ANHUI GUJING DISTILLERY COMPANY LIMITED
INTERIM REPORT 2018
August 2018
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Anhui Gujing Distillery Company Limited (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Liang Jinhui, the Company’s legal representative, Ye Changqing, the Company’s Chief
Accountant, and Zhu Jiafeng, head of the Company’s financial department (equivalent to
financial manager) hereby guarantee that the Financial Statements carried in this Report are
factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report and
its summary shall NOT be considered as absolute promises of the Company to investors.
Therefore, investors are reminded to exercise caution when making investment decisions.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Contents
Part I Important Notes, Table of Contents and Definitions 2
Part II Corporate Information and Key Financial Information 5
Part III Business Summary 8
Part IV Operating Performance Discussion and Analysis 9
Part V Significant Events 21
Part VI Share Changes and Shareholder Information 28
Part VII Preferred Shares 32
Part VIII Directors, Supervisors and Senior Management 33
Part IX Corporate Bonds 34
Part X Financial Report 35
Part XI Documents Available for Reference 158
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Definitions
Term Definition
Anhui Gujing Distillery Company Limited and its consolidated subsidiaries,
The “Company”, “ Gu Jing” or “we”
except where the context otherwise requires
Gujing Group Anhui Gujing Group Co., Ltd.
Yellow Crane Tower Yellow Crane Tower Distillery Co., Ltd.
The “Reporting Period” or “Current Period” The period from 1 January 2018 to 30 June 2018
Expressed in the Chinese currency of Renminbi, expressed in ten thousand
RMB, RMB’0,000
Renminbi
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
Gujing Distillery, Gujing
Stock name Stock code 000596, 200596
Distillery-B
Stock exchange for stock listing 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 any) ANHUI GUJING DISTILLERY COMPANY LIMITED
Abbr. (if any) GU JING
Legal representative Liang Jinhui
II Contact Information
Board Secretary Securities Representative
Name Ye Changqing Mei Jia
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）5710099 （0558）5710099
Email address gjzqb@gujing.com.cn gjzqb@gujing.com.cn
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and
email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2017 Annual Report.
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s
periodic reports in the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
Company’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information can
be found in the 2017 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2018 H1 2017 Change (%)
Operating revenue (RMB) 4,783,083,895.33 3,670,127,764.59 30.32%
Net profit attributable to the listed
892,422,337.64 548,889,891.65 62.59%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before exceptional 872,348,474.12 483,955,014.12 80.25%
items (RMB)
Net cash generated from/used in operating
668,946,891.61 425,365,224.08 57.26%
activities (RMB)
Basic earnings per share (RMB/share) 1.77 1.09 62.39%
Diluted earnings per share (RMB/share) 1.77 1.09 62.39%
Weighted average return on net assets (%) 13.94% 9.86% 4.08%
30 June 2018 31 December 2017 Change (%)
Total assets (RMB) 11,210,703,795.70 10,152,862,119.05 10.42%
Net assets attributable to the listed
6,802,798,440.44 6,459,078,378.38 5.32%
company’s shareholders (RMB)
V Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Net Asset Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Net Profit and Net Asset Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Gain or loss on disposal of non-current assets (inclusive of
-3,419,972.96
impairment allowance write-offs)
Government subsidies charged to current profit or loss (exclusive
of government subsidies given in the Company’s ordinary course
4,708,036.05
of business at fixed quotas or amounts as per government’s
uniform standards)
Gain or loss on fair-value changes in trading financial assets and
liabilities & investment income from disposal of trading financial
assets and liabilities and available-for-sale financial assets 12,507,302.31
(exclusive of effective portion of hedges that arise in the
Company’s ordinary course of business)
Non-operating income and expense other than above 13,674,195.49
Less: Income tax effects 6,827,920.31
Non-controlling interests effects (net of tax) 567,777.06
Total 20,073,863.52 --
Explanation of why the Company classifies a gain/loss item as exceptional according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items, or reclassifies any exceptional item listed in the said explanatory announcement as recurrent:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part III Business Summary
I Core Business Scope of the Company in Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
The Company primarily produces and markets liquor and spirits.
As one of China’s traditional top eight liquor brands, the Company is the first listed liquor and spirits company with both A and B
stocks. It is located in Bozhou City, Anhui Province in China, the hometown of historic figures Cao Cao and Hua Tuo, as well as one
of the world’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period.
As the main product of the Company, the Gujing spirit originated as a “JiuYunChun Spirit”, together with its making secrets, being
presented as a hometown specialty by Cao Cao, a famous warlord in China’s history, to Emperor Han Xiandi (name: Liu Xie) in A.D.
196, and was continually presented to the royal house since then. With crystalline liquid, rich aroma, a fine flavor and a lingering
aftertaste, the Gujing spirit has helped the Company win four national distilled spirit golden awards, a golden award at the 13th SIAL
Paris, the title of China’s “Geographical Indication Product”, the recognition as a “Key Cultural Relics Site under the State
Protection”, the recognition with a “National Intangible Cultural Heritage Protection Project”, a Quality Award from the Anhui
provincial government, a title of “National Quality Benchmark”, among other honors.
II Material Changes in Major Assets
1. Material Changes in Major Assets
□ Applicable √ Not applicable
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
No.
No material changes occurred to the Company’s core competitiveness in the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part IV Operating Performance Discussion and Analysis
I Overview
In the first half of 2018, China’s economy was generally stable and further restructuring was seen. As for the liquor and spirits
industry, concentration was increasing.
Under the common efforts of the Board and all the staff, for the six months from January to June 2018, the Company recorded
operating revenue of RMB4,783 million, up 30.32% compared to the same period of last year; and a net profit attributable to the
Company as the parent of RMB892 million, representing a year-on-year growth of 62.59%. As such, the operating goals that the
Company had set for the first half of 2018 at the beginning of the year were all accomplished. To achieve that, the Company took the
following main measures in the Reporting Period: ① continuously strengthening branding with more investments to carry forward
the brand revitalization programme; ② promoting digital marketing to carry on with the “5.0” strategy; ③ reinforcing quality control,
which has resulted in higher-quality liquor and spirits; ④ stimulating endogenous driving force through better management; ⑤
strengthening safety and environmental protection management to ensure smooth operations; ⑥ enhancing system and risk
assessment to optimize business processes; and ⑦ improving corporate culture by promoting party committee-management
integration.
II Analysis of Core Businesses
See “I Overview” above.
Year-on-year changes in key financial data:
Unit: RMB
H1 2018 H1 2017 Change (%) Main reason for change
Operating revenue More upmarket products
4,783,083,895.33 3,670,127,764.59 30.32%
were sold
Cost of sales 1,042,675,468.24 913,179,198.91 14.18%
Selling expense 1,597,300,315.17 1,249,688,761.13 27.82%
Administrative expense 280,500,337.72 263,421,695.43 6.48%
Finance costs -20,284,906.55 -17,264,642.65 -17.49%
Income tax expense 320,789,915.24 203,016,533.12 58.01% Rise in gross profit
Net cash generated
Rise in payments
from/used in operating 668,946,891.61 425,365,224.08 57.26%
collected from customers
activities
Net cash generated
Decline in cash proceeds
from/used in investing -266,649,560.60 32,576,174.29 -918.54%
from disinvestment
activities
Net cash generated -503,600,000.00 -302,160,000.00 -66.67% Rise in dividend
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
from/used in financing distributed
activities
Decline in net cash
Net increase in cash and
-101,302,668.99 155,781,398.37 -165.03% generated from investing
cash equivalents
and financing activities
30 June 2018 31 December 2017 Change (%) Main reason for change
Decline in net increase in
Monetary assets 967,785,957.41 1,484,088,626.40 -34.79% paid cash and cash
equivalents
Notes were adopted more
Notes receivable 1,898,811,744.49 720,611,126.78 163.50% often in settlement of
sales
Rise in prepaid
Prepayments 82,209,009.71 41,729,637.34 97.00%
advertising fee
Available-for-sale Rise in financial assets
267,197,036.68 517,086,347.91 -48.33%
financial assets sold
Advances from
803,222,097.92 503,083,108.13 59.66% Rise in sales revenue
customers
Rise in unrecognized
Other current liabilities 804,829,022.62 182,846,942.10 340.17%
expense
Disposal of
Other comprehensive
8,418,551.86 53,520,827.44 -84.27% available-for-sale
income
financial assets
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of core businesses:
Unit: RMB
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By industry
Manufacturing 4,783,083,895.33 1,042,675,468.24 78.20% 30.32% 14.18% 3.08%
By product category
Liquor and spirits 4,707,210,564.91 1,010,894,998.63 78.52% 30.99% 15.28% 2.92%
Hotel services 41,620,289.12 18,192,924.18 56.29% 2.03% 4.45% -1.01%
Other 34,253,041.30 13,587,545.43 60.33% -4.03% -27.95% 13.17%
By operating segment
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Domestic 4,776,503,422.80 1,040,361,772.83 78.22% 30.17% 13.96% 3.10%
Overseas 6,580,472.53 2,313,695.41 64.84% 759.68% 715.97% 1.88%
III Analysis of Non-Core Businesses
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2018 30 June 2017 Change in
As % of total As % of total percentage Reason for material change
Value Value
assets assets (%)
Monetary assets 967,785,957.41 8.63% 688,690,424.44 7.17% 1.46%
Accounts
19,492,576.07 0.17% 14,701,820.59 0.15% 0.02%
receivable
Inventories 2,140,586,455.59 19.09% 1,846,271,997.98 19.23% -0.14%
Investment
5,055,069.67 0.05% 8,160,298.60 0.09% -0.04%
property
Fixed assets 1,717,043,900.68 15.32% 1,785,781,644.39 18.60% -3.28%
Construction in
76,076,053.22 0.68% 77,471,004.70 0.81% -0.13%
progress
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in
Beginning allowance for
Item changes in changes Reporting Reporting Ending amount
amount Reporting
Reporting charged to Period Period
Period
Period equity
Financial assets
1. Financial
assets at fair
value through
99,800.76 396,379.39 0.00 0.00 1,539,796.23 978,316.65 1,057,659.73
profit or loss
(exclusive of
derivatives)
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
2. Derivative
0.00 0.00 0.00 0.00 0.00 0.00 0.00
financial assets
3.
Available-for-sale 517,086,347.91 0.00 -41,442,155.53 0.00 0.00 208,447,155.70 267,197,036.68
financial assets
Subtotal of
517,186,148.67 396,379.39 -41,442,155.53 0.00 1,539,796.23 209,425,472.35 268,254,696.41
financial assets
Total of the
517,186,148.67 396,379.39 -41,442,155.53 0.00 1,539,796.23 209,425,472.35 268,254,696.41
above
Financial
0.00 0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Material changes in the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as of End of the Reporting Period
Unit: RMB
Item Ending carrying value Reasons
Other monetary funds 45,000,000.00 Drawing the bill for pledge of bank deposits
Notes receivable 99,930,600.00 Endorsement for pledge
Total 144,930,600.00
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
V Investments Made
1. Total Investments Made
□ Applicable √ Not applicable
2. Significant Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain/los
s on fair Cumulative
Code of Initial Purchase Gain/loss in
Variety of Name of Accounting Beginning value fair value Sold in the Ending Source of
d in the the
securitie investment measureme changes changes Reporting Accounting title
securities securities Reportin Reporting funds
nt model carrying value in the charged to Period carrying value
s cost g Period Period
Reportin equity
g Period
Domestic/overse Fair value 106,943,823.7 -25,087,573.6 11,586,297.2 Available-for-sa Self-owne
000001 PAYH 70,317,243.98 81,856,250.02 0.00
as stock method 0 8 3 le financial asset d funds
Domestic/overse 601988 ZGYH 44,385,674.20 Fair value 71,313,507.00 -6,466,716.00 0.00 0.00 64,846,791.00 Available-for-sa Self-owne
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
as stock method le financial asset d funds
GFNSTYR
1st E
150,000,000.0 Fair value 127,154,958.0 126,590,905.6 Available-for-sa Self-owne
Funds Securities -564,052.40 8,841,868.22 0.00
0 method 8 8 le financial asset d funds
Investment
Funds
ZXYSDP
1st Assets
200,000,000.0 Fair value 211,674,059.1 10,883,000.0 202,350,245.6 Available-for-sa Self-owne
Funds Manage -9,323,813.45 0.00
0 method 3 0 8 le financial asset d funds
ment
Plan
Other ending holding securities
-- -- --
investments
464,702,918.1 517,086,347.9 -41,442,155.5 208,447,155.7 31,311,165.4 267,197,036.6
Total -- -- --
8 1 3 0 5 8
Disclosure date of the announcement
about the board’s consent for the Naught
securities investment
Disclosure date of the announcement
about the general meeting’s consent for Naught
the securities investment (if any)
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB’0,000
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Proportion
of closing
Actual
Purchased in investment
Relationship Initial Beginning Sold in the Impairment Ending gain/loss in
Connected Type of the amount in
Operator with the investment Starting date Ending date investment Reporting provision (if investment the
transaction derivative Reporting the
Company amount amount Period any) amount Reporting
Period Company’s
Period
ending net
assets
Reverse
Reverse
repurchase
Naught No repurchase of 0.00 5,000 12,000 17,000 0 0 0.00% 21.44
of national
national debt
debt
Total 0.00 -- -- 5,000 12,000 17,000 0 0 0.00% 21.44
Capital source for derivative investment Company’s own funds
Lawsuits involved (if applicable) N/A
Disclosure date of board announcement approving
30 August 2013
derivative investment (if any)
Disclosure date of shareholders’ meeting announcement
N/A
approving derivative investment (if any)
Analysis of risks and control measures associated with
derivative investments held in the Reporting Period
The Company had controlled the relevant risks strictly according to the Derivatives 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)
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
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 and the sufficient free idle money, the Company increased the profits
through investing in the reasonable financial derivative instruments, which was in favor of improving the service efficiency of the idle
funds; in order to reduce the investment risks of the financial derivative instruments, the Company had set up corresponding supervision
Opinion of independent directors on derivative mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific principles of
investments and risk control financial accounting; the derivative Investment business developed separately took national debts as mortgage object, which was met
with the cautious and steady risks management principle and the interest of the Company and shareholders. 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.
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Unit: RMB
Relationship Main
Company business
with the Registered capital Total assets Net assets Operating revenues Operating profit Net profit
name scope
Company
Wholesales
of distilled
spirit,
Bozhou
construction
Gujing Sales Subsidiary 84,864,497.89 3,210,400,453.96 511,474,706.76 4,253,242,535.90 502,639,601.02 373,876,477.59
materials,
Co., Ltd
feeds and
assistant
materials
Anhui Manufacture
Longrui and sale of
Subsidiary 86,660,268.98 272,051,488.82 227,087,845.41 113,642,525.23 25,405,466.53 21,249,089.19
Glass Co., glass
Ltd products
Yellow
Production
Crane Tower
and sales of
Wine Subsidiary 400,000,000.00 801,720,368.65 529,953,868.24 429,495,365.21 66,529,234.06 50,054,993.63
distilled
Industry Co.,
spirit
Ltd
Shanghai
Hotel
Gujing
management
Jinhao Hotel Subsidiary 54,000,000.00 205,362,160.86 81,853,741.49 37,879,862.42 6,957,747.80 3,584,728.10
and house
Management
lease
Co., Ltd.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
~ 18 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2018
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end of
the next reporting period, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Operating risk of the Company
(1) The adverse effect of the systematic risk in macro-economic environment on the development of the industry and the Company.
(2) Impact of industrial policy adjustment and change on the sustainable development of the Company.
(3) Impact of the change of consumption behaviors and habits on the consumption crowds and trend replacement of distilled spirits.
2. Countermeasures
(1) Marketing
Build Anhui market and accelerate Henan's market construction. Intensify strategic node market promotion, establish the
commanding point of the brand and radiate across the country. Accelerate the upward movement of the product structure and take
efforts to develop secondary high-end and high-end products. Continue to follow a strategy of “setting a higher market positioning
and meanwhile maintaining a higher quality, from the international market to the domestic market, and focusing on both international
and domestic market”.
(2) Product management
Continuously boost intelligent and green brewing process, implement quality upgrading action plan, enhance information, scientific
and systematic management of product quality, lay a solid foundation for quality management. Make full use of the platform of
National Distilled Spirits Health Research Institute and continuously strengthen the research on heath factors in distilled spirits.
Continue to deeply boost product, technology and operation standardization and lay a solid foundation for the Company to
implement automation and intellectualization.
(3) Management innovation
Focus on the users, accelerate the implementation of Strategy 5.0, achieve business process evolution, introduce the "User-Centered"
thought in the design and construction of Strategy 5.0, and continuously promote the transformation of business model of the
enterprise. Deeply drive internal marketization and independent legal person system. Facilitate budget management informatization.
Build data standardization, strengthen statistical analysis and application and comprehensively deepen the budget management
system.
(4) Human resources
Build the development channel and improve the incentive mechanism. Advocate a "united, tense, serious and lively" office
atmosphere, establish a sound multi-level talent cultivation system, and further improve the various talent assessment system and
incentive and constraint mechanism. Establish talent "craftsman pool" and "elite pool",get through the "Management Channel" and
"Technology Channel", and build the "Innovation Platform" and "Entrepreneurship Platform".
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
(5) Corporate cultural construction
Thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of China and Xi Jinping Thought
on Socialism with Chinese Characteristics for a New Era, and guide all the Party members to enhance their thought and action
consciousness to maintain the core. Focus on the general keynote of "establishing, revitalizing and stabilizing the enterprise through
Party building", tighten the politics string, build the organization wall, main a strict standard in probity and ensure co-frequency
resonance of Party governance. Continuously strengthen "four-consciousness", and strengthen political leadership. Deepen the
implementation of Gujing’s core values and consolidate Gujing new thought guidance.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part V Significant Events
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Convened date Disclosure date
participation ratio information
For details, see
Announcement about
Resolutions of 2017
Annual General Meeting
of the Company disclosed
The 2017 Annual Annual General
58.79% 22 May 2018 23 May 2018 on China Securities
General Meeting Meeting
Journal, Shanghai
Securities News, Ta Kung
Pao (HK), and
http://www.cninfo.com.cn
on 23 May 2018.
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
II Interim Dividend Plan for the Reporting Period
□ Applicable √ Not applicable
The Company has no interim dividend plan.
III Commitments of the Company’s Actual Controller, Shareholders, Connected Parties and
Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting
Period or still Ongoing at Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
IV Engagement and Disengagement of CPAs Firm
Has the Interim financial report been audited?
□Yes √ No
This Interim Report is unaudited.
V Explanations Given by Board of Directors and Supervisory Committee Regarding
“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issued
for Last Year
□ Applicable √ Not applicable
VII Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits or arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other legal matters:
□ Applicable √ Not applicable
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Gujinggong Liquor Aged Original Liquor Interim Report 2018
X Credit Conditions of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Connected Transactions
1. Connected Transactions Relevant to Routine Operations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Connected Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Connected Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Connected Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Significant Connected Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
~ 23 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
XIII. Particulars about the Non-operating Occupation of Funds by the Controlling
Shareholder and Other Connected 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 connected parties
during the Reporting Period.
XIV. Significant Contracts and Execution
1. Entrustment, Contracting and Leasing
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leasing
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV. Social Responsibilities
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental
~ 24 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
protection authorities of China
Yes
Name of
Name of Pollutant
major Quantity of Distribution
company or Way of Discharge discharge Total Permitted Excess
pollutant and discharge of discharge
subsidiary discharge concentration standard discharge discharge discharge
typical outlet outlet
company implemented
pollutant
Gujing
Anbui plant
Gujing Directly Zhangji
COD 3 75.81 mg/L ≤100 mg/L 106.06 t 155.05 t Naught
Distillery discharge plant
Co., Ltd. Headquarter
plant
Gujing
Anbui plant
Gujing Directly Zhangji
NH3-N 3 6.38mg/L ≤10 mg/L 8.93 t 15.53 t Naught
Distillery discharge plant
Co., Ltd. Headquarter
plant
Gujing
Anbui plant
Gujing Organized Zhangji
Smoke 3 37mg/m ≤80mg/ m 18 t Naught Naught
Distillery discharge plant
Co., Ltd. Headquarter
plant
Gujing
Anbui plant
Gujing Organized Zhangji
Sulfur Dioxide 3 250mg/ m ≤400mg/ m 121.8 t Naught Naught
Distillery discharge plant
Co., Ltd. Headquarter
plant
Gujing
Anbui plant
Gujing Nitrogen Organized Zhangji
3 273mg/ m ≤400mg/ m 132.8 t Naught Naught
Distillery oxide discharge plant
Co., Ltd. Headquarter
plant
Anhui No. 1
Organized
Longrui Smoke 3 furnace 43mg/ m ≤200mg/ m 6.6 t Naught Naught
discharge
Glass Co., No. 2
~ 25 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ltd furnace
No. 3
furnace
No. 1
Anhui furnace
Longrui Organized No. 2
Sulfur Dioxide 3 182mg/ m ≤850mg/ m 27.9 t Naught Naught
Glass Co., discharge furnace
Ltd No. 3
furnace
No. 1
Anhui furnace
Longrui Nitrogen Organized No. 2
3 335mg/ m ≤700mg/ m 51.1 t Naught Naught
Glass Co., oxide discharge furnace
Ltd No. 3
furnace
Construction and operation of pollution prevention and management
Rain and sewage distribution measures have been carried out, sewage treatment stations has been built and COD, NH3-N online
monitors has been installed in the production areas of the Company. All detected data will be uploaded to the Pollution Sources Key
Monitoring Information Platform of Anhui Province and accepts social supervision. The existing pollution-control facilities of the
Company perform well and discharge according to relevant discharge standard. Wastewater discharge can meet requirements of
GB27631-2011Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry, and flue gas emission
can meet requirements of GB13271-2014 Emission Standard of Air Pollutants for Boiler.
Environmental impact assessment of construction project and other administrative license situation in respect of environmental
protection
1. The Gujing No. 9 Semi-Open Spirit Storehouse Renovation Project has carried out environmental impact assessment and prepared
the environmental impact assessment report, which has been approved by Bozhou Environmental Protection Bureau on 21 May 2017.
Please refer to BHB [2017] No. 62 document for details. The project is currently under construction;
2. The Gujing No. 10 Open Spirit Storehouse and Spirit Recycling Workshop Renovation Project has carried out environmental
impact assessment and prepared the environmental impact assessment report, which has been approved by Bozhou Environmental
Protection Bureau on 8 September 2017. Please refer to BHB [2017] No. 139 document for details. The project is currently under
construction;
3. Environmental impact assessment work of Anhui Longrui Glass Co., Ltd VOC treatment project has been carried out.
Environmental impact assessment reports has been compiled and approved by Bozhou Environmental Protection Bureau on 28,
March 2018 (see Bozhou Environment Impact Report [2018] No. 16 for reference). This project is now under construction.
Emergency plan for sudden environment affairs
The Company has formulated the Emergency Plan of Anhui Gujing Distillery Company Limited for Sudden Environmental Pollution
Accident, which has been filed with municipal environmental protection bureau. Emergency plan drill has been carried out according
to relevant requirements.
Environmental self-monitoring scheme
The Company has formulated the Self-Monitoring Scheme of Key Pollution Source Enterprises under the National Monitoring and
published it on the website of Bozhou Environmental Protection Bureau.
~ 26 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Other environment information that should be disclosed
Longrui Glass Co., Ltd, as subsidiary of the Company, shares sewage treatment system with the Company to dispose household and
industrial waste water. Waste water will be treated by sewage treatment station of the Company before being discharged according to
relevant discharge standard and the discharge process can meet requirements of GB27631-2011Discharge Standard of Water
Pollutants for Fermentation Alcohol and Distilled Spirits Industry. Glass furnaces flue gas of Longrui Glass Co., Ltd will be dusted,
desulfurized and denitrated according to relevant standard before being discharged and the discharge process can meet requirements
of GB9078-1996 Emission Standard of Air Pollutants for Industrial Kiln and Furnace.
Other related environment protection information
No
2. Targeted Measures Taken to Help People Lift Themselves Out of Poverty
(1) Summary of Precision Poverty Alleviation for 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 176poor
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 implementation of poverty alleviation work, Bali Village in Wuma Town has all
achieved poverty alleviation and has a fixed income.
(2) Subsequent Plan for Precision Poverty Alleviation
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 relevant requirements
to carry out the social responsibility.
XVI. Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
~ 27 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part VI Share Changes and Shareholder Information
I. Share Changes
Unit: share
Before Increase/decrease (+/-) After
Percentage New Bonus Bonus issue Percentage
Number Other Subtotal Number
(%) issues shares from profit (%)
I. Restricted shares 0 0.00% 0 0.00%
II. Non-restricted shares 503,600,000 100.00% 503,600,000 100.00%
1 RMB ordinary shares 383,600,000 76.17% 383,600,000 76.17%
2 Domestically listed
120,000,000 23.83% 120,000,000 23.83%
foreign shares
III. Total shares 503,600,000 100.00% 503,600,000 100.00%
Reasons for the share changes
□ Applicable √ Not applicable
Approval of share changes
□ Applicable √ Not applicable
Transfer of share ownership
□ Applicable √ Not applicable
Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders of the Company and
other financial indexes over the prior year and the prior period
□ Applicable √ Not applicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
~ 28 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of preference shareholders
Total number of ordinary
18,171 with resumed voting rights at the 0
shareholders at the period-end
period-end (if any) (see Note 8)
5% or greater ordinary shareholders or the top 10 ordinary shareholders
Number Pledged or frozen shares
Shareholding Total shares Increase/decrease of Number of
Name of Nature of
percentage held at the during the restricted non-restricted
shareholder shareholder Status Number
(%) period-end Reporting Period shares shares held
held
ANHUI GUJING
GROUP State-owned
53.89% 271,404,022 271,404,022 Pledge 114,000,000
COMPANY legal person
LIMITED
Foreign legal
NORGES BANK 2.89% 14,554,480 14,554,480
person
GAOLING Foreign legal
2.47% 12,446,408 12,446,408
FUND,L.P. person
AGRICULTURAL
BANK OF
CHINA- E FUND
CONSUMPTION
Other 1.49% 7,485,278 7,485,278
SECTOR STOCK
SECURITIES
INVESTMENT
FUND
CHINA INT'L
CAPITAL CORP
Foreign legal
HONG KONG 1.46% 7,372,976 7,372,976
person
SECURITIES
LTD
UBS (LUX)
EQUITY FUND -
Foreign legal
CHINA 1.41% 7,096,361 7,096,361
person
OPPORTUNITY
(USD)
CENTRAL
State-owned
HUIJIN ASSET 1.30% 6,543,600 6,543,600
legal person
MANAGEMENT
~ 29 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
CO., LTD.
GREENWOODS
Foreign legal
CHINA ALPHA 0.98% 4,939,963 4,939,963
person
MASTER FUND
UBS (LUX)
EQUITY FUND - Foreign legal
0.90% 4,541,338 4,541,338
GREATER person
CHINA (USD)
3W GREATER
Foreign legal
CHINA FOCUS 0.70% 3,529,479 3,529,479
person
FUND
Strategic investor or general
corporation becoming a top ten
N/A
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 connected party of other shareholders; nor are they parties acting in
Explanation on connected
concert as defined in the Administrative Measures on Information Disclosure of Changes in
relationship or/and persons acting in
Shareholding of Listed Companies. As for the other shareholders, the Company does not know
concert among the above-mentioned
whether they are connected parties or whether they belong to parties acting in concert as defined
shareholders
in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed
Companies.
Shareholdings of the top ten non-restricted ordinary shareholders
Type of shares
Name of shareholder Number of non-restricted shares held at the period-end
Type Number
ANHUI GUJING GROUP RMB ordinary
271,404,022 271,404,022
COMPANY LIMITED share
Domestically
NORGES BANK 14,554,480 listed foreign 14,554,480
share
Domestically
GAOLING FUND,L.P. 12,446,408 listed foreign 12,446,408
share
AGRICULTURAL BANK OF
CHINA- E FUND
RMB ordinary
CONSUMPTION SECTOR 7,485,278 7,485,278
share
STOCK SECURITIES
INVESTMENT FUND
CHINA INT'L CAPITAL CORP Domestically
7,372,976 7,372,976
HONG KONG SECURITIES LTD listed foreign
~ 30 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
share
Domestically
UBS (LUX) EQUITY FUND -
7,096,361 listed foreign 7,096,361
CHINA OPPORTUNITY (USD)
share
CENTRAL HUIJIN ASSET RMB ordinary
6,543,600 6,543,600
MANAGEMENT CO., LTD. share
Domestically
GREENWOODS CHINA ALPHA
4,939,963 listed foreign 4,939,963
MASTER FUND
share
Domestically
UBS (LUX) EQUITY FUND -
4,541,338 listed foreign 4,541,338
GREATER CHINA (USD)
share
Domestically
3W GREATER CHINA FOCUS
3,529,479 listed foreign 3,529,479
FUND
share
Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group
Connected or acting-in-concert
Company Limited—is not a connected party of other shareholders; nor are they parties acting in
parties among the top ten
concert as defined in the Administrative Measures on Information Disclosure of Changes in
non-restrictedly tradable share
Shareholding of Listed Companies. As for the other shareholders, the Company does not know
holders and between the top ten
whether they are connected parties or whether they belong to parties acting in concert as defined
non-restrictedly tradable share
in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed
holders and the top ten shareholders
Companies.
Top ten ordinary shareholders
conducting securities margin N/A
trading (if any) (see 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.
IV. 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
There was no any change of the actual controller of the Company in the Reporting Period.
~ 31 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
~ 32 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part VIII Directors, Supervisors and Senior Management
I Changes in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
There were no changes in shareholdings of directors, supervisors, and senior management in the Reporting Period. For details, see
Annual Report of 2017.
II Changes in Directors, Supervisors and Executive Officers
□ Applicable √ Not applicable
~ 33 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part IX Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this
Report or were due but could not be redeemed in full?
No
~ 34 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part X Financial Report
I. Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
30 June 2018
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 967,785,957.41 1,484,088,626.40
Settlement reserve
Interbank loans granted
Financial assets at fair value through
1,057,659.73 99,800.76
profit or loss
Derivative financial assets
Notes receivable 1,898,811,744.49 720,611,126.78
Accounts receivable 19,492,576.07 22,466,143.06
Prepayments 82,209,009.71 41,729,637.34
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Interest receivable 19,403,178.08 13,883,178.08
Dividends receivable
Other receivables 12,882,228.59 15,390,106.14
~ 35 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Financial assets purchased under
resale agreements
Inventories 2,140,586,455.59 2,064,130,297.51
Assets classified as held for sale
Current portion of non-current assets
Other current assets 2,167,041,053.66 1,772,310,946.58
Total current assets 7,309,269,863.33 6,134,709,862.65
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 267,197,036.68 517,086,347.91
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment property 5,055,069.67 5,343,777.33
Fixed assets 1,717,043,900.68 1,792,254,178.56
Construction in progress 76,076,053.22 54,496,798.56
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 747,362,393.05 691,381,442.67
R&D expense
Goodwill 478,283,495.29 478,283,495.29
Long-term prepaid expense 74,201,576.33 69,238,523.78
Deferred income tax assets 223,740,381.46 92,157,477.74
Other non-current assets 312,474,025.99 317,910,214.56
Total non-current assets 3,901,433,932.37 4,018,152,256.40
Total assets 11,210,703,795.70 10,152,862,119.05
Current liabilities:
Short-term borrowings
Borrowings from central bank
Customer deposits and deposits from
banks and other financial institutions
Interbank loans obtained
Financial liabilities at fair value
~ 36 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
through profit or loss
Derivative financial liabilities
Notes payable 188,073,094.09 200,750,000.00
Accounts payable 292,602,067.69 435,615,039.83
Advances from customers 803,222,097.92 503,083,108.13
Financial assets sold under repurchase
agreements
Handling charges and commissions
payable
Payroll payable 249,960,170.72 372,374,014.37
Taxes payable 413,938,710.44 420,984,845.45
Interest payable
Dividends payable
Other payables 1,103,986,706.45 1,032,543,553.34
Reinsurance payables
Insurance contract reserve
Payables for acting trading of
securities
Payables for underwriting of
securities
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
liabilities
Other current liabilities 804,829,022.62 182,846,942.10
Total current liabilities 3,856,611,869.93 3,148,197,503.22
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income 41,140,119.46 43,706,503.22
Deferred income tax liabilities 105,037,408.26 119,779,105.90
~ 37 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Other non-current liabilities
Total non-current liabilities 146,177,527.72 163,485,609.12
Total liabilities 4,002,789,397.65 3,311,683,112.34
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 1,295,405,592.25 1,295,405,592.25
Less: Treasury shares
Other comprehensive income 8,418,551.86 53,520,827.44
Specific reserve
Surplus reserves 256,902,260.27 256,902,260.27
General reserve
Retained profits 4,738,472,036.06 4,349,649,698.42
Total equity attributable to owners of the
6,802,798,440.44 6,459,078,378.38
Company as the parent
Non-controlling interests 405,115,957.61 382,100,628.33
Total owners’ equity 7,207,914,398.05 6,841,179,006.71
Total liabilities and owners’ equity 11,210,703,795.70 10,152,862,119.05
Legal representative: Liang Jinhui The Company’s chief accountant: Ye Changqing
Head of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 772,284,862.52 1,276,262,109.02
Financial assets at fair value through
1,057,659.73 99,800.76
profit or loss
Derivative financial assets
Notes receivable 1,707,225,175.49 674,521,654.40
Accounts receivable 7,614,296.08 8,509,918.03
Prepayments 24,857,999.07 8,534,600.82
~ 38 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Interest receivable
Dividends receivable
Other receivables 103,848,091.62 130,357,778.75
Inventories 1,888,382,381.02 1,818,358,884.18
Assets classified as held for sale
Current portion of non-current assets
Other current assets 1,525,688,078.30 1,554,870,774.98
Total current assets 6,030,958,543.83 5,471,515,520.94
Non-current assets:
Available-for-sale financial assets 266,691,636.68 516,530,547.91
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,155,089,408.32 1,155,089,408.32
Investment property 25,599,187.91 26,409,050.95
Fixed assets 1,248,446,627.92 1,303,119,011.66
Construction in progress 62,902,724.31 44,673,219.38
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 191,482,188.30 185,868,178.71
R&D expense
Goodwill
Long-term prepaid expense 52,071,942.48 58,563,409.89
Deferred income tax assets 45,869,242.45 37,996,747.93
Other non-current assets 12,474,026.00 12,474,026.00
Total non-current assets 3,060,626,984.37 3,340,723,600.75
Total assets 9,091,585,528.20 8,812,239,121.69
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit or loss
Derivative financial liabilities
Notes payable 46,282,864.09 0.00
~ 39 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Accounts payable 198,568,181.33 347,757,180.53
Advances from customers 2,231,969,430.14 1,680,678,175.37
Payroll payable 89,036,488.26 110,435,403.45
Taxes payable 130,156,087.08 262,884,211.13
Interest payable
Dividends payable
Other payables 229,014,721.93 173,250,790.29
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
liabilities
Other current liabilities 69,116,753.96 18,296,415.85
Total current liabilities 2,994,144,526.79 2,593,302,176.62
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income 37,612,568.27 39,976,048.28
Deferred income tax liabilities 6,095,966.89 19,792,209.68
Other non-current liabilities
Total non-current liabilities 43,708,535.16 59,768,257.96
Total liabilities 3,037,853,061.95 2,653,070,434.58
Owners’ equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 1,247,162,107.35 1,247,162,107.35
Less: Treasury shares
Other comprehensive income 8,390,260.80 53,454,736.38
~ 40 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Specific reserve
Surplus reserves 251,800,000.00 251,800,000.00
Retained profits 4,042,780,098.10 4,103,151,843.38
Total owners’ equity 6,053,732,466.25 6,159,168,687.11
Total liabilities and owners’ equity 9,091,585,528.20 8,812,239,121.69
3. Consolidated Income Statement
Unit: RMB
Item H1 2018 H1 2017
1. Revenue 4,783,083,895.33 3,670,127,764.59
Including: Operating revenue 4,783,083,895.33 3,670,127,764.59
Interest income
Premium income
Handling charge and commission
income
2. Operating costs and expenses 3,630,830,299.47 3,012,871,713.47
Including: Cost of sales 1,042,675,468.24 913,179,198.91
Interest expense
Handling charge and commission
expense
Surrenders
Net claims paid
Net amount provided as insurance
contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surtaxes 729,467,173.53 606,131,354.51
Selling expense 1,597,300,315.17 1,249,688,761.13
Administrative expense 280,500,337.72 263,421,695.43
Finance costs -20,284,906.55 -17,264,642.65
Asset impairment loss 1,171,911.36 -2,284,653.86
Add: Gain on changes in fair value (“-”
236,707.77 -119,656.35
for loss)
Investment income (“-” for loss) 68,775,019.95 81,017,484.47
Including: Share of profit or loss of
joint ventures and associates
~ 41 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss) 154,437.81 487,886.67
Other income 4,487,036.05 23,716,926.49
3. Operating profit (“-” for loss) 1,225,906,797.44 762,358,692.40
Add: Non-operating income 14,758,797.76 14,961,789.67
Less: Non-operating expense 4,438,013.04 2,189,022.01
4. Profit before taxation (“-” for loss) 1,236,227,582.16 775,131,460.06
Less: Income tax expense 320,789,915.24 203,016,533.12
5. Net profit (“-” for net loss) 915,437,666.92 572,114,926.94
5.1 Net profit from continuing
915,437,666.92 572,114,926.94
operations (“-” for net loss)
5.2 Net profit from discontinued
operations (“-” for net loss)
Net profit attributable to owners of the
892,422,337.64 548,889,891.65
Company as the parent
Net profit attributable to
23,015,329.28 23,225,035.29
non-controlling interests
6. Other comprehensive income, net of
-45,102,275.58 -19,896,472.08
tax
Attributable to owners of the Company
-45,102,275.58 -19,896,472.08
as the parent
6.1 Items that will not be reclassified
to profit or loss
6.1.1 Changes in net liabilities or
assets caused by remeasurements on
defined benefit pension schemes
6.1.2 Share of other
comprehensive income of investees that
will not be reclassified to profit or loss
under equity method
6.2 Items that may subsequently be
-45,102,275.58 -19,896,472.08
reclassified to profit or loss
6.2.1 Share of other
comprehensive income of investees that
will be reclassified to profit or loss under
equity method
6.2.2 Gain/Loss on changes in fair
-45,102,275.58 -19,896,472.08
value of available-for-sale financial assets
6.2.3 Gain/Loss arising from
reclassification of held-to-maturity
~ 42 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
investments to available-for-sale financial
assets
6.2.4 Effective gain/loss on cash
flow hedges
6.2.5 Differences arising from
translation of foreign
currency-denominated financial
statements
6.2.6 Other
Attributable to non-controlling interests
7. Total comprehensive income 870,335,391.34 552,218,454.86
Attributable to owners of the Company
847,320,062.06 528,993,419.57
as the parent
Attributable to non-controlling interests 23,015,329.28 23,225,035.29
8. Earnings per share
8.1 Basic earnings per share 1.77 1.09
8.2 Diluted earnings per share 1.77 1.09
Legal representative: Liang Jinhui The Company’s chief accountant: Ye Changqing
Head of the Company’s financial department: Zhu Jiafeng
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Operating revenue 2,373,509,719.96 2,032,050,832.48
Less: Cost of sales 962,446,727.32 808,157,556.90
Taxes and surtaxes 612,880,006.38 521,153,270.11
Selling expense 90,185,702.99 119,601,430.10
Administrative expense 190,821,389.57 180,104,417.79
Finance costs -17,205,534.12 -8,358,356.49
Asset impairment loss 1,440,847.72 -1,943,865.48
Add: Gain on changes in fair value
236,707.77 -119,656.35
(“-” for loss)
Investment income (“-” for loss) 61,302,268.33 74,940,152.97
Including: Share of profit or loss
of joint ventures and associates
Asset disposal income (“-” for loss) 0.00 117,524.82
~ 43 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Other income 2,363,480.01 20,551,597.62
2. Operating profit (“-” for loss) 596,843,036.21 508,825,998.61
Add: Non-operating income 12,278,301.09 2,446,478.83
Less: Non-operating expense 3,316,344.52 798,234.93
3. Profit before taxation (“-” for loss) 605,804,992.78 510,474,242.51
Less: Income tax expense 162,576,738.06 136,935,504.91
4. Net profit (“-” for net loss) 443,228,254.72 373,538,737.60
4.1 Net profit from continuing
443,228,254.72 373,538,737.60
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
-45,064,475.58 -19,923,772.08
tax
5.1 Items that will not be reclassified
to profit or loss
5.1.1 Changes in net liabilities or
assets caused by remeasurements on
defined benefit pension schemes
5.1.2 Share of other comprehensive
income of investees that will not be
reclassified into profit or loss under
equity method
5.2 Items that may subsequently be
-45,064,475.58 -19,923,772.08
reclassified to profit or loss
5.2.1 Share of other comprehensive
income of investees that will be
reclassified into profit or loss under
equity method
5.2.2 Gain/Loss on changes in fair
value of available-for-sale financial -45,064,475.58 -19,923,772.08
assets
5.2.3 Gain/Loss arising from
reclassification of held-to-maturity
investments to available-for-sale
financial assets
5.2.4 Effective gain/loss on cash
flow hedges
5.2.5 Differences arising from
translation of foreign
currency-denominated financial
statements
~ 44 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
5.2.6 Other
6. Total comprehensive income 398,163,779.14 353,614,965.52
7. Earnings per share
7.1 Basic earnings per share 0.88 0.74
7.2 Diluted earnings per share 0.88 0.74
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities
4,168,785,414.04 3,555,497,838.84
and rendering of services
Net increase in customer deposits and
deposits from banks and other financial
institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Net increase in proceeds from
disposal of financial assets at fair value
through profit or loss
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Tax rebates 1,526,552.28 14,260,319.10
Cash generated from other operating
578,221,173.31 163,681,861.39
activities
Subtotal of cash generated from
4,748,533,139.63 3,733,440,019.33
operating activities
Payments for commodities and
805,659,265.35 519,208,246.66
services
~ 45 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Net increase in loans and advances to
customers
Net increase in deposits in central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 777,363,928.00 664,176,293.14
Taxes paid 1,875,377,764.19 1,695,407,866.03
Cash used in other operating activities 621,185,290.48 429,282,389.42
Subtotal of cash used in operating
4,079,586,248.02 3,308,074,795.25
activities
Net cash generated from/used in
668,946,891.61 425,365,224.08
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestments 1,050,984,415.12 2,122,314,171.98
Investment income 64,643,822.92 79,384,831.47
Net proceeds from disposal of fixed
assets, intangible assets and other 170,207.20 412,563.04
long-lived assets
Net proceeds from disposal of
subsidiaries or other business units
Cash generated from other investing
0.00 1,646,000.00
activities
Subtotal of cash generated from
1,115,798,445.24 2,203,757,566.49
investing activities
Payments for acquisition of fixed
assets, intangible assets and other 160,906,209.61 74,306,031.33
long-lived assets
Payments for investments 1,221,541,796.23 2,096,875,360.87
Net increase in pledged loans granted
Net payments for acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
1,382,448,005.84 2,171,181,392.20
activities
Net cash generated from/used in
-266,649,560.60 32,576,174.29
investing activities
~ 46 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by
non-controlling interests to subsidiaries
Increase in borrowings obtained
Net proceeds from issuance of bonds
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings
Payments for interest and dividends 503,600,000.00 302,160,000.00
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing activities
Subtotal of cash used in financing
503,600,000.00 302,160,000.00
activities
Net cash generated from/used in
-503,600,000.00 -302,160,000.00
financing activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
-101,302,668.99 155,781,398.37
equivalents
Add: Cash and cash equivalents,
1,024,088,626.40 527,849,026.07
beginning of the period
6. Cash and cash equivalents, end of the
922,785,957.41 683,630,424.44
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities
1,823,943,040.35 2,364,605,355.19
and rendering of services
Tax rebates 0.00 13,013,817.25
Cash generated from other operating
637,265,577.14 79,147,317.52
activities
Subtotal of cash generated from
2,461,208,617.49 2,456,766,489.96
operating activities
~ 47 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Payments for commodities and
621,024,637.00 451,629,264.08
services
Cash paid to and for employees 299,547,110.96 280,790,376.47
Taxes paid 1,185,933,500.57 1,125,948,368.08
Cash used in other operating activities 122,550,902.77 114,239,605.20
Subtotal of cash used in operating
2,229,056,151.30 1,972,607,613.83
activities
Net cash generated from/used in
232,152,466.19 484,158,876.13
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestments 860,984,415.12 2,069,314,171.98
Investment income 62,684,376.34 78,831,554.77
Net proceeds from disposal of fixed
assets, intangible assets and other
long-lived assets
Net proceeds from disposal of
subsidiaries or other business units
Cash generated from other investing
0.00 1,646,000.00
activities
Subtotal of cash generated from
923,668,791.46 2,149,791,726.75
investing activities
Payments for acquisition of fixed
assets, intangible assets and other 84,656,707.92 59,402,496.47
long-lived assets
Payments for investments 621,541,796.23 1,969,875,360.87
Net payments for acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
706,198,504.15 2,029,277,857.34
activities
Net cash generated from/used in
217,470,287.31 120,513,869.41
investing activities
3. Cash flows from financing activities:
Capital contributions received
Increase in borrowings obtained
Net proceeds from issuance of bonds
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
~ 48 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Repayment of borrowings
Payments for interest and dividends 503,600,000.00 302,160,000.00
Cash used in other financing activities
Sub-total of cash used in financing
503,600,000.00 302,160,000.00
activities
Net cash generated from/used in
-503,600,000.00 -302,160,000.00
financing activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
-53,977,246.50 302,512,745.54
equivalents
Add: Cash and cash equivalents,
826,262,109.02 225,792,686.26
beginning of the period
6. Cash and cash equivalents, end of the
772,284,862.52 528,305,431.80
period
~ 49 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent
Item Other equity instruments Non-controlling Total owners’
Less: Other
Specific Surplus General
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained profits interests equity
Other reserve reserves reserve
shares bonds shares income
1. Balances as of
503,600,000.00 1,295,405,592.25 53,520,827.44 256,902,260.27 4,349,649,698.42 382,100,628.33 6,841,179,006.71
end of prior year
Add: Adjustments
for changed
accounting
policies
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations
involving
enterprises under
common control
Other
adjustments
2. Balances as of
503,600,000.00 1,295,405,592.25 53,520,827.44 256,902,260.27 4,349,649,698.42 382,100,628.33 6,841,179,006.71
beginning of the
~ 50 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
year
3. Increase/
decrease in the
-45,102,275.58 388,822,337.64 23,015,329.28 366,735,391.34
period (“-” for
decrease)
3.1 Total
comprehensive -45,102,275.58 892,422,337.64 23,015,329.28 870,335,391.34
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit
-503,600,000.00 -503,600,000.00
distribution
3.3.1
Appropriation to
~ 51 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
Appropriation to
-503,600,000.00 -503,600,000.00
owners (or
shareholders)
3.3.4 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
~ 52 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
4. Balances as of
503,600,000.00 1,295,405,592.25 8,418,551.86 256,902,260.27 4,738,472,036.06 405,115,957.61 7,207,914,398.05
end of the period
H1 2017
Unit: RMB
H1 2017
Equity attributable to owners of the Company as the parent
Item Other equity instruments Non-controlling Total owners’
Less: Other
Specific Surplus General
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained profits interests equity
Other reserve reserves reserve
shares bonds shares income
1. Balances as of
503,600,000.00 1,295,405,592.25 36,144,477.95 256,902,260.27 3,503,069,053.49 345,609,535.80 5,940,730,919.76
end of prior year
Add: Adjustments
for changed
accounting
policies
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations
~ 53 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
involving
enterprises under
common control
Other
adjustments
2. Balances as of
beginning of the 503,600,000.00 1,295,405,592.25 36,144,477.95 256,902,260.27 3,503,069,053.49 345,609,535.80 5,940,730,919.76
year
3. Increase/
decrease in the
17,376,349.49 846,580,644.93 36,491,092.53 900,448,086.95
period (“-” for
decrease)
3.1 Total
comprehensive 17,376,349.49 1,148,740,644.93 36,491,092.53 1,202,608,086.95
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
~ 54 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
in owners’ equity
3.2.4 Other
3.3 Profit
-302,160,000.00 -302,160,000.00
distribution
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
Appropriation to
-302,160,000.00 -302,160,000.00
owners (or
shareholders)
3.3.4 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
~ 55 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
4. Balances as of
503,600,000.00 1,295,405,592.25 53,520,827.44 256,902,260.27 4,349,649,698.42 382,100,628.33 6,841,179,006.71
end of the period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
H1 2018
Other equity instruments Less: Other
Item Specific Surplus Total owners’
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained profits
Other reserve reserves equity
shares bonds shares income
1. Balances as of end of
503,600,000.00 1,247,162,107.35 53,454,736.38 251,800,000.00 4,103,151,843.38 6,159,168,687.11
prior year
Add: Adjustments for
changed accounting
~ 56 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
policies
Adjustments for
corrections of previous
errors
Other adjustments
2. Balances as of
503,600,000.00 1,247,162,107.35 53,454,736.38 251,800,000.00 4,103,151,843.38 6,159,168,687.11
beginning of the year
3. Increase/ decrease in
the period (“-” for -45,064,475.58 -60,371,745.28 -105,436,220.86
decrease)
3.1 Total
-45,064,475.58 443,228,254.72 398,163,779.14
comprehensive income
3.2 Capital increased
and reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital
increased by holders of
other equity instruments
3.2.3 Share-based
payments included in
owners’ equity
3.2.4 Other
3.3 Profit distribution -503,600,000.00 -503,600,000.00
3.3.1 Appropriation
to surplus reserves
3.3.2 Appropriation
-503,600,000.00 -503,600,000.00
to owners (or
~ 57 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
shareholders)
3.3.3 Other
3.4 Carryforwards
within owners’ equity
3.4.1 Increase in
capital (or share capital)
from capital reserves
3.4.2 Increase in
capital (or share capital)
from surplus reserves
3.4.3 Surplus
reserves used to make up
losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for
the period
3.5.2 Used during the
period
3.6 Other
4. Balances as of end of
503,600,000.00 1,247,162,107.35 8,390,260.80 251,800,000.00 4,042,780,098.10 6,053,732,466.25
the period
H1 2017
Unit: RMB
H1 2017
Item
Share capital Other equity instruments Capital reserves Less: Other Specific Surplus Retained profits Total owners’
~ 58 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Preferred Perpetual Treasury comprehensive reserve reserves equity
Other
shares bonds shares income
1. Balances as of end of
503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
prior year
Add: Adjustments for
changed accounting
policies
Adjustments for
corrections of previous
errors
Other adjustments
2. Balances as of
503,600,000.00 1,247,162,107.35 37,315,555.64 251,800,000.00 3,307,203,353.63 5,347,081,016.62
beginning of the year
3. Increase/ decrease in
the period (“-” for 16,139,180.74 795,948,489.75 812,087,670.49
decrease)
3.1 Total
16,139,180.74 1,098,108,489.75 1,114,247,670.49
comprehensive income
3.2 Capital increased
and reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital
increased by holders of
other equity instruments
3.2.3 Share-based
payments included in
owners’ equity
~ 59 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
3.2.4 Other
3.3 Profit distribution -302,160,000.00 -302,160,000.00
3.3.1 Appropriation
to surplus reserves
3.3.2 Appropriation
to owners (or -302,160,000.00 -302,160,000.00
shareholders)
3.3.3 Other
3.4 Carryforwards
within owners’ equity
3.4.1 Increase in
capital (or share capital)
from capital reserves
3.4.2 Increase in
capital (or share capital)
from surplus reserves
3.4.3 Surplus
reserves used to make up
losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for
the period
3.5.2 Used during the
period
3.6 Other
4. Balances as of end of 503,600,000.00 1,247,162,107.35 53,454,736.38 251,800,000.00 4,103,151,843.38 6,159,168,687.11
~ 60 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
the period
~ 61 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Anhui Gujing Distillery Company Limited
Notes to Financial Statements for H1 2018
(Currency Unit Is RMB Unless Otherwise Stated)
I. Company Profile
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 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 per share.
On 29 May 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 27 June 2007, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 29
June 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 17 July 2008, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 18
July 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.
The Company issued
on 24 July 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.
~ 62 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
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. After private issuance, the share capital of the Company increased to RMB251.8 million.
Pursuant to the Resolution of The 2011 Annual General Meeting, 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.
In April 2016, the company entered a strategic cooperation agreement with Wuhan Tianlong Yellow Crane Tower
Co., Ltd., creating a new age for cooperation related to Chinese famous spirit. As the only Chinese famous spirit
in Hubei Province, it features unique mellow taste, elegant appearance and tempting smell. Moreover, Yellow
Crane Tower White Spirit won the Golden Prize respectively in 1984 and 1989 National White Spirit Appraisal
Competition as one of the business card representing Hubei Province’s economy. At present, the company has
established three major bases in Wuhan, Xianning and Suizhou, of which, Xianning Base has integrated
modernism, ecologism and high technology as a new spirit-making base, known as “the most beautiful chateau in
China”. In 2016, Yellow Crane Tower Spirit won “2015 Top 10 Star Product in Hubei Province”.
By 30 June 2018, the Company issued 503,600,000 shares.
The company is registered at Gujing Town, Bozhou City, Anhui Province.
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 as the parent and the final company as the parent is Anhui Gujing Company Co., Ltd in China.
Financial statement of the Company will be released on 27 August 2018 by the Board of Directors.
On 30 June 2018, there were 23 subsidiaries included in the consolidation scope. Please refer to Note VIII “Rights
and Interests in other Entities” for details.
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 Finance), the 41 specific standards of
Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 February 2006 and
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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 management of the Company executed the assessment on the continuation ability and had not discovered any
event or situation caused significant suspicion on the continuation ability. Thus, the financial statements compiled
based on the hypothesis of the continuation.
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 June 30, 2018, operating
results, cash flow from January to June in 2018 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
The company and various subsidiaries are mainly specialized in manufacturing and selling white spirit. According
to the actual production & operation and related ASBE provisions, this company and various subsidiaries have
formulated some specific accounting policies and estimations related to various transactions and matters including
revenue recognition. Please refer to Note IV. 23 “Revenues” for details. For any description of major accounting
judgment and estimations made by the company’s management, please refer to Note IV. 28 “Major Accounting
Judgment and Estimations” for details.
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 January 1st to
December 31st 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 regards which as the
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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 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.
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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.
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) and Article 51 of Accounting Standards for
Enterprises No. 33 – Consolidated Financial Statements on the “package deal” criterion (see Note IV. 5 (2)), to
judge the multiple exchange transactions whether they are the “package deal”. If it belongs to the “package deal”
in reference to the preceding paragraphs of this section and the Notes described in Note IV. 13 “long-term
investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual
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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.
The Company would reassess it if the involved relevant factors of above control definitions changed, which was
caused by changes of relevant facts and situations.
(2) Methods for preparing the consolidated financial statements
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
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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 from 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 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;
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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.
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
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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 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,
③available-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
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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 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
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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 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
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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 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
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impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of
impairment loss on the reserving date.
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
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and liability accordingly according to the extent of its 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 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.
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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.
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
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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
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.
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(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
Connected 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.
Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Don’t withdraw the bad debts provision unless the related-party lost the repaying
Connected party portfolios
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
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Category Proportion for accounts receivable (%) Proportion for other receivable (%)
[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 cannot 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
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
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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. Assets Held for Sale and Disposal Group
The company classifies a non-current asset or disposal group as held for sale if its carrying amount will be
recovered principally through a sale transaction rather than through continuing use. For this to be the case, the
following conditions shall be met: a) the asset (or disposal group) must be available for immediate sale in its
present condition subject to terms that are usual and customary for sales of such assets or disposal groups; b) the
company has made the resolution on the disposal plan and must be committed to a plan to sell the asset (or
disposal group); c) the sale is expected to be completed within one year from the date of classification. A disposal
group is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and
liabilities directly associated with those assets that will be transferred in the transaction. The group shall include
goodwill acquired in a business combination if the group is a cash-generating unit to which goodwill has been
allocated in accordance with the requirements of Accounting Standard for Business Enterprises No. 8 –
Impairment of assets.
The company measure a non-current asset or disposal group classified as held for sale at the lower of its carrying
amount and fair value less costs to sell on initial recognition and subsequent remeasuremnt on the balance sheet
date. An impairment loss is recognised when the carrying amount is higher than the fair value less costs to sell,
and allowance for impairment is recognised accordingly. For the disposal group, the recognised impairment loss
on assets is offset against the carrying amount of the goodwill in the disposal group, and then reduced in
proportion of the book value of the non-current assets applicable to "Accounting Standard for Business
Enterprises No. 42 - Non-current Assets Held for Sale, Disposal Group and Discontinued Operations (hereinafter
referred to as "held for sale accounting principle") measurement requirements. The company shall recognise a
gain during the period for any subsequent increase in fair value less costs to sell of an asset, but not in excess of
the cumulative impairment loss that has been recognised after the reclassification to non-current assets held for
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sale. The book value of assets in the disposal group is increased proportionately according to the proportion of the
book value of each non-current asset except for goodwill. Impairment loss recognised before the reclassification
to non-current assets held for sell shall not be recovered.
Non-current asset or non-current asset in the disposal group classified as held for sale is not subject to
depreciation or amortization. The interest and other expenses on liabilities held in the disposal group for sale are
continuously recognised.
Non-current assets or disposal group that no longer meet the conditions of non-current asset held for sell shall be
removed from the category, and shall be measured at the lower of the following: (1) The carrying amount before
classification as held for sale after adjustment of depreciation, amortization or impairment that should be
recognised if it is not classified as non-current assets held for sell; (2) recoverable amount.
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 policies 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 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
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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 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
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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 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
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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 policies 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
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 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
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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 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
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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 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
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would not change in the short term, 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 annual depreciation rate of each fixed assets are as below:
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Expected net salvage
Category of fixed assets Method Useful life (Y) Annual deprecation (%)
value (%)
Average method of
Housing and building 8.00-35.00 3.00-5.00 2.70-12.10
useful life
Average method of
Machinery equipments 5.00-10.00 3.00-5.00 9.50-19.40
useful life
Average method of
4.00 3.00 24.25
Transportation vehicle
useful life
Office equipment and Average method of 3.00 3.00 32.33
useful life
others
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.
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
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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 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
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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:
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”.
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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 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
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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 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.
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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
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
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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 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
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the relevant funds are expected to be able to receive financial support, 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 recognised as deferred income, and evenly amortized to profit or loss
over the useful life of the related assetin a reasonable and systematic manner. 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 recognised as deferred income, and recognised in profit or loss over the periods in which the related costs are
recognised. If the grant is a compensation for related expenses or losses already incurred, the grant is recognised
immediately in profit or loss for the period.
Government subsidies including both assets-related parts and income-related parts should be treated separately. If
it is difficult to seperate, the government subsidiesas a whole will be classified as income-related government
grants.
The government grants related to the daily activities of the Company are included in other income or offset the
related costs according to the essence of the economic business. The government grants unrelated to the daily
activities are included in the non-operating income and expenses.
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, 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.
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(2) Deferred income tax assets and liabilities
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.
(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
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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 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.
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(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 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.
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(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 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
~ 99 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
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 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.
(10) 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
~ 100 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
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%, 11%, and 6% of tax rate to calculate output tax
and according to the balance of the current the deductibility deduct the input tax to
VAT
calculate value added tax. (if the tax obligations is performed after 1 May 2018, the
output tax shall be calculated by the tax rate of 16%, 10%, and 6%)
Sales of wine RMB1 per 1000 ml or per kg 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.
Urban maintenance and construction tax 1, 5, 7% of the actual taxable turnover amount.
Education expenses surcharge 3% of the actual taxable turnover amount.
Local education surcharge 2% of the actual taxable turnover amount.
Enterprise income tax For details, see the table below
Table of income tax rate of different entities:
Name of the entities Income tax rate
Anhui Longrui Glass Co., Ltd 15%
Anhui Ruisiweier Technology Co., Ltd 15%
Bozhou Gujin Rubbish Recycling Co., Ltd 10%
Wuhan Yashibo Technology Co., Ltd 10%
Hubei Hechuanyuan Trade Co., Ltd 10%
Anhui Gujing Distillery Company Limited and its other
25%
subsidiaries
2. Tax Preference and Approval
(1) On 5 December 2016, the company’s subsidiary Anhui Longrui Glass Co., Ltd. was attested to be qualified as
a hi-tech enterprise and obtained Hi-tech Enterprise Certificate (NO.: GR201634001204) which shall be valid in 3
years. Corresponding corporate income tax was also paid at the rate of 15% from January to June in 2018.
(2) On 21 October 2016, the company’s subsidiary Anhui Swisse Will Science & Technology Co., Ltd. was
attested to be qualified as a hi-tech enterprise and obtained Hi-tech Enterprise Certificate (NO.: GR201634000832)
~ 101 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
which shall be valid in 3 years. Corresponding corporate income tax was also paid at the rate of 15% from January
to June in 2018.
(3) According to Notification for extending coverage of preferential income tax policies for small enterprises with
low profits (Financial and taxation (2017) No. 43), published by Ministry of Finance of the People’s Republic of
China and State Administration of Taxation, from 1 January 2017 to 31 December 2019, for small enterprises with
low profits, of which the annual taxable income amount is under RMB0.5 million (including RMB0.5 million),
the income tax deduction shall be 50% of the taxable income amount and the corporate income tax rate shall be
reduced to 20%. For subsidiaries of the Company, BozhouGujing Recycling Co., Ltd, Wuhan Yashibo Technology
Co., Ltd and Hubei Hechuyuan Commercial & Trading Co., Ltd, which satisfy conditions for small enterprises
with low profits, the actual prevailing tax shall be reduced to 10% from January to June in 2018.
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 2018, the closing period was 30 June 2018.
1. Monetary Funds
Item Ending balance Beginning balance
Cash in treasury 364,726.59 369,197.41
Bank deposit 921,933,834.69 1,440,617,397.53
Other monetary funds 45,487,396.13 43,102,031.46
Total 967,785,957.41 1,484,088,626.40
Of which: the total amount deposited in overseas 0.00 0.00
Note: At the end of this period, the amount of RMB45,000,000.00 was restricted for pledge due to the opening of
bank’s acceptance bill among the other monetary fund; there’s no limitation and restriction on the usage and
remittance of funds deposited abroad due to pledge and mortgage etc.
2. Financial Assets at Fair Value through Profit or Loss
Item Ending balance Beginning balance
Trading financial assets 1,057,659.73 99,800.76
Of which: equity tool investment 1,057,659.73 99,800.76
Total 1,057,659.73 99,800.76
3. Notes Receivable
(1) Notes receivable listed by category
Item Ending balance Beginning balance
~ 102 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Ending balance Beginning balance
Bank acceptance bill 1,896,811,744.49 720,611,126.78
Trade acceptance bill 2,000,000.00 0.00
Total 1,898,811,744.49 720,611,126.78
(2) Notes receivable pledged at the period-end
Notes receivable pledged at the period-end was RMB99,930,600.
(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 415,100,060.67 0.00
Total 415,100,060.67 0.00
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
Ending balance
Carrying amount Bad debt provision
Category Carrying
Proport Withdrawal
Amount Amount value
ion (%) proportion (%)
Accounts receivable with significant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 20,644,13 1,151,55 19,492,57
100.00 5.58
characteristics: 2.48 6.41 6.07
Accounts receivable with insignificant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
20,644,13 1,151,55 19,492,57
100.00 5.58
Total 2.48 6.41 6.07
(Continued)
Beginning balance
Category
Carrying amount Bad debt provision Carrying
~ 103 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Proport Withdrawal value
Amount Amount
ion (%) proportion (%)
Accounts receivable with significant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
Accounts receivable withdrawal of bad debt provision of by credit risks 23,800,57 1,334,43 22,466,14
100.00 5.61
characteristics: 6.11 3.05 3.06
Accounts receivable with insignificant single amount for which bad debt
0.00 0.00 0.00 0.00 0.00
provision separately accrued
23,800,57 1,334,43 22,466,14
100.00 5.61
Total 6.11 3.05 3.06
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
Ending balance
Aging Withdrawal proportion
Account receivable Bad debt provision
(%)
Within 1 year 19,477,898.54 273,272.84 1.40
[Of which: within 6 months] 17,515,552.21 175,155.52 1.00
[7-12 months] 1,962,346.33 98,117.32 5.00
1 to 2 years 307,078.19 30,707.82 10.00
2 to 3 years 23,160.00 11,580.00 50.00
Over 3 years 835,995.75 835,995.75 100.00
Total 20,644,132.48 1,151,556.41 5.58
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The reversed amount of the bad debt provision during the Reporting Period was of RMB 182,876.64.
(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 the Ending Balance of the Accounts Receivable Collected According to the Arrears Party
The total amount of top five of account receivable of ending balance collected by arrears party was
RMB7,494,637.60, 36.30% of total closing balance of account receivable, the relevant ending balance of bad debt
provision withdrawn was RMB149,888.77.
5. Prepayment
~ 104 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
(1) List by Aging Analysis
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 79,562,981.71 96.79 40,817,554.03 97.81
1 to 2 years 2,319,508.00 2.82 82,115.23 0.20
2 to 3 years 36,520.00 0.04 828,648.08 1.99
Over 3 years 290,000.00 0.35 1,320.00 0.00
Total 82,209,009.71 100.00 41,729,637.34 100.00
(2) Top Five of the Ending Balance of the Prepayment Collected According to the Prepayment Target
The total amount of top five of account receivable of ending balance collected by arrears party was
RMB42,062,242.90, 51.17% of total ending balance of account receivable.
6. Interest Receivable
Item Ending balance Beginning balance
Interest of certificate of deposit 19,403,178.08 13,883,178.08
Total 19,403,178.08 13,883,178.08
7. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Ending balance
Carrying amount Bad debt provision
Category Propor Carrying
Withdrawal
Amount tion Amount value
proportion (%)
(%)
Other accounts receivable with significant single amount for which bad 40,850,9 40,850,9
74.18 100.00 0.00
debt provision separately accrued 49.35 49.35
Other accounts receivable withdrawn bad debt provision according to 14,220,7 1,338,52 12,882,2
25.82 9.41
credit risks characteristics 57.86 9.27 28.59
Other accounts receivable with insignificant single amount for which
0.00 0.00 0.00 0.00 0.00
bad debt provision separately accrued
55,071,7 42,189,4 12,882,2
Total 100.00 76.61
07.21 78.62 28.59
~ 105 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
(Continued)
Beginning balance
Carrying amount Bad debt provision
Category Carrying
Propor
Withdrawal
Amount tion Amount value
proportion (%)
(%)
Other accounts receivable with significant single amount for which bad 40,850,9 40,850,9
71.04 100.00 0.00
debt provision separately accrued 49.35 49.35
Other accounts receivable withdrawn bad debt provision according to 16,651,3 1,261,29 15,390,1
28.96 7.57
credit risks characteristics 96.91 0.77 06.14
Other accounts receivable with insignificant single amount for which
0.00 0.00 0.00 0.00 0.00
bad debt provision separately accrued
57,502,3 42,112,2 15,390,1
Total 100.00 73.24
46.26 40.12 06.14
①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Ending balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal proportion
Withdrawal reason
receivable provision (%)
29,010,449.35 29,010,449.35 100.00 Enter enterprise bankruptcy
Hengxin Securities Co., Ltd.
liquidation
11,840,500.00 11,840,500.00 100.00 Enter enterprise bankruptcy
Jianqiao Securities Co., Ltd.
liquidation
Total 40,850,949.35 40,850,949.35 100.00 --
②In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 12,128,336.42 204,974.58 1.69
[Of which: within 6 months] 10,036,055.96 100,360.56 1.00
[7-12 months] 2,092,280.46 104,614.02 5.00
1 to 2 years 1,054,178.94 105,417.89 10.00
~ 106 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
2 to 3 years 20,211.41 10,105.71 50.00
Over 3 years 1,018,031.09 1,018,031.09 100.00
Total 14,220,757.86 1,338,529.27 9.41
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawn bad debt provision of Reporting Period was of RMB77,238.50.
(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 Ending carrying amount Beginning carrying amount
Securities investment 40,850,949.35 40,850,949.35
Margin &cash pledge 6,064,299.92 4,593,198.69
Business travel borrowing charges 2,228,900.64 2,088,800.78
Rent and utilities fee 2,330,083.24 6,241,851.35
Others 3,597,474.06 3,727,546.09
Total 55,071,707.21 57,502,346.26
(5) Top 5 of the Ending Balance of the Other Accounts Receivable Collected According to the Arrears Party
Bad debt
Name of the
Nature Ending balance Aging Proportion (%) provision
entity
Ending balance
No.1 Securities investment 2,901,0449.35 Over 3 years 52.68 29,010,449.35
No.2 Securities investment 1,1840,500.00 Over 3 years 21.50 11,840,500.00
No. 3 Cash deposit 500,000.00 Within 6 months 0.91 5,000.00
No. 4 Others 415,000.00 Within 6 months 0.75 4,150.00
No. 5 Prepayment of oil fee 369,185.37 Within 6 months 0.67 3,691.85
Total -- 42,135,134.72 -- 76.51 40,863,791.20
8. Inventory
~ 107 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
(1) Category of Inventory
Ending balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials& package 113,213,102.26 16,779,560.13 96,433,542.13
Homemade semi-finished products and goods in process 1,832,857,138.37 0.00 1,832,857,138.37
Finished product 227,219,100.50 15,923,325.41 211,295,775.09
Total 2,173,289,341.13 32,702,885.54 2,140,586,455.59
(Continued)
Beginning balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials& package 132,151,695.59 17,029,623.45 115,122,072.14
Homemade semi-finished products and goods in process 1,705,396,599.74 0.00 1,705,396,599.74
Finished product 258,007,338.23 14,395,712.60 243,611,625.63
Total 2,095,555,633.56 31,425,336.05 2,064,130,297.51
(2) Falling Price Reserves of Inventory
Increase Decrease
Item Beginning balance Ending balance
Withdrawal Others Reverse or write-off Others
Raw materials&
17,029,623.45 0.00 0.00 250,063.32 0.00
package 16,779,560.13
Finished product 14,395,712.60 1,527,612.81 0.00 0.00 0.00 15,923,325.41
Total 31,425,336.05 1,527,612.81 0.00 250,063.32 0.00 32,702,885.54
(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 revers
al
Raw materials& The realizable net value was lower The raw material withdrawn impairment disposed in
~ 108 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Reaso
Specific basis of withdrawal of falling ns for
Item Reasons for write-off
price reserves of inventory revers
al
package than the cost Reporting Period
The realizable net value was lower The raw material withdrawn impairment disposed in
Finished product
than the cost Reporting Period
9. Other Current Assets
Item Ending balance Beginning balance
Financial products 2,100,110,858.42 1,741,000,000.00
Tax to be deducted 66,930,195.24 31,310,946.58
Total 2,167,041,053.66 1,772,310,946.58
10. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Available-for-sale equity instruments 267,197,036.68 0.00 267,197,036.68 517,086,347.91 0.00 517,086,347.91
Of which: measured at fair value 267,197,036.68 0.00 267,197,036.68 517,086,347.91 0.00 517,086,347.91
Measured by cost 0.00 0.00 0.00 0.00 0.00 0.00
Total 267,197,036.68 0.00 267,197,036.68 517,086,347.91 0.00 517,086,347.91
(2) Available-for-sale Financial Assets at Fair Value at the Period-end
Available-for-sale Available-for-sale
Category Total
equity instruments debt instruments
Cost of the equity instruments/amortized cost of the liabilities
255,972,300.88 0.00 255,972,300.88
instruments
Fair value 267,197,036.68 0.00 267,197,036.68
Changed amount of the fair value accumulatively included in
11,224,735.80 0.00 11,224,735.80
other comprehensive income
Withdrawn impairment amount 0.00 0.00 0.00
11. Investment Property
~ 109 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Houses and buildings Land use right Total
I. Original carrying value
1. Beginning balance 8,680,555.75 2,644,592.00 11,325,147.75
2. Increased amount of the period 0.00 0.00 0.00
3. Decreased amount of the period 146,888.55 0.00 146,888.55
(1) Disposal 146,888.55 0.00 146,888.55
(2) Other transfer 0.00 0.00 0.00
4. Ending balance 8,533,667.20 2,644,592.00 11,178,259.20
II. Accumulative depreciation and accumulative amortization
1. Beginning balance 5,393,723.68 587,646.74 5,981,370.42
2. Increased amount of the period 140,899.80 28,013.28 168,913.08
Withdrawal or amortization 140,899.80 28,013.28 168,913.08
3. Decreased amount of the period 27,093.97 0.00 27,093.97
(1) Disposal 27,093.97 0.00 27,093.97
(2) Other transfer 0.00 0.00 0.00
4. Ending balance 5,507,529.51 615,660.02 6,123,189.53
III. Depreciation reserves
1. Beginning balance 0.00 0.00 0.00
2. Increased amount of the period 0.00 0.00 0.00
Withdrawing 0.00 0.00 0.00
3. Decreased amount of the period 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00
(2) Other transfer 0.00 0.00 0.00
4. Ending balance 0.00 0.00 0.00
IV. Carrying value
1. Ending carrying value 3,026,137.69 2,028,931.98 5,055,069.67
2. Beginning carrying value 3,286,832.07 2,056,945.26 5,343,777.33
12. Fixed Assets
~ 110 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
(1) List of Fixed Assets
Houses and Machinery Transportation Office equipment
Item Total
buildings equipment equipment and other
I. Original carrying value
1,994,106,003.8 3,063,204,43
1. Beginning balance 885,870,116.23 63,990,533.99 119,237,780.37
0 4.39
2. Increased amount of the 32,015,986.6
2,700,436.19 8,303,581.15 1,351,123.42 19,660,845.87
period
3
(1) Purchase 0.00 3,769,485.95 1,351,123.42 1,799,553.67 6,920,163.04
(2) Transfer of project under 24,948,935.0
2,553,547.64 4,534,095.20 0.00 17,861,292.20
construction
4
(3) Taking back of rental
146,888.55 0.00 0.00 0.00 146,888.55
housing
3. Decreased amount of the 68,766,915.2
23,309,796.95 26,063,847.16 3,950,265.71 15,443,005.41
period
3
62,852,321.8
(1) Disposal or Scrap 17,395,203.59 26,063,847.16 3,950,265.71 15,443,005.41
7
(2) Other decrease 5,914,593.36 0.00 0.00 0.00 5,914,593.36
1,973,496,643.0 3,026,453,50
4. Ending balance 868,109,850.22 61,391,391.70 123,455,620.83
4 5.79
II. Accumulative depreciation
1,254,602,69
1. Beginning balance 673,130,286.33 441,060,956.92 50,053,304.86 90,358,146.27
4.38
2. Increased amount of the 96,547,862.9
35,933,032.13 46,846,937.31 2,726,849.95 11,041,043.53
period
2
96,520,768.9
(1) Withdrawal 35,905,938.16 46,846,937.31 2,726,849.95 11,041,043.53
5
(2) Taking back of rental
27,093.97 0.00 0.00 0.00 27,093.97
housing
3. Decreased amount of the 46,647,411.9
13,625,432.00 16,424,122.62 3,782,097.06 12,815,760.29
period
7
(1) Disposal or Scrap 13,625,432.00 16,424,122.62 3,782,097.06 12,815,760.29 46,647,411.9
~ 111 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Houses and Machinery Transportation Office equipment
Item Total
buildings equipment equipment and other
7
1,304,503,14
4. Ending balance 695,437,886.46 471,483,771.61 48,998,057.75 88,583,429.51
5.33
III. Depreciation reserves
16,347,561.4
1. Beginning balance 7,061,980.08 8,691,493.68 7,047.07 587,040.62
5
2. Increased amount of the
0.00 0.00 0.00 0.00 0.00
period
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decreased amount of the 11,441,101.6
3,665,687.29 7,775,414.38 0.00 0.00
period
7
11,441,101.6
(1) Disposal or Scrap 3,665,687.29 7,775,414.38 0.00 0.00
7
4. Ending balance 3,396,292.79 916,079.30 7,047.07 587,040.62 4,906,459.78
IV. Carrying value
1,274,662,463.7 1,717,043,90
1. Ending carrying value 395,709,999.31 12,386,286.88 34,285,150.70
9 0.68
1,313,913,737.3 1,792,254,17
2. Beginning carrying value 436,117,665.63 13,930,182.06 28,292,593.48
9 8.56
(2) List of Temporarily Idle Fixed Assets
Original carrying Accumulative Impairment
Item Carrying value Notes
value depreciation provision
Houses and buildings 10,740,209.84 7,238,483.71 3,396,292.79 105,433.34
Machinery equipment 8,203,103.85 7,235,401.18 916,079.30 51,623.37
Transportation equipment 58,119.66 49,329.00 7,047.07 1,743.59
Office equipment and others 900,605.02 286,559.74 587,040.62 27,004.66
Total 19,902,038.37 14,809,773.63 4,906,459.78 185,804.96
(3) Details of Fixed Assets Failed to Accomplish Certification of Property
Item Carrying value Reason
~ 112 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Carrying value Reason
Houses and building 797,896,268.71 In process
Total 797,896,268.71 --
13. Construction in Progress
(1) List of Construction in Progress
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
5,272,286. 5,272,286
Operation network of Gujing 0.00 0.00 0.00 0.00
37 .37
Renovation project of potential safety 3,486,657. 3,486,657 20,643,371 20,643,37
0.00 0.00
concerns
81 .81 .11 1.11
1,876,678. 1,876,678 1,876,678. 1,876,678
Phase II of CRM project 0.00 0.00
16 .16 16 .16
Renovation of rain sewage pipe network 8,529,729. 8,529,729 8,529,729. 8,529,729
0.00 0.00
outside the factory
73 .73 73 .73
1,025,641. 1,025,641
Phase II of BPM project 0.00 0.00 0.00 0.00
03 .03
878,152.1 878,152.1
Exhibition center of Bengbu products 878,152.15 0.00 878,152.15 0.00
5 5
895,690.2
Hangzhou experience pavilion 895,690.29 0.00 99,622.64 0.00 99,622.64
9
113,207.5
Tianjin experience pavilion 0.00 0.00 0.00 113,207.55 0.00
5
Technical improvement project of 8,374,584. 8,374,584 113,207.5
0.00 113,207.55 0.00
automation of brewing
66 .66 5
28,060,455 28,060,45 1,127,033. 1,127,033
Half open wine library in Gujing plant 0.00 0.00
.11 5.11 31 .31
Renovation project of deep disposal of 3,634,231. 3,634,231 3,634,231. 3,634,231
0.00 0.00
sewagedisposal station
28 .28 28 .28
~ 113 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Yellow Crane Tower Chateau and 2,726,775. 2,726,775
0.00 0.00 0.00 0.00
museum
89 .89
1,096,197. 1,096,197
Equipment installation project 0.00 0.00 0.00 0.00
71 .71
14,531,206 14,531,20 7,360,664. 7,360,664
Other projects with small single amount 0.00 0.00
.65 6.65 08 .08
1,162,393. 1,162,393
Crushing plant production line of Wuliang 0.00 0.00 0.00 0.00
16 .16
Renovation project of Zhangji sewage for 1,867,356. 1,867,356
0.00 0.00 0.00 0.00
upgrading
20 .20
668,437.0
35KV electric power project 668,437.01 0.00 0.00 0.00 0.00
1
1,521,295. 1,521,295
Project of Anhui in Shanghai office 0.00 0.00 0.00 0.00
56 .56
Renovation project of monitoring 589,185.4
589,185.45 0.00 0.00 0.00 0.00
upgrading
5
76,076,053 76,076,05 54,496,798 54,496,79
Total 0.00 0.00
.22 3.22 .56 8.56
(2) Changes of Significant Construction in Progress
Amount that Other
Estimated Beginning Increase transferred to decreased Ending
Name o f item
number balance Amount fixed assets of amount of the balance
the period period
Operation network of
8,350,000.00 5,272,286.37 942,121.54 0.00 6,214,407.91 0.00
Gujing
Renovation project of
potential safety 180,107,600.00 20,643,371.11 350,137.01 17,506,850.31 0.00 3,486,657.81
concerns
Phase II of CRM 2,300,000.00 1,876,678.16 0.00 0.00 0.00 1,876,678.16
~ 114 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
project
Renovation of rain
sewage pipe network 10,520,000.00 8,529,729.73 0.00 0.00 0.00 8,529,729.73
outside the factory
Phase II of BPM
2,600,000.00 1,025,641.03 683,760.68 0.00 1,709,401.71 0.00
project
Exhibition center of
2,100,000.00 878,152.15 0.00 0.00 0.00 878,152.15
Bengbu products
Hangzhou Experience
7,000,000.00 99,622.64 796,067.65 0.00 0.00 895,690.29
Center
Tianjin Experience
5,600,000.00 113,207.55 2,170,915.12 0.00 2,284,122.67 0.00
Center
Technical
improvement project
274,300,000.00 113,207.55 8,261,377.11 0.00 0.00 8,374,584.66
of automation of
brewing
Half open wine
library in Gujing 109,916,500.00 1,127,033.31 26,933,421.80 0.00 0.00 28,060,455.11
plant
Renovation project of
deep disposal of
8,500,000.00 3,634,231.28 0.00 0.00 0.00 3,634,231.28
sewagedisposal
station
Yellow Crane Tower
26,000,000.00 2,726,775.89 0.00 0.00 2,726,775.89 0.00
Chateau and museum
Equipment
3,400,000.00 1,096,197.71 838,290.60 1,934,488.31 0.00 0.00
installation project
Other projects with
69,885,610.00 7,360,664.08 13,127,144.67 5,507,596.42 449,005.68 14,531,206.65
small single amount
Crushing plant
production line of 13,411,600.00 0.00 1,162,393.16 0.00 0.00 1,162,393.16
Wuliang
Renovation project of
Zhangji sewage for 8,000,000.00 0.00 1,867,356.20 0.00 0.00 1,867,356.20
upgrading
35KV electric power
1,252,920.43 0.00 668,437.01 0.00 0.00 668,437.01
project
Project of Anhui in
8,000,000.00 0.00 1,521,295.56 0.00 0.00 1,521,295.56
Shanghai office
~ 115 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Renovation project of
25,000,000.00 0.00 589,185.45 0.00 0.00 589,185.45
monitoring upgrading
Total 766,244,230.43 54,496,798.56 59,911,903.56 24,948,935.04 13,383,713.86 76,076,053.22
(Continued)
Of which:
Proportion Capitalization
Accumulative the amount
estimated of Project rate of the
amount of of the Capital
Project name the project Progress interests of
capitalized capitalized resources
accumulative (%) the period
interests interests of
input (%) (%)
the period
Self-owned
Operation network of Gujing 74.42 100.00
fund
Renovation project of potential safety Self-owned
72.19 95.00
concerns fund
Self-owned
Phase II of CRM project 81.59 97.00
fund
Renovation of rain sewage pipe Self-owned
81.08 95.00
network outside the factory fund
Self-owned
Phase II of BPM project 65.75 100.00
fund
Self-owned
Exhibition center of Bengbu products 41.82 90.00
fund
Self-owned
Hangzhou Experience Center 12.80 90.00
fund
Self-owned
Tianjin Experience Center 40.79 100.00
fund
Technical improvement project of Self-owned
3.05 5.00
automation of brewing fund
Self-owned
Half open wine library in Gujing plant 27.82 70.00
fund
Renovation project of deep disposal of Self-owned
42.76 95.00
sewagedisposal station fund
Yellow Crane Tower Chateau and Self-owned
57.69 100.00
museum fund
Self-owned
Equipment installation project 56.90 50.00
fund
Other projects with small single 29.32 50.00 Self-owned
~ 116 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Of which:
Proportion Capitalization
Accumulative the amount
estimated of Project rate of the
amount of of the Capital
Project name the project Progress interests of
capitalized capitalized resources
accumulative (%) the period
interests interests of
input (%) (%)
the period
fund
amount
Crushing plant production line of Self-owned
8.67 10.00
Wuliang fund
Renovation project of Zhangji sewage Self-owned
23.34 30.00
for upgrading fund
Self-owned
35KV electric power project 53.35 60.00
fund
Self-owned
Project of Anhui in Shanghai office 19.02 80.00
fund
Renovation project of monitoring Self-owned
2.36 10.00
upgrading fund
Total --
14. Intangible Assets
Item Land use right Patent right Software Trademark Total
I. Original carrying
value
1. Beginning balance 628,279,302.56 45,889,466.19 16,616,834.45 169,116,600.00 859,902,203.20
2. Increased amount of
55,254,656.00 0.00 9,215,354.37 0.00 64,470,010.37
the period
(1) Purchase 55,254,656.00 0.00 1,250,519.12 0.00 56,505,175.12
(2) Internal R & D 0.00 0.00 0.00 0.00 0.00
(3) Transfer of
construction in 0.00 0.00 7,964,835.25 0.00 7,964,835.25
progress
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
~ 117 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Land use right Patent right Software Trademark Total
4. Ending balance 683,533,958.56 45,889,466.19 25,832,188.82 169,116,600.00 924,372,213.57
II. Accumulated
amortization
1. Beginning balance 115,286,620.37 45,721,513.97 7,162,253.07 350,373.12 168,520,760.53
2. Increased amount of
6,916,352.72 24,038.88 1,548,668.39 0.00 8,489,059.99
the period
(1) Withdrawal 6,916,352.72 24,038.88 1,548,668.39 0.00 8,489,059.99
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Ending balance 122,202,973.09 45,745,552.85 8,710,921.46 350,373.12 177,009,820.52
III. Depreciation
reserves
1. Beginning balance 0.00 0.00 0.00 0.00 0.00
2. Increased amount of
0.00 0.00 0.00 0.00 0.00
the period
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decreased amount
0.00 0.00 0.00 0.00 0.00
of the period
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Ending balance 0.00 0.00 0.00 0.00 0.00
IV. Carrying value
1. Ending carrying
561,330,985.47 143,913.34 17,121,267.36 168,766,226.88 747,362,393.05
value
2. Beginning carrying
512,992,682.19 167,952.22 9,454,581.38 168,766,226.88 691,381,442.67
value
15. Goodwill
Item Beginning balance Increase Decrease Ending balance
~ 118 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Generated from
enterprise Other disposal Disposal
merger
Yellow Crane Tower Distillery Co., Ltd. 478,283,495.29 0.00 0.00 0.00 0.00 478,283,495.29
Total 478,283,495.29 0.00 0.00 0.00 0.00 478,283,495.29
16. Long-term Unamortized Expenses
Other
Beginning Increased Amortization Other Ending
Item reasons for
balance amount amount decrease balance
decrease
Yeast house & yeast frame
293,193.37 0.00 293,193.37 0.00 0.00
project
Reform on highly qualified
0.00 0.00 0.00 0.00 0.00
base liquid project
Wine warehouse goods shelf 281,780.60 0.00 281,780.60 0.00 0.00
Specialty store decoration
0.00 0.00 0.00 0.00 0.00
engineering
Beijing experience centre
17,095,147.21 0.00 1,221,548.10 0.00 15,873,599.11
decoration
The relocation compensation
8,625,000.00 0.00 750,000.00 0.00 7,875,000.00
of Beijing experience center
Pottery jar warehouse 10,652,526.78 0.00 2,203,971.00 0.00 8,448,555.78
Decoration project of wine
179,544.67 0.00 179,544.67 0.00 0.00
culture museum
Sewage Treatment Project 3,650,000.00 0.00 300,000.00 0.00 3,350,000.00
Afforestation fees 241,885.66 0.00 121,885.18 0.00 120,000.48
Renovation of potential
805,933.61 0.00 805,933.61 0.00 0.00
safety concerns
Shenzhen experience centre 3,552,763.50 134,384.47 676,097.56 0.00 3,011,050.41
Others 3,671,221.27 29,203.60 494,317.69 0.00 3,206,107.18
Landscape renovation of
1,963,083.52 0.00 512,108.76 0.00 1,450,974.76
Zuimei Chateau
Zhengzhou Experience
4,174,238.80 0.00 263,636.16 0.00 3,910,602.64
Center
~ 119 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Other
Beginning Increased Amortization Other Ending
Item reasons for
balance amount amount decrease balance
decrease
Shanghai Experience Center 2,412,303.20 0.00 629,296.50 0.00 1,783,006.70
Hefei Experience Center 1,945,119.27 0.00 466,828.62 0.00 1,478,290.65
Renovation project of plant
1,025,154.32 0.00 246,037.02 0.00 779,117.30
of fruit and vegetable wine
Kitchen renovation of
651,423.70 0.00 55,049.82 0.00 596,373.88
Beijing Experience Center
Decoration project of Beijing
Product Display and 450,450.45 18,078.94 46,852.98 0.00 421,676.41
Reception Center
Decoration of Dingyuan pub 0.00 407,980.05 45,331.12 0.00 362,648.93
Decoration of Tianjin
0.00 2,284,122.67 76,137.42 0.00 2,207,985.25
EcperienceCenter
Decoration project of Yellow
7,567,753.85 12,933,525.46 1,174,692.46 0.00 19,326,586.85
Crane Tower Chateau
Total 69,238,523.78 15,807,295.19 10,844,242.64 0.00 74,201,576.33
17. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) List of Deferred Income Tax Assets
Ending balance Beginning balance
Item Deductible temporary Deductible temporary Deferred income tax
Deferred income tax assets
Differences Differences assets
Bad debt provision 43,341,035.03 10,835,258.76 43,446,673.17 10,853,076.08
Impairment of inventories 32,676,185.64 8,169,046.41 31,398,636.15 7,804,115.47
Impairment provision of the
fixed assets 4,906,459.78 1,226,614.95 16,319,563.99 4,079,686.68
Deferred income 41,140,119.46 10,285,029.86 43,706,503.22 10,614,699.02
Accrued expenses 751,867,337.27 187,966,834.32 170,866,990.79 42,716,747.69
Deductible losses 9,959,599.85 2,489,899.96 36,422,859.63 9,100,740.51
Unrealized internal salesprofits 11,070,788.80 2,767,697.20 8,947,215.47 2,236,803.87
Deducted payroll payable 0.00 0.00 19,804,188.04 4,751,608.42
~ 120 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
carryingforward to the next
period
Total 894,961,525.83 223,740,381.46 370,912,630.46 92,157,477.74
(2) Lists of Deferred Income Tax Liabilities
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Change of fair value of trading financial
281,087.04 70,271.76 44,379.27 11,094.82
assets
Change in fair value of available-for-sale
11,224,735.80 2,806,183.95 71,361,103.28 17,840,275.82
financial assets
Additional deduction of difference of fixed
12,915,766.17 3,228,941.54 7,851,477.60 1,962,869.40
assets
Asset evaluation increment of business
395,728,044.05 98,932,011.01 399,859,463.44 99,964,865.86
combination not under the same control
Total 420,149,633.06 105,037,408.26 479,116,423.59 119,779,105.90
(3) List of Unrecognized Deferred Income Tax Assets
Item Ending balance Beginning balance
Deductible temporary difference 26,699.90 54,697.36
Deductible losses 4,729,929.29 4,331,653.92
Total 4,756,629.19 4,386,351.28
18. Other Non-current Assets
Item Ending balance Beginning balance
Certificate of deposit 300,000,000.00 300,000,000.00
Prepayment of equipment and house
12,474,025.99 17,910,214.56
purchase
Total 312,474,025.99 317,910,214.56
19. Notes Payable
Category Ending balance Beginning balance
Bank acceptance bill 141,790,230.00 200,750,000.00
Trade acceptance 46,282,864.09 0.00
~ 121 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Category Ending balance Beginning balance
Total 188,073,094.09 200,750,000.00
20. Accounts Payable
(1) List of Accounts Payable
Item Ending balance Beginning balance
Payment for materials 180,724,444.02 260,407,500.55
Prepayment for projects and equipment 57,035,111.24 89,176,879.87
Others 54,842,512.43 86,030,659.41
Total 292,602,067.69 435,615,039.83
(2) Significant Accounts Payable Aging over One Year
Item Ending balance Unpaid/ Un-carry-over reason
A Company 2,252,093.02 Final payment of the project
B Company 1,090,000.00 Final payment of the project
C Company 769,163.75 Final payment of the project
D Company 577,691.84 Final payment of the project
E Company 393,392.70 Final payment of the project
Total 5,082,341.31 --
21. Advance from Customers
Item Ending balance Beginning balance
Loans 803,222,097.92 503,083,108.13
Total 803,222,097.92 503,083,108.13
22. Payroll Payable
(1) List of Payroll Payable
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 371,459,202.44 612,262,256.05 734,646,283.48 249,075,175.01
II. Post-employment benefit-defined
914,811.93 60,856,284.57 60,886,100.79 884,995.71
contribution plans
III. Termination benefits 0.00 0.00 0.00 0.00
IV. Other benefits due within one 0.00 0.00 0.00 0.00
~ 122 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
year
Total 372,374,014.37 673,118,540.62 795,532,384.27 249,960,170.72
(2) List of Short-term Salary
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus, allowance, subsidy 298,131,004.17 540,715,242.30 670,816,860.60 168,029,385.87
2. Employee welfare 3,692,980.00 5,249,944.98 8,942,924.98 0.00
3. Social insurance 236,208.08 23,336,040.33 23,332,954.33 239,294.08
Of which: 1. Medical insurance
196,904.35 20,334,551.37 20,331,465.37 199,990.35
premiums
Work-related injury insurance 20,069.87 1,243,369.69 1,243,369.69 20,069.87
Maternity insurance 19,233.86 1,758,119.27 1,758,119.27 19,233.86
4. Housing fund 9,051,999.88 24,981,359.37 24,018,883.07 10,014,476.18
5. Labor union budget and employee
60,347,010.31 17,979,669.07 7,534,660.50 70,792,018.88
education budget
6. short-term paid absence 0.00 0.00 0.00 0.00
7. Short-term profits sharing plan 0.00 0.00 0.00 0.00
Total 371,459,202.44 612,262,256.05 734,646,283.48 249,075,175.01
(3) List of Drawing Scheme
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 867,739.31 58,763,572.31 58,793,391.53 837,920.09
2. Unemployment insurance 47,072.62 2,092,712.26 2,092,709.26 47,075.62
Total 914,811.93 60,856,284.57 60,886,100.79 884,995.71
23. Taxes Payable
Item Ending balance Beginning balance
VAT 18,061,149.68 78,832,243.10
Consumption tax 19,628,722.12 210,532,348.09
Corporate income tax 333,472,335.50 92,299,563.98
Personal income tax 6,210,976.43 3,949,866.64
~ 123 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Ending balance Beginning balance
Urban maintenance and construction tax 12,851,793.29 11,904,195.78
Stamp tax 661,823.10 486,594.48
Education Surcharge 11,943,990.42 11,127,386.19
Others 11,107,919.90 11,852,647.19
Total 413,938,710.44 420,984,845.45
24. Other Accounts Payable
Nature Ending balance Beginning balance
Margin &cash pledge 934,758,741.09 874,462,125.60
Quality guarantee deposit 42,694,470.42 12,061,326.71
Housing deduction 10,014,476.18 9,051,999.88
Unsettled sales discount 36,395,275.05 54,471,463.99
Others 80,123,743.71 82,496,637.16
Total 1,103,986,706.45 1,032,543,553.34
25. Other Current Liabilities
Item Ending balance Beginning balance
Accrued expenses 804,829,022.62 182,846,942.10
Total 804,829,022.62 182,846,942.10
26. Deferred Revenue
Item Beginning balance Increase Decrease Ending balance Formed reason
Government subsidies 43,706,503.22 0.00 2,566,383.76 41,140,119.46 Related to assets
Total 43,706,503.22 0.00 2,566,383.76 41,140,119.46 --
Of which, items involved in government subsidies:
Decrease Related
Beginning Recorded into Recorded Ending to
Item Increase Offset Other
balance non-operating into other balance assets/
costs decrease
income
revenue income
Technical reform Related
317,708.39 0.00 0.00 31,249.98 0.00 0.00 286,458.41
to the
of wine
~ 124 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Decrease Related
Beginning Recorded into Recorded Ending to
Item Increase Offset Other
balance non-operating into other balance assets/
costs decrease
income
revenue income
assets
production
system
Related
Instruments
1,212,750.00 0.00 0.00 110,250.00 0.00 0.00 1,102,500.00 to the
subsidies assets
Intelligent solid
brewing Related
technology 182,291.61 0.00 0.00 15,625.02 0.00 0.00 166,666.59 to the
assets
innovation
project
Anhui service
Related
industry
1,380,487.88 0.00 0.00 146,341.44 0.00 0.00 1,234,146.44 to the
development assets
guide fund
Anhui innovative
province
construction Related
independent 3,409,210.00 0.00 0.00 365,272.50 0.00 0.00 3,043,937.50 to the
assets
innovation ability
construction
subsidy
Energy-saving
and reform
Related
project of
165,750.00 0.00 0.00 76,500.00 0.00 0.00 89,250.00 to the
coal-fired assets
industry boiler
and glass furnace
Related
Bozhou city
120,000.00 0.00 0.00 30,000.00 0.00 0.00 90,000.00 to the
logistics center assets
~ 125 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Decrease Related
Beginning Recorded into Recorded Ending to
Item Increase Offset Other
balance non-operating into other balance assets/
costs decrease
income
revenue income
project
Related
Equipment
865,168.63 0.00 0.00 71,769.86 0.00 0.00 793,398.77 to the
subsidy assets
Financial subsidy Related
for energy-saving 465,956.93 0.00 0.00 265,811.76 0.00 0.00 200,145.17 to the
assets
project
Financial subsidy Related
for technology 950,152.42 0.00 0.00 267,110.76 0.00 0.00 683,041.66 to the
assets
innovation
Special fund to
enterprise Related
development 82,500.00 0.00 0.00 15,000.00 0.00 0.00 67,500.00 to the
assets
directed by
municipal finance
Related
Iot traceability
4,083,750.00 0.00 0.00 556,875.00 0.00 0.00 3,526,875.00 to the
system project assets
Related
Land refund 23,663,240.29 0.00 0.00 275,103.09 0.00 0.00 23,388,137.20 to the
assets
Motor and boiler Related
energy-saving 550,000.16 0.00 0.00 68,749.98 0.00 0.00 481,250.18 to the
assets
reform project
Automated
Related
storage hook and
453,125.00 0.00 0.00 46,875.00 0.00 0.00 406,250.00 to the
product quality assets
online monitoring
Research fund on Related
563,400.00 0.00 0.00 0.00 0.00 0.00 563,400.00
to the
smart
~ 126 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Decrease Related
Beginning Recorded into Recorded Ending to
Item Increase Offset Other
balance non-operating into other balance assets/
costs decrease
income
revenue income
assets
Koji-making
technology
Renovation of Related
Gujing Zhangji 930,208.35 0.00 0.00 23,749.98 0.00 0.00 906,458.37 to the
assets
Spirit Room
Key technical
cooperation on Related
isotopic 480,000.00 0.00 0.00 0.00 0.00 0.00 480,000.00 to the
assets
authenticity of
important food
Food security Related
enhancement 965,517.25 0.00 0.00 68,965.50 0.00 0.00 896,551.75 to the
assets
project
Comprehensive
Related
subsidies for air
2,865,286.31 0.00 0.00 131,133.89 0.00 0.00 2,734,152.42 to the
pollution
assets
prevention
Total 43,706,503.22 0.00 0.00 2,566,383.76 0.00 0.00 41,140,119.46
27. Share Capital
Increase/decrease in Reporting Period (+,-)
Item Beginning balance Newly Bonus Bonus issue Ending balance
Others Subtotal
issue share shares from profit
The sum of shares 503,600,000.00 0.00 0.00 0.00 0.00 0.00 503,600,000.00
28. Capital Reserves
Item Beginning balance Increase Decrease Ending balance
Capital premium 1,262,552,456.05 0.00 0.00 1,262,552,456.05
Other capital reserves 32,853,136.20 0.00 0.00 32,853,136.20
Total 1,295,405,592.25 0.00 0.00 1,295,405,592.25
~ 127 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
29. Other Comprehensive Income
Reporting Period
Less: recorded
in other
comprehensive
Attributable to
Beginning income in Attributable to Ending
Income before owners of the
Item prior period Less: Income non-controlling
balance taxation in the Company as balance
and transferred tax expense interests after
Current Period the parent after
in profit or tax
tax
loss in the
Current
Period
I. Other
comprehensive
income cannot be
0.00 0.00 0.00 0.00 0.00 0.00 0.00
reclassified into
profits and losses
in future
II. Other
comprehensive
53,520,827.44 -41,442,155.53 14,020,658.94 -10,360,538.89 -45,102,275.58 0.00 8,418,551.86
reclassified into
profits or losses
Of which: profits
or losses of
change in fair
53,520,827.44 -41,442,155.53 14,020,658.94 -10,360,538.89 -45,102,275.58 0.00 8,418,551.86
value of
available-for-sale
financial assets
Total 53,520,827.44 -41,442,155.53 14,020,658.94 -10,360,538.89 -45,102,275.58 0.00 8,418,551.86
30. Surplus Reserves
Item Beginning balance Increase Decrease Ending 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.
31. Retained Profits
~ 128 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Item Reporting Period
year
Beginning balance of retained profits before adjustments 4,349,649,698.42 3,503,069,053.49
Total beginning balance of retained profits before adjustments (Increase+, decrease-) 0.00 0.00
Beginning balance of retained profits after adjustments 4,349,649,698.42 3,503,069,053.49
Add: Net profit attributable to owners of the Company 892,422,337.64 1,148,740,644.93
Less: Withdrawal of statutory surplus reserves 0.00 0.00
Withdrawal of discretional surplus reserves 0.00 0.00
Withdrawal of generic risk reserve 0.00 0.00
Dividend of common stock payable 503,600,000.00 302,160,000.00
Dividend of common stock transfer into share capital 0.00 0.00
Ending retained profits 4,738,472,036.06 4,349,649,698.42
32. Operating Revenues and Costs
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 4,761,127,411.98 1,030,168,914.20 3,640,782,146.34 891,178,513.56
Other operations 21,956,483.35 12,506,554.04 29,345,618.25 22,000,685.35
Total 4,783,083,895.33 1,042,675,468.24 3,670,127,764.59 913,179,198.91
33. Business Taxes and Surcharges
Item Reporting Period Same period of last year
Consumption tax 563,325,650.24 477,359,578.63
Urban maintenance, construction tax and educational surcharge 142,213,013.80 107,125,009.74
Urban land use tax 6,015,282.37 6,268,387.32
Real estate tax 8,375,687.33 8,038,252.32
Stamp duty 3,804,040.42 3,894,182.32
Others 5,733,499.37 3,445,944.18
Total 729,467,173.53 606,131,354.51
Notes: the measurement standards of business tax and surcharges see Notes V. Taxation
34. Sales Expenses
~ 129 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Reporting Period Same period of last year
Employee’s remuneration
136,422,226.05 123,985,954.16
Business travel charges
46,668,654.04 47,121,726.34
Advertising expense
340,669,501.89 185,979,223.96
Transport fees
26,869,004.77 23,693,930.48
Promotion fees 661,443,573.05 556,575,629.94
Sample wine
153,728,608.24 113,260,666.41
Labor cost
194,269,250.64 157,857,846.03
Other sales expenses
37,229,496.49 41,213,783.81
Total 1,597,300,315.17 1,249,688,761.13
35. Administration Expenses
Item Reporting Period Same period of last year
Employee’s remuneration
156,429,758.02 138,467,339.94
Office expenses
15,386,308.57 6,842,426.24
Repair charge
30,444,032.33 29,106,759.72
Depreciation charge
29,064,059.09 28,961,402.74
Amortization of intangible assets
8,489,059.99 7,794,696.58
Sewage charge
6,066,176.72 11,408,909.28
Business travel charges
1,093,709.89 847,155.37
Water & electricity fees
5,668,025.21 5,009,938.09
Others
27,859,207.90 34,983,067.47
Total 280,500,337.72 263,421,695.43
36. Financial Expenses
Item Reporting Period Same period of last year
Interest expenses 0.00 0.00
Less: Interest income 21,644,883.48 17,954,811.63
Exchange gains and losses 608,331.71 409,322.34
Others 751,645.22 280,846.64
~ 130 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Reporting Period Same period of last year
Total -20,284,906.55 -17,264,642.65
37. Asset Impairment Loss
Item Reporting Period Same period of last year
Bad debt loss -105,638.14 -260,798.74
Inventory falling price loss 1,277,549.50 -2,023,855.12
Total 1,171,911.36 -2,284,653.86
38. Gain on Changes in Fair Value
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss 236,707.77 -119,656.35
Of which: gains on changes in fair value of derivative financial assets 0.00 0.00
Total 236,707.77 -119,656.35
39. Investment Income
Same Period of last
Item Reporting Period
year
Investment income from disposal of financial assets at fair value through profit or loss 1,271,471.00 2,329,585.99
Investment income from holding of available-for-dale financial assets 50,743,630.89 22,622,635.21
Investment income from disposal of available-for-sale financial assets 10,999,123.54 49,254,878.84
Other 5,760,794.52 6,810,384.43
Total 68,775,019.95 81,017,484.47
40. Asset Disposal Income
Same Period of
Item Reporting Period Amount recorded in the current non-recurring profit or loss
last year
Fixed assets disposal income 154,437.81 487,886.67 154,437.81
Total 154,437.81 487,886.67 154,437.81
41. Other Income
Same
Reporting Amount recorded in the current non-recurring
Item Period of
Period
last year profit or loss
Government subsidy related to routine business 23,716,926.
4,487,036.05 4,487,036.05
activities 49
~ 131 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same
Reporting Amount recorded in the current non-recurring
Item Period of
Period
last year profit or loss
23,716,926.
Total 4,487,036.05 4,487,036.05
49
42. Non-operating Income
Amount recorded in the
Same Period of last
Item Reporting Period current non-recurring
year
profit or loss
Gains from damage or scrap of non-current assets 728,876.14 0.00 728,876.14
Government subsidy unrelated to routine business
221,000.00 600,000.00 221,000.00
activities
Income from penalty and compensations 7,587,991.61 7,861,891.12 7,587,991.61
Sales of scrap 5,808,369.37 3,475,474.77 5,808,369.37
Other 412,560.64 3,024,423.78 412,560.64
Total 14,758,797.76 14,961,789.67 14,758,797.76
43. Non-operating Expense
Amount recorded in the
Item Reporting Period Same Period of last year current non-recurring profit
or loss
Losses on damage or scrap of non-current assets 4,303,286.91 1,193,100.98 4,303,286.91
Other 134,726.13 995,921.03 134,726.13
Total 4,438,013.04 2,189,022.01 4,438,013.04
44. Income Tax Expense
(1) List of Income Tax Expense
Item Reporting Period Same Period of last year
Current income tax expense 452,080,424.72 320,222,019.81
Deferred income tax expense -131,290,509.48 -117,205,486.69
Total 320,789,915.24 203,016,533.12
45. Other Comprehensive Income
Refer to Note VI-29 for details.
~ 132 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
46. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Item Reporting Period Same Period of last year
Margin 52,007,634.47 126,884,726.25
Government subsidies 615,100.00 7,686,580.00
Interest income 21,644,883.48 17,954,811.63
Recovery of restricted monetary capital 460,000,000.00 0.00
Other 43,953,555.36 11,155,743.51
Total 578,221,173.31 163,681,861.39
(2) Cash Used in Other Operating Activities
Same Period of last
Item Reporting Period
year
Cash paid in selling expense and administrative expense 526,682,839.55 414,549,277.31
Pledged fixed term deposits used to issue notes payable or cash deposit of notes 45,000,000.00 0.00
Other 49,502,450.93 14,733,112.11
Total 621,185,290.48 429,282,389.42
(3) Cash Generated from Other Investing Activities
Item Reporting Period Same Period of last year
Received government subsidies related to assets 0.00 1,646,000.00
Total 0.00 1,646,000.00
47. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Same period of last
Supplemental information Reporting Period
year
1. Reconciliation of net profit to net cash flows generated from operating
activities
Net profit 915,437,666.92 572,114,926.94
Add: Provision for impairment of assets 1,171,911.36 -2,284,653.86
Depreciation of fixed assets, oil-gas assets, and productive living assets 96,520,768.95 95,173,432.11
~ 133 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Supplemental information Reporting Period
year
Amortization of investment property 168,913.08 242,646.14
Amortization of intangible assets 8,489,059.99 7,794,696.58
Amortization of long-term prepaid expenses 10,844,242.64 22,860,604.61
Losses on disposal of fixed assets, intangible assets and other long-lived assets
(gains: negative) 154,437.81 705,214.31
Losses on scrap of fixed assets (gains: negative) 3,574,410.77 0.00
Losses from variation of fair value (gains: negative) -236,707.77 119,656.35
Finance costs (gains: negative) 608,331.71 409,322.34
Investment loss (gains: negative) -68,775,019.95 -81,017,484.47
Decrease in deferred income tax assets (gains: negative) -131,582,903.72 -117,120,093.84
Increase in deferred income tax liabilities
(“-” means decrease) 292,394.23 -7,892,851.83
Decrease in inventory (gains: negative) -77,733,707.57 -59,838,961.48
Decrease in accounts receivable generated from operating activities (gains:
negative) -1,205,967,657.32 -656,394,178.36
Increase in accounts payable used in operating activities (decrease: negative) 708,414,366.71 652,862,975.93
Amortization of deferred income 2,566,383.76 -2,370,027.39
Certificate of deposit 405,000,000.00 0.00
Net cash generated from/used in operating activities 668,946,891.61 425,365,224.08
2. Significant investing and financing activities without involvement of cash
receipts and payments
Conversion of debt into capital 0.00 0.00
Convertible corporate bonds due within one year 0.00 0.00
Fixed assets under financing lease 0.00 0.00
3. Net increase/decrease of cash and cash equivalents:
Ending balance of cash 922,785,957.41 683,630,424.44
Less: beginning balance of cash 1,024,088,626.40 527,849,026.07
Add: ending balance of cash equivalents 0.00 0.00
~ 134 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Supplemental information Reporting Period
year
Less: beginning balance of cash equivalents 0.00 0.00
Net increase in cash and cash equivalents -101,302,668.99 155,781,398.37
(2) Cash and Cash Equivalent
Item Ending balance Beginning balance
I. Cash 922,785,957.41 1,024,088,626.40
Of which: cash on hand 364,726.59 369,197.41
Bank deposits on demand 921,933,834.69 990,617,397.53
Other monetary funds on demand 487,396.13 33,102,031.46
II. Cash and cash equivalents 0.00 0.00
Of which: Bond investment due within three months 0.00 0.00
III. Ending balance of cash and cash equivalents 922,785,957.41 1,024,088,626.40
(3) Non-cash Negotiability Amount of Trade Bills
Item Reporting Period
Negotiability amount of trade bills 409,809,334.11
Of which: payment for goods 409,809,334.11
48. Assets with Restricted Ownership or Use Right
Item Ending carrying value Restriction reason
Other monetary capital 45,000,000.00 Bank deposits pledged for issuing notes
Notes receivable 99,930,600.00 Pledged by notes
Total 144,930,600.00 --
VII. Changes of Consolidation Scope
There was no subsidiary newly set up during the Reporting Period.
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
~ 135 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
Bozhou,
Bozhou Gujing Sales Co., Ltd. Bozhou, Anhui Business trading 100.00 Investment
Anhui
Bozhou,
Bozhou Gujing Transportation Co., Ltd. Bozhou, Anhui Transportation 99.00 1.00 Investment
Anhui
Bozhou,
Anhui Longrui Glass Co., Ltd. Bozhou, Anhui Production 100.00 Investment
Anhui
Bozhou Gujing Waste Reclamation Co., Bozhou,
Bozhou, Anhui Waste cycled 100.00 Investment
Ltd. Anhui
Anhui Jinyunlai Culture & Media Co.,
Hefei Anhui Hefei Anhui Ads marketing 100.00 Investment
Ltd.
Anhui Swisse Will Science & Bozhou, Technology
Bozhou, Anhui 100.00 Investment
Technology Co., Ltd. Anhui research
Bozhou,
Anhui Subway Cordial Wine Co., Ltd. Bozhou, Anhui Production 100.00 Investment
Anhui
Business
Shanghai Gujing Jinhao Hotel Hotel
Shanghai Shanghai 100.00 combination under
Management Co., Ltd. management
the same control
Business
Bozhou,
Bozhou Gujing Hotel Co., Ltd. Bozhou, Anhui Hotel operating 100.00 combination under
Anhui
the same control
Anhui Yuanqing Environmental Co. , Bozhou, Sewage
Bozhou, Anhui 100.00 Investment
Ltd. Anhui Treatment
Anhui Gujing Cloud E-commerce Co.,
Hefei, Anhui Hefei, Anhui E-commerce 100.00 Investment
Ltd.
Anhui Zhenrui Construction Engineering Bozhou, Engineering
Bozhou, Anhui 100.00 Investment
Co., Ltd. Anhui construction
Anhui RunAnXinKe Testing Technology Bozhou,
Bozhou, Anhui Food detection 100.00 Investment
Anhui
Co., Ltd
Business
Wuhan Pride Yellow Crane Tower combination not
Wuhan, Hubei Wuhan, Hubei Production 51.00
Distillery Co., Ltd. under the same
control
~ 136 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Main Holding percentage
Registration Nature of
Name operating (%) Way of gaining
place business
place Directly Indirectly
Business
Pride Yellow Crane Tower Distillery Xianning, combination not
Xianning, Hubei Production 51.00
(Xianning) Co., Ltd. Hubei under the same
control
Business
Hubei Yellow Crane Tower Distillery Suizhou, combination not
Suizhou, Hubei Production 51.00
Co., Ltd. Hubei under the same
control
Business
Commercial combination not
Tian Long Jin Di (Wuhan) Co., Ltd. Wuhan, Hubei Wuhan, Hubei 51.00
trade under the same
control
Business
Xianning, Commercial combination not
Xianning Junhe Sales Co., Ltd. Xianning, Hubei 51.00
Hubei trade under the same
control
Business
combination not
Hubei Junhe Advertising Co., Ltd. Wuhan, Hubei Wuhan, Hubei Ads marketing 51.00
under the same
control
Wuhan Junya Shibo Technology Co., Technology
Wuhan, Hubei Wuhan, Hubei 51.00 Investment
Ltd. development
Commercial
Wuhan Junya Sales Co., Ltd. Wuhan, Hubei Wuhan, Hubei 51.00 Investment
trade
Suizhou,
Suizhou Junhe Trading Co., Ltd. Suizhou, Hubei Business trading 51.00 Investment
Hubei
Hubei Hechuyuan Trading Co., Ltd. Wuhan, Hubei Wuhan, Hubei Business trading 51.00 Investment
~ 137 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
(2) Significant Not Wholly-owned Subsidiary
Shareholding The profit or loss Declaring dividends
Ending balance of
proportion of attributable to distributed to
Name non-controlling
non-controlling non-controlling non-controlling
interests
interests interests interests
Wuhan Pride Yellow Crane Tower
49.00 23,015,329.28 0.00 405,115,957.61
Distillery Co., Ltd.
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Ending balance
Name Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liability
Wuhan Pride Yellow
Crane Tower Distillery 472,762,807.51 724,685,605.19 1,197,448,412.70 271,205,313.30 99,493,197.97 370,698,511.27
Co., Ltd.
(Continued 1)
Beginning balance
Name Current
Current assets Non-current assets Total assets Non-current liability Total liabilities
liabilities
Wuhan Pride
Yellow Crane
441,615,299.44 678,572,840.91 1,120,188,140.35 239,818,614.70 100,576,052.97 340,394,667.67
Tower Distillery
Co., Ltd.
(Continued 2)
Reporting Period Same period of last year
Cash flows Cash flows
Total Total
Name Operating from Operating from
Net profit comprehensiv Net profit comprehensiv
revenue operating revenue operating
e income e income
activities activities
Wuhan
Pride
Yellow
429,495,365.21 46,956,428.75 46,956,428.75 73,102,943.91 347,068,706.22 42,796,425.53 42,796,425.53 92,368,110.24
Crane
Tower
Distillery
~ 138 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Name Reporting Period Same period of last year
Co., Ltd.
IX. The Risk Related to Financial Instruments
The main financial instruments of the Company are equity investment, financial product, trust investment,
accounts receivable and accounts payable, 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 operation 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-for-sale financial assets and trading financial assets
measured at fair value on balance sheet date. Thus, the Company bares the risk change of securities market.
The Company adopts variety of equity group to reduce the price risk in equity security investment.
2. Credit Risk
On 30 June 2018, 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: carrying value of financial assets recognized in consolidated balance sheet; as
for the financial instruments measured at fair value, the carrying value reflects its risk exposure, but not the
largest one, the largest risk exposure will change when the future fair value changes.
The Company only trade with the third party authorized with good credit and large scale. In line with the
~ 139 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
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 Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Ending fair value
Fair value
Fair value Fair value
Item measurement
measurement items at measurement Total
items at level
level 1 items at level 2
3
I. Consistent fair value measurement
(I) Financial assets at fair value through profit
1,057,659.73 1,057,659.73
or loss
1. Trading financial assets 1,057,659.73 1,057,659.73
(1) Equity instrument investment 1,057,659.73 1,057,659.73
(II) Available-for-sale financial assets 267,197,036.68 267,197,036.68
1. Equity instrument investment 267,197,036.68 267,197,036.68
Total assets consistently measured at fair value 267,197,036.68 267,197,036.68
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. When the shares held were in the restricted period, the price shall be determined according to the
relevant valuation methods mentioned in SFC [2007] No. 21.
XI. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
~ 140 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Proportion of
Proportion of voting
share held by
rights owned by the
Registration the Company as
Name Nature of business Registered capital Company as the
place the parent
parent against the
against the
Company (%)
Company (%)
Beverage,
Construction materials,
Anhui Gujing Group Co., Ltd. Anhui and plastic 1,000,000,000.00 53.89 53.89
productions
manufacture
Notes: The finial controller of the Company was People’s Government of Bozhou, Anhui
2. Subsidiaries of the Company
Refer to Note VIII-1. Equity in Subsidiaries.
3. Information on Other Connected Parties
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 Haochidian Catering Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Shanghai Ruiyao Hotel Management Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Shanghai Beihai Restaurant 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
Bozhou Rufuxiang 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
~ 141 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Name Relationship
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
Hefei Longxin Financial Management Consulting Co.,
Affiliated enterprise of controlling shareholder and actual controller
Ltd.
Bozhou Anxin Microcredit Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Large Central Plain Wine Valley Culture Tourism Affiliated enterprise of controlling shareholder and actual controller
Development Co., Ltd.
Anhui Xinyuan Government Landscape Engineering Co., Affiliated enterprise of controlling shareholder and actual controller
Ltd.
Bozhou Gujing Hotel Co., Ltd Affiliated enterprise of controlling shareholder and actual controller
Anhui Youxin Financing Guarantee 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
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 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
Anhui Gujing International Travel Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Jinzhai Gujing Real Estate Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Shenglong Trading Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Zhonggu Tourism Development Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Health Industry Co., Ltd. Affiliated enterprise of controlling shareholder and actual controller
4. List of Connected Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: RMB’0,000)
①Information on Acquisition of Goods and Reception of Labor Service
Same period of last
Connected party Content Reporting Period
year
~ 142 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Connected party Content Reporting Period
year
Anhui Ruifuxiang Food Co., Ltd Purchase of raw material 0.00 15,810.48
Accepting food and
1,859,506.20 807,692.59
Bozhou Hotel Co., Ltd. accommodation services
Anhui Ruijing Restaurant Management Co., Ltd. Accepting catering services 23,043.00 89,759.00
Anhui Xinyuan Government Landscape Afforestation fees
482,050.39 589,278.15
Engineering Co., Ltd.
Holiday Inn Hefei Purchase of goods 132,717.52 35,451.28
Accepting food and
41,549.36 70,699.06
Holiday Inn Hefei accommodation services
Anhui Gujing Hotel Development Co., Ltd. Accepting labor service 156.04 3,413.21
Anhui Gujing Hotel Development Co., Ltd. Purchase of materials 0.00 7,245.28
Bozhou Gujing Junlai Hotel Management Co., Ltd. Accepting food and
259,021.00 149,579.79
accommodation services
Accepting food and
4,819.00 26,285.00
Anhui Gujing Hotel Development Co., Ltd. accommodation services
Accepting food and
1,349,445.00 1,592,452.00
Bozhou Huisheng Building Catering Company accommodation services
Anhui Haochidian Catering Co., Ltd. Accepting food and
30,300.00 4,800.00
accommodation services
Anhui Gujing International Travel Co., Ltd. Accepting labor service 38,228.00 12,240.00
Bozhou Gujing Hotel Co., Ltd Purchase of commercial
0.00 11,900,000.00
residential buildings
Anhui Huixin Finance Investment Group Co., Ltd. Accepting labor service 134,803.75 0.00
Total -- 4,355,639.26 15,304,705.84
②Information of Sales of Goods and Provision of Labor Service
Same period of last
Connected party Content Reporting Period
year
Anhui Hengxin Pawn Co., Ltd. Sales of white spirit 3,683.59 6,176.78
~ 143 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Connected party Content Reporting Period
year
Anhui Gujing Group Co., Ltd. Sales of small sized materials 19,624.03 62,464.38
Anhui Gujing Group Co., Ltd. Providing labor service 0.00 9,897.94
Providing catering and
Anhui Gujing Group Co., Ltd. 124,239.79 102,811.00
accommodation services
Bozhou Huisheng Building Catering Company Sales of white spirit 34,082.23 17,000.00
Bozhou Hotel Co., Ltd. Sales of white spirit 47,383.29 61,965.81
Anhui Ruijing Trade Travel (Group) Co., Ltd Sales of white spirit 5,718,162.07 2,498,463.23
Providing catering and
Anhui Ruijing Trade Travel (Group) Co., Ltd 12,388.57 599.99
accommodation services
Anhui Ruijing Trade Travel (Group) Co., Ltd Sales of materials 356.00 0.00
Anhui Ruifuxiang Food Co., Ltd Sales of white spirit 331,900.64 339,877.92
Anhui Huixin Finance Investment Group Co., Ltd. Sales of white spirit 1,236,821.89 14,683.36
Anhui Gujing Hotel Development Co., Ltd. Sales of white spirit 73,937.00 14,529.91
Anhui Gujing Real Estates Group Co., Ltd. Sales of white spirit 531,449.33 9,854.52
Anhui Gujing Real Estates Group Co., Ltd. Providing labor service 6,756.76 456,621.63
Bozhou Gujing Real Estates Development Co., Ltd. Sales of white spirit 11,475.45 20,033.69
Providing catering and
Bozhou Gujing Real Estates Development Co., Ltd. 0.00 600.00
accommodation services
Bozhou Ruineng Thermoelectricity Co., Ltd. Sales of white spirit 145,564.41 128,848.87
Bozhou Ruineng Thermoelectricity Co., Ltd. Providing labor service 252,252.25 0.00
Bozhou Ruifuxiang High-protein Feed Co., Ltd. Sales of white spirit 18,051.34 20,332.81
Anhui Aoxin Real Estate Development Co., Ltd. Sales of white spirit 7,553.44 6,099.86
Anhui Lixin E-Commerce Co., Ltd. Sales of white spirit 64,181.89 7,435.83
Anhui Ruixin Pawn Co., Ltd Sales of white spirit 9,755.53 5,499.01
Anhui Xinxin Property Management Co., Ltd. Sales of white spirit 23,587.69 21,703.08
Anhui Youxin Financing Guarantee Co., Ltd. Sales of white spirit 4,374.98 3,089.68
Anhui Zhongxin Financial Leasing Co., Ltd. Sales of white spirit 7,026.79 6,102.42
~ 144 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Connected party Content Reporting Period
year
Bozhou Anxin Microcredit Co., Ltd Sales of white spirit 7,399.60 5,800.72
Bozhou Gujing Hotel Co., Ltd Sales of white spirit 9,363.27 24,100.26
Bozhou Gujing Junlai Hotel Management Co., Ltd. Sales of white spirit 9,270.55 4,307.69
Bozhou Gujing Real Estates Management Co., Ltd. Sales of white spirit 39,987.82 38,442.24
Large Central Plain Wine Valley Culture Tourism
Providing labor service 15,057.68 5,485.98
Development Co., Ltd.
Large Central Plain Wine Valley Culture Tourism
Utilities 39,974.95 94,630.14
Development Co., Ltd.
Large Central Plain Wine Valley Culture Tourism Providing catering and
10,818.00 20,896.00
Development Co., Ltd. accommodation services
Large Central Plain Wine Valley Culture Tourism Sales of small sized
2,516.56 5,101.65
Development Co., Ltd. materials
Large Central Plain Wine Valley Culture Tourism
Sales of white spirit 1,135,798.58 337,678.77
Development Co., Ltd.
Anhui Haochidian Catering Co., Ltd. Sales of white spirit 25,571.62 182,598.15
Providing catering and
Anhui Shenglong Trading Co., Ltd. 6,900.00 400.00
accommodation services
Anhui Shenglong Trading Co., Ltd. Sales of white spirit 247,600.01 0.00
Anhui Xinyuan Government Landscape Engineering Sales of small sized
8,100.01 8,507.41
Co., Ltd. materials
Providing catering and
Anhui Gujing International Travel Co., Ltd. 46,824.00 3,960.00
accommodation services
Anhui Gujing International Travel Co., Ltd. Sales of small sized materials 470.95 0.00
East Ruijing Enterprise Investment Development
Providing labor service 0.00 201,390.13
Co., Ltd
Hefei Longxin Financial Management Consulting
Sales of white spirit 1,510.68 7,902.56
Co., Ltd.
Anhui Zhonggu Tourism Development Co., Ltd. Sales of small sized materials 120.85 0.00
~ 145 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Same period of last
Connected party Content Reporting Period
year
Providing catering and
Anhui Zhonggu Tourism Development Co., Ltd. 13,125.00 0.00
accommodation services
Anhui Gujing Health Industry Co., Ltd. Sales of small sized materials 10,061.26 0.00
Anhui Gujing Health Industry Co., Ltd. Sales of white spirit 3,103.45 0.00
Anhui Jinzhai Gujing Real Estate Development Co.,
Sales of white spirit 95,255.39 0.00
Ltd.
Providing catering and
Holiday Inn Hefei 56,825.49 0.00
accommodation services
Total -- 10,470,264.68 4,755,893.42
(2) Information on Connected Lease
The Company serves as the leasee
The lease income confirmed The lease income confirmed
Name of lessor Category of leased assets
in the Reporting Period
in the same period of last year
Anhui Gujing Group Co., Ltd. Houses and buildings 1,095,238.10 1,095,238.10
The Company serves as the lessor
The lease income
The lease income confirmed
Name of lessee Category of leased assets confirmed in the same
in the Reporting Period
period of last year
Anhui Gujing Hotel Management Co., Ltd. Houses and buildings 246,190.48 246,190.49
5. Accounts Receivable and Payable of Connected Party
(1) Accounts Receivable
Item Ending balance Beginning balance
Accounts receivable:
Anhui Ruifuxiang Food Co., Ltd 5,257.31 5,257.31
Anhui Gujing Group Co., Ltd. 0.00 2,250.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd. 0.00 3,860.00
Bozhou Ruineng Thermoelectricity Co., Ltd. 14,000.00 0.00
Total 19,257.31 11,367.31
~ 146 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Ending balance Beginning balance
Other accounts receivable:
Anhui Gujing Real Estates Group Co., Ltd. 25,342.50 25,342.50
Bozhou Ruineng Thermoelectricity Co., Ltd. 19,450.00 19,450.00
Total 44,792.50 44,792.50
(2) Accounts Payable
Item Ending balance Beginning balance
Advances from customers:
Anhui Ruijing Trade Travel (Group) Co., Ltd 0.00 3,854,332.31
Large Central Plain Wine Valley Culture Tourism Development Co.,
1,372,380.00 2,193,069.10
Ltd.
Anhui Ruijing Restaurant Management Co., Ltd. 75,936.30 0.00
Bozhou Gujing Real Estates Development Co., Ltd. 49,890.32 0.00
Total 1,498,206.62 6,047,401.41
Other accounts payable:
Anhui Ruifuxiang Food Co., Ltd 0.00 6,726.00
Anhui Ruijing Trade Travel (Group) Co., Ltd 0.00 23,678.36
Anhui Gujing Group Co., Ltd. 2,742.45 0.00
Total 2,742.45 30,404.36
XII. Commitments and Contingency
1. Significant Commitments
Operating Lease Commitments
As of the balance sheet date, the irrevocable operating lease contracts the Company signed were listed as
follows:
Item Ending balance Beginning 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
~ 147 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Ending balance Beginning balance
Subsequent years 20,508,333.33 21,658,333.33
Total 27,408,333.33 28,558,333.33
2. Contingency
(1) Due to the infringement behaviors on the Company’s trademark in the market, the Company filed lawsuits
against such infringement acts. Since the individual and overall amount of action was relatively small, the
contingency is expected to have no significant impacts on the Company.
(2) There was no other contingency of the Company other than the above-mentioned event.
XIII. Events after the Balance Sheet Date
As of 30 June 2018, there was no significant event of the Company after the balance sheet date.
XIV. Other Significant Events
Segment Information
There was no segment information based on operating segments to disclose, since the Company didn’t
determine operating segments in accordance with internal organizational structure, management requirements
and internal report systems.
XV. Notes of Main Items in the Financial Statements of the Company
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal
Proportion Carrying value
Amount Amount proportion
(%)
(%)
Accounts receivable with significant single amount
0.00 0.00 0.00 0.00 0.00
for which bad debt provision separately accrued
Accounts receivable withdrawal of bad debt
8,343,188.95 100.00 728,892.87 8.74 7,614,296.08
provision of by credit risks characteristics:
Accounts receivable with insignificant single
amount for which bad debt provision separately 0.00 0.00 0.00 0.00 0.00
accrued
Total 8,343,188.95 100.00 728,892.87 8.74 7,614,296.08
(Continued)
~ 148 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Beginning balance
Carrying amount Bad debt provision
Category Withdrawal
Proportion Carrying value
Amount Amount proportion
(%)
(%)
Accounts receivable with significant single amount
0.00 0.00 0.00 0.00 0.00
for which bad debt provision separately accrued
Accounts receivable withdrawal of bad debt
9,168,249.97 100.00 658,331.94 7.18 8,509,918.03
provision of by credit risks characteristics:
Accounts receivable with insignificant single
amount for which bad debt provision separately 0.00 0.00 0.00 0.00 0.00
accrued
Total 9,168,249.97 100.00 658,331.94 7.18 8,509,918.03
①In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision
Ending balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 0.00 0.00 0.00
[Of which: within 6 months] 0.00 0.00 0.00
[7-12 months] 0.00 0.00 0.00
1 to 2 years 0.00 0.00 0.00
2 to 3 years 0.00 0.00 0.00
Over 3 years 728,892.87 728,892.87 100.00
Total 728,892.87 728,892.87 100.00
②In the groups, accounts receivable adopted other methods to withdraw bad debt provision
Ending balance
Name of the group
Accounts receivable Bad debt provision Withdrawal proportion (%)
Connected group within the
7,614,296.08 0.00 0.00
combination scope
Total 7,614,296.08 0.00 0.00
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
~ 149 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
The amount of bad debt provision withdrawn during the Reporting Period was RMB70,560.93.
(3) Particulars of Accounts Receivable with Actual Verification during the Reporting Period
No such cases in the Reporting Period.
(4) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Total amount of the Top 5 accounts receivable in ending balance collected according to the arrears party was
RMB7,413,311.01, accounting for 88.85% of the total ending balance of accounts receivable, and the total of
ending balance of bad debt provision withdrawn was RMB0.00.
2. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Ending balance
Carrying amount Bad debt provision
Category Withdrawa
Proporti l Carrying value
Amount Amount
on (%) proportion
(%)
Other accounts receivable with significant single
amount for which bad debt provision separately 40,850,949.35 28.08 40,850,949.35 100.00 0.00
accrued
Other accounts receivable withdrawn bad debt
104,616,570.41 71.92 768,478.79 0.73 103,848,091.62
provision according to credit risks characteristics
Other accounts receivable with insignificant single
amount for which bad debt provision separately 0.00 0.00 0.00 0.00 0.00
accrued
Total 145,467,519.76 100.00 41,619,428.14 28.61 103,848,091.62
(Continued)
Beginning balance
Carrying amount Bad debt provision
Category Withdrawal
Proportio Carrying value
Amount Amount proportion
n (%)
(%)
Other accounts receivable with significant single
amount for which bad debt provision separately 40,850,949.35 23.76 40,850,949.35 100.00 0.00
accrued
Other accounts receivable withdrawn bad debt
131,103,824.99 76.24 746,046.24 0.57 130,357,778.75
provision according to credit risks characteristics
~ 150 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Beginning balance
Carrying amount Bad debt provision
Category Withdrawal
Proportio Carrying value
Amount Amount proportion
n (%)
(%)
Other accounts receivable with insignificant
single amount for which bad debt provision 0.00 0.00 0.00 0.00 0.00
separately accrued
Total 171,954,774.34 100.00 41,596,995.59 24.19 130,357,778.75
①Other receivable with single significant amount for which bad debt provision separately accrued at the end
of the period
Ending balance
Other accounts receivable (unit) Other accounts Bad debt Withdrawal proportion
Withdrawal reason
receivable provision (%)
100.00 Under the bankruptcy
Hengxin Securities 29,010,449.35 29,010,449.35
liquidation
100.00 Under the bankruptcy
Jianqiao Securities 11,840,500.00 11,840,500.00
liquidation
Total 40,850,949.35 40,850,949.35
②In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 2,593,577.25 32,291.80 1.25
[Of which: within 6
2,434,676.49 24,346.76 1.00
months]
[7-12 months] 158,900.76 7,945.04 5.00
1 to 2 years 465,288.96 46,528.90 10.00
2 to 3 years 0.00 0.00 0.00
Over 3 years 689,658.09 689,658.09 100.00
Total 3,748,524.30 768,478.79 20.50
③In the groups, other accounts receivable adopted other methods to withdraw bad debt provision
~ 151 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ending balance
Name of the group
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Connected group within the
100,868,046.11 0.00 0.00
consolidation scope
Total 100,868,046.11 0.00 0.00
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The amount of bad debt provision withdrawn during the Reporting Period was RMB22,432.55.
(3) Particulars about Other Accounts Receivable with Actual Verification during the Reporting Period
No such cases in the Reporting Period.
(4) Other Accounts Receivable Classified by Account Nature
Nature Ending carrying amount Beginning carrying amount
Intercourse funds between entities within 128,390,563.19
100,868,046.11
combination scope
Securities investment 40,850,949.35 40,850,949.35
Margin &cash pledge 1,658,139.09 858,139.09
Borrowings by employees 115,000.00 16,164.00
Rent and utilities fee 505,321.35 1,023,996.61
Others 1,470,063.86 814,962.10
Total 145,467,519.76 171,954,774.34
(5) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Proportion to total
Name of Ending balance
ending balance of
the Relationship Nature Ending balance Aging of bad debt
other accounts
provision
entity receivable (%)
Intercourse funds
The Company’s between entities
No.1 94,808,659.13 Within 6 months 65.18 0.00
subsidiary within combination
scope
Securities
No.2 Non-connected party 29,010,449.35 Over 3 years 19.94 29,010,449.35
investment
~ 152 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Proportion to total
Name of Ending balance
ending balance of
the Relationship Nature Ending balance Aging of bad debt
other accounts
provision
entity receivable (%)
Securities
No. 3 Non-connected party 11,840,500.00 Over 3 years 8.14 11,840,500.00
investment
Intercourse funds
The Company’s between entities
No. 4 6,059,386.98 Within 1 year 4.17 0.00
subsidiary within combination
scope
Margin &cash
No. 5 Non-connected party 500,000.00 Within 6 months 0.34 5,000.00
pledge
Total -- -- 142,218,995.46 97.77 40,855,949.35
3. Long-term Equity Investment
(1) Category of Long-term Equity Investment
Ending balance Beginning balance
Depre
Depreci
Item ciation
Carrying amount ation Carrying value Carrying amount Carrying value
reserv
reserve
e
Investment to
1,155,089,408.32 0.00 1,155,089,408.32 1,155,089,408.32 0.00 1,155,089,408.32
subsidiaries
Total 1,155,089,408.32 0.00 1,155,089,408.32 1,155,089,408.32 0.00 1,155,089,408.32
(2) Investment to Subsidiaries
Ending
Depreciatio
balance of
Investee Beginning balance Increase Decrease Ending balance n reserve
depreciation
withdrawn
reserve
Bozhou Gujing
68,949,286.89 0.00 0.00 68,949,286.89 0.00 0.00
Sales Co., Ltd.
Anhui Longrui
85,267,453.06 0.00 0.00 85,267,453.06 0.00 0.00
Glass Co., Ltd.
Shanghai Gujing 49,906,854.63 0.00 0.00 49,906,854.63 0.00 0.00
~ 153 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ending
Depreciatio
balance of
Investee Beginning balance Increase Decrease Ending balance n reserve
depreciation
withdrawn
reserve
Jinhao Hotel
Management Co.,
Ltd.
Bozhou Gujing
648,646.80 0.00 0.00 648,646.80 0.00 0.00
Hotel Co., Ltd.
Gujing
Transportation 6,875,743.00 0.00 0.00 6,875,743.00 0.00 0.00
Co., Ltd.
Anhui Swisse Will
Science &
40,000,000.00 0.00 0.00 40,000,000.00 0.00 0.00
Technology Co.,
Ltd.
Anhui Subway
Cordial Wine Co., 30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Ltd.
Anhui Yuanqing
Environmental 16,000,000.00 0.00 0.00 16,000,000.00 0.00 0.00
Co. , Ltd.
Anhui Gujing
Cloud
5,000,000.00 0.00 0.00 5,000,000.00 0.00 0.00
E-commerce Co.,
Ltd.
Anhui Zhenrui
Construction
10,000,000.00 0.00 0.00 10,000,000.00 0.00 0.00
Engineering Co.,
Ltd.
Wuhan Pride
Yellow Crane 816,000,000.00 0.00 0.00 816,000,000.00 0.00 0.00
Tower Distillery
~ 154 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Ending
Depreciatio
balance of
Investee Beginning balance Increase Decrease Ending balance n reserve
depreciation
withdrawn
reserve
Co., Ltd.
Anhui Jinyunlai
Culture & Media 15,000,000.00 0.00 0.00 15,000,000.00 0.00 0.00
Co., Ltd.
Bozhou Gujing
Waste
1,441,423.94 0.00 0.00 1,441,423.94 0.00 0.00
Reclamation Co.,
Ltd.
Anhui
RunAnXinKe
Testing 10,000,000.00 0.00 0.00 10,000,000.00 0.00 0.00
Technology Co.,
Ltd
Total 1,155,089,408.32 0.00 0.00 1,155,089,408.32 0.00 0.00
4. Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2,331,145,973.42 930,097,754.58 1,996,798,133.21 787,209,683.22
Other operations 42,363,746.54 32,348,972.74 35,252,699.27 20,947,873.68
Total 2,373,509,719.96 962,446,727.32 2,032,050,832.48 808,157,556.90
5. Investment Income
Item Reporting Period Same period of last year
Investment income generating from long-term equity accounted by cost
0.00 0.00
method
Investment income generated from disposal of financial assets at fair value
1,271,471.00 2,329,585.99
through profit or loss
Investment income generated from the holding of available-for-sale financial
49,031,673.79 23,355,688.14
assets
Investment income generated from the disposal of available-for-sale financial
10,999,123.54 49,254,878.84
assets
~ 155 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Reporting Period Same period of last year
Total 61,302,268.33 74,940,152.97
XVI. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Item Amount Explanation
Gains/losses on the disposal of non-current assets -3,419,972.96
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of
0.00
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 4,708,036.05
government’s unified standards
Capital occupation charges on non-financial enterprises that are recorded into current gains
0.00
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 0.00
investees when making the investments
Gain/loss on non-monetary asset swap 0.00
Gain/loss on entrusting others with investments or asset management 0.00
Asset impairment provisions due to acts of God such as natural disasters 0.00
Gains and losses from debt restructuring 0.00
Expenses on business reorganization, such as expenses on staff arrangements, integration,
0.00
etc.
Gain/loss on the part over the fair value due to transactions with distinctly unfair prices 0.00
Current net gains and losses of subsidiaries acquired in business combination under the same control
0.00
from period-begin to combination date
Profit and loss from contingencies irrelative to the normal business operations of company 0.00
Gain/loss from change of fair value of trading financial assets and liabilities, and investment
gains from disposal of trading financial assets and liabilities and available-for-sale financial 12,507,302.31
assets, other than valid hedging related to the Company’s common businesses
Depreciation reserves returns of receivables with separate depreciation test 0.00
Gain/loss on entrustment loans 0.00
~ 156 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Item Amount Explanation
Gain/loss on change of the fair value of investing real estate of which the subsequent
0.00
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
0.00
according to requirements of taxation, accounting and other relevant laws and regulations
Custody fee income when entrusted with operation 0.00
Other non-operating income and expense other than the above 13,674,195.49
Project confirmed with the definition of non-recurring gains and losses and losses 0.00
Subtotal 27,469,560.89
Income tax effects 6,827,920.31
Non-controlling interests effects (after tax) 567,777.06
Total 20,073,863.52
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
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary
13.94 1.77 1.77
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
13.63 1.73 1.73
deduction of non-recurring profit
and loss
~ 157 ~
Gujinggong Liquor Aged Original Liquor Interim Report 2018
Part XI Documents Available for Reference
(I) Financial statements signed and sealed by the Company’s legal representative, the
Company’s Chief Accountant and the head of the Company’s financial department
(equivalent to financial manager); and
(II) All originals of the Company’s documents and announcements that have been
publicly disclosed in the Reporting Period on the media designated by the China
Securities Regulatory Commission.
Chairman of the Board: (Liang Jinhui)
Anhui Gujing Distillery Company Limited
27 August 2018
~ 158 ~
