ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL REPORT 2016
Announcement No. 2016-025
August 2016
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section I Important Statements, Contents and Terms
The board of directors (the “Board”), the board of supervisors (the “Board of Supervisors”) as well
as the directors, supervisors and senior management of Anhui Gujing Distillery Company Limited
(the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of the
Report, and shall be jointly and severally liable for any false representation, misleading statements
or material omissions in the Report.
All the directors attended the board meeting for the review of the Report.
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into
share capital.
Liang Jinhui, head of the Company, Ye Changqing, accounting head for the Report, and Zhu Jiafeng,
head of the accounting organ (head of accounting), hereby guarantee that the Financial Report
carried in the Report is factual, accurate and complete.
The Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Contents
Section I Important Statements, Contents and Terms .................................................................... 2
Section II Corporate Profile .............................................................................................................. 5
Section III Highlights of Accounting Data and Financial Indicators ............................................ 7
Section IV Report by the Board of Directors .................................................................................. 9
Section V Significant Events ........................................................................................................... 18
Section VI Changes in Shares & Shareholders ............................................................................. 23
Section VII Preference Shares......................................................................................................... 28
Section VIII Directors, Supervisors and Senior Management Staffs .......................................... 29
Section IX Financial Report ............................................................................................................ 30
Section X Documents Available for Reference ............................................................................ 153
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Terms
Term Meaning
Company, the Company, Gu Jing Anhui Gujing Distillery Company Limited
Group, the Group Anhui Gujing Distillery Company Limited (consolidated)
Gujing Group Anhui Gujing Group Co., Ltd.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section II Corporate Profile
I Corporate information
Stock name Gujing Distillery, Gujing Distillery B Stock code 000596, 200596
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 安徽古井贡酒股份有限公司
Abbr. (if any) 古井
Company name in English (if
ANHUI GUJING DISTILLERY COMPANY LIMITED
any)
Abbr. (if any) GU JING
Legal representative Liang Jinhui
II Contact information
Board Secretary Securities Representative
Name Ye Changqing Ma Junwei
Gujing Town, Bozhou City, Anhui Gujing Town, Bozhou City, Anhui
Address
Province, P.R.China Province, P.R.China
Tel. (0558) 5712231 (0558) 5710057
Fax (0558)5317706 (0558) 5317706
E-mail gjzqb@gujing.com.cn gjzqb@gujing.com.cn
III Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the Reporting Period?
□ Applicable √ Not applicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the Reporting Period. The said information can be found in the 2015 Annual Report.
2. About information disclosure and the place where the Report is kept
Did any change occur to information disclosure media and the place where the Report is kept during the Reporting Period?
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
5
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Report and the location where the Report is placed did not change during the Reporting Period. The said information can be found in
the 2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the Reporting Period?
□ Applicable √ Not applicable
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section III Highlights of Accounting Data and Financial Indicators
I Major accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in
accounting policies or correction of accounting errors
□ Yes √ No
Reporting Period Same period of last year +/- (%)
Operating revenues (RMB) 3,045,034,706.73 2,713,042,828.92 12.24%
Net profit attributable to shareholders of
431,055,462.62 380,504,804.17 13.29%
the Company (RMB)
Net profit attributable to shareholders of
the Company after excluding exceptional 423,236,352.49 368,258,604.21 14.93%
profit and loss (RMB)
Net cash flows from operating activities
326,112,612.99 336,217,657.83 -3.01%
(RMB)
Basic earnings per share (RMB/share) 0.86 0.76 13.16%
Diluted earnings per share (RMB/share) 0.86 0.76 13.16%
Weighted average return on equity (%) 8.54% 8.75% -0.21%
As at the end of the
As at the end of last year +/- (%)
Reporting Period
Total assets (RMB) 8,762,569,335.47 7,183,147,641.13 21.99%
Net assets attributable to shareholders of
5,196,297,183.36 4,833,721,630.08 7.50%
the Company (RMB)
II Differences in accounting data under domestic and overseas accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared under
international and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared under overseas
and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
III Exceptional profit and loss
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Profit/loss on disposal of non-current assets (including offset
-4,318,558.07
amount of asset impairment provisions)
Government grants charged to the profit/loss for the Reporting
Period (except for the government grants closely related to the
3,899,636.68
business of the Company and given at a fixed quota or amount in
accordance with the State’s uniform standards)
Profit/loss on fair value changes of transactional financial assets
and liabilities & investment income from disposal of transactional
financial assets and liabilities as well as financial assets available 7,374,385.49
for sale, except for effective hedges related to normal business
operations of the Company
Non-operating income and expense other than the above 3,470,016.08
Less: Corporate income tax 2,606,370.05
Total 7,819,110.13 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss,
or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section IV Report by the Board of Directors
I Overview
2016 has continued to see obvious downward pressure on China’s economy, with complexity and volatility in the
environment at home and abroad. Despite signs of recovery in the distilled spirits industry, which had been in
hibernation, the industry as a whole is still going through deep change with continuous pressure.
Under the common efforts of the Board and all the other staff, for the six months from January to June 2016, we
achieved operating revenues of RMB3.045 billion, up 12.24% year on year; and net profit of RMB431 million,
representing a year-on-year growth of 13.29%. As such, the operating goals that we had set for the first half of
2016 at the beginning of the year were all accomplished. To achieve that, we took the following main measures in
the reporting period: ① following a strategy of “from the high-end market to other markets, from the
international market to the domestic market” to extend our brand influence; ② optimizing our market
competitive strategy through pushing forward the campaign to bring our products to more channels, stores and
consumers as well as through expanding our marketing channels to low-tier cities; ③ further improving our
brewing technique to increase our product quality; ④ pushing forward market internalization, reforming our
management methods and optimizing our human resource; and ⑤ accelerating automation, informatization and
intelligentization through the “5.0” strategy.
II Analysis of main business
YoY movements in major financial data
Unit: RMB
Main reason for
Reporting Period Same period of last year YoY +/-%
movement
Operating revenues 3,045,034,706.73 2,713,042,828.92 12.24%
Operating costs 780,394,434.66 827,578,527.59 -5.70%
Selling expenses 1,013,923,133.24 794,226,823.89 27.66%
Administrative expenses 257,077,455.72 237,926,770.64 8.05%
Finance costs -9,764,161.14 -8,593,975.74 -13.62%
Corporate income tax 144,981,768.68 132,550,174.27 9.38%
Net cash flows from
326,112,612.99 336,217,657.83 -3.01%
operating activities
Net cash flows from Net increase in cash paid
-225,265,330.93 -114,449,347.71 -96.83%
investing activities to acquire subsidiaries
Net cash flows from Payment of dividends to
-50,360,000.00 0.00 -100.00%
financing activities ordinary shareholders
Payment for investment
Net increase in cash and 50,487,282.06 221,768,310.12 -77.23%
and payment of
9
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
cash equivalents dividends
Financial assets that are
measured at fair value
The main reason for the
and whose movements
3,175,807.27 322,223.28 885.59% increase in the purchase
are included in the profit
of financial assets.
and loss of the current
period
The main reason for the
increase in the proportion
Note receivable 1,270,576,488.25 539,442,903.31 135.53%
of bills due to the
settlement
The main reason for the
Other receivables 22,597,880.76 8,617,955.68 162.22% increase in the scope of
the merger.
The main reason for the
project construction is
Construction project 23,322,200.71 62,562,971.78 -62.72% expected to be used in
the state, due to the
transfer of fixed assets.
The main reason for the
intangible assets 708,186,627.83 298,372,239.96 137.35% increase in the scope of
the merger.
The main reason is the
Payment in advance 1,059,316,464.50 608,565,152.50 74.07%
increase in sales orders.
The main reason is not
the same control
Deferred Tax Liability 119,413,770.33 20,463,660.87 483.54%
enterprise merger assets
evaluation caused by.
The main reason is the
Other payable 772,094,221.14 452,193,188.94 70.74% increase in deposit and
deposit.
Major changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Reporting Period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Review the reporting period progress of any previously disclosed business plan:
In the reporting period, we carried out our work according to our development strategy and annual operating plan, with the progress
10
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
meeting the schedule.
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease
Increase/decrease Increase/decrease
Operating of operating
Operating cost Gross profit rate of operating cost of gross profit
revenue revenue over last
over last year rate over last year
year
Classified by industry:
Manufacture 3,045,034,706.73 780,394,434.66 74.37% 12.24% -5.70% 4.88%
Classified by product:
Distilled spirit
2,973,449,794.40 746,662,345.73 74.89% 12.20% -6.55% 5.04%
products
Hotel service 40,919,489.59 17,287,727.65 57.75% 4.52% 9.02% -1.74%
Other 30,665,422.74 16,444,361.28 46.37% 28.55% 29.35% -0.33%
Classified by region:
Domestic 3,045,034,706.73 780,394,434.66 74.37% 12.24% -5.70% 4.88%
Overseas 0.00 0.00 -- -100% -100% --
IV. Core competitiveness analysis
In the reporting period, no changes occurred to our core competitiveness in equipment, patents, non-proprietary technology, franchise
rights, land use rights, trademark use rights, etc., with no impact on the Company.
V. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
√ Applicable □ Not applicable
Investments in external parties
Investment amount in the Reporting Period Investment amount in the same period of
+/-%
(RMB Yuan) last year (RMB Yuan)
816,000,000.00 0.00 100.00%
Particulars about investees
Proportion of the Company’s investment in
Name of investee Main business
the investee’s total equity interests (%)
Wuhan Pride Yellow Crane Tower Production and sales of distilled spirit 51.00%
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Distillery Co., Ltd.
(2) Equity-holdings in financial enterprises
□ Applicable √ Not applicable
No such cases in the reporting period.
(3) Securities investments
√Applicable □ Not applicable
Shareholdi Gain/los
Number Number Shareholdi
Variety Code Name Initial ng s for
of shares of shares ng Closing
of of of investment percentage reporting Accounting Source
held at held at percentage book value
securiti securiti securiti cost (RMB at period title of stock
period-be period-e at (RMB Yuan)
es es es Yuan) period-beg (RMB
gin nd period-end
in Yuan)
Available-for-
44,362,929. 10,485,10 14,877,1 47,755,491. 141,172. Self-own
Stock 601988 ZGYH sale financial
40 0 00 00 16 ed funds
assets
Available-for-
34,153,645. 4,211,66 36,641,476. 170,480. Self-own
Stock 000001 PAYH 2,219,720 sale financial
37 4 80 24 ed funds
assets
Available-for-
91,133,996. 6,445,12 133,736,240 Self-own
Stock 600373 ZWCM 6,445,120 0.00 sale financial
80 0 .00 ed funds
assets
169,650,571 19,149,94 25,533,8 218,133,207 311,652.
Total -- -- -- --
.57 0 84 .80 40
Disclosure date of the
board announcement on
approval of the
securities investment
Disclosure date of the
general meeting
announcement on
approval of the
securities investment (if
any)
12
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(4) Shareholdings in other listed companies
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Derivative investment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Entrustment loans
□ Applicable √ Not applicable
No such cases in the reporting period.
3. Particulars about the use of raised funds
√ Applicable □ Not applicable
(1) Overview of the use of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Total amount of raised funds 122,749.95
Total amount of raised funds input in the reporting
1,257.12
period
Total amount of raised funds accumulatively input 108,269.86
Total amount of the raised funds with modified
0
purposes during the reporting period
Total amount of the accumulative raised funds with
0
modified purposes
Proportion of the total amount of the accumulative
0.00%
raised funds with modified purposes
Overview of the use of raised funds
The Company’s raised funds were used stably as scheduled, without any changes.
13
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(2) Projects promised to be invested with raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Date
Project Investment when the Material
Projects invested with Accumulative Profit Reach
changed Raised Investment Input in progress project change in
raised capital as input up to generated the
or not capital after the up to the reaches the
promised and the in the expected
(including input as adjustment reporting period-end the project
investments with period-end reporting profit or
partially promised (1) year (%)(3)＝ expected feasibility
over-raised capital (2) period not
changed) (2)/(1) usable or not
condition
Projects invested with raised capital as promised
Technological
Transform on the 30 Apr.
Brewage of No 13,500 12,194.42 0.00 12,247.9 100.44% Yes No
High-quality Base 2014
Wine
Construction of Base
Wine Blending & 30 Apr.
No 68,600 65,921.06 1,065.45 60,708.87 92.09% Yes No
Filling Centre and 2014
Ancillary Facilities
Construction of 30 Apr.
No 27,500 27,500 191.67 18,288.03 66.50% Yes No
Marketing Network 2014
31 Dec.
Brand Promotion No 17,000 17,000 0.00 17,025.06 100.15% Yes No
2012
Subtotal of promised
-- 126,600 122,615.48 1,257.12 108,269.86 -- -- -- --
investment projects
Investments of over-raised capital
Naught
Total -- 126,600 122,615.48 1,257.12 108,269.86 -- -- 0 -- --
Reason for failing to
reach scheduled
progress or projected Naught
income (explain one
project by one project)
Explanation on
significant changes in Naught
feasibility of projects
Amount, usage and Not applicable
usage progress of
over-raised capital
Change of the Not applicable
14
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
implementation
location of any raised
funds investment
project
Adjustment of the Not applicable
implementation
method of any raised
funds investment
project
Applicable
In accordance with the explanation of the Particulars on the Private Issuance of A-share of Anhui Gujing
Distillery Co., Ltd. and the Listing Announcement, “Before the raised proceeds being in place, the Company
Advanced input and can use the self-raised proceeds to input preliminarily in accordance with the actual progress of raised
exchange of any proceeds investment projects; after the raised proceeds being in place, the Company can use the raised
raised funds proceeds to replace the self-raised proceeds preliminarily input”. And the Proposal on Using the Raised
investment project Proceeds to Replace the Self-raised Proceeds Preliminarily Input to the Raised Proceeds Investment Projects
was reviewed and approved at the 7th Session of the 6th Board of Directors, which agreed to use the raised
proceeds to replace the self-raised proceeds of RMB27,058,143.42 preliminarily input to the raised proceeds
investment projects. The above funds replacement was completed on 6 January 2012.
Idle raised capital for Not applicable
temporarily
supplementing
working capital
Applicable
1. The Company strictly carried out the purchase system and the project bidding way, which better controlled
the project construction and purchase cost and under the premise of guaranteeing the project quality with the
Outstanding raised principles of practicing strict economy, the Company further strengthened the project expenses control,
funds in project supervisor and management in the process of the execution which reduced the total cost of the investment
implementation and project of the raised funds. 2. The surplus reason of the marketing network construction project was due to the
reasons rather big changes of the liquor market environment and the third party logistics system gradually becoming
more and more mature and at the same time, the Company would no more execute the center project of Hefei
Logistics for reducing the fixed operating cost of the Company, which caused the capital surplus of the
project.
Usage and
whereabouts of Deposited in the special account for raised proceeds.
unused raise capital
Problems found in the
usage and disclosure
affairs of raised Naught
capital and other
situations
15
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(3) Changes in projects invested with raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Analysis to main subsidiaries and shareholding companies
√ Applicable □ Not applicable
Main subsidiaries and shareholding companies
Unit: RMB Yuan
Main
Compan Compan Industr Registered Operating Operating
products/servic Total assets Net assets Net profit
y name y variety y capital revenues profit
es
Wholesales of
distilled spirit,
Bozhou
Busine construction
Gujing Subsidiar 84,864,497. 2,401,810,413. 314,863,202. 2,902,945,573. 232,519,520. 171,808,153.
ss materials,
Sales y 89 62 15 87 37 25
trading feeds and
Co., Ltd
assistant
materials
5. Particulars about significant projects invested with non-raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI. Predict the operating results of January-September 2016
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable √ Not applicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the Reporting Period
□ Applicable √ Not applicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” for last
year
□ Applicable √ Not applicable
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
IX. Implementation of profit allocation during the Reporting Period
Formulation, execution or adjustment of the Company’s profit distribution policy, especially the cash dividend policy, during the
Reporting Period:
√ Applicable □ Not applicable
On 26 May 2016, the 2015 Annual General Meeting of the Company reviewed and approved the 2015 Profits
distribution plan: based on the total shares of 503,600,000 shares as on 31 December 2015, a cash dividend of
RMB1.00股为(tax included) to all shareholders for every 10 shares they held, with the total dividends paid out
totaling RMB50,360,000.00. The retained profits would carry over to the next year. The announcement on the
dividend payout was disclosed on China Securities Journal, Shanghai Securities News, Ta Kung Pao and
www.cninfo.com.cn on 21 June 2016.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
the resolution of the general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors fulfilled their responsibilities and played
Yes
their due role.
Minority shareholders have the chance to fully express their
opinion and desire and their legal rights and interests were fully Yes
protected.
In adjustment or alteration of the cash dividend policy, the
conditions and procedure were in compliance with regulations Not applicable
and transparent.
X. Pre-plan for profit allocation and turning capital reserve into share capital for the
Reporting Period
□ Applicable √ Not applicable
The Company planed not to distribute cash dividends or bonus shares or turn capital reserve into share capital for the Reporting
Period.
XI. Particulars about researches, visits and interviews received in this Reporting Period
□ Applicable √ Not applicable
No such in the Reporting Period.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
V. Significant Events
I. Corporate governance
Since foundation, the Company constantly perfects corporate governance structure and standardize its management strictly in
accordance with the Company Law, Securities Law, Standard for Governance of Listed Companies, Guide Opinion on Setting up
Independent Directors Systems for Listed Companies as well as principles and requirements of other relevant laws, regulations and
normative documents. In the reporting period, as per requirements of Basic Standard for Enterprise Internal Control and Shenzhen
Stock Exchange Guideline on Internal Control of Listed Companies, the Company developed internal control activity, perfected
internal control system step by step, promoted normative operation and healthy development. The Board of Directors, the
Supervisory Committee and the management of the Company make decisions, perform rights and assume obligation strictly
according to the standard operation rules and inner control system so as to make sure the standard operation of the Company in the
frame of rules and systems.
In the Reporting Period, according to requirements of China Securities Regulatory Commission and Rules for Listing of Shares in
Shenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriously and timely performed information
disclosure obligation and guaranteed that the information disclosed is true, accurate and complete, free from fictitious presentation,
misleading statements or important omissions, so that all the shareholders will equally acquaint themselves with all the notices of the
Company.
During the Reporting Period, the actual situation of the corporate governance had no difference with the Company Law and the
requirements of the relevant regulations of the CSRC.
II. Litigations
Significant litigations and arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other litigations
□ Applicable √ Not applicable
III. Media query
□ Applicable √Not applicable
The Company was not involved in any media query in the Reporting Period.
IV. Bankruptcy or Reorganization Events
□ Applicable √ Not applicable
There Company was not involved in any bankruptcy or reorganization events in the Reporting Period.
18
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
V. Transaction in Assets
1. Purchase of assets
√ Applicable □ Not applicable
Relationsh
ip between
Ratio of the
Influence the net transaction
Influence
on the profit party and
Transactio Asset Transactio on the Related-pa
gains and contribute the Disclosure
n party or acquired n price Progress operation rty Disclosure
losses of d by the Company date (note
ultimate or bought (RMB’0,0 (note 2) of the transaction index
the asset to the (applicable 5)
controller in 00) Company or not
Company Company for
(note 3)
(note 4) to the total related-par
profit ty
transaction
s)
Strengthen
ed the
developme
nt of the
distilled
51%
spirit See the
equities of
business of details of
Wuhan
the the
51% Pride
Company, Announce
equities of Yellow
Wuhan accelerated ment on
Wuhan Crane
Pride the the Assets
Pride Tower
Investment national Not 29 Apr. Purchase
Yellow 81,600 Distillery 587.83 1.36% No
Group Co., layout of applicable 2016 of the
Crane Co., Ltd.
Ltd., Yan the Company
Tower had
Hongzhi products on 29
Distillery transferred
market and April 2016
Co., Ltd. under the
enhanced on
name of
the brand www.cninf
the
impact as o.com.cn
Company
well as the
business
scope of
the
Company.
19
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
2. Sale of assets
□ Applicable √ Not applicable
There is no sale of assets in the Company during the Reporting Period.
3. Business combination
√ Applicable □ Not applicable
For strengthening the development of the distilled spirits business and accelerating the national layout of the products market as well
as enhancing of the brand impact with the business scope, the Company completed the purchase of the 51% equities of Wuhan Pride
Yellow Crane Tower Distillery during the Reporting Period, which is thus included in the consolidated scope of the 2016
Semi-annual Report.
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable √ Not applicable
There is no equity incentive plan and its implementation in the Company during the Reporting Period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
□ Applicable √ Not applicable
There is no related-party transaction concerning routine operating in the Company during the Reporting Period.
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the Reporting Period.
3. Related-party transitions with joint investments
□ Applicable √ Not applicable
The Company was not involved in any related-party transaction with joint investments during the Reporting Period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other significant related-party transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
20
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
VIII. Particulars about the non-operating occupation of funds by the controlling shareholder
and other related parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties
during the Reporting Period.
IX. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no any trusteeship of the Company in the Reporting Period.
(2) Contract
□ Applicable √ Not applicable
There was no any contract of the Company in the Reporting Period.
(3) Lease
□ Applicable √ Not applicable
There was no any lease of the Company in the Reporting Period.
2. Guarantees provided by the company
□ Applicable √ Not applicable
There was no any guarantee provided by the Company in the Reporting Period.
3. Other significant contracts
□ Applicable √ Not applicable
There was no other significant contract of the Company in the Reporting Period.
4. Other significant transactions
□ Applicable √ Not applicable
There was no other significant transaction of the Company in the Reporting Period.
21
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
X. Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period or such commitments carried down into the Reporting Period
□ Applicable √ Not applicable
No such situation of the Company during the Reporting Period.
XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes √ No
This semi-annual report is un-audited.
XII. Punishment and Rectification
□ Applicable √ Not applicable
There was no any punishment and rectification of the Company in the Reporting Period.
XIII. Reveal of the delisting risks of illegal or violation
□ Applicable √ Not applicable
There was no any delisting risk of illegal or violation of the Company in the Reporting Period.
XIV. Explanation about other significant matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV. Related situation of the corporate bonds
Whether there was any public issuance of the corporate bonds which listed on the securities exchange that had not due on the
approved presentation date of the half-annual report or failed to pay in full amount.
No
22
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section VI. Change in Shares & Shareholders
I. Changes in shares
Unit: share
Before this change Increase/decrease (+, -) After the change
Issuance Capitalization
Bonus
Amount Proportion of new of public Other Subtotal Amount Proportion
share
shares reserve fund
I. Shares subject to trading
900 0.00% 900 0.00%
moratorium
1. Other domestic shares 900 0.00% 900 0.00%
Shares held by
900 0.00% 900 0.00%
domestic individuals
II. Shares not subject to
503,599,100 100.00% 503,599,100 100.00%
trading moratorium
1. Ordinary shares
383,599,100 76.17% 383,599,100 76.17%
denominated in RMB
2. Domestically listed
120,000,000 23.83% 120,000,000 23.83%
foreign shares
III. Total of shares 503,600,000 100.00% 503,600,000 100.00%
Reasons for changes in share
□ Applicable √ Not applicable
Approval of share changes
□ Applicable √ Not applicable
Transfers in share changes
□ Applicable √ Not applicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net
assets per share belonging to shareholder with ordinary share
□ Applicable √ Not applicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable √ Not applicable
Explanation of the changes in the sum of the shares and the structure of the shareholders and the structure of the assets as well as the
liabilities of the Company
□ Applicable √ Not applicable
23
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
II. Number of shareholders and shareholding
Unit: Share
Total number of preferred
Total number of common
shareholders that had restored the
shareholders at the end of the 19,231
voting right at the end of the
Reporting Period
Reporting Period (if any) (note 8)
Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders
Increase Pledged or frozen shares
Number of and Number of Number of
shareholding decrease shares held shares held
Name of Nature of Holding
at the end of of shares subject to not subject Status of Number of
shareholder shareholder percentage
the reporting during trading to trading shares shares
period reporting moratorium moratorium
period
ANHUI GUJING
GROUP State-owned
53.89% 271,404,022 0 271,404,022 Pledged 114,000,000
COMPANY corporation
LIMITED
GAOLING Foreign
2.47% 12,446,408 1,335,766 12,446,408
FUND,L.P. corporation
Foreign
NORGES BANK 2.43% 12,217,246 2,214,387 12,217,246
corporation
UBS
Foreign
(LUXEMBOURG) 2.41% 12,150,199 -83,281 12,150,199
corporation
S.A.
GREENWOODS
Foreign
CHINA ALPHA 1.71% 8,627,598 0 8,627,598
corporation
MASTER FUND
CENTRAL HUIJIN
ASSET State-owned
1.30% 6,543,600 0 6,543,600
MANAGEMENT corporation
CO., LTD.
CHINA INT'L
CAPITAL CORP Foreign
1.13% 5,684,059 36,099 5,684,059
HONG KONG corporation
SECURITIES LTD
CHINA
CONSTRUCTION
Other 0.79% 4,000,000 4,000,000 4,000,000
BANK
CORPORATION －
24
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
E-FUND NEW
SILK ROAD
FLEXIBLE
CONFIGURATION
HYBRID
SECURITIES
INVESTMENT
FUNDS
GOLDEN CHINA Foreign
0.75% 3,786,434 0 3,786,434
MASTER FUND corporation
3W GREATER
Foreign
CHINA FOCUS 0.70% 3,529,479 0 3,529,479
corporation
FUND
Strategic investor or general
corporation becoming a top ten
Not applicable
shareholder due to placing of new
shares (if any) (note 3)
Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing
Group Company Limited—is not a related party of other shareholders; nor are they parties
Explanation on associated relationship
acting in concert as defined in the Administrative Measures on Information Disclosure of
or/and persons acting in concert
Changes in Shareholding of Listed Companies. As for the other shareholders, the Company
among the above-mentioned
does not know whether they are related parties or whether they belong to parties acting in
shareholders
concert as defined in the Administrative Measures on Information Disclosure of Changes in
Shareholding of Listed Companies.
Particulars about shares held by top 10 common shareholders not subject to trading moratorium
Number of shares held not subject to trading moratorium Type of share
Name of shareholder
at the end of the period Type of share Number
ANHUI GUJING GROUP RMB ordinary
271,404,022 271,404,022
COMPANY LIMITED share
Domestically
GAOLING FUND,L.P. 12,446,408 listed foreign 12,446,408
share
Domestically
NORGES BANK 12,217,246 listed foreign 12,217,246
share
Domestically
UBS (LUXEMBOURG) S.A. 12,150,199 listed foreign 12,150,199
share
Domestically
GREENWOODS CHINA ALPHA
8,627,598 listed foreign 8,627,598
MASTER FUND
share
25
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
CENTRAL HUIJIN ASSET RMB ordinary
6,543,600 6,543,600
MANAGEMENT CO., LTD. share
Domestically
CHINA INT'L CAPITAL CORP
5,684,059 listed foreign 5,684,059
HONG KONG SECURITIES LTD
share
CHINA CONSTRUCTION BANK
CORPORATION － E-FUND NEW
SILK ROAD FLEXIBLE RMB ordinary
4,000,000 4,000,000
CONFIGURATION HYBRID share
SECURITIES INVESTMENT
FUNDS
Domestically
GOLDEN CHINA MASTER FUND 3,786,434 listed foreign 3,786,434
share
Domestically
3W GREATER CHINA FOCUS
3,529,479 listed foreign 3,529,479
FUND
share
Explanation on associated relationship
Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing
among the top ten shareholders of
Group Company Limited—is not a related party of other shareholders; nor are they parties
tradable share not subject to trading
acting in concert as defined in the Administrative Measures on Information Disclosure of
moratorium, as well as among the top
Changes in Shareholding of Listed Companies. As for the other shareholders, the Company
ten shareholders of tradable share not
does not know whether they are related parties or whether they belong to parties acting in
subject to trading moratorium and top
concert as defined in the Administrative Measures on Information Disclosure of Changes in
ten shareholders, or explanation on
Shareholding of Listed Companies.
acting-in-concert
Particular about shareholder
participate in the securities lending
Not applicable
and borrowing business (if any) (note
4)
Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company carry
out an agreed buy-back in the Reporting Period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company had not
carried out any agreed buy-back in the Reporting Period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
26
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
There was no any change of the actual controller of the Company in the Reporting Period.
IV. Particulars on shareholding increase scheme during the Reporting Period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable √ Not applicable
Within the scope known to the Company, there was no any shareholding increase scheme during the Reporting Period proposed or
implemented by the shareholders and act-in-concert persons.
27
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section VII. Preferred Shares
□ Applicable √ Not applicable
There was no any preferred share of the Company during the Reporting Period.
28
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section VIII. Directors, Supervisors, Senior Management Staffs
I. Changes in shareholding of Directors, Supervisors and Senior Management Staffs
□ Applicable √ Not applicable
There was no change in shareholding of Directors, Supervisors and Senior Management Staffs, for the specific information please
refer to the 2015 Annual Report.
II. Changes in Directors, Supervisors and Senior Management Staffs
□ Applicable √ Not applicable
There was no change in Directors, Supervisors and Senior Management Staffs, for the specific information please refer to the 2015
Annual Report.
29
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Anhui Gujing Distillery Company Limited
30 June 2016
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,191,900,720.16 1,087,319,158.77
Settlement reserves
Intra-Company lendings
Financial assets measured by fair
value with the changes be included in 3,175,807.27 322,223.28
the current gains and losses
Derivative financial assets
Notes receivable 1,270,576,488.25 539,442,903.31
Accounts receivable 5,933,487.57 4,948,074.84
Accounts paid in advance 55,891,773.32 80,373,083.59
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 22,597,880.76 8,617,955.68
Financial assets purchased under
30
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
agreements to resell
Inventories 1,679,096,152.26 1,396,712,050.87
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 870,481,108.21 1,500,970,860.37
Total current assets 5,099,653,417.80 4,618,706,310.71
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 318,133,207.80 313,881,190.47
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment
Investing property 9,425,316.99 9,715,451.89
Fixed assets 1,941,766,799.81 1,691,028,804.32
Construction in progress 23,322,200.71 62,562,971.78
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 708,186,627.83 298,372,239.96
R&D expense
Goodwill 473,325,507.30 0.00
Long-term deferred expenses 108,433,949.42 127,815,668.37
Deferred income tax assets 80,322,307.81 61,065,003.63
Other non-current assets
Total of non-current assets 3,662,915,917.67 2,564,441,330.42
Total assets 8,762,569,335.47 7,183,147,641.13
Current liabilities:
Short-term borrowings
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-Company borrowings
Financial liabilities measured by fair
31
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
value with the changes be included in
the current gains and losses
Derivative financial liabilities
Notes payable 118,240,262.03 93,768,583.00
Accounts payable 409,626,614.83 378,187,452.07
Accounts received in advance 1,059,316,464.50 608,565,152.50
Financial assets sold for repurchase
Handling charges and commissions
payable
Employee’s compensation payable 201,789,976.70 253,901,700.72
Tax payable 293,627,729.24 358,087,353.80
Interest payable
Dividend payable
Other accounts payable 772,094,221.14 452,193,188.94
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities 213,429,867.63 138,135,604.82
Total current liabilities 3,068,125,136.07 2,282,839,035.85
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 43,849,216.27 46,123,314.33
32
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Deferred income tax liabilities 119,413,770.33 20,463,660.87
Other non-current liabilities
Total non-current liabilities 163,262,986.60 66,586,975.20
Total liabilities 3,231,388,122.67 2,349,426,011.05
Owners’ equity
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 1,294,938,493.19 1,294,938,493.19
Less: Treasury stock
Other comprehensive income 36,361,977.17 54,481,886.51
Specific reserves
Surplus reserves 256,902,260.27 256,902,260.27
Provisions for general risks
Retained profits 3,104,494,452.73 2,723,798,990.11
Total equity attributable to owners of
5,196,297,183.36 4,833,721,630.08
the Company
Minority interests 334,884,029.44
Total owners’ equity 5,531,181,212.80 4,833,721,630.08
Total liabilities and owners’ equity 8,762,569,335.47 7,183,147,641.13
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2. Balance sheet of the Company
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 442,996,437.07 548,650,832.84
Financial assets measured by fair
value with the changes be included in 2,961,045.95 322,223.28
the current gains and losses
Derivative financial assets
Notes receivable 1,009,485,003.27 288,101,188.68
33
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Accounts receivable 4,938,665.24 4,350,437.24
Accounts paid in advance 22,226,017.80 5,876,678.41
Interest receivable
Dividend receivable
Other accounts receivable 106,741,698.35 107,625,019.85
Inventories 1,430,747,070.41 1,374,311,894.88
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 870,115,822.70 1,500,000,000.00
Total current assets 3,890,211,760.79 3,829,238,275.18
Non-current assets:
Available-for-sale financial assets 288,518,407.80 313,881,190.47
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 1,170,089,408.32 354,089,408.32
Investing property 9,425,316.99 9,715,451.89
Fixed assets 1,450,231,235.81 1,471,584,047.66
Construction in progress 22,526,925.31 62,355,022.07
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 184,837,985.78 187,468,810.92
R&D expense
Goodwill
Long-term deferred expenses 108,433,949.42 127,815,668.37
Deferred income tax assets 42,154,627.44 42,154,627.44
Other non-current assets
Total of non-current assets 3,276,217,856.87 2,569,064,227.14
Total assets 7,166,429,617.66 6,398,302,502.32
Current liabilities:
Short-term borrowings
Financial liabilities measured by fair
value with the changes be included in
the current gains and losses
34
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Derivative financial liabilities
Notes payable 3,028,583.00 828,583.00
Accounts payable 339,675,045.40 371,636,772.06
Accounts received in advance 1,374,171,319.83 659,484,624.07
Employee’s compensation payable 68,180,897.79 88,513,920.05
Tax payable 193,528,289.89 237,459,964.06
Interest payable
Dividend payable
Other accounts payable 262,436,022.69 268,035,753.60
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities 63,638,484.78 61,660,494.13
Total current liabilities 2,304,658,643.38 1,687,620,110.97
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 43,849,216.27 46,123,314.33
Deferred income tax liabilities 16,081,969.69 20,463,660.87
Other non-current liabilities
Total non-current liabilities 59,931,185.96 66,586,975.20
Total liabilities 2,364,589,829.34 1,754,207,086.17
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 1,247,162,107.35 1,247,162,107.35
35
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Less: Treasury stock
Other comprehensive income 36,762,996.51 54,481,886.51
Specific reserves
Surplus reserves 251,800,000.00 251,800,000.00
Retained profits 2,762,514,684.46 2,587,051,422.29
Total owners’ equity 4,801,839,788.32 4,644,095,416.15
Total liabilities and owners’ equity 7,166,429,617.66 6,398,302,502.32
3. Consolidated income statement
Unit: RMB Yuan
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total operating revenues 3,045,034,706.73 2,713,042,828.92
Including: Sales income 3,045,034,706.73 2,713,042,828.92
Interest income
Premium income
Handling charge and commission
income
II. Total operating cost 2,512,805,683.52 2,247,031,817.63
Including: Cost of sales 780,394,434.66 827,578,527.59
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 471,239,184.35 392,182,734.37
Selling and distribution expenses 1,013,923,133.24 794,226,823.89
Administrative expenses 257,077,455.72 237,926,770.64
Financial expenses -9,764,161.14 -8,593,975.74
Asset impairment loss -64,363.31 3,710,936.88
Add: Gain/(loss) from change in fair
2,080,010.18 40,432.58
value (“-” means loss)
36
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Gain/(loss) from investment (“-”
44,324,855.36 38,298,172.94
means loss)
Including: share of profits in associates
and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 578,633,888.75 504,349,616.81
Add: non-operating income 8,139,697.17 9,984,586.51
Of which: gains from non-current
5,477.22 82,953.29
asset disposal
Less: non-operating expense 5,088,602.48 1,279,224.88
Of which: losses from non-current
4,324,035.29 644,420.16
asset disposal
IV. Total profit (“-” means loss) 581,684,983.44 513,054,978.44
Less: Income tax expense 144,981,768.68 132,550,174.27
V. Net profit (“-” means loss) 436,703,214.76 380,504,804.17
Attributable to owners of the
431,055,462.62 380,504,804.17
Company
Minority shareholders’ income 5,647,752.14 0.00
VI. After-tax net amount of other
-18,119,909.34 55,421,817.33
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to -18,119,909.34 55,421,817.33
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and -18,119,909.34 55,421,817.33
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
37
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
under the equity method
2. Gains and losses on fair
value changes of available-for-sale -18,119,909.34 55,421,817.33
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to
minority shareholders
VII. Total comprehensive incomes 418,583,305.42 435,926,621.50
Attributable to owners of the
412,935,553.28 435,926,621.50
Company
Attributable to minority
5,647,752.14 0.00
shareholders
VIII. Earnings per share
(I) Basic earnings per share 0.86 0.76
(II) Diluted earnings per share 0.86 0.76
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
4. Income statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total sales 1,738,703,915.32 1,526,161,277.67
Less: cost of sales 766,632,166.44 849,408,915.00
Business taxes and surcharges 438,712,029.21 370,306,018.23
Distribution expenses 106,464,016.98 49,930,659.26
Administrative expenses 185,132,665.41 162,304,060.52
Financial costs -8,383,165.64 -8,083,219.69
38
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Impairment loss -170,676.54 2,948,211.17
Add: gain/(loss) from change in
2,038,778.28 40,432.58
fair value (“-” means loss)
Gain/(loss) from investment (“-”
43,379,375.36 37,697,274.33
means loss)
Of which: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 295,735,033.10 137,084,340.09
Add: non-business income 8,735,915.53 7,222,891.82
Of which: gains from non-current
asset disposal
Less: non-business expense 4,318,076.25 74,531.37
Of which: losses from non-current
4,318,076.25 70,087.08
asset disposal
III. Total profit (“-” means loss) 300,152,872.38 144,232,700.54
Less: income tax expense 74,329,610.21 40,778,019.63
IV. Net profit (“-” means loss) 225,823,262.17 103,454,680.91
V. After-tax net amount of other
-17,718,890.00 55,421,817.33
comprehensive incomes
(I) Other comprehensive
incomes that will not be reclassified
into gains and losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive
incomes that will be reclassified into -17,718,890.00 55,421,817.33
gains and losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair
value changes of available-for-sale -17,718,890.00 55,421,817.33
financial assets
39
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes 208,104,372.17 158,876,498.24
VII. Earnings per share
(I) Basic earnings per share 0.450 0.210
(II) Diluted earnings per share 0.450 0.210
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
2,839,999,383.84 2,825,242,242.74
commodities and rendering of service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase of deposits of policy
holders and investment fund
Net increase of dispose of the
financial assets measured by fair value
with the changes be included in the
current gains and losses
Cash received from interest,
handling charges and commissions
40
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Net increase of intra-Company
borrowings
Net increase of funds in repurchase
business
Tax refunds received 368,270.62 0.00
Other cash received relating to
274,445,609.43 175,019,524.21
operating activities
Subtotal of cash inflows from operating
3,114,813,263.89 3,000,261,766.95
activities
Cash paid for goods and services 517,398,554.95 709,413,298.38
Net increase of customer lendings
and advances
Net increase of funds deposited in
the central bank and amount due from
banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest, handling
charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 540,282,959.39 517,459,277.00
Various taxes paid 1,174,821,006.32 1,048,663,427.74
Other cash payment relating to
556,198,130.24 388,508,106.00
operating activities
Subtotal of cash outflows from
2,788,700,650.90 2,664,044,109.12
operating activities
Net cash flows from operating activities 326,112,612.99 336,217,657.83
II. Cash flows from investing activities:
Cash received from withdrawal of
2,233,652,050.58 1,359,031,928.76
investments
Cash received from return on
44,324,855.36 38,298,172.94
investments
Net cash received from disposal of
fixed assets, intangible assets and other 500,379.86 107,750.00
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to 0.00 500,000.00
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
investing activities
Subtotal of cash inflows from investing
2,278,477,285.80 1,397,937,851.70
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 75,351,512.67 109,798,840.51
assets
Cash paid for investment 1,632,621,071.61 1,402,588,358.90
Net increase of pledged loans
Net cash paid to acquire
795,770,032.45 0.00
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
2,503,742,616.73 1,512,387,199.41
investing activities
Net cash flows from investing activities -225,265,330.93 -114,449,347.71
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses and
50,360,000.00 0.00
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
50,360,000.00 0.00
financing activities
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Net cash flows from financing activities -50,360,000.00 0.00
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
50,487,282.06 221,768,310.12
equivalents
Add: Opening balance of cash and
1,040,373,733.07 682,360,442.79
cash equivalents
VI. Closing balance of cash and cash
1,090,861,015.13 904,128,752.91
equivalents
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
1,644,591,743.75 1,700,083,632.03
commodities and rendering of service
Tax refunds received
Other cash received relating to
220,264,244.15 88,556,807.56
operating activities
Subtotal of cash inflows from operating
1,864,855,987.90 1,788,640,439.59
activities
Cash paid for goods and services 433,945,983.66 551,870,710.00
Cash paid to and for employees 261,484,424.76 240,816,560.34
Various taxes paid 785,049,481.14 558,464,417.24
Other cash payment relating to
230,121,472.77 66,678,887.51
operating activities
Subtotal of cash outflows from
1,710,601,362.33 1,417,830,575.09
operating activities
Net cash flows from operating activities 154,254,625.57 370,809,864.50
II. Cash flows from investing activities:
Cash received from retraction of
2,233,318,095.80 1,312,651,013.05
investments
Cash received from return on
43,379,375.36 37,697,274.33
investments
Net cash received from disposal of
fixed assets, intangible assets and other 409,000.00 0.00
long-term assets
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
0.00 500,000.00
investing activities
Subtotal of cash inflows from investing
2,277,106,471.16 1,350,848,287.38
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 68,357,442.76 106,844,334.84
assets
Cash paid for investment 2,418,298,049.74 1,360,032,857.38
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
2,486,655,492.50 1,466,877,192.22
investing activities
Net cash flows from investing activities -209,549,021.34 -116,028,904.84
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses
50,360,000.00 0.00
and distribution of dividends or profit
Other cash payments relating to
financing activities
Sub-total of cash outflows from
50,360,000.00 0.00
financing activities
Net cash flows from financing activities -50,360,000.00 0.00
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
44
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
V. Net increase in cash and cash
-105,654,395.77 254,780,959.66
equivalents
Add: Opening balance of cash and
548,650,832.84 584,601,536.78
cash equivalents
VI. Closing balance of cash and cash
442,996,437.07 839,382,496.44
equivalents
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2016
Unit: RMB Yuan
Jan.-Jun. 2016
Equity attributable to owners of the Company
Other equity instruments
Item Less: Other General Minority Total owners’
Perpetual Specific
Share capital Preferred Capital reserve treasury comprehensive Surplus reserve risk Retained profit interests equity
capital Other reserve
shares stock income reserve
securities
I. Balance at the end
503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
of the previous year
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
II. Balance at the
503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
period-begin
III. Increase/
decrease in the -18,119,909.34 380,695,462.62 334,884,029.44 697,459,582.72
period (“-” means
46
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
decrease)
(I) Total amount
of the
-18,119,909.34 431,055,462.62 5,647,752.14 418,583,305.42
comprehensive
income
(II) Capital paid
in and reduced by 329,236,277.30 329,236,277.30
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others 329,236,277.30 329,236,277.30
(III) Profit
-50,360,000.00 -50,360,000.00
distribution
1. Appropriations to
surplus reserves
2. Appropriations to
general risk
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
provisions
3. Appropriations to
owners (or -50,360,000.00 -50,360,000.00
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from capital
public reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(VI) Other
IV. Closing balance 503,600,000.00 1,294,938,493.19 36,361,977.17 256,902,260.27 3,104,494,452.73 334,884,029.44 5,531,181,212.80
January-June 2015
Unit: RMB Yuan
Jan.-Jun. 2015
Equity attributable to owners of the Company
Other equity instruments
Item Less: Other General Minority Total owners’
Perpetual Specific
Share capital Preferred Capital reserve treasury comprehensive Surplus reserve risk Retained profit interests equity
capital Other reserve
shares stock income reserve
securities
I. Balance at the end of
503,600,000.00 1,294,938,493.19 16,669,604.07 256,902,260.27 2,108,940,620.43 4,181,050,977.96
the previous year
Add: change of
accounting policy
Correction of errors
in previous periods
Business combination
under the same control
Other
II. Balance at the
503,600,000.00 1,294,938,493.19 16,669,604.07 256,902,260.27 2,108,940,620.43 4,181,050,977.96
period-begin
III. Increase/ decrease in
the period (“-” means 37,812,282.44 614,858,369.68 652,670,652.12
decrease)
(I) Total amount of 37,812,282.44 715,578,369.68 753,390,652.12
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
the comprehensive
income
(II) Capital paid in
and reduced by owners
1. Common shares
invested by the
shareholders
2. Capital invested by
the owners of other
equity instruments
3. Amounts of
share-based payments
recognized in owners’
equity
4. Others
(III) Profit
-100,720,000.00 -100,720,000.00
distribution
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
owners (or -100,720,000.00 -100,720,000.00
shareholders)
4. Other
(IV) Internal
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
carry-forward of
owners’ equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves for
making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(VI) Other
IV. Closing balance 503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
8. Statement of changes in owners’ equity of the Company
January-June 2016
Unit: RMB Yuan
Jan.-Jun. 2016
Item
Share capital Other equity instruments Capital reserve Less: Other Specific Surplus reserve Retained profit Total owners’
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Perpetual treasury comprehensive reserve equity
Preferred
capital Other stock income
shares
securities
I. Balance at the end of the
503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
previous year
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the
503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
period-begin
III. Increase/ decrease in
the period (“-” means -17,718,890.00 175,463,262.17 157,744,372.17
decrease)
(I) Total amount of the
-17,718,890.00 225,823,262.17 208,104,372.17
comprehensive income
(II) Capital paid in and
reduced by owners
1. Common shares
invested by the
shareholders
2. Capital invested by the
owners of other equity
instruments
3. Amounts of share-based
52
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
payments recognized in
owners’ equity
4. Others
(III) Profit distribution -50,360,000.00 -50,360,000.00
1. Appropriations to
surplus reserves
2. Appropriations to
-50,360,000.00 -50,360,000.00
general risk provisions
3. Appropriations to
owners (or shareholders)
4. Other
(IV) Internal
carry-forward of owners’
equity
1. New increase of capital
(or share capital) from
capital public reserves
2. New increase of capital
(or share capital) from
surplus reserves
3. Surplus reserves for
making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the
53
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
period
2. Used in the period
(VI) Other 503,600,000.00 1,247,162,107.35 36,762,996.51 251,800,000.00 2,762,514,684.46 4,801,839,788.32
January-June 2015
Unit: RMB Yuan
Jan.-Jun. 2015
Other equity instruments
Less: Other
Item Specific Total owners’
Perpetual
Share capital Preferred Capital reserve treasury comprehensive Surplus reserve Retained profit
capital Other reserve equity
shares stock income
securities
I. Balance at the end of
503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
the previous year
Add: change of
accounting policy
Correction of errors in
previous periods
Other
II. Balance at the
503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
period-begin
III. Increase/ decrease in
the period (“-” means 37,812,282.44 596,971,132.31 634,783,414.75
decrease)
(I) Total amount of the
37,812,282.44 697,691,132.31 735,503,414.75
comprehensive income
(II) Capital paid in and
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
reduced by owners
1. Common shares
invested by the
shareholders
2. Capital invested by the
owners of other equity
instruments
3. Amounts of
share-based payments
recognized in owners’
equity
4. Others
(III) Profit distribution -100,720,000.00 -100,720,000.00
1. Appropriations to
surplus reserves
2. Appropriations to
-100,720,000.00 -100,720,000.00
general risk provisions
3. Appropriations to
owners (or shareholders)
4. Other
(IV) Internal
carry-forward of owners’
equity
1. New increase of capital
(or share capital) from
capital public reserves
55
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
2. New increase of capital
(or share capital) from
surplus reserves
3. Surplus reserves for
making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(VI) Other 503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
56
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Anhui Gujing Distillery Company Limited
Notes to the 2016 semi-annual financial statement
I. Company history
Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned
Property, Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited
liability company with net assets of RMB377,167,700 and state-owned shares of 155,000,000
shares and considered Anhui Gujing Company as the only promoter. The registration place was
Bozhou Anhui China. The Company was established on 5 March 1996 by document of WZM (1996)
No.42 of Anhui People’s Government. The Company set up plenary session on 28 May 1996 and
registered in Anhui on 30 May 1996 with business license of 14897271-1.
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 RMB1.00 per share. Those A shares and B shares are listed in Shenzhen
Stock exchange.
Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries
(the Company) specialize in producing and selling white spirit.
Registered capitals of the Company were RMB235,000,000 with stocks of 235,000,000, of which
155,000,000 shares were issued in China, B shares of 60,000,000 shares and A shares of 20,000,000
shares. The book value of the stocks of the Company was of RMB1 Yuan per share.
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 that day, outstanding shares with restrict
condition on disposal are 135,250,000, representing 57.55% of total equity, the share without
restrict condition are 99,750,000, representing 42.45% of total equity.
The Company issued on July 17, 2008, 11,750,000 outstanding shares with restrict condition on
disposal are listed in stock market on July 18, 2008. Up to that day, outstanding shares with restrict
condition on disposal are 123,500,000, representing 52.55% of total equity, the share without
restrict condition are 111,500,000, representing 47.45% of total equity.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
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 that day, the Company’s all shares are all
tradable.
As approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943, the Company privately
offered 16,800,000 ordinary shares (A-shares) to special investors on 15 July 2011, with a par value
of RMB1 and the price of RMB75.00 per share, raising RMB1,260,000,000.00 in total, the net
amount of raised funds stood at RMB1,227,499,450.27 after deducting RMB32,500,549.73 of
various issuance expenses. Certified Public Accountants verified the raised capital upon its arrival
and issued the Capital Verification Report Reanda-Yan-Zi [2011] No. 1065.
In accordance with the resolutions made at the 2011 Annual Shareholders’ General Meeting, basing
on the total share capital of 251,800,000 shares, the Company decided to transfer the capital reserves
to share capital by 10 shares upon each 10 shares to the A-share holders registered in the Company
on 27 April 2012 and the B-share holders registered in the Company on 4 May 2012, thus the total
share capital increased to RMB 503,600,000 after the capitalization. Reanda Certified Public
Accountants verified the raised capital (Capital Verification Report Reanda-Yan-Zi [2012] No.
1022). Up to 4 May 2012, the Company has transferred RMB251,800,000 of capital reserves to
share capital.
Pursuant to the decision of annual shareholders meeting in 2011, the Company that considered
251,800,000 shares as base number on 31 December 2011 transferred capital reserve into share
capital at a rate of “10 shares for per 10 shares” accounting for 251,800,000 shares and implemented
in the year of 2012. Upon the transference, the registered capitals increased to RMB503,600,000.
By 30 June 2016, the Company issued 503,600,000 shares.
The approved business of the Company including procurement of grain (operating with business
license), manufacture of distilled spirits, wine distilling facilities, packaging material, bottles,
alcohol, grease (limited to byproducts from wine manufacture), and research and development of
high-tech, biotechnology development, agricultural and sideline products deep processing, as well as
sale of self-manufacturing products.
The Company and the final parent company is Anhui Gujing Company Co., Ltd in China.
Financial statement of the Company will be released on 26 August 2016 by the Board of Directors.
II. Basis for the preparation of financial statements
1. Basis for the preparation
With the going-concern assumption as the basis and based on transactions and other events that
actually occurred, the Company prepared financial statements in accordance with the ASBE-Basic
Standard (No. 33 issued decreed by Ministry of Finance and No. 76 revised decreed by Ministry of
58
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Finance), the 41 specific standards of Accounting Standards for Business Enterprises issued by
Ministry of Finance of the PRC on 15 Feb 2006 and revised thereafter, Application Guidance of
Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business
Enterprises and other regulations(hereinafter referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting
(revised in 2014) by China Securities Regulatory Commission.
In line with relevant rules of ASBE, financial accounting of the Company is based on accrual
system. Except financial instruments and instrument real estate, the financial statement is calculated
on the basis of history costs. Available-for-sale non-current assets are calculated by the lower one of
fair value deducting estimated costs and original costs meeting the standard of available-for-sale. If
assets confront impairment, it shall be withdrawn provision for impairment in line with relevant
stipulations.
2. Continuous operation
The financial statement was presented based on the continuous operation.
The accounting measurement of the Company based on the accrued basis. And the financial
statement regarded the historical cost as the measurement basis. If there was impairment of the
assets, should withdraw the corresponding impairment provision according to the relevant
regulations.
III. 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 of the Company on 30
June 2016, operating results, cash flow from January to June in 2016 and other relevant information.
The financial statement of the Company met the relevant disclosure requirements of financial
statement and notes of “Compiling stipulations of public information disclosure No.15---general
rules of financial statement” (revised in 2014).
IV. Main accounting policies and accounting estimates
1. Accounting year
Accounting year is divided to annual term and medium term. Accounting medium refers to
reporting period shorter than a complete accounting period. The Company employs a period of
calendar days from 1 Jan. to 31 Dec. each year as accounting year.
2. Operating cycle
Normal operating cycle refers to the period from the Company purchases the assets for processing
to realize the cash or cash equivalents. The Company regards 12 months as an operating cycle and
59
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
regards which as the partition criterion of the mobility of the assets and liabilities.
3. Bookkeeping base currency
Renminbi is the dominant currency used in the economic circumstances where the Company and its
domestic subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use
Renminbi as their bookkeeping base currency. And the Company adopted Renminbi as the
bookkeeping base currency when preparing the financial statements for the reporting period.
4. Accounting treatment methods for business combinations under the same control and those
not under the same control
The term “business combinations” refers to a transaction or event bringing together two or more
separate enterprises into one reporting entity. Business combinations are classified into the business
combinations under the same control and the business combinations not under the same control.
(1) Accounting treatment of the business combination that is under the same control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the business combination, and that control is not transitory. The assets and
liabilities obtained are measured at the carrying amounts as recorded by the enterprise being
combined at the combination date. The difference between the carrying amount of the net assets
obtained and the carrying amount of consideration paid for the combination (or the total face value
of shares issued) is adjusted to share premium in the capital reserve. If the balance of share
premium is insufficient, any excess is adjusted to retained earnings. Other direct expenses occur
when the Company conducting business combinations is recognized in current profit and loss. The
combination date is the date on which one combining enterprise effectively obtains control of the
other combining enterprises.
Those assets and liabilities obtained by the Company during the business combination should be
recognized in the carrying value of the equity of the merged party on the merger date. The
difference between the carrying amount of the net assets obtained and carrying amount of the
merger consideration (or total par value of issued shares) paid 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.
Direct costs of a business combination shall be reckoned into current gains and losses.
(2) Accounting treatment of the business combination that is not under the same control
A business combination involving entities not under common control is a business combination in
which all of the combining entities are not ultimately controlled by the same party or parties both
60
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
before and after the business combination. In business combination not under the same control,
acquirer refers to party obtaining control of other combining corporations in the date of acquisition
and acquiree refers to corporation participating in combination. Date of acquire refers to the date the
acquirer actually obtaining control of the acquiree.
As for combination not under the same control, costs of combination includes assets that acquirers
occur in the date of combination in order to obtain control of acqirees, loans, fair value of issued
equity securities, intermediary costs such as audit, legal services and evaluation consultation, and
other administrative fees occurred in the reporting period. As for trading costs that acquirers as
combination consideration issue equity securities or debt securities, it shall be reckoned into initial
accounts of equity securities or debt securities. As for business combination realized by several
exchanges and trades, in the combined financial statement of the Company, the Company shall
recalculate the stock right obtained by acquirees before the date of acquisition in line with fair value
of the stock right in the date of acquisition. When the Company acts as the combination party, the
cost of a business combination paid by the acquirer is the aggregate of the fair value at the
acquisition date of assets given (including share equity of the acquiree held before the combination
date), liabilities incurred or assumed, and equity securities issued by the acquirer. Any excess of the
cost of a business combination over the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets is recognized as goodwill, while any excess of the acquirer’s interest in the
fair value of the acquiree’s identifiable net assets over the cost of a business combination is
recognized in profit or loss. The cost of equity securities or liability securities as on combination
consideration offering is recognized in initial recording capital on equity securities or liability
securities. Other direct expenses occur when the Company conducting business combinations is
recognized in current profit and loss. The difference between the fair value and the carrying amount
of the assets given is recognized in profit or loss. The Company, at the acquisition date, recognized
the acquiree’s identifiable asset, liabilities and contingent liabilities at their fair value at that date.
The acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
As for deductible temporary difference of acquirers obtained by acquirers which can’t be confirmed
due to failure of meeting the confirmation requirements of deferred income tax assets, if there is
newly information proving the existence of relevant situation in the date of acquisition in a year
after the acquisition date and financial benefits of deductible temporary difference of acquirers in
the date of acquisition are estimated to be realized, deferred income tax assets shall be confirmed.
At the same time, goodwill shall be decreased. If goodwill is insufficient, the difference shall be
reckoned into current gains and losses; except the above circumstance, reliable deferred income tax
assets relevant to the Company shall be reckoned into current gains and losses.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
For a business combination not involving enterprise under common control, which achieved in
stages that involves multiple exchange transactions, according to “The notice of the Ministry of
Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) on
the “package deal” criterion (see Note IV. 5 (2)), to judge the multiple exchange transactions
whether they are the “package deal”. If it belong to the “package deal” in reference to the preceding
paragraphs of this section and the Notes described in IV. 13 “long-term investment” accounting
treatment, if it does not belong to the “package deal” to distinguish the individual financial
statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the sum of the book value and new investment cost of the
Company holds in the acquiree before the acquiring date shall be considered as initial cost of the
investment. Other related comprehensive gains in relation to the equity interests that the Company
holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree
directly disposes the related assets or liabilities when disposing the investment (that is, except for
the corresponding share in the changes in the net liabilities or assets with a defined benefit plan
measured at the equity method arising from the acquiree’s re-measurement, the others shall be
transferred into current investment gains).
In the Company’s consolidated financial statements, as for the equity interests that the Company
holds in the acquiree before the acquiring date, they shall be re-measured according to their fair
values at the acquiring date; the positive difference between their fair values and carrying amounts
shall be recorded into the investment gains for the period including the acquiring date. Other related
comprehensive gains in relation to the equity interests that the Company holds in the acquiree
before the acquiring date shall be treated on the same basis as the acquiree directly disposes the
related assets or liabilities when disposing the investment (that is, except for the corresponding
share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity
method arising from the acquiree’s re-measurement, the others shall be transferred into current
investment gains on the acquiring date).
5. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term
“control” is the power of the Company upon an investee, with which it can take part in relevant
activities of the investee to obtain variable returns and is able to influence the amount of returns.
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries. A subsidiary is an enterprise or entity controlled by the Company.
(2) Methods for preparing the consolidated financial statements
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The Company begins to include subsidiaries into consolidation scope from the date obtaining net
assets of subsidiaries and actual control of production and operation and terminates to include
subsidiaries into consolidation scope from the date losing actual control of subsidiaries. As for the
disposal of subsidiaries, operating results and cash flow are included in consolidated income
statement and consolidated statement of cash flow before the date of the disposal; as for current
disposal of subsidiaries, opening balance of the consolidated balance sheet shall not be adjusted. As
for subsidiaries increased in the combination not under the same control, operating results and cash
flow after the date of the acquisition are included in consolidated income statement and
consolidated statement of cash flow, in addition, opening balance of the consolidated balance sheet
shall not be adjusted. As for subsidiaries increased in the combination under the same control and
combined parties under acquisition, operating results and cash flow form the beginning of
combination to the date of combination are included in consolidated income statement and
consolidated statement of cash flow, in addition, opening balance of the consolidated balance sheet
shall be adjusted.
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities under common control, the financial statements of the subsidiary are included in
the consolidated financial statements as if the combination had occurred at the date that common
control was established. Therefore the opening balances and the comparative figures of the
consolidated financial statements are restated. In the preparation of the consolidated financial
statements, the subsidiary’s assets, liabilities and results of operations are included in the
consolidated balance sheet based on their carrying amounts; while results of operations are included
in the consolidated income statement, from the date that common control was established.
All the significant inter-company balances, trading and unrealized profits shall be offset when
preparing the consolidated financial statement.
If current loss shoulder by minority shareholders of a subsidy over the proportion enjoyed by
minority shareholders in a subsidy at owners’ equity at period-begin, its balance still offset minority
shareholders’ equity.
When the accounting period or accounting policies of a subsidiary are different from those of the
Company, the Company makes necessary adjustments to the financial statements of the subsidiary
based on the Company’s own accounting period or accounting policies. Intra-Company balances
and transactions, and any unrealized profit or loss arising from intra-Company transactions, are
eliminated in preparing the consolidated financial statements. Unrealized losses resulting from
intra-Company transactions are eliminated in the same way as unrealized gains but only to the
extent that there is no evidence of impairment.
When losing control right of subsidiaries because of the disposal of stock right investment or other
reasons, the Company shall recalculate residual stock right in accordance to the fair value in the
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date of losing control right. As for remaining equity investment after disposal, the Company will
re-account it according to the fair value at the date the control was lost. Any profit or loss occurred
shall be recorded into the investment income during the period of losing control right. Then
follow-up measurement of remaining equity shall be arranged in line with “No. 2—Long-term
Equity Investment” or “No. 22—Affirmation and Calculation of Financial Instrument”. More
details please refer to Note IV, 13 “Long-term Equity Investment” or Note IV, 9 “Financial
Instrument”.
The company through multiple transactions step deals with disposal of the subsidiary's equity
investment until the loss of control; need to distinguish between equity until the disposal of a
subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction
disposition of equity investment in a subsidiary, subject to the following conditions and the
economic impact of one or more of cases, usually indicates that several transactions should be
accounted for as a package deal: ① these transactions are considered simultaneously, or in the case
of mutual influence made, ② these transactions as a whole in order to achieve a complete business
results; ③ the occurrence of a transaction depends on occurs at least one other transaction ; ④ a
transaction look alone is not economical, but when considered together with other transaction is
economical. If they do not belong to the package deal, each of them separately, as the case of a
transaction in accordance with “without losing control over the disposal of a subsidiary part of
long-term equity investments” (see Note IV. 13. (2) ④)) and “due to the disposal of certain equity
investments or other reasons lost control of a subsidiary of the original” (see previous paragraph)
principles applicable accounting treatment. Until the disposal of the equity investment loss of
control of a subsidiary of the transactions belonging to the package deal, the transaction will be
used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing
control of the price of each disposal entitled to share in the net assets of the subsidiary's investment
corresponding to the difference between the disposals, recognized in the consolidated financial
statements as other comprehensive income, loss of control over the transferred together with the
loss of control or loss in the period.
6. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The
Company classifies joint arrangements into joint operations and joint ventures according to its
rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the
Company enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers
to a joint arrangement where the Company is only entitled to the net assets of the arrangement.
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The Company’s investments in joint ventures are measured at the equity method according to the
accounting policies mentioned in Note IV. 13 (2) ② “Long-term equity investments measured at
the equity method”.
For a joint operation, the Company, as a joint operator, recognizes the assets and liabilities that it
holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne
liabilities according to the Company’s stake in the joint operation; recognizes the income from sale
of the Company’s share in the output of the joint operation; recognizes the income from sale of the
joint operation’s outputs according to the Company’s stake in it; and recognizes the expense solely
incurred to the Company and the expense incurred to the joint operation according to the
Company’s stake in it.
When the Company, as a joint operator, transfers or sells assets (the assets not constituting business,
the same below) to the joint operation, or purchases assets from the joint operation, before the assets
are sold to a third party, the Company only recognizes the share of the other joint operators in the
gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in , the Company shall fully
recognizes the loss for a transfer or sale of assets to a joint operation; and shall recognize the loss
according to its stake in the joint operation for a purchase of assets from the joint operation.
7. Recognition standard for cash and cash equivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and
investments having short holding term (normally will be due within three months from the day of
purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be
measured reliably and have low risks of change.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by
applying [the spot exchange rate on the date of the transaction / an exchange rate that approximates
the actual spot exchange rate on the date of transaction]. The exchange of foreign currency and
transactions related to the foreign exchange are translated at the spot exchange rate.
(2) Accounting treatments for translation of foreign currency monetary items and
non-monetary items
At the balance sheet date, foreign currency monetary items are translated using the spot exchange
rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss,
except for ① those relating to foreign currency borrowings specifically for construction and
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acquisition of qualifying assets, which are capitalized in accordance with the principle of
capitalization of borrowing costs, ② hedging accounting, the exchange difference related to
hedging instruments for the purpose of net oversea operating investment is recorded in the
comprehensive income till the date of disposal and recognized in profit or loss of the period;
exchange difference from changes of other account balance of foreign currency monetary items, ③
available-for-trade is recorded into profit or loss except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot
exchange rate prevailing on the transaction date, and the amount denominated in the functional
currency is not changed. Non-monetary foreign currency items measured at fair value are translated
at the spot exchange rate prevailing at the date when the fair values are determined. The exchange
difference thus resulted are recognized in profit or loss for the current period or as capital reserve.
9. Financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant
financial instrument contract. Financial assets and liabilities are measured at fair value in initial
recognition. As for the financial assets and liabilities measured at fair value of which changes are
recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains
and losses; and the dealing expenses on other kinds of financial assets and liabilities are included in
the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay
for transferring a liability in an orderly transaction on the measurement date. As for the financial
assets or financial liabilities for which there is an active market, the quoted prices in the active
market shall be used to determine the fair values thereof. The quoted prices in the active market
refers to the prices available from stock exchange, broker’s agencies, guilds, pricing organization
and etc., which represent the actual trading price under equal transaction. Where there is no active
market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques,
including the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring to other financial
instruments of the same essential nature, the cash flow capitalization method and the option pricing
model, etc., to determine its fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to
be recognized respectively at the price of transaction date. Financial assets shall be classified into
the following four categories when they are initially recognized: (a) the financial assets which are
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measured at their fair values and the variation of which is recorded into the profits and losses of the
current period, (b) the investments which will be held to their maturity; (c) loans and the account
receivables; and (d) financial assets available for sale.
① The financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be measured
at their fair value when they are initially recognized and of which the variation is recorded into the
profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as transactional
financial assets：A. The purpose to acquire the said financial assets is mainly for selling them in the
near future; B. Forming a part of the identifiable combination of financial instruments which are
managed in a centralized way and for which there are objective evidences proving that the
enterprise may manage the combination by way of short-term profit making in the near future; C.
Being a derivative instrument, excluding the designated derivative instruments which are effective
hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative
instruments which are connected with the equity instrument investments for which there is no
quoted price in the active market, whose fair value cannot be reliably measured, and which shall be
settled by delivering the said equity instruments.
The financial assets meeting any of the following requirements shall be designated as financial
assets which are measured at their fair values and the variation of which is recorded into the profits
and losses of the current period for initial recognition: A. the designation can eliminate or
significantly reduce the difference of relevant gains and losses between recognition and
measurement causing from different bases for measurement of financial assets; B. The official
written documents for risk management and investment strategies of the enterprise have clearly
stated that it shall, manage, evaluate and report to important management personnel based on the
fair value, about the financial assets Company or the Company of financial assets & liabilities
which the financial assets are belong to.
For the financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period shall continue to be measured by fair value,
gains and losses of change in fair value, dividends and interest related with these financial assets
should be recorded into gains and losses of current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date
of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a
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definite purpose or the enterprise is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the
post-amortization costs, the profits and losses that arise when such financial assets or financial
liabilities are terminated from recognition, or are impaired or amortized, shall be recorded into the
profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the
interest incomes of different installments or interest expenses are calculated in light of the actual
interest rates of the financial assets or financial liabilities (including a set of financial assets or
financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash
flow of a financial asset or financial liability within the predicted term of existence or within a
shorter applicable term into the current carrying amount of the financial asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of
taking into account all the contractual provisions concerning the financial asset or financial liability
(the future credit losses shall not be taken into account).and also the various fee charges, trading
expenses, premiums or reduced values, etc., which are paid or collected by the parties to a financial
asset or financial liability contract and which form a part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no
quotation in the active market, with fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Company including
notes receivables, accounts receivables, interest receivable, dividends receivable and other
receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of
post-amortization costs employing the effective interest method. Gains or loss arising from the
termination recognition, impairment occurs or amortization shall be recorded into the profits and
losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets
available for sales on the initial recognition and financial assets excluded those measured at fair
value and of which the variation into profits and losses of the current period, they are some financial
assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed
according to its amortized cost method, that is the initially recognized amount which deduct the
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principal that had been repaid, to plus or minus the accumulative amortization amount formed by
the amortization between the difference of the initially recognized amount and the amount on the
due date that adopted the actual interest rate method, and at the same time deduct the amount after
the impairment loss happened. The cost at the period-end of the available-for-sale liabilities
instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income，and be carried
forward when the said financial assets stopped recognition, then it shall be recorded into the profits
and losses of the current period. But, the equity instrument investment which neither have quotation
in the active market nor its fair value could not be reliable measured, as well as the derivative
financial assets that concern with the equity instruments and should be settled through handing over
to its equity instruments, should take the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution
announcement by invested companies, it shall be recorded into the profits and losses of the current
period.
(3) Impairment of financial assets
The Company assesses at the balance sheet date the carrying amount of every financial asset except
for the financial assets that measured by the fair value. If there is objective evidence indicating a
financial asset may be impaired, a provision is provided for the impairment.
The Company carries out a separate impairment test for every financial asset which is individually
significant. As for a financial asset which is individually insignificant, an impairment test is carried
out separately or in the financial asset Company with similar credit risk. Where the financial asset
(individually significant or insignificant) is found not impaired after the separate impairment test, it
is included in the financial asset Company with similar credit risk and tested again on the Company
basis. Where the impairment loss is recognized for an individual financial asset, it is not included in
the financial asset Company with similar credit risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there
is objective evidence to indicate the recovery of value of financial assets after impairment, and it is
related with subsequent event after recognition of loss, the impairment loss recorded originally can
be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed
the amortized cost of the financial assets without provisions of impairment loss on the reserving
date.
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② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment
is serious and not temporarily after comprehensive considering relevant factors, it reflected that the
available-for-sale equity instrument investment occurred impairment. Of which, the “serious
decline” refers to the accumulative decline range of the fair value over 20%; while the
“non-temporary decline” refers to the consecutive decline time of the fair value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the
decrease of the fair value of the capital reserve which is directly included are transferred out and
recorded in the profits and losses for the current period. The accumulative losses transferred out are
the balance obtained from the initially obtained cost of the said financial asset after deducting the
principals as taken back, the amortized amount, the current fair value and the impairment loss
originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within
the accounting periods thereafter, there is any objective evidence proving that the value of the said
financial asset has been restored and the restoration is objectively related to the events that occur
after the impairment loss was recognized, the originally recognized impairment loss is reversed.
The impairment losses on the available-for-sale equity instrument investments are reversed and
recognized as other comprehensive incomes, and the impairment losses on the available-for-sale
liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price
in the active market and whose fair value cannot be reliably measured, or incurred to a derivative
financial asset which is connected with the said equity instrument investment and which must be
settled by delivering the said equity investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is
terminated: ① The contractual rights for collecting the cash flow of the said financial asset are
terminated; ② The said financial asset has been transferred and nearly all of the risks and rewards
related to the ownership of the financial asset to the transferee; or ③ The said financial asset has
been transferred. And the Company has ceased its control on the said financial asset though it
neither transfers nor retains nearly all of the risks and rewards related to the ownership of the
financial asset.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the
ownership of a financial asset, and it does not cease its control on the said financial asset, it
recognizes the relevant financial asset and liability accordingly according to the extent of its
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continuous involvement in the transferred financial asset. The term "continuous involvement in the
transferred financial asset" refers to the risk level that the enterprise faces resulting from the change
of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the
difference between the amounts of the following 2 items is recorded in the profits and losses of the
current period: (1) The book value of the transferred financial asset; and (2) The sum of
consideration received from the transfer, and the accumulative amount of the changes of the fair
value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book
value of the transferred financial asset is apportioned between the portion whose recognition has
been stopped and the portion whose recognition has not been stopped according to their respective
relative fair value, and the difference between the amounts of the following 2 items is included into
the profits and losses of the current period: (1) The summation of the consideration received from
the transfer and the portion of the accumulative amount of changes in the fair value originally
recorded in other comprehensive incomes which corresponds to the portion whose recognition has
been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Company needs
to determine whether almost all of the risks and rewards of the financial asset ownership are
transferred. If almost all of the risks and rewards of the financial asset ownership had been
transferred to the transferee, derecognize the financial assets. For almost all of the risks and rewards
of the financial asset ownership retained, do not end to recognize the financial assets. For which
neither transfer or retain almost all of the risks and rewards of the financial asset ownership,
continuously judge whether the Company retain the control of the assets, and conduct accounting
treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair
values and whose changes are recorded in current gains and losses and other financial liabilities.
Financial liabilities are initially recognized at their fair values. As for a financial liability measured
at fair value and whose changes are recorded in current gains and losses, the relevant trading
expense is directly recorded in the profits and losses for the current period. As for other financial
liabilities, the relevant trading expenses are recorded in the initially recognized amounts.
① Financial liabilities measured at fair values and whose changes are recorded in current gains and
losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities
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designated to be measured at fair values and whose changes are recorded in current gains and losses
in the initial recognition under the same conditions where such financial assets are divided into
transactional financial assets and financial assets designated to be measured at fair values and
whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and
losses are subsequently measured at their fair values. Gains or losses arising from the fair value
changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are
recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted
price in an active market and whose fair value cannot be reliably measured and which must be
settled by delivering the equity instrument, it is subsequently measured on the basis of costs. Other
financial liabilities are subsequently measured according to the amortized cost using the actual
interest rate method. Gains or losses arising from de-recognition or amortization of the said
financial liabilities is recorded in the profits and losses for the current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability measured at its
fair value and the variation thereof is recorded into the profits and losses of the current period, or
the loan commitment which is not designated as a financial liability measured at its fair value and
the variation thereof is recorded into the gains and losses that will be loaned lower than the market
interest rate, which shall be initially recognized by fair value, and the subsequent measurement shall
be made after they are initially recognized according to the higher one of the following: a. the
amount as determined according to the Accounting Standards for Enterprises No. 13 –
Contingencies; b. the surplus after accumulative amortization as determined according to the
principles of the Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the
initially recognized amount.
(6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly. Where the Company (debtor)
enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of
any new financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it terminates the
recognition of the existing financial liability, and at the same time recognizes the new financial
liability.
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Where the recognition of a financial liability is totally or partially terminated, the enterprise
concerned shall include into the profits and losses of the current period for the gap between the
book value which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has assumed)
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date
when the derivative contracts are entered into and are substantially re-measured at fair value. The
resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not
designated as a financial asset or financial liability at fair value though profit or loss, and the treated
as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative
are not closely related to the economic characteristics and risks of the host contract; and (b) a
separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative. If the Company is unable to measure the embedded derivative separately either at
acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a
financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial
assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall
not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. The Company issues (including refinancing), re-purchases, sells
or written-offs the equity instrument as the disposing of the changes of the equity. The Company not
recognized the changes of the fair value of the equity instrument. The transaction expenses related
to the equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Company to holders of equity
instruments are deducted from shareholders’ equity. The Company does not recognize any changes
in the fair value of equity instruments.
10. Receivables
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The receivables by the Company include account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective
evidence proving that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
① Provisions of bad debts in account receivables that is individually significant.
The Company recognized the accounts receivables which amounted to more than 2 million as the
account receivables that is individual significant.
For an account receivable that is individually significant, the asset is individually assessed for
impairment, the impairment loss is recognized at the difference between the present value of future
cash flow less the carrying amount, and provision is made accordingly.
② Provisions of bad debts in account receivables that individually insignificant item with similar
credit risk characteristics that have significant risk:
A. Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included
in a group of financial assets with similar credit risk characteristics and collectively assessed for
impairment. Such credit risk reflects the repayment of all due amount under the contract, and is
related to the estimation of future cash flow expected to be derived from the assets.
Evidence of portfolios:
Item Basis
Age portfolios Age
Related party portfolios Companies within the combination scope of the Company
B. Provision by credit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by the
assessed result from the experience of historical loss and current economic status and the existing
loss in the estimated account receivables according to the set of account receivables and credit risk
characteristic.
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Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Don’t withdraw the bad debts provision unless the related-party lost the
Related party portfolios
repaying capability
a. Portfolio by age analysis
Category Proportion for accounts receivable (%) Proportion for other receivable (%)
Within 1 year (including 1 year, similarly
hereinafter)
Including: [within 6 months] 1.00 1.00
[7 to 12 months] 5.00 5.00
1 to 2 years 10.00 10.00
2 to 3 years 50.00 50.00
Over 3 years 100.00 100.00
③Accounts receivable with insignificant amount but being individually withdrawn bad debts
provision
When making individual impairment test on accounts receivable with insignificant amount but high
credit risk, the impairment loss shall be recognized based on the difference of the book values
higher than the present value of future cash flows, then withdraw the bad debts provision. For
example, accounts receivable of related parties; accounts receivable involving dispute or litigation,
arbitration; accounts receivable having clear signs to indicate that debtor probably can not
implement obligations of payment.
(3) Reversal of provision for bad debt
If there is any provident demonstrating recovery of the value of the accounts receivable and
objectively correlating to the issues after the confirmation of the losses, the original confirmed
losses would be reversed and recorded into current gains and losses. However, the reserved book
value shall not exceed the amortized costs of the accounts receivable under non-withdrawing
impairment circumstance.
11. Inventory
(1) Category of inventory
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Inventory mainly includes raw materials, packing materials, self-made semi-manufactured products,
goods in process and finished goods, etc.
(2) Pricing method for outgoing inventories
Inventory is priced by actual costs when it is obtained. Inventory costs include procurement costs,
processing costs and other costs. Weighted average method is used to price inventory when it is
received and delivered.
(3) Recognition basis of net realizable value and withdrawal method of falling price provision for
inventories
Net realizable value in daily activity, it is referred to the estimated selling price minus the estimated
selling expenses and related tax and fees in normal operating process. When confirming the net
realizable value of inventories, the Company shall take the intention of inventories into
consideration and influence of issues after balance sheet date.
On the balance sheet date, the evaluation criteria should base on the lower value between costs and
net realizable value. When net realizable value is lower than costs, falling price provision of
inventories shall be made. Under normal circumstances, the Company withdraws the falling price
provision in according to individual inventory items, but for large quantity and low-unit-price
inventories, falling price provision 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 falling price provision of inventories shall be
consolidated.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any
write-down of the inventories, have disappeared, the amount of write-down shall be recovered and
reversed from the original amount of depreciation reserve for inventories. The reversed amount
shall be included in the profits and losses of the current period.
(4) Inventory system for inventories is perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods: one-off amortization method
Packing articles: one-off amortization method
12. Divided as assets held for sale
If a non-current assets could be immediately sold only according to the usual terms of selling this
kind of assets under current situation, and the Group has made a decision on disposing a
non-current asset, entered into an irreversible transfer agreement with the transferee and the transfer
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is likely to be completed within one year, the non-current asset is measured as a non-current asset
held for sale, which shall not be depreciated or amortized since the date held for sale but shall be
measured at the lower one of the net amounts of the book value and the fair value after deducting
the disposal expense. Non-current assets held for sale include single-item assets and disposal groups.
Where a disposal group is an asset group and the goodwill obtained in the business combination is
apportioned to the asset group according to the “Accounting Standard No. 8 for Business
Enterprises—Asset Impairment”, or a disposal group is an operation in such an asset group, the
disposal group shall include the goodwill in the business combination.
The non-current assets of single amount and the assets among the disposing group that both be
divided as assets held for sale, should be listed alone of the current assets on the balance sheet;
liabilities related to the assets transfer among the disposing group which be divided as assets held
for sale, should be listed alone of the current assets on the balance sheet.
An asset or an disposal group was classified as held for sale before, but if it couldn’t meet the
recognition conditions for held-for-sale non-current asset later, the Company shall cease to classify
it as held for sale, and measure it by the lower amount of the followings: (1) its carrying amount
before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation,
amortization or impairment before the asset (or disposal group) being classified as held for sale; or
(2) its recoverable amount on the date of the subsequent decision not to sell.
13. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the
Company has control, joint control or significant influence over the investees. The long-term equity
investment that the Company does not have control, joint control or significant influence over the
investees, should be recognized as available-for-sale financial assets or be measured by fair value
with the changes should be included in the financial assets accounting of the current gains and
losses, and please refer the details of the accounting polices to Notes IV. 9 “financial instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an
arrangement by the Company and the relevant activities of the arrangement should be decided only
after the participants which share the control right make consensus. Significant influence refers to
the power of the Company which could anticipate in the finance and the operation polices of the
investees, but could not control or jointly control the formulation of the policies with the other
parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same
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control, the share of the book value of the owner’s equity of the merged enterprise, on the date of
merger, is regarded as the initial cost of the long-term equity investment. The difference between
the initial cost of the long-term equity investment and the payment in cash, non-cash assets
transferred as well as the book value of the debts borne by the merging party shall offset against the
capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of
merger, regard the share of the book value of the shareholder's equity of the merged enterprise on
the consolidated financial statement of the ultimate control party as the initial cost of the long-term
equity investment. The total face value of the stocks issued shall be regarded as the capital stock,
while the difference between the initial cost of the long-term equity investment and total face value
of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to
dilute, the retained earnings shall be adjusted. The equities of the combined party which
respectively acquired through multiple transaction under the same control that ultimately form into
the combination of the enterprises under the same control, should be disposed according whether
belongs to package deal; if belongs to package deal, each transaction would be executed accounting
treatment by the Company as a transaction of acquiring the control right. If not belongs to package
deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's
equity of the merged enterprise on the consolidated financial statement of the ultimate control party
as the initial cost of the long-term equity investment, and as for the difference between the initial
investment cost of the long-term equity investment and sum of the book value of the long-term
equity investment before the combination and the book value of the consideration of the new
payment that further required on the combination date, should adjust the capital reserve; if the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity
investment held before the combination date which adopted the equity method for accounting, or
the other comprehensive income confirmed for the available-for-sale financial assets, should not
have any accounting disposal for the moment.
For the long-term investment required from the business combination under different control, the
initial investment cost regarded as long-term equity investment on the purchasing date according to
the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the
liabilities incurred or assumed and the equity securities issued by the Company. The equities of the
acquirees which respectively acquired through multiple transaction that ultimately form into the
combination of the enterprises under the different control, should be disposed according whether
belongs to package deal; if belongs to package deal, each transaction would be executed accounting
treatment by the Company as a transaction of acquiring the control right. If not belongs to package
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deal, the sum of the book value of the original held equity investment of the acquirees and the
newly added investment cost should be regarded as the initial investment cost of the long-term
equity investment that changed to be accounted by cost method. If the original held equity is
calculated by cost method, the other relevant comprehensive income would not have any accounting
disposal for the moment. If the original held equity investment is the financial assets available for
sale, its difference between the fair value and the book value as well as the accumulative changes of
the fair value that include in the other comprehensive income, should transfer into the current gains
and losses.
The commission fees for audit, law services, assessment and consultancy services and other
relevant expenses occurred in the business combination by the combining party or the purchase
party, shall be recorded into current profits and losses upon their occurrence; the transaction
expense from the issuance of equity securities or bonds securities which are as consideration for
combination by the combining party, should be recorded as the initial amount of equity securities
and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term
equity investments shall be initially measured by cost, the cost is fixed in accordance with the ways
of gaining, such as actual cash payment paid by the Company, the fair value of equity securities
issued by the Company, the agreed value of the investment contract or agreement, the fair value or
original carrying amount of exchanged assets from non-monetary assets exchange transaction, the
fair value of the long-term equity investments, etc. The expenses, taxes and other necessary
expenditures directly related with gaining the long-term equity investments shall also be recorded
into investment cost. The long-term equity investment cost for those could execute significant
influences on the investees because of appending the investment or could execute joint control but
not form as control, should be as the sum of the fair value of the original held equity investment and
the newly added investment cost recognized according to the No.22 of Accounting Standards for
Business Enterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which
forms into common operators) or significant influence over the investors should be measured by
equity method. Moreover, long-term equity investment adopting the cost method in the financial
statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included
at its initial investment cost and append as well as withdraw the cost of investing and adjusting the
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long-term equity investment. The return on investment at current period shall be recognized in
accordance with the cash dividend or profit announced to distribute by the invested entity, except
the announced but not distributed cash dividend or profit included in the actual payment or
consideration upon gaining the investment.
②Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company’s attributable share of
the fair value of the invested entity’s identifiable net assets for the investment, the initial cost of the
long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment
is less than the Company’s attributable share of the fair value of the invested entity’s identifiable net
assets for the investment, the difference shall be included in the current profits and losses and the
cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other
comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book
value of the long-term equity investment; corresponding reduce the book value of the long-term
equity investment according to profits which be declared to distribute by the investees or the portion
of the calculation of cash dividends which should be enjoyed; for the other changes except for the
net gains and losses, other comprehensive income and the owners’ equity except for the profits
distribution of the investees, should adjust the book value of the long-term equity investment as
well as include in the capital reserve. The investing enterprise shall, on the ground of the fair value
of all identifiable assets of the invested entity when it obtains the investment, recognize the
attributable share of the net profits and losses of the invested entity after it adjusts the net profits of
the invested entity. If the accounting polices adopted by the investees is not accord with that of the
Company, should be adjusted according to the accounting policies of the Company and the financial
statement of the investees during the accounting period and according which to recognize the
investment income as well as other comprehensive income. For the transaction happened between
the Company and associated enterprises as well as joint ventures, if the assets launched or sold not
form into business, the portion of the unrealized gains and losses of the internal transaction, which
belongs to the Company according to the calculation of the enjoyed proportion, should recognize
the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the
transferred assets, should not be neutralized. The assets launched by the Company to the associated
enterprises or the joint ventures if could form into business, the long-term equity investment
without control right which acquired by the investors, should regard the fair value of the launched
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business as the initial investment cost the newly added long-term equity investment, and for the
difference between the initial investment cost and the book value of the launched business, should
be included into the current gains and losses with full amount. The assets sold by the Company to
the associated enterprises or the joint ventures if could form into business, the difference between
the acquired consideration and the book value of the business should be included in the current
gains and losses with full amount. The assets purchased by the Company to the associated
enterprises or the joint ventures if could form into business, should be accounting disposed
according to the regulations of No. 20 of ASBE—Business Combination, and should be recognized
gains or losses related to the transaction with full amount.
The Company shall recognize the net losses of the invested enterprise until the book value of the
long-term equity investment and other long-term rights and interests which substantially form the
net investment made to the invested entity are reduced to zero. However, if the Company has the
obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance
with the estimated duties and then recorded into investment losses at current period. If the invested
entity realizes any net profits later, the Company shall, after the amount of its attributable share of
profits offsets against its attributable share of the un-recognized losses, resume recognizing its
attributable share of profits.
For the long-term equity investment held by the Company before the first execution of the new
accounting criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is debit
difference of the equity investment related to the investment, should be included in the current gains
and losses according to the amount of the straight-line amortization during the original remained
period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity
investment increased by acquiring shares of minority interest and the attributable net assets on the
subsidiary calculated by the increased shares held since the purchase date (or combination date), the
capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained
profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity
investment on subsidiaries without losing its controlling right on them, the balance between the
disposed price and attributable net assets of subsidiaries by disposing the long-term equity
investment shall be recorded into owners’ equity; where the Company losses the controlling right by
disposing part of long-term equity investment on such subsidiaries, it shall treated in accordance
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with the relevant accounting policies in Note IV. 5 (2) Method on preparation of combined financial
statements.
For other ways on disposal of long-term equity investment, the balance between the book value of
the disposed equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity
after disposal still adopts the equity method for measurement, the other comprehensive income
originally recorded into owners’ equity should adopt the same basis of the accounting disposal of
the relevant assets or liabilities directly disposed by the investees according to the corresponding
proportion. The owners’ equity recognized owning to the changes of the other owners’ equity except
for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained
equity still adopt the cost method, the other comprehensive income recognized owning to adopting
the equity method for measurement or the recognition and measurement standards of financial
instrument before acquiring the control of the investees, should adopt the same basis of the
accounting disposal of the relevant assets or liabilities directly disposed by the investees and should
be carried forward into the current gains and losses according to the proportion; the changes of the
other owners’ equity except for the net gains and losses, other comprehensive income and the
profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to
the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment
as well as the remained equity after disposal could execute joint control or significant influences on
the investees, should change to measure by equity method when compiling the individual financial
statement and should adjust the measurement of the remained equity to equity method as adopted
since the time acquired; if the remained equity after disposal could not execute joint control or
significant influences on the investees, should change the accounting disposal according to the
relevant regulations of the recognition and measurement standards of financial instrument, and its
difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized by
adopting equity method for measurement or the recognition and measurement standards of financial
instrument before the Company acquired the control of the investees, should execute the accounting
disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities
directly disposed by the investees when lose the control of them, while the changes of the other
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owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution among the net assets of the investees which recognized by adopting the equity method
for measurement, should be carried forward into the current gains and losses according to the
proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried
forward according to the proportion; for the disposed remained equity which changed to execute the
accounting disposal according to the recognition and measurement standards of financial instrument,
the other comprehensive income and the other owners’ equity should be carried forward in full
amount.
For those the Company lost the control of the investees by disposing part of the equity investment,
the disposed remained equity should change to calculate according to the recognition and
measurement standards of financial instrument, and difference between the fair value and book
value on the date lose the control right should be included in the current gains and losses. For the
other comprehensive income recognized from the original equity investment by adopting the equity
method, should execute the accounting disposal by adopting the same basis of the accounting
disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of
the other owner’s equity except for the net gains and losses, other comprehensive income and the
profits distribution of the investees, should be transferred into the current investment income with
full amount when terminate adopting the equity method.
The Company respectively disposes the equity investment of the subsidiaries through multiple
transactions until lose the control right, if the above transactions belongs to the package deal, should
execute the accounting disposal by regarding each transaction as a deal of disposing the equity
investment of the subsidiaries until lose the control right, while the difference between each
expenses of the disposal and the book value of the long-term equity investment in accord with the
disposed equity before losing the control right, should firstly be recognized as other comprehensive
income then be transferred into the current gains and losses of losing the control right along until
the time when lose it.
14. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment
property includes leased or ready to transfer after capital appreciation land use rights and leased
buildings. Besides, for the idle constructions held by the Company for operation and lease, if the
Board of Directors (or the similar institutions) made the written resolutions which affirmatively
disclosed to use which for operation and lease with the intention would not change in the short term,
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should also be presented as the investment property.
Investment property is initially measured at cost. Subsequent expenditures related to an investment
real estate are likely to flow about the economic benefits of the asset and its cost can be measured
reliably, is included in the cost of investment real estate. Other subsequent expenditures of gains or
losses should be recorded in the current gains and losses when occurred.
The Company uses the cost model for subsequent measurement of investment property, and in
accordance with the depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in Note IV.
20 “Long-term assets impairment”.
Occupied real estate for investment property or investment property is transferred to
owner-occupied real estate or stock conversion as the recorded value after the conversion, according
to the book value before the conversion.
From the date of transference, investment properties shall be transferred into fixed assets or
intangible assets when investment properties transfer into self-owned properties. From the date of
transference, fixed assets or intangible assets shall be transferred into investment properties when
the intention of self-owned properties changes to be earning rents. Upon transference, investment
properties using cost modeling shall use its book value before transference as the entry value after
transference; investment properties using fair value shall use its fair value in the date of transference
as the entry value after transference.
As for investment property disposed or perpetually out of use, and estimated without economic
benefits from the disposal, confirmation shall be terminated. Disposal consideration of the
investment property after sale, transference, discard or damage deducting its book value and
relating taxes shall be recorded into current gains and losses.
15. Fixed assets
(1) Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as
follows: they are held for the sake of producing commodities, rendering labor service, renting or
business management; and their useful life is in excess of one fiscal year.
(2) Depreciation methods of fixed assets
The initial measurement of a fixed asset shall be made at its cost after considering the effect of
expected discard expenses. The Group shall withdraw the depreciation of fixed assets by adopting
the straight-line method since the second month of its useful life. Useful life, expected net salvage
value (refers to the expected amount that the Group may obtain from the current disposal of a fixed
asset after deducting the expected disposal expenses at the expiration of its expected useful life) and
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annual depreciation rate of each fixed assets are as below:
Expected net
Annual deprecation
Category of fixed assets Method Useful life (Y) salvage value
(%)
(%)
Average method of
Housing and building 8-35 3-5 2.7-12.1
useful life
Average method of
Machinery equipments 8-10 3-5 9.5-12.1
useful life
Average method of
4 3 24.25
Transportation vehicle
useful life
Average method of
3 3 32.33
Office equipment and others
useful life
Expected net residual value of fixed assets is the balance of the Company currently obtained from
the disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of
useful life and state the expected service life in the end.
(3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note IV. 20 “Long-term assets
impairment”.
(4) Fixed Assets under finance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership
of an asset. Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as
that for the fixed assets owned by the Company. If it can be reasonably determined that the
ownership of the leased assets can be obtained at the end of the lease period, the leased assets are
depreciated over their useful lives; otherwise, the leased assets are depreciated over the shorter of
the lease terms and the useful lives of the leased assets.
(5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably
flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure
incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed
asset, and the carrying amount of the component of the fixed asset that is replaced shall be
derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in
which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss
after deduction of carrying value and related tax.
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The Company conducts a review of useful life, expected net realizable value and depreciation
methods of the fixed asset at least on an annual base. Any change is regarded as change in
accounting estimates.
16. Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction
expenditures during the construction period, borrowing costs capitalized before it is ready for
intended use and other relevant costs. Construction in progress is transferred to a fixed asset when it
is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for
provision impairment please refer to Note IV. 20 “Long-term assets impairment”.
17. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings,
ancillary costs incurred in connection with the arrangement of borrowings, and exchange
differences arising from foreign currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as an
expense in the period in which they are incurred. Qualifying assets are asset (fixed assets,
investment property and inventories, etc.) that necessarily take a substantial period of time for
acquisition, construction or production to get ready for their intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the
actual interest expense incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the
temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such
borrowings is determined by applying a weighted average interest rate to the weighted average of
the excess amounts of accumulated expenditure on the asset over and above the amounts of
specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing
denominating in foreign currency are all capitalized. Exchange differences in connection with
general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which
need a long time of construction or production activities before ready for intended used or sale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction
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or production of a qualifying asset is interrupted by activities other than those necessary to prepare
the asset for its intended use or sale, when the interruption is for a continuous period of more than 3
months. Borrowing costs incurred during these periods recognized as an expense for the current
period until the acquisition, construction or production is resumed.
18. Intangible assets
(1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape,
possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the
economic benefits related to intangible assets are likely to flow into the enterprise and the cost of
intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The
expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings,
such as plants that are developed and constructed by the Company, and relevant land use rights and
buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the
land and buildings purchased are allocated between the land use rights and the buildings; if they
cannot be reasonably allocated all of the land use rights and buildings should accounted for as fixed
assets.
When an intangible asset with a definite useful life is available for use, its original cost less net
residual value and any accumulate impairment losses is amortized over its estimated useful life
using the straight-line method. An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Company reviews the useful life and
amortization method at the end of the period, and makes adjustment when necessary. An additional
review is also carried out for useful life of the intangible assets with indefinite useful life. If there is
evidence showing the foreseeable limit period of economic benefits generated to the enterprise by
the intangible assets, then estimate its useful life and amortize according to the policy of intangible
assets with definite useful life.
(2) Research and development cost
Cost of research and development is distinguished into the research phase and the development
phases.
Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the
profit or loss in the period in which it is incurred:
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① it is technically feasible to complete the intangible asset so as to use it or sell it;
② it is clearly invented to complete the intangible asset in order to use it or sell it;
③ it is probable that the intangible asset is capable of generating future economic benefit, such as
the market for the product produced by the intangible asset or the intangible asset itself, it is
objectively evidential that the intangible asset is economically usable if it is going to be used
internally;
④ there are sufficient technical, financial and other resources to complete the intangible asset and
to use it or sell it;
⑤ the cost of the development of the intangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized
in the profit or loss for the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note IV. 20 “Long-term assets
impairment”.
19. Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a
beneficial period (a period during which an expense is expected to bring economic benefits to an
entity) which is longer than one year and which includes at least part of the reporting period during
which the expense was incurred and subsequent reporting periods. An item of long-term deferred
expenses is recognized at the actual amount of the expense incurred and allocated in each month of
the beneficial period using the straight line method.
20. Long-term assets impairment
Non-financial assets with non-current nature include fixed assets, construction in progress,
intangible assets with definite useful lives, investment properties measured by cost methods and
long-term equity investment on subsidiaries, jointly operations. The Company assesses whether
there are any indicators of impairment for all non-financial assets at the balance sheet date, and
impairment test is carried out and recoverable value is estimated if such an indicator exits. Goodwill
and intangible assets with indefinite useful lives, as well as intangible assets not ready for use, are
tested for impairment annually regardless of indicators of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of
the assets is lower than the book value. The recoverable value is the higher of estimated present
value of the future expected cash flows from the asset and net fair value of the asset less disposed
cost. The fair value of asset is determined by the sales agreement price within an arm’s length
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transaction. In case there is no sales agreement, but there is active market of assets, the fair value
can be determined by the selling price. If there is neither sales agreement nor active market, the fair
value of the asset can be estimated based on the best information obtained.
Disposal expenses include expenses related to the legislation, taxes, transportations and the direct
expense for the asset to be ready for sale. When calculating the present value of expected future
cash flows from an asset or asset Group, the management shall estimate the expected future cash
flows from the asset or asset Group and choose a suitable discount rate in order to calculate the
present value of those cash flows.
Provision for asset impairment is calculated and determined on the individual basis. If the
recoverable of individual asset is hard to estimate, the recoverable amount can be determined by the
asset Group where subject asset belongs. Asset Group is the smallest set of assets that can have cash
flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the present value of the future expected cash flows from the asset Groups or sets of
asset Groups to which the goodwill is allocated. Estimating the present value requires the Company
to make an estimate of the expected future cash flows from the asset Groups or sets of asset Groups
and also choose a suitable discount rate in order to calculate the present value of those cash flows.
Once the loss from above asset impairment is recognized, the recoverable part cannot be reserved in
the subsequent periods.
21. Payroll
The payroll of the Company mainly includes the short-term employee compensation, welfare after
demission, demission welfare and other long-term employee benefits. Of which:
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee
services and benefits, medical insurance premiums, birth insurance premium, industrial injury
insurance premium, housing fund, labor union expenditure and personnel education fund,
non-monetary benefits etc. The short-term compensation actually happened during the accounting
period when the active staff offering the service for the Group should be recognized as liabilities
and is included in the current gains and losses or relevant assets cost. Of which the non-monetary
benefits should be measured according to the fair value.
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan
mainly includes basic endowment insurance, unemployment insurance and annuity etc, and the
corresponding payable and deposit amount should be included into the relevant assets cost or the
current gains and losses when happen.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the
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relevant labor contract or brings forward any compensation proposal for the purpose of encouraging
the employee to accept a layoff, and should recognize the payroll liabilities occurred from the
demission welfare base on the earlier date between the time when the Group could not one-sided
withdraw the demission welfare which offered by the plan or layoff proposal owning to relieve the
labor relationship and the date the Group recognizes the cost related to the reorganization of the
payment of the demission welfare and at the same time includes which into the current gains and
losses. But if the demission welfare is estimated that could not totally pay after the end of the
annual report within 12 months, should be disposed according to other long-term payroll payment.
The inside employee retirement plan is treated by adopting the same principle with the above
dismiss ion welfare. The group would recorded the salary and the social security insurance fees paid
and so on from the employee’s service terminative date to normal retirement date into current
profits and losses (dismiss ion welfare) under the condition that they meet the recognition
conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan,
should be accounting disposed according to the setting drawing plan, while the rest should be
disposed according to the setting revenue plan.
22. Estimated liabilities
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: (1) This obligation is current obligation of the Company; and, (2) The performance of
this obligation will probably cause economic benefits outflow of the Company; and, (3) The amount
of this obligation can be reliably measured.
On balance sheet date the Company performed relate obligation that consider risk, incertitude, time
value of currency of contingency factor. According to the best estimate of the expenditure required
to settle the present obligation for estimated liabilities measured.
If the expenditure required to settle the liability is expected to be fully or partly compensated by a
third party, to determine the amount of compensation will be received at the basic, separately
recognized as an asset, and is recognized in the amount of compensation does not exceed the
carrying value of estimated liabilities.
23. Revenues
(1) Commodity sales revenues
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No revenue from selling goods may be recognized unless the following conditions are met
simultaneously: the significant risks and rewards of ownership of the goods have been transferred to
the buyer by the enterprise; the enterprise retains neither continuous management right that usually
keeps relation with the ownership nor effective control over the sold goods; the relevant amount of
revenue can be measured in a reliable way; the relevant economic benefits may flow into the
enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.
In the Company’s daily accounting practices, as for the domestic sales, when the products had
shipped out of the library and had handed over to the buyers, and the major risk as well as the
reward on the ownership of the products had transferred to them, without keeping any continued
management right which commonly related to the ownership nor carrying out any effective control
of the products which had been sold, and at the same time the amounts received could be calculated
reliably, and the relevant economic interest may flow into the enterprise, as well as the relevant
costs which had occurred or is going to occur could be calculated reliably, should recognize the
implementation of the commodity sales revenues. As for the overseas sales, should recognize the
implementation of the revenues when the goods had made shipment and gained the customs export
declaration.
(2) Revenues from providing labor services
If an enterprise can reliably estimate the outcome of a transaction concerning the labor services it
provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the balance sheet date. The percentage-of-completion is
determined by the proportion of the costs incurred against the estimated total costs.
The outcome of a transaction concerning the providing of labor services can be measured in a
reliable way, means that the following conditions shall be met simultaneously: ① The amount of
revenue can be measured in a reliable way; ② The relevant economic benefits are likely to flow
into the enterprise; ③ The schedule of completion under the transaction can be confirmed in a
reliable way; ④ The costs incurred or to be incurred in the transaction can be measured in a
reliable way.
If the Company can not measure the result of a transaction concerning the providing of labor
services in a reliable way, it shall be conducted in accordance with the following circumstances,
respectively: If the cost of labor services incurred is expected to be compensated, the compensation
amount for the cost of labor services shall be recognized as the revenue from providing labor
service, and the cost of labor service incurred shall be as the current cost; if the cost of labor
services incurred is not expected to compensate, no revenue from the providing of labor services
may be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods
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and providing of labor services, if the part of sale of goods and the part of providing labor services
can be distinguished from each other and can be measured respectively, the part of sale of goods
and the part of providing labor services shall be treated respectively. If the part of selling goods and
the part of providing labor services can not be distinguished from each other, or if the part of sale of
goods and the part of providing labor services can be distinguished from each other but can not be
measured respectively, both parts shall be conducted as selling goods.
(3) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be
recognized as revenue on accrual basis. In the Company’s daily accounting practices, it should be
calculated and recognized according to the chargeable time and methods in accordance with the
relevant contract or agreement.
(4) Interest revenue
In accordance with the time that others use the Group’s monetary capital and the actual rate.
24. Government subsidies
Government grants are transfer of monetary assets and non-monetary assets from the government to
the Company at no consideration, excluding the capital invested by the government as equity owner.
Government grant can be classified as grant related to the assets and grants related to the income.
The government grants which were acquired by the Company will be used to purchase or otherwise
form become long-term assets will be defined as grant related to the assets; the others will be
defined as grants related to the income. If the files have not clearly defined government grants
objects, it will be divided in the following manner compartmentalize the grants into rant related to
the assets and grants related to the income: (1) government documents defined specific projects
targets, according to the relative proportion of the budgets of specific items included the
expenditure of to form assets and the expenditure will be charged into expense to be divided, the
division ratio required at each balance sheet date for review and make changes if necessary; (2)
government documents to make a general presentation purposes only, does not specify a particular
project, as grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable. If a government grant is in the form of a non-monetary asset, it is measured
at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A
government grant measured at a nominal amount is recognized immediately in profit or loss for the
period.
When received the government grants actually, recognized and measured them by the actual amount
received. However, there is strong evidence that the end of fiscal support policies able to meet the
conditions specified in the relevant funds are expected to be able to receive financial support,
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measured at the amount receivable. Government grants are measured according to the amount
receivable shall also comply with the following conditions: (1) grants receivable of government
departments issued a document entitled have been confirmed, or could reasonably estimated in
accordance with the relevant provisions of its own official release of financial resources
management approach, and the expected amount of a material uncertainty which does not exist; (2)
it is based on the local financial sector to be officially released and financial support for the project
and its financial fund management approach voluntarily disclosed in accordance with the provisions
of “Regulations on Disclosure Government Information”, and the management approach should be
(inclusive of any compliance business conditions may apply), and not specifically formulated for
specific businesses;(3) related grants approval has been clearly committed the deadline, and is
financed by the proceeds of a corresponding budget as a guarantee, so that will be received within
the prescribed period with the a reasonable assurance; (4) according to the specific circumstances of
the Company and the subsidy matter, should satisfy the other conditions (if any).
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset. For a government grant related to income, if
the grant is a compensation for related expenses or losses to be incurred in subsequent period, the
grant is recognized as deferred income, and recognized in profit or loss over the periods in which
the related costs are recognized. If the grant is a compensation for related expenses or losses already
incurred, the grant is recognized immediately in profit or loss for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the
repayment is offset against the carrying amount of the deferred income, and any excess is
recognized in profit or loss for the period. If there is no related deferred income, the repayment is
recognized immediately in profit or loss for the period.
25. Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realized or the liability is settled, according to the
requirements of tax laws. The measurement of deferred tax assets and deferred tax liabilities reflects
the tax consequences that would follow from the manner in which the Company expects at the
balance sheet date, to recover the assets or settle the liabilities.
At the balance sheet date, current income tax liabilities or assets for the current and prior periods are
measured at the amount expected to be paid (or recovered) according to the requirements of tax
laws. The calculation for income tax expenses in the current period is based on the taxable income
according to the related tax laws after adjustment to the accounting profit of the reporting period.
(2) Deferred income tax assets and liabilities
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For temporary differences between the carrying amount of certain assets or liabilities and their tax
base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial
recognition of an asset or liability arising from a transaction (not a business combination) that
affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax liability related is recognized except where the
Company is able to control the timing of reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones
mentioned above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability
arising from a transaction (not a business combination) that affects neither the accounting profit nor
taxable profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and
associates, and interests in joint ventures, no deferred income tax asset related is recognized if it is
impossible to reversal the temporary difference in the foreseeable future, or it is not probable to
obtain taxable income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Company recognizes other deferred income tax assets that can deduct
temporary differences to the extent that it is probable that taxable profits will be available against
which the deductible temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for
deductible temporary differences are recognized to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according
to tax laws, which are expected to apply in the period in which the asset is realized or the liability is
settled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is
no longer probable that sufficient taxable profit will be available in future periods to allow the
benefits of the deferred tax assets to be used, the Company reduces the carrying amount of deferred
tax assets. The amount of such reduction is reversed when it becomes probable that sufficient
taxable profit will be available.
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(3) Income tax expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded
into profit or loss in current accounting period, except expense for income tax of the current period
and deferred income tax that booked into other income or equity and adjusted carrying value of
deferred income tax goodwill arose from business combination.
(4) Income tax offset
When we have the legal right, and have intended to, to make settlement with net amount or through
the asset acquisition and liability fulfillment simultaneously, the Company shall present the net
value from the offset between current income tax asset and current income tax liability in the
financial statement.
When the Company has the legal right to make a settlement with the current income tax asset and
current income tax liability, and the deferred income tax asset and deferred income tax liability are
related to the same taxable subject under the same tax payer, or related to different taxable subject,
but the intension of net value settlement in regard of the current income tax asset and current
income tax liability, the Company shall present net value after the offset of deferred income tax
asset and deferred income tax liability.
26. Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership
of an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a
finance lease.
(1) The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the
lease term, and either included in the cost of the related asset or charged to profit or loss for the
current period. The contingent rents shall be recorded in the profit or loss of the period in which
they actually arise.
(2) The Company as Leaser under operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a
straight-line basis over the lease term. Initial direct cost of significance in amount shall be
capitalized when incurred. If another basis is more systematic and rational, that basis may be used.
Contingent rents are credited to profit or loss in the period in which they actually arise.
(3) The Company as Lessee under financing Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is
recorded at the lower of its fair value at the lease commencement and the present value of the
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
minimum lease payments, and the minimum lease payment is recorded as the carrying amount of
the
long-term payables; the difference between the recorded amount of the leased asset and the
recorded amount of the payable is accounted for as unrecognized finance charge, Initial direct costs
incurred by the lessee during the process of negotiating and securing the lease agreement shall be
added to the amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be
separated into long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease
term. Contingent rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lessor of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at
the inception of the lease and the initial direct costs is recorded as a finance lease receivable, and
unguaranteed residual value is recorded at the same time; the difference between the aggregate of
the minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate
of their present values, is recognized as unearned finance income, which is amortized using the
effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities
and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term.
Contingent rent shall be credited into profit or loss in which actually incurred.
27. Changes in main accounting policies and estimates
(1) Change of accounting policies
There was no any change of accounting policies
(2) Change of main accounting estimates
There was no any change of main accounting estimates.
28. Significant account judgment and estimates
The Company is required to make judgments, estimates and assumptions about the carrying
amounts of items in the financial statements that cannot be measured accurately, due to the internal
uncertainties of operation activities. These judgments, estimates and assumptions are based on
historical experiences of the Company’s management as well as other factors that are considered to
be relevant. These judgments, estimates and assumptions may affect value of the financial
statements in revenue, expenses, assets and liabilities and the disclosure of contingency at the
balance sheet date. However, the result derived from those uncertainties in estimates may lead
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significant adjustments to the carrying amounts of the assets or liabilities affected in the future.
The Company has reviews the judgments, estimates and assumptions regularly on the basis of going
concern. Where the changes in accounting estimates only affect the period when changes occurred,
and they are recognized within the same period. Where the changes in accounting estimates affect
both current period and future period, the changes are recognized within the period of change and
future period.
At balance sheet date, the followings are the significant areas where the Company needs to make
judgment, estimates and assumptions over the value of items in the financial statements:
(1) Classification of lease
The Company classifies leases as operating lease and financing lease according to the rule
stipulated in the Accounting Standard for Business Enterprises No. 21—Leasing. The management
shall make analysis and judgment on whether the risks and rewards related to the title of leased
assets has been transferred to the leaser, or whether the Company has substantially held the risks
and rewards related to the ownership of leased assets.
(2) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance method is
used for bad debt’s calculation. The impairment of receivables is calculated based on the assessment
of recoverable of receivables. Assurance of receivable impairment needs judgments and estimations
from the management. The difference between actual results and original estimates shall have
impact on the carrying amount of receivables and receivable bad debt provisions or the reverse
during the change of estimation.
(3) Impairment of inventories
The Company measures inventories by the lower of cost and realizable net value according to the
accounting policies in regard of inventories and provisions for decline in value of inventories are
made if the cost is higher than their net realizable value and obsolete and slow-movement
inventories. Inventories decline in value to net realizable value is the estimated selling price in the
ordinary course of business. Net realizable value is determined on the basis of clear evidence
obtained, and takes into consideration the purposes of holding inventories and effect of post balance
sheet events. The difference between the actual result and the original estimates shall have impact
on reverse of the carrying amount of the inventories and their decline in value or provisions during
the period of change.
(4) The fair value of financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using
various valuation methods, including of discounted cash flow analysis model. The Company needs
to estimate future cash flow, credit risk, volatility and relationship during the valuation and choose
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appropriate discount rate. Such assumptions have uncertainties and their changes shall have impact
on the fair value of financial instruments.
(5) Impairment of financial assets available-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and
assumptions of management, to determine whether impairment loss is recognized in the income
statement. The process of making the judgments and assumptions, the Company is required to
assess the extent and duration of the fair value of the investment below cost, as well as investment
financial position and short-term business outlook, including industry conditions, technological
change, the credit rating, default rates and counterparty risk.
(6) Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets
other than financial assets at the balance sheet date. For an intangible asset that has indefinite useful
life, impairment test is made in addition to the annual impairment test if there is any indication of
impairment. For non-current assets other than financial assets, impairment test is made when there
is any indication that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of
disposal and present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the
price of similar product in a sale agreement in an arm’s length transaction or an observable market
price less the additional cost directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over the
asset’s production, selling price and relevant operating expenses, and discount rate used to calculate
present value. All available materials that are considered to be relevant shall be used in the
estimation of recoverable value. These materials include estimations of production, selling price and
operating expenses based on reasonable and supportable assumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an
estimation of present value of future cash flow of the assets or assets group where goodwill has
been allocated. The Company shall makes estimation on the future cash flow derived from assets or
assets group and determine an appropriate discount rate for the present value of future cash flow
when the estimation of present value of future cash flow is made.
(7) Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the
straight-line method over their useful lives after taking into account residual value. The useful lives
are regularly reviewed to determine the depreciation and amortization costs charged in each
reporting period. The useful lives are determined based on historical experience of similar assets
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
and the estimated technical changes. If there is an indication that there has been a change in the
factor used to determine the depreciation or amortization, the rate of depreciation or amortization is
revised.
(8) Deferred tax assets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable
that future taxable profit will be available against which the unused tax losses and unused tax
credits can be utilized. This requires the management of the Company make a lot of judgments over
the estimation of time period, value and tax planning strategies when future taxable profit incurs so
that the value of deferred tax assets can be determined.
(9) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the
Company’s everyday operation. If it is possible for any item to make expenditure before tax that
needs to be approved from competent tax authorities. If there is any difference between finalized
determination value and their initial estimations value, the difference shall have the impact on the
income tax and deferred income tax of the current period during the final determination.
(15) Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience, product
quality assurance and expected contract losses, delay in delivery of liquidated damages are
estimated and recognized as accrued liabilities. In these matters has been the formation of a current
obligation, and fulfilling the duty is likely to lead to the outflow of economic benefits of the
Company, the Company or the best estimate of the current obligation expenditure required
recognized as a accrued liabilities. Recognition and measurement of accrued liabilities is dependent
on the judgment of management. In the processing of judgment the company needed to appraise the
related risks, uncertainties and time value of money and other factors.
V. Taxation
1. Main taxes and tax rate
Category of taxes Particulars about specific tax rate
Income tax was in accordance with 17%, 6% of tax rate to calculate output tax and
VAT according to the balance of the current the deductibility deduct the input tax to calculate
value added tax.
Sales of wine per 1000 ml or per kg 1 Yuan to calculate the amount of consumption tax,
Consumption tax a flat rate, 20% of the annual turnover to calculate the amount of consumption tax at
valorem.
Business Tax 5% of turnover tax payable.
Urban maintenance and construction tax 1, 5, 7% of the actual taxable turnover amount.
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Category of taxes Particulars about specific tax rate
Education expenses surcharge 3% of the actual taxable turnover amount.
Local education surcharge 2% of the actual taxable turnover amount.
Enterprise income tax 25% of the actual taxable turnover amount.
VI. Notes on major items in consolidated financial statements of the Company
The following notes (including notes on major items in consolidated financial statements of the
Company), unless otherwise noted, the opening period was 1 January 2016, the closing period was
30 June 2016, this Period referred to 1 January-30 June 2016, and last period referred to 1
January-30 June 2015.
1. Monetary funds
Item Closing balance Opening balance
Cash in treasury 332,509.88 373,724.24
Bank deposit 1,090,153,358.62 1,040,000,008.83
Other monetary funds 101,414,851.66 46,945,425.70
Total 1,191,900,720.16 1,087,319,158.77
Of which: the total amount deposited in overseas 0.00 0.00
2. Financial assets measured by fair value and the changes be included in the current gains
and losses
Item Closing balance Opening balance
Trading financial assets 3,175,807.27 322,223.28
Of which: equity tool investment 3,175,807.27 322,223.28
Total 3,175,807.27 322,223.28
3. Notes receivable
(1) Notes receivable listed by category
Item Closing balance Opening balance
Bank acceptance bill 1,270,576,488.25 539,442,903.31
Total 1,270,576,488.25 539,442,903.31
(2) Notes receivable pledged at the period-end
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Amount
Bank acceptance bill 21,651,974.00
Total 21,651,974.00
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the
period-end
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 336,309,544.27
Total 336,309,544.27
4. Accounts receivable
(1) Accounts receivable classified by category
Closing balance
Book balance Bad debt provision
Category Propor Book
Withdrawal
Amount tion Amount value
proportion (%)
(%)
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit 7,383,2 1,449,7 5,933,4
100 19.64
08.08 20.51 87.57
risks characteristics:
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
7,383,2 1,449,7 5,933,4
Total 100 19.64
08.08 20.51 87.57
(Continued)
Opening balance
Book balance Bad debt provision
Category
Propor Book
tion Withdrawal value
Amount (%) Amount proportion (%)
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Opening balance
Book balance Bad debt provision
Category
Propor Book
tion Withdrawal value
Amount (%) Amount proportion (%)
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit 6,226,5 1,278,5 4,948,0
100 20.53
90.29 15.45 74.84
risks characteristics:
Accounts receivable with insignificant single amount for which bad
debt provision separately accrued
6,226,5 1,278,5 4,948,0
Total 100 20.53
90.29 15.45 74.84
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt
provision:
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion (%)
Within 1 year
[Of which: within 6 months] 4,252,951.92 42,529.52 1.00
[7-12 months] 966,943.53 48,347.18 5.00
Subtotal of within 1 year 5,219,895.45 90,876.70 1.74
1 to 2 years 396,940.74 39,694.07 10.00
2 to 3 years 894,444.30 447,222.15 50.00
Over 3 years 871,927.59 871,927.59 100.00
Total 7,383,208.08 1,449,720.51 19.64
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawn bad debt provision of Reporting Period was of RMB41, 139.49.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
There was no actual verification of accounts receivable during the Reporting Period
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
party
The total amount of top five of account receivable of closing balance collected by arrears party
was RMB2, 831,776.71, 38.35% of total closing balance of account receivable, the relevant closing
balance of bad debt provision withdrawn was RMB731, 764.36.
5. Prepayment
(1) List by aging analysis:
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 52,929,107.11 94.70 80,083,715.48 99.64
1 to 2 years 2,236,109.42 4.00 285,694.11 0.36
2 to 3 years 283,297.06 0.51 0.00 0.00
Over 3 years 443,259.73 0.79 3,674.00 0.00
Total 55,891,773.32 100.00 80,373,083.59 100
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment
target
The total amount of top five of account receivable of closing balance collected by arrears party
was RMB20, 937,075.34, 37.46% of total closing balance of account receivable.
6. Other accounts receivable
(1) Other account receivable classified by category
Closing balance
Book balance Bad debt provision
Category
Proportion Withdrawal Book value
Amount Amount
(%) proportion (%)
Other accounts receivable with
insignificant single amount for which bad 41,342,938.53 63.62 41,342,938.53 100.00 0.00
debt provision separately accrued
Other accounts receivable withdrawn bad
debt provision according to credit risks 23,641,262.26 36.38 1,043,381.50 4.41 22,597,880.76
characteristics
Other accounts receivable with
insignificant single amount for which bad
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Closing balance
Book balance Bad debt provision
Category
Proportion Withdrawal Book value
Amount Amount
(%) proportion (%)
debt provision separately accrued
Total 64,984,200.79 100 42,386,320.03 65.23 22,597,880.76
(Continued)
Opening balance
Book balance Bad debt provision
Category
Proportion Withdrawal Book value
Amount (%) Amount proportion (%)
Other accounts receivable with
insignificant single amount for which bad
41,342,938.53 81.90 41,342,938.53 100.00 0.00
debt provision separately accrued
Other accounts receivable withdrawn bad
debt provision according to credit risks
9,134,457.26 18.10 516,501.58 5.65 8,617,955.68
characteristics
Other accounts receivable with
insignificant single amount for which bad
debt provision separately accrued
Total 50,477,395.79 100.00 41,859,440.11 82.93
8,617,955.68
① Other receivable with single significant amount and withdrawal bad debt provision
separately at end of period：
Closing balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal
Withdrawal reason
receivable provision proportion (%)
Enter enterprise bankruptcy
Jianqiao Securities Co., Ltd. 11,840,500.00 11,840,500.00 100.00
liquidation
Hengxin Securities Co., Ltd. 29,502,438.53 29,502,438.53 100.00 Enter enterprise bankruptcy
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Closing balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal
Withdrawal reason
receivable provision proportion (%)
liquidation
Total 41,342,938.53 41,342,938.53 100.00
② In the groups, other accounts receivable adopting aging analysis method to withdraw bad
debt provision:
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year
[Of which: within 6 months] 15,040,998.54 150,409.98 1.00
[7-12 months] 7,164,888.59 358,244.43 5.00
Subtotal within 1 year 22,205,887.13 508,654.41 2.29
1 to 2 years 942,171.58 94,217.16 10.00
2 to 3 years 105,387.24 52,693.62 50.00
Over 3 years 387,816.31 387,816.31 100.00
Total 23,641,262.26 1,043,381.50 4.41
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawn bad debt provision of Reporting Period was of RMB35,542.21.
(3) Particulars of the actual verification of other accounts receivable during the Reporting
Period
There was no actual verification of other accounts receivable during the Reporting Period
(4) Other account receivable classified by account nature
Nature Closing book balance Opening book balance
Securities investment 41,342,938.53 41,342,938.53
Margin &cash pledge 1,407,050.01 1,642,346.71
Business travel borrowing charges 3,915,005.70 2,789,864.26
Rent and utilities fee 6,721,027.98 2,432,526.57
Others 11,598,178.57 2,269,719.72
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Total 64,984,200.79 50,477,395.79
(5) Top 5 of the closing balance of the other accounts receivable collected according to the
arrears party
Proportion (%) Bad debt
Name of the entity Nature Closing balance Aging provision
Closing balance
No.1 Securities investment 29,502,438.53 Over 3 years 45.40 29,502,438.53
No.2 Securities investment 11,840,500.00 Over 3 years 18.22 11,840,500.00
No. 3 Intercourse funds 3,410,772.54 Within 1 year 5.25 34,107.73
Within 6
No. 4
Prepayment of oil fee 1,550,000.00 months 2.39 15,500.00
Within 6
No. 5
Prepayment of rental fee 689,658.09 months 1.06 68,965.81
Total 46,993,369.16 72.32 41,461,512.07
7. Inventory
(1) Category of inventory
Closing balance
Item
Book balance Falling price reserves Book value
Raw materials& package 124,998,125.88 6,572,307.41 118,425,818.47
Homemade semi-finished products and goods in process 1,329,501,557.99 1,329,501,557.99
Finished product 238,833,956.89 7,665,181.09 231,168,775.80
Total 1,693,333,640.76 14,237,488.50 1,679,096,152.26
(Continued)
Opening balance
Item
Book balance Falling price reserves Book value
Raw materials& package 102,293,838.52 6,976,129.27 95,317,709.25
Homemade semi-finished products and goods in process 1,130,825,408.23 1,130,825,408.23
Finished product 177,900,253.21 7,331,319.82 170,568,933.39
Total 1,411,019,499.96 14,307,449.09 1,396,712,050.87
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(2) Impairment of inventories
Increased amount Decrease
Item Opening balance Reverse or Closing balance
Withdrawal Others Others
write-off
Raw materials& package 6,976,129.27 403,821.86 6,572,307.41
Finished product 7,331,319.82 333,861.27 7,665,181.09
Total 14,307,449.09 333,861.27 403,821.86 14,237,488.50
(3) Withdrawal provision basis of the falling price of the inventory and the reasons of the
reserve or write-off
Reaso
Specific basis of withdrawal of falling ns for
Item Reasons for write-off
price reserves of inventory reversa
l
The realizable net value was lower than The raw material withdrawn impairment disposed in
Raw materials
the cost Reporting Period
Finished The realizable net value was lower than The raw material withdrawn impairment disposed in
product the cost Reporting Period
8. Other current assets
Item Closing balance Opening balance
Financial products 870,000,000.00 1,500,000,000.00
Tax to be deducted 481,108.21 970,860.37
Total 870,481,108.21 1,500,970,860.37
9. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity instruments 218,133,207.80 218,133,207.80 213,881,190.47 213,881,190.47
Of which: measured at fair value 218,133,207.80 218,133,207.80 213,881,190.47 213,881,190.47
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Measured by cost
Others 100,000,000.00 100,000,000.00 100,000,000.00 100,000,000.00
Total 318,133,207.80 318,133,207.80 313,881,190.47 313,881,190.47
(2) Available-for-sale financial assets measured by fair value at the period-end
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
Cost of the equity
instruments/amortized cost of 169,650,571.57 169,650,571.57
the liabilities instruments
Fair value 218,133,207.80 218,133,207.80
Changed amount of the fair
value accumulatively included 48,482,636.23 48,482,636.23
in other comprehensive income
Withdrawn impairment amount
(3) Available-for-sale financial assets measured by cost at the period-end
Book balance Depreciation reserves
Closin
Investee Opening Increa Decrea Closing Opening Increa Decrea
g
period se se period period se se
period
Hongtai No. 55 assembled 100,000,000. 100,000,000.
funds trust
00 00
100,000,000. 100,000,000.
Total
00 00
10. Investment property
Item Houses and buildings Land use right Total
I. Original book value
1. Opening balance 23,148,813.75 2,644,592.00 25,793,405.75
2. Increased amount of the period
3. Decreased amount of the period
4. Closing balance 23,148,813.75 2,644,592.00 25,793,405.75
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Houses and buildings Land use right Total
II. Accumulative depreciation and accumulative amortization
1. Opening balance 15,583,897.24 494,056.62 16,077,953.86
2. Increased amount of the period 259,127.62 31,007.28 290,134.90
(1) Withdrawal or amortization 259,127.62 31,007.28 290,134.90
3. Decreased amount of the period
4. Closing balance 15,843,024.86 525,063.90 16,368,088.76
III. Depreciation reserves
1. Opening balance
2. Increased amount of the period
3. Decreased amount of the period
4. Closing balance
IV. Book value
1. Closing book value 7,305,788.89 2,119,528.10 9,425,316.99
2. Opening book value 7,564,916.51 2,150,535.38 9,715,451.89
11. Fixed assets
(1) List of fixed assets
Transportat
Houses and Machinery Office equipment and
Item ion Total
buildings equipment other
equipment
I. Original book value
774,600,299 52,684,498.9 2,548,734,73
1. Opening balance 1,661,241,240.92 60,208,697.42
.46 2 6.72
80,542,453. 12,432,548.1 443,674,174.
2. Increased amount of the period 328,649,196.71 22,049,976.31
00 0 12
4,431,396.8
(1) Purchase - 1,738,804.61 839,619.99 7,009,821.44
4
14,164,449. 51,182,092.8
(2) Transfer of project under construction 37,017,643.64 - -
16 0
3. Business combination not under the 61,946,607. 10,693,743.4 385,482,259.
291,631,553.07 21,210,356.32
same control 00 9 88
17,156,000. 22,353,428.4
3. Decreased amount of the period 3,549,959.51 595,964.12 1,051,503.98
88 9
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
17,156,000. 22,353,428.4
(1) Disposal or Scrap 3,549,959.51 595,964.12 1,051,503.98
88 9
837,986,751 64,521,082.9 2,970,055,48
4. Closing balance 1,986,340,478.12 81,207,169.75
.58 0 2.35
II. Accumulative depreciation
288,129,635 42,255,683.0 851,431,802.
1. Opening balance 475,454,089.21 45,592,394.27
.62 5 15
66,057,311. 188,324,693.
2. Increased amount of the period 101,414,232.74 9,219,649.77 11,633,499.19
43 13
42,029,709. 85,133,585.7
(1) Withdrawal 35,835,471.83 3,019,481.90 4,248,922.77
21 1
2. Business combination not under the 24,027,602. 103,191,107.
65,578,760.91 6,200,167.87 7,384,576.42
same control 22 42
13,554,619. 16,826,624.6
3. Decreased amount of the period 1,729,716.06 520,868.30 1,021,420.47
83 6
13,554,619. 16,826,624.6
(1) Disposal or Scrap 1,729,716.06 520,868.30 1,021,420.47
83 6
340,632,327 50,954,464.5 1,022,929,87
4. Closing balance 575,138,605.89 56,204,472.99
.22 2 0.62
III. Depreciation reserves -
2,140,753.1
1. Opening balance 4,133,377.10 - - 6,274,130.25
5
2. Increased amount of the period - - - -
(1) Withdrawal - - - -
3. Decreased amount of the period - 915,318.33 - - 915,318.33
(1) Disposal or Scrap - 915,318.33 - - 915,318.33
1,225,434.8
4. Closing balance 4,133,377.10 - - 5,358,811.92
2
IV. Book value -
496,128,989 13,566,618.3 1,941,766,79
1. Closing book value 1,407,068,495.13 25,002,696.76
.54 8 9.81
484,329,910 10,428,815.8 1,691,028,80
2. Opening book value 1,181,653,774.61 14,616,303.15
.69 7 4.32
(2) List of temporarily idle fixed assets
Original book Accumulative Impairment
Item Book value Notes
value depreciation provision
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Houses and buildings 15,719,043.63 11,411,262.48 4,133,377.10 174,404.05
Machinery equipment 7,964,491.74 6,734,804.38 1,225,434.82 4,252.54
Total 23,683,535.37 18,146,066.86 5,358,811.92 178,656.59
(3) Details of fixed assets failed to accomplish certification of property
Item Book value Reason
Uniform handling after the completion of the industrial park
Industry park building 64,365,869.23
project
Uniform handling after the completion of the industrial park
The fire station 953,080.95
project
Uniform handling after the completion of the industrial park
No.3 shift floor 5,743,206.88
project
Uniform handling after the completion of the industrial park
No.1 Peiqu building 10,745,217.28
project
Uniform handling after the completion of the industrial park
No.2 Peiqu building 10,745,217.28
project
Uniform handling after the completion of the industrial park
No.3 Peiqu building 10,745,217.28
project
Uniform handling after the completion of the industrial park
No.4 Peiqu building 10,257,673.20
project
Uniform handling after the completion of the industrial park
No.5 Peiqu building 10,269,579.40
project
Uniform handling after the completion of the industrial park
Industrial park No. 1 brewhouse 20,157,491.87
project
Uniform handling after the completion of the industrial park
Industrial park No. 2brewhouse 20,277,148.61
project
Uniform handling after the completion of the industrial park
Industrial park No. 3brewhouse 22,945,900.39
project
Uniform handling after the completion of the industrial park
Industrial park No. 4brewhouse 22,911,005.77
project
Uniform handling after the completion of the industrial park
Generator room 313,552.89
project
Uniform handling after the completion of the industrial park
Bran warehouse, yeast warehouse 29,142,324.18
project
Uniform handling after the completion of the industrial park
Auxiliary workshop office building 955,465.75
project
111
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Book value Reason
Uniform handling after the completion of the industrial park
Sewage treatment station of industrial park 9,903,006.73
project
Blending workshop, wine collection station Uniform handling after the completion of the industrial park
19,072,091.82
and stainless steel tank district project
Uniform handling after the completion of the industrial park
No.2, No. 3 stainless steel tank district 20,902,528.07
project
Pottery jar wine warehouse F1-4 Uniform handling after the completion of the industrial park
building projects 45,003,899.65 project
Uniform handling after the completion of the industrial park
Industrial Park No.1 filling house
31,980,337.29 project
Uniform handling after the completion of the industrial park
Industrial Park No.2 filling house 38,423,590.21
project
Uniform handling after the completion of the industrial park
Industrial park No. 6brewhouse 21,183,794.22
project
Uniform handling after the completion of the industrial park
Industrial park No. 8brewhouse 23,985,549.72
project
Uniform handling after the completion of the industrial park
Reception and multi-function hall 23,447,638.47
project
Scientific research and comprehensive Uniform handling after the completion of the industrial park
26,066,443.33
command center project
Logistics office building, canteen, salvage Uniform handling after the completion of the industrial park
4,198,827.00
station project
Uniform handling after the completion of the industrial park
Qinggong apartment 9,665,199.99
project
Uniform handling after the completion of the industrial park
Industrial Park electropower station 33,094,219.98
project
Uniform handling after the completion of the industrial park
Industrial park No. 5brewhouse 20,761,372.44
project
Uniform handling after the completion of the industrial park
Industrial park No. 7brewhouse 21,127,025.93
project
Uniform handling after the completion of the industrial park
Industrial Park No.3 filling house 38,651,948.11
project
Uniform handling after the completion of the industrial park
Hefei marketing command center 133,803,465.20
project
Total 761,798,889.12
12. Construction in progress
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(1) List of construction in progress
Closing balance Opening balance
Item Book Depreciation Book Book Depreciation Book
balance reserves value balance reserves value
Removal and R&D project of base liquid and
32,051.44 32,051.44 32,051.44 32,051.44
support facility project
3,755,555. 3,755,555. 3,305,555. 3,305,555.
Operation network of Gujing
56 56 56 56
1,204,613. 1,204,613. 1,186,500. 1,186,500.
Information integration system
21 21 00 00
769,230.7 769,230.7 769,230.7 769,230.7
GujingCRMsystem
7 7 7 7
7,852,045. 7,852,045. 47,025,89 47,025,89
Renovation project of potential safety concerns
88 88 4.49 4.49
2,167,605. 2,167,605. 2,167,605. 2,167,605.
Renovation project of wine culture museum
55 55 55 55
Light and shadow show digital demonstration 3,657,367. 3,657,367.
project 52 52
965,000.0 965,000.0 965,000.0 965,000.0
Automatic reform
0 0 0 0
2,299,961. 2,299,961. 2,299,961. 2,299,961.
Shanghai experience centre
53 53 53 53
“Drunken beauty chateau” Landscape promotion 947,572.8 947,572.8
transformation 3 3
Rice husk steamed warehouse and transportation 2,061,538. 2,061,538.
system 54 54
1,267,025. 1,267,025. 1,153,804. 1,153,804.
Others
40 40 92 92
23,322,20 23,322,20 62,562,97 62,562,97
Total
0.71 0.71 1.78 1.78
(2) Changes of significant construction in progress
Amount that Other
Opening Increase transferred to decreased
Name o f item Estimated number Closing balance
balance Amount fixed assets of amount of the
the period period
Removal and R&D
800,000,000.00 32,051.44 32,051.44
project of base liquid
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Amount that Other
Opening Increase transferred to decreased
Name o f item Estimated number Closing balance
balance Amount fixed assets of amount of the
the period period
and support facility
project
Operation network of
8,350,000.00 3,305,555.56 450,000.00 3,755,555.56
Gujing
Information integration
6,000,000.00 1,186,500.00 18,113.21 1,204,613.21
system
GujingCRMsystem 8,000,000.00 769,230.77 769,230.77
Renovation project of
116,670,000.00 47,025,894.49 4,190,948.31 43,364,796.92 7,852,045.88
potential safety concerns
Renovation project of
5,400,000.00 2,167,605.55 2,167,605.55
wine culture museum
Automatic reform 2,600,000.00 965,000.00 965,000.00
Shanghai experience
5,000,000.00 2,299,961.53 2,299,961.53
centre
“Drunken beauty
chateau” Landscape
3,810,000.00 947,572.83 947,572.83
promotion
transformation
Rice husk steamed
warehouse and 4,200,000.00 2,061,538.54 2,061,538.54
transportation system
Light and shadow show
digital demonstration 5,500,000.00 3,657,367.52 914,341.88 4,571,709.40 0
project
Others 3,050,000.00 1,153,804.92 3,358,806.96 3,245,586.48 1,267,025.40
Total 968,580,000.00 62,562,971.78 11,941,321.73 51,182,092.80 23,322,200.71
(Continued)
Proportion Of which: the
Accumulative Capitalization
estimated of the amount of the
Project amount of rate of the Capital
Project name project capitalized
Progress (%) capitalized interests of the resources
accumulative interests of the
interests period (%)
input (%) period
Removal and R&D project of 92.62 100 Self-owned
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Proportion Of which: the
Accumulative Capitalization
estimated of the amount of the
Project amount of rate of the Capital
Project name project capitalized
Progress (%) capitalized interests of the resources
accumulative interests of the
interests period (%)
input (%) period
base liquid and support facility fund
project
Self-owned
Operation network of Gujing 72.22 90
fund
Self-owned
Information integration system 19.78 50
fund
Self-owned
GujingCRM system 11.56 50
fund
Renovation project of Self-owned
47.37 100
potential safety concerns fund
Renovation project of wine Self-owned
50.64 90
culture museum fund
Self-owned
Automatic reform 43.48 90
fund
Self-owned
Shanghai experience centre 47.45 70
fund
“Drunken beauty chateau” Self-owned
Landscape promotion 9.87 50 fund
transformation
Rice husk steamed Self-owned
warehouse and transportation 33.94 50 fund
system
Light and shadow show digital Self-owned
95.45 100
demonstration project fund
Self-owned
Others 88.94 100
fund
Total - -
13. Intangible assets
Item Land use right Patent right Software Total
I. Original book value
1. Opening balance 351,249,420.80 38,150,000.00 4,869,402.68 394,268,823.48
115
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Land use right Patent right Software Total
2. Increased amount of the period 277,029,881.76 176,833,542.63 999,312.90 454,862,737.29
(1) Purchase
(2) Business combination not under the same control 277,029,881.76 176,833,542.63 999,312.90 454,862,737.29
3. Decreased amount of the period
4. Closing balance 628,279,302.56 214,983,542.63 5,868,715.58 849,131,560.77
II. Accumulated amortization
1. Opening balance 54,759,386.45 38,150,000.00 2,987,197.07 95,896,583.52
2. Increased amount of the period 36,560,145.79 7,513,992.63 974,211.00 45,048,349.42
(1) Withdrawal 4,232,848.95 0.00 537,406.94 4,770,255.89
(2) Business combination not under the same control 32,327,296.84 7,513,992.63 436,804.06 40,278,093.53
3. Decreased amount of the period
4. Closing balance 91,319,532.24 45,663,992.63 3,961,408.07 140,944,932.94
III. Depreciation reserves
1. Opening balance
2. Increased amount of the period
3. Decreased amount of the period
4. Closing balance
IV. Book value
1. Closing book value 536,959,770.32 169,319,550.00 1,907,307.51 708,186,627.83
2. Opening book value 296,490,034.35 1,882,205.61 298,372,239.96
14. Goodwill
Items to be Increased amount of the period Decreased amount of the period
invested in the
name of the unit Opening balance Enterprise merger Closing balance
Management
or the formation formation
of goodwill
Wuhan Pride
Yellow Crane
0.00 473,325,507.30 0.00 473,325,507.30
Tower Distillery
Co., Ltd.
116
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Total 0.00 473,325,507.30 0.00 473,325,507.30
15. Long-term unamortized expenses
Amortization
Item Opening balance Increased amount Decrease Closing balance
amount
Yeast house & yeast frame
2,918,368.91 761,679.42 2,156,689.49
project
Reform on highly qualified
7,305,261.80 1,860,700.85 5,444,560.95
base liquid project
Wine warehouse goods shelf 1,408,903.13 281,780.64 1,127,122.49
Specialty store decoration
17,226,636.96 6,725,485.32 10,501,151.64
engineering
Beijing experience centre
17,455,429.04 4,678,616.50 1,191,553.55 20,942,491.99
decoration
The relocation compensation
11,366,500.00 750,000.00 10,616,500.00
of Beijing experience center
Pottery jar warehouse 19,216,518.59 83,364.25 2,184,916.75 17,114,966.09
Decoration project of wine
1,041,359.68 215,453.70 825,905.98
culture museum
Sewage Treatment Project 4,850,000.00 300,000.00 4,550,000.00
Afforestation fees 27,703,158.38 7,756,164.67 21,181.12 19,925,812.59
Gujing mountain villa
4,941,948.33 478,359.66 4,463,588.67
decoration project
Renovation of potential
3,607,861.23 452,564.62 827,686.18 3,232,739.67
safety concerns
Shenzhen experience centre 6,217,336.14 0 666,143.14 5,551,193.00
Others 2,556,386.18 0 575,159.32 1,981,226.86
Total 127,815,668.37 5,214,545.37 24,575,083.20 21,181.12 108,433,949.42
16. Deferred income tax assets/deferred income tax liabilities
(1) List of unrecognized deferred income tax assets
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
Differences assets Differences assets
Bad debt provision 43,836,040.54 10,959,010.13 43,137,779.39 10,784,271.97
Impairment of inventories 14,237,488.50 3,559,372.12 14,307,449.09 3,576,862.28
117
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Impairment provision of the
5,330,814.46 1,332,703.61 6,246,132.79 1,561,533.20
fixed assets
Deferred income 43,849,216.27 10,962,304.07 46,123,314.33 11,530,828.58
Accrued expenses 213,429,867.63 53,357,466.91 134,446,030.45 33,611,507.60
Change in fair value of
605,803.87 151,450.97
available-for-sale financial assets
Total 321,289,231.27 80,322,307.81 244,260,706.05 61,065,003.63
(2) Lists of deferred income tax liabilities had not been off-set
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences liabilities differences liabilities
Change of fair value of trading
2,243,248.59 560,812.15 163,238.41 40,809.60
financial assets
Change in fair value of
49,088,440.10 12,272,110.03 72,642,515.35 18,160,628.84
available-for-sale financial assets
Additional deduction of
8,892,265.05 2,223,066.25 9,048,889.73 2,262,222.43
difference of fixed assets
Asset evaluation increment of
business combination not under 417,431,127.61 104,357,781.90 0.00 0.00
the same control
Total 477,655,081.35 119,413,770.33 81,854,643.49 20,463,660.87
(3) List of unrecognized deferred income tax assets
Item Closing balance Opening balance
Deductible temporary difference 27,997.46 28,173.63
Deductible losses 2,959,839.41 2,059,849.97
Total 2,987,836.87 2,088,023.60
17. Notes payable
Category Closing balance Opening balance
Bank acceptance bill 115,211,679.03 92,940,000.00
Trade acceptance 3,028,583.00 828,583.00
Total 118,240,262.03 93,768,583.00
18. Accounts payable
118
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(1) List of accounts payable
Item Closing balance Opening balance
Within 1 year 335,688,897.62 299,081,452.13
Over 1 years 73,937,717.21 79,105,999.94
Total 409,626,614.83 378,187,452.07
(2) Notes of the accounts payable aging over one year
Item Closing balance Unpaid/ Un-carry-over reason
A Company 11,525,200.00 The project had not perform the final settlement of account
B Company 7,615,752.27 The project had not perform the final settlement of account
C Company 7,597,440.81 The project had not perform the final settlement of account
D Company 6,376,632.93 The project had not perform the final settlement of account
E Company 3,932,156.11 The project had not perform the final settlement of account
Total 37,047,182.12
19. Advance from customers
Item Closing balance Opening balance
Goods payment 1,059,316,464.50 608,565,152.50
Total 1,059,316,464.50 608,565,152.50
20. Payroll payable
(1) List of Payroll payable
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 253,376,275.54 359,364,175.55 411,358,885.13 201,381,565.96
II. Post-employment benefit-defined
408,410.74
contribution plans 525,425.18 49,725,406.69 49,842,421.13
III. Termination benefits
IV. Other benefits due within one year
Total 253,901,700.72 409,089,582.24 461,201,306.26 201,789,976.70
(2) List of Short-term salary
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus, allowance, subsidy 202,138,836.94 264,771,008.81 326,496,121.23 140,413,724.52
119
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Opening balance Increase Decrease Closing balance
2. Employee welfare 0 4,581,967.04 4,581,967.04 0.00
3. Social insurance 36,873.97 16,642,650.25 16,651,357.80 28,166.42
Of which: 1. Medical insurance premiums 27,079.95 15,067,511.82 15,076,117.40 18,474.37
Work-related injury insurance 4,771.50 896,660.13 896,841.60 4,590.03
Maternity insurance 5,022.52 678,478.30 678,398.80 5,102.02
4. Housing fund 12,784,777.20 59,802,478.52 59,009,613.26 13,577,642.46
5. Labor union budget and employee
38,415,787.43 13,566,070.93 4,619,825.80 47,362,032.56
education budget
Total 253,376,275.54 359,364,175.55 411,358,885.13 201,381,565.96
(3) List of drawing scheme
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 499,446.46 46,556,611.61 46,667,718.94 388,339.13
2. Unemployment insurance 25,978.72 3,168,795.08 3,174,702.19 20,071.61
Total 525,425.18 49,725,406.69 49,842,421.13 408,410.74
21. Taxes payable
Item Closing balance Opening balance
VAT 88,576,040.83 87,099,637.75
Consumption tax 113,948,209.08 137,743,836.68
Business tax 7,734.85 1,567,227.74
Corporate income tax 58,954,095.13 70,375,692.68
Personal income tax 2,399,767.78 2,747,356.67
Urban maintenance and construction tax 10,477,670.38 10,339,184.61
Stamp tax 448,199.51 1,096,999.83
Education Surcharge 9,934,691.07 10,327,628.89
Others 8,881,320.61 36,789,788.95
Total 293,627,729.24 358,087,353.80
22. Other accounts payable
120
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Closing balance Opening balance
Margin &cash pledge 641,091,653.77 349,397,678.43
Business travel borrowing charges 1,536,367.73 1,369,843.17
Quality guarantee 66,088,722.97 42,153,589.56
4. Housing deduction 12,985,839.72 12,784,777.20
Others 50,391,636.95 46,487,300.58
Total 772,094,221.14 452,193,188.94
23. Other non-current liabilities
Item Closing balance Opening balance
Accrued expenses 213,429,867.63 138,135,604.82
Total 213,429,867.63 138,135,604.82
24. Deferred revenue
Increas
Item Opening balance Decrease Closing balance Formed reason
e
Government Received assets related to government
subsidies 46,123,314.33 2,274,098.06 43,849,216.27 subsidies
Total —
46,123,314.33 2,274,098.06 43,849,216.27
Of which, items involved in government subsidies:
Amount
Amount of recorded into Related to
Other
Item Opening balance newly non-operating Closing balance assets/related
changes
subsidy income in report income
period
Technical reform of wine production Related to the
442,708.37 0.00 31,249.98 0.00 411,458.39
system assets
Related to the
Instruments subsidies 1,653,750.00 0.00 110,250.00 0.00 1,543,500.00
assets
Intelligent solid brewing technology Related to the
244,791.66 0.00 15,625.02 0.00 229,166.64
assets
innovation project
Anhui service industry development 1,965,853.62 0.00 146,341.44 0.00 1,819,512.18 Related to the
121
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Amount
Amount of recorded into Related to
Other
Item Opening balance newly non-operating Closing balance assets/related
changes
subsidy income in report income
period
assets
guide fund
Anhui innovative province
Related to the
construction independent innovation 4,870,300.00 0.00 365,272.50 0.00 4,505,027.50
assets
ability construction subsidy
Energy-saving and reform project of
Related to the
coal-fired industry boiler and glass 471,750.00 0.00 76,500.00 0.00 395,250.00
assets
furnace
Related to the
Bozhou city logistics center project 240,000.00 0.00 30,000.00 0.00 210,000.00
assets
Financial subsidy for energy-saving Related to the
1,529,204.04 0.00 265,811.84 0.00 1,263,392.20
assets
project
Financial subsidy for technology Related to the
2,018,595.46 0.00 267,110.76 0.00 1,751,484.70
assets
innovation
Discount on technology reform of
Related to the
deposit in budget directed by 3,333.45 0.00 3,333.45 0.00 0.00
assets
municipal finance
Special fund to enterprise
Related to the
development directed by municipal 142,500.00 0.00 15,000.00 0.00 127,500.00
assets
finance
Related to the
Iot traceability system project 6,311,250.00 0.00 556,875.00 0.00 5,754,375.00
assets
Related to the
Land refund 24,763,652.65 0.00 275,103.09 0.00 24,488,549.56
assets
Motor and boiler energy-saving Related to the
825,000.08 0.00 68,749.98 0.00 756,250.10
assets
reform project
Automated storage hook and product Related to the
640,625.00 0.00 46,875.00 0.00 593,750.00
assets
quality online monitoring
Total 46,123,314.33 0.00 2,274,098.06 0.00 43,849,216.27
122
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
25. Share capital
Increase/decrease in Reporting Period (+,-)
Capitalization
Newly
Item Opening balance Bonus of Closing balance
issue Others Subtotal
shares public
share
reserves
The sum of shares 503,600,000.00 503,600,000.00
26. Capital surplus
Item Opening balance Increase Decrease Closing balance
Capital premium 1,262,552,456.05 1,262,552,456.05
Other capital reserves 32,386,037.14 32,386,037.14
Total 1,294,938,493.19 1,294,938,493.19
27. Other comprehensive income
Reporting Period
Less: recorded
in other
comprehensive
Reporting Attributable to Attributable Closing
Opening period income in
Item Period Less: Income owners of the to minority period
Balance prior period
Amount before tax expense Company after shareholders Balance
and transferred
income tax tax after tax
to profit or
loss in current
period
I. Other
comprehensive
income can not
be reclassified
into profits and
losses in future
II. Other
comprehensive
54,481,886.51 -23,679,607.12 360,204.00 -5,919,901.78 -18,119,909.34 0.00 36,361,977.17
reclassified into
profits or losses
Of which: profits
or losses of
54,481,886.51 -23,679,607.12 360,204.00 -5,919,901.78 -18,119,909.34 0.00 36,361,977.17
change in fair
value of
123
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Reporting Period
Less: recorded
in other
comprehensive
Reporting Attributable to Attributable Closing
Opening period income in
Item Period Less: Income owners of the to minority period
Balance prior period
Amount before tax expense Company after shareholders Balance
and transferred
income tax tax after tax
to profit or
loss in current
period
available-for-sale
financial assets
Total 54,481,886.51 -23,679,607.12 360,204.00 -5,919,901.78 -18,119,909.34 0.00 36,361,977.17
28. Surplus reserves
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 256,902,260.27 0.00 0.00 256,902,260.27
Total 256,902,260.27 0.00 0.00 256,902,260.27
Notes: Based on the regulations of the Corporation Law and Article of Association, the Company
should withdraw 10% of the statutory surplus reserves according to the net profits. If the
accumulated amount of the statutory surplus reserves exceeded the 50% of the registered capital,
the Company could no more withdraw.
The Company, after withdraw statutory surplus reserves, can withdraw discretional surplus reserves,
in line with the approval, the discretional surplus reserves can be used for making up losses in
previous year or increase share capital
29. Retained profits
Item Reporting Period Last period
Opening balance of retained profits before adjustments 2,723,798,990.11 2,108,940,620.43
Total opening balance of retained profits before adjustments (Increase+, decrease-)
Opening balance of retained profits after adjustments 2,723,798,990.11 2,108,940,620.43
Add: Net profit attributable to owners of the Company 431,055,462.62 715,578,369.68
Less: Withdrawal of statutory surplus reserves
Withdrawal of discretional surplus reserves
Withdrawal of generic risk reserve
124
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Reporting Period Last period
Dividend of common stock payable 50,360,000.00 100,720,000.00
Dividend of common stock transfer into share capital
Closing retained profits 3,104,494,452.73 2,723,798,990.11
30. Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 3,024,521,955.55 764,241,551.89 2,697,122,601.21 812,852,316.96
Other operations 20,512,751.18 16,152,882.77 15,920,227.71 14,726,210.63
Total 3,045,034,706.73 780,394,434.66 2,713,042,828.92 827,578,527.59
31. Business tax and surcharges
Item Reporting Period Same period of last year
Consumption tax 387,368,333.18 324,369,895.65
Business tax 1,287,301.81 2,085,404.31
Urban maintenance, construction tax and educational surcharge 81,797,388.99 65,419,732.26
Others 786,160.37 307,702.15
Total 471,239,184.35 392,182,734.37
Notes: the measurement standards of business tax and surcharges see Notes V. Tax
32. Sales expenses
Item Reporting Period Same period of last year
Employee’s remuneration 91,988,233.13 69,426,393.62
Business travel charges 50,616,867.44 46,830,598.44
Advertising expense 232,167,675.77 212,795,746.59
Transport fees 14,302,719.73 12,475,756.29
Propaganda and promotion expenses 382,200,662.52 278,466,662.23
Sample wine 81,770,179.30 31,965,394.85
Labor cost 126,056,794.13 129,461,776.59
Other sales expenses 34,820,001.22 12,804,495.28
125
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Reporting Period Same period of last year
Total 1,013,923,133.24 794,226,823.89
33. Administrative expenses
Item Reporting Period Same period of last year
Employee’s remuneration 138,598,708.62 136,704,663.06
Office expenses 5,051,588.92 7,287,777.92
Taxes 16,180,538.79 4,326,514.49
Repair charge 7,396,042.34 18,344,927.54
Depreciation charge 25,666,709.05 23,808,699.83
Amortization of intangible assets 4,495,152.80 3,978,814.50
Sewage charge 7,028,047.40 7,542,096.40
Material wastage 22,093,807.33 19,443,106.51
Business travel charges 923,463.49 840,055.23
Water & electricity fees 4,305,991.70 4,357,291.78
Others 25,337,405.28 11,292,823.38
Total 257,077,455.72 237,926,770.64
34. Financial expenses
Item Reporting Period Same period of last year
Interest expenses
Less: Interest income 9,929,844.92 15,350,708.99
Less: Amount of capitalized interest
Exchange gains and losses 93,752.69
Less: capitalization of foreign currency
exchange gains and losses
Others 71,931.09 6,756,733.25
Total -9,764,161.14 -8,593,975.74
35. Asset impairment loss
Item Reporting Period Same period of last year
Bad debt loss 5,597.28 -32,522.34
Inventory falling price loss -69,960.59 3,743,459.22
Total -64,363.31 3,710,936.88
36. Gains and losses from changes in fair value
126
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Sources Reporting Period Same period of last year
Financial assets measured by fair value and the changes be
2,080,010.18 40,432.58
included in the current profits and losses
Of which, gains on the changes in the fair value of derivative
financial instruments
Total 2,080,010.18 40,432.58
37. Investment income
Item Reporting Period Same period of last year
Investment income received from financial assets measured by
fair value and the changes be included in the current profits and
losses during holding period
Investment income received from disposal of financial assets
measured by fair value and the changes be included in the 4,982,722.91 7,295,964.00
current profits and losses during holding period
Investment income received from holding of available-for-sale
39,030,480.05 31,002,208.94
financial assets
Investment income received from disposal of available-for-sale
311,652.40 0.00
financial assets
Total 44,324,855.36 38,298,172.94
38. Non-operating gains
Recorded in the
amount of the
Reporting Same period of
Item non-recurring
Period last year
gains and
losses
Total gains from disposal of non-current assets
5,477.22 82,953.29 5,477.22
Including: Gains from disposal of fixed assets
5,477.22 82,953.29 5,477.22
Government grants (details, see the statement below, lists of government subsidies) 3,899,636.68 3,021,627.75
3,899,636.68
Penalty income 3,129,276.74
127
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Recorded in the
amount of the
Reporting Same period of
Item non-recurring
Period last year
gains and
losses
335,651.90 335,651.90
Sales of scrap 2,712,008.98 3,078,184.05
2,712,008.98
Others 1,186,922.39
672,544.68 1,186,922.39
Total 8,139,697.17 9,984,586.51
8,139,697.17
Of which, government subsidies recorded into current profits and losses
Reporting Same period Related to the assets/
Item
Period of last year income
Related to the income
Social Security office subsidy 337,268.00 723,800.00
Related to the income
Technology innovation demonstration prize 600,000.00
Related to the income
The title of honor award
100,000.00
Related to the income
Other payment of treasury payment center 220,000.00
Related to the income
Tax refund 368,270.62
Received assets related to government subsidies deferred revenue 2,274,098.0 2,297,827.7 Related to the assets
amortization 6 5
Total 3,899,636.6 3,021,627.7
8 5
39. Non-operating expenses
Recorded in the amount
Item Reporting Period Same period of last year of the non-recurring
gains and losses
128
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Recorded in the amount
Item Reporting Period Same period of last year of the non-recurring
gains and losses
Loss on disposal of non-current assets 4,324,035.29 644,420.16 4,324,035.29
Including: Loss on disposal of fixed assets 4,324,035.29 644,420.16 4,324,035.29
Others 764,567.19 634,804.72 764,567.19
Total 5,088,602.48 1,279,224.88 5,088,602.48
40. Income tax expense
(1) Lists of income tax expense
Item Reporting Period Same period of last year
Current income tax expense 148,337,746.92 132,167,550.18
Deferred income tax expense -3,355,978.24 382,624.09
Total 144,981,768.68 132,550,174.27
41. Other comprehensive income
See note VI. 26
42. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities:
Item Reporting Period Same period of last year
Margin 205,517,087.14 101,441,243.19
Government subsidies 1,625,538.62 723,800.00
Interest income 9,929,844.92 14,740,180.55
Others 10,427,713.05 22,014,300.47
Recover of the pledge of bank deposit 46,945,425.70 36,100,000.00
Total 274,445,609.43 175,019,524.21
(2) Other cash paid relevant to operating activities:
Item Reporting Period Same period of last year
Cash paid in selling expenses and administrative expenses 438,621,689.10 342,410,137.61
Fixed term deposits used to issue the pledge for the notes payable 101,039,705.03 30,100,000.00
Others 16,536,736.11 15,997,968.39
129
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Reporting Period Same period of last year
Total 556,198,130.24 388,508,106.00
(3) Other cash received relevant to investment activities
Item Reporting Period Same period of last year
Received assets related to government subsidies 0.00 500,000.00
Total 0.00 500,000.00
43. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Supplemental information Same period of last
Reporting Period
year
1. Reconciliation of net profit to net cash flows generated from operating
activities
Net profit 436,703,214.76 380,504,804.17
Add: Provision for impairment of assets -64,363.31 3,710,936.88
Depreciation of fixed assets, of oil-gas assets, of productive biological
77,748,166.67
assets 85,133,585.71
Investment property amortization 290,134.90 1,498,113.93
Amortization of intangible assets 4,770,255.89 4,578,678.08
Long-term unamortized expenses 24,575,083.20 21,329,995.57
Losses on disposal of fixed assets, intangible assets and other long-term
285,606.26
assets (gains: negative) 4,318,558.07
Loss on retirement of fixed assets (gains: negative) 0
Losses from variation of fair value (gains: negative) -2,080,010.18 -40,432.58
Financial cost (gains: negative) 93,752.69 0
Investment loss (gains: negative) -44,324,855.36 -38,298,172.94
Decrease in deferred income tax assets (gains: negative) -19,257,304.18 382,624.09
Increase in deferred income tax liabilities
24,040,581.94
(“-” means decrease) -5,407,672.44
Decrease in inventory (gains: negative) -282,384,101.39 -20,672,611.87
130
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Supplemental information Same period of last
Reporting Period
year
Decrease in accounts receivable from operating activities (gains:
-289,286,240.30
negative) -722,315,697.46
Increase in payables from operating activities (decrease: negative) 843,787,934.03 168,137,780.18
Deferred revenue amortization 2,274,098.06 2,297,827.75
Net cash flows generated from operating activities 326,112,612.99 336,217,657.83
2. Investing and financing activities that do not involving cash receipts and
payment:
Conversion of debt into capital
Company bonus convertible due within one year
Fix assets under financing lease
3. Net increase in cash and cash equivalents
Closing balance of cash 1,090,861,015.13 904,128,752.91
Less: Opening balance of cash 1,040,373,733.07 682,360,442.79
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 50,487,282.06 221,768,310.12
(2) Cash and cash equivalents
Item Closing balance Opening balance
I. Cash 1,090,861,015.13 1,040,373,733.07
Including: Cash on hand 332,509.88 373,724.24
Bank deposit on demand 1,090,153,358.62 1,040,000,008.83
Other monetary funds on demand 375,146.63
II. Cash and cash equivalents
Of which: Bond investment due within three months
III. Closing balance of cash and cash equivalents 1,090,861,015.13 1,040,373,733.07
43. The assets with the ownership or use right restricted
131
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Closing book value Restricted reason
The pledge use for opening a bank
Monetary capital 101,039,705.03
acceptance bill
The pledge use for opening a bank
Notes receivable 21,651,974.00
acceptance bill
Total 122,691,679.03
VII. Changes of merge scope
1. Business combination not under the same control
(1) Business combination under the same control during the Reporting Period
Unit: RMB Yuan
Income of Net profit of
Time to Equity Way of
Name of Time to obtain Recognition acquiree from acquiree from
obtain proportion equity Purchase date
acquiree cost judgment purchase date purchase date
equity obtained obtained
to period-end to period-end
Wuhan Pride
Yellow Equity
1 June 1 June
Crane Tower 51% Purchase acquisition
816,000,000.00 74,200,918.34 11,526,024.62
2016 2016
Distillery agreement
Co., Ltd.
(2) Combination cost and goodwill
Unit: RMB Yuan
Combination cost Amount
--Cash 816,000,000.00
-Fair value of non-cash assets
--Fair value of debt issued or undertake
--Fair value of equity securities issued
--Fair value of contingent consideration
--Fair value of equity held before purchase date on purchase
date
--Other
Total 816,000,000.00
132
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Less: share of fair value of net identifiable assets obtained 342,674,492.70
Amount of goodwill/ combination cost less than share of fair
473,325,507.30
value of net identifiable assets obtained
(3) The identifiable assets and liabilities of acquiree at purchase date
Unit: RMB Yuan
Fair value on purchase date Book value on purchase date
Assets:
Monetary capital 20,229,967.55 20,229,967.55
Account receivable 35,078,054.14 35,078,054.14
Prepayment 4,592,658.47 4,592,658.47
Other accounts receivable 11,047,048.55 11,047,048.55
Inventories 242,253,429.44 242,253,429.44
Other current assets 184,929.69 184,929.69
Fixed assets 281,921,292.87 244,422,796.90
Construction in progress 153,478.18 153,478.18
Intangible assets 414,584,643.76 34,652,012.12
Deferred income tax assets 14,442,466.21 14,442,466.21
Liabilities:
Notes payable 5,000,000.00 5,000,000.00
Accounts payable 53,189,550.56 53,189,550.56
Accounts received in advance 51,292,952.12 51,292,952.12
Payroll payable 1,552,166.23 1,552,166.23
Tax payable 17,902,164.20 17,902,164.20
Other account payable 112,406,799.76 112,406,799.76
Other current-liabilities 6,875,784.08 6,875,784.08
Deferred income tax liabilities 104,357,781.90 0.00
Net assets 671,910,770.01 358,837,424.30
Less: minority interests 329,236,277.30 175,830,337.91
Net assets obtained 342,674,492.70 183,007,086.39
2. Other reasons for the changes in combination scope:
Main Registration Nature of Holding percentage (%)
Name Way of gaining
operating place business Directly Indirectly
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
place
Bozhou
gujinggong Bozhou, Bozhou, Business
100.00 Investment
Marketing Anhui Anhui trading
Co. Ltd.
VIII. Equity in other entities
1. Equity in subsidiary
Main operating Registration Nature of Holding percentage (%)
Name Way of gaining
place place business Directly Indirectly
Bozhou, Business
Bozhou Gujing Sales Co., Ltd. Bozhou, Anhui 100.00 Investment
Anhui trading
Bozhou Gujing Transportation Bozhou,
Bozhou, Anhui Transportation 99.00 1.00 Investment
Co., Ltd. Anhui
Bozhou,
Anhui Longrui Glass Co., Ltd. Bozhou, Anhui Production 99.00 1.00 Investment
Anhui
Bozhou Gujing Waste Bozhou,
Bozhou, Anhui Waste cycled 100.00 Investment
Reclamation Co., Ltd. Anhui
Anhui Jinyunlai Culture & Media
Hefei Anhui Hefei Anhui Ads marketing 100.00 Investment
Co., Ltd.
Bozhou,
Bozhou Gujing Packing Co., Ltd. Bozhou, Anhui Production 100.00 Investment
Anhui
Anhui Swisse Will Science & Bozhou, Technology
Bozhou, Anhui 100.00 Investment
Technology Co., Ltd. Anhui research
Anhui Subway Cordial Wine Co., Bozhou,
Bozhou, Anhui Production 100.00 Investment
Ltd. Anhui
Anhui Yuanqing Environmental Bozhou, Sewage
Bozhou, Anhui 100.00 Investment
Co. , Ltd. Anhui Treatment
Business combination
Bozhou, Hotel
Bozhou Gujing Hotel Co., Ltd. Bozhou, Anhui 100.00 under the same
Anhui operating
control
Business combination
Shanghai Gujing Jinhao Hotel Hotel
Shanghai Shanghai 100.00 under the same
Management Co., Ltd. management
control
Business combination
Wuhan Pride Yellow Crane Tower
Wuhan, Hubei Wuhan, Hubei Production 51.00 not under the same
Distillery Co., Ltd.
control
Bozhou gujinggong Marketing Bozhou, Business
Bozhou, Anhui 100.00 Investment
Co. Ltd. Anhui trading
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IX. The risk related financial instruments
The main financial instruments of the Company are equity investment, financial product, trust
investment, account receivables and account payables, etc, the specific explanation of each financial
instrument are in relevant item of Note VI. Risk related to these financial instruments and the risk
management policies the Company adopted to reduce the risk is as follows: the management of
the Company monitors and manages the risk exposure to ensure the aforesaid risk within the limit
scope of control.
(I) Risk management objectives and policies
The goals of the Company is to maintain a proper balance between the risk and the income, reduce
the negative influence of risk to the operation performance of the Company to a minimum, and
maximize profits of shareholders and other equity investors, basing on the risk management goal,
the Company basis policies are to recognize and analyze each risk the Company faced, establish
proper risk bottom line and conduct risk management, timely and reliably supervise each risk,
control the risks within the limit scope .
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate.
Foreign exchange risk is referred to the risk of loss from the change of exchange rate. The main
operation of the Company is within the territory of China, mainly settled by RMB, only small
amount of export business and the influence of the proportion in the total income is rather small; the
exchange rate risk is very little.
(2) Interest rate risk- cash flow change risk
The opration capital of the Company is sufficient, there is no external borrowing in the Company;
the interest rate risk is very little.
(3) Other price risk
What the Company held are classified as available financial assets and tradable financial assets
measured at fair value on balance sheetdate. Thus, the Company bares the risk change of
securities market. The Company adopt variety of equity group to reduce the price risk in equity
security investment.
2. Credit risk
On 30 June 2016, the largest credit risk exposure what may lead to the financial losses was the other
party of the contract failed to fulfill the obligations and causes loss of the Company’s financial
assets and financial guarantee, which including:book value of financial assets recognized in
consolidated balance sheet; as for the financial instruments measured at fair value, the book value
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
reflect its risk exposure, but not the largest one, the largest risk exposure will change when the
future fair value changed.
The Company only trade with the third party authorized with good credit and large scale. In line
with the policies of the Company and the items of sale contracts, the Company gives priority to first
payment shipment, only small amount of credit transactions and examines and verifies the credit of
the client who trading with by credit way.
The Company's working capital was in bank with higher credit rating, so credit risk of working
capital was low.
3. Liquidity Risk
When managing liquidity risk, the Company maintained the management’s believe that supervising
the sufficient cash and cash equivalents to meet the operating demand of the Company and reduce
the influence of the fluctuation of cash flow.
X. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
Fair value Fair value Fair value
Item
measurement measurement measurement Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value measurement
(I) Financial assets calculated by fair value and
3,175,807.27 3,175,807.27
changes record into current profits or losses
1. Trading financial assets 3,175,807.27 3,175,807.27
(1) Equity tool investment 3,175,807.27 3,175,807.27
(II) Available-for-sale financial assets 218,133,207.80 218,133,207.80
1. Equity instrument investment 218,133,207.80 218,133,207.80
Total assets of consistent fair value
221,309,015.07 221,309,015.07
measurement
2. Market price recognition basis for consistent and inconsistent fair value measurement items
at level 1
The consistent fair value measurement items were the share public trade on Shanghai Stock
Exchange or Shenzhen Stock Exchange, the market price recognition basis was the closing price of
the share on balance sheet date.
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XI. Related party and related Transaction
1. Information of parent company
Proportion of Proportion of
share held by voting rights
Registration Registered
Name of parent company Nature of business parent company owned by parent
place capital
against the company against
Company (%) the Company (%)
Beverage, Construction
materials, and plastic
Anhui Gujing Group Co., Ltd. Anhui 1,000,000,000.00 53.89 53.89
productions
manufacture
Notes: The finial control of the Company was People’s Government of Bozhou, Anhui
2. Information of subsidiary of the Company
Details of information of subsidiary of the Company see note 1. Equity in subsidiary VIII
3. Information on other related parties of the Company
Name Relationship
Anhui Ruifuxiang Food Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruijing Restaurant Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruijing Trade Travel (Group) Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Bozhou Hotel Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Real Estates Group Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
East Ruijing Enterprise Investment Development Co.,
Affiliated enterprise of controlling shareholder and actual controller
Ltd
Anhui Hengxin Pawn Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Ruineng Thermoelectricity Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Holiday Inn Hefei Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruifuxiang High-protein Feed Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Hotel Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruixin Pawn Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Zhongxin Financial Leasing Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Huixin Finance Investment Group Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
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Name Relationship
Bozhou Anxin Microcredit Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Hotel Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Bozhou Huisheng Building Catering Company Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Junlai Hotel Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Real Estates Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Hengxin Pawn Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Aoxin Real Estate Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Lixin E-Commerce Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Xinxin Property Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Youxin Financing Guarantee Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Real Estates Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Shanghai Beihai Restaurant Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Shanghai Ruiyao Hotel Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Xinyuan Government Landscape Engineering
Affiliated enterprise of controlling shareholder and actual controller
Co., Ltd.
4. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
①Information on acquisition of goods and reception of labor service
Related party Content Reporting Period Same period of last year
Anhui Ruifuxiang Food Co., Ltd Purchase of raw material 103,717.97 2,852,022.30
Accepting food and
Bozhou Hotel Co., Ltd. accommodation services 1,003,377.40 279,740.90
Holiday Inn Hefei Purchase of goods 89,654.36 2,227,030.00
Accepting food and
Holiday Inn Hefei accommodation services 14,088.46 42,366.92
Accepting food and
Bozhou Huisheng Building Catering Company accommodation services 2,051,307.00 1,326,279.00
Bozhou Gujing Junlai Hotel Management Co., Ltd. Residential Services 199,119.00 134,834.00
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Related party Content Reporting Period Same period of last year
Accepting food and
Anhui Gujing Hotel Development Co., Ltd. accommodation services 188,450.00 0
Accepting food and
Anhui Ruijing Restaurant Management Co., Ltd. accommodation services 9,460.00 0
Total 3,659,174.19 6,862,273.12
②Information of sales of goods and provision of labor service
Related party Content Reporting Period Same period of last year
Sales of white
Bozhou Hengxin Pawn Co., Ltd. 4,941.54 1,538.46
spirit
Sales of small
Anhui Gujing Group Co., Ltd. 19,355.93 40,047.82
sized materials
Providing
Anhui Gujing Group Co., Ltd. Hotels and 195,376.99 58,500.00
Restaurants
Sales of white
Bozhou Huisheng Building Catering Company 16,538.46 135,213.67
spirit
Sales of white
Bozhou Hotel Co., Ltd. 41,025.64 151,538.47
spirit
Sales of white
Anhui Ruijing Trade Travel (Group) Co., Ltd 1,744,615.38 98,804.62
spirit
Sales of white
Anhui Ruijing Restaurant Management Co., Ltd. 0.00 109,786.32
spirit
Sales of white
Anhui Ruifuxiang Food Co., Ltd 164,692.31 145,784.61
spirit
Sales of white
Anhui Huixin Finance Investment Group Co., Ltd. 9,123.08 21,079.23
spirit
Sales of white
Anhui Gujing Hotel Development Co., Ltd. 55,384.64 448,880.33
spirit
Sales of white
Anhui Gujing Real Estates Group Co., Ltd. 8,981.53 134,000.00
spirit
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Related party Content Reporting Period Same period of last year
Providing
Anhui Gujing Real Estates Group Co., Ltd. 0.00 2,380.00
catering service
Sales of white
Holiday Inn Hefei 0.00 703,846.16
spirit
Holiday Inn Hefei Selling materials 0.00 29,443.06
Sales of white
Bozhou Gujing Real Estates Development Co., Ltd. 82,896.41 198,000.00
spirit
Providing
Bozhou Gujing Real Estates Development Co., Ltd. 800.00 0.00
catering service
Sales of white
Bozhou Ruineng Thermoelectricity Co., Ltd. 85,867.71 45,780.77
spirit
Sales of white
Anhui Ruifuxiang High-protein Feed Co., Ltd. 9,692.31 8,092.31
spirit
Anhui Ruifuxiang High-protein Feed Co., Ltd. Selling materials 0.00 33,181.21
Sales of white
Anhui Aoxin Real Estate Development Co., Ltd. 3,658.47 0.00
spirit
Sales of white
Anhui Lixin E-Commerce Co., Ltd. 4,406.15 0.00
spirit
Sales of white
Anhui Ruixin Pawn Co., Ltd 24,747.70 0.00
spirit
Sales of white
Anhui Xinxin Property Management Co., Ltd. 18,563.07 0.00
spirit
Sales of white
Anhui Youxin Financing Guarantee Co., Ltd. 12,155.90 0.00
spirit
Sales of white
Anhui Zhongxin Financial Leasing Co., Ltd. 3,670.78 0.00
spirit
Sales of white
Bozhou Anxin Microcredit Co., Ltd 1,230.77 0.00
spirit
Sales of white
Bozhou Gujing Hotel Co., Ltd 15,273.85 0.00
spirit
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Related party Content Reporting Period Same period of last year
Sales of white
Bozhou Gujing Junlai Hotel Management Co., Ltd. 5,076.92 0.00
spirit
Sales of white
Bozhou Gujing Real Estates Management Co., Ltd. 29,307.69 0.00
spirit
Sales of white
Shanghai Beihai Restaurant Co., Ltd. 8,153.85 0.00
spirit
Sales of white
Shanghai Ruiyao Hotel Management Co., Ltd. 4,461.54 0.00
spirit
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. Catering 17,110.00 0.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. Selling materials 47,934.55 0.00
Sales of white
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 51,583.59 0.00
spirit
Total 2,686,626.76 2,365,897.04
(2) Information of related lease
The Company was lessee:
The lease income
lessor Category of leased assets Category of leased assets
confirmed in this year
Anhui Gujing Group Co., Ltd. Houses and buildings 900,000.00 900,000.00
Anhui Gujing Group Co., Ltd. Houses and buildings 250,000.00 250,000.00
The Company was lessor
The lease income The lease income
Name of lessee Category of leased assets
confirmed in this year confirmed in last year
Anhui Gujing Hotel Management Co., Ltd. Houses and buildings 169,597.89 28,722.22
5. Receivables and payables of related parties
(1) Receivables
Name o f item Closing balance Opening balance
Other accounts receivable:
Large Central Plain Wine Valley Culture Tourism
0.00 6,186.47
Development Co., Ltd.
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Total 0.00 6,186.47
(2) Payables
Name o f item Closing balance Opening balance
Accounts received in advance:
Anhui Ruijing Restaurant Management Co., Ltd. 204,400.01 299,280.01
Holiday Inn Hefei 16,100.00 16,100.00
Bozhou Hotel Co., Ltd. 10,000.00 10,000.00
Anhui Gujing Real Estates Group Co., Ltd. 50,543.00 5,015.00
Anhui Lixin E-Commerce Co., Ltd. 0.00 2,419.20
Shanghai Beihai Restaurant Co., Ltd. 9,540.00 0.00
Shanghai Ruiyao Hotel Management Co., Ltd. 5,220.00 0.00
Anhui Xinyuan Government Landscape Engineering Co., Ltd. 12,110.90 0.00
Total 307,913.91 332,814.21
Accounts payable:
Bozhou Huisheng Building Catering Company 0.00 10,000.00
Total 0.00 10,000.00
Other account payable:
Bozhou Huisheng Building Catering Company 15,500.00 24,500.00
Anhui Ruifuxiang Food Co., Ltd 0.00
2,000.00
Holiday Inn Hefei 0.00
24,000.00
Anhui Gujing Hotel Development Co., Ltd. 0.00
3,600.00
Anhui Ruijing Restaurant Management Co., Ltd. 0.00
1,200.00
Anhui Ruijing Trade Travel (Group) Co., Ltd 55,740.56 69,568.74
Bozhou Hotel Co., Ltd. 0.00 23,400.00
Total 71,240.56 148,268.74
XII. Commitments and contingency
1. Significant commitments
(2) Operating lease commitments
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
As of the end of balance sheet date, the irrevocable operating lease commitments that the Company
signed were as followed:
Item Closing balance Opening balance
Minimum lease payments of irrevocable operating
lease
1 year after balance date 2,300,000.00 2,300,000.00
2 year after balance date 2,300,000.00 2,300,000.00
3 year after balance date 2,300,000.00 2,300,000.00
Future years 25,108,333.33 26,258,333.33
Total 32,008,333.33 33,158,333.33
2. Contingency
As of 30 June 2016, there were no significant contingency to be disclosed.
XIII. Events after balance sheet date
As of 30 June 2016, there was no other significant event after balance sheet date.
XIV. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Closing balance
Book balance Bad debt provision
Category
Proportion Proportion Book value
Amount (%) Amount (%)
Accounts receivable with insignificant single
amount for which bad debt provision separately
accrued
Accounts receivable withdrawal of bad debt
5,533,492.33 100.00 594,827.09 81.61 4,938,665.24
provision of by credit risks characteristics:
Accounts receivable with insignificant single
amount for which bad debt provision separately
accrued
Total 5,533,492.33 100.00 594,827.09 81.61 4,938,665.24
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
(Continued)
Opening balance
Book balance Bad debt provision
Category Book
Proporti Proportion
value
Amount on (%) Amount (%)
Accounts receivable with insignificant single amount for which bad debt
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 4,940,776 590,339. 4,350,437
100.00 11.95
.33 09 .24
characteristics:
Accounts receivable with insignificant single amount for which bad debt
provision separately accrued
4,940,776 590,339. 4,350,437
Total 100.00 11.95
.33 09 .24
① In the groups, accounts receivable adopting aging analysis method to withdraw bad debt
provision:
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion (%)
Within 1 year
[Of which: within 6 months]
[7-12 months] 141,121.87 7,056.09 5
Subtotal within 1 year 141,121.87 7,056.09 5
1 to 2 years 0.00 0.00 0.00
2 to 3 years 0.00 0.00 0.00
Over 3 years 587,771.00 587,771.00 100
Total 728,892.87 594,827.09 81.61
② In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
Closing balance
Name of the group
Account receivable Bad debt provision Withdrawal proportion (%)
Related party group within combination
4,804,599.46
scope
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Closing balance
Name of the group
Account receivable Bad debt provision Withdrawal proportion (%)
Total 4,804,599.46
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawn bad debt provision of Reporting Period was of RMB4,488.00.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
There was no actual verification of accounts receivable during the Reporting Period
(4) Top five of account receivable of closing balance collected by arrears party
The total amount of top five of account receivable of closing balance collected by arrears party
was RMB5, 533,492.33, 100.00% of total closing balance of account receivable, the relevant
closing balance of bad debt provision withdrawn was RMB594, 827.09.
2. Other accounts receivable
(1) Other account receivable classified by category
Closing balance
Book balance Bad debt provision
Category
Proportion Proportion Book value
Amount (%) Amount (%)
Other accounts receivable with
insignificant single amount for which bad 41,342,938.53 27.88 41,342,938.53 100.00
debt provision separately accrued
Other accounts receivable withdrawn bad
debt provision according to credit risks 106,969,190.33 72.12 227,491.98 0.21 106,741,698.35
characteristics
Other accounts receivable with
insignificant single amount for which bad
debt provision separately accrued
Total 148,312,128.86 100.00 41,570,430.51 28.03 106,741,698.35
(Continued)
Opening balance
Book balance Bad debt provision
Category
Proportion Proportion Book value
Amount (%) Amount (%)
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Opening balance
Book balance Bad debt provision
Category
Proportion Proportion Book value
Amount (%) Amount (%)
Other accounts receivable with
insignificant single amount for which bad 41,342,938.53 27.69 41,342,938.53 100.00
debt provision separately accrued
Other accounts receivable withdrawn bad
debt provision according to credit risks 107,957,715.78 72.31 332,695.93 0.31 107,625,019.85
characteristics
Other accounts receivable with
insignificant single amount for which bad
debt provision separately accrued
Total 149,300,654.31 100.00 41,675,634.46 27.91 107,625,019.85
① Other receivable with single significant amount and withdrawal bad debt provision
separately at end of period：
Closing balance
Other accounts receivable (unit） Other accounts Bad debt Withdrawal
Withdrawal reason
receivable provision proportion (%)
Enter enterprise bankruptcy
Jianqiao Securities 11,840,500.00 11,840,500.00 100.00
liquidation
Enter enterprise bankruptcy
Hengxin Securities 29,502,438.53 29,502,438.53 100.00
liquidation
Total 41,342,938.53 41,342,938.53 — —
② In the groups, other accounts receivable adopting aging analysis method to withdraw bad
debt provision:
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year
[Of which: within 6 months] 4,151,462.14 41,514.61 1.00
[7-12 months] 96,869.47 4,843.47 5.00
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Subtotal within 1 year 4,248,331.61 46,358.08 1.09
1 to 2 years 707,559.25 70,755.93 10.00
2 to 3 years 15,014.93 7,507.47 50.00
Over 3 years 102,870.49 102,870.50 100.00
Total 5,073,776.28 227,491.98 4.48
③ In the groups, other accounts receivable adopting other methods to withdraw bad debt
provision:
Closing balance
Name of the group
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Related party group within
101,895,414.05
combination scope
Total 101,895,414.05
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawn bad debt provision of Reporting Period was of RMB105,203.95.
(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
There was no actual verification of other accounts receivable during the Reporting Period
(4) Other account receivable classified by account nature
Nature Closing book balance Opening book balance
Intercourse funds between entities within combination scope 101,895,414.05 105,475,000.00
Securities investment 41,342,938.53 41,342,938.53
Margin &cash pledge 753,658.09 1,295,081.09
Employee loan 55,798.00 209,766.20
Rent and utilities fee 2,744,956.39 327,679.52
Others 1,519,363.80 650,188.97
Total 148,312,128.86 149,300,654.31
(5) Top 5 of the closing balance of the other accounts receivable collected according to the
arrears party
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Proportion (%) Bad debt
Name of the entity Nature Closing balance Aging provision
Closing balance
Intercourse funds between
No.1 entities within combination 97,955,000.00 0.5years 66.05% 0.00
scope
No.2 Securities investment 29,502,438.53 Over 3 years 19.89% 29,502,438.53
No. 3 Securities investment 11,840,500.00 Over 3 years 7.98% 11,840,500.00
Rent, water, electricity &
No. 4 3,940,414.05 0-6 months 2.66% 0.00
gas expense
No. 5 Securities to be refunded 1,550,000.00 0-6 months 1.05% 15,500.00
Total — 144,788,352.58 — 97.62% 41,358,438.53
3. Long-term equity investment
(1) Long-term equity investment
Closing balance Opening balance
Item Depreciati Depreciation
Book balance Book value Book balance Book value
on reserves reserves
Investment to the 1,170,089,408. 1,170,089,408. 354,089,408. 354,089,408.
0.00 0.00
subsidiary 32 32 32 32
1,170,089,408. 1,170,089,408. 354,089,408. 354,089,408.
Total 0.00 0.00
32 32 32 32
(2) Investment to the subsidiary
Withdrawn
Closing
impairment
balance of
Investee Opening balance Increase Decrease Closing balance provision in
impairment
the Reporting
provision
Period
Bozhou Gujing Sales Co.,
84,864,497.89 0.00 0.00 84,864,497.89 0.00 0.00
Ltd.
Anhui Longrui Glass Co., 85,793,666.00 0.00 0.00 85,793,666.00 0.00 0.00
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Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Withdrawn
Closing
impairment
balance of
Investee Opening balance Increase Decrease Closing balance provision in
impairment
the Reporting
provision
Period
Ltd.
Shanghai Gujing Jinhao
49,906,854.63 0.00 0.00 49,906,854.63 0.00 0.00
Hotel Management Co., Ltd.
Bozhou Gujing Hotel Co.,
648,646.80 0.00 0.00 648,646.80 0.00 0.00
Ltd.
Gujing Transportation Co.,
6,875,743.00 0.00 0.00 6,875,743.00 0.00 0.00
Ltd.
Bozhou Gujing Packing
30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Co., Ltd.
Anhui Swisse Will Science
50,000,000.00 0.00 0.00 50,000,000.00 0.00 0.00
& Technology Co., Ltd.
Anhui Subway Cordial
30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Wine Co., Ltd.
Anhui Yuanqing
16,000,000.00 0.00 0.00 16,000,000.00 0.00 0.00
Environmental Co. , Ltd.
Wuhan Pride Yellow Crane
0.00 816,000,000.00 0.00 816,000,000.00 0.00 0.00
Tower Distillery Co., Ltd.
Total 354,089,408.32 0.00 0.00 1,170,089,408.32 0.00 0.00
4. Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 1,713,016,802.41 749,998,664.73 1,507,439,267.54 833,639,429.06
Other operations 25,687,112.91 16,633,501.71 18,722,010.13 15,769,485.94
Total 1,738,703,915.32 766,632,166.44 1,526,161,277.67 849,408,915.00
5. Investment income
149
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Same
Reportin period
Item
g Period of last
year
Long-term equity investment income accounted by cost method
Investment income received from disposal of financial assets measured by fair value and the changes be 4,982,72 6,695,06
2.91 5.39
included in the current profits and losses during holding period
38,085,0 31,002,2
Investment income received from holding of available-for-sale financial assets
00.05 08.94
311,652.
Investment income received from disposal of available-for-sale financial assets
40
43,379,3 37,697,2
Total
75.36 74.33
XV. Supplementary materials
1. Items and amounts of extraordinary gains and losses
Item Amount Explanation
Gains/losses on the disposal of non-current assets -4,318,558.07
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of
official approval documents
Government grants recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the 3,899,636.68
government’s unified standards
Capital occupation charges on non-financial enterprises that are recorded into current
gains and losses
Gains due to that the investment costs for the Company to obtain subsidiaries, associates
and joint ventures are lower than the enjoyable fair value of the identifiable net assets of
the investees when making the investments
Gain/loss on non-monetary asset swap
Gain/loss on entrusting others with investments or asset management
Asset impairment provisions due to acts of God such as natural disasters
Gains and losses from debt restructuring
150
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Item Amount Explanation
Expenses on business reorganization, such as expenses on staff arrangements, integration,
etc.
Gain/loss on the part over the fair value due to transactions with distinctly unfair prices
Current net gains and losses of subsidiaries acquired in business combination under the same
control from period-begin to combination date
Profit and loss from contingencies irrelative to the normal business operations of
company
Gain/loss from change of fair value of transactional assets and liabilities, and investment
gains from disposal of transactional financial assets and liabilities and available-for-sale 7,374,385.49
financial assets, other than valid hedging related to the Company’s common businesses
Depreciation reserves returns of receivables with separate depreciation test
Gain/loss on entrustment loans
Gain/loss on change of the fair value of investing real estate of which the subsequent
measurement is carried out adopting the fair value method
Effect on current gains/losses when a one-off adjustment is made to current gains/losses
according to requirements of taxation, accounting and other relevant laws and regulations
Custody fee income when entrusted with operation
Other non-operating income and expenses other than the above 3,470,016.08
Project confirmed with the definition of non-recurring gains and losses and losses
Subtotal 10,425,480.18
Income tax effects 2,606,370.05
Minority interests effects (after tax)
Total 7,819,110.13
Notes: the number “+” among the non-current gains and losses items refers to profits and revenues, while “-”referred to losses or
expenditure.
The recognition of the non-current gains and losses items was executed according to the regulations of No.1 of the Information
Disclosure Explanatory Notice of the Companies Public Offering Securities-Non-current Gains and losses (Z-J-H-Announcement
[2008] No. 43) .
2. Return on equity and earnings per share
151
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
Basic EPS Diluted EPS
Net profit attributable to
common shareholders of the 8.54 0.86 0.86
Company
Net profits attributed to the
common shareholders after
8.38 0.84 0.84
deducting the non-current gains
and losses
152
Gujing Distillery Original Chinese Spirits Semi-annual Report 2016
Section X. Documents Available For Reference
(I) Financial statements signed and sealed by persons in charge of the Company, principal of
accounting work, and principal of accounting institution (manager of finance department);
(II) In the Reporting Period, all originals of the Company’s documents and public notices have been
publicly disclosed in media designated by China Securities Regulatory Commission as well as the
originals of all the public notices were deposited in the office of the Company.
153
