2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Yantai Changyu Pioneer Wine Co. Ltd. 2017 the First Quarter Report 2017-Final 02 April 2017 1 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. I. Important Notice The board of directors,the board of supervisors,directors, supervisors & senior managers of the Company collectively and individually accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this report and confirm that to the best of their knowledge and belief there are no unfaithful facts, significant omissions or misleading statements. All directors attended the meeting for deliberating this quarter report. Mr. Sun Liqiang (Chairman of the Company), Mr. Leng Bin (Chief Financial Officer) and Mr. Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the financial report in the quarter report. 2 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. II、Corporate Information 1. Key accounting data and financial indicators Whether the Company makes retroactive adjustments or restates the accounting data of previous fiscal years. □ Yes V No The same period of More or less than last Item The report period last year year (%) Business income (CNY) 1,896,586,469 1,882,230,620 0.76% Net profit attributed to the shareholders of the listed 516,634,494 542,806,719 -4.82% company (CNY) Net profit attributed to the shareholders of the listed 512,684,945 538,762,161 -4.84% company after deducting the irregular profit and loss (CNY) Net cash flows from the 384,358,508 605,256,456 -36.50% operating activities (CNY) Basic earnings per share 0.75 0.79 -5.06% (CNY) Diluted earnings per share 0.75 0.79 -5.06% (CNY) Weighted average for earning 6.10% 6.93% -0.83% rate of the net assets The end of the More or less than last The end of last year report period year (%) Total assets (CNY) 11,857,812,108 11,528,077,971 2.86% Net Assets attributed to the shareholders of the listed 8,727,017,524 8,209,010,989 6.31% company (CNY) Details of irregular profit and loss V Yes □ No Unit:CNY From beginning of year Item Explanation to end of report period Gain on disposal of non-current assets, including -21,933 the reversal of accrued impairment provision Government grants credited in profit and loss (except for those recurring government grants that are closely related to the entity's operation, 3,725,036 in line with related regulations and have proper basis of calculation) Other non-operating income and expenses 1,246,917 3 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Less: Income tax effect 1,000,471 Total 3,949,549 -- The reasons shall be made clear and definitely as to the irregular profit and loss that the Company has defined by virtue of the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss as specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss. □Available V Not available There is no situation regarding the non-recurring profit and loss as defined and specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Non-recurring Profit and Loss as recurrent profit and loss. 2. The total number of shareholders and top 10 shareholders at the end of the report period 1) The number of the common shareholders and preferred shareholders with recovered voting power as well as the shareholding of top 10 shareholders Unit: share 42,254 Total number of 0 Total number of common preferred shareholders at the end of report shareholders with recov period ered voting power at the end of report period The top 10 common shareholders Number Pledged or Character of Percentage of frozen Name of Shareholders Shares held shareholders (%) restricted Share Amo shares status unt Domestic non- YANTAI CHANGYU GROUP state-owned 50.40% 345,473,856 COMPANY LIMITED legal person CHINA SECURITIES FINANCE State-owned 2.32% 15,924,155 CORP legal person Foreign legal GAOLING FUND,L.P. 3.11% 21,300,919 person BBH BOS S/A FIDELITY FD - Foreign legal 2.22% 15,241,826 CHINA FOCUS FD person TIANAN PROPERTY Domestic non- INSURANCE CO., LTD— state-owned 1.24% 8,519,160 BAOYING NO.1 legal person Foreign legal NORGES BANK 0.90% 6,147,993 person GUOTAI JUNAN Foreign legal SECURITIES(HONGKONG) person 0.76% 5,208,208 LIMITED CENTRAL HUIJIN ASSET State-owned 0.69% 4,761,200 MANAGEMENT LTD. legal person FIDELITY PURITAN TRUST: Foreign legal 0.60% 4,115,481 FIDELITY SERIES INTRINSIC person 4 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. OPPORTUNITIES FUND BBH A/C VANGUARD Foreign legal EMERGING MARKETS STOCK person 0.55% 3,788,487 INDEX FUND MASTER FUND The top 10 common shareholders with unrestricted shares Name of Shareholders Number of Type of share unrestricted Type of Amount shares held share YANTAI CHANGYU GROUP COMPANY 345,473,856 A share 345,473,856 LIMITED CHINA SECURITIES FINANCE CORP 15,924,155 A share 15,924,155 GAOLING FUND,L.P. 21,300,919 B share 21,300,919 BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,241,826 B share 15,241,826 TIANAN PROPERTY INSURANCE CO., LTD— 8,519,160 A share 8,519,160 BAOYING NO.1 NORGES BANK 6,147,993 B share 6,147,993 GUOTAI JUNAN SECURITIES(HONGKONG) 5,208,208 B share 5,208,208 LIMITED CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A share 4,761,200 FIDELITY PURITAN TRUST: FIDELITY SERIES 4,115,481 B share 4,115,481 INTRINSIC OPPORTUNITIES FUND BBH A/C VANGUARD EMERGING MARKETS 3,788,487 B share 3,788,487 STOCK INDEX FUND MASTER FUND Among the top 10 shareholders, Yantai Changyu Group The explanation for the associated Company Limited has no associated relationship or accordant relationship and accordant action action relationship with the other 9 listed shareholders, and the of the top 10 shareholders relationship among the other shareholders is unknown. Explanation for the top 10 common shareholders who No involved in financing activities and stock trading business(if any) Whether or not the Company’s top 10 common shareholders and top 10 common shareholders with unrestricted shares promise to buy back trading during the report period □ Yes √ No There are no top 10 common shareholders and top 10 common shareholders with unrestricted shares in the Company promise to buy back trading during the report period. 2) The total number of the preferred shareholders and top 10 preferred shareholders at the end of the report period □Available V Not available 5 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. III Major Issue 1. Great changes and reasons on main accountant data and financial index √Available □Not available Compared the end of the report period with the beginning of the report period: notes receivable increases by 128.57%, mainly due to the growth on bank acceptances; accounts receivable increases by 14%, mainly due to the expansion of Company’s direct-selling business and increase of clients’ sales amount on credit; advance payment increases by 74.05%, mainly due to the growth of advances payment for raw material procurement; other current assets increases by 46.86%, mainly due to the growth of pending deduction of VAT input tax; inventory decreases by 17.09%, mainly due that the sales of products result in the reduce of inventory and materials; notes payable decreases by 69.15%, mainly due that the notes payable amount is paid during the report period; accounts payable decreases by 36.52%, mainly because accounts payable amount is paid during the report period; other accounts payable increases by 20.87%, mainly due to the growth of marketing expenses such as advertising fee payable. Compared with the same period of last year: the net amount of other comprehensive income after- tax increases by 85.30%, the net amount of other comprehensive income after-tax attributable to owner of the parent company and other comprehensive income that will be reclassified into profit and loss later increase by 87.16%, mainly due to the growth of foreign currency financial statement converting balance of the Company’s subordinate overseas enterprises; net amount of cash flows generated in operating activities decreases by 36.50%, mainly because of decline of received cash from production sales and rendering of service, as well as the growth of cash payment for various taxes; subtotal cash inflow in investment activities decreases by 51.13%, mainly due to the reduction of regaining of the fixed deposit whose duration is more than three-month; cash received from debts decreases by 86.98%, mainly due to the decline of bank loan; subtotal of cash outflow in capital-raising activities reduces by 76.37%, mainly due to the decrease in the cash paid for debt repayment; net amount of cash flow generated in capital-raising activities decreases by 90.95%, mainly due to the decline of bank loan; net increase of cash and cash equivalents reduces by 63.10%, mainly because of declines of received cash from production sales, rendering of service and bank loan. 2. Analysis explanation of the major issue’s process, its influence and the solution □Available V Not available 3. The commitments that the Company’s actual controllers, shareholders, related parties, purchasers, the Company and other related parties do not implement completely exceeding the time limit within report period √available □not available 6 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Commitment Commitment Commitment Commitment Commitment Commitments Implementation Party Type content time period Commitments at - - share reform Commitments made in acquisition - - - - report or equity changes report Commitments at asset - - - - restructuring Yantai Solve Changyu horizontal Non-horizontal Has been Group Co., competition 1997.05.18 Permanent competition performing Ltd Clear the According to purpose of "Trademark brand royalty License Contract", the Company will pay trademark Commitments at royalty for the the initial public "Changyu"produ offering or Yantai cts of Yantai refinancing Changyu Changyu Group Has been Group Co., 1997.05.18 Permanent Co., Ltd every performing Ltd year, Yantai Changyu Group Co., Ltd will use trademark to advertise Changyu trademarks and the Contract products. Equity incentive commitments Commitments made to the minority - - - - shareholders of the Company Commitment under timely Yes implementation or not For commitments that exceed the time limit and are not completed, specific reasons of not No completing the implementation and the next step 7 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. 4. Forecast on the operating performance in the period from January to June of 2017 Warning and explanation for the estimation on the possible loss of cumulative net profit in the period from the beginning of this year to the end of the next report period or the great change comparing with same period of last year. □Available V Not available 5. The situation of security investment □Available V Not available There is no security investment during the report period. 6. The situation of derivative investment □Available V Not available There is no derivative investment during the report period. 7. The activities registration form of receptions, communication and interview etc. during the report period □Available V Not available There are no activities of receptions, communication and interview etc. during the report period. 8. The situation of illegal external guarantee □Available V Not available There is no illegal external guarantee during the report period. 9. The situation of non-operating fund occupation of controlling shareholders and related parties □Available V Not available There is no non-operating fund occupation of controlling shareholders and related parties during the report period. 8 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Ⅳ Financial Statements 1. Financial statements 1) Consolidated balance sheet Yantai Changyu Pioneer Wine Co. Ltd. Unit: CNY ITEM At 31 March 2017 At 31 December 2016 Current assets: Monetary fund 1,632,676,308 1,391,517,607 Financial assets which are measured by fair value and which changes are recorded in current profit and loss Derivative financial liability Notes receivable 481,064,037 210,470,027 Account receivable 197,296,359 173,062,628 Advance money 3,786,732 2,175,606 Interest receivable 0 24,200 Dividend receivable Other account receivable 16,348,542 18,880,800 Inventories 1,864,341,209 2,248,609,740 Assets held for sale 2,000,197 2,000,197 Non-current assets due within one year Other current assets 248,952,482 169,522,242 Total current assets 4,446,465,866 4,216,263,047 Non-current assets: Financial assets for sale 348,270 340,263 Investment held to expiration Long-term account receivable Long-term equity investment Real estate for investment Fixed assets 4,648,604,785 4,683,187,493 Construction in progress 1,517,900,866 1,346,281,737 Project material 0 0 Liquidation of fixed assets 0 0 Biological assets for production 205,637,694 201,428,980 Oil and gas assets Intangible assets 479,979,318 483,815,080 Development expenditure Goodwill 121,265,866 121,265,866 Long-term deferred expenses 151,936,811 162,206,229 Assets of deferred income tax 268,201,057 295,937,037 9 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Other non-current assets 17,471,575 17,352,239 Total non-current assets 7,411,346,242 7,311,814,924 Total assets 11,857,812,108 11,528,077,971 Current liabilities: Short-term loan 662,801,477 662,388,882 Financial liabilities which are measured by fair value and which changes are recorded in current profit and loss Derivative financial liability Notes payable 12,000,000 38,900,000 Accounts payable 346,103,278 545,231,319 Advance money 376,769,534 425,246,421 Wage payable 166,566,373 206,431,734 Tax payable 124,611,054 144,042,600 Interest payable 566,307 563,613 Dividend payable Other accounts payable 660,333,659 546,305,310 Liabilities held for sale Non-current liabilities due within one year 66,680,673 71,799,093 Other current liabilities 11,163,883 11,163,883 Total current liabilities 2,427,596,238 2,652,072,855 Non-current liabilities: Long-term loan 89,616,540 49,140,555 Bond payable Including: Preferred stock Perpetual capital securities Long-term accounts payable 293,000,000 293,000,000 Long-term wages payable Special accounts payable Deferred income 99,132,457 101,775,243 Liabilities of deferred income tax 23,379,303 24,908,410 Other non-current liabilities 7,696,222 7,696,222 Total non-current liabilities 512,824,522 476,520,430 Total liabilities 2,940,420,760 3,128,593,285 Shareholder rights and interests: Share capital 685,464,000 685,464,000 Other equity instrument Including: Preferred stock Perpetual capital securities Capital public reserve 565,955,441 565,955,441 Less: Inventory shares Other comprehensive Income -3,886,973 -5,259,014 Reasonable reserve 10 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Surplus reserve 342,732,000 342,732,000 Provision of general risk Retained profit 7,136,753,056 6,620,118,562 Total owner’s equity attributable to parent Company 8,727,017,524 8,209,010,989 Minority interests 190,373,824 190,473,697 Total owner's equity 8,917,391,348 8,399,484,686 Total liabilities and owner's equity 11,857,812,108 11,528,077,971 Legal representative: Sun Liqiang Person in charge of accounting : Leng Bin Person in charge of accounting organ: Jiang Jianxun 2) Balance sheet of parent company Unit: CNY Item At 31 March 2017 At 31 December 2016 Current assets: Monetary fund 560,162,806 269,460,060 Financial assets which are measured by fair value and which changes are recorded in current profit and loss Derivative financial liability Notes receivable 118,106,029 1,114,200 Account receivable 3,428,541 3,326,683 Advance money 1,974,645 702,647 Interest receivable 0 24,200 Dividend receivable 404,788,001 531,819,113 Other account receivable 3,711,085,879 3,582,532,862 Inventories 393,037,603 792,732,418 Assets held for sale 2,000,197 2,000,197 Non-current assets due within one year Other current assets 27,178,088 20,085,058 Total current assets 5,221,761,789 5,203,797,438 Non-current assets: Financial assets for sale Investment held to expiration Long-term account receivable Long-term equity investment 1,834,341,541 1,834,341,541 Real estate for investment 0 0 fixed assets 338,840,340 347,481,417 Construction in progress 2,075,003 500,000 Project material 0 0 Liquidation of fixed assets 0 0 Biological assets for production 122,216,622 123,036,693 Oil and gas assets 0 0 Intangible assets 71,407,584 72,002,372 11 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Development expenditure 0 0 Goodwill 0 0 Long-term deferred expenses 0 0 Assets of deferred income tax 17,878,166 26,985,252 Other non-current assets 2,731,906,376 2,617,457,460 Total non-current assets 5,118,665,632 5,021,804,735 Total assets 10,340,427,421 10,225,602,173 Current liabilities: Short-term loan 500,000,000 500,000,000 Financial liabilities which are measured by fair value and which changes are recorded in current profit and loss Derivative financial liability Notes payable Accounts payable 104,412,844 247,568,857 Advance money 6,000,000 6,000,000 Wage payable 56,258,526 70,812,761 Tax payable 15,554,981 33,266,225 Interest payable 566,307 563,613 Dividend payable 0 0 Other accounts payable 622,025,608 368,310,362 Liabilities held for sale 0 0 Non-current liabilities due within one year 29,488,400 29,227,200 Other current liabilities 1,767,053 1,767,054 Total current liabilities 1,336,073,719 1,257,516,072 Non-current liabilities: Long-term loan - Bond payable Including: Preferred stock Perpetual capital securities Long-term accounts payable Long-term wages payable Special accounts payable Deferred income 19,428,754 19,933,699 Liabilities of deferred income tax Other non-current liabilities 2,499,403 2,499,403 Total non-current liabilities 21,928,157 22,433,102 Total liabilities 1,358,001,876 1,279,949,174 Shareholder rights and interests: Share capital 685,464,000 685,464,000 Other equity instrument 0 0 Including: Preferred stock 0 0 Perpetual capital securities 0 0 12 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. Capital public reserve 557,222,454 557,222,454 Less: Inventory shares 0 0 Other comprehensive Income 0 0 Reasonable reserve 0 0 Surplus reserve 342,732,000 342,732,000 Retained profit 7,397,007,091 7,360,234,545 Total owner's equity 8,982,425,545 8,945,652,999 Total liabilities and owner's equity 10,340,427,421 10,225,602,173 3) Consolidated profit statement Unit: CNY Three months ended 31 Three months ended 31 Item March 2017 March 2016 I. Total Operating Revenue 1,896,586,469 1,882,230,620 Incl: Operating Revenue 1,896,586,469 1,882,230,620 II. Total Operating Cost 1,211,081,443 1,167,560,487 Incl:Operating Cost 636,501,146 605,388,600 Tax and levies on operations 110,070,692 97,663,734 Selling expenses 390,557,653 390,313,786 Administrative expenses 68,123,359 69,048,398 Finance expenses 5,828,593 5,145,969 Impairment losses of Assets - - Add:Gains on increase in fair value of assets - - Investment income - - Incl. Investment income from affiliates - - III.Operating profit 685,505,026 714,670,133 Add:Non-operating income 5,021,623 5,214,481 Including: Disposal earnings of non-current asset 2,585 94,567 Less:Non-operating expenses 71,603 158,857 Incl. Losses from disposal of non-current assets 24,517 21,839 IV.Total Profit before Taxation 690,455,046 719,725,757 Less:Income tax 174,172,291 176,813,048 V.Net profit after Taxation 516,282,755 542,912,709 Net profit attributable to Parent company 516,634,494 542,806,719 Net profit attributable to Minority interest -351,739 105,990 VI. Net after-tax of other comprehensive income 1,623,907.00 11,045,624.00 Net after-tax of other comprehensive income 1,372,041.00 10,681,557.00 attributable to owners of parent company (I) Other comprehensive income items which will - - not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net - - defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which - - will not be reclassified subsequently to profit and loss 13 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. (II) Other comprehensive income items which 1,372,041.00 10,681,557.00 will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which - - will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair - - value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale - - financial assets 4. The effect hedging portion of gains or losses - - arising from cash flow hedging instruments 5. Translation differences arising on translation of 1,372,041 10,681,557 foreign currency financial statements 6. Other - - Net after-tax of other comprehensive income 251,866 364,067 attributable to minority shareholders VII. Total comprehensive income 517,906,662 553,958,333 Total comprehensive income attributable to 518,006,535 553,488,276 owners of parent Company Total comprehensive income attributable to -99,873.00 470,057.00 minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.75 0.79 (ii) Diluted earnings per share 0.75 0.79 During this report period, the issue relates to company consolidation under common control, consolidated party completes net profit amount of CNY 0 before being consolidated, and consolidated party completes net profit amount of CNY 0 in the same period of last year. Legal representative: Sun Liqiang Person in charge of accounting: Leng Bin Person in charge of accounting organ: Jiang Jianxun 4) Profit statement of parent company Unit: CNY Three months ended 31 Three months ended 31 Item March 2017 March 2016 I.Sales Revenue 698,458,930 429,102,315 less:Cost of sales 611,883,847 323,773,053 Tax and levies on operations 45,787,579 47,351,215 Selling and distribution expenses General and administrative expenses 20,418,872 39,984,821 Finance expenses 4,922,061 6,317,441 Impairment losses of Assets - - Add:Gains on increase in fair value of assets - - Investment income 24,861,144 506,737,526 Incl. Investment income from affiliates - - II.Operating profit 40,307,715 518,413,311 Add:Non-operating income 466,924 562,752 Including: Disposal earnings of non-current - 94,567 14 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. asset Less:Non-operating expenses 31,626 36,839 Incl. Losses from disposal of non-current assets 11,641 21,839 III.Total Profit before Taxation 40,743,013 518,939,224 Less:Income tax 3,970,467 3,050,424 IV.Net profit after Taxation 36,772,546 515,888,800 V. Net after-tax of other comprehensive income - Net after-tax of other comprehensive income - attributable to owners of parent company (I) Other comprehensive income items which will - not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net - defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which - will not be reclassified subsequently to profit and loss (II) Other comprehensive income items which will - be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which - will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value - of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale - financial assets 4. The effect hedging portion of gains or losses - arising from cash flow hedging instruments 5. Translation differences arising on translation of - foreign currency financial statements 6. Other - VI. Total comprehensive income 36,772,546 515,888,800 VII. Earnings per share: (i) Basic earnings per share 0.05 0.75 (ii) Diluted earnings per share 0.05 0.75 Legal representative: Sun Liqiang Person in charge of accounting : Leng Bin Person in charge of accounting organ: Jiang Jianxun 15 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. 5) Consolidated cash flow statement Unit: CNY Three months ended 31 Three months ended Item March 2017 31 March 2016 1. Cash flows from operating activities: Cash received from sales of goods and rending of services 1,653,469,554 1,852,141,728 Tax refund received 1,092,133 Other cash received related to operating activities 35,857,955 5,343,373 Subtotal of cash flows of operating activities 1,689,327,509 1,858,577,234 Cash paid for goods and services 424,736,589 444,239,863 Cash paid to and on behalf of employees 137,940,254 127,947,911 Cash paid for various taxes 564,277,054 482,676,851 Other cash paid related to operating activities 178,015,104 198,456,153 Sub-total of cash outflows of operating activities 1,304,969,001 1,253,320,778 Net cash flow from operating activities 384,358,508 605,256,456 2. Cash flow from investing activities: Cash received from return of investment Fixed deposit with the term of over 3 months 3,000,000 6,000,000 Cash received from obtaining investment profit Cash received from interest income 25,550 21,433 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 30,300 231,240 Net cash received from disposal of branch and other business unit Other cash received related to investing activities Subtotal of cash flows of investment activities 3,055,850 6,252,673 Cash paid to acquire fixed assets, intangible assets and other long-term assets 142,789,698 172,593,131 Fixed deposit with the term of over 3 months 5,000,000 7,007,000 Cash for investment Net cash paid to acquire branch and other business unit 760,824 Other cash paid related to investment activities Subtotal of cash outflows of investment activities 147,789,698 180,360,955 Net cash flow from investing activites -144,733,848 -174,108,282 3.Cash flow from financing activites Cash received from acquiring investment Including: cash received from acquiring minority shareholders investment by branch Cash received from acquiring loans 51,803,310 397,881,779 Other cash received related to finaning activities Subtotal cash flows of financing activities 51,803,310 397,881,779 Cash paid to pay debts 18,643,560 101,108,029 Cash paid to distribute dividend, profit or pay interest 6,949,153 7,186,699 Including: dividend and profit paid to minority shareholders by branch Other cash paid related to financing activities Subtotal of cash outflows of financing activities 25,592,713 108,294,728 Net cash flow from financing activites 26,210,597 289,587,051 4. Influences of exchange rate fluctuation on cash and cash equivalents 197,614 252,077 5. Net Increase in cash and cash equivalents 266,032,871 720,987,302 Add: balance at the beginning of the period of cash and cash equivalents 1,256,942,304 1,092,241,661 16 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. 6.Balance at the end of the period of cash and cash equivalents 1,522,975,175 1,813,228,963 Legal representative: Sun Liqiang Person in charge of accounting : Leng Bin Person in charge of accounting organ: Jiang Jianxun 6) Cash flow statement of parent company Unit: CNY Three months ended 31 Three months ended Item March 2017 31 March 2016 1. Cash flows from operating activities: Cash received from sales of goods and rending of services 422,763,453 429,685,962 Tax refund received Other cash received related to operating activities 198,360,050 160,725 Subtotal of cash flows of operating activities 621,123,503 429,846,687 Cash paid for goods and services 163,847,294 183,441,735 Cash paid to and on behalf of employees 33,712,684 44,615,485 Cash paid for various taxes 145,925,056 61,696,240 Other cash paid related to operating activities 17,540,294 1,025,733,883 Sub-total of cash outflows of operating activities 361,025,328 1,315,487,343 Net cash flow from operating activities 260,098,175 -885,640,656 2. Cash flow from investing activities: Cash received from return of investment Fixed deposit with the term of over 3 months 3,000,000 6,000,000 Cash received from obtaining investment profit 92,701,945 1,097,942,213 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 231,240 Net cash received from disposal of branch and other business unit Other cash received related to investing activities Subtotal of cash flows of investment activities 95,701,945 1,104,173,453 Cash paid to acquire fixed assets, intangible assets and other long-term assets 1,875,090 10,535,307 Fixed deposit with the term of over 3 months 5,000,000 7,007,000 Cash for investment 55,192,710 Net cash paid to acquire branch and other business unit Other cash paid related to investment activities Subtotal of cash outflows of investment activities 62,067,800 17,542,307 Net cash flow from investing activites 33,634,145 1,086,631,146 3.Cash flow from financing activites Cash received from acquiring investment Including: cash received from acquiring minority shareholders investment by branch Cash received from acquiring loans 100,000,000 Other cash received related to finaning activities Subtotal cash flows of financing activities 100,000,000 Cash paid to pay debts 100,000,000 Cash paid to distribute dividend, profit or pay interest 5,055,403 6,857,499 Including: dividend and profit paid to minority shareholders by branch Other cash paid related to financing activities Subtotal of cash outflows of financing activities 5,055,403 106,857,499 Net cash flow from financing activites -5,055,403 -6,857,499 4. Influences of exchange rate fluctuation on cash and cash 17 2017 the First Quarter Report of Yantai Changyu Pioneer Wine Co. Ltd. equivalents 5. Net Increase in cash and cash equivalents 288,676,917 194,132,991 Add: balance at the beginning of the period of cash and cash equivalents 238,003,198 143,798,080 6.Balance at the end of the period of cash and cash equivalents 526,680,115 337,931,071 Legal representative: Sun Liqiang Person in charge of accounting : Leng Bin Person in charge of accounting organ: Jiang Jianxun 2. Audit report Whether the 1st quarter report has been audited. □Yes √No The first quarter report has not been audited. Yantai Changyu Pioneer Wine Co. Ltd. Board of Directors 28th April 2017 18