss over one year.
129
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Other payables
(1) Natures of other payables are as follows
Closing balance Opening balance
RMB RMB
Deposit from distributors 134,470,408 215,888,735
Payables for equipment and construction 90,857,839 49,195,300
Payables for transportation 24,388,114 13,937,729
Royalty fee 77,809,993 78,986,198
Advertising costs 43,488,770 51,854,647
Other loans 22,522,636 22,522,636
Employee deposit 10,005,000 2,012,959
Deposits from suppliers 2,263,984 2,565,206
Payables for contracting fee 27,132,371 22,159,875
Others 36,865,202
__________ 38,178,345
__________
469,804,317 497,301,630
__________ __________
(2) Description of significant other payables aged more than one year
Company Amount Reasons
RMB
Beijing Qinglang agriculture science and technology
development limited company 18,630,431 Other loans
Beijing Qinglang agriculture science and technology 9,516,214 Payables for contracting fee
development limited company
Yantai De'an Investment Company Limited 3,892,205 Other loans
Yantai De'an Investment Company Limited 3,245,832
_________ Payables for contracting fee
35,284,682
_________
130
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Long-term borrowings
Categories of long-term borrowings
Closing balance Opening balance
RMB RMB
Secured loans with securities under the custody of lenders 119,912,800 -
Unsecured and non-guaranteed loans 89,467,200
__________ -
______
209,380,000 -
__________ ______
As at 31 December 2014, secured loan with securities under the custody of lenders is the amount
borrowed by the Company from Qingdao Branch of HSBC with the bank deposit of RMB
125,000,000 as custody. The borrowing amount is HKD 152,000,000(equivalent to RMB
119,912,800) with quarterly paid interest rate of the 3 months Hong Kong interbank offered rates
plus 195 basis points and borrowing period from 4 July 2014 to 3 July 2016. As at 31 December
2014, the interest rate of secured loan is 2.4%.
As at 31 December 2014, credit loan of EUR 12,000,000 (equivalent to RMB 89,467,200) is
borrowed by the Company from Yantai Branch of ICBC. Monthly paid interest rate is 6 months
benchmark London interbank offered rate plus 355 basis points and borrowing period is from 1
October 2014 to 29 September 2017. As at 31 December 2014, the interest rate of credit loan is
3.7%.
As at 31 December 2014, the group's long-term borrowings are all floating rate loans.
26. Other non-current liabilities
Closing balance Opening balance
RMB RMB
Employee benefit 3,998,352 4,755,794
_________ _________
As at 31 December 2014, employee benefit represents deposit from bonus accrued for managers
and above. According to the bonus payment schedule of 2014, the bonus is expected to be paid
during 2016 to 2017.
131
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
27. Share capital
2014
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Unrestricted shares
A shares 453,460,800 - - 453,460,800
B shares 232,003,200
_________ -
______ -
______ 232,003,200
_________
Total of unrestricted shares
and total shares 685,464,000 - - 685,464,000
_________ ______ ______ _________
2013
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Unrestricted shares
A shares 453,460,800 - - 453,460,800
B shares 232,003,200
_________ -
______ -
______ 232,003,200
_________
Total of unrestricted shares
and total shares 685,464,000 - - 685,464,000
_________ ______ ______ _________
28. Capital reserve
2014
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Share premium 557,222,454 - - 557,222,454
Other 5,916,588
_________ -
______ -
______ 5,916,588
_________
Total 563,139,042 - - 563,139,042
_________ ______ ______ _________
2013
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Share premium 557,222,454 - - 557,222,454
Other 4,916,588
_________ 1,000,000
_______ -
______ 5,916,588
_________
Total 562,139,042 1,000,000 - 563,139,042
_________ _______ ______ _________
According to Xing Cai (Qi) Fa [2009]1160, Ningxia Wine Co.Ltd. ("Ningxia Wine") recognised
government grant of RMB1,000,000 into capital reserve. The government grant is obtained for 3
years in 2013 and was previously recognised in deferred income.
132
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Other comprehensive income
2014
2014
Less: last year other Post-tax Post-tax
Before-tax comprehensive income Less: attributable attributable
Items Opening balance amount in P/L current year tax expense to parent to NCI Closing balance
Other comprehensive
income to be reclassified
to profit and loss (2,803,271) - - (2,803,271) - (2,803,271)
Foreign currency statement
translation difference - (2,803,271) - - (2,803,271) - (2,803,271)
____ _____ ____ ____ _____ ____ _____
30. Surplus reserve
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. As the Company's surplus reserve has reached 50% of the
share capital, the Company does not appropriate net profit to the surplus reserve in 2014.
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.
31. Retained earnings
Closing balance Opening balance
RMB RMB
Retained earnings brought forward 4,616,944,663 4,322,769,136
Add: profit attributable to shareholders of the Company 977,707,711 1,048,185,927
Less: Dividends paid in respect prior year's profit -
Withdrawal of legal surplus (342,732,000) (754,010,400)
Conversion of ordinary share dividends ____________ -
____________
Retained earnings carried forward 5,251,920,374 4,616,944,663
____________ ____________
133
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Retained earnings - continued
(1) Appropriation to statutory surplus reserve
In accordance with 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.
(2) Appropriation to surplus reserve by subsidiaries
As at 31 December 2014, the balance of the Group's unappropriated profits include appropriation
to surplus reserve by subsidiaries amounting to RMB 49,484,644 (31 December 2013: RMB
37,554,671).
(3) Profit distribution decided after the balance sheet date
According to a proposal of the board of directors approved on 25 April 2015, on the basis of
685,464,000 issued shares in 2014, cash dividends of RMB 4.4 for every 10 share will be
distributed to all the shareholders. The aggregate amount of cash dividend is RMB301,604,160. The
above proposal regarding dividends distribution is yet to be approved in a shareholders' meeting.
32. Operating income and costs
Operating income is analyzed as follows:
2014 2013
RMB RMB
Principal operating income 4,113,169,270 4,273,801,693
Other operating income 43,558,255
____________ 47,146,879
____________
4,156,727,525 4,320,948,572
____________ ____________
Operating cost is analyzed as follows:
2014 2013
RMB RMB
Principal operating cost 1,354,777,577 1,336,631,197
Other operating cost 17,667,035
____________ 21,266,802
____________
1,372,444,612 1,357,897,999
____________ ____________
The operating income for the Group is mainly from the sales of wine, brandy and sparkling wine.
Over 99% of the sales generated in PRC.
134
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Taxes and surcharges
2014 2013
RMB RMB
Consumption tax 171,424,114 150,438,896
Business Tax 2,853,114 2,595,076
City construction tax 51,051,930 44,937,923
Education fee and surcharges 36,830,754 31,426,897
Others 7,286,862
__________ 6,995,372
__________
269,446,774 236,394,164
__________ __________
For detail standards of tax rate please refer to Notes V Tax.
34. Selling expenses
2014 2013
RMB RMB
Advertising costs 466,868,778 592,734,876
Freight 120,998,488 126,085,723
Salary and employee benefit 183,841,797 181,783,664
Trademark fee 77,809,993 78,986,198
Warehouse leasing expenses 50,816,255 37,714,861
Travelling expenses 20,986,441 20,927,235
Commission 2,926,165 13,828,552
Others 81,761,447
____________ 88,775,041
____________
1,006,009,364 1,140,836,150
____________ ____________
135
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
35. General and administrative expense
2014 2013
RMB RMB
Salary and employee benefit 42,752,029 39,539,807
Insurance fee 28,953,319 29,625,036
Leasing expenses 11,063,572 7,337,569
Depreciation 33,086,559 24,694,962
Amortization 10,961,304 8,396,636
Administrative expenses 14,472,830 13,706,767
Travelling expenses 5,290,745 6,604,787
Entertainment fee 3,786,968 3,964,265
Property tax, stamp duty and other taxes 13,585,138 11,118,372
Maintenance fee 16,559,436 15,723,166
Green fee 16,207,197 21,275,912
Contracting fee 16,539,989 18,415,497
Technology development fee 3,057,225 4,149,451
Service fee 4,158,814 5,890,437
Cleaning fee 6,860,665 4,875,096
Others 29,644,228
__________ 30,181,190
__________
256,980,018 245,498,950
__________ __________
36. Loss on impairment of assets
2014 2013
RMB RMB
Reversal of impairment loss (192,908) (607,571)
Inventory impairment (reversal) 2,188,785 (2,242,991)
Impairment of available for sale assets -
_________ 5,000,000
_________
1,995,877 2,149,438
_________ _________
37. Financial income
2014 2013
RMB RMB
Interest income (23,614,179) (27,620,072)
Exchange difference (7,031,076) (6,632,540)
Less: Interest expenses 12,298,953 12,681,058
Bank charges 1,089,581
__________ 2,871,197
__________
(17,256,721) (18,700,357)
__________ __________
136
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Non-operation income
Recognized in
extraordinary
2014 2013 profit and loss
RMB RMB RMB
Gains on disposal of non-current assets 121,113 271,989 121,113
Including: gain on disposal of plant
property and equipment 121,113 271,989 121,113
Government grants 40,545,714 36,659,754 40,545,714
Penalty income 637,531 210,757 637,531
Others 2,692,047
_________ 4,966,226
_________ 2,692,047
_________
43,996,405 42,108,726 43,996,405
_________ _________ _________
Government grants recognized in the income statement is as follows:
Assets/income
2014 2013 related
RMB RMB
Major projects support fund 6,878,819 1,680,000 Assets related
Small and medium enterprises
support fund 5,010,153 3,902,827 Assets related
Tax refund 18,259,690 22,163,624 Income related
Others 10,397,052
_________ 8,913,303
_________ Income related
40,545,714 36,659,754
_________ _________
39. Non-operation expenses
Recognized in
extraordinary
2014 2013 profit and loss
RMB RMB RMB
Loss on disposal of non-current assets 5,207,658 678,016 5,207,658
Including: losses from disposal
of fixed assets 114,390 678,016 114,390
losses from disposal
of biological assets 5,093,268 - 5,093,268
Donation 434,352 291,729 434,352
Others 2,728,239
_________ 904,478
_________ 2,728,239
_________
8,370,249 1,874,223 8,370,249
_________ _________ _________
137
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Income tax
2014 2013
RMB RMB
Current income tax 421,450,258 357,077,756
Deferred income tax (96,424,212)
__________ (8,156,952)
__________
325,026,046 348,920,804
__________ __________
Reconciliation between income tax expenses and profits is as follows:
2014 2013
RMB RMB
Profit before tax 1,302,733,757 1,397,106,731
Income tax expense at statutory tax rate 25% 325,683,439 349,276,683
Effect of different tax rates applied by certain subsidiaries (1,356,542) (2,677,153)
Non-taxable income - (131,500)
Non-deductible expenses 699,149
____________ 2,452,774
____________
Income tax expenses at the Group's effective tax rate 325,026,046 348,920,804
____________ ____________
41. Basic and dilutive earnings per share
The calculation of basic earnings per share is based on the consolidated profit attributable to
ordinary shareholders of the Company during the year and the weighted average number of
outstanding ordinary shares.
2014 2013
RMB RMB
Earnings
Consolidated profit attributable to ordinary
shareholders of the Company 977,707,711
____________ 1,048,185,927
____________
Shares
Weighted average number of outstanding
ordinary shares 685,464,000
____________ 685,464,000
____________
Basic earnings per share 1.43 1.53
____________ ____________
The Company does not have potential dilutive ordinary shares.
From the balance sheet date to the date of approval of this report, there are no subsequent events
which would affect the numbers of the weighted average number of outstanding of ordinary
shares.
138
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Notes to consolidated cash flow statement
(1) Cash received relating to other operating activities:
2014 2013
RMB RMB
Government grants 22,286,024 42,783,729
Others 2,257,523
_________ 5,176,982
_________
24,543,547 47,960,711
_________ _________
(2) Cash paid relating to other operating activities:
2014 2013
RMB RMB
Selling expenses 726,232,000 944,945,796
General and administrative expenses 107,585,895 102,626,714
Others 11,130,693
____________ 11,982,799
____________
844,948,588 1,059,555,309
____________ ____________
(3) Cash paid relating to other financing activities:
2014 2013
RMB RMB
Cash liquidation of trust scheme - 150,945,000
Pledged security of short-term borrowing 125,000,000
__________ 125,000,000
__________
125,000,000 275,945,000
__________ __________
139
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Supplementary information to consolidated cash flow statement
(i) Supplementary information to consolidated cash flow statement
2014 2013
RMB RMB
Cash flows from operating activities
calculated by adjusting the net profit:
Net profit 977,707,711 1,048,185,927
Add: Loss for impairment of assets 1,995,877 2,149,438
Depreciation of fixed assets 127,149,785 125,540,127
Amortization of intangible assets 11,396,496 6,839,668
Amortization of Biological assets 865,855 846,620
Amortization of long-term prepaid expenses 15,799,878 17,780,973
Loss/(gain) on disposal of property
plant and equipment 5,086,545 406,027
Finance income (7,012,502) (21,571,554)
Increase/(decrease) in deferred tax assets (95,653,733) (8,156,952)
Decrease/(increase) in deferred tax liabilities (770,479) -
Decrease/(increase) in inventories 31,552,254 149,746,995
Decrease/(increase) in operating receivables 48,497,684 (49,235,221)
Increase/(decrease) in operating payables (46,532,075)
____________ (537,457,741)
____________
Net cash flows from operating activities 1,070,083,296 735,074,307
____________ ____________
(ii) Cash and cash equivalent
Closing balance Opening balance
RMB RMB
Closing balance of cash and bank 1,145,365,071 1,367,818,182
Less:
restricted bank deposits 2,643,519 2,609,237
restricted other monetary funds 135,004,018 131,257,285
deposit with a period of over three months 47,245,260
____________ 277,392,728
____________
Closing balance of cash and cash equivalents 960,472,274 956,558,932
____________ ____________
140
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Supplementary information to consolidated cash flow statement - continued
(ii) Cash and cash equivalent - continued
Closing balance Opening balance
RMB RMB
Cash 960,472,274 956,558,932
Including:
Cash on hand 101,660 772,817
Bank deposits on demand 960,370,614
__________ 955,786,115
__________
Closing balance of cash and cash equivalents 960,472,274 956,558,932
__________ __________
44. Assets with restriction of ownership
Closing balance Opening balance
RMB RMB
Cash and bank 137,647,537 133,866,522
__________ __________
As at 31 December 2014, cash and bank balances with restriction of ownership include: the
Group's housing fund of RMB2,643,519, security of RMB125,000,000 pledged for a short-term
borrowing from HSBC of HKD 152,000,000 (translated as RMB 119,912,800), refundable
deposit for notes payable of Shi He Zi Chateau of RMB 10,000,000, and company cards deposit
guarantee of RMB4,018.
45. Foreign monetary items
Closing foreign Exchange Closing translated
Items currency balance rate RMB balance
Cash and bank
EUR 46,148 7.4556 344,061
__________ ______ __________
Long-term borrowing
EUR 12,000,000 7.4556 89,467,200
HKD 152,000,000 0.7889 119,912,800
__________ ______ __________
141
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VII. CHANGE IN CONSOLIDATION SCOPE
Change in consolidation scope due to other reasons (new established subsidiaries)
Name Place and date of registration Legal representative Business nature Registered capital Principal activities Incorporate code
Subsidiaries acquired by establishment：
Francs Champs 17 December 2014 Zhou, Hongjiang Investment EUR 8,575,000 Investment、production N/A
Participations SAS("Francs Champs") Cognac, France Sales sales and export
Lanzhou Changyu Wine Sales 10 October 2014 Yang, Ming Sales RMB100,000 Sales of wine 31607272-1
Co. Ltd ("Lanzhou Sales") Lanzhou Gansu, China
Beijing Retailing Co. Ltd 28 April 2014 Pan, Jianfu Sales RMB500,000 Wholesale of pre-packed foods 09890880-9
("Beijing Retailing") Beijing, China
Tianjin Changyu Pioneer 8 November 2013
Sales Co. Ltd ("Tianjin Pioneer")* Tianjin, China Li, Haiping Sales RMB500,000 Wholesale of pre-packed foods 08301099-1
Fuzhou Changyu Pioneer 27 May 2014
Sales Co. Ltd ("Fuzhou Pioneer") Fuzhou Fujian, China Sun, Guiyang Sales RMB500,000 Wholesale of pre-packed foods 07976834-5
Nanjing Changyu Pioneer 12 November 2013
Sales Co. Ltd ("Nanjing Pioneer")* Nanjing Jiangsu, China Zhang, Fuqian Sales RMB500,000 Wholesale of pre-packed foods 08416861-9
Xianyang Changyu Pioneer 6 March 2014
Sales Co. Ltd ("Xianyang Pioneer") Xianyang Shanxi, China Wei, Binsheng Sales RMB500,000 Wholesale of pre-packed foods 08818837-7
Shenyang Changyu Pioneer 16 April 2014
Sales Co. Ltd ("Shenyang Pioneer") Shenyang Liaoning, China Xiao, Yongjie Sales RMB500,000 Wholesale of pre-packed foods 09789141-9
Jinan Changyu Pioneer 16 October 2013
Sales Co. Ltd ("Jinan Pioneer")* Jinan Shandong, China Li, Yingjun Sales RMB500,000 Wholesale of pre-packed foods 07617957-x
Shanghai Changyu Pioneer 15 November 2013
Sales Co. Ltd ("Shanghai Pioneer")* Shanghai, China Zhai, Deqiang Sales RMB500,000 Wholesale of pre-packed foods 08209497-8
Fuzhou Changyu Pioneer 16 October 2013
Sales Co. Ltd ("Fuzhou Pioneer")* Fushun Jiangxi, China Li, Shoukun Sales RMB500,000 Wholesale of pre-packed foods 07903537-9
Shijiazhuang Changyu Pioneer Sales 16 October 2013
Co. Ltd ("Shijiazhuang Pioneer")* Shijiazhuang Hebei, China Yi, Longhai Sales RMB500,000 Wholesale of pre-packed foods 08131179-0
Hangzhou Yuzefeng Sales 11 April 2014
Co. Ltd ("Hangzhou Yuzefeng") Hangzhou Zhejiang, China Xiao, Zhenbo Sales RMB500,000 Wholesale of pre-packed foods 09760041-5
Jilin Changyu Pioneer Sales 21 October 2013
Co. Ltd ("Jilin Pioneer")* Changchun Jilin, China Wang, Bo Sales RMB500,000 Wholesale of pre-packed foods 07364313-8
Beijing Changyu Pioneer Sales 12 March 2014
Co. Ltd ("Beijing Pioneer") Beijing, China Pan, Jianfu Sales RMB500,000 Wholesale of pre-packed foods 06125269-0
Haerbin Changyu Pioneer Sales 17 June 2014
Co. Ltd ("Haerbin Pioneer") Haerbin Heilongjiang, China Tan, Jun Sales RMB500,000 Wholesale of pre-packed foods 30082468-5
Hunan Changyu Pioneer Sales 10 March 2014
Co. Ltd ("Hunan Pioneer") Changsha Hunan, China Sun, Junming Sales RMB2,000,000 Wholesale of pre-packed foods 09446465-7
Yinchuan Changyu Pioneer Sales 21 November 2013
Co. Ltd ("Yinchuan Pioneer")* Yinchuan Ningxia, China Ruan, Shili Sales RMB500,000 Wholesale of pre-packed foods 07384874-X
Kunming Changyu Pioneer Sales 31 October 2013
Co. Ltd ("Kunming Pioneer")* Kunming Yunnan, China Ma, Long Sales RMB500,000 Wholesale of pre-packed foods 08042997-3
Chongqing Changyu Pioneer Sales 20 August 2014
Co. Ltd ("Chongqing Pioneer") Chongqing, China Wang, Wenkai Sales RMB500,000 Wholesale of pre-packed foods 30506782-0
Zhengzhou Changyu Pioneer Sales 14 October 2014
Co. Ltd ("Zhengzhou Pioneer") Zhengzhou Henan, China Bi, Jianhui Sales RMB500,000 Wholesale of pre-packed foods 31730946-0
Wuhan Changyu Pioneer Sales 12 September 2014
Co. Ltd ("Wuhan Pioneer") Wuhan Hubei, China Yu, Jun Sales RMB500,000 Wholesale of pre-packed foods 09200921-2
Taiyuan Changyu Pioneer Sales 3 September 2014
Co. Ltd ("Taiyuan Pioneer") Taiyuan Shanxi, China Zhang, Shuzheng Sales RMB500,000 Wholesale of pre-packed foods 39792586-0
Huhehaote Changyu Pioneer Sales 18 July 2014
Co. Ltd ("Huhehaote Pioneer") Huhehaote Inner Mongolia, China Han, Yong Sales RMB500,000 Wholesale of pre-packed foods 39776001-5
Chengdu Changyu Pioneer Sales 10 September 2014
Co. Ltd ("Chengdu Pioneer") Chengdu Sichuan, China Sun, Xiaopu Sales RMB500,000 Wholesale of pre-packed foods 39562291-1
Nanning Changyu Pioneer Sales 10 December 2014
Co. Ltd ("Nanning Pioneer") Nanning Guangxi, China Dong, Houxin Sales RMB500,000 Wholesale of pre-packed foods 32266009-5
* At 31 December 2013, these subsidiaries had completed registration but paid share capital
in 2014, therefore they are included in the consolidation scope of the Group in 2014.
142
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VIII. INTERESTS IN OTHER ENTITIES
1. Structure of the Group
Equity interest owned
by the company
Name Address Place of registration Nature Direct Indirect Acquisition method
Xinjiang Tianzhu (a) Shihezi, Xinjiang, China Shihezi, Xinjiang, China Manufacturing 60% - Subsidiary acquired in business combination
under non-common control
Fransac Sales Cognac, France Cognac, France Trading 100% - Subsidiary acquired in business combination
under non-common control
Beijing Changyu Sales and distribution Co., Ltd Beijing, China Beijing, China Sales 100% - Subsidiaries acquired by establishment
("Beijing Sales")
Yantai Kylin Packaging Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Manufacturing 100% - Subsidiaries acquired by establishment
("Kylin Packaging")
Yantai Changyu-Castel Wine Chateau Co., Ltd Yantai, Shandong, China Yantai, Shandong, China Manufacturing 70% - Subsidiaries acquired by establishment
("Changyu Chateau") (b)
Changyu (Jingyang) Wine Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Manufacturing 90% 10% Subsidiaries acquired by establishment
("Jingyang Wine")
Yantai Changyu Pioneer Wine Sales Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Sales 100% - Subsidiaries acquired by establishment
("Sales Company")
Langfang Development Zone Castel-Changyu Wine Lanfang, Hebei, China Lanfang, Hebei, China Manufacturing 39% 10% Subsidiaries acquired by establishment
Co., Ltd ("Langfang Castel") (c)
Changyu (Jingyang) Wine Sales Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Sales 10% 90% Subsidiaries acquired by establishment
("Jingyang Sales")
Langfang Changyu Pioneer Wine Sales Co., Ltd Lanfang, Hebei, China Lanfang, Hebei, China Sales 10% 90% Subsidiaries acquired by establishment
("Langfang Sales")
Shanghai Changyu Sales and distribution Co., Shanghai, China Shanghai, China Sales 30% 70% Subsidiaries acquired by establishment
Ltd. ("Shanghai Sales")
Beijing Changyu AFIP Agriculture development Miyun, Beijing, China Miyun, Beijing, China Sales - 100% Subsidiaries acquired by establishment
Co., Ltd ("Agriculture Development")
Beijing Changyu AFIP Wine Chateau Co., Ltd. (d) Beijing, China Beijing, China Manufacturing 70% - Subsidiaries acquired by establishment
Yantai ("Beijing Chateau") Changyu Wine Sales Yantai, Shandong, China Yantai, Shandong, China Sales 90% 10% Subsidiaries acquired by establishment
Co., Ltd. ("Wines Sales")
Yantai Changyu Pioneer International Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Sales 70% 30% Subsidiaries acquired by establishment
("Pioneer International")
Hangzhou Changyu Wine Sales Co., Ltd. Hangzhou, Zhejiang, China Hangzhou, Zhejiang, China Sales - 100% Subsidiaries acquired by establishment
("Hangzhou Changyu")
Ningxia Growing Yinchuang, Ningxia, China Yinchuang, Ningxia, China Planting 100% - Subsidiaries acquired by establishment
Huanren Changyu National Wines Sales Co., Ltd. Benxi, Liaoning, China Benxi, Liaoning, China Sales 100% - Subsidiaries acquired by establishment
("National Wines")
Liaoning Changyu Ice Wine Chateau Co., Ltd. Benxi, Liaoning, China Benxi, Liaoning, China Manufacturing 51% - Subsidiaries acquired by establishment
("Ice Chateau") (e)
Yantai Development Zone Changyu Trading Co., Yantai, Shandong, China Yantai, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Ltd ("Development Zone Trading")
Shenzhen Changyu Wine Marketing Ltd. Shenzhen, Guangdong, China Shenzhen, Guangdong, China Sales - 100% Subsidiaries acquired by establishment
("Shenzhen Marketing")
Yantai Changyu Fushan Trading Yantai, Shandong, China Yantai, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Company("Fushan Trading")
Beijing AFIP Meeting Center ("Meeting Center") Miyun, Beijing, China Miyun, Beijing, China Service - 100% Subsidiaries acquired by establishment
Beijing AFIP Tourism and Culture Miyun, Beijing, China Miyun, Beijing, China Tourism 70% - Subsidiaries acquired by establishment
Company("AFIP Tourism") (f)
Ningxia Wine Yinchuan, Ningxia, China Yinchuan, Ningxia, China Manufacturing 100% - Subsidiaries acquired by establishment
Yantai Changyu DingLuoTe Chateau. Yantai, Shandong China Yantai, Shandong China Retail and 100% - Subsidiaries acquired by establishment
("Ding Luo Te Chateau") Sales
Qing Tong Xia Changyu Wine Marketing Qing Tong Xia, Ningxia, China Qing Tong Xia, Ningxia, China Sales - 100% Subsidiaries acquired by establishment
Ltd("Qing Tong Xia Sales")
Shi He Zi Chateau Shihezi, Xinjiang, China Shihezi, Xinjiang, China Manufacturing 100% - Subsidiaries acquired by establishment
Ningxia Moser 15th Changyu Wine Chateau Co., Yinchuan, Ningxia, China Yinchuan, Ningxia, China Manufacturing 100% - Subsidiaries acquired by establishment
Ltd. (" Ningxia Chateau")
Shanxi Changyu Rina Castle Chateau Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Manufacturing 100% - Subsidiaries acquired by establishment
(" Chang'an Chateau")
Yantai Changyu Wine Research and Development Yantai, Shandong China Yantai, Shandong China Manufacturing 100% - Subsidiaries acquired by establishment
Co., Ltd. ("R&D Centre")
Changyu (HuanRen) Wine Co., Ltd Benxi LiaoNing China Benxi LiaoNing China Wine production 100% - Subsidiaries acquired by establishment
("Huan Ren Wine") Projecting
Xinjiang Changyu Sales Co., Ltd Shihezi Xinjiang China Shihezi Xinjiang China Sales - 100% Subsidiaries acquired by establishment
("Xinjiang Sales")
Xinjiang Changyu Winery Co., Ltd Shihezi Xinjiang China Shihezi Xinjiang China Manufacturing - 100% Subsidiaries acquired by establishment
("Xinjiang Winery")
Ningxia Changyu Trading Co., Ltd Yinchuan Ningxia China Yinchuan Ningxia China Sales - 100% Subsidiaries acquired by establishment
("Ningxia Trading")
Shanxi Changyu Rina Wine Sales Co., Ltd Xianyang Shanxi China Xianyang Shanxi China Sales - 100% Subsidiaries acquired by establishment
("Shanxi Sales")
Penglai Changyu Wine Sales Co., Ltd Penglai Shandong China Penglai Shandong China Sales - 100% Subsidiaries acquired by establishment
("Penglai Sales")
Laizhou Changyu Wine Sales Co., Ltd Laizhou Shandong China Laizhou Shandong China Sales - 100% Subsidiaries acquired by establishment
("Laizhou Sales")
Francs Champs Cognac, France Cognac, France Investment and 100% - Subsidiaries acquired by establishment
trading
Lanzhou Sales Lanzhou Gansu, China Lanzhou Gansu, China Sales 100% - Subsidiaries acquired by establishment
Beijing Retailing Beijing, China Beijing, China Sales - 100% Subsidiaries acquired by establishment
Tianjin Pioneer Tianjin, China Tianjin, China Sales - 100% Subsidiaries acquired by establishment
Fuzhou Pioneer Fuzhou Fujian, China Fuzhou Fujian, China Sales - 100% Subsidiaries acquired by establishment
Nanjing Pioneer Nanjing, Jiangsu, China Nanjing, Jiangsu, China Sales - 100% Subsidiaries acquired by establishment
Xianyang Pioneer Xianyang, Shanxi, China Xianyang, Shanxi, China Sales - 100% Subsidiaries acquired by establishment
Shenyang Pioneer Shenyang, Liaoning, China Shenyang, Liaoning, China Sales - 100% Subsidiaries acquired by establishment
Jinan Pioneer Jinan, Shandong, China Jinan, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Shanghai Pioneer Shanghai, China Shanghai, China Sales - 100% Subsidiaries acquired by establishment
Fuzhou Pioneer Fuzhou, Jiangxi, China Fuzhou, Jiangxi, China Sales - 100% Subsidiaries acquired by establishment
Shijiazhuang Pioneer Shijiazhuang, Hebei, China Shijiazhuang, Hebei, China Sales - 100% Subsidiaries acquired by establishment
Hangzhou Yuzefeng Hangzhou, Zhejiang, China Hangzhou, Zhejiang, China Sales - 100% Subsidiaries acquired by establishment
Jilin Pioneer Changchun, Jilin, China Changchun, Jilin, China Sales - 100% Subsidiaries acquired by establishment
Beijing Pioneer Beijing, China Beijing, China Sales - 100% Subsidiaries acquired by establishment
Haerbin Pioneer Haerbin, Heilongjiang, China Haerbin, Heilongjiang, China Sales - 100% Subsidiaries acquired by establishment
Hunan Pioneer Changsha, Hunan, China Changsha, Hunan, China Sales - 100% Subsidiaries acquired by establishment
Yinchuan Pioneer Yinchuan, Ningxia, China Yinchuan, Ningxia, China Sales - 100% Subsidiaries acquired by establishment
Kunming Pioneer Kunming, Yunnan, China Kunming, Yunnan, China Sales - 100% Subsidiaries acquired by establishment
Chongqing Pioneer Chongqing, China Chongqing, China Sales - 100% Subsidiaries acquired by establishment
Zhengzhou Pioneer Zhengzhou, Henan, China Zhengzhou, Henan, China Sales - 100% Subsidiaries acquired by establishment
Wuhan Pioneer Wuhan, Hubei, China Wuhan, Hubei, China Sales - 100% Subsidiaries acquired by establishment
Taiyuan Pioneer Taiyuan, Shanxi, China Taiyuan, Shanxi, China Sales - 100% Subsidiaries acquired by establishment
Huhehaote Pioneer Huhehaote Inner Mongolia, China Huhehaote Inner Mongolia, Sales - 100% Subsidiaries acquired by establishment
China
Chengdu Pioneer Chengdu, Sichuan, China Chengdu, Sichuan, China Sales - 100% Subsidiaries acquired by establishment
Nanning Pioneer Nanning, Guangxi, China Nanning, Guangxi, China Sales - 100% Subsidiaries acquired by establishment
143
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
VIII. INTERESTS IN OTHER ENTITIES - continued
1. Structure of the Group - continued
Explanation in difference between holding interests and voting rights in subsidiaries:
(a) Xinjiang Tianzhu was acquired by the Company, accounting for 60% of Xinjiang Tianzhu's
equity interest. Through agreement arrangement, the Company has the full power to
control Xinjiang Tianzhu's strategic operating, investing and financing policies. The
agreement arrangement will be terminated on 31 December 2018.
(b) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 70% of Changyu Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Changyu Chateau's strategic
operating, investing and financing policies. The agreement arrangement will be
terminated on 31 December 2022.
(c) Langfang Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 49% of Langfang Chateau's equity interest by the Company and
subsidiaries. Through agreement arrangement, the Company has the full power to
control Langfang Chateau's strategic operating, investing and financing policies. The
agreement arrangement will be terminated on 31 December 2022.
(d) Beijing Chateau is a limited liability company established by the Company and domestic
investors, accounting for 70% of Beijing Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Beijing Chateau's strategic
operating, investing and financing policies. The agreement arrangement will be
terminated on 2 September 2019.
(e) Ice Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 51% of Ice Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Ice Chateau's strategic operating,
investing and financing policies. The agreement arrangement will be terminated on 31
December 2016.
(f) AFIP Tourism is a limited liability company established by the Company and domestic
investors, accounting for 70% of AFIP Tourism's equity interest. Through agreement
arrangement, the Company has the full power to control AFIP Tourism's strategic
operating, investing and financing policies. The agreement arrangement will be
terminated on 2 September 2019.
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VIII. INTERESTS IN OTHER ENTITIES - continued
2. Non-wholly owned subsidiaries
Balance of the interests
The non-controlling of minority
Name shareholder ratio shareholders
Xinjiang Tianzhu 40% 56,093,912
Changyu Chateau 30% 12,365,016
Langfang Castel 51% 22,702,522
Beijing Chateau 30% 35,293,868
Ice Chateau 49% 33,319,062
AFIP Tourism 30% 2,966,399
Explanation in difference between share percentage and voting power of non-controlling interests:
Please see Note VIII -1.
3. Key financial information of important non-wholly owned subsidiaries
Closing balance Opening balance
Current Non-current Current Non-current Total Current Non-current Current Non-current Total
Name assets assets Total assets liabilities liabilities liabilities assets assets Total assets liabilities liabilities liabilities
Xinjiang Tianzhu 86,541,666 89,469,815 176,011,481 7,165,015 5,336,114 12,501,129 81,239,590 92,905,274 174,144,864 6,768,637 5,336,114 12,104,751
Changyu Chateau 56,430,830 113,883,719 170,314,549 88,220,921 - 88,220,921 96,487,353 103,678,442 200,165,795 119,959,582 - 119,959,582
Langfang Castel 29,986,460 24,229,921 54,216,381 7,753,321 - 7,753,321 33,029,246 25,777,415 58,806,661 11,835,706 - 11,835,706
Beijing Chateau 113,589,773 544,577,614 658,167,387 549,595,386 2,666,835 552,262,221 117,277,848 571,558,225 688,836,073 603,812,439 - 603,812,439
Ice Chateau 43,424,068 30,796,802 74,220,870 10,073,994 100,000 10,173,994 42,713,007 29,436,139 72,149,146 9,601,850 100,000 9,701,850
AFIP Tourism 22,013,654 1,138,756 23,152,410 4,847,671 - 4,847,671 25,794,776 690,766 26,485,542 9,644,326 - 9,644,326
2014 2013
Total Operating Total Operating
Operating comprehensive activities cash comprehensive activities cash
Name income Net profit (loss) income flows Operating income Net profit(loss) income flows
Xinjiang Tianzhu 86,483,652 1,470,239 1,470,239 (5,590,904) 65,260,973 778,119 778,119 (10,112,402)
Changyu Chateau 110,684,738 1,887,415 1,887,415 30,351,075 84,862,080 1,262,260 1,262,260 (9,076,400)
Langfang Castel 50,335,802 (507,895) (507,895) (2,788,417) 60,678,547 144,551 144,551 (6,676,277)
Beijing Chateau 160,547,230 20,881,532 20,881,532 29,246,144 80,532,065 (33,684,992) (33,684,992) (41,475,520)
Ice Chateau 51,973,176 1,599,580 1,599,580 (9,712,584) 24,802,111 (3,592,759) (3,592,759) 3,251,612
AFIP Tourism 55,171,595 1,463,523 1,463,523 16,993,824 97,928,987 12,535,965 12,535,965 (30,901,914)
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT
The Group's major financial instruments include cash and bank, notes receivable, accounts
receivable, interest receivables, other receivables, other non-current assets, short-term borrowings,
notes payables, accounts payable, other payables, interest payables, and long-term borrowings.
Details of these financial instruments are disclosed in Note VI. The risks associated with these
financial instruments and the policies on how to mitigate these risks are set out below.
Management manages and monitors these exposures to ensure the risks are monitored at a certain
level.
The Group adopts sensitivity analysis technique to analyse how the profit and loss for the period
and shareholders' equity would have been affected by reasonably possible changes in the relevant
risk variables. As it is unlikely that risk variables will change in an isolated manner, and the
interdependence among risk variables will have significant effect on the amount ultimately
influenced by the changes in a single risk variable, the following are based on the assumption that
the change in each risk variable is on a stand-alone basis.
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IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies
The Group's risk management objectives are to achieve a proper balance between risks and yield,
minimise the adverse impacts of risks on the Group's operation performance, and maximise the
benefits of the shareholders and other stakeholders. Based on these risk management objectives,
the Group's basic risk management strategy is to identify and analyse the Group's exposure to
various risks, establish an appropriate maximum tolerance to risk, implement risk management,
and monitors regularly and effectively these exposures to ensure the risks are monitored at a
certain level.
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with EUR and HKD. Several of the
Group's subsidiaries have purchases and sales denominated in EUR and HKD while the Group's
other principal activities are denominated and settled in RMB. As at 31 December 2014, the
balance of the Group's assets and liabilities are both denominated in RMB except that the assets
and liabilities set out below are denominated in EUR and HKD. Currency risk arising from the
assets and liabilities denominated in foreign currencies may have impact on the Group's
performance.
Closing balance Opening balance
RMB RMB
Bank and cash 344,061 -
Long-term borrowings 209,380,000 -
Short-term borrowings - 243,170,674
___________ ___________
The Group closely monitors the effects of changes in the foreign exchange rates on the Group's
currency risk exposures. The Group currently does not take any measures to hedge currency risk
exposures.
146
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IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
Sensitivity analysis on currency risk
Where all other variables are held constant, the reasonably possible changes in the foreign
exchange rate may have the following pre-tax effect on the profit or loss for the period and
shareholders' equity:
Current year Prior year
Effect on Effect on
shareholders' shareholders'
Change in exchange rate Effect on profit equity Effect on profit equity
RMB RMB RMB RMB RMB
HKD 5% increase against RMB (5,995,640) (5,995,640) (12,158,534) (12,158,534)
HKD 5% decrease against RMB 5,995,640 5,995,640 12,158,534 12,158,534
EUR 5% increase against RMB (4,456,157) (4,456,157) - -
EUR 5% decrease against RMB 4,456,157 4,456,157 - -
________ ________ ________ ________
1.1.2 Interest rate risk - risk of changes in cash flows
The Group's cash flow interest rate risk of financial instruments relates primarily to variable-rate
bank borrowings (see NoteVI (1) and NoteVI (25) for details). It is the Group's policy to keep its
borrowings at floating rate of interests so as to eliminate the fair value interest rate risk.
The sensitivity analysis on interest rate risk
The sensitivity analysis on interest rate risk is based on the changes in the market interest rate may
influence the interest income or expense of the variable rate financial instruments.
Management of the Group believes interest rate risk on bank deposit is not significant, therefore
does not disclose sensitivity analysis for interest rate risk.
Where all other variables are held constant, the reasonably possible changes in the interest rate
may have the following pre-tax effect on the profit or loss for the period and shareholders' equity
Current year Prior year
Effect on Effect on
Items Change in interest rate Effect on profit owners' equity Effect on profit owners' equity
Bank borrowings 50% increase (1,044,435) (1,044,435) N/A N/A
Bank borrowings 50% decrease 1,044,435 1,044,435 N/A N/A
The Group has no floating-rate borrowings in 2013, and management of the Group considers the
fluctuation in interest rates of bank balances and pledged deposits is insignificant. Therefore, no
sensitivity analysis on interest rates for bank balances and pledged deposits is presented.
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IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.2 Credit risk
As at 31 December 2014, the Group's maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties
In order to minimise the credit risk, the Group has adopted a policy to ensure that all sales
customers have good credit records. the Group has delegated a team responsible for determination
of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action
is taken to recover overdue debts. For transactions that are not denominated in the functional
currency of the relevant operating unit, the Group does not offer credit terms without the specific
approval of the Department of Credit Control in the Group. In addition, the Group reviews the
recoverable amount of each individual trade debt at each balance sheet date to ensure that
adequate impairment losses are made for irrecoverable amounts. In this regard, the management
of the Group considers that the Group's credit risk is significantly reduced.
Since the Group trades only with recognized and creditworthy third parties, there is no
requirement for collateral. Concentrations of credit risk are managed by customer/counterparty,
by geographical region and by industry sector. As at 31 December 2014, 33.6% of the Group
trade receivables are due from top 5 customers (31 December 2013: 30.0%). There is no collateral
or other credit enhancement on the balance of the trade receivables of the Group.
Analysis of individually impaired financial assets
As at 31 December 2014, the Group has provided full bad debts provision for the individually
impaired account receivable due from Tiantong Security Co., Ltd., which has been in insolvency.
1.3 Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of
bank borrowings and ensures compliance with loan covenants.
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Non-derivative financial liabilities
Less than one month 1-3 months 3-12 months 1-5 years
RMB RMB RMB RMB
Short-term borrowings 101,046,667 1,704,444 204,802,222 -
Notes payables - - 10,000,000 -
Account payables 357,811,822 - - -
Other payables 323,064,925 - 146,739,392 -
Interest payables 3,026,660 - 448,981 -
Long-term borrowings 509,814
__________ 1,002,634
_________ 4,673,295
_________ 216,691,479
__________
785,459,888 2,707,078 366,663,890 216,691,479
__________ _________ _________ __________
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IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.4 Fair value disclosure - Financial assets and liabilities not measured using fair value
As at 31 December 2014, management of the Group believes that book value of financial assets
measured under amortised cost method is approximately equal to their fair value.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS
1. Parent company
Name of Type of Place of Legal Scope Registered Percentage Percentage Incorporate
parent company Relation enterprise registration representative of business capital of shares of voting rights Code
RMB % %
Cotrolling Limited
Company Company Yantai SunLiqiang Manufacturing 50,000,000 50.4 50.4 265645824
During the year ended 31 December 2014, there is no change in parent company's registered
capital, shares holding or voting power.
2. Subsidiaries: Please refer to Note V III.
3. Other related parties
Name of related parities Nature of related parties Incorporate code
Yantai Changyu Wine Culture Museum Company controlled 258258654
Co., Ltd.("Wine Culture Museum") by the same parent
Yantai Changyu International Window of the Company controlled 672208146
Wine City Co., Ltd.("Window of the Wine City) by the same parent
Yantai ShenMa Packing Co., Ltd. Company controlled 553393350
("ShenMa Packing") by the same parent
Yantai Zhongya Pharmaceutical Tonic Company controlled 726203923
Wine Co., Ltd.("Zhongya Pharmaceutical") by the same parent
149
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X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
4. Significant related party transactions
(1) Purchases from and sales to related parties
Purchase from related parties
The content of related 2014 2013
party transactions RMB RMB
ShenMa Packing product purchase 149,536,913 194,648,978
Zhongya Pharmaceutical product purchase 5,205,207 7,960,294
Wine Culture Museum product purchase 934,085 2,618,189
Window of the Wine City product purchase 4,161,708
__________ 100,246
__________
159,837,913 205,327,707
__________ __________
All related party transactions are based on the negotiated price.
In 2014, purchases from related parties accounted for less than 11.8% of the Group's total
purchase (2013: 11.9%)
Sales to related parties
The content of related 2014 2013
party transactions RMB RMB
Wine Culture Museum goods sales 10,111,288 5,495,959
Window of the Wine City goods sales 7,083,716 2,524,559
Zhongya Pharmaceutical goods sales 2,596,070 1,890,313
ShenMa Packing goods sales 1,684,486
__________ 1,492,538
__________
21,475,560 11,403,369
__________ __________
All related party transactions are based on the negotiated price.
In 2014, sales to related parties accounted for less than 1% of the Group's total sales (2013: less
than 1%).
(2) Property leased from a related party
The Group as Lessee
2014 Assets leased Beginning date Ending date Rental expense
Changyu Group Company Warehouse and office building 2012/1/1 2016/12/31 5,858,000
______
Pursuant to the lease agreement entered into between the Company and Changyu Group Company
on 1 January 2012, starting from 1 January 2012, the Company rented properties from Changyu
Group Company for operation purposes at a basic annual rental of RMB5,858,000, and till 31
December 2016. For the year ended 31 December 2014, the rental payable to Changyu Group
Company amounted to RMB5,858,000 (2013: RMB5,858,000).
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
4. Significant related party transactions - continued
(3) Other significant related party transactions
Note 2014 2013
RMB RMB
Royalty fee (a) 77,809,993 78,986,198
Patents fee (b) 50,000 50,000
_________ _________
All related party transactions are based on the negotiated price.
(a) Royalty fee
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Company may use certain trademarks of Changyu Group Company, which have 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.
During 2014, royalty fee paid to related company accounted for 100% of the Group (2013:
100%).
(b) Patents fee
Pursuant to a patents implementation license dated 18 May 1997, starting from 18
September 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
RMB50,000. The contract was expired on 20 December 2005. The Company renewed
the contract on 20 August 2006 for 10 years. The annual patents usage fee payable by
the Company to Changyu Group Company remained RMB50,000. For the year ended 31
December 2014, the patents usage fee payable to Changyu Group Company amounted to
RMB50,000 (2013: RMB50,000).
During 2014, patent fee paid to related company accounted for 100% of the Group (2013:
100%).
(4) Remuneration of the management
2014 2013
RMB RMB
Remuneration of the management 8,884,459 8,292,000
_________ ________
151
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
5. Balance due from/ to related parties
(1) Balance due from related parties
Closing balance Opening balance
Accounts receivable Balance Provision Balance Provision
RMB RMB RMB RMB
Zhongya Pharmaceutical 1,378,843 2,567,129 -
Shen Ma Packing. 15,820 911,197 -
Window of the Wine City -
_______ _____ 42,478
_______ -
_____
1,394,663 3,520,804 -
_______ _____ _______ _____
The above amounts due from related parties are unsecured, interest-free and have no fixed terms
of repayment.
(2) Balance due to related parties
Closing balance Opening balance
RMB RMB
Accounts payable
Shen Ma Packing 53,027,076 46,370,178
Zhongya Pharmaceutical 6,550,051 4,520,101
Wine Culture Museum 1,043,208 177,526
Window of the Wine City 59,668
_________ -
_________
Total 60,680,003 51,067,805
_________ _________
Other payable
Royalty fee payable to parent company 77,809,993 78,986,198
Shen Ma Packing 200,000 165,230
Zhongya Pharmaceutical -
_________ 52,760
_________
Total 78,009,993 79,204,188
_________ _________
The above amounts due to related parties are unsecured, interest-free and have no fixed terms of
repayment.
152
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XI. COMMITMENT
1. Important commitments
(1) Capital commitments
Closing balance Opening balance
RMB'000 RMB'000
Capital commitments 687,460 1,253,880
________ ________
(2) Operating lease commitment
As lessee
Significant operating lease: Total future minimal lease payments under non-cancelable contract
with lessor are as follow:
Closing balance Opening balance
RMB'000 RMB'000
Within 1 year 25,505 23,612
1 to 2 years 10,271 11,208
2 to 3 years 7,252 9,726
3 years and above 21,262
_________ 28,390
______
64,290 72,936
_________ ______
2. Contingent liability
The Group and the Company do not have any significant contingent liabilities as at balance sheet
date.
XII. POST BALANCE SHEET DATE EVENT
According to the board of the directors resolution raised on 25 April 2015, the Company proposed
a cash dividend of RMB 4.4 (tax inclusive) for every 10 shares in respect of 2014 based on the
issued shares of 685,464,000. The aggregate amount of cash dividend is RMB 301,604,160. The
resolution is to be approved by the annual general meeting.
XIII. OTHER SIGNIFICANT EVENTS
Segment report
The Group is principally engaged in the production and sales of wine, brandy, and champagne. In
accordance with the Group's internal organization structure, management requirements and
internal reporting system, the Group's operation determines only one operation segment and
reporting segment engaged in the production and sales within China. Therefore the Group does
not need to disclose additional segment report information.
153
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS
1. Cash and bank
Closing balance Opening balance
RMB RMB
Cash 5,847 12,479
Bank Blance 371,128,398 477,140,475
Other currency fund 125,004,018
____________ 125,291,289
__________
Total 496,138,263 602,444,243
____________ __________
As at 31 December 2014, the balance of restricted cash of the Group is RMB2,643,519 (31
December 2013: RMB2,609,237), which is composed of the Group's housing fund.
As at 31 December 2014, other currency fund of the Company include: security of RMB
125,000,000 (at 31 December 2013: RMB 125,000,000) pledged for a long-term borrowing from
HSBC of HKD 152,000,000(equivalent to RMB 119,912,800), and company cards deposit
guarantee of RMB 4,018(at 31 December 2013: RMB 291,289).
As at 31 December 2014, The Group's term deposits with original maturity from three months to
one year when acquired is RMB35,245,260 (31 December 2013: RMB277,392,728 ) with interest
rates ranging from 3.25%-4.13% .
2. Notes receivable
(1) Categories of notes receivable
Closing balance Opening balance
RMB RMB
Bank acceptances 98,158,251 32,594,381
_________ _________
(2) Pledged notes receivable
As of 31 December 2014, there was no pledged notes receivable (31 December 2013: Nil).
154
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XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
2. Note receivable - continued
(3) Notes endorsed by the Group to other parties which are not yet due at the end of the period
Closing balance Opening balance
RMB RMB
Bank acceptances 52,895,804 16,727,830
__________ _________
As at 31 December 2014，notes endorsed by the Group to other parties which are not yet due at
the end of the period is RMB 52,895,804 (31 December 2013: RMB 16,727,830). It is for the
payment to suppliers. The Group believes that due to bank good reputation, the risk of maturity
can not be cashed is very low, these notes receivable ownership of the risks and rewards have
been transferred to the supplier, therefore confirm the termination of the endorsement note
receivables. If bank is unable to settle the notes on maturity, according to the relevant laws and
regulations of China, the Group would undertake limited liability for the notes.
(4) Notes receivable were reclassified as accounts receivable due to the default of drawer
As of 31 December 2014, there was no notes receivable were reclassified as accounts receivable
due to the default of drawer (31 December 2013: Nil).
3. Accounts receivable
(1) The aging analysis is as follows:
Closing balance Opening balance
Balance Bad debts provisions Carrying Amount Balance Bad debts provisions Carrying Amount
Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount
RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB
Accounts receivable
that are individually
not significant and
for which bad debt
provision has been
assessed individually 1,516,518 100.0 - - 1,516,518 1,600,968 100.0 - - 1,600,968
______ ___ ____ ____ ______ ______ ___ ____ ____ ______
The Company determines that trade receivable of more than RMB3,000,000 is considered as
individually significant trade receivable.
The normal credit term of trade receivables is one month, which can be extended to one year for
certain major customers. The trade receivables are interest free.
There was no individually significant and for which bad debt provision has been assessed
individually account receivable.
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 1,516,518 1,600,968
_________ ________
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
3. Accounts receivable - continued
(2) Provision, reversals and collections during the current period:
As at 31 December 2014, there was no provision provided for trade receivables (31 December
2013: Nil). The Company did not provide, reverse or write off any provision during 2014 (31
December 2013: Nil)
(3) Top three entities with the largest balances of accounts receivable
Relationship Proportion of
with the Group Amount Aging total receivables
RMB %
Yantai Huibao arts and
crafts Manufacturing Co., Ltd. Third party 1,052,828 Within 1 year 69.5
Zhongya Pharmaceutical Other related parties 447,870 Within 1 year 29.5
ShenMa Packing Other related parties 15,820
________ Within 1 year 1.0
____
1,516,518 100.0
________ ____
4. Prepayments
(1) The aging analysis is as follows:
Closing balance Opening balance
Amount Proportion Amount Proportion
RMB % RMB %
Within 1 year 1,710,787 100.0 24,824,672 100.0
_______ ____ ________ ____
(2) Top five entities with the largest balances of prepayments
Reason for Percentage of
Relationship being total advances
with the Group Amount Aging outstanding to suppliers
RMB %
Shandong Electric Power Group Third party 677,389 Within 1 year electric fee 39.6
Liu, Yuling Third party 348,124 Within 1 year goods not received 20.4
Yu, Zhihai Third party 328,194 Within 1 year goods not received 19.2
Rizhao Lingfei Packaging Co. Ltd. Third party 94,484 Within 1 year goods not received 5.5
Lin, Changxue Third party 80,428
_______ Within 1 year goods not received 4.7
___
1,528,619 89.4
_______ ___
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
5. Interest receivable
(1) Categories of interest receivable
Closing balance Opening balance
RMB RMB
Interests of term deposits 3,580,811 8,417,995
________ ________
(2) Overdue interest
As at 31 December 2014, there was no overdue interest receivable (31 December 2013: Nil).
6. Dividend receivables
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Within 1 year
Including: Sales Company 738,981,500 1,013,615,384 (1,350,000,000) 402,596,884
Wines Sales - 90,000,000 (90,000,000) -
Huanren Wine - 25,000,000 (25,000,000) -
Langfang Sales - 474,282 (474,282) -
Jingyang Sales - 35,000,000 (35,000,000) -
Over 1 year
Including: Pioneer International 13,614,384
_________ -
__________ (13,614,384)
__________ -
_________
Total 752,595,884 1,164,089,666 (1,514,088,666) 402,596,884
_________ __________ __________ _________
7. Other receivables
(1) Disclosure of other receivables by categories:
Closing balance Opening balance
Balance Bad debts provisions Carrying Amount Balance Bad debts provisions Carrying Amount
Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount
RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB
Other receivables that are
individually significant
and for which bad debt
provision has been
assessed individually 4,701,016,368 99.7 (7,199,521) 0.2 4,693,816,847 3,683,374,031 99.1 (7,392,429) 0.2 3,675,981,602
Other receivables that are
not individually significant
and for which bad debt
provision has been
assessed individually ______ ___0.3
15,019,429 _____ - ___- ______
15,019,429 ______
33,602,347 ___0.9 _____ - ___- ______
33,602,347
Total
______ ___
4,716,035,797 100.0
_____
(7,199,521)
___0.2 ______
4,708,836,276
______
3,716,976,378
___
100.0
_____
(7,392,429)
___0.2 ______
3,709,583,949
The Company determines that other receivable of more than RMB3,000,000 is considered as
individually significant other receivable.
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Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
7. Other receivables - continued
(1) Disclosure of other receivables by categories: - continued
Other receivables that are individually significant and for which bad debt provision has been
assessed individually:
As at 31 December 2014, other receivable that are individually significant at the end of the period
but for which bad debt provision has been assessed individually:
Bad debt
Balance provision Percentage Reason for provision
RMB RMB %
The debtor is in
the process of liquidation
Tiantong Security Co., Ltd. 7,199,521 7,199,521 100 Unable to repay
_______ _______
As at 31 December 2013, other receivable that are individually significant at the end of the period
but for which bad debt provision has been assessed individually:
Bad debt
Balance provision Percentage Reason for provision
RMB RMB %
The debtor is in
the process of liquidation
Tiantong Security Co., Ltd 7,392,429 7,392,429 100 Unable to repay
_______ _______
The aging analysis is as follows:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Balance provision amount Balance provision amount
Amount Proportion Amount Amount Amount Proportion Amount Amount
RMB % RMB RMB RMB % RMB RMB
Within 1 year 4,708,620,670 99.8 - 4,708,620,670 3,709,472,668 99.8 - 3,709,472,668
1 to 2 years 215,606 0.0 - 215,606 111,281 - - 111,281
2 to 3 years - - - - -
Over 3 years ________
7,199,521 ____0.2 _______
(7,199,521) ________ - ________ ____0.2 ______
7,392,429 7,392,429 ________ -
4,716,035,797 100.0 (7,199,521) 4,708,836,276 3,716,976,378 100.0 7,392,429 3,709,583,949
________ ____ _______ ________ ________ ____ ______ ________
158
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
7. Other receivables - continued
(2) Accrual, reversal and written-off during the current period:
Opening balance Accrued Reversed Writen-off Closing balance
RMB RMB RMB RMB RMB
2014 7,392,429 - (192,908) - 7,199,521
_______ _____ ______ _____ _______
No bad debt accrued in 2014, and bad debt reversed in 2014 is RMB 192,908.
Basis of determining Accumulated bad debt
Reasons for the original bad debt provision prior to Amount of reversal
Cotent reversal or collections provison reversals or collections or collections
RMB RMB
Tiantong Security Co., Ltd. Collected Exceed credit period (7,392,429) 192,908
_______ _______
(3) Other receivable written off current year
No other receivable written off in 2014.
(4) Disclosure of other receivables by nature
Closing balance Opening balance
RMB RMB
Receivable from subsidiary 4,699,819,825 3,691,961,808
Consumption tax refund 1,924,913 1,880,028
Receivable deposit - 1,661,969
Others 7,091,538
____________ 14,080,144
____________
4,708,836,276 3,709,583,949
____________ ____________
(5) Top five entities with the largest balances of other receivables
As at 31 December 2014, the particulars of top 5 other receivables are as follows:
Proportion of total
Nature Amount Aging prepayments
RMB %
Development Centre Internal balance 884,290,206 Within 1 year 18.7
Changan Chateau Internal balance 712,804,638 Within 1 year 15.1
Shihezi Chateau Internal balance 611,720,867 Within 1 year 13.0
Beijing Chateau Internal balance 533,229,933 Within 1 year 11.3
Ningxia Wine Internal balance 418,128,500
__________ Within 1 year 8.9
___
3,160,174,144 67.0
__________ ___
159
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
8. Inventories
Closing balance Opening balance
Net carrying Net carrying
Balance Provision amount Balance Provision amount
RMB RMB RMB RMB RMB RMB
Raw material 8,061,194 - 8,061,194 5,328,866 - 5,328,866
Work in progress 605,911,810 - 605,911,810 685,390,264 - 685,390,264
Finished goods 67,723,770
_________ -
_____ 67,723,770
_________ 90,565,059
_________ -
_____ 90,565,059
_________
681,696,774 - 681,696,774 781,284,189 - 781,284,189
_________ _____ _________ _________ _____ _________
9. Long-term equity investments
Movement Cash Dividends
2014 Cost Opening balance for the year Closing balance Share holding Voting power for the year
RMB RMB RMB RMB % % RMB
Cost Method
Xinjiang Tianzhu (a) 60,000,000 60,000,000 - 60,000,000 60 100 -
Kylin Packaging 23,176,063 23,176,063 - 23,176,063 100 100 -
Changyu Chateau (a) 28,968,100 28,968,100 - 28,968,100 70 100 -
AFIP Tourism (a) 350,000 350,000 - 350,000 70 100 -
Pioneer International (b) 3,500,000 3,500,000 - 3,500,000 70 100 -
Ningxia Growing 1,000,000 1,000,000 - 1,000,000 100 100 -
National Wines 2,000,000 2,000,000 - 2,000,000 100 100 -
Ice Chateau (a) 30,440,500 30,440,500 - 30,440,500 51 100 -
Beijing Chateau (a) 77,000,000 77,000,000 - 77,000,000 70 100 -
Sales Company 7,200,000 7,200,000 - 7,200,000 100 100 1,013,615,384
Langfang Sales (b) 100,000 100,000 - 100,000 10 100 474,282
Langfang Castel (a) 19,835,730 19,835,730 - 19,835,730 39 100 -
Wine Sales 4,500,000 4,500,000 - 4,500,000 90 100 90,000,000
Shanghai Sales(b) 300,000 300,000 - 300,000 30 100 -
Beijing Sales 850,000 850,000 - 850,000 100 100 -
Jingyang Sales (b) 100,000 100,000 - 100,000 10 100 35,000,000
Jingyang Wine (b) 900,000 900,000 - 900,000 90 100 -
Ningxia Wine 1,000,000 1,000,000 - 1,000,000 100 100 -
Ningxia Chateau 2,000,000 2,000,000 - 2,000,000 100 100 -
Dingluote Chateau 80,000,000 80,000,000 - 80,000,000 100 100 -
Shihezi Chateau 150,000,000 150,000,000 - 150,000,000 100 100 -
Changan Chateau 20,000,000 20,000,000 - 20,000,000 100 100 -
Development Centre 500,000,000 500,000,000 - 500,000,000 100 100 -
Huanren Wine 5,000,000 5,000,000 6,000,000 11,000,000 100 100 25,000,000
French Sales 29,988,530 29,988,530 (29,988,530) - - - -
Francs Champs
Participations SAS _______
69,216,634 _______
- ______
69,216,634 _______
69,216,634 100 100 _______
-
1,117,425,557 1,048,208,923 45,228,104 1,093,437,027 1,164,089,666
_______ _______ ______ _______ _______
(a) The Company is entrusted to manage these non-wholly owned subsidiaries whereby the
Group owned the entire operating results of these subsidiaries deducting fixed fees paid to
the non-controlling interests' holders. Please refer to Note VIII (1) for details.
(b) The Company has 100% voting power of those subsidiaries by the way of indirect
controlling.
During 2014, there was no significant restriction on the remittance of fund from the
investees to the Company.
160
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
10. Fixed assets
(1) Fixed assets
Buildings Machinery Motor vehicles Total
RMB RMB RMB RMB
I. Total original carrying amount
1. Opening balance 300,301,763 582,833,349 12,601,336 895,736,448
2. Increase
Purchase 3,313,956 11,917,141 781,111 16,012,208
CIP transfer 275,102 56,214 - 331,316
3. Decrease
Disposal -
_________ (2,332,423)
_________ (279,850)
_________ (2,612,273)
_________
4. Closing balance 303,890,821
_________ 592,474,281
_________ 13,102,597
_________ 909,467,699
_________
II. Total accumulated depreciation
1. Opening balance 93,360,535 367,510,418 9,571,379 470,442,332
2. Increase
Accrual 9,662,598 27,611,496 618,844 37,892,938
3. Decrease
Disposal -
_________ (1,815,138)
_________ (263,088)
_________ (2,078,226)
_________
4. Closing balance 103,023,133
_________ 393,306,776
_________ 9,927,135
_________ 506,257,044
_________
III. Total net carrying amount
1. Closing net carrying amount 200,867,688 199,167,505 3,175,462 403,210,655
_________ _________ _________ _________
2. Opening net carrying amount 206,941,228 215,322,931 3,029,957 425,294,116
_________ _________ _________ _________
As at 31 December 2014, there was no fixed assets with ownership restricted (31 December 2013:
Nil).
As at 31 December 2014, the Group has no temporary idle fixed assets, fixed assets held for sale,
fixed assets leased in under finance leases and fixed assets leased out under operating leases (2013:
RMB: Nil).
(2) Fixed assets of which certificates of title have not been obtained:
As at 31 December 2014, buildings without property certificate are as follows：
Reasons why
certificates of title have
Items Amount not been obtained
RMB
Fermentation center office,
experiment building and workshop 6,556,657 Processing
__________
161
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
11. Construction in progress
(1) Construction in progress
Closing balance Opening balance
RMB RMB
The Company's reconstruction project 182,765 269,802
__________ _______
(2) Current year movement on important construction
Accumulated
Opening Transfer to Closing expenditure/b The progress of
Budget balance Addition PPE balance udget construction Financed by
RMB RMB RMB RMB RMB %
The Company's
reconstruction project 201,440,000 269,802 244,279 (331,316) 182,765 91.0 91.0 Self-raised
There was no interest capitalized in construction in progress in 2014.
(3) As at 31 December 2014, there was no provision was made for the construction in process.
12. Bearer biological asset
Biological asset measured at cost
Planting
RMB
I. Total original carrying amount
1. Opening balance 67,302,314
2. Increase
Self cultivated 28,460,486
3. Decrease
Disposal (5,093,268)
__________
4. Closing balance 90,669,532
__________
II. Total accumulated depreciation
1. Opening balance 6,450,905
2. Increase
Accrual 586,905
__________
3. Closing balance 7,037,810
__________
III. Total net carrying amount
1. Closing net carrying amount 83,631,722
__________
2. Opening net carrying amount 60,851,409
__________
As at 31 December 2014, there is no biological asset with ownership restricted.
162
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
12. Bearer biological asset - continued
As at 31 December 2014, the Company's accumulated depreciation of biological assets is RMB
7,037,810 (2013: RMB 6,450,905).
As at 31 December 2014, biological assets of the Company include mature bearer biological
assets of RMB 7,923,216 (2013: RMB 8,510,121) and immature bearer biological assets of RMB
75,708,506. (2013: RMB 52,341,288)
As at 31 December 2014, there is no indication that biological assets may be impaired, and no
provision was made.
13. Intangible assets
Intangible assets
Land use right Software use right Total
RMB RMB RMB
I. Total original carrying amount
1. Opening and closing balance 96,594,766
_________ 3,480,000
_________ 100,074,766
__________
II. Total accumulated depreciation
1. Opening balance 17,454,935 3,480,000 20,934,935
2. Increase
Accrual 2,379,153
_________ -
_________ 2,379,153
__________
3. Closing balance 19,834,088
_________ 3,480,000
_________ 23,314,088
__________
III. Total net carrying amount
1. Closing net carrying amount 76,760,678 - 76,760,678
_________ _________ __________
2. Opening net carrying amount 79,139,831 - 79,139,831
_________ _________ __________
As at 31 December 2014, there was no intangible asset with restricted ownership.
163
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
14. Deferred tax assets and liabilities
Deferred tax assets and deferred tax liabilities that are not presented at the net amount after offset
Recognised deferred tax assets not presented at the net amount after offset
Closing balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary difference tax assets temporary difference tax assets
RMB RMB RMB RMB
Unrealized profit from intra
company transactions 9,000,404 2,250,101 7,795,104 1,948,776
Unpaid bonus 28,548,564 7,137,141 29,568,378 7,392,095
Retirement benefit 11,514,647 2,878,662 14,416,547 3,604,137
Asset impairment provision 17,199,521 4,299,880 17,392,429 4,348,107
Deductable losses 16,185,336 4,046,334 - -
Deferred income 25,765,813 6,441,453 22,654,527 5,663,632
108,214,285 27,053,571 91,826,985 22,956,747
15. Trade payables
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 228,052,722 166,453,563
__________ __________
16. Employee benefit
(1) Employee benefit
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Short-term salaries and welfare 51,864,092 143,836,063 (136,981,551) 58,718,604
Post-demission benefits
- predetermined provision plan - 10,060,441 (10,060,441) -
Termination benefit 14,552,295
_________ 1,652,615
_________ (4,690,263)
_________ 11,514,647
_________
66,416,387 155,549,119 (151,732,255) 70,233,251
_________ _________ _________ _________
164
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
16. Employee benefit - continued
(2) Short-term salaries and welfare
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Salaries and bonus 49,583,695 127,184,205 (120,593,968) 56,173,932
Staff benefit - 7,430,814 (7,427,314) 3,500
Staff welfare - 4,318,828 (4,318,828) -
Includes:
Medical insurance - 3,382,675 (3,382,675) -
Injury insurance - 490,366 (490,366) -
Maternity insurance - 445,787 (445,787) -
Housing fund - 3,584,493 (3,584,493) -
Union fee and education fee 2,280,397
_________ 1,317,723
_________ (1,056,948)
_________ 2,541,172
_________
51,864,092 143,836,063 (136,981,551) 58,718,604
_________ _________ _________ _________
(3) Predetermined provision plan
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Pension - 9,325,372 (9,325,372) -
Unemployment insurance -
_____ 735,069
_________ (735,069)
_________ -
_____
- 10,060,441 (10,060,441) -
_____ _________ _________ _____
The Company participates in pension insurance and unemployment insurance plans established by
government institution. According to those plans, the Company pays pension and unemployment
insurance each month on the basis of 18% and 1% last period salary respectively. Apart from
these monthly expenses, the Company does not bear any further payment obligation. This year the
Company should pay RMB 9,325,372 and RMB 735,069 (In 2013: RMB 9,217,726 and RMB
682,538) respectively into pension insurance and unemployment insurance. At 31 December 2014,
the Company does not have unpaid pension and unemployment insurance (At 31 December 2013:
Nil) which is due to the pension insurance and unemployment insurance plan and not paid at the
end of the reporting period.
165
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
17. Taxes payable
Closing balance Opening balance
RMB RMB
Value added tax (7,183,464) 3,289,792
Consumption tax 12,157,986 19,900,332
Corporation income tax 3,034,692 3,348,032
Urban land use tax 837,367 421,924
Individual income tax 6,213,385 6,275,760
City construction tax 1,510,366 2,319,867
Property tax 355,417 127,674
Others 1,279,375
__________ 1,895,289
_________
18,205,124 37,578,670
__________ _________
18. Other payables
(1) Natures of other payables are as follows
Closing balance Opening balance
RMB RMB
Payable to subsidiaries 1,013,237,829 1,585,656,605
Payables for equipment and construction 7,437,012 14,058,146
Payables for transportation 306,238 971,220
Deposits from suppliers 436,271 277,430
Others 9,187,469
____________ 11,633,120
____________
1,030,604,819 1,612,596,521
____________ ____________
(2) As at 31 December 2014, there were no significant outstanding balance aged over than one year.
19. Capital reserve
2014 Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Share premium 557,222,454 - - 557,222,454
_________ ______ ______ _________
166
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
20. Revenue and cost of sales
Revenue is as follows:
2014 2013
RMB RMB
Principal operating income 1,647,825,652 1,730,694,774
____________ ____________
Cost of sales is as follows:
2014 2013
RMB RMB
Principal operating cost 1,406,987,744 1,473,772,762
____________ ____________
21. Tax and surcharges
2014 2013
RMB RMB
Consumption tax 129,159,521 112,191,992
City construction tax 14,952,818 12,054,335
Education fee and surcharges 10,672,202 8,897,690
Others 2,242,360
__________ 1,902,568
__________
157,026,901 135,046,585
__________ __________
22. General and administrative expense
2014 2013
RMB RMB
Salary and employee benefit 31,119,420 26,777,563
Insurance fee 21,720,066 21,246,591
Leasing expenses 7,569,488 6,048,896
Depreciation 3,860,257 3,718,349
Amortization 2,917,149 2,373,076
Administrative expenses 8,748,731 8,489,998
Travelling expenses 2,704,509 4,127,300
Entertainment fee 278,344 288,524
Property tax, stamp duty and other taxes 5,331,881 3,942,998
Maintenance fee 9,685,094 10,416,751
Others 18,116,606
__________ 22,234,906
__________
112,051,545 109,664,952
__________ __________
167
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
23. Loss on impairment of assets
2014 2013
RMB RMB
Impairment loss of available for sale assets - 5,000,000
Reversal of impairment loss (192,908)
________ (607,571)
________
(192,908) 4,392,429
________ ________
24. Financial Expense
2014 2013
RMB RMB
Interest income (15,866,780) (25,717,422)
Exchange earning (6,093,361) (4,055,987)
Less: Interest expenses 10,227,740 2,174,286
Bank charges 678,848
_________ 1,650,982
_________
(11,053,553) (25,948,141)
_________ _________
25. Investment income
2014 2013
RMB RMB
Long-term equity investment income accounted
for by using the cost method 1,164,089,666 1,126,019,415
____________ ____________
Among the long-term equity investment income accounted for by using cost method, the investees
with investment income accounting for more than 5% of the Company's total profit before tax are
as follows:
Investees 2014 2013
RMB RMB
Sales Company 1,013,615,384 970,000,000
Wine Sales 90,000,000 11,140,442
AFIP Tourism - 68,000,000
____________ ____________
As at 31 December 2014 and at 31 December 2013, there was no significant restriction on the
remittance of investment income to the Company.
168
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
26. Supplement to cash flow statement
2014 2013
RMB RMB
Cash flows from operating activities
calculated by adjusting the net profit:
Net profit 1,151,762,045 1,154,687,278
Add: Impairment/(reverse) provision (192,908) 4,392,429
Depreciation of fixed assets 37,892,938 34,615,038
Amortization of intangible assets 2,379,153 2,373,077
Amortization of biological assets 586,905 586,905
Losses/(gains) on disposal of property,
plant and equipment 5,076,491 662,192
Finance expenses (11,684,489) (29,773,409)
Investment income (1,164,089,666) (1,126,019,415)
Increase in deferred tax assets (4,096,824) (3,439,545)
Decrease/(increase) in inventories 99,587,415 112,158,569
Increase in trade receivables (1,057,576,001) (1,562,373,091)
Increase/(decrease) in trade payables (525,631,084)
____________ 200,790,717
____________
Net cash flows from operating activities (1,465,986,025) (1,211,339,255)
____________ ____________
27. Cash and cash equivalents
2014 2013
RMB RMB
Closing balance of cash and bank 496,138,263 602,444,243
Less:
Restricted bank deposits 2,643,519 2,609,237
Restricted other monetary assets 125,004,018 125,291,289
Deposit with a period of over three months 35,245,260
__________ 277,392,728
__________
Closing balance of cash and cash equivalents 333,245,466 197,150,989
__________ __________
2014 2013
RMB RMB
Cash and bank 333,245,466 197,150,989
Including: Cash on hand 5,847 12,479
Bank deposits on demand 333,239,619
__________ 197,138,510
__________
Closing balance of cash and cash equivalents 333,245,466 197,150,989
__________ __________
169
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
28. Related party transactions
(1) Purchase of materials
2014 2013
RMB RMB
Subsidiaries 275,537,285 230,279,590
Other related parties 105,807,546
__________ 135,903,876
__________
381,344,831 366,183,466
__________ __________
(2) Sales of goods
2014 2013
RMB RMB
Subsidiaries 1,640,615,167 1,723,774,566
Other related parties 7,210,485
____________ 6,920,208
____________
1,647,825,652 1,730,694,774
____________ ____________
29. Receivables and payables to related parties
(1) Trade receivables
Trade receivables Closing balance Opening balance
Balance Bad debts provision Balance Bad debts provision
RMB RMB RMB RMB
Other related parties 463,690 - 1,600,968 -
_______ _______ _______ _______
Other receivables Closing balance Opening balance
Balance Bad debts provision Balance Bad debts provision
RMB RMB RMB RMB
Subsidiaries 4,699,819,825 - 3,691,961,808 -
__________ _______ __________ _______
The above receivables due from related parties are unsecured, have no interest or fixed date of
repayment.
170
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
29. Receivables and payables to related parties - continued
(2) Trade payables
Trade Payables Closing balance Opening balance
RMB RMB
Subsidiaries - 9,497,134
Other related parties 29,592,060
_________ 33,518,567
_________
29,592,060 43,015,701
_________ _________
Other payables Closing balance Opening balance
RMB RMB
Subsidiaries 1,013,237,829 1,585,656,605
Other related parties 200,000
____________ 3,906
____________
1,013,437,829 1,585,660,511
____________ ____________
The above payables due to related parties are unsecured, have no interest or fixed date of
repayment.
171
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
APPENDIX I SUPPLEMENTARY INFORMATION TO FINANCIAL
STATEMENTS
YEAR ENDED 31 DECEMBER 2014
I. DETAILS OF EXTRAORDINARY PROFIT AND LOSS
2014
RMB
Loss on disposal of non-current assets, including
reversal of accrued impairment provision (5,086,545)
Tax rebate and reduction without formal approval documents 13,405,520
Government grants credited in profit and loss
(except for those recurring government grants
that are closely related to the Group's operation,
in line with related regulations and have proper basis of calculation) 27,140,194
Other non-operating income and expense 166,987
Reversal of bad debt provision of receivables tested individually 192,908
Corporate income tax effect (8,302,732)
__________
27,516,332
__________
__________
The Company's extraordinary profit and loss items are recognized in
accordance with the regulations of the "public offering of securities of the
Company Disclosure Explanatory Notice No. 1 - non-recurring profit and
losses" (SFC [2008] No. 43).
All non-operation income and non-operation expenses are non-operating profit
in 2014. Please refer to Note VI-38 and VI-39.
II. RETRUN ON EQUITY ("ROE") AND EARNINGS PRE SHARE ("EPS")
The Company's ROE and EPS are calculated in accordance with the CSRC
regulations of the "Information Preparing and Disclosure Rules of Public
Company No. 9 - calculation and disclosure of ROE and EPS" (Revised 2010).
Weighted average
2014 ROE Basic EPS
% RMB
Net profit attributable to shareholders of the Company 15.11 1.43
Net profit attributable to shareholders
172
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
of the Company deducting extraordinary profit and loss 14.69 1.39
_____ ____
_____ ____
The Company did not have any potential dilutive shares.
Weighted average
2013 ROE Basic EPS
% RMB
Net profit attributable to shareholders of the Company 16.45 1.53
Net profit attributable to shareholders
of the Company deducting extraordinary profit and loss 16.78 1.48
_____ ____
_____ ____
The Company did not have any potential dilutive shares.
173
Yantai Changyu Pioneer Wine Co. Ltd. 2014 Annual Report.
XII、Reference Documents
(1)The original of Annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman, chief
accountant and accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997, the
Prospectus and The Shares’ Change & Public Offering Announcement for Stock A in
2000.
(4) The originals of all documents and announcements that the Company made public
during the report period in the newspapers designated by China Securities Regulatory
Commission.
Yantai Changyu Pioneer Wine Co. Ltd.
Board of Directors
28th April 2015
174
