ANHUI GUJING DISTILLERY COMPANY LIMITED THIRD QUARTER REPORT 2017 October 2017 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Part I Important Statements The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) 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 this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissions in this Report. All the directors of the Company attended the board meeting for the review of this Report. Liang Jinhui, head of the Company, Ye Changqing, accounting head for this Report, and Zhu Jiafeng, head of the accounting department (head of accounting) of the Company, hereby guarantee that the financial statements carried in this Report are factual, accurate and complete. This 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. 1 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Part II Company Fundamentals I Key Consolidated Operating Results Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data. □ Yes √ No September 30, 2017 December 31, 2016 Change Total assets (RMB) 9,995,172,521.06 8,736,205,153.86 14.41% Equity attributable to owners of the 6,092,557,665.88 5,595,121,383.96 8.89% parent (RMB) January-September July-September 2017 YoY change YoY change 2017 Net sales (RMB) 1,673,566,893.29 14.59% 5,343,694,657.88 18.60% Net margin attributable to shareholders of the Company 248,593,418.78 64.21% 797,483,310.43 36.92% (RMB) Net margin attributable to shareholders of the Company 245,301,628.24 91.21% 729,256,642.36 32.23% before exceptional gains and losses (RMB) Net cash flows from operating -- -- 1,172,185,422.15 -2.55% activities (RMB) Basic earnings per share 0.49 63.33% 1.58 36.21% (RMB/share) Diluted earnings per share 0.49 63.33% 1.58 36.21% (RMB/share) Weighted average return on equity 4.18% 1.44% 13.53% 2.32% (%) Unit: RMB Item January-September 2017 Note Gains/Losses on disposal of non-current assets (inclusive of offset -5,360,371.18 asset impairment provisions) Government grants charged to the profit/loss for the Reporting Period (except for the government grants closely related to the 26,666,268.85 business of the Company and given at a fixed quota or amount in accordance with the State’s uniform standards) 2 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Gains/Losses on fair value changes of trading financial assets and liabilities & investment income from disposal of trading financial assets and liabilities as well as financial assets available for sale 52,325,837.54 (exclusive of effective hedges related to normal business operations of the Company) Non-operating income and expense other than above 19,564,939.14 Less: Income tax effects 23,017,502.12 Minority interests effects (after tax) 1,952,504.16 Total 68,226,668.07 -- Explanation of why the Company classified an item as an exceptional gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gains and Losses, or reclassified any exceptional gain/loss item given as an example in the said explanatory announcement as a recurrent gain/loss: □ Applicable √ Not applicable No such cases in the Reporting Period. II Total Number of Shareholders and Shareholdings of Top 10 Shareholders at Period-End 1. Numbers of Common Shareholders and Preference Shareholders with Resumed Voting Rights, and Shareholdings of Top 10 Shareholders Unit: share Total number of preference Total number of common shareholders with resumed 19,228 0 shareholders at period-end voting rights at period-end (if any) Top 10 shareholders Name of Nature of Shareholding Total shares held Restricted shares Pledged or frozen shares shareholder shareholder percentage at period-end held at period-end Status Number ANHUI GUJING GROUP State-owned 53.89% 271,404,022 Pledged 114,000,000 COMPANY corporation LIMITED Foreign NORGES BANK 2.92% 14,712,309 corporation GAOLING Foreign 2.47% 12,446,408 FUND,L.P. corporation UBS (LUX) Foreign EQUITY FUND - 1.41% 7,096,361 corporation CHINA 3 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 OPPORTUNITY (USD) CENTRAL HUIJIN State-owned 1.30% 6,543,600 INVESTMENT corporation CO., LTD. CHINA CONSTRUCTIO N BANK CORPORATION -YINHUA Other 1.26% 6,324,381 RICH TOPIC HYBRID SECURITIES INVESTMENT FUNDS CHINA INT'L CAPITAL CORP Foreign HONG KONG 1.21% 6,072,690 corporation SECURITIES LTD UBS (LUX) EQUITY FUND - Foreign 0.98% 4,949,038 GREATER corporation CHINA (USD) GREENWOODS Foreign CHINA ALPHA 0.98% 4,939,963 corporation MASTER FUND BANK OF CHINA-HUAXI A RETURN Other 0.72% 3,632,625 SECURITIES INVESTMENT FUND Top 10 non-restricted shareholders Type of stock Name of shareholder Non-restricted shares held at period-end Type Number ANHUI GUJING GROUP RMB common 271,404,022 271,404,022 COMPANY LIMITED stock Domestically NORGES BANK 14,712,309 14,712,309 listed stock for 4 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 foreign investors Domestically GAOLING FUND,L.P. 12,446,408 listed stock for 12,446,408 foreign investors Domestically UBS (LUX) EQUITY FUND - 7,096,361 listed stock for 7,096,361 CHINA OPPORTUNITY (USD) foreign investors CENTRAL HUIJIN INVESTMENT RMB common 6,543,600 6,543,600 CO., LTD. stock CHINA CONSTRUCTION BANK CORPORATION-YINHUA RICH RMB common 6,324,381 6,324,381 TOPIC HYBRID SECURITIES stock INVESTMENT FUNDS Domestically CHINA INT'L CAPITAL CORP 6,072,690 listed stock for 6,072,690 HONG KONG SECURITIES LTD foreign investors Domestically UBS (LUX) EQUITY FUND - 4,949,038 listed stock for 4,949,038 GREATER CHINA (USD) foreign investors Domestically GREENWOODS CHINA ALPHA 4,939,963 listed stock for 4,939,963 MASTER FUND foreign investors BANK OF CHINA-HUAXIA RMB common RETURN SECURITIES 3,632,625 3,632,625 stock INVESTMENT FUND Among the shareholders above, no affiliated relationship exists between the Company’s controlling shareholder—Anhui Gujing Group Company Limited—and other shareholders, nor they are parties acting in concert as defined in the Administrative Measures on Related or acting-in-concert parties Information Disclosure of Changes in Shareholding of Listed Companies. As for other among shareholders above shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. Top 10 common shareholders conducting securities margin trading N/A (if any) Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No No such cases in the Reporting Period. 5 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 2. Total Number of Preference Shareholders and Shareholdings of Top 10 of Them at Period-End □ Applicable √ Not applicable 6 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Part III Significant Events I Changes in Key Consolidated Financial Statement Items and Reasons for Such Changes √ Applicable □ Not applicable Unit: RMB September 30, 2017 December 31, 2016 Balance sheet item Change Main reason for change (RMB) (RMB) The main reason is the Monetary funds 715,513,494.38 532,909,026.07 34.27% increase of sales back money. The main reason is the Financial assets at fair decrease of the financial 202,683.92 429,190.68 -52.78% value through profit/loss assets held at the end of the period. The main reason is the Notes receivable 858,807,197.36 534,386,586.59 60.71% increase of sales revenue. The main reason is the Accounts receivable 20,524,908.75 12,287,262.88 67.04% increase of sales revenue. The main reason is the Interest receivable 11,123,178.08 2,843,178.08 291.22% increase of bank interest. The main reason is to Notes payable 55,340,583.00 11,298,583.00 389.80% increase the proportion of issuing bills settlement. The main reason is the Accounts payable 645,284,136.52 340,972,366.21 89.25% increase in the amount of unsettled material. The main reason is the Other accounts payable 1,001,979,659.72 641,472,271.53 56.20% increase of dealer's non settlement discount. January-September January-September Income statement item Change Main reason for change 2017 (RMB) 2016 (RMB) The main reason is the increase in the proceeds of Investment income 97,799,330.67 69,221,696.66 41.28% disposal of available for sale financial assets. The main reason is the Non-operating income 47,769,894.93 33,553,013.41 42.37% increase of government subsidies. 7 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 The main reason is the Gross margin 1,111,204,185.96 794,540,267.34 39.85% increase of operating income. Cash flow statement January-September January-September Change Main reason for change item 2017 (RMB) 2016 (RMB) The main reason is the Cash generated by other 203,473,532.73 382,955,144.81 -46.87% decrease of the deposit operating activities receipt. The main reason is the Cash received as 93,509,806.38 68,398,591.73 36.71% increase of investment investment income income. The main reason is the Cash paid for 3,699,390,190.62 2,671,617,710.68 38.47% increase in payment of investments financial products. The main reason is the Net cash from financing -302,160,000.00 -49,360,000.00 -512.16% increase of payment of cash activities dividends. II Progress, Influence and Solutions Associated with Significant Events □ Applicable √ Not applicable III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time during Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 8 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 IV Forecast of 2017 Annual Operating Results Warning of a possible loss on or a significant year-over-year change in accumulative net margin during the period the beginning of the current year through the end of the next reporting period, as well as the reasons: □ Applicable √ Not applicable V Securities Investments √ Applicable □ Not applicable Unit: RMB Gains/Los ses on fair Cumulative Code of Initial Source of Variety of Name of Accounting value fair value Purchased in Sold in Gains/losses Opening book Closing book Accountin securitie investment measureme changes changes Reporting Reporting in Reporting investmen securities securities value value g title nt model in charged to Period Period Period s cost t funds Reporting equity Period Available- The Domestic/over Fair value for-sale Company 000001 PAYH 70,317,243.98 73,172,089.90 0.00 16,162,186.89 0.00 0.00 0.00 89,334,276.79 seas stock method financial ’s own asset funds Available- The Domestic/over Fair value for-sale Company 601988 ZGYH 57,171,459.09 51,177,224.00 0.00 12,715,500.15 14,996,716.49 4,881,468.64 1,515,784.77 74,007,972.00 seas stock method financial ’s own asset funds Available- The Domestic/over Fair value 130,191,424.0 130,191,424.0 47,739,094.0 for-sale Company 600373 ZWCM 91,133,996.80 0.00 0.00 0.00 0.00 seas stock method 0 0 7 financial ’s own asset funds 9 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Guangfa Nest Available- The Yuerui No. 150,000,000.0 Fair value 149,488,814.3 157,065,245.5 for-sale Company Fund 1E 0.00 7,576,431.14 0.00 0.00 0.00 0 method 7 1 financial ’s own Securities asset funds Investment Fund CITIC Available- The Wings Dapu 200,000,000.0 Fair value 200,000,000.0 208,091,141.3 for-sale Company Fund No. 1 Asset 0.00 0.00 8,091,141.36 0.00 0.00 0 method 0 6 financial ’s own Managemen asset funds t Plan 568,622,699.8 404,029,552.2 214,996,716.4 135,072,892.6 49,254,878.8 528,498,635.6 Total -- 0.00 44,545,259.54 -- -- 7 7 9 4 4 6 Disclosure date of announcement about Board’s consent for securities Naught investment Disclosure date of announcement about shareholders’ meeting’s consent Naught for securities investment (if any) VI Investments in Derivative Financial Instruments √ Applicable □ Not applicable Unit: RMB’0,000 Relationship Related Type of Initial Opening Purchased in Sold in the Impairment Closing Proportion Actual Operator Starting date Ending date with the transaction derivative investment investment the Reporting provision (if investment of closing gain/loss in 10 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Company amount amount Reporting Period any) amount investment the Period amount in Reporting the Period Company’s closing net assets Reverse Reverse repurchase Naught No repurchase of 0.00 01/18/2017 10/11/2017 0.00 152,220 138,220 0.00 14,000 2.30% 200.05 of national national debt debt Total 0.00 -- -- 0.00 152,220 138,220 0.00 14,000 2.30% 200.05 Capital source for derivative investment The Company’s own funds Lawsuits involved (if applicable) N/A Disclosure date of board announcement approving 08/30/2013 derivative investment (if any) Disclosure date of shareholders’ meeting announcement approving derivative investment (if any) Analysis of risks and control measures associated with derivative investments held in the Reporting Period The Company has strictly controlled related risks according to Derivative Investment Management System (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) Changes in market prices or fair value of derivative investments during the Reporting Period (fair value Naught analysis should include measurement method and related assumptions and parameters) 11 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Significant changes in accounting policies and specific accounting principles adopted for derivative Naught investments in the Reporting Period compared to previous reporting period Based on the sustainable development of the main business of the Company and abundant idle money, the Company increased incomes by investing reasonable financial derivative instruments, which was beneficial to improve the utilization efficiency of the idle money of the Company, and the Company has set up corresponding supervision mechanism for financial derivatives business and made reasonable Opinion of independent directors on derivative accounting policy and accounting principle to decrease the risks of derivative investments; in addition, the derivative investment investments and risk control business regarded the national debt as mortgage target, conforming to the prudent, steady risks management principle and the interests of the shareholders of the Company. Therefore, agreed the Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit of RMB0.3 billion. VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. VIII Irregularities Arising from Provision of Guarantees for Third Parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Funds by Its Controlling Shareholder or Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 12 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 X Targeted Measures Taken to Help People Lift Themselves out of Poverty 1. Outline of Targeted Measures in the Reporting Period In accordance with the requirements of the State, Anhui Provincial Party Committee and Government, and Bozhou Municipal Party Committee and Government on precision poverty alleviation, the Company has established targeted support towards 17 poor families in Bali village, Wuma town, Qiaocheng District, Bozhou. The Company has established a complete and formal long-term mechanism for poverty alleviation targeted at those families. A supporting policy of one file for one family, one card for one family, and one policy for one family has been implemented based on the principle of “organizations are responsible for villages and cadres are responsible for families”, and files have been created based on family members, major labor force, farmland and income structure of poor families in each poor village. Since the work of implementing poverty alleviation, 11 poor households have been out of poverty with fixed income now. 2. Subsequent Targeted Measure Plans First, the Company will continue to engage in poverty alleviation and strengthen its efforts in targeted support towards poor families; second, the Company will continue to implement the supporting policy of the Provincial Party Committee and Government and the Municipal Party Committee and Government, soundly advancing the poverty alleviation work in line with the requirements of relevant poor counties to carry out the social responsibility. 13 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Anhui Gujing Distillery Company Limited September 30, 2017 Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Monetary funds 715,513,494.38 532,909,026.07 Settlement reserve Interbank lendings Financial assets at fair value through 202,683.92 429,190.68 profit/loss Derivative financial assets Notes receivable 858,807,197.36 534,386,586.59 Accounts receivable 20,524,908.75 12,287,262.88 Accounts paid in advance 97,102,117.42 74,784,221.59 Premiums receivable Reinsurance premiums receivable Receivable reinsurance contract reserve Interest receivable 11,123,178.08 2,843,178.08 Dividends receivable Other accounts receivable 9,519,458.61 10,765,397.03 Financial assets purchased under agreements to resell Inventories 1,810,936,606.32 1,786,433,036.50 Assets held for sale Non-current assets due within one year Other current assets 2,301,537,926.48 1,750,278,829.24 Total current assets 5,825,267,571.32 4,705,116,728.66 Non-current assets: Loans and advances to customers 14 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Available-for-sale financial assets 528,498,635.66 404,029,552.27 Held-to-maturity investments Long-term accounts receivable Long-term equity investments Investment property 5,402,207.16 8,402,944.74 Fixed assets 1,794,083,695.11 1,865,691,585.06 Construction in progress 58,207,812.56 71,771,324.26 Engineering materials Disposal of fixed assets Productive living assets Oil-gas assets Intangible assets 692,438,826.77 700,684,529.08 R&D expenses Goodwill 478,283,495.29 478,283,495.29 Long-term deferred expense 68,752,085.13 93,588,397.35 Deferred income tax assets 231,383,554.29 107,654,597.15 Other non-current assets 312,854,637.77 300,982,000.00 Total non-current assets 4,169,904,949.74 4,031,088,425.20 Total assets 9,995,172,521.06 8,736,205,153.86 Current liabilities: Short-term borrowings Borrowings from the Central Bank Money deposits accepted and inter-bank deposits Interbank borrowings Financial liabilities at fair value through profit/loss Derivative financial liabilities Notes payable 55,340,583.00 11,298,583.00 Accounts payable 645,284,136.52 340,972,366.21 Accounts received in advance 623,448,823.49 623,990,614.91 Financial assets sold for repurchase Fees and commissions payable Payroll payable 197,784,546.15 288,027,136.09 Taxes payable 412,246,400.86 486,959,651.85 15 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Interest payable Dividends payable Other accounts payable 1,001,979,659.72 641,472,271.53 Reinsurance premiums payable Insurance contract reserve Payables for acting trading of securities Payables for acting underwriting of securities Liabilities held for sale Non-current liabilities due within one year Other current liabilities 428,064,027.71 241,487,812.54 Total current liabilities 3,364,148,177.45 2,634,208,436.13 Non-current liabilities: Long-term borrowings Bonds payable Of which: Preference shares Perpetual bonds Long-term accounts payable Long-term payroll payable Special payables Provisions 1,120,755.50 0.00 Deferred income 45,031,765.70 43,978,795.45 Deferred income tax liabilities 116,888,761.32 117,287,002.52 Other non-current liabilities Total non-current liabilities 163,041,282.52 161,265,797.97 Total liabilities 3,527,189,459.97 2,795,474,234.10 Owners’ equity: Share capital 503,600,000.00 503,600,000.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 1,295,405,592.25 1,295,405,592.25 Less: Treasury shares Other comprehensive income 38,257,449.44 36,144,477.95 16 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Special reserve Surplus reserve 256,902,260.27 256,902,260.27 Provisions for general risks Retained earnings 3,998,392,363.92 3,503,069,053.49 Equity attributable to owners of the 6,092,557,665.88 5,595,121,383.96 Company Minority interests 375,425,395.21 345,609,535.80 Total owners’ equity 6,467,983,061.09 5,940,730,919.76 Total liabilities and owners’ equity 9,995,172,521.06 8,736,205,153.86 Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing Chief of the accounting division: Zhu Jiafeng 2. Parent Company Balance Sheet Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Monetary funds 513,868,135.00 225,792,686.26 Financial assets at fair value through 202,683.92 429,190.68 profit/loss Derivative financial assets Notes receivable 681,621,532.91 449,016,169.03 Accounts receivable 6,862,706.04 6,377,346.00 Accounts paid in advance 43,275,161.10 11,815,064.19 Interest receivable Dividends receivable Other accounts receivable 78,027,486.27 105,514,906.34 Inventories 1,589,890,899.58 1,549,397,565.11 Assets held for sale Non-current assets due within one year Other current assets 2,210,565,718.56 1,750,000,000.00 Total current assets 5,124,314,323.38 4,098,342,927.61 Non-current assets: Available-for-sale financial assets 527,921,835.66 403,547,952.27 Held-to-maturity investments 17 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Long-term accounts receivable Long-term equity investments 1,155,089,408.32 1,155,089,408.32 Investment property 26,832,966.19 30,846,736.84 Fixed assets 1,323,218,118.71 1,375,089,823.91 Construction in progress 39,378,695.59 68,022,146.66 Engineering materials Disposal of fixed assets Productive living assets Oil-gas assets Intangible assets 184,553,224.30 186,370,081.28 R&D expenses Goodwill Long-term deferred expense 66,011,973.28 92,695,064.02 Deferred income tax assets 36,778,706.50 36,366,330.90 Other non-current assets 12,854,637.77 982,000.00 Total non-current assets 3,372,639,566.32 3,349,009,544.20 Total assets 8,496,953,889.70 7,447,352,471.81 Current liabilities: Short-term borrowings Financial liabilities at fair value through profit/loss Derivative financial liabilities Notes payable 28,583.00 28,583.00 Accounts payable 578,432,233.10 307,649,868.02 Accounts received in advance 1,681,733,667.38 1,003,521,896.65 Payroll payable 65,902,495.91 90,742,908.53 Taxes payable 197,603,089.12 320,037,309.94 Interest payable Dividends payable Other accounts payable 300,695,448.30 282,570,379.80 Liabilities held for sale Non-current liabilities due within one year Other current liabilities 46,985,970.69 37,589,367.67 Total current liabilities 2,871,381,487.50 2,042,140,313.61 Non-current liabilities: 18 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Long-term borrowings Bonds payable Of which: Preference shares Perpetual bonds Long-term payables Long-term payroll payable Special payables Provisions Deferred income 40,977,788.28 42,745,851.74 Deferred income tax liabilities 15,977,984.99 15,385,289.84 Other non-current liabilities Total non-current liabilities 56,955,773.27 58,131,141.58 Total liabilities 2,928,337,260.77 2,100,271,455.19 Owners’ equity: Share capital 503,600,000.00 503,600,000.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 1,247,162,107.35 1,247,162,107.35 Less: Treasury shares Other comprehensive income 39,498,202.19 37,315,555.64 Special reserve Surplus reserve 251,800,000.00 251,800,000.00 Retained earnings 3,526,556,319.39 3,307,203,353.63 Total owners’ equity 5,568,616,628.93 5,347,081,016.62 Total liabilities and owners’ equity 8,496,953,889.70 7,447,352,471.81 3. Consolidated Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 1,673,566,893.29 1,460,526,002.88 Including: Net sales 1,673,566,893.29 1,460,526,002.88 Interest revenue Premium revenue 19 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Fee and commission revenue 2. Operating expenses 1,358,235,844.48 1,295,538,071.74 Including: Cost of sales 403,027,066.48 379,261,657.76 Interest expense Fee and commission expense Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 270,572,799.66 227,083,386.54 Selling expense 567,852,892.46 522,299,572.98 Administrative expense 121,465,727.34 168,327,112.65 Finance costs -4,682,311.30 -1,469,126.50 Asset impairment losses -330.16 35,468.31 Add: Gains on fair value changes (“-” 66,574.90 -2,064,863.14 for losses) Investment income (“-” for losses) 16,781,846.20 24,896,841.30 Including: Share of gains/losses of associates and joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 332,179,469.91 187,819,909.30 Add: Non-operating income 8,603,292.10 25,413,316.24 Including: Gains on disposal of 783.47 375,882.42 non-current assets Less: Non-operating expense 4,710,036.11 377,941.64 Including: Losses on disposal of 4,655,940.34 96,960.62 non-current assets 4. Gross margin (“-” for losses) 336,072,725.90 212,855,283.90 Less: Income tax expense 80,888,483.00 59,011,681.50 5. Net margin (“-” for losses) 255,184,242.90 153,843,602.40 Attributable to owners of the parent 248,593,418.78 151,384,181.93 Attributable to minority interests 6,590,824.12 2,459,420.47 6. Other comprehensive income, net of 22,009,443.57 14,565,128.27 tax 20 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Other comprehensive income, net of tax attributable to owners of the 22,009,443.57 14,565,128.27 parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 6.2 Other comprehensive income to be subsequently reclassified into 22,009,443.57 14,565,128.27 gains/losses 6.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale 22,009,443.57 14,565,128.27 financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 6.2.6 Other Other comprehensive income, net of tax attributable to minority interests 7. Total comprehensive income 277,193,686.47 168,408,730.67 Attributable to owners of the parent 270,602,862.35 165,949,310.20 Attributable to minority interests 6,590,824.12 2,459,420.47 8. Earnings per share 8.1 Basic earnings per share 0.49 0.30 8.2 Diluted earnings per share 0.49 0.30 Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing 21 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Chief of the accounting division: Zhu Jiafeng 4. Parent Company Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 921,576,158.99 804,435,303.66 Less: Operating expenses 369,286,185.89 350,189,125.02 Taxes and surtaxes 239,185,115.80 204,951,334.28 Selling expense 49,208,966.68 75,015,225.25 Administrative expense 85,908,988.33 120,782,364.91 Finance costs -4,231,951.79 -1,303,334.98 Asset impairment losses 0.00 170,676.54 Add: Gains on fair value changes (“-” 66,574.90 -2,097,346.45 for losses) Investment income (“-” for loss) 13,166,277.13 22,268,798.87 Including: Share of gains/losses of associates and joint ventures Other income 2. Operating margin (“-” for losses) 195,451,706.11 74,801,365.06 Add: Non-operating income 5,491,370.44 19,196,694.62 Including: Gains on disposal of non-current assets Less: Non-operating expense 4,415,042.93 95,984.32 Including: Losses on disposal of 4,415,042.93 95,984.32 non-current assets 3. Gross margin (“-” for losses) 196,528,033.62 93,902,075.36 Less: Income tax expense 48,553,805.46 23,653,702.19 4. Net margin (“-” for losses) 147,974,228.16 70,248,373.17 5. Other comprehensive income, net of 22,106,418.63 14,589,310.33 tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be 22 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into 22,106,418.63 14,589,310.33 gains/losses 5.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 5.2.2 Gains/Losses on fair value changes of available-for-sale financial 22,106,418.63 14,589,310.33 assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 170,080,646.79 84,837,683.50 7. Earnings per share 7.1 Basic earnings per share 0.30 0.14 7.2 Diluted earnings per share 0.30 0.14 5. Consolidated Income Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Operating revenue 5,343,694,657.88 4,505,560,709.61 Including: Net sales 5,343,694,657.88 4,505,560,709.61 Interest revenue Premium revenue Fee and commission revenue 2. Operating expenses 4,371,107,557.95 3,808,343,755.26 Including: Cost of sales 1,316,206,265.39 1,159,656,092.42 Interest expense Fee and commission expense Surrenders 23 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 876,704,154.17 698,322,570.89 Selling expense 1,817,541,653.59 1,536,222,706.22 Administrative expense 384,887,422.77 425,404,568.37 Finance costs -21,946,953.95 -11,233,287.64 Asset impairment losses -2,284,984.02 -28,895.00 Add: Gains on fair value changes (“-” -53,081.45 15,147.04 for losses) Investment income (“-” for losses) 97,799,330.67 69,221,696.66 Including: Share of gains/losses of associates and joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 1,070,333,349.15 766,453,798.05 Add: Non-operating income 47,769,894.93 33,553,013.41 Including: Gains on disposal of 488,670.14 381,359.64 non-current assets Less: Non-operating expense 6,899,058.12 5,466,544.12 Including: Losses on disposal of 5,849,041.32 4,420,995.91 non-current assets 4. Gross margin (“-” for losses) 1,111,204,185.96 794,540,267.34 Less: Income tax expense 283,905,016.12 203,993,450.18 5. Net margin (“-” for losses) 827,299,169.84 590,546,817.16 Attributable to owners of the parent 797,483,310.43 582,439,644.55 Attributable to minority interests 29,815,859.41 8,107,172.61 6. Other comprehensive income, net of 2,112,971.49 -3,554,781.07 tax Other comprehensive income, net of tax attributable to owners of the 2,112,971.49 -3,554,781.07 parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities 24 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 6.2 Other comprehensive income to be subsequently reclassified into 2,112,971.49 -3,554,781.07 gains/losses 6.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale 2,112,971.49 -3,554,781.07 financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 6.2.6 Other Other comprehensive income, net of tax attributable to minority interests 7. Total comprehensive income 829,412,141.33 586,992,036.09 Attributable to owners of the parent 799,596,281.92 578,884,863.48 Attributable to minority interests 29,815,859.41 8,107,172.61 8. Earnings per share 8.1 Basic earnings per share 1.58 1.160 8.2 Diluted earnings per share 1.58 1.160 6. Parent Company Income Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Operating revenue 2,953,626,991.47 2,543,139,218.98 Less: Operating expenses 1,177,443,742.79 1,116,821,291.46 25 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Taxes and surtaxes 760,338,385.91 643,663,363.49 Selling expense 168,810,396.78 181,479,242.23 Administrative expense 266,013,406.12 305,915,030.32 Finance costs -12,590,308.28 -9,686,500.62 Asset impairment losses -1,943,865.48 0.00 Add: Gains on fair value changes (“-” -53,081.45 -58,568.17 for losses) Investment income (“-” for loss) 88,106,430.10 65,648,174.23 Including: Share of gains/losses of associates and joint ventures Other income 2. Operating margin (“-” for losses) 683,608,582.28 370,536,398.16 Add: Non-operating income 28,606,971.71 27,932,610.15 Including: Gains on disposal of 117,524.82 0.00 non-current assets Less: Non-operating expense 5,213,277.86 4,414,060.57 Including: Losses on disposal of 4,462,721.08 4,414,060.57 non-current assets 3. Gross margin (“-” for losses) 707,002,276.13 394,054,947.74 Less: Income tax expense 185,489,310.37 97,983,312.40 4. Net margin (“-” for losses) 521,512,965.76 296,071,635.34 5. Other comprehensive income, net of 2,182,646.55 -3,129,579.67 tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into 2,182,646.55 -3,129,579.67 gains/losses 5.2.1 Share of other comprehensive income of investees that will be reclassified into gains/losses under equity method 26 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 5.2.2 Gains/Losses on fair value changes of available-for-sale financial 2,182,646.55 -3,129,579.67 assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 523,695,612.31 292,942,055.67 7. Earnings per share 7.1 Basic earnings per share 1.04 0.590 7.2 Diluted earnings per share 1.04 0.590 7. Consolidated Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of 5,433,189,005.14 4,665,181,632.59 commodities and rendering of service Net increase in money deposits from customers and interbank placements Net increase in loans from Central Bank Net increase in funds borrowed from other financial institutions Cash received as premiums of original insurance contracts Net cash generated by reinsurance business Net increase in deposits of policy holders and investment fund Net increase in disposal of financial assets at fair value through gains/losses Interest, fees and commissions received Net increase in interbank borrowings 27 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Net increase in funds in repurchase business Tax rebates received 14,260,319.10 16,075,251.07 Cash generated by other operating 203,473,532.73 382,955,144.81 activities Subtotal of cash generated by operating 5,650,922,856.97 5,064,212,028.47 activities Cash paid for goods and services 701,247,390.39 813,734,763.05 Net increase in loans and advances to customers Net increase in funds deposited in Central Bank and interbank placements Cash paid for claims of original insurance contracts Interest, fees and commissions paid Cash paid as policy dividends Cash paid to and for employees 962,585,070.51 774,961,969.54 Taxes paid 2,164,760,737.13 1,623,032,665.41 Cash used in other operating activities 650,144,236.79 649,635,442.00 Subtotal of cash used in operating 4,478,737,434.82 3,861,364,840.00 activities Net cash from operating activities 1,172,185,422.15 1,202,847,188.47 2. Cash generated by or used in investing activities: Cash generated by disinvestments 3,027,776,929.29 2,687,852,537.76 Cash received as investment income 93,509,806.38 68,398,591.73 Net cash generated by disposal of fixed assets, intangible assets and other 413,563.04 971,279.86 long-term assets Net cash generated by disposal of subsidiaries or other business units Cash generated by other investing 1,646,000.00 314,000.00 activities Subtotal of cash generated by investing 3,123,346,298.71 2,757,536,409.35 activities Cash paid to acquire fixed assets, intangible assets and other long-term 111,377,061.93 116,075,478.32 assets Cash paid for investments 3,699,390,190.62 2,671,617,710.68 Net increase in pledged loans 28 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Net cash paid to acquire subsidiaries 0.00 795,770,032.45 and other business units Cash used in other investing activities Subtotal of cash used in investing 3,810,767,252.55 3,583,463,221.45 activities Net cash from investing activities -687,420,953.84 -825,926,812.10 3. Cash generated by or used in financing activities: Cash received as capital contributions Including: Cash received from minority shareholder investments by subsidiaries Cash received as borrowings 0.00 1,000,000.00 Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing 0.00 1,000,000.00 activities Repayment of borrowings Cash paid for interest expenses and 302,160,000.00 50,360,000.00 distribution of dividends or profit Including: dividends or profit paid by subsidiaries to minority interests Cash used in other financing activities Sub-total of cash used in financing 302,160,000.00 50,360,000.00 activities Net cash from financing activities -302,160,000.00 -49,360,000.00 4. Effect of foreign exchange rate changes on cash and cash equivalents 5. Net increase in cash and cash 182,604,468.31 327,560,376.37 equivalents Add: Opening balance of cash and 527,849,026.07 1,040,373,733.07 cash equivalents 6. Closing balance of cash and cash 710,453,494.38 1,367,934,109.44 equivalents 29 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 8. Parent Company Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of 3,652,910,092.77 2,585,404,219.49 commodities and rendering of service Tax rebates received 13,013,817.25 15,009,167.60 Cash generated by other operating 191,916,993.96 249,909,533.84 activities Subtotal of cash generated by operating 3,857,840,903.98 2,850,322,920.93 activities Cash paid for goods and services 675,142,223.73 588,723,963.61 Cash paid to and for employees 376,675,264.85 357,751,167.07 Taxes paid 1,463,992,035.18 1,032,959,847.90 Cash used in other operating activities 174,480,145.44 260,998,167.70 Subtotal of cash used in operating 2,690,289,669.20 2,240,433,146.28 activities Net cash from operating activities 1,167,551,234.78 609,889,774.65 2. Cash generated by or used in investing activities: Cash generated by disinvestments 2,910,776,929.29 2,685,870,391.93 Cash received as investment income 92,096,692.18 65,404,965.00 Net cash generated by disposal of fixed assets, intangible assets and other 0.00 514,500.00 long-term assets Net cash generated by disposal of subsidiaries or other business units Cash generated by other investing 1,646,000.00 0.00 activities Subtotal of cash generated by investing 3,004,519,621.47 2,751,789,856.93 activities Cash paid to acquire fixed assets, intangible assets and other long-term 89,445,216.89 104,776,556.58 assets Cash paid for investments 3,492,390,190.62 3,463,441,781.52 Net cash paid to acquire subsidiaries and other business units Cash used in other investing activities 30 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Subtotal of cash used in investing 3,581,835,407.51 3,568,218,338.10 activities Net cash from investing activities -577,315,786.04 -816,428,481.17 3. Cash generated by or used in financing activities: Cash received as capital contributions Cash received as borrowings Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing activities Repayment of borrowings Cash paid for interest expenses and 302,160,000.00 50,360,000.00 distribution of dividends or profit Cash used in other financing activities Sub-total of cash used in financing 302,160,000.00 50,360,000.00 activities Net cash from financing activities -302,160,000.00 -50,360,000.00 4. Effect of foreign exchange rate changes on cash and cash equivalents 5. Net increase in cash and cash 288,075,448.74 -256,898,706.52 equivalents Add: Opening balance of cash and 225,792,686.26 548,650,832.84 cash equivalents 6. Closing balance of cash and cash 513,868,135.00 291,752,126.32 equivalents II Auditor’s Report Are the Q3 2017 financial statements audited? □Yes √ No These financial statements are unaudited. 31 Gujing Distillery Aged Original Spirits Third Quarter Report 2017 Board Chairman: Liang Jinhui Anhui Gujing Distillery Company Limited October 27, 2017 32