Semi-annual Report 2010
August 20102
Important Notices
. The Board of Directors, Board of Supervisors and directors, supervisors, and senior
managers of the company ensure that there is neither untrue presentation, seriously
misleading statements, nor omission of material facts contained in the information
herein and shall severally and jointly bear responsibility for the authenticity, accuracy
and completeness of the information contained in this report.
. Mr. Yu Lin, the principal of the Company, Mr. Ye Changqing, the principal in charge of
accounting, and Ms. Xia Xueyun, the principal of the accounting department (chief
accountant), hereby declare that: We guarantee the authenticity and completeness of the
financial statements in the semi-annual report.
. The financial statements in the Company’s interim report have not yet been audited.
. The report has been prepared in Chinese and English respectively. In case of
discrepancy, the Chinese version shall prevail.3
Contents
Chapter I Basic Information of the Company......................................................................... 4
Chapter II Details of Changes in Share Capital and Major Shareholders.................................. 6
Chapter III Particulars about Directors, Supervisors and Senior Executives of the Company......... 7
Chapter IV Report of the Board of Directors.......................................................................... 10
Chapter V Substantial Events................................................................................................. 14
Chapter VI Financial Report.............................................................................................. 18
Chapter VII Documents for Further Reference....................................................................... 904
Chapter I Basic Information of the Company
I. Basic Information
1. Statutory name of the Company:
In Chinese: 安徽古井贡酒股份有限公司
In English: ANHUI GUJING DISTILLERY COMPANY LIMITED
Abbreviation: GUJING
2. Legal representative: Ye Lin
3. Secretary of Board of Directors: Ye Changqing
Contact address: Gujing, Bozhou, Anhui
Tel: (0558) 5712231
Fax: (0558) 5317706
E-mail: ycq@gujing.com.cn
Authorized representative for securities: Ma Junwei
Contact address: Gujing, Bozhou, Anhui
Tel: (0558) 5317057
Fax: (0558) 5317706
E-mail: gjzqb@gujing.com.cn
4. Registered address: Gujing, Bozhou, Anhui
Office address: Gujing, Bozhou, Anhui
Post code: 236820
Website: http://www.gujing.com
E-mail: gujing@mail.ahbbptt.com.cn
5. Selected newspapers for information disclosure are as follows: China Securities Journal,
Shanghai Securities News, and Hong Kong Ta Kung Pao
Website for publishing Annual Report of the Company: http://www.cninfo.com.cn
Place of the Annual Report filed: Office of Secretary of BOD of the Company
6. Place where the company shares are listed: Shenzhen Stock Exchange
Short form of Stock Name: Gujing Distillery Stock Code: 0005965
Short form of Stock Name: Gujing Distillery B Stock Code: 200596
7. Other information:
1). Initial registration date of the Company: May 30, 1996
Registration authority: Anhui Provincial Administration for Industry and Commerce
2). Registration number of business license: 340000400001632
Tax registration number: 341600151940008.
3). Name and address of the CPA firm appointed by the Company
Name: Reanda Certified Public Accountants
Address: Room 2008, East Wing, Building 1, Zhubang 2000 Tower, No. 100,
Balizhuang Xili, Chaoyang District, Beijing, PRC
II. Main financial data and index
1. Main accounting data and financial index
Unit: (RMB) Yuan
End of reporting
period
End of previous year Increase/decrease (%)
Total assets 1,470,186,784.40 1,342,230,542.78 Owners’ equity attributed to shareholders of the
listed company
833,134,940.97 807,997,950.93 Equity 235,000,000.00 235,000,000.00 Net assets per share attributed to shareholders of the
listed company (Yuan/share)
3.55 3.44 Reporting period
(Jan. to Jun.)
Same period of last
year
Increase/decrease (%)
Operating total income 856,347,372.96 705,277,294.05 21.42
Operating profit 137,764,355.39 48,879,266.61 181.85
Total profit 145,416,447.76 51,526,673.76 182.22
Net profit attributed to shareholders of the listed
company
107,386,990.04 35,609,194.93 201.57
Net profit after deducting non-recurring profit and
loss attributed to shareholders of the listed company
101,647,920.76 32,961,787.78 208.38
Basic earnings per share (Yuan/share) 0.46 0.15 206.67
Diluted earnings per share (Yuan/share) 0.46 0.15 206.67
Net asset earning ratio (%) 13.09% 5.16% Net cash flows from operating activities 162,039,277.10 151,980,449.10 Net cash flows from operating activities per share
(Yuan/share)
0.69 0.65 2. Non-recurring profit and loss deducted
Unit: (RMB) Yuan6
Non-recurring profit and loss Amount Note (if applicable)
Net non-operating incomes and expenses 7,652,092.37
Less: effect on income tax 1,913,023.09
Total 5,739,069.28 -
3. Difference between PRC GAAP and IFRS
There existed no difference between PRC GAAP and IFRS concerning the accounting
data of the Company.
Chapter II Details of Changes in Share Capital and Major
Shareholders
Ⅰ. No changes in reporting period
II. Particulars about shareholders
(1) Number of shareholders and shares held by them
Unit: share
Total number of shareholders 11,898
Shareholdings of top 10 shareholders
Name of shareholders
Type of
shareholders
Percentage of
shares held
Total number of
shares held
Number of restricted
shares held
Number of shares
pledged or frozen
Anhui Gujing Group Co., Ltd.
State-owned
legal person
61.15% 143,702,011 57,000,000
GUOTAI JUNAN
SECURITIES(HONGKONG)
LIMITED
Foreign legal
person
2.99% 7,017,968
China Merchants Securities
(HK) Co., Ltd.
Foreign legal
person
2.19% 5,135,313
KGIASIA LIMITED
Foreign legal
person
2.13% 5,010,293
Agricultural Bank of
China–Soochow Value Growth
Double Power Stock Fund
unknown 2.06% 4,841,082
ICBC-Galaxy Yintai Financing
Dividend Fund
unknown 1.42% 3,344,868
UBS (LUXEMBOURG) S.A.
Foreign legal
person
1.26% 2,961,827
ICBC-Tianhong Selected
Mixed Type Fund
unknown 1.16% 2,729,014
DRAGON BILLION CHINA
MASTER FUND
Foreign legal
person
0.98% 2,299,320
ICBC-Soochow Jiahe unknown 0.82% 1,916,2337
Advanced Mixed Type
Open-ended Fund
Shareholdings of the top ten non-restricted shares shareholders
Name of shareholders Number of non-restricted shares held Type of shares
Anhui Gujing Group Co., Ltd. 143,702,011 RMB–denominated common share
GUOTAI JUNAN SECURITIES(HONGKONG)
LIMITED
7,017,968 Domestic listed foreign-oriented shares
China Merchants Securities (HK) Co., Ltd. 5,135,313 Domestic listed foreign-oriented shares
KGIASIA LIMITED 5,010,293 Domestic listed foreign-oriented shares
Agricultural Bank of China–Soochow Value
Growth Double Power Stock Fund
4,841,082 RMB–denominated common share
ICBC-Galaxy Yintai Financing Dividend Fund 3,344,868 RMB–denominated common share
UBS (LUXEMBOURG) S.A. 2,961,827 Domestic listed foreign-oriented shares
ICBC-Tianhong Selected Mixed Type Fund 2,729,014 RMB–denominated common share
DRAGON BILLION CHINA MASTER FUND 2,299,320 Domestic listed foreign-oriented shares
ICBC-Soochow Jiahe Advanced Mixed Type
Open-ended Fund
1,916,233 RMB–denominated common share
Description of the connected
relationship or acting in
concert relationship among the
aforesaid shareholders
Among the aforesaid shareholders, the state-owned shareholder – Anhui Gujing Group Company
Limited— has no associated relations with the other shareholders, and is not concluded in the group a person specified in theMeasures for the Administration of Disclosure of Shareholder Equity
Changes of Listed Companies . Among the float shareholders, the associated relations and whether are included in the group as a person specified in theMeasures for the Administration of Disclosure Shareholder Equity Changes of Listed Companies or not are not available.
(2) The shareholder holding over 5% shares—Anhui Gujing Group Co., Ltd.—holds
143,702,011 shares at the end of the reporting period, which are all non-restricted
circulating shares. Shares it held are state-owned legal person shares, 5,700,000
shares of which are frozen for loan on 16th March 2009, and not pledged, or
consigned.
(3) Anhui Gujing Group Co., Ltd. is the shareholder that represents the state.
Chapter III Particulars about Directors, Supervisors and Senior
Executives of the Company
I ． Changes in shares held by directors, supervisors and senior executives of the
Company
There is no change in shares held by directors, supervisors and senior executives of
the Company during the reporting period.8
II. Changes in directors, supervisors and senior executives of the Company during the
reporting period:
On 21 Apr. 2010, due to job change, Mr. Cao Jie applied to the Board of Directors to
resign from the positions of chairman of the 5th Board of Directors, director, convener
of the Strategy Committee under the Board of Directors and committeeman of the
Nomination Committee under the Board.
On 11 May 2010, Mr. Yu Lin was by-elected as a director for the 5th Board of
Directors at the 1st Provisional Shareholders’ General Meeting in 2010 of the
Company.
On 11 May 2010, Mr. Yu Lin was elected as Chairman of the Board of Directors at the
21st Meeting of the 5th Board of Directors.
Chapter IV Report of the Board of Directors
I. Discussion and analysis from management
2010 marked the year for the Company to “deepen marketing and promote a highly
efficient operation. In the report period, sticking to the production and operation plan
set at the year-begin, under the support from all shareholders and the leadership of the
Board of Directors, the Company fulfilled all the production and operation indexes set
at the year-begin through further optimizing and integrating the organizational
structure, as well as rationally allocating various resources.
Concerning the distilled spirit production, the Company, under the guidance of the
return strategy, continued to optimize its brewage technology, solidified the concept
of “viewing quality as the most important principle”, strongly promoted the guiding
principles of “be practical and hard-working in production”, and put quality of the
basic spirit in the first place, which provided a firm guarantee for high quality of its
products.
As for marketing, the Company continued to adopt the strategy of “great focus and
highly-efficient execution”, grow bigger and stronger in markets of Jiangsu,
Shangdong, Henan and Anhui (with Anhui as the core market), and optimize its
product structure with the Gujinggong vintage original spirit serial as the core. With
those efforts, all operation indexes were improved.
II. Operating results of the Company during the reporting period
(I) Overview of operation
For the report period, the Company achieved an operating income of RMB
856,347,400, up by 21.42% year on year; an operating profit of RMB 137,764,400, up
by 181.85% year on year; and a net profit reaching RMB 107,387,000, up by
201.57% year on year.
(Ⅱ) Breakdown of main businesses9
1. Main business scope of the Company
The Company mainly undertakes the production and sales of Gujinggong, Gujing and
its serial distilled spirits which can be classified into the strong, faint aromatic and
mixed-flavor types, with the alcohol content ranging from 60 degree to 30 degree, and
the prices ranging from high, medium and low levels. A product system has been
formed with the Gujinggong vintage original spirit serial as the core and traditional
products (with the flower-flavor elegant spirit serial and Golden Gujinggong spirit as
representatives) as the important support.
2. Main operations classified by products and industries
Unit: (RMB) ten thousand
Main operations classified by industries
By industry or products
Revenue from
operations
Operating costs
Gross margin
(%)
Increase/decreas
e in revenue
from operations
over the
previous year
(%)
Increase/decreas
e in operating
costs over the
previous year
(%)
Increase/decrease
in gross margin
over the previous
year (%)
Distilled spirit 78,478.68 18,770.71 76.08 40.32 -21.78 18.99
Deep processing of
agricultural products
— — — — — Others 4,806.60 3,057.47 36.39 -52.03 -48.12 -Total 83,285.28 21,828.18 73.79 22.37 -31.74 20.77
Main operations by products
High-class spirit 39,574.69 7,686.04 80.58 158.45 148.52 Medium-class spirit 37,080.42 10,190.72 72.51 10.28 -14.87 Low-class spirit 1,823.57 893.95 50.98 -62.89 -63.76 Total 78,478.68 18,770.71 76.08 40.32 -21.78 18.99
3. Main operations classified by regions
Unit: (RMB) ten thousand
Region Revenue from operations
Increase/decrease in revenue from
operations over the previous year North China 8,990.08 152.88
Central China 66,560.13 15.16
South China 7,735.06 20.10
Other districts 0.00 -100.00
Total 83,285.28 22.37
(III) Financial analysis Unit: RMB Yuan10
1. Items of the balance sheet:
(1) Accounts receivable at the period-end were up by 38.25% as compared with the
opening amount, which was mainly due to an income growth in the report period;
(2) Prepayments at the period-end were up by 181.27% as compared with the opening
amount, which was mainly because the expenses incurred due to the seasonal
production halt were recognized as deferred expenses;
(3) Other receivables at the period-end were down by 41.77% as compared with the
opening amount, which was mainly because invoices for advertising fees stroke a
balance in the report period;
(4) Accounts received in advance at the period-end were up by 142.11% as compared
with the opening amount, which was mainly due to an increase in the accounts
received in advance for goods in the report period;
2. Items of the income statement:
(1) Selling expenses in the report period were up by 59.85% year on year, which was
mainly due to a higher market input to expand the market share in the report period;
(2) Administrative expenses in the report period were up by 98.15% year on year,
which was mainly due to factory rebuilding, equipment repair and the adjustment of
social security expense ratio in the report period;
(3) Financial expenses in the report period were down by 171.19% year on year,
which was mainly due to an increase in monetary funds;
(4) Non-operating incomes in the report period were up by 198.36% year on year,
which was mainly because the Company received a land compensation in the report
period;
(5) Income tax expenses in the report period were up by 138.09% year on year, which
was mainly due to an increase in the total profit.
(IV) There are no other operating activities that have made material effect on the
revenue during the reporting period.
(V) There is no investment from single joint stock company of which the income
accounts for over (including) 10 % of the Company’s net profit during the reporting
period.
(VI) Existing problems and difficulties, as well as plan of the second half of year:
1. Existing problems and difficulties
(1) Distilled liquor is still in prosperity, and market competition is quite fierce.
Although the Company grow quickly, sales scale of the primary brand is till at
moderate level compared with area strong brand, so it is more pressing to effectively
solve difficulties in sales.
(2) Although market of strategic leading products year protoplasmic liquor develops
rapidly and responsible is very good intra industry, the Company focuses on resource,
further optimizes products structure, reduce products and promote profitability.
(3) Along with establishment of leap-forward development, output enlargement and
market input need more resource.
2. Work measures in the second half year11
In order to finish various indexes better, the Company is going to adopt the following
measures:
(1) In respect of production, the Company will continue to promote view of “being
practical and realistic, practical brewing mellow liquor”, insist on quality being the
first, focus on execution of production and crafts, strengthen standard operation to
improve quality intrinsic of basic liquor, promote productive efficiency and reduce
production cost.
(2) Further promote in-depth marketing and improve market operating efficiency
The Company will continue to focus on establishment of foundation facility of core
market, optimize procedures, push market segmentation, exactly launch in, improve
ratio of input and output, further stimulate positivity of marketing team, respect
creative spirit of sales staff in frontline. Roundly actualize project of “throughout all
stores and cities”, and establish excellent service system with response.
(3) Propose concept of “Quality, Brand, Staff and Market is the Most Important”,
further promote brand of “Gujingong” with high reputation.
III. Particulars about investments during the report period
(I) Investment with raised capital
There is no investment with raised capital during the report period.
(II) Investment with non-raised capital
There is no significant investment with non-raised capital during the report period.
(IV) During the reporting period, there is no difference between the actual operating
results and the profit forecast and expectations disclosed in the periodical report of the
previous period
Chapter V Substantial Events
I. Corporate governance
In the reporting period, the Company legally operates pursuant to Company Law,
Securities Law, Code of Corporate Governance for Listed Companies in China,
Opinions on Improving the Quality of Listed Companies, Administrative Measures on
Information Disclosure by Listed Companies, Shenzhen Stock Exchange Market
Stock Listing Rules and other laws and regulations. The actual situation of the
corporate legal person governance structure complies with provisions of normative
documents about governance for listed companies issued by China Securities
Regulatory Commission. During the reporting period, the strategy and investment
regulatory committee of BOD, remuneration and appraisal committee, nomination
committee, and audit committee have already held the relevant works according to the
implementation details of relevant special committees.
According to Notice on Carrying out Activity to Further Promote Corporate
Governance, the Company promptly checks the funds with interested parties, and
submits the “Statistics on Funds of the Listed Companies and Interested Parties” to
Anhui Securities Regulatory Bureau as per the regulatory requirements, so as to avoid12
dominant shareholders' occupying funds of listed company. Till the end of the
reporting period, there are no funds occupied by dominant shareholders and other
interested parties and no violation of Notice on Normalizing Fund and Warrant of the
Listed Companies and Interested Parties issued by China Securities Regulatory
Commission. Funds between the Company and its dominant shareholders and the
interested parties are from the daily operative related transactions which follow the
principle of openness, fairness, and justice of the market. The transaction price is on
the basis of market fair price, which effectively ensure the openness and fairness of
related transactions and fairness of price of related transactions.
According to the requirements of Basic Standard for Enterprise Internal Control,
Guidance of Internal Control of Listed Companies of Shenzhen Stock Exchange, the
Company is revising and adding the relevant internal controlling system and
continuously supplementing and perfecting the corporate legal person governance
structure, so as to establish a more effective restrictive relation among right institution,
decision institution, supervision institution, and administration institution, and ensure
the continuous improvement of operation of the Company.
II. Plans for profit distribution and transfer of surplus to capital and their
implementations
According to resolutions of the Annual Shareholders’ General Meeting of 2009, the
Board of Directors implemented profit distribution of 2009.
III. Major litigations and arbitrations
There is no major litigation or arbitration during the reporting period.
IV. Stock equity of other listed companies held
The Company is not holding any stock equities of other listed companies.
V. There is neither acquisition, sale or restructuring of major assets, nor other material
event.
VI. Major related transactions
(I) There is no major non-operating related transaction.
(II) Implementations of daily operating related transactions
For details of the implementations of the Company’s daily operating related
transactions, please refer to Notes to financial report.
VII. There is no performance of important contracts during the reporting period.
VIII. As at the end of the reporting period, the Company has made no major guarantee;
and no controlling shareholder or other interested party has taken up funds.
IX. Special explanation and independent opinion of the independent directors on
occupation of fund and warranty of the interested party.13
According to the document ZJF [2003] No. 56 Notice on Normalizing Fund and
Warrant of the Listed Companies and Interested Parties issued by China Securities
Regulatory Commission, and as the independent directors of Anhui Gujing Distillery
Company Limited, we have made the following opinions on occupation of fund and
warrant of the interested party with the principle of self-regulation, standard operation
and practice and on the basis of the investigation to the relevant information:
There are no such events in the reporting period.
We believe: the directors, supervisors and executive staff of the Company can strictly
abide by relevant laws and regulations as well as internal controls. There are no funds
occupied by shareholders and other interested parties or warrants made by other
companies in any forms. The Company has well controlled the risk and protected the
interest of the middle and small shareholders.
Independent directors: Ding Yuan, Wu Cisheng, Zhou Libin
X. Reception of survey, communication and interview in the reporting period
Date Place Method Object Information discussed and provided
5 Mar. 2010 In the Company On-site survey Everbright Securities Co., Ltd Production and operation of company
8 Mar. 2010 In the Company On-site survey Haitong Securities Co., Ltd Production and operation of company
8 Mar. 2010 In the Company On-site survey Soochow Securities Co., Ltd Production and operation of company
8 Mar. 2010 In the Company On-site survey
Galaxy Asset Management
Co., Ltd
Production and operation of company
In the first half of 2010, the investors interviewed the company through phone and the
Company answered them according to relevant system. The Company never disclosed,
leaked out confidential information selectively, privately to special objects, and
guaranteed fairness of information disclosure of the Company.
The Company will establish and complete internal control of information disclosure
pursuant to Guide to Disclosure of Information of Listed Companies of Shenzhen
Stock Exchange to make sure the fairness off the information disclosure; establish
strict confidential system, prepare reception and promotion system and Information
Disclosure Registration System. Publicize the internal control system of information
disclosure and do fair information disclosure work well.
XI. Particulars about engagement and dismissal of accounting firms
The resolution of the Shareholder Meeting 2009 decides to continue engaging Reanda
Certified Public Accountants for auditing work in 2010. In the reporting period, the
Company has paid 0.35 million to the public accountant.
Chapter VI Financial Report
I. Financial statements
Balance Sheet
Prepared by: ANHUI GUJING DISTILLERY COMPANY LIMITED
June 30, 2010 Unit: RMB Yuan14
Items
Closing balance Opening balance
Consolidation Parent company Consolidated Parent company
Current assets:
Monetary funds 443,451,147.11 326,240,638.24 361,051,750.67 279,382,070.44
Deposit reservation for balance
Outgoing call loans
Trading financial assets 397,590.00 283,075.00
Notes receivable 136,032,142.40 132,652,093.14 72,556,609.11 70,878,563.08
Accounts receivable 30,782,865.45 364,055.24 22,265,545.83 369,465.04
Prepayment 6,640,859.89 5,152,564.24 2,361,064.82 1,930,281.52
Insurance receivables
Reinsurance receivables
Provision of reinsurance contract reserve
receivable
Interest receivable
Dividend receivable
Other receivables 12,517,857.62 163,505,664.29 21,498,541.96 158,191,541.52
Financial assets purchased under agreement
to resell
Inventories 386,935,338.47 353,867,662.02 366,230,129.14 331,899,869.74
Non-current assets due within 1-year
Other current assets
Total current assets 1,016,360,210.94 981,782,677.17 846,361,231.53 842,934,866.34
Non-current assets：
Loan and payment on other’s behalf
disbursed
Available-for-sale financial assets
Investment held to maturity
Long-term receivables
Long-term equity investment 227,242,761.52 300,000.00 227,242,761.52
Investment property 31,760,734.56 31,760,734.56 31,272,097.26 31,272,097.26
Fixed assets 339,927,758.33 119,146,182.36 357,250,551.32 126,593,690.76
Construction in progress 3,968,929.00 3,967,042.00 3,282,158.21 3,282,158.21
Engineering materials 42,500.00 42,500.00 42,500.00 42,500.00
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 73,454,208.22 27,925,195.91 81,882,011.19 35,498,033.88
R&D expenses
Goodwill
Long-term deferred expenses
Deferred tax assets 4,672,443.35 2,300,392.38 21,839,993.27 18,947,861.18
Other non-current assets15
Total non-current assets 453,826,573.46 412,384,808.73 495,869,311.25 442,879,102.81
Total assets 1,470,186,784.40 1,394,167,485.90 1,342,230,542.78 1,285,813,969.15
Current liabilities :
Short-term loans
Loans from central bank
Deposits received and hold for others
Call loan received
Held-for-trading financial liabilities
Notes payable
Accounts payable 46,343,623.62 34,630,436.97 66,328,864.96 62,462,032.03
Advance from customers 237,990,739.89 453,341,965.06 98,300,223.30 252,956,083.41
Financial assets sold under agreements to
repurchase
Fees and commissions payable
Payroll payable 92,510,798.75 60,376,168.15 93,609,527.73 63,894,271.86
Taxes payable 137,791,706.34 85,007,554.79 170,539,356.25 107,010,823.86
Interest payable
dividend payable
Other payables 119,321,724.83 46,950,473.95 97,267,619.61 45,149,908.70
Amount due to reinsurance
Insurance contract provision
Entrusted trading of securities
Amount payables under security underwriting
Non-current liabilities due within 1-year 5,000,000.00 5,000,000.00
Other current liabilities
Total current liabilities : 633,958,593.43 680,306,598.92 531,045,591.85 536,473,119.86
Non-current liabilities :
Long-term loans
Bonds payable
Long-term payables
Specific payables
Provision for liabilities
Deferred taxes liabilities
Other non-current liabilities 3,093,250.00 1,883,250.00 3,187,000.00 1,977,000.00
Total non-current liabilities : 3,093,250.00 1,883,250.00 3,187,000.00 1,977,000.00
Total liabilities 637,051,843.43 682,189,848.92 534,232,591.85 538,450,119.86
Owner’s equity (or shareholders ’ equity)
Paid-in capital (or share capital) 235,000,000.00 235,000,000.00 235,000,000.00 235,000,000.00
Capital surplus 326,064,758.92 288,184,010.28 326,064,758.92 288,184,010.28
Less：Treasury Stock
Specific reserve
Surplus reserve 69,977,281.49 64,938,139.66 69,977,281.49 64,938,139.66
General risk provision16
Retained earnings 202,092,900.56 123,855,487.04 176,955,910.52 159,241,699.35
Foreign exchange difference
Total owners’ equity attributable to parent
company
833,134,940.97 711,977,636.98 807,997,950.93 747,363,849.29
Minority interest
Total owner’s equity 833,134,940.97 711,977,636.98 807,997,950.93 747,363,849.29
Total liabilities & owner’s equity 1,470,186,784.40 1,394,167,485.90 1,342,230,542.78 1,285,813,969.15
Income statement
Prepared by: ANHUI GUJING DISTILLERY COMPANY LIMITED
Jan.-Jun. 2010 Unit: RMB Yuan
Items
Jan.-Jun. 2010 Jan.-Jun. 2009
Consolidation Parent company Consolidation Parent company
I. Total operation income 856,347,372.96 494,783,937.72 705,277,294.05 377,173,618.17
Including: Sales income 856,347,372.96 494,783,937.72 705,277,294.05 377,173,618.17
Interest income
Premium income
Handling charges and commission income
II. Total operation cost 719,462,302.12 438,254,757.59 656,398,027.44 361,230,728.82
Including: Cost of sales 241,788,417.54 212,032,214.67 343,337,248.98 221,175,551.78
Interest expenses
Handling charges and commission expenses
Surrender value
Net amount of claims
Net amount of insurance contract reserve
withdrawn
Expenditure on policy dividends
Reinsurance premium expenses
Taxes and associate charges 129,503,665.00 121,901,746.02 100,896,752.10 93,094,149.23
Selling expenses 199,540,427.62 124,828,963.72 315,245.49
Administrative expenses 151,923,089.23 106,002,812.68 76,670,096.26 39,648,546.35
Financial expenses -3,647,510.77 -2,036,229.28 5,123,862.85 1,456,132.44
Impairment loss 354,213.50 354,213.50 5,541,103.53 5,541,103.53
Add: gain from change in fair value (“-” means
loss)
0.00 0.00
Gain from investment (“-” means loss) 879,284.55 645,653.65 20,323,997.73
Including: income form investment in
affiliated enterprise and joint ventures
Foreign exchange difference (“-” means loss)
III. Operation profit (“-” means loss) 137,764,355.39 57,174,833.78 48,879,266.61 36,266,887.08
Add: non-operation income 9,177,114.26 7,802,557.76 3,075,857.57 1,757,056.40
Less: non-business expense 1,525,021.89 1,466,135.05 428,450.42 43,280.97
Including: loss from non-current asset disposal 1,394,204.42 27,794.00 301,334.06 28,422.9717
IV. Total profit (“-” means loss) 145,416,447.76 63,511,256.49 51,526,673.76 37,980,662.51
Less: income tax expense 38,029,457.72 16,647,468.80 15,972,471.77
V. Net profit (“-” means loss) 107,386,990.04 46,863,787.69 35,554,201.99 37,980,662.51
Attributable to owners of parent company 107,386,990.04 46,863,787.69 35,609,194.93 37,980,662.51
Minority interest -54,992.94
VI. Earnings per share
(I) Basic earnings per share 0.46 0.20 0.15 0.16
(II) Diluted earnings per share 0.46 0.20 0.15 0.16
VII. Other composite income
VIII. Total composite income 107,386,990.04 46,863,787.69 35,554,201.99 37,980,662.51
Attributable to owners of parent company 107,386,990.04 46,863,787.69 35,609,194.93 37,980,662.51
Minority interest -54,992.94
Cash flow statement
Prepared by: ANHUI GUJING DISTILLERY COMPANY LIMITED
Jan.-Jun. 2010 Unit: RMB Yuan
Items
Jan.-Jun. 2010 Jan.-Jun. 2009
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities and
rendering of service
944,450,759.79 669,099,779.94 866,791,367.60 445,913,122.64
Net increase of deposits from customers and due
from banks
Net increase of loans from the central bank
Net increase of funds borrowed from other
financial institutions
Cash received from premium of original
insurance contracts
Net cash received from reinsurance business
Net increase of savings of policy holders and
investment fund
Net increase of disposal of tradable financial
assets
Cash received from interest, handling charges
and commissions
Net increase of borrowed inter-bank funds
Net increase of buy-back funds
Tax refunds received 185,409.52 384,233.71
Other cash received relating to operating
activities
32,212,518.52 6,397,998.92 18,859,094.91 12,311,415.49
Subtotal of cash inflows from operating activities 976,848,687.83 675,497,778.86 886,034,696.22 458,224,538.13
Cash paid for purchase of commodities and
reception of service
350,562,945.06 297,605,191.76 343,194,790.19 162,675,134.6618
Net increase of customer lending and advance
Net increase of funds deposited in the central
bank and amount due from banks
Cash for paying claims of the original insurance
contract
Cash for paying interest, handling charges and
commissions
Cash for paying policy dividends
Cash paid to and for employees 81,480,491.28 47,482,907.43 125,184,921.07 63,357,274.82
Various taxes paid 299,367,760.53 195,644,012.34 247,560,957.39 157,756,313.24
Other cash paid relating to operating activities 83,398,213.86 10,111,917.21 18,113,578.47 71,794,529.81
Subtotal of cash outflows from operating activities 814,809,410.73 550,844,028.74 734,054,247.12 455,583,252.53
Net cash flows from operating activities 162,039,277.10 124,653,750.12 151,980,449.10 2,641,285.60
II. Cash Flows from investment activities:
Cash received from disposal of investments
Cash received from investment income 879,284.55 645,653.65
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets
14,207,842.23 14,207,842.23 300,932.78 34,447.44
Net cash received from disposal of subsidiary or
other business units
Other cash received relating to investment
activities
Subtotal of cash inflows from investment
activities
15,087,126.78 14,853,495.88 300,932.78 34,447.44
Cash paid to acquire fixed assets, intangible
assets and other long-term assets
7,118,379.86 5,040,050.62 15,510,929.99 3,704,299.27
Cash paid for investment 36,818,512.53 14,700,200.00
Net increase of pledged loans
Net cash paid to acquire subsidiaries and other
business units
Other cash paid relating to investment activities
Subtotal of cash outflows from investment
activities
7,118,379.86 5,040,050.62 52,329,442.52 18,404,499.27
Net cash flows from investment activities 7,968,746.92 9,813,445.26 -52,028,509.74 -18,370,051.83
III. Cash flows from financing activities:
Cash received from absorbing investment
Including: Cash received by subsidiaries from
investment of minority interest
Cash received from borrowings
Cash received from issuance of bonds
Other cash received relating to financing
activities
Subtotal of cash inflows from financing activities19
Cash paid to repay loans 5,000,000.00 5,000,000.00 151,000,000.00 40,000,000.00
Cash paid for interest expenses and distribution
of dividends or profit
82,608,627.58 82,608,627.58 4,769,859.41 619,975.00
Including: dividends or profit paid to minority
shareholders by subsidiaries
Other cash payments relating to financing
activities
Sub-total of cash outflows from financing activities 87,608,627.58 87,608,627.58 155,769,859.41 40,619,975.00
Net cash flows from financing activities -87,608,627.58 -87,608,627.58 -155,769,859.41 -40,619,975.00
IV. Effect of foreign exchange rate changes on
cash and cash equivalents
V. Net increase in cash and cash equivalents 82,399,396.44 46,858,567.80 -55,817,920.05 -56,348,741.23
Add : beginning balance of cash and cash
equivalents
361,051,750.67 279,382,070.44 278,780,676.68 160,876,265.53
VI. Closing balance of cash and cash equivalents 443,451,147.11 326,240,638.24 222,962,756.63 104,527,524.3020
Consolidated statement of changes in owners’ equity
Prepared by: ANHUI GUJING DISTILLERY COMPANY LIMITED For the first half of 2010 Unit: (RMB) Yuan
Items
Amount of current period Amount of last year
Owners’ equity attributable to parent company
Minorit
y
interest
s
Total
owners’
equity
Owners’ equity attributable to parent company
Minorit
y
interest
s
Total
owners’
equity
Paid-in
capital
(or
share
capital)
Capital
reserve
Less:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retained
profit
Others
Paid-in
capital
(or share
capital)
Capital
reserve
Less:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retained
profit
Others
I. Balance at the end of last year
235,000
,000.00
326,064,
758.92
69,977,
281.49
176,955,
910.52
807,997,
950.93
235,000,
000.00
532,491,
668.70
52,283,
759.34
60,135,32
7.85
3,128,4
37.15
883,039,19
Add: change of accounting
policy
Correction of errors in previous
periods
Others
58,631,9
46.58
-5,575,07
4.87
53,056,871.
II. Balance at the beginning of
this year
235,000
,000.00
326,064,
758.92
69,977,
281.49
176,955,
910.52
807,997,
950.93
235,000,
000.00
591,123,
615.28
52,283,
759.34
54,560,25
2.98
3,128,4
37.15
936,096,06
III. Increase/ decrease of amount
in this year (“-” means decrease)
25,136,9
90.04
25,136,9
90.04
-265,058
,856.36
17,693,
522.15
122,395,6
57.54
-3,128,
437.15
-128,098,1
(I) Net profit
107,386,
990.04
107,386,
990.04
140,089,1
79.69
-35,778
.53
140,053,40
(II) Other composite income
Subtotal of (I) and (II)
107,386,
990.04
107,386,
990.04
140,089,1
79.69
-35,778
.53
140,053,4021
(III) Capital input and
reduction of owners
1. Capital input of owners
2. Amount of stock payment
included in the owners’ equity
3. Others
(IV) Profit distribution
-82,250,
000.00
-82,250,
000.00
17,693,
522.15
-17,693,5
22.15
1. Withdrawing surplus
public reserve
17,693,
522.15
-17,693,5
22.15
2. Withdrawing general risk
reserve
3. Distribution to owners (or
shareholders)
4. Others
-82,250,
000.00
-82,250,
000.00
(V) Internal carrying forward
of owners’ equity
-265,058
,856.36
-3,092,
658.62
-268,151,5
1. New increase of capital
(or share capital) from capital
reserves
2. Converting surplus
reserves to capital (or share
capital)
3. Surplus reserves make up
losses22
4. Others
-265,058
,856.36
-3,092,
658.62
-268,151,5
(VI) Specific reserves
1. Appropriated in current
period
2. Used in current period
IV. Balance at the end of this
period
235,000
,000.00
326,064,
758.92
69,977,
281.49
202,092,
900.56
833,134,
940.97
235,000,
000.00
326,064,
758.92
69,977,
281.49
176,955,9
10.52
807,997,95
Statement of changes in owners’ equity of parent company
Prepared by: ANHUI GUJING DISTILLERY COMPANY LIMITED For the first half of 2010 Unit: (RMB) Yuan
Items
Amount of current period Amount of last year
Paid-in
capital (or
share capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
Paid-in capital
(or share
capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
I. Balance at the end of last
year
235,000,000.
00
288,184,0
10.28
64,938,13
9.66
159,241,6
99.35
747,363,
849.29
235,000,000.00
518,090,9
90.16
47,244,61
7.51
-3,995,88
0.78
796,339,7
26.89
Add: change of accounting
policy
Correction of errors in
previous periods
Others
II. Balance at the beginning
of this year
235,000,000.
00
288,184,0
10.28
64,938,13
9.66
159,241,6
99.35
747,363,
849.29
235,000,000.00
518,090,9
90.16
47,244,61
7.51
-3,995,88
0.78
796,339,7
26.89
III. Increase/ decrease of
amount in this year (“-”
-35,386,21
2.31
-35,386,
212.31
-229,906,
979.88
17,693,52
2.15
163,237,5
80.13
-48,975,8
77.6023
means decrease)
(I) Net profit
46,863,78
7.69
46,863,7
87.69
180,931,1
02.28
180,931,1
02.28
(II) Other composite
income
Subtotal of (I) and (II)
46,863,78
7.69
46,863,7
87.69
180,931,1
02.28
180,931,1
02.28
(III) Capital input and
reduction of owners
1. Capital input of
owners
2. Amount of stock
payment included in the
owners’ equity
3. Others
(IV) Profit distribution
-82,250,00
0.00
-82,250,
000.00
17,693,52
2.15
-17,693,5
22.15
1. Withdrawing surplus
public reserve
17,693,52
2.15
-17,693,5
22.15
2. Withdrawing general
risk reserve
3. Distribution to
owners (or shareholders)
-82,250,00
0.00
-82,250,
000.00
4. Others
(V) Internal carrying
forward of owners’ equity
-229,906,
979.88
-229,906,
979.8824
1. New increase of
capital (or share capital) from
capital reserves
2. Converting surplus
reserves to capital (or share
capital)
3. Surplus reserves
make up losses
4. Others
-229,906,
979.88
-229,906,
979.88
(VI) Specific reserves
1. Appropriated in
current period
2. Used in current
period
IV. Balance at the end of this
period
235,000,000.
00
288,184,0
10.28
64,938,13
9.66
123,855,4
87.04
711,977,
636.98
235,000,000.00
288,184,0
10.28
64,938,13
9.66
159,241,6
99.35
747,363,8
49.2925
II. Notes to the consolidated financial statement s
Anhui Gujing Distillery Company Limited
Notes to the Financial Statement
For the first half year ended 30 June 2010
（All amounts are expressed in RMB Yuan unless otherwise stated）
I . General
1. Company’s history
Anhui Gujing Distillery Company Limited(“the Company”) was registered in the People
Republic of China on 30 May 1996.
The company has been issued 60,000,000 domestic listed foreign shares (“B” shares) in June
1996 and 20,000,000 ordinary shares (“A shares) on September 1996, ordinary shares are listed in
national and par value is one yuan per share. Those A share and B share are listed in Shenzhen
Stock exchange.
On May 29, 2006, a shareholder meeting was held to discuss and approval a program of
equity division of A share, the program was implement in June 2006. After implementation, all
shares are outstanding share, which include 147,000,000 shares with restrict condition on disposal,
represent 62.55% of total equity, and 88,000,000 shares without restrict condition on disposal,
represent 37.45% of total equity.
The Company issued on June 27, 2007, 11,750,000 outstanding shares with restrict condition on
disposal are listed in stock market on June 29, 2007. Up to December 31, 2007, outstanding shares
with restrict condition on disposal are 135,250,000, representing 57.55% of total equity, the share
without restrict condition are 99,750,000, representing 42.45% of total equity.
The Company issued on July 17, 2008, 11,750,000 outstanding shares with restrict condition on
disposal are listed in stock market on July 18, 2008. Up to December 31, 2008, outstanding shares
with restrict condition on disposal are 123,500,000, representing 52.55% of total equity, the share
without restrict condition are 111,500,000, representing 47.45% of total equity.
The Company issued on July 24, 2009, 123,500,000 outstanding shares with restrict
condition on disposal are listed in stock market on 29 July, 2009. Up to December 31, 2009,
outstanding shares with restrict condition on disposal are 235,500,000.
Legal representative of the Company: Yu Lin
Registration address of the Company: Gujing Town, Bozhou City, Anhui Province
Parent company of the Company: Anhui Gujing Group Co., Ltd
2. The industry26
The Company belong to the food manufacturing industry.
3. Scope of business
The approved business of the Company including manufacture and sale of distilled spirits,
beer, red wine, fruit wine distilling facilities, packaging material, alcohol, bottles, feeds, carbon
dioxide, foods, grease, and research and development of high-tech, biotechnology development,
agricultural and sideline products deep processing.
4. Main Change
The company has no major changes during current reporting period.
II. Summary of significant accounting policies and estimates, and correction of
errors
1. Bases for preparation of the financial statements
The financial statements of the Company have been prepared on the going concern basis
with reference to the actual occurrence of transactions and events and in accordance with the
China Enterprise Accounting Standards (CAS) issued by the Ministry of Finance on 15th February
2006 and the significant accounting policies and estimates as set out in part four of this FS notes.
2. Declaration of Compliance with the Enterprise Accounting Standards
The financial statements of the Company have been prepared in accordance with the
Enterprise Accounting Standards to present truly and completely the financial position, result of
operation and cash flow and the relevant information of the Company.
3. Accounting year
The Company employs a period of calendar days from January 1 to December 31 each year
as accounting year.
4. Presentation currency
The Company’s presentation currency is Renminbi (“RMB”).
5. Accounting treatment of the business combination that is under the same control and not
under the same control.
(1) Accounting treatment of the business combination that is under the common control
Those assets and liabilities obtained by the Company during the business combination should be
recognized in the carrying value of the shareholder’s equity of the subsidiary on the merger date.
The difference between the carrying amount of the net assets obtained and carrying amount of the
merger consideration shall be adjusted to capital reserve. If the capital reserve is not sufficient to
absorb the difference, any excess shall be adjusted against retained earnings.
(2) Accounting treatment of the business combination that is not under the common
control
The consideration paid for the business combination exceeds the acquirer’s interest in the fair
value of the bargainor’s identifiable net assets, the difference shall be recognized as goodwill;27
Where the cost of combination is less than the acquirer’s interest in the fair value of the
bargainor ’s identifiable net assets, should be review the fair value of bargainor’s identifiable
assets、liabilities and contingency liabilities , as well as the computation of combination cost,
after reassessment, the difference shall be recognized in profit or loss to the current period.
6. Basis of Consolidated Financial Statement
(1) Consolidation Scope
The consolidated financial statements prepared are in accordance with the No. 33 Enterprise
Accounting Standards – Consolidated Financial Statement issued in February, 2006. The
consolidated financial statements incorporate the financial statements of the Company and
enterprises direct controlled or indirect controlled by the Company (“its subsidiaries ”). Control is
achieved where the Company has the power to govern the financial and operating policies of an
investee enterprise so as to obtain benefits from its operating activities.
If there is evidence provide that the invested company is not control by holding company,
the invested company would not in consolidation scope.
(2) Buy and sale the holding rights of subsidiaries
The effective purchase day and sales day recognized, should has transferred the material risk
and reward of ownership of share of subsidiaries. The consolidated income statement and
consolidated cash flow statement has included the results of operation and cash flow of
subsidiaries(not under the same control) before disposal or after acquired the share; for the
subsidiaries under the same control from business combination, the operation results and cash
flow has been included in the consolidated income statement and consolidated cash flow
statement from beginning of combination period to consolidation date and disclosed in statement
individual, the comparative amount in consolidation statement has been adjusted correspond to it.
If the Company acquires minority equity shares of subsidiaries, thus hold the long-term
equity investment, on the date of prepare consolidation statement, the difference between the
value of the new long-term equity investment and the value of subsidiary’s net assets enjoyed by
proportion of shareholdings(begin with acquired date or combination date), shall be adjusted to
capital reserve, if the capital reserve is not sufficient to absorb the difference, any excess shall be
adjusted against retained earnings.
(3) Adjusted the subsidiaries’financial statement, when the subsidiaries has different accounting
policy and reporting period.
If the subsidiaries has different accounting policy and reporting period with the parent
company, the consolidated financial statement prepared according to the parent company’s
accounting policy ,and adjusted the subsidiaries’ financial statement; For those subsidiaries
acquired not under the same control, according to the fair value of identifiable assets、liabilities
and contingency liabilities of the subusidiary on the acquisition date, to adjusted subsidiaries’28
financial statement.
(4) Consolidation method
All significant intercompany transaction and balances between group enterprises are eliminated on
consolidation.
The minority interest would disclosed in consolidation statement alone. Decrease minority
interest if the minority shareholders should afford to the loss of the subsidiaries that allocate to
minorities, otherwise, the Company would bear the loss of exceed.
7. Standard of cash and cash equivalents
Cash equivalents are short-term (normally with a maturity date within three months from the
date of acquisition), highly liquid investments that are readily convertible to known amounts of
cash and and low-risk of changes in value.
8. Foreign currency transactions
The Company’s foreign currency transactions are convered into presentation currency(RMB)
at spot exchange rates prevailing on the day in which the transactions take place.
On the balance sheet date, those foreign currency monetary items within the financial
statement should be convered at the spot rates prevailing on the balance sheet date. The exchange
difference caused by the change in the exchange rate from the initial recognized date and the
current balance sheet date, included in profit and loss for the year. With historical cost
measurement of foreign currency non-monetary items, the transaction is convered at the spot
exchange rate of transaction day, without changing its presentation currency amount. In the fair
value measurement of foreign currency non-monetary items, convered at the spot exchange rate at
that day when the fair value can be determined, the difference between amount after converted
into presentation currency and the original presentation currency amount, as the changes in the fair
value, recognized in the current profits and losses.
9. Financial Instruments
(1) Classification of financial assets and financial liabilities
The Company in accordance with the investment purpose and economic substance of the
ownership of financial assets are divided into four category, which is fair value through profit or
loss; Held-to-maturity investments; Loans and receivables; Available-for-sale financial assets.
According to the economic substance those financial liabilities are divided into fair value
through profit or loss and others.
① Financial assets or financial liabilities at fair value through profit or loss: including held
for trading financial assets or financial liabilities and designated by the Company as at
fair value through profit or loss.
A financial asset or financial liability is classified as held for trading if it is :29
a. Acquired or incurred principally for the purpose of selling or repurchasing it in the near
term; or
b. Part of a portfolio of identified financial instruments that are managed together and for
which there is evidence of a recent actual pattern of short-term profit-taking; or
c. A derivative (except for a derivative that is a designated and effective hedging instrument,
a derivative of financial guarantee contract, a derivative that settle by equity instrument, which the
price of instrument could not be quoted in active market and the fair value could not measure
reasonably).
A financial asset or financial liability is classified as designated fair value through profit or
loss if it is :
a. The designation can be eliminated or significantly reduced the inconsistent situation or
relate profit and loss cause by different measurement basis of financial assets and financial
liabilities;
b. Company risk management or investment strategy has been enshrined in a formal written
document that the financial assets portfolio, the financial liabilities portfolio, or the financial
assets and financial liabilities portfolio are management in fair value-based and evaluation
and report to key management person.
② Held-to-maturity investments: are non-derivative financial assets with fixed or
determinable payments and fixed maturity that company has the positive intention and
ability to hold to maturity. Mainly include the Company's management has a clear
intention and ability to hold to maturity of fixed-rate national bonds, floating-rate
corporate bonds.
3 Receivables : are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Receivables of the Company mainly refer to the
Company's sales of goods or rendering of services to form the accounts receivable and
other receivables.
4 Available-for-sale financial assets: are those non-derivative financial assets that are
designated as available for sale at initial recognized, or those financial assets are not
measured in fair value based and through to profit and loss, or loans and receivables, or
held-to-maturity investments.
5 Other financial liabilities: financial liabilities not divided into measurement in fair value
base and through into profit and loss account.
(4) Measurement of financial assets and financial liabilities
The Company’s financial asset or financial liability is recognized at its fair value initially. For30
financial assets or financial liabilities at fair value through profit or loss, relevant transaction costs
that are directly attributable to current profit and loss; for other types of financial assets or
financial liabilities, transaction costs related to the amount included in the initial confirmation
cost.
Subsequent measurement of financial assets and financial liabilities:
① Financial assets or financial liabilities at fair value through profit or loss measured at its
fair value, at balance sheet date, the changed difference of fair value are accounted for profit
and loss in current period.
② Held-to-maturity investments, which shall be measured at amortized cost using the
effective interest method, the profit or loss of termination confirmation, impairment or
amortization included in the profit and loss account.
③Receivables, which shall be measured at amortized cost using the effective interest method,
the profit or loss from termination confirmation, impairment or amortization included in the
profit and loss account.
④ Available-for-sale financial assets, are measured with fair value, any changes of fair value
of available-for-sale financial assets at the end of period are accounted for capital reserve
(other capital reserve). Disposal of available-for-sale financial assets, the difference between
consideration received and carrying value of the financial assets included into investment
profit or loss account; at the same time, turn out the original cumulative amount of fair value
change of corresponding part within the equity, included into investment profit or loss account.
The impairment losses and Exchange differences of foreign monetary financial assets
including into current profit and loss. Interest received and cash dividends received during the
hold period are recognized as investment income.
⑤ Other financial liabilities, together with the equity instrument that price not be quoted in
active market and the fair value could not measure reasonably measured, as well as the
subsequent measurement should according to the cost of derivative financial liabilities.
The financial guarantee contract is not belong to financial liabilities designated by the
Company as at fair value through profit or loss, as well as the loan commitment is not belong
to financial liabilities designated by the Company as at fair value through profit or loss and
belower than market rate, After initial recognition, measured higher of：(a)Amount confirmed
by < Enterprise Accounting Standard 13-- Provisions, Contingent Liabilities and Contingent
Assets>；(b)Balance of initial recognition amount minus the accumulated amortization refer to
.31
Other financial liabilities adopt the effective interest method, subsequent measured by
amortization cost, recognized the profits and losses by termination confirmation or
amortization to current profit and loss account.
⑥ Fair value：It’s the amount for which an asset could be exchanged or a liability settled,
between knowledgeable, willing parties in an arm’s length transaction. In a fair deal, the
transaction should the two sides are continuing operations enterprises, do not intend to carry
out the liquidation or a major reduction in scale of operation, or under adverse conditions is
still trading. The existence of an active market of financial assets or financial liabilities, the
quotation within the active market should be used to determine its fair value. If there is no
active market, company should adopt valuation techniques to determine the fair value.
⑦ The amortized cost of a financial asset or financial liability： it ’s the amount at which the
financial asset or financial liability is measured at initial recognition minus principal
repayments, plus or minus the cumulative amortization using the effective interest method of
any difference between that initial recognized amount and the maturity date amount, and
minus any reduction for impairment or unrecoverable
⑧ The effective interest method: It’s a method of using effective interest calculating the
amortized cost of a financial asset or a financial liability (or group of financial assets or
financial liabilities) and of allocating the interest income or interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash flows
through the expected life of the financial instrument or, when appropriate, a shorter period to
the net carrying amount of the financial asset or financial liability. Then calculating the
effective interest rate, company shall estimate cash flows considering all contractual terms of
the financial instrument (for example, prepayment, call and similar options) but shall not
consider future credit losses.
(5) Transfers and derecognize of financial assets
① Derecognize financial asset if, and only if, meets one of the following three conditions:
a. Terminate the contractual rights of cash flows from the financial asset;
b. The financial assets have been transferred, and the ownership of the risks and rewards of
financial assets transfered to other party;
c. The financial assets have been transferred, but the Company neither transfered the
ownership of the risks and rewards of financial assets, nor retained , and gives up control
of the financial assets.
② When termination conditions of entire transferred assets has been satisfied, the differences
between the amounts of following items shall be recognised in the current period profits and32
losses account:
a. The carrying value of transferred financial assets;
b. The consideration received from the transfer, and the accumulative amount of the changes
of the fair value originally recorded in the shareholders’ equities.
③ If the transfer of partial financial assets satisfies the conditions of derecognize, the entire book
value of the transferred financial asset shall apportion, between the portion whose derecognize
and the recognized portion (under such circumstance, the service asset retained shall be deemed
as a portion of financial asset whose derecognize), be apportioned according to their respective
relative fair value, and the difference between the amounts of the following two items shall be
accounted for the profits and losses of the current period .
a. The portion of carrying value derecognized;
b. The consideration received from the transfer, and the accumulative amount of the changes
of the fair value originally recorded in the shareholders’ equities.
④ If the Company fails to satisfy the conditions of derecognize for transferred financial assets, it
shall continue to recognize the entire financial assets to be transferred and shall recognize the
consideration it receives as a financial liability. For those financial assets transfer adopt
continuing involvement method, the Company should recognize one financial asset and one
financial liability, according to the extent of the transferred financial assets of continuing
involvement.
(6) Impairment of financial assets
① If the Company have the following evidence to prove the impairment of financial assets,
should recognize the provision of impairment:
a. significant financial difficulty of the issuer or obligor;
b. a breach of contract, such as a default or delinquency in interest or principal payments;
c. the lender, for economic or legal reasons relating to the borrower’s financial difficulty,
granting to the borrower a concession that the lender would not otherwise consider;
d. it becoming probable that the borrower will enter bankruptcy or other financial
reorganisation;
e. the disappearance of an active market for that financial asset because of financial
difficulties;
f. observable data indicating that there is a measurable decrease in the estimated future cash
flows from a 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;33
g. adverse changes in the payment status of borrowers in the group, let the lender may cannot
recover the investment cost;
h. the fair value of financial instrument investment incur serious or non-temporary
decline;
i. other objective evidence that prove impairment of financial assets.
② On balance sheet date, the Company should adopt different impairment test method for
different category financial assets, and recognize provision for impairment:
a. Held-to-maturity investments：on the balance sheet date, if there are objective evidence of
impairment for the investment, the Company has recognized the impairment loss by the asset’
s carrying amount and the present value of estimated future cash flows.
b. Available-for-sale financial assets： on the balance sheet date, the Company analyse the
impairment evidences of the financial assets, experienced judgement whether continuing decline
in the fair value. Generally, if the fair value of financial assets incurred serious decline, after
consideration of all relevant factors, anticipate this is non-temporary, therefore can identified the
available-for-sale financial assets has impaired, should recognize the impairment loss. When a
decline in the fair value of an available-for-sale financial asset has been recognised directly in
equity and there is objective evidence that the asset is impaired, the cumulative loss that had been
recognised directly in equity shall be removed from equity and recognised in impairment loss
account of income statement.
10. Accounts receivable
At the end of the period, those balance of accounts receivable and other accounts receivable
with amount more than 2,000,000 yuan is considered as individual significant amounts, One by
one to carry out impairment test, if there is objective evidence that the accounts receivable have
been impaired, the impairment loss shall be recognized based on the difference of the book
values higher than the present value of future cash flows.
At the end of the period, for those individual accounts receivable with non- significant
amounts, if there is objective evidence that the accounts receivable have been impaired, recognize
impairment loss alone.。
For other individual the amount of non-significant receivables, classification primarily on
the basis of account age, and those accounts receivable’s account age more than three year will
be classified as non-significant in amount but in accordance with the characteristics of credit risk
portfolio, the risk of the portfolio is high, others classified as other non-significant receivables.
For those account receivables classified as non-significant in amount but in accordance with the
characteristics of credit risk portfolio, the risk of the portfolio is high, as well as other individual
non-significant receivable accounts that not impaired after impairment test, these account
receivables will carry out age analysis by the company and consider the debtor’s actual business
situation and cash flow to determine the recoverable amount of receivables, a reasonable estimate34
of bad debts.
The Company determine the following percentage of bad debt provision based on the actual
loss rate of receivable accounts, with same or similar credit risk characteristics of accounts
receivable package in previous year, also considered current situations:
Age Percentage %
Within 6 months 1
6 months to 1 year 5
1-2 years 10
2-3 years 50
Above 3 years 100
11. Inventory
(1) Category of inventory:
Inventory of the Company refers to enterprises in the day-to-day activities of the holder for
the sale of finished goods or merchandise, product that in the production process, and materials
consumed in the production process or provision of services. Including: raw materials, wrappage,
self-made semi-manufactured goods , work-in-process, finished goods, etc.
(2) Valuation methods of inventories input and output:
The issue of inventories is calculated by the weighted average method. The Company's inventories
costs adopt planned cost in the day-to-day accounting, carry down the cost differences at the end
of period, and adjust planned cost to actual cost.
（3）Estimates of net realizable value and method of impairment loss for inventories:
① Estimates of net realizable value:
Those finished goods、commodities and materials used for directly sale, the net realizable value is
referred to the estimated selling price minus the estimated selling expenses and related tax and
fees in normal operating process. Those stocks need to process, the net realizable value is referred
to the estimated selling price minus the estimated finished cost and estimated selling expenses and
related tax and fees in normal operating process. The net realizable value of the quantity of
inventory held to satisfy firm sales or service contracts is based on the contract price. If the sales
contracts are for less than the inventory quantities held, the net realizable value of the excess is
based on general selling prices.
②Impairment loss of inventories:
At the balance sheet date, the evaluation criteria should base on the lower value between costs and35
net realizable value. When net realizable values are lower than costs, provision for impairment
loss of inventories shall be made. Under normal circumstances, the Company provision
impairment loss in according to individual inventory items, but for large quantity and
low-unit-price inventories, provision for impairment loss of inventories shall be made based on
the category of inventories; for those inventories that relating to the same product line that have
similar purposes or end uses, are produced and marketed in the same geographical area, and
cannot be practicably evaluated separately from other items in that product line, their impairment
loss provision shall be consolidated.
When the circumstances that previously caused inventories to be written off below cost no longer
exist or when there is clear evidence of an increase in net realizable value because of changed
economic circumstances, the amount of the write-off is reversed (i.e. the reversal is limited to the
amount of the original write-off) so that the new carrying amount is the lower of the cost and the
revised net realizable value. The amount reversed recording into current profit and loss.
（4）Inventories stock physical count system:
The Company adopts the perpetual stocktaking system.
（5）Low-value consumable products and wrappage amortization method:
The low–value consumable supplies and wrappage are amortized at once.
12. Long-term equity investment
Long-term equity investment including the equity investments held by the Company, who
can able to exercise control, joint control or significant influence to the invested entity, or the
Company do not have control, joint control or significant influence on the invested entity, and
there is no active market quotation, the fair value measurement should not reliable.
（1）Initial measurement
The Company separates the following two cases of long-term equity investment in the initial
measurement:
① Long-term equity investment obtained through business combinations:
a. For obtaining subsidiary under common control, the consideration cost can be cash
payment, non-monetary assets transfer or taking over the subsidiary’s liability. Under this
situation, the initial investment cost is carrying amount of shareholder ’s equity of the subsidiary
on the merger date. The difference between the carrying amount of the net assets obtained and
initial investment cost of long-term equity investment shall be adjusted to capital reserve. If the
capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against36
retained earnings. In the case of company issues equity securities as the consideration, the initial
investment cost is carrying amount of shareholder’s equity of the subsidiary on the merger date. If
the book value amount of the issued shares is deemed as the capital, the difference between the
carrying amount of the issued shares and initial investment cost of long-term equity investment
shall be adjusted to capital reserve. If the capital reserve is not sufficient to absorb the difference,
any excess shall be adjusted against retained earnings All direct expenses related to the merger,
including the auditor fee, evaluation expense, legal service expense, etc will be
accrued to the current profit and loss.
b. For obtaining subsidiary not under common control, the cost of long-term equity investment is
fair value of assets paid, liabilities undertaken by the Company, or the fair value of equity bonds
issued. Where the cost of a business combination exceeds the acquirer’s interest in the fair value
of the bargainor ’s identifiable net assets, the difference shall be recognized as goodwill, Where
the cost of combination is less than the acquirer’s interest in the fair value of the bargainor ’s
identifiable net assets, after reassessment, the difference shall be recognized in profit or loss for
the current period (non-operating income). The costs directly related to business combinations
shall be included in the cost of business combinations (except issuing expenses of bonds and
equity instruments).
② Other long-term equity investment, accordance with the following principles to determine their
initial investment costs:
a. Long-term equity investment, which is acquired by cash consideration, the actual cash payment
amount will be deemed as the initial investment cost. The initial investment cost includes the
direct expenses related to the long-term equity investment, taxes and other necessary expenses.
But if the actual payment contains cash dividend that has not been received but has been
announced, that should be accounted as receivable items separately.
b. Long-term equity investment, which is acquired by issuing equity securities, the fair value of
the issued equity will be deemed as the initial investment cost.
c. For the long-term equity investment made by the investors, the values agreed in the investment
contracts or agreements will be deemed as the initial investment cost, except that the contracts or
agreements provide that the values are not fair.
d. Long-term equity investment is acquired by exchange of non-monetary assets, if this
transaction has commercial substance or the fair values of exchange assets can be reliably
measured, the fair values of these assets and relevant taxes will be deemed as the initial
investment cost; the difference between the fair values of the assets and book values will be
record into the current profit and loss; if the non-currency asset exchange does not satisfy these
two conditions mention above, the book values of the assets and relevant taxes will be deemed37
as the initial investment cost.
e. Long-term equity investment, which is acquired by the debt restructuring, the fair values of the
obtained equities will be deemed as the initial investment cost; the difference between the initial
investment cost and book values of credit will be record into the current profit and loss.
(2) Subsequent measurement and recognition of gains or losses
The cost method is employed to calculate the long-term equity investment of subsidiaries and
will be adjusted in accordance with the equity method in the preparation of the consolidated
financial statements.
The Company uses cost method for the following conditions: a long-term equity investment
where the investing enterprise does not have joint control or significant influence over the investee,
the investment is not quoted in an active market and its fair value can’t be reliably measured.
The Company uses equity method for the following conditions: a long-term equity investment
where the investing enterprise have joint control or significant influence over the investee.
a. When using cost method, increase or recovery of investment need to adjust the cost of long term
equity investment. Cash dividends or profit distributions declared by the investee shall be
recognized as investment income in the current period. However, investment income recognized
by the investing enterprise shall be limited to the amount distributed to it out of accumulated net
profits of the investee arising after the investment was made. Any cash dividends or distributions
received in excess of this amount shall be treated as a recovery of initial investment cost.
b. When using equity method, after the investing enterprise has acquired a long-term equity
investment, it shall recognize its share of net profits or losses made by the investee as investment
income or losses, and adjust the carrying amount of the investment accordingly.
The Company shall recognize current period investment profits or losses following its share of the
net profits or losses made by the investee. Base on the investee’s book value of net profit, if the
investee used inconsistent accounting policies with the Company, the Company shall adjust the net
profits by the balances of the depreciation or amortization of the investee’s fixed assets and
intangible assets measured by fair value on the investment acquired date, as well as adjust the net
profits by the balance of the impairment losses of investee’s assets measured by fair value on the
investment acquired date. Set off the internal transaction profit and loss between the Company and
the joint enterprises or the jointly-run enterprises, and then recognize the investment profit or loss
on this basis. The internal transaction profit and loss between the Company and the joint
enterprises or the jointly-run enterprises, refer to the < Enterprise Accounting Standard38
8--Impairment of assets>, belong to asset impairment loss is recognized in full.
If an investor’s share of losses of an associate equals or exceeds its interest in the associate, the
investor discontinues recognizing its share of further losses, after the investor’s interest is reduced
to zero, additional losses are provided for, and a liability is recognized, only to the extent that the
investor has incurred legal or constructive obligations or made payments on behalf of the associate;
If the associate subsequently reports profits, the investor resumes recognizing its share of those
profits only after its share of the profits equals the share of losses not recognized, recover
investment interests, and in the book value of the long-term equity investment successively.
Those long term equity for affiliated company and joint company, hold before first executive date,
if ther is relevant investment debit difference, according to residual time to amortize in straight
line method, the amortization amount recognized in current profit and loss account.
（3）Scope of joint control and significant influence for investee
1 The existence of jointly control by an investor is usually evidenced in one or more of the
following ways: a. any venturer cannot control the jointly controlled company’s operation alone; b.
the strategy decision of the jointly controlled company, should be agreed by each venture parties; c.
the venturers may appoint one of them to manange the jointly controlled company, through control
or agreement, but the management must follow all venturers ‘s financial and operation strategies.
When the jointly controlled company during legal reconstruction or bankrupt, or the transfer funds
to investors strictly restricted in long time, the venturers cannot exercise joint control to the
investee. However, if the joint control is really exsit can be certified, the venturers still adopt
equity method of long term equity investment principle to account.
2 The existence of significant influence by an investor is usually evidenced in one or more of
the following ways: a. representation on the board of directors or equivalent governing body of the
investee; b. participation in policy-making processes, including participation in decisions about
dividends or other distributions; c. material transactions between the investor and the investee; d.
dispatch of managerial personnel; or e. provision of essential technical information.
（ 4 ） Method of impairment test of long term equity investment and provision for
impairment
On the balance sheet date, the Company shall assess the long term equity investment one by
one ,according to the investee’s operation strategy、legal environment、market demand、industry
and profitability etc, to decide whether there are impairment indicators. The long term equity
investment is impaired when its carrying amount exceeds its recoverable amount, the differences
should be recognized as provision for impairment. If the impairment loss has recognized, never
carry back in future accounting periods.39
13. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment
property includes leased or ready to transfer after capital appreciation land use rights and leased
buildings.
(1) The Company’s all investment properties are subsequent measured by cost model, according
to its expected useful life and net residual rate on buildings and land-use right to calculate
depreciation or amortization. The Company’s expected useful life, net residual rate and annual
depreciation rate of investment property as follow:
Categories
Expected residual rate
(%)
Expected useful life
Annual depreciation
(amortization) rate (%)
Buildings、structures 3-5 8-35 years 2.7-12.1
Land use rights 0 50 years 2
（2）Basis of impairment of property investment is measured by cost model:
At the balance sheet date, the evaluation criteria should base on the lower value between costs
and net realizable value. When net realizable values are lower than costs, provision for impairment
loss of property investment shall be made. If the value of the impaired investment property
recovered, the provided impairment loss in prior period cannot be carry back.
14 . Recognition and measurement of fixed assets
（1）Recognition of fixed assets:
Fixed assets are tangible assets, held for use in production or supply of goods or services, for
rental to others, or for administrative purpose, and have high unit price, as well as useful lives
more than one accounting year. Fixed assets shall be recognized by actual costs incurred, if they
meet the following conditions:
① The economic benefits related to fixed asset probably flows to the enterprise;
② The cost of fixed asset may be reliably measured.
The expenses relate meet above condition to fixed asset would be capitalized in the cost of
asset, if not, it would be recognized as expense in profit and loss account of that period.
（2）The depreciation method of fixed assets
Straight-line method is in used to calculate the depreciation of fixed assets.
The estimated useful lives, expected residual value and annual depreciation rate of different40
kinds of fixed assets are listed as follows:
Categories Estimated residual value
rate (%)
Estimated useful li fe Estimated annual
depreciation rate (%)
Buildings and structures 3-5 8-35 years 2.7-12.1
Machineries and
equipments
3-5 8-10 years 9.7-12.1
Vehicles 3 8 years 12.1
Office equipments and
others
3 8 years 12.1
（3）Method of impairment test and provision for impairment loss of fixed assets:
At the balance sheet date, the Company assess all types of fixed assets whether there is any
indication that an asset may be impaired, if any such indication exists, the entity shall estimate the
recoverable amount of the asset, reducing the carrying value to the estimated recoverable amount,
the difference recognized into the current profit and loss account, simultaneous recognize the
provision for impairment. Once the impairment loss has recognized, never carry back in future
acoounting period.
In assessing whether there is any indication that an asset may be impaired, an entity shall
consider, as a minimum, the following indications:
① during the period, an asset’s market value has declined significantly more than would be
expected as a result of the passage of time or normal use;
② significant changes with an adverse effect on the entity have taken place during the period, or
will take place in the near future, in the technological, market, economic or legal environment in
which the entity operates or in the market to which an asset is dedicated;
③ market interest rates or other market rates of return on investments have increased during the
period, and those increases are likely to affect the discount rate used in calculating an asset’s value
in use and decrease the asset’s recoverable amount materially;
④ evidence is available of obsolescence or physical damage of an asset;
⑤ significant changes with an adverse effect on the entity have taken place during the period,
These changes include the asset becoming idle, plans to discontinue or restructure the operation to
which an asset belongs, plans to dispose of an asset before the previously expected date;
⑥ evidence is available from internal reporting that indicates that the economic performance of
an asset is, or will be, worse than expected. For example: the net cash inflow or realized operating
profits( or losses) made by the assets has declined significantly more than would be expected.41
⑦ Other indications that an asset may be impaired.
15. Recognition and measurement of construction in progress
（1）Category of construction in progress
The category of construction in progress classified by the approved project.
（2）The standard and time point of the construction in progress transfer to fixed aeeets
Construction in progress is transferred to fixed assets when the project is substantially ready for its
intended use. The project is in condition of ready for used but not transact in the final account
would be transferred to fixed assets in its estimate value, and adjust the value after transact in the
final account, but would not adjust depreciated value that have been depreciated.
（3）Method of impairment test and provision for impairment loss of construction in progress:
On the balance sheet date, the Company shall assess the overall construction in progress, If there
is evidence provide that the value of project are declined, the entity shall estimate the recoverable
amount of the asset, reducing the carrying value to the estimated recoverable amount, the
difference recognized into the current profit and loss account, simultaneous recognize the
provision for impairment. Once the impairment loss has recognized, never carry back in future
accounting period. Exercise impairment test for construction in progress, if meet the one or more
the following conditions:
① suspend the project in a long time, and according to the estimate, not restart the construction
within the next 3years;
② evidence is available of obsolescence in either function or technical, and bring great
uncertainty for the cash inflows to the Company;
③ other indications that project may be impaired
16. Borrowing costs
（1）Recognition of capitalization of borrowing costs and capitalization period:
Borrowing costs that are direct attributable to construction, purchase and production of assets and
comply with capitalization conditions, shall be capitalized and accounted to costs of relate assets;
otherwise, borrowing costs shall be recognized as expenses when incurred and accounted through
in profit and loss in current period.
The capitalization of borrowing costs shall satisfy the following conditions:
① The capital expenditures have been incurred.
② The borrowing costs have been incurred.
③ Activities relating to acquisition, construction or production that are necessary to make
the assets being intended for use or sales have been launched.42
Other borrowing costs、discount or premium and difference of foreign exchange, should be
recognized in the current profit and loss account.
Capitalization of borrowing costs shall be suspended during periods in which acquisition,
construction or production of assets is interrupted abnormally, and is interrupted for over
continuous period of three months.
Capitalisation of borrowing costs should cease when substantially all the activities necessary
to prepare the qualifying asset for its intended use or sale are complete. Borrowing costs should be
recognised as an expense in the subsequent period.
（2）Measurement of capitalized borrowing costs
For a specific purpose borrowing, the amount of interest to be capitalized shall be the actual
interest expenses incurred for the period less deposit interests of the borrowing founds or
investment income from the temporary investment.
Where funds are borrowed under general purpose, the entity shall determine the amount of
interest to be capitalized by applying capitalization rate to weighted average of the excess amount
between cumulative expenditures on the asset and the amount of specific-purpose borrowings. The
capitalization rate shall be weighted average of the interest rates applicable to the general-purpose
borrowings.
17. Recognition and measurement of intangible assets
（1）Measurement of intangible asset
Intangible asset are recognize initially at cost.
（2）Estimate of useful life and impairment of intangible assets
Period of intangible asset that could bring future economic benefit inflow to company could
determined reasonably according to the judgment according to reason of contract right or other
legal right, condition in same industry, history experience, and demonstrate of expert would be
recognize as finite useful life assets. Otherwise, the asset would be recognize as infinite useful life
assets.
① To estimate the life of finite useful years asset would consider factor of: a. The life cycle
of the product produced by the assets, and the information of similar asset; b. The development of
craftwork and technology, and the estimate of future development trend; c. The demand condition
in market of the product produced by the asset; d. The estimated action would be taken by
competitor or potential competitor; e. The expense expected to maintain the assets to bring future
economic benefits and the ability of the Company to pay for it; f. The relevant law restriction on
control period of the asset or other similar restriction such as franchise, lease period; g. Relation43
with other assets’ useful life, that hold by the Company.
② The intangible asset with finite useful years should be amortization on a systematic and
rational basic according its economic benefit achievement plan. A straight line method would be
used if the plan could not define.
（3）Method of impairment test and provision for impairment of infinite useful years asset
① Intangible asset with infinite useful years would not amortize, but would conduct
impairment test every year. the useful life of such an asset should be reviewed each reporting
period to determine whether events and circumstances continue to support an indefinite useful life
assessment for that asset., if still under uncertainty situation after the revaluation, shall conduct
impairment test. When the net recoverable amount lower than the carrying value, reducing the
carrying value to the estimated recoverable amount, the difference recognized into the current
profit and loss account, simultaneous recognize the provision for impairment. Once the
impairment loss has recognized, never carry back in future accounting period..
Exercise impairment test for intangible assets, if meet the one or more the following conditions:
A. significant changes with an adverse effect on the profitability of intangible assets have
taken place during the period, These changes include the intangible replaced by other new
technique;
B. the market value has declined in current period, and may not rise in the future residual
period;
C. other indication to prove that the carrying value higher than the recoverable value.
（4）The rules of divide the research stage and the development stage of internal research and
development project:
Internal organizational research expenses are accounted through profit and loss in current period;
development costs which are recognized as intangible assets shall satisfy the following conditions:
① it is technical feasible for use or sales upon the completion of the intangible assets; ② it is
intended for use or sales upon the completion of the intangible assets; ③ the manner to provide
that expect future economic benefits that are attributable to the intangible assets including a
market is exist for the asset or product of the asset or provide evidence of serviceable if asset are
inside used; ④ the entity should have enough technology, financial and other resources to
support the completion of development, and have ability to use or sale the intangible assets; ⑤
the cost of intangible asset can be measured reliably.
18. Amortisation of long-term deferred expenses
The Long-term deferred expenses are defined as those expenses in this year but should be
allocated in following few years (more than one year). The amount transfer to the account are44
the amount actual paid, and allocate equally in beneficial period.
19. Accrued liabilities
（1）Recognition of accrued liabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute,
guarantee on quality of product, cut-down plan, loss of contract, recombine obligation, obligation
on abandon fixed asset, and meet the follow condition simultaneously would determined as
liabilities:
①This obligation is current obligation of the Company; and,
②The performance of this obligation will probably cause economic benefits outflow of the
Company; and,
③The amount of this obligation can be reliably measured.
Loss contracts and restructuring obligations of the Company meet the above conditions shall be
recognized as accrued liabilities.
（2）Measurement of accrued liabilities
Accrued liabilities would be measured initial according to the optimum evaluation of outflow of
economic benefit, and the Company perform relate obligation that consider risk, incertitude, time
value of currency of contingency factor. Discount future cash flow to present value to determine
the optimum evaluation if the time value of currency has great impact. On balance sheet date,
check the carry amount of accrued liabilities, and make adjustment to carry amount to reflect the
optimum evaluation. The increase amount in carry amount of accrued liabilities cause by time
process would be determined as interest fee.
（3）Optimum evaluation of accrued liabilities
If the necessary payments have scopes, the optimum evaluation shall be determined based on the
average amount between the upper and lower limit amount of scope ; if the necessary payments do
not have such scopes, then the optimum evaluation shall be determined in the following method:
①If the contingent event is involved in an individual project, the optimum evaluation amount will
be determined base on the most possible amount;
②If the contingent event is involved more than one project, the optimum evaluation amount shall
be determined base on possible amount and occurrence probability. In case of all or part of
payments about the confirmed liquidation liabilities are expected to be compensated by the third
parties or other parties, and the compensation amounts are surely received, then such amounts45
shall be separately recognized as assets. The confirmed compensation amounts shall not exceed
book values of confirmed liabilities.
20. Shares-based payment and equity instrument
（1）Category of share-based payment
The types of shares-based payment of the Company are: cash-settle and equity-settle.
①Cash-settled share-based payment
The measurement of cash-settle is according with the fair value of liability undertake by the
Company, which is calculated base on the Company’s share or other equity instrument.
The value of cash-settle share-based payment that could exercise immediately after award would
be reckoned to relate cost or expense, and increase liability corresponds to it.
At each balance sheet date, a best estimated of situation of exercise cash-settled right that with
waiting-period should be undertaken, and reckon cost or expense and increase liability which is on
the base of service award by the Company, according to the fair value of company’s liability.
②Equity-settled share-based payment
The measurement is base on the fair value of the equity instrument granted to employees.
The value of equity-settled payment that could be exercised immediately after award would be
reckoned in relates cost and expense and increase capital reserves corresponds to it..
On each balance sheet date, a best estimated of amount of exercise equity-settled that with
waiting-period should be undertaken, and reckon in cost or expense and capital reserves which is
on the base of service award by the Company, according to the fair value of company’s liability.
（2）Determining the fair value of equity instruments granted
① For those shares granted to employees shall measure the fair value of equity instruments
granted at the measurement date, based on market prices if available, simultaneously, taking into
account the terms and conditions ( exclude the vesting conditions of external market) upon
which those equity instruments were granted.
1 For those share options granted to employees, the market prices are not available in most
circumstance. If there is no clauses and requirements of others similar trading options, the
Company shall estimate the fair value of the share option granted using a valuation technique.
（3） Base of the best estimate of vesting equity instrument’s recognization:
On each balance sheet date of waiting-period, the Company shall recognise an amount for the
equity instrument during the vesting period based on the best available estimate of the number of46
equity instruments expected to vest and shall revise that estimate, if necessary, if subsequent
information indicates that the number of equity instruments expected to vest differs from previous
estimates.
（4）Accounting treatment of share-based payment plan:
① For cash-settled share-based payment transactions granted vest immediately, reckon cost or
expense according to the fair value of the Company’s liability on the measurement date, increase
liability corresponds to it. At each reporting date and at the date of final settlement, with any
change in intrinsic value recognised in profit or loss.
② If the equity instruments granted do not vest until completes a specified period of service or
can be satisfied pre requirement, on each balance sheet date of waiting-period, the Company shall
recognise an amount for the equity instrument during the vesting period based on the best
available estimate of the number of equity instruments, according to the fair value of the
Company’s liability, recognize the received services as cost or expense, and increase liability
corresponds to it.
③ The value of equity-settled payment that could be exercised immediately after award would be
reckoned in relates cost and expense and increase capital reserves corresponds to it..
④ If the equity instruments granted do not vest until completes a specified period of service or
can be satisfied pre requirement, on each balance sheet date of waiting-period, the Company shall
recognise an amount for the equity instrument during the vesting period based on the best
available estimate of the number of equity instruments, according to the fair value on the
measurement date,, recognize the received services as cost or expense, and increase capital reserve
corresponds to it.
21. Recognition of revenue
Recognition and measurement of revenue:
(1) Sale of goods
Revenue from the sale of goods shall be recognized when all of the following conditions are
satisfied:
① the entity has transferred the significant risks and reward ownership of goods to the
buyer;
② the entity retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over goods sold;
③the amount of revenue can be measured reliably;
④relate economic benefit is probably inflow to the enterprise;
⑤the associated costs incurred or to be incurred can be measured reliably.47
（2）Rendering of services
① The entity recognize revenue from rendering of service when come out of rendering of
service can be measured reliably at balance sheet date, and adopt percentage of completion
method in recognition of revenue. The method depends on schedule of complete to
determined revenue and expense.
the outcome of service can be estimated reliably when all the following conditions are
satisfied:
a. the amount of revenue can be measured reliably;
b. relate economic benefit is probably inflow to the enterprise;
c. the complete of schedule could be determined reliably;
d. the associated costs incurred or to be incurred can be measured reliably.
② When the outcome of rendering of service cannot be measured reliably at balance sheet
date:
a. revenue shall be recognized to the extent of costs incurred that are expected to be
recoverable if compensation are predict to be award;
b. to those cost that without compensation in predict, through to profit and loss account
without recognize revenue.
（3）Transfer of asset use right
The revenue of transfer of asset use right including : interest income、user charges etc, recognized
when all the following conditions are satisfied:
①the economic benefits related to the transaction are probably will flow into enterprise;
②the amounts can be reliably measured.
Interest income, compute base on the funds used time by other peoples and the actual interest
rate.
User charges, compute base on the chargeable time and method arranged in the contract or
agreement.
22. Government grants
(1) Recognition of government grants:
①comply with the conditions attached to the grant;
② the Company can receive the grant.
(2) Category and accounting treatment of government grants:
① A government grant related to an asset shall be recognized as deferred income, when the assets48
is substantially ready for its intended use, evenly amortized to profit and loss over the useful lives
of the related asset. Unamortized amount would be one-off recognized in profit and loss account
when the asset is sale, convey, scrap, derogation before its useful life.
② For government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, the grant shall be recognized as deferred income, and
recognized in profit and loss over the periods in which the related cost are recognized.
（3）Measurement of government grants:
If the government grants is monetary assets, recognized by the amount received or to be received.
If the government grants is non monetary assets, recognized by the fair value; if the fair value
cannot be estimated reliably, recognized by the nominal value.
（4）Restitution of recognized government grants:
① If there is relevant deferred income, decrease the carrying value of the deferred income,
any exceeds the amount shall be recognized to current profit and loss account.
4 If there is no relevant deferred income, recognized to current profit and loss account
directly.
23. Deferred income tax assets and deferred income tax liability
The Company uses balance sheet-liability method in calculation of income taxes.
According the difference between carry amount of asset and liability and its tax base, apply tax
rate to determine deferred income tax asset or liability according the predict period of recover
asset or discharge liability.
（1）Recognition of deferred income tax assets
① Deferred income tax assets shall be recognized according to deductible temporary
differences to the extent that is probable that tax profits will be available against which the
deductible temporary differences can be utilized, but deferred income tax asset arise from initial
recognize of asset and liabilities in transaction that have character listed below would not
recognised:
a. The transaction is not business combination;
b. At the time of the transaction, it affects neither accounting profit nor taxable profit (or
deductible loss).
② The company and subsidiaries, associated companies and joint venture investments that
can be related to deductible temporary differences, while meeting the following conditions, to
confirm the corresponding deferred income tax assets:
a. Temporary differences in the foreseeable future is likely to switch back to; and49
b. It is likely to be used for deductible temporary differences in taxable income in the future.
③ The Company can carry forward for the subsequent year's tax losses and tax credits, to
very likely be used to offset tax losses and tax credits amount of future taxable income limit,
verify the corresponding deferred income tax assets.
（2）Recognition of deferred income tax liability
Deferred tax liabilities shall be recognized for all taxable temporary differences, except to the
extent that the deferred tax liabilities arise from:
① the initial recognition of goodwill;
② the initial recognition of assets or liabilities, when all the following conditions are
satisfied:
a.the transaction is not a business combination;
b.at the time of the transaction, it affects neither accounting profit nor taxable profit (or
deductible loss).
③ Temporary differences arise from the investments in subsidiaries, associates and interests
in joint ventures, when all the following conditions are satisfied:
a.the parent, investor or venturer is able to control the timing of the reversal of the temporary
difference; and
b.it is probable that the temporary difference will not reverse in the foreseeable future.
(3) The carrying amount of a deferred tax asset should be reviewed at each balance sheet
date.
The Company should reduce the carrying amount of a deferred tax asset to the extent that it is
no longer probable that sufficient taxable profit will be available to allow the benefit of part or all
of that deferred tax asset to be utilised. Any such reduction should be reversed to the extent that it
becomes probable that sufficient taxable profit will be available.
24. Operating leases and finance leases
（1）Operating leases
① When the Company as the Lessee under operating lease, lease payments under an
operating lease shall be recognised as an expense on a straight-line basis over the lease term.
Initial direct expense undertaken by the Company, recognized to the management expenses,
contingent rental incurred recognized as current expenses. If the lease contract including a
rent-free period, the Company shall amortize the overall rent expenses on a straight-line basis over
the whole lease period, during the rent-free period recognize lease expenses and liability
correspond to it. If the lessee’s expenses paid by the lessor, the Company shall be reduce this
expenses from the total rent expenses, and amortize the balance.50
② When the Company as the lessor under operating lease, lease income from operating
leases shall be recognised in income on a straight-line basis over the lease term. The initial costs,
recognized to the current profit and loss account, however, if the amount is large, shall be added to
the carrying amount of the leased asset and recognised as an expense over the lease term on the
same basis as the lease income. If the lease contract including a rent-free period, the Company
shall recognize the total lease income for the whole lease period, during the rent-free period
recognize the income also. If the Company paid some lessee’s expenses, the Company shall
amortize the income balance (total lease income deduct the expenses) during lease period.
（2）Finance lease
①At the commencement of the lease term, lessees shall recognise finance leases as assets in
their balance sheets at amounts equal to the fair value of the leased property or, if lower, the
present value of the minimum lease payments, and the amount of present value of the minimum
lease payments recognized as long term accounts payable, the difference recognized as
unrecognized financial charges. During each lease period, adopt actual interest rate method to
amortize the expenses, and recognized to financial expense in current period.
The depreciation policy for depreciable leased assets shall be consistent with that for
depreciable assets that are owned, the depreciation period according to the lease period. If there is
reasonable certainty that the lessee will obtain ownership by the end of the lease term, the assets
shall be depreciated over its useful life. If there is no reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter
of the lease term and its useful life
② When the Company as the lessor under finance lease, lessors shall recognise assets held
under a finance lease in their balance sheets and present them as a long term accounts receivable
at an amount equal to the minimum lease receivable add the initial cost, and simultaneously
recognize unguaranteed residual value. The diference between the total of minimum lease
receivable 、initial costs 、unguaranteed residual value and the total of present value shall be
recognized as unrealized financing profits, adopt the actual interest rate method to recognize
income during the lease period, recording to other operating income.
25. Assets held for sale
（1）Recognition of assets held for sale
An entity shall classify a non-current asset as held for sale if when all the following
conditions are satisfied:
1 the appropriate level of management must be committed to a plan to sell the asset;
2 the Company has entered into a irrepealable transfer agreement with buyer;
③ the sale should be expected to qualify for recognition as a completed sale within one
year from the date of classification.51
(2）Accounting treatment
For those assets held for sale, the Company shall adjust the assets’ estimated net residual
value, let the amount can reflect the fair value less costs to sell, but not in excess of the original
carrying amount of the non-current assets, the difference of estimated net residual value after
adjustment and the original carrying amount, shall be recognized as assets impairment loss to
current profit and loss account.
The entity shall measure a non-current asset that ceases to be classified as held for sale (or
ceases to be included in a disposal group classified as held for sale) at the lower of:
① its carrying amount before the asset (or disposal group) was classified as held for sale,
adjusted for any depreciation, amortisation or revaluations that would have been recognised had
the asset (or disposal group) not been classified as held for sale, and
Its recoverable amount at the date of the subsequent decision not to sell.
26. Summary of significant accounting policies and estimates, and correction of errors
1. Changes in accounting policies
There are no changes in accounting policies during current reporting period.
2. Changes in accounting estimates
There are no changes in accounting estimates during current reporting period.
3. Correct previous accounting period errors
There are no items of correct previous accounting period error in current reporting period.
Ⅲ. Taxation
The main type of tax and tax rate for the Company are list below:
Type of tax Tax base Tax rate %
VAT Sale of product and raw material 17、13
Business Tax Business turnover 3、5
Consumption tax
Sales amount and quantity of taxable
product
20% based on price or RMB 0.5
per kg. (500ml)
Urban construction tax
VAT payable, business tax, consumer
tax, Tax that shall not be exempt from
tax allowance and deduction
5
Education Surcharge
VAT payable, business tax, consumer
tax, Tax that shall not be exempt from
352
tax allowance and deduction
Local education
surcharge
VAT payable, business tax, consumer
tax, Tax that shall not be exempt from
tax allowance and deduction
1
Corporation Tax Taxable profit 25
Ⅳ. Enterprise consolidation and consolidation statement
1. Information of subsidiaries in consolidation scope:
Subsidiary name Company type
Registration
location
Nature of
business
*Registered
capital
Business scope
Bozhou Gujing Sales Co., Ltd
wholly-owned
subsidiary Bozhou, Anhui
B usiness
trading 8,486
Wholesales of distilled spirit, construction materials,
feeds and assistant materials
Shanghai Gujing Trade Co., Ltd
wholly-owned
subsidiary
Shanghai
B usiness
trading 1,000
S ale of distilled spirit, g eneral merchandise,
construction material foods
Hefei Gujing Trade Co., Ltd
wholly-owned
subsidiary
Hefei,Anhui
B usiness
trading 1,000
Department stores, wine, hardware, and wholesale of
construction materials
Bozhou Gujing Transportation Co., Ltd
wholly-owned
subsidiary
Bozhou,Anhui Transpo rta tion
695 Provision of transportation services to the Company
Bozhou Gujing Glass Co., Ltd
wholly-owned
subsidiary
Bozhou,Anhui Manufacture
6,646
Manufacture and sale of glass products
Bozhou Gujing Waste Reclamation Co.,
Ltd
wholly-owned
subsidiary
Bozhou,Anhui R ecycled
100
Collect and sale of recycled glass bottle、glass、
wastebasket
Shanghai Gujing Jinhao Hotel
Management Co., Ltd. wholly-owned
subsidiary
Shanghai
Hotel
management 5400
Hotel management （ Except for catering
management 、Except for hotel operation ） ;
Self-owned housing rental; establish branch. （ I f
there is need administrative licensing, operating
based on the license.）
Subsidiary through the establishment or investment method obtained（Continued）
Subsidiary name
*Actual investment amount as at the
end of period
The balance of other project,
substantially constitute the net
investment in subsidiary.
Shareholding
proportion %
Voting rights
proportion %
Bozhou Gujing Sales Co., Ltd 8,486 0.00 100.00 100.00
Shanghai Gujing Trade Co., Ltd 1,000 0.00 100.00 100.00
Hefei Gujing Trade Co., Ltd 1,000 0.00 100.00 100.0053
Bozhou Gujing Transportation Co., Ltd 695 0.00 100.00 100.00
Bozhou Gujing Glass Co., Ltd 6,646 0.00 100.00 100.00
Bozhou Gujing Waste Reclamation Co., Ltd 100 0.00 100.00 100.00
Shanghai Gujing Jinhao Hotel Management Co.,
Ltd.
26,505.89 0.00 100.00 100.00
Subsidiary through the establishment or investment method obtained（Continued）
Subsidiary name
Whether
consolidated
statements
Minority equity
The amount of
minority equity used
for decrease the
profits and losses of
minority shareholders
The balance of parent company’s equity, that
is equal to the parent shareholders ’ equity less
the subsidiary’s current loss undertaken by
the minority shareholders according their
quotient of the beginning of the period
Bozhou Gujing Sales Co., Ltd Yes 0.00 0.00 0.00
Shanghai Gujing Trade Co., Ltd Yes 0.00 0.00 0.00
Hefei Gujing Trade Co., Ltd Yes 0.00 0.00 0.00
Bozhou Gujing Transportation Co., Ltd Yes 0.00 0.00 0.00
Bozhou Gujing Glass Co., Ltd Yes 0.00 0.00 0.00
Bozhou Gujing Waste Reclamation Co., Ltd Yes 0.00 0.00 0.00
Shanghai Gujing Jinhao Hotel Management Co.,
Ltd.
Yes 0.00 0.00 0.00
*The monetary unit is ten thousand unless other wise stated.
Ⅴ. Main notes in the Consolidation Statement
1. Monetary fund
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Original currency Exchange rate Presentation currency Original currency Exchange rate Presentation currency
Cash on hand
CNY 319,492.38 1.0000 319,492.38 86,054.97 1.0000 86,054.97
Subtotal 319,492.38 86,054.97
Cash in bank
CNY 443,131,654.73 1.0000 443,131,654.73 360,911,275.56 1.0000 360,911,275.56
USD 7,969.91 6.8282 54,420.14
Subtotal 443,131,654.73 360,965,695.70
Total 443,451,147.11 361,051,750.6754
2、Held for trading financial assets
Items
Fair value as at 30 June
2010
Fair value as at 31
December 2009
Financial assets at fair value through profit or loss 0.00 397,590.00
Total 0.00 397,590.00
3、Notes receivable
（1）Categories of notes receivable
Item Balance as at 30 June 2010 Balance as at 31 December 2009
Bank acceptance bill 136,032,142.40 72,556,609.11
Total 136,032,142.40 72,556,609.11
（2）Details of top five balance of bills that has endorsed to others but not matured yet as at
the end of reporting period
Issuing company Date of draft Mature date Balance
Anhui Taihe County Shicun
Commercial & Trading Co., Ltd.
2010-01-28 2010-07-28 726,000.00
Jiang Guanglong, Wuwei County 2010-01-19 2010-07-19 658,800.00
Jiang Guanglong, Wuwei County 2010-02-02 2010-08-02 600,000.00
Bozhou Gujing Distillery Industry
Co., Ltd.
2010-01-15 2010-07-15 500,000.00
Bozhou Gujing Distillery Industry
Co., Ltd.
2010-01-20 2010-07-20 500,000.00
Total 2,984,800.00
4. Accounts receivable
（1）Details of accounts receivable listed by categories
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book value Bad debts provisions Book value Bad debts provisions
Amount Percentage% Amount Percentage% Amount Percentage% Amount Percentage%
Individual significant
amounts 9,673,075.26 29.55 96,730.75 4.96 2,070,619.22 8.55 20,706.19 1.06
Non-significant in
amount but in
accordance with the
characteristics of
credit risk portfolio,
1,348,015.89 4.12 1,348,015.89 69.08 1,348,015.89 5.57 1,348,015.89 69.0955
the risk of the
portfolio is high
Other non-significant
receivables 21,713,018.51 66.33 506,497.57 25.96 20,798,154.93 85.88 582,522.13 29.85
Total 32,734,109.66 100.00 1,951,244.21 100.00 24,216,790.04 100.00 1,951,244.21 100.00
(2) Details of provision for bad debts of accounts receivables that classified as individual
significance amount or non-significant in amount but conduct impairment test individually:
Name Book value
Provision for bad
debts
Accrual
Proportion% Reason
Anhui Ruijing Famous Wine
Marketing Co., Ltd
9,673,075.26 96,730.75
1.00 According to the policies
for bad debts adopted by
the Company.
Total 9,673,075.26 96,730.75 1.00
（3）Details of accounts receivables that classified as non-significant in amount but in accordance
with the characteristics of credit risk portfolio, the risk of the portfolio is high:
Aging
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance Provision for bad
debts
Book balance Provision for bad
Amount Percentage% Amount Percentage% debts
Over 3
years
1,348,015.89 4.12 1,348,015.89 1,348,015.89 5.57 1,348,015.89
Total 1,348,015.89 4.12 1,348,015.89 1,348,015.89 5.57 1,348,015.89
（4）The Company no written off account receivable during current period
（5）Up to 30 June 2010, there is no account receivable due from shareholders who own five
or over five percent voting rights.
（6）The balance of top five account receivable:
Company name
Relationship with the
Company
Balance Age
Proportion of total accounts
receivable %
Anhui Ruijing Famous Wine
Marketing Co., Ltd
Related party
9,673,075.26
Within 1 year
29.55
Farm Industry Commerce Super
Market （Group）Co., Ltd
Non-related party
1,827,400.89
Within 1 year
5.58
Hefei Baiyue Commercial &
Trading Co., Ltd.
Non-related party
1,241,750.69
Within 1 year
3.79
Chen Xiaomei, Bozhou
Non-related party
1,049,042.00
Within 1 year
3.2056
Kaikaiyuan Biological Pharmacy
Co., Ltd
Non-related party
910,663.52
Within 1 year
2.78
Total 14,701,932.36 44.91
5、Advance to suppliers
(1) Age analysis
Aging
Balance as at 30 June
2010
Percentage%
Balance as at 31
December 2009
Percentage %
Within 1 year 6,629,377.89 99.83 2,344,528.09 99.30
1-2 years 11,482.00 0.17 16,536.73 0.70
Total 6,640,859.89 100.00 2,361,064.82 100.00
(2) There is no advance to suppliers balance due from shareholders who own five or over five
percent voting rights as at 30 June 2010.
6、Other accounts receivable
（1）Details of other accounts receivable listed by categories
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book value Bad debts provisions Book value Bad debts provisions
Amount Percentage% Amount Percentage% Amount Percentage% Amount Percentage%
Individual significant
amounts 80,253,040.34 87.29 73,817,498.71 92.94 88,447,372.04 87.95 73,544,565.21 93.02
Non-significant in
amount but in
accordance with the
characteristics of
credit risk portfolio,
the risk of the portfolio
is high
4,686,400.56 5.10 4,686,400.56 5.90 1,061,709.89 1.05 1,061,709.89 1.34
Other non-significant
receivables 7,000,776.79 7.61 918,460.80 1.16 11,057,606.60 11.00 4,461,871.47 5.64
Total 91,940,217.69 100.00 79,422,360.07 100.00 100,566,688.53 100.00 79,068,146.57 100.00
（2）Details of provision for bad debts of other accounts receivables that classified as individual
significance amount or non-significant in amount but conduct impairment test individually:
Details of other accounts
receivable
Book value Amount of bad d
ebts
Provision
proportion%
Reasons57
Minfa Securities
30,000,000.00
30,000,000.00 100.00
According to the Company’s
provision for bad debts
accounting policy
Hengxin Securities
29,502,438.53
29,502,438.53 100.00
According to the Company’s
provision for bad debts
accounting policy
Capital-Bridge Securities
13,600,000.00
13,600,000.00 100.00
According to the Company’s
provision for bad debts
accounting policy
Bozhou Gujing Pairuite Packaging
Co., Ltd 7,150,601.81
715,060.18 10.00
According to the Company’s
provision for bad debts
accounting policy
Total 80,253,040.34 73,817,498.71
（ 3 ） Details of other accounts receivable that classified as non-significant in amount but in
accordance with the characteristics of credit risk portfolio, the risk of the portfolio is high:
Aging
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance Bad debts
provisions
Book balance Bad debts
Amount Percentage % Amount Percentage% provisions
Over 3 years 4,686,400.56 5.10 4,686,400.56 1,061,709.89 1.05 1,061,709.89
Total 4,686,400.56 5.10 4,686,400.56 1,061,709.89 1.05 1,061,709.89
（4）There is no other accounts receivable balance due from shareholders who own five or over
five percent voting rights as at June 30, 2010.
（5）List the balance of top five other accounts receivable:
Company name
Relationship with
the Company
Balance Age
Proportion of total other accounts
receivable %
Minfa securities Non-related party 30,000,000.00 Over 3 years 32.63
Hengxin Securities Non-related party 29,502,438.53 Over 3 years 32.09
Capital-Bridge Securities Non-related party 13,600,000.00 Within 3 years 14.79
Bozhou Gujing Pairuite
Packaging Co., Ltd
Non-related party
7,150,601.81
1-2 years 7.7858
Company name
Relationship with
the Company
Balance Age
Proportion of total other accounts
receivable %
Sports Centre of Anhui
Province
Non-related party
1,000,000.00
Within 1 year 1.09
Total 81,253,040.34 88.38
（6）In July 2003, Anhui Laobada Distillery Co., Ltd (hereinafter referred to as “Laobada ”), a
subsidiary of the Company, bought RMB 30,000,000 worth of national debt with self-owned funds
through Minfa Securities Business Office. Subsequently, due to self reason of Minfa Securities,
Laobada failed to operate itself account of national debt. Therefore, Laobada instituted a
proceeding in the Higher People's Courts of Anhui Province, which claimed Minfa Securities to
return national debt and relevant dividend interests or compensate RMB 30,438,000, and
undertake the litigation fees for the case. Details of the lawsuit have been published on China
Securities Journal, Shanghai Securities News and Hong Kong Wen Wei Po on 29 July 2004.
Thereafter, the said case was transferred to Higher People’s Courts of Fujian Province for trial. On
8 March 2005, the Higher People’s Court of Fujian Province issued the civil ruling paper, as a
result, discontinuance of action. In July 2008, Minfa Securities went the procedures of bankruptcy
liquidation, at the same time, the Company declared its rights of credit (RMB 30,000,000 worth of
principal and interests) to the trustee in bankruptcy of Minfa Securities.
In July 2010, the Company has received the funds of liquidation of RMB 16,482,976.99 from
Minfa Securities.
7、Inventory
（1）Details of inventory:
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance
Provision for
impairment
Carrying value Book balance
Provision for
impairment
Carrying value
Raw material and
wrappage 42,623,312.24 5,585,827.23 37,037,485.01
49,712,215.95 5,585,827.22 44,126,388.73
Self-made
semi-manufactured goods
and work-in-process 300,388,330.04 300,388,330.04
283,993,834.13 0.00 283,993,834.13
Finished goods 51,618,405.92 2,108,882.50 49,509,523.42 40,700,389.02 2,590,482.74 38,109,906.28
Total 394,630,048.20 7,694,709.73 386,935,338.47 374,406,439.10 8,176,309.96 366,230,129.14
（2）Provision for Impairment59
Items
Balance as at 31
December 2009
Provision in
current period
Reversal in
current
period
Write off in
current period
Balance as at 30
June 2010
Raw material and wrappage 5,585,827.22 5,585,827.22
Self-made
semi-manufactured goods
and work-in-process
0.00 0.00
Finished goods 2,590,482.74 481,600.23 2,108,882.51
Total 8,176,309.96 481,600.23 7,694,709.73
（3）The amount of provision for inventory impairment calculated basis on the differences
between inventory carrying value on 30 June 2010, and the net realisable value . The net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale and relevant taxes and dues. During
the reporting period, the write off of provision for inventory impairment are caused by carry down
delivered inventories.
8、Long-term equity investment
（1）Details of long-term equity investment
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance
Provision for
impairment
Carrying value Book balance
Provision for
impairment
Carrying value
Cost method 0.00 0.00 0.00 300,000.00 0.00 300,000.00
Total 0.00 0.00 0.00 300,000.00 0.00 300,000.00
Note: 30% equities of Anhui Gujing Hotel Management Co., Ltd., which is held by Shanghai
Gujing Jinhao Hotel Management Co., Ltd. (the subsidiary of the Company), have been
transferred to Anhui Ruijing Trade Travel (Group) Co., Ltd..
9、Investment Property
Investment property adopt the cost model
Items
Balance as at 31
December 2009
Increment Decrement Balance as at 30
June 2010
Ⅰ. Total costs 51,277,165.35 1,699,252.80 52,976,418.15
①Buildings and
structures
50,062,365.35 50,062,365.35
②Land use right 1,214,800.00 1,699,252.80 2,914,052.80
Ⅱ. Total accumulated 20,005,068.09 1,210,615.50 21,215,683.5960
depreciation and
accumulated
amortization:
①Buildings and
structures
19,871,496.82 1,198,488.78 21,069,985.60
②Land use right 133,571.27 12,126.72 145,697.99
Ⅲ. Total net value : 31,272,097.26 31,760,734.56
①Buildings and
structures
30,190,868.53 28,992,379.75
②Land use right 1,081,228.73 2,768,354.81
Ⅳ. Total accumulated
impairment loss :
0.00 0.00
①Buildings and
structures
0.00 0.00
②Land use right 0.00 0.00
Ⅴ. Total carrying value 31,272,097.26 31,760,734.56
①Buildings and
structures
30,190,868.53 28,992,379.75
②Land use right 1,081,228.73 2,768,354.81
Note: During the reporting period, land use right under investment property refers to land transfer
payment that has paid, which should be capitalized. The provision for depreciation and
impairment of investment property for the reporting period is RMB 1,210,615.50.
10、Fixed assets and accumulated depreciation
（1）Classification of fixed assets
Items Balance as at 31
December 2009
Increment Decrement Balance as at 30
June 2010
ⅰ. Total book values: 791,531,723.50 6,495,975.58 4,748,678.99 793,279,020.09
Buildings and structures 512,041,872.03 - 2,260,178.69 509,781,693.34
Machineries and
equipments
193,076,465.25
1,949,507.97 2,229,636.66
192,796,336.56
Vehicles 23,840,793.06 2,641,841.28 116,313.64 26,366,320.70
Office equipment and others 62,572,593.16 1,904,626.33 142,550.00 64,334,669.49
ⅱ . Total accumulated
depreciation 432,514,326.61 22,213,532.92 3,143,443.34 451,584,416.1961
Buildings and structures 256,290,522.87 8,085,817.26 1,668,638.49 262,707,701.64
Machineries and
equipments 124,241,913.90 10,103,578.21 1,246,929.11 133,098,563.00
Vehicles 13,228,333.11 1,186,353.39 114,394.23 14,300,292.27
Office equipment and others 38,753,556.73 2,837,784.06 113,481.51 41,477,859.28
ⅲ. Total net value 359,017,396.89 0.00 0.00 341,694,603.90
Buildings and structures 255,751,349.16 247,073,991.70
Machineries and
equipments
68,834,551.35 59,697,773.56
Vehicles 10,612,459.95 12,066,028.43
Office equipment and others 23,819,036.43 22,856,810.21
ⅳ . Total accumulated
impairment loss
1,766,845.57 0.00 0.00 1,766,845.57
Buildings and structures 599,315.17 599,315.17
Machineries and
equipments
1,167,530.40 1,167,530.40
Vehicles 0.00 0.00
Office equipment and others 0.00 0.00
ⅴ. Total carrying value 357,250,551.32 0.00 0.00 339,927,758.33
Buildings and structures 255,152,033.99 246,474,676.53
Machineries and
equipments
67,667,020.95 58,530,243.16
Vehicles 10,612,459.95 12,066,028.43
Office equipment and others 23,819,036.43 22,856,810.21
Note: The increased accumulated depreciation of fixed assets includes RMB 22,213,532.92,
which is withdrawn for current period.
（2）During current period, the amount of fixed assets that are transferred from completion of
construction in progress is RMB 1,140,373.55.
（3）The Company has no finance leased fixed assets during current period.
（4）Details of fixed assets leasing out by operating lease:
Items Book value Accumulated depreciation Net value62
Machineries and
equipments 10,169,113.34 6,531,851.65 3,637,261.69
Vehicles 129,305.69 129,305.69 0.00
Electric Equipment and others 6,119,764.27 3,065,348.50 3,054,415.77
Total 16,418,183.30 9,726,505.84 6,691,677.46
（ 5 ） Details of fixed assets which have not completed the process of property right
certificate:
Item Book value Accumulated depreciation Net value
Buildings and structures 54,908,246.95 25,262,002.04 29,646,244.91
Total 54,908,246.95 25,262,002.04 29,646,244.91
（6）The Company has no pledged and warranted fixed assets during current period.
（ 7） According to < The law of land administration of the People’s Republic of China>,
, and the sprit comment by Government of Bozhou City on
June 25, 2008, and consultation between State-owned land reserves center(“center”) of Bozhou
and the ex-subsidiary Bozhou Gujing Printing Ltd, and sign an agreement of retake state-owned
land for construction with compensation on July 10, 2008, the center retake the right of
state-owned construction land, building, and attachment of East Bozhou Weiwu Avenue with
compensation to the Bozhou Gujing Printing Ltd, that the land area are 27,611.6 square
meter(about 41.4174 acres), the area of building and attachment are 15,157.45 square meter. The
compensation paid by the centre are 14,207,842.23, which include compensation fee 1,863,783.00
for land and 12,344,059.23 for building and attachment ,the price is according to the estimated
report which is issued by Anhui Jiandi Real Estate land evaluation Ltd on 30 April 2008 and 12
May 2008. The payable time is on the date of transfer the land by the centre completely, and the
fee would be paid to Bozhou Gujing Printing Ltd once the transfer fees are collected.
Due to the reason of deregistration of Bozhou Gujing Printing Ltd, Bozhou Pairuite Package
Ltd (“Pairuite”) will accept the right, and the company have not received the amount yet.
According to the transfer shareholding agreement signed in Novemeber 2009, Jiangsu Xincheng
Printing Developmet Co., Ltd decided to transfer shareholding of Pairuite, and in accordance with
requirement of the agreement, the relevant rights and liabilities required in original contract,
accepted by the Company.
In May 2010, the Company has received the above-mentioned compensation fee. The risk
and reward of above assets has been transferred.63
11、Construction in progress
（1）Details of construction in progress
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance
Provision for
impairment
Carrying value Book balance
Provision for
impairment
Carrying value
Extract filtering wine pot
project
0.00
0.00 150,000.00 0.00 150,000.00
B reweries Industrial P ark 805,000.00
0.00
805,000.00 2,230,267.01 0.00 2,230,267.01
Line renovation 0.00
0.00
0.00 901,891.20 0.00 901,891.20
Workshop relocat ion project 2,998,650.00
0.00
2,998,650.00
Renovation for wine filling
and packing line
163,392.00
0.00
163,392.00
Other 1,887.00
0.00
1,887.00
Total 3,968,929.00 0.00 3,968,929.00 3,282,158.21 0.00 3,282,158.21
（2）Changes in construction in progress
Name of projects Budget value
Balance as at
31 December
2009
Increment
Transferred to
Fixed assets
Other
decrement
Balance as at
30 June 2010
Extract filtering wine
pot project
876,929.48 150,000.00 150,000.00 0.00
B reweries Industrial
P ark
7,000,000.00 2,230,267.01
1,425,267.01
805,000.00
Line renovation 1,000,000.00 901,891.20 901,891.20 0.00
Workshop relocat ion
project
24,000,000.00
2,998,650.00
2,998,650.00
Renovation for wine
filling and packing
line
44,500,000.00
163,392.00
163,392.00
Other 90,369.35 88,482.35 1,887.00
Total 3,282,158.21 3,252,411.35 1,140,373.55 1,425,267.01 3,968,929.0064
Note: Other decrement of which refers to external decoration project being not subject to the
capitalization condition, which was transferred into gains and losses for the reporting period.
12、Project Material
Items
Balance as at 31
December 2009
Increment Decrement Balance as at 30 June
2010
Dedicated
equipments
42,500.00 0.00 0.00 42,500.00
Total 42,500.00 0.00 0.00 42,500.00
13、Intangible assets and accumulated amortization
（1）Intangible assets
Items Balance as at 31
December 2009
Increment Decrement Balance as at 30
June 2010
ⅰ. Total book values: 138,036,223.65 7,678,872.00 130,357,351.65
Land use rights 98,107,779.25 7,678,872.00 90,428,907.25
Trade mark privileges 38,150,000.00 38,150,000.00
Software 1,778,444.40 1,778,444.40
ⅱ. Total accumulated
amortization: 56,154,212.46 1,317,151.38 568,220.41 56,903,143.43
Land use rights 18,186,368.02 1,109,266.98 568,220.41 18,727,414.59
Trade mark privileges 37,790,000.00 30,000.00 37,820,000.00
Software 177,844.44 177,884.40 355,728.84
ⅲ. Total net value : 81,882,011.19 73,454,208.22
Land use rights 79,921,411.23 71,701,492.66
Trade mark privileges 360,000.00 330,000.00
Software 1,600,599.96 1,422,715.56
ⅳ. Total accumulated impairment
loss: 0.00 0.00
Land use rights 0.00 0.00
Trade mark privileges 0.00 0.00
Software 0.00 0.00
ⅴ. Total carrying value: 81,882,011.19 73,454,208.22
Land use rights 79,921,411.23 71,701,492.6665
Items Balance as at 31
December 2009
Increment Decrement Balance as at 30
June 2010
Trade mark privileges 360,000.00 330,000.00
Software 1,600,599.96 1,422,715.56
Note: Current period the intangible assets impairment is RMB 1,317,151.38.
For details of the reason for decreased of intangible assets, please refer to Note X. (7)
（2）As at the reporting period, there is no intangible asset which has restriction on right of
ownership.
14、Long-term deferred expense
Item
Balance as at 31
December 2009
Increment Amortization Other decrement
Balance as at 30
June 2010
Decoration Fee 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
15、Deferred tax assets
（1）Recognized of deferred tax assets
Items Balance as at 30 June 2010 Balance as at 31 December 2009
Deferred tax assets:
Bad debit provisions 731,428.07 731,428.07
Provision of impairment loss for inventory 1,923,677.43 2,044,077.48
Provision of impairment loss for fixed asset 0.00 0.00
Unrecognized profits or losses from intragroup
transactions 0.00 1,513,083.34
Deductible losses 2,017,337.85 17,551,404.38
Total 4,672,443.35 21,839,993.27
（2）Details of temporary differences:
Items
Amount of temporary differences
Balance as at 30 June 2010 Balance as at 31 December 2009
Provision for bad debits 2,925,712.28 2,925,712.28
Provision of impairment loss for inventory 7,694,709.73 8,176,309.9666
Provision of impairment loss for fixed asset 0.00 0.00
Unrecognized profits or losses from
intragroup transactions
0.00 6,052,333.36
Deductible losses 8,069,351.39 70,205,617.50
Total 18,689,773.40 87,359,973.10
16、Provision for assets impairment
Items
Balance as at 31
December 2009
Increment
Decrement
Balance as at
Reversal Write-off 30 June 2010
Other
decrement
Bad debit
provisions 81,019,390.78 354,213.50 81,373,604.28
Provision of
impairment loss
for inventory 8,176,309.96
481,600.23
7,694,709.73
Provision of
impairment loss
for fixed asset 1,766,845.57 1,766,845.57
Total 90,962,546.31 354,213.50 0.00 481,600.23 0.00 90,835,159.58
17、Short-term loan
Category Balance as at 30 June 2010 Balance as at 31 December 2009
Pledge bank loan 0.00 0.00
Guaranteed bank loan 0.00 0.00
Total 0.00 0.00
18、Accounts payable
（1）Age analysis
Aging Balance as at 30 June 2010 Balance as at 31 December 2009
Within 1 year 44,158,629.76 62,354,585.84
More than 1 year 2,184,993.86 3,974,279.1267
Total 46,343,623.62 66,328,864.96
（2）The details of accounts payable, which is significant in amount and the account’s age
more than one year:
Name of company Balance Age
Outstanding
reasons
Repayment after the balance
sheet date
Shenzhen City Guomei Paper Packaging
Co., Ltd 567,569.82 1-3 years
Business
termination 0.00
Liyang City Construction Installation
Co.,Ltd 490,485.32 2-3 years
Project final
payment 0.00
Shanghai Tianshi Print Co., Ltd 474,696.76 2-3 years
Business
termination 0.00
Bozhou City Friendly Colour Printing
Co., Ltd 408,509.35 1-3 years
Business
termination 0.00
Tianshi Print (Shengzhen) Co., Ltd 243,732.61 2-3 years
Business
termination 0.00
Total 2,184,993.86 0.00
（3）There is no Accounts payable balance due to shareholders who own five or over five
percent voting rights as at 30 June 2010.
（4）Details of accounts payable balance due to related parties please refer to Ⅵ.5.
19、Advance from customers
（1）Age analysis
Aging Balance as at 30 June 2010 Balance as at 31 December 2009
With in 1 year 237,990,739.89 91,095,280.57
More than 1 year 7,204,942.73
Total 237,990,739.89 98,300,223.30
（2）There is no Advance from customers balance due to shareholders who own five or over
five percent voting rights as at 30 June 2010.
（3 There is no advance from customers, which is significant in amount and the account’s
age more than one year.
20、Payroll payables68
Items
Balance as at 31
December 2009
Increased Payment
Balance as at
30 June 2010
1.Salary, bonus and allowance 44,598,881.25 70,478,218.99 88,728,226.11 26,348,874.13
2.Employee welfare 0.00 2,628,851.71 2,628,851.71 0.00
3.Social insurance: 27,015,329.76 17,543,221.48 12,140,097.34 32,418,453.90
Including:①Medical insurance 466,576.53 3,440,484.79 874,270.12 3,032,791.20
②Basic retirement insurance 25,361,720.83 13,802,015.05 11,075,254.36 28,088,481.52
③Unemployment insurance 720,207.23 204,141.80 96,163.66 828,185.37
④Injury insurance 407,751.15 53,480.40 51,483.60 409,747.95
⑤Pregnancy insurance 59,074.02 43,099.44 42,925.60 59,247.86
4.Housing accumulation fund 16,403,421.61 11,329,625.36 1,713,178.26 26,019,868.71
5. Retire welfare 0.00 0.00 0.00 0.00
6.Labour union fee and employee
education fee
5,591,895.11 2,899,557.42 767,850.52 7,723,602.01
7.Non-monetary welfare 0.00 0.00 0.00 0.00
8.Redemption of termination of labor
contract
0.00 0.00 0.00 0.00
9.Others: 0.00 0.00 0.00 0.00
Including: share payment by cash 0.00 0.00 0.00 0.00
Total 93,609,527.73 104,879,474.96 105,978,203.94 92,510,798.75
21、Tax payable
Types of tax Balance as at 30 June 2010 Balance as at 31 December 2009
VAT 28,773,317.38 35,464,119.82
Consumption tax 70,710,499.59 89,119,822.32
Business Tax 491,051.93 525,262.60
Urban construction tax 60,783.67 2,302,165.58
Corporation Tax 37,166,402.45 39,178,993.61
Property tax 0.00
Withholding of individual income tax 547,336.88 1,123,042.48
Stamp duty tax 0.00
Education Surcharge 42,314.44 1,647,934.1269
Others 1,178,015.72
Total 137,791,706.34 170,539,356.25
22、Other accounts payable
（1）Age analysis
Aging Balance as at 30 June 2010 Balance as at 31 December 2009
Within 1 year 101,048,241.67 55,287,979.08
More than 1 year 18,273,483.16 41,979,640.53
Total 119,321,724.83 97,267,619.61
（2）The details of other accounts payable, which is significant in amount and the account’s
age more than one year:
Company name Balance Age Outstanding reasons
Repayment after the balance sheet
date
Anhui Anzhen investment Co., Ltd 5,000,000.00 Over 3 years
Unable to contact
creditor
0.00
Bozhou Jieyun Automobile
Transportation Co., Ltd
600,000.00 1-2 years Security deposit 0.00
Jiangsu Xincheng Print Development
Co., Ltd 330,000.00
1-2 years Security deposit 0.00
北京刮拉瓶盖司300,000.00 1-2 years Security deposit 0.00
Dezhou Jingfeng Glasses Co., Ltd.
德州晶峰玻璃司300,000.00
1-2 years Security deposit 0.00
Total 6,530,000.00 0.00
（3）Details of other accounts payable balance due to shareholders who own 5% or more than
5% voting right as at 30 June 2010 is as followed:
Shareholder name Balance Age
Proportion of total other
accounts receivable% Arrearage reason
Gujing Group 29,801.50 Within 2 years 0.02 Arrearages for operation current
23、Non-current liabilities due within one year
Item Balance as at 30 June 2010 Balance as at 31 December 2009
Long-term borrowings due
within one year
0.00 5,000,000.0070
Total 0.00 5,000,000.00
24、Long-term Loans
Item Balance as at 30 June 2010 Balance as at 31 December 2009
Pledge loan 0.00 0.00
Total 0.00 0.00
25、Other current liabilities
Items
Total
subsidies
Document of approval
Balance as
at 31
December
2009
Increment Amortization
Other
decrement
Balance as
at 30 June
2010
coal-fi red industrial
boiler and glass
furnace saving
energy renovation
project
2,740,000.00
Fagaihuanzi
[2007]2500
2,587,000.00 0.00 93,750.00 0.00 2,493,250.00
Bozhou city logistics
center project
600,000.00 Fagaifuwu（2009）341 600,000.00 0.00 0.00 0.00 600,000.00
Total 3,340,000.00 3,187,000.00 0.00 93,750.00 0.00 3,093,250.00
26、Share capital
Items
Changin current period（+、－） Unit : share
Balance as at 31
December 2009
Allotm
ent of
shares
Bonus
shares
Transfer
reserves
into shares
Relieve
restriction on
sales
Others Subtotal
Balance as at 30
June 2010
(1) Unlisted shares
①Sponsor shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Including： 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Shares held by states 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Shares held by domestic
legal person s
0.00 0.00 0.00 0.00
0.00
0.00 0.00 0.0071
Shares held by overseas
legal persons
0.00 0.00 0.00 0.00
0.00
0.00 0.00 0.00
Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
②Raising shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
③Internal staff shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
④Preference shares or
others
0.00 0.00 0.00 0.00
0.00
0.00 0.00 0.00
Including：Allotment of
shares
0.00 0.00 0.00 0.00
0.00
0.00 0.00 0.00
Total Unlisted shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(2) Listed shares
Domestically listed RMB
shares
175,000,000.00 0.00 0.00 0.00
0.00 0.00 0.00
175,000,000.00
Including：Executives
shares
0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
Domestically listed
foreign shares
60,000,000.00 0.00 0.00 0.00
0.00 0.00 0.00
60,000,000.00
Total Listed shares 235,000,000.00 0.00 0.00 0.00 0.00 0.00 0.00 235,000,000.00
(3) Restricted listed
shares
0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00
(4) Total shares 235,000,000.00 0.00 0.00 0.00 0.00 0.00 0.00 235,000,000.00
（1）The aforesaid listed shares are listed with face value RMB 1.00 each. There is no change
of total shares during the report period.
(2) The Company issued on July 24, 2009, 123,500,000 outstanding shares with restrict
condition on disposal are listed in stock market on 29 July, 2009. Up to June 30, 2010, outstanding
shares with restrict condition on disposal are 235,000,000.
27、Capital Reserves
Categories
Balance as at 31
December 2009
Increment Decrement
Balance as at 30
June 2010
Share premium 303,595,005.78 0.00 0.00 303,595,005.7872
Other capital reserves 22,469,753.14 0.00 0.00 22,469,753.14
Total 326,064,758.92 0.00 0.00 326,064,758.92
28、Surplus reserve
Category
Balance as at 31
December 2009
Increment Decrement
Balance as at 30
June 2010
Statutory surplus
reserve 69,977,281.49 0.00 0.00 69,977,281.49
Total 69,977,281.49 0.00 0.00 69,977,281.49
29、Undistributed profits
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Balance at the end of the year of 2009(Before
adjustment) 176,955,910.52 60,135,327.85
Total adjustment for the balance at the beginning
of the year of 2010 0.00 -5,575,074.87
Balance at the beginning of the year of
2010(After adjustment) 176,955,910.52 54,560,252.98
Add: Current distributable net profits for owners
of parent company 107,386,990.04 140,089,179.69
Less: Appropriation of statutory surplus reserves 0.00 17,693,522.15
Appropriation of discretionary surplus
reserve 0.00 0.00
Appropriation of normal risk provision 0.00 0.00
Appropriation of ordinary shares dividend 82,250,000.00 0.00
Transfer from ordinary shares dividend to
share capital 0.00 0.00
Undistributed profits as at 30 June 2010 202,092,900.56 176,955,910.52
Note: In accordance with the resolution made at the Shareholders’ General Meeting 2009
held on 23 April 2010, based on total shares as at the end of 2009 amounting to 235,000,000
shares, the Company distributed cash bonus of RMB 3.50 (tax included) for every 10 shares,
which means distributed RMB 82,250,000 as dividend to all shareholders. In May 2010, the said
dividend distribution plan has been completed.
30、Operating Revenues and Operating Costs
（1）Operating Revenues and operating costs
Items Jan.-Jun. 2010 Jan.-Jun. 200973
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Main operating incomes 832,852,759.94 680,625,493.12
Other operating incomes 23,494,613.02 24,651,800.93
Total operating income 856,347,372.96 705,277,294.05
Main operating Costs 218,281,810.84 319,763,354.56
Other operating Costs 23,506,606.70 23,573,894.42
Total operating costs 241,788,417.54 343,337,248.98
（2）Main business（listed according to categories of products）
Products or
categories
Jan.-Jun. 2010 Jan.-Jun. 2009
Operating incomes Operating Costs Operating profit Operating incomes Operating Costs Operating profit
Wine 784,786,790.62 187,707,053.93 597,079,736.69 522,842,812.29 198,630,248.40 324,212,563.89
Alcohol 36,440,625.75 41,340,021.96 -4,899,396.21
Deep
processing of
farm products 21,135,993.05 20,856,927.53 279,065.52
Others 48,065,969.32 30,574,756.91 17,491,212.41 100,206,062.03 58,936,156.67 41,269,905.36
Total 832,852,759.94 218,281,810.84 614,570,949.10 680,625,493.12 319,763,354.56 360,862,138.56
（3）Main business（listed according to different districts）
Items
Jan.-Jun. 2010 Jan.-Jun. 2009
Operating incomes Operating Costs Operating profit Operating incomes Operating Costs Operating profit
North China 89,900,827.78 21,502,680.38 68,398,147.40 35,551,399.68 21,833,128.04 13,718,271.64
Central
China 665,601,300.56 178,278,233.97 487,323,066.59 578,003,465.55 268,161,807.94 309,841,657.61
South China 77,350,631.60 18,500,896.49 58,849,735.11 64,404,083.00 27,304,542.00 37,099,541.00
Other 2,666,544.89 2,463,876.58 202,668.31
Total 832,852,759.94 218,281,810.84 614,570,949.10 680,625,493.12 319,763,354.56 360,862,138.56
（4）Details of operating revenues from top five clients:
Clients name
Operating
revenues Proportion of total operating revenues%
The first 38,598,635.73 4.51
The second 25,732,745.30 3.00
The third 18,508,258.79 2.16
The fourth 16,618,701.71 1.9474
The fifth 15,684,608.55 1.83
Total 115,142,950.08 13.44
31、Business tax and surtax
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Consumption tax 105,651,934.12 81,781,235.50
Business tax 2,048,480.08 1,841,697.15
Urban construction tax and
Education surcharge
21,784,915.58
17,273,819.45
Flood protection fee 18,335.22
Total 129,503,665.00 100,896,752.10
Please refer to Ⅲ taxation for the details of tax rate and scale.
32、Financial expenses
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Interest expenses 79,200.00 6,020,440.26
Less: Interest Incomes 3,752,813.00 921,773.41
Exchange gain (or loss) 0.00 6,521.00
Bank charges 26,102.23 18,675.00
Total -3,647,510.77 5,123,862.85
33、Assets impairment loss
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Bad debts 354,213.50 0.00
Impairment loss on inventories 0.00 5,541,103.53
Total 354,213.50 5,541,103.53
34、Investment income
Source of investment income Jan.-Jun. 2010 Jan.-Jun. 2009
Gains from held for trading financial
assets 879,284.55 0.00
Total 879,284.55 0.00
35、Non-operating income75
（1）Details of non-operating income:
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Gains from disposal of non-current assets 6,750,770.10 164,833.34
Including: Gains from disposal of fixed
assets 1,549,386.30 164,833.34
Government grants 0.00 530,610.07
Gains from penalties 1,806,148.06 858,477.31
Others 620,196.10 1,521,936.85
Total 9,177,114.26 3,075,857.57
（2）Government Grants
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Subsidy received 0.00 0.00
Returned tax 0.00 530,610.07
Others 0.00 0.00
Total 0.00 530,610.07
36、Non-operating expenses
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Loss on disposal of non-current assets 1,394,204.42 301,334.06
Include: Loss on disposal of fixed assets 1,394,204.42 301,334.06
Others 130,817.47 127,116.36
Totals 1,525,021.89 428,450.42
37、Income Tax Expense
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Income Tax for current period 21,381,988.92 15,972,471.77
Deferred Income Tax Expense 16,647,468.80 0.00
Total 38,029,457.72 15,972,471.77
38、Calculation for Basic EPS and Diluted EPS
Reporting period profits
Jan.-Jun. 2010 Jan.-Jun. 2009
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profits attributable to ordinary shareholders 0.46 0.46 0.15 0.15
Net profits attributable to ordinary shareholders 0.43 0.43 0.14 0.1476
that have deducted extraordinary profits or
losses.
Basic Earnings Per Share =P0÷S
S=S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0-Sk
Including：P0 : is the net profits attributable to ordinary shareholders or net profits attributable
to ordinary shareholders that have deducted extraordinary profits or losses; S: is weighted average
number of ordinary shares outstanding during the period; S0 : is the total number of ordinary
shares outstanding at the beginning of the period; S1: is incremental ordinary shares issued as a
result of the conversion of surplus to ordinary shares or distribution of shares dividend; Si: is
incremental ordinary shares issued as a result of the conversion of a debt instrument to ordinary
shares or issued new shares; Sj: Decrement shares that are the number of ordinary shares bought
back,etc; Sk: is the number of shrink stocks during the reporting period; M0: is the number of
month during the reporting period; Mi: is the accumulative months that is from the next month of
incremental shares to the month of end of reporting period; Mj is the accumulative months that is
from the next month of decrement shares to the month of end of reporting period.
Diluted Earnings Per Share =P1/(S0 ＋ S1 ＋ Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average
number of increased ordinary shares from Options and warrants 、Share options 、Convertible
debenture, etc)
Including：P1: is the net profits attributable to ordinary shareholders or net profits attributable
to ordinary shareholders that have deducted extraordinary profits or losses, and need to consider
the effects of all dilutive potential ordinary shares, as well as adjusted according to and relevant policies.
40、Notes of cash flow statement
（1）Cash received related to other operating activities
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Security Deposit 24,208,415.40 9,692,708.95
Others 8,004,103.12 9,166,385.96
Total 32,212,518.52 18,859,094.91
（2）Cash paid related to other operating activities
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Advertisement fee 53,967,868.00 0.00
Business trip fee 11,382,073.37 8,325,958.9877
Security Deposit 12,388,384.71 3,356,029.77
Transportation fee 5,659,887.78 6,431,589.72
Total 83,398,213.86 18,113,578.47
41、Supplemental information for cash flow statement
（1）Supplemental information for cash flow statement
(1) Adjusting net profit to cash flow from operating activities： Jan.-Jun. 2010 Jan.-Jun. 2009
Net profits 107,386,990.04 35,554,201.99
Add：Provision for assets impairment loss 0.00 0.00
Depreciation of fixed assets 、oil and gas assets and productbility
biological assets
23,412,021.70
28,145,871.81
Amortization of intangible assets 1,329,278.10 1,573,749.87
Amortization of Long-term deferred expenses 0.00 278,236.74
Loss on disposal of fixed assets、intangible assets and other long-term
assets (The gain is listed beginning with “- “)
1,366.00 48,886.17
Losses on scraped fixed assets (The gain is listed beginning with “-“) 1,394,204.42 300,932.78
Losses from fluctuation in fair values (The gain is listed beginning
with “-“) 0.00 0.00
Financial costs (The gain is listed beginning with “-“) 79,200.00 4,769,859.41
Losses on investment (The gain is listed beginning with “- “) -879,284.55 0.00
Decrease of deferred income tax assets (The increase is listed
beginning with “- “) 17,167,549.92 356,013.02
Increase of deferred income tax liabilities (The decrease is listed
beginning with “- “) 0.00 0.00
Decrease of inventories (The increase is listed beginning with “-“) -20,705,209.33 109,623,751.05
Decrease of operating receivables (The increase is listed beginning
with “-“) -67,291,963.64 43,900,520.51
Increase of operating payables (The decrease is listed beginning with
“- “) 100,145,124.44 -72,571,574.25
Others 0.00 0.00
Net cash flow arising from operating activities 162,039,277.10 151,980,449.1078
(1) Adjusting net profit to cash flow from operating activities： Jan.-Jun. 2010 Jan.-Jun. 2009
（1） Significant investment and financing activities that not
relate to cash flows:
Debts convert to capital 0.00 0.00
Convertible corporate bond due within 1 year 0.00 0.00
Finance leased fixed assets 0.00 0.00
（2） Net increase (decrease) of cash and cash equivalents：
Ending balance of cash 443,451,147.11 222,962,756.63
Less: Beginning balance of cash 361,051,750.67 278,780,676.68
Add : Ending balance of cash equivalents
Less: Beginning balance of cash equivalents 0.00 0.00
Net increase of cash and cash equivalents 82,399,396.44 -55,817,920.05
（2）Cash and cash equivalent
Items Jan.-Jun. 2010 Jan.-Jun. 2009
(1) Cash
Including: Cash on hand 319,492.38 451,143.61
unrestricted bank deposit 443,131,654.73 222,511,613.02
(2) Cash equivalents
Including: Bond investment due within
three month
(3) Ending balance of cash and cash
equivalents 443,451,147.11 222,962,756.63
Ⅵ. Related party relationships and transactions
1. Details of the Company’s parent company
Parent
company ’s
name
Relationship
with the
Company
Type of
enterprise
Place of
registration
Authorized
representative
Nature of business Registered capital
Gujing
Group
Controlling
shareholder
State-owne
d
Anhui
Bozhou
Yu Lin Beverage, Construction
materials, and plastic
353,380,000.0079
enterprises productions manufacture
Con.：
Parent
company ’s name
Shareholding proportion% Voting rights proportion% The Company’s final controller
Code of
organization
Gujing Group 61.15 61.15 Anhui Province, Bozhou
City government
151947437
2、Details of the Company’s subsidiaries
Please refer Ⅳ. 1 for details of the Company’s subsidiaries.
3、Details of other related parties of the Company:
Names Relationships with the company Code of organization
Anhui Ruijing Trade Travel (Group) Co., Ltd
Same controlling shareholder
14912443-1
Bozhou Gujing Thermoelectricity Co., Ltd Same controlling shareholder
15194236-1
Anhui Ruijing Famous Wine Marketing Co., Ltd Same controlling shareholder
667916375
Anhui Gujing Hotel (Group) Co., Ltd Same controlling shareholder
15194483-4
Anhui JinYang Media Ltd Same controlling shareholder
705048960
Anhui Bozhou Gujing Employee Hospital Same controlling shareholder
777376154
Anhui Ruifuxiang Food Co., Ltd
Same controlling shareholder
779088922
Bozhou Gujing Hotel Co., Ltd
Same controlling shareholder
15194003-2
Anhui Gujing Real Estates Group Co., Ltd.
Same controlling shareholder
151940024
4、Related party transactions
（1）Purchase of goods and services:
Related party
Transaction
types
Transaction Jan.-Jun. 2010 Jan.-Jun. 2009
details Amount
The proportion of
similar
transactions（%）
Amount
The proportion of
similar
transactions（%）
Anhui JinYang Media Co.,Ltd
Accept labor
service Advertisement 62,095,868.00 94.57 32,433,519.50 91.2080
Anhui Ruifuxiang Food Co., Ltd
Purchase of
goods Alcohol 19,740,787.87 100.00 0.00 0.00
Bozhou Gujing
Thermoelectricity Co., Ltd
Purchase of
goods
Water、
electricity and
gas 0.00 0.00
9,289,589.38 7.23
Total 81,836,655.87 41,723,108.88
（2）Sales of goods and services:
Related party
Transaction
types
Transaction Jan.-Jun. 2010 Jan.-Jun. 2009
details Amount
The proportion of
similar transactions
（%）
Amount
The proportion
of similar
transactions（%）
Anhui Gujing Group Co., Ltd
Sales of
goods
Small-scale
material 84,350.84 0.35 31,250.00 0.08
Bozhou Gujing Hotel Co., Ltd
Sales of
goods
Water、
electricity
and gas 113,225.71 0.48 113,161.81 0.31
Anhui Ruijing Vintage Wine
Marketing Co., Ltd
Sales of
goods
distillate
spirits 44,716,844.44 5.96 11,824,200.40 31.96
Anhui Bozhou Gujing Employee
Hospital
Sales of
goods
Water、
electricity
and gas 2,833.60 0.01 3,594.98 0.01
Anhui Gujing Real Estates Group
Co., Ltd.
Sales of
goods
distillate
spirits 42,051.28 0.01
Total 44,959,305.87 11,972,207.19
5、The details of account payables and receivables among related parties:
（1）The balance of payables and receivables among related parties
Items Related parties Balance as at 30 June 2010 Balance as at 31 December 2009
Accounts receivable
Anhui Ruijing Famous Wine Marketing Co.,
Ltd
9,673,075.26 0.00
Other accounts81
Items Related parties Balance as at 30 June 2010 Balance as at 31 December 2009
receivable
Anhui JinYang Media Co., Ltd 0.00 8,128,000.09
Gujing Group 5,371.64 0.00
Bozhou Gujing Hotel Co., Ltd 16,709.50 0.00
Anhui Bozhou Gujing Employee Hospital 122.20 0.00
Other payables
Gujing Group 29,801.50 2,071,720.99
Anhui Ruijing Trade Travel (Group) Co., Ltd 159,378.72 13,006,128.51
Ⅶ. Contingency
Up to 30 June 2010, there is no contingency event that needs to be disclosed.
Ⅷ. Commitment
Up to 30 June 2010, there is no commitment event that needs to be disclosed.
Ⅸ. Events after the Balance Sheet Date
Up to 30 June 2010, there is no significant evens after the balance sheet date.
Ⅹ. Other significant events
Up to 30 June 2010, there are no other significant events.
Ⅺ. Main notes to financial statements of parent company
1、Accounts receivable
（1）Details of accounts receivable listed by categories
Categories
Balance as at 30 June 2010
Book balance Bad debts provisions
Amount Percentage% Amount Percentage%
Individual significant amounts 0.00 0.00 0.00 0.00
Non-significant in amount but in accordance
with the characteristics of credit risk portfolio, 0.00 0.00 0.00 0.0082
the risk of the portfolio is high
Other non-significant receivables 587,771.00 100.00 223,715.76 100.00
Total 587,771.00 100.00 223,715.76 100.00
Con.：
Categories
Balance as at 31 December 2009
Book balance Bad debts provisions
Amount Percentage% Amount Percentage%
Individual significant amounts 0.00 0.00 0.00 0.00
Non-significant in amount but in accordance
with the characteristics of credit risk portfolio,
the risk of the portfolio is high
0.00 0.00 0.00 0.00
Other non-significant receivables 593,180.80 100.00 223,715.76 100.00
Total 593,180.80 100.00 223,715.76 100.00
（2）Up to 30 June 2010, there is no account receivable due from shareholders who own five
or over five percent voting rights.
2、Other accounts receivable
（1）Details of other accounts receivable listed by categories
Items
Balance as at 30 June 2010 Balance as at 31 December 2009
Book balance
Percentage
%
Bad debts
provisions
Percentage% Book balance
Percentage
%
Bad debts
provisions
Percentage%
Individual significant amounts 234,955,988.60 98.99 73,817,498.71 99.97 230,833,910.24 99.64 73,463,285.21 99.97
Non-significant in amount but
in accordance with the
characteristics of credit risk
portfolio, the risk of the
portfolio is high
0.00 0.00 0.00 0.00
Other non-significant
receivables 2,391,405.88 1.01 24,231.48 0.03 845,147.97 0.36 24,231.48 0.03
Total 237,347,394.48 100.00 73,841,730.19 100.00 231,679,058.21 100.00 73,487,516.69 100.00
（ 2 ） Details of provision for bad debts of other accounts receivables that classified as
individual significance amount or non-significant in amount but conduct impairment test
individually:
Details of other accounts
receivable
Book value Amount of bad debts Provision
proportion%
Reasons
Shanghai Gujing Jinhao Hotel
Management Co., Ltd 131,000,000.00 0.00 0.00
Not provided bad
debts for intra-group83
companies
Minfa Securities
30,000,000.00 30,000,000.00 100.00
The securities has
bankrupted
Hengxin Securities
29,502,438.53 29,502,438.53 100.00
The securities has
bankrupted
Bozhou Gujing Glass Co., Ltd 23,702,948.26 0.00 0.00
Not provided bad
debts for intra-group
companies
Capital-Bridge Securities 13,600,000.00 13,600,000.00 100.00
The securities has
bankrupted
Bozhou Gujing Pairuite Packaging
Co., Ltd 7,150,601.81 715,060.18 10.00
According to the
Company’s provision
for bad debts
accounting policy
Total 234,955,988.60 73,817,498.71
（3）There is no other accounts receivable balance due from shareholders who own five or
over five percent voting rights as at June 30, 2010.
（4）List the balance of top five other accounts receivable:
Company name
Relationships
with the
Company
Balance Nature Age
Proportion of total other
accounts receivable%
Shanghai Jinhao Hotel
Management Co., Ltd Subsidiary 131,000,000.00
Temporary
borrowing
Within 1
year 55.19
Minfa Securities
Non related
parties 30,000,000.00
Security
deposit of
national
debentures
Over 3
years 12.64
Hengxin Securities
Non related
parties 29,502,438.53
Security
deposit of
national
debentures
Over 3
years 12.43
Bozhou Gujing Glass Co., Ltd Subsidiary 23,702,948.26
Intra –group
transaction
debts
Over 3
years 9.99
Capital-Bridge Securities
Non related
parties 13,600,000.00
Security
deposit of
national
debentures
Over 3
years 5.73
Total 227,805,386.79 95.98
（5）Details of other accounts receivable balance due from related parties:84
Company name
Relationships with the
Company
Balance
Proportion of total other accounts
receivable%
Shanghai Jinhao Hotel Management Co., Ltd Subsidiary 131,000,000.00 55.19
Bozhou Gujing Glass Co., Ltd Subsidiary 23,702,948.26 9.99
Total 154,702,948.26 65.18
3、Long-term equity investment
（1）Details of long-term equity investment
Name of investee company
Accounting
Method
Initial investment
cost
Proportion of
shareholding %
Proportion of voting
rights%
Explanation for the
difference between
shareholding proportion
and voting rights
proportion
Bozhou Gujing Sales Co., Ltd Cost method 84,428,042.21 100.00 100.00
Bozhou Gujing Transportation Co.,
Ltd
Cost method 6,875,743.00 99.00 99.00
Bozhou Gujing Glass Co., Ltd Cost method 65,795,666.00 99.00 99.00
Anhui Old Eight Big Distillery
Co., Ltd
Cost method 28,000,000.00 93.00 93.00
Bozhou Pairuite Packaging Co.,
Ltd
Cost method 49,900,000.00 99.80 99.80
Shanghai Gujing Trading Co., Ltd Cost method 9,900,000.00 99.00 99.00
Anhui Ruifuxiang Food Co., Ltd Cost method 265,113,634.51 100.00 100.00
Hefei Gujing Trading Co., Ltd Cost method 9,900,000.00 99.00 99.00
Bozhou City Gujing Hotel Co., Ltd Cost method 16,271,917.40 92.77 92.77
Shanghai Gujing Jinhao Hotel
Management Co., Ltd
Cost method 49,906,854.63 100.00 100.00
Total 586,091,857.75
Con.：
Name of investee company
Balance on 31
Dec 2009
Changes in current
year
Balance on 30
Jun. 2010
Provision
for
impairment
Provision for
impairment loss
for current year
Cash dividend
Bozhou Gujing Sales Co., Ltd 84,864,497.89 0.00 84,864,497.89 0.00 0.00 0.00
Bozhou Gujing Transportation
Co., Ltd 6,875,743.00 0.00 6,875,743.00 0.00 0.00 0.0085
Bozhou Gujing Glass Co., Ltd 65,795,666.00 0.00 65,795,666.00 0.00 0.00 0.00
Shanghai Gujing Trading Co.,
Ltd 9,900,000.00 0.00 9,900,000.00 0.00 0.00 0.00
Hefei Gujing Trading Co., Ltd 9,900,000.00 0.00 9,900,000.00 0.00 0.00 0.00
Shanghai Gujing Jinhao Hotel
Management Co., Ltd 49,906,854.63 0.00 49,906,854.63 0.00 0.00 0.00
Total 227,242,761.52 0.00 227,242,761.52 0.00 0.00 0.00
4、Operating Revenues and Operating Costs
（1）Operating Revenues and operating costs
Items Jan.-Jun. 2010 Jan.-Jun. 2009
Main operating incomes 471,613,698.56 351,259,046.09
Other operating incomes 23,170,239.16 25,914,572.08
Total operating income 494,783,937.72 377,173,618.17
Main operating Costs 188,744,723.93 194,118,226.61
Other operating Costs 23,287,490.74 27,057,325.17
Total operating costs 212,032,214.67 221,175,551.78
（2）Main business（listed according to categories of products）
Products
Jan.-Jun. 2010 Jan.-Jun. 2009
Operating incomes Operating Costs Operating incomes Operating Costs
Wine 471,613,698.56 188,744,723.93 345,296,241.14 189,197,567.34
Others 0.00 0.00 5,962,804.95 4,920,659.27
Total 471,613,698.56 188,744,723.93 351,259,046.09 194,118,226.61
（3）Details of operating revenues from top three clients:
Clients name Operating revenues Proportion of total operating revenues%
The first 467,868,900.56 94.56
The second 3,721,155.73 0.75
The third 23,642.27 0.01
Total 471,613,698.56 95.32
5、Investment income
（1）listed according to the source of investment income
Source of investment income Jan.-Jun. 2010 Jan.-Jun. 200986
Remittance of profits from subsidiaries 0.00 35,565,558.18
Gains from disposal of subsidiaries 0.00 -15,241,560.45
Gains from held for trading financial assets 645,653.65 0.00
Total 645,653.65 20,323,997.73
6、Supplemental information for cash flow statement
Supplemental information Jan.-Jun. 2010 Jan.-Jun. 2009
(1) Adjusting net profit to cash flow from operating activities：
Net profits 46,863,787.69 37,980,662.51
Add：Provision for assets impairment loss 0.00 0.00
Depreciation of fixed assets 、oil and gas assets and productbility
biological assets 10,356,089.21
9,834,173.63
Amortization of intangible assets 650,543.58 392,607.42
Amortization of Long-term deferred expenses 0.00 0.00
Loss on disposal of fixed assets、intangible assets and other long-term
assets (The gain is listed beginning with “- “)
0.00 0.00
Losses on scraped fixed assets (The gain is listed beginning with “-“) 27,794.00 28,422.97
Losses from fluctuation in fair values (The gain is listed beginning with
“- “) 0.00
0.00
Financial costs (The gain is listed beginning with “-“) 79,200.00 619,975.00
Losses on investment (The gain is listed beginning with “- “) -645,653.65 -20,323,997.73
Decrease of deferred income tax assets (The increase is listed beginning
with “-“) 16,647,468.80
0.00
Increase of deferred income tax liabilities (The decrease is listed
beginning with “- “) 0.00
0.00
Decrease of inventories (The increase is listed beginning with “-“) -21,967,792.28 70,876,981.67
Decrease of operating receivables (The increase is listed beginning with
“- “) -70,304,525.75
-90,606,902.10
Increase of operating payables (The decrease is listed beginning with
“- “) 142,946,838.52 -6,160,637.77
Others 124,653,750.12 2,641,285.60
Net cash flow arising from operating activities87
(2) Significant investment and financing activities that not relate to cash
flows:
0.00 0.00
Debts convert to capital 0.00 0.00
Convertible corporate bond due within 1 year 0.00 0.00
Finance leased fixed assets
(3) Net increase (decrease) of cash and cash equivalents： 326,240,638.24 104,527,524.30
Ending balance of cash 279,382,070.44 160,876,265.53
Less: Beginning balance of cash
Add : Ending balance of cash equivalents
Less: Beginning balance of cash equivalents 46,858,567.80 -56,348,741.23
Ⅻ. Supplemental information
1. List of current extraordinary profits or losses
Items Amount
Profits and losses from disposal non-current assets, including write off the
provided assets impairment
0.00
Tax return, relief from ultra vires approval or no formal approval file 0.00
The government subsidy recognized into current profit and loss, except those
government subsidies that closely related to the Company’s business,
according to national policies, and according to standard unified quota or
ration
0.00
The collected fees for possession of funds recognized into current profit and
loss
0.00
Gains from the investment costs paid less than the acquirer’s interest in the
fair value of the bargainor’s identifiable net assets( During acquire
subsidiary、joint venture and associates)
0.00
Profits and losses from exchange of non-monetary assets 0.00
Profits and losses from investment or management of assets entrusted to
others
0.00
The provison for impairment of assets due to force majeure factors, such as
incurred natural disasters
0.00
Profits and losses from debt restructuring 0.00
Restructuring expenses, such as replacement of employees 、integration 0.0088
expenses, etc
Profits and losses from the any amount exceed fair values when there is non
under fair value transactions
0.00
The net profits and losses of subsidiary that is from beginning of the period
to the combination date, the subsidiary generated from the business
combination that is under the same control
0.00
Profits and losses from contingent events that irrelevant to the Company’s
normal business
0.00
Except for effective hedging operations that relevant to the Company’s
normal business, the profits and losses from fair value changes from held
for trading financial assets and held for trading financial liabilities, as well
as the investment gains from disposal held for trading financial assets、held
for trading financial liabilities and available-for-sale financial assets
0.00
Reversal of provision for impairment of receivable that carry impairemt test
individually
0.00
Profits and losses from external entrusted loan 0.00
Profits and losses from fair value changes of investment property that adopt
fair value model as subsequent measurement method
0.00
The impact on current profit and loss, that according to tax, accounting and
other laws and regulations requirement to carry out one time adjustment for
current profit and loss
0.00
Trustee fee income from entrusted operations 0.00
Other non operating income and expenses except from above mentioned
items
7,652,092.37
Other profit and loss items that satisfied the definition of extraordinary
profits or losses
0.00
Subtotal 7,652,092.37
Less: the amount from income tax effect 1,913,023.09
the impact from minority interests 0.00
Total 5,739,069.28
2、Yield Rate of Net Assets and Earnings Per Share
Profit in the report period Weighted Earnings Per Share(Yuan per share)89
Average Yield Rate
of Net Assets%
Basic EPS Basic EPS
Net profits attributable to ordinary shareholders 13.09 0.46 0.46
Net profits attributable to ordinary shareholders that have
deducted extraordinary profits or losses.
12.39 0.43 0.43
3、Reasons and explanation for extraordinary items of financial statements
（1）Accounts receivable at the period-end were up by 38.25% as compared with the opening
amount, which was mainly due to an income growth in the report period;.
（ 2 ） Advances to suppliers at the period-end were up by 181.27% as compared with the
opening amount, which was mainly because the expenses incurred due to the seasonal production
halt were recognized as deferred expenses;
（3）Other receivables at the period-end were down by 41.77% as compared with the opening
amount, which was mainly because invoices for advertising fees stroke a balance in the report
period;
（4）Advances from customers at the period-end were up by 142.11% as compared with the
opening amount, which was mainly due to an increase in the accounts received in advance for
goods in the report period;
（5）Sale expenses in the report period were up by 59.85% year on year, which was mainly
due to a higher market input to expand the market share in the report period;
（6）Administrative expense in the report period were up by 98.15% year on year, which was
mainly due to factory rebuilding, equipment repair and the adjustment of social security expense
ratio in the report period;
（7）Financial expense in the report period were down by 171.19% year on year, which was
mainly due to an increase in monetary funds;
（8）Non-operating incomes in the report period were up by 198.36% year on year, which was
mainly because the Company received a land compensation in the report period;
（9）Income tax expenses in the report period were up by 138.09% year on year, which was
mainly due to an increase in the total profit.
4. Approval of financial statements
This financial statement are approved and authorized for issuance by the Board of Directors
on 5 August 2010.90
Chapter Ⅺ Documents Available for Reference
1. Semiannual report with the signature of chairman of the board of directors;
2. Accounting statements with the signatures and seals of the company principal, chief
accountant and principal in charge of the accounting department;
3. All documents disclosed in the appointed newspapers by China Securities Regulatory
Commission during the report period;
4. Articles of Association of the Company;
5. Other relating materials.
Board of Directors of
Anhui Gujing Distillery Company Limited
5 August 2010
