Gujing Distillery Original Chinese Spirits The 2015 Annual Report
ANHUI GUJING DISTILLERY COMPANY LIMITED
THE 2015 ANNUAL REPORT
Announcement No. 2016-007
April 2016
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section I Important Statements
The Board of Directors, Supervisory Committee, directors, supervisors and senior management of
Anhui Gujing Distillery Company Limited (hereinafter referred to as the “Company”) hereby
guarantee that the information presented in this Report is factual, accurate and complete, and shall
be jointly and severally liable for any false information, misleading statements or material
omissions carried in this Report.
All directors attended the board meeting for the review of this Report.
The Board has considered and approved the following preliminary plan for profit distribution:
Based on the total shares of the Company on 31 December 2015, a cash dividend of RMB2.00 (tax
inclusive) per 10 shares will be distributed to all shareholders of the Company. No bonus shares will
be granted, nor will any capital reserves be converted into share capital.
Liang Jinhui, company principal, Ye Changqing, chief of the accounting work, and Zhu Jiafeng,
chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
carried in this Report is factual, accurate and complete.
The future plans and some other forward-looking statements mentioned in this Report shall not be
considered as virtual promises of the Company to investors. Therefore, investors are kindly
reminded to pay attention to possible investment risks.
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Contents
Section I Important Statements ........................................................................................................ 2
Section II Corporate Profile and Financial Results ........................................................................ 5
Section III Business Profile ............................................................................................................... 9
Section IV Management Discussion and Analysis ......................................................................... 10
Section V Significant Events ........................................................................................................... 30
Section VI Share Changes and Information about Shareholders................................................ 36
Section VII Preference Shares......................................................................................................... 42
Section VIII Directors, Supervisors, Senior Management and Employees ................................ 43
Section IX Corporate Governance ................................................................................................. 50
Section X Financial Report ............................................................................................................. 57
Section XI Documents Available for Reference ........................................................................... 152
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Definitions
Term Definition
Company, the Company, Gu Jing Anhui Gujing Distillery Company Limited
Group, the Group Anhui Gujing Distillery Company Limited (consolidated)
Gujing Group Anhui Gujing Group Co., Ltd.
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section II Corporate Profile and Financial Results
I Corporate information
Stock name Gujing Distillery, Gujing Distillery B
Stock code 000596, 200596
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 安徽古井贡酒股份有限公司
Abbr. of the Company name in 古井
Chinese
Company name in English (if any) ANHUI GUJING DISTILLERY COMPANY LIMITED
Abbr. of the Company name in GU JING
English (if any)
Legal representative Liang Jinhui
Registered address Gujing Town, Bozhou City, Anhui Province, P.R.China
Zip code 236820
Office address Gujing Town, Bozhou City, Anhui Province, P.R.China
Zip code 236820
Company website http://www.gujing.com
Email gjzqb@gujing.com.cn
II Contact information
Company Secretary Representative for Securities Affairs
Name Ye Changqing Ma Junwei
Gujing Town, Bozhou City, Anhui Gujing Town, Bozhou City, Anhui
Address
Province, P.R.China Province, P.R.China
Tel. (0558) 5712231 (0558)5710057
Fax (0558)5317706 (0558)5317706
E-mail ycq@gujing.com.cn gjzqb@gujing.com.cn
III Information disclosure and place where this Report is kept
Newspapers designated by the Company for
China Securities Journal, Securities Times, Ta Kung Pao (HK)
information disclosure
Website designated by the China Securities http://www.cninfo.com.cn
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Regulatory Commission (CSRC) for the publication
of this Report
Place where this Report is kept Company Secretary Office
IV Company registration and alteration
Organization code 15194000-8
Changes in main business activities since the
No changes
Company was listed (if any)
Changes of the controlling shareholder (if
No changes
any)
V Other information
The CPAs firm hired by the Company
Name Ruihua Certified Public Accountants LLP
5-11 F, West Tower, China Overseas Property Plaza, Building No. 7, Courtyard No. 8, Xi
Office address
Binhe Road, Yong Ding Men, Dong Cheng District, Beijing, China
Accountants writing signatures Lin Wanqiang, yangganlin
Sponsor engaged by the Company to continuously perform its supervisory function during the Reporting Period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to continuously perform its supervisory function during the Reporting Period
□ Applicable √ Not applicable
VI Accounting and financial results
Whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting
policies or correction of accounting errors
□ Yes √ No
2015 2014 +/-% 2013
Operating revenues (RMB) 5,253,411,479.40 4,650,855,881.72 12.96% 4,580,575,654.71
Net profit attributable to
shareholders of the Company 715,578,369.68 597,041,887.34 19.85% 622,004,915.79
(RMB)
Net profit attributable to
shareholders of the Company after 682,760,794.86 568,353,541.08 20.13% 593,950,787.12
exceptional profit and loss (RMB)
Net operating cash flow (RMB) 790,109,535.01 387,494,289.89 103.90% 638,255,355.31
Basic earnings per share
1.42 1.19 19.33% 1.24
(RMB/share)
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Diluted earnings per share
1.42 1.19 19.33% 1.24
(RMB/share)
Weighted average return on equity
15.91% 15.05% 0.86% 17.47%
(%)
31 December 2015 31 December 2014 +/-% 31 December 2013
Total assets (RMB) 7,183,147,641.13 6,413,518,166.03 12.00% 5,816,934,562.27
Net assets attributable to
shareholders of the Company 4,833,721,630.08 4,181,050,977.96 15.61% 3,742,756,257.05
(RMB)
VII Differences in accounting data under domestic and overseas accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared under
international and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared under overseas
and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
VIII Financial results by quarter
Unit: RMB
1Q 2Q 3Q 4Q
Operating revenues 1,667,266,446.81 1,045,776,382.11 1,301,371,823.31 1,238,996,827.17
Net profit attributable to
302,810,177.34 77,694,626.83 120,106,124.85 214,967,440.66
shareholders of the Company
Net profit attributable to
shareholders of the Company after 297,882,968.56 70,375,635.65 103,842,076.48 210,660,114.17
exceptional profit and loss
Net operating cash flow 308,110,106.39 28,107,551.44 331,313,368.07 122,578,509.11
Whether there are any material differences between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports
□ Yes √ No
IX Exceptional profit/loss
√ Applicable □ Not applicable
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Unit: RMB
Item 2015 2014 2013 Note
Profit/loss on disposal of non-current assets
(including offset amount of asset -990,695.19 -2,134,348.70 -1,394,990.98
impairment provisions)
Government grants charged to the profit/loss
for the Reporting Period (except for the
government grants closely related to the
19,931,320.03 6,045,394.97 6,438,091.17
business of the Company and given at a
fixed quota or amount in accordance with
the States uniform standards)
Profit/loss on fair value changes of
transactional financial assets and liabilities
& investment profit on disposal of
transactional financial assets and liabilities
7,842,274.38 17,233,109.00 10,050,415.19
as well as financial assets available for sale,
except for effectively hedging business
related to normal business operations of the
Company
Impairment provision reversal for accounts
receivable on which the impairment test is 0.00 382,500.00 0.00
carried out separately
Non-operating income and expense other
16,973,709.12 16,729,758.11 22,311,989.53
than the above
Less: Corporate income tax 10,939,033.52 9,568,067.12 9,351,376.24
Total 32,817,574.82 28,688,346.26 28,054,128.67 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss,
or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section III Business Profile
I Main business scope in the Reporting Period
We are mainly engaged in the production and sale of distilled spirits and packaging materials, as well as deep processing and hi-tech
development of agricultural and sideline products. The “Original Chinese Spirits of Gu Jing” are our main product.
After nearly four years of adjustment, Chinas distilled spirits industry has entered a new normal state characteristic of
medium-and-slow-speed development. The period of high-speed growth has passed for the industry and its development has shifted
from a sharp decline to the relatively steady state at present.
In 2015, the value of our “Gujing Distillery” brand exceeded RMB37.555 billion, putting it on the Top 500 Asian Brands, the Hurun
Top 200 Brands 2015 and the BrandZ Top 100 Chinese Brands in Value.
II Significant changes in the main assets
1. Significant changes in the main assets
Not applicable
2. Main assets overseas
□ Applicable √ Not applicable
III Core competitiveness analysis
No significant changes occurred to our core competitiveness during the Reporting Period.
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section IV Management Discussion and Analysis
I Overview
In the Reporting Period, Chinas economy encountered various hits and challenges, building up the downward pressure on it. Still in
a “hibernation period” before recovery, Chinas distilled spirits industry saw increasing competition. Despite the complicated internal
and external environments, the Company, upon the common efforts of the Board and all the staff, upheld its corporate values of “Be
Honest, Make Good Wine, Make Ourselves Better and Make the World Better”, overcame difficulties and forged ahead. As a result,
all of our objectives set for the year 2015 were successfully fulfilled.
For the year 2015, the Company achieved operating revenues of RMB5.253 billion, up 12.96% from last year; total profit of
RMB966 million, representing a year-on-year growth of 21.36%; net profit of RMB716 million, rising19.85% from last year; an EPS
of RMB1.42/share, up 19.33% from last year; and net operating cash flow of RMB790million, soaring103.90% from the year earlier.
(I) The Company innovated patterns, and expanded new markets
1) The Company positively explored new marketing patterns, and started the 5.0 era of Gujing distilled spirits. In the Reporting
Period, the Company promoted customized businesses such as Wuji Cellar, Wuji Exchange Shop, Healthy Wine in Jar, and
Health-care Wine. The Company started the Gujing 5.0 era, constructed an integrated operation pattern of front-end customer
introduction, middle-end experience, and trail-end settlement, and provided consumers with sustainable purchasing and consuming
experience.
2) The Company formed a complete network internally and externally, and sustainably improved brand power. Gujing always took
brand building as the priority for all marketing efforts. As for external network, the Company continued to help the World Expo
entered into Milan, and promoted Chinese distilled spirits into the world again. As for internal network, the Company held 5.19
Cellar Open Ceremony, enabled 9.9 Wine God Square (also as the Autumn Brew Ceremony), held the Gujing Distillery Original
Chinese Spirits Hefu High-speed Rail Starting Ceremony, successfully registered Vintage Liquor, and continuously improved the
brand image of Gujing Distillery, winning a brand value of RMB37.555 billion.
3) The Company deeply carried forward marketing construction, and planned national strategic layout. In 2015, the Company
continued to expand Anhui market, started in Henan market; strengthened business promotion through breakthroughs in clients,
products, and organizations, and obtained stage effects. At the same time, marketing efforts in strategic nodes such as Bejing,
Shanghai and Shenzhen were rapidly advanced.
4) The Company optimized product system, and adjusted marketing competition strategy. In the Reporting Period, the Company
optimized the Original Chinese Spirits series according to market demand; accomplished product upgrade for the Original Chinese
Spirits series in Anhui province, and sustainably impelled the three-link project and channel-sinking process.
(II) The Company innovated quality management pattern, and stably improved the quality of distilled spirits
1) The Company innovated quality management, and strengthened quality management and control. The Company introduced
automatic production technology of distilled spirits, transformed toward new industrial trends of automation and intelligence. The
135 Refine Quality management pattern, which was the independently innovated quality management pattern with unique Gujing
feature, won the high appraisal of National Quality Management Benchmarking by the Ministry of Industry and Information
Technology.
2) The Company increased on science and technology innovation, and made multiple breakthroughs for scientific research
achievements. 2 achievements won as one of the Ten Excellent Scientific and Technological Achievements in Chinese Distilled
Spirits Science and Technology Convention, 1 achievement won the Second Prize among Science and Technology Progress Prizes
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
issued by China Alcoholic Drinks Association, 1 achievement won the Third Prize among Science and Technology Progress Prizes in
Anhui province, 1 achievement won the award for Significant and Rational Advice and Technology Improvement Result in Anhui
Province, and 1 scientific achievement won as one of the Ten Technology Innovation Achievements in Anhui Staff.
(III) The Company optimized organizations and structures, and improved skills of the management staff
1) The Company effectively conducted the activity of Post Measurement. The Company perfected human resources management
mechanism, further optimized the Companys originations and structures, position systems, and successfully conducted career path
construction.
2) The Company conducted talent team construction. The Company targeted to carry out the cultivation and training for core
marketing talents, core technological talents, and core management talents, and obtained good training effects.
(IV) The Company strengthened company culture construction, and improved brand image
With the guidance of the Companys core values of “Be Honest, Make Good Wine, Make Ourselves Better and Make the World
Better”, the Companys atmosphere and ecology became more healthy and positive. The results of “new environment, new
atmosphere, new motion, and new performance” gradually showed up, creating a good internal environment of “fair people and fair
works, justice and fairness, as well as fair atmosphere”. The Company supervised and urged every employee to become the executer
and transmitter of Gujings contribution culture.
(V) In the Reporting Period, there were still shortcomings as below of the Company.
1) The transformation of the Company has not been accomplished, the pressure of regional competitions still kept pushing, and the
Company needed more guarantee resources;
2) Internal labor cost sustainably rose up, and employee needs became more diversified.
II Analysis of main business
1. Overview
See “I. Overview” in “Management Discussion and Analysis”.
2. Revenues and costs
(1) Breakdown of operating revenues
Unit: RMB
2015 2014
As a percentage of As a percentage of
+/-%
Amount operating revenues Amount operating revenues
(%) (%)
Operating revenues 5,253,411,479.40 100.00% 4,650,855,881.72 100.00% 12.96%
By business segment
Manufacturing 5,253,411,479.40 100.00% 4,650,855,881.72 100.00% 12.96%
By product
Distilled spirits 5,118,622,287.57 97.44% 4,525,663,475.64 97.31% 13.10%
Hotel services 83,118,805.82 1.58% 76,460,229.81 1.64% 8.71%
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Other 51,670,386.01 0.98% 48,732,176.27 1.05% 6.03%
By geographical segment
North China 297,439,265.75 5.66% 375,113,132.66 8.06% -20.71%
Central China 4,435,362,515.78 84.43% 3,632,413,502.07 78.10% 22.11%
South China 518,051,081.70 9.86% 641,172,562.92 13.79% -19.20%
Overseas 2,558,616.17 0.05% 2,156,684.07 0.05% 18.64%
(2) Business segments, products or geographical segments contributing over 10% of the operating revenues
or profit
√ Applicable □ Not applicable
Unit: RMB
Operating Gross profit
Operating Gross profit Operating cost:
Operating cost revenue: YoY margin: YoY
revenue margin YoY +/-%
+/-% +/-%
By business segment
Manufacturing 5,253,411,479.40 1,509,536,099.28 71.27% 12.96% 3.46% 2.64%
By product
Distilled spirits 5,118,622,287.57 1,456,785,874.42 71.54% 13.10% 5.98% 1.91%
Hotel services 83,118,805.82 34,151,473.72 58.91% 8.71% -17.32% 12.93%
Other 51,670,386.01 18,598,751.14 64.01% 6.03% -56.92% 52.60%
By geographical segment
North China 297,439,265.75 116,582,792.92 60.80% -20.71% -22.76% 1.04%
Central China 4,435,362,515.78 1,223,283,285.57 72.42% 22.11% 11.47% 2.63%
South China 518,051,081.70 168,847,248.71 67.41% -19.20% -19.65% 0.18%
Overseas 2,558,616.17 822,772.08 67.84% 18.64% 49.82% -6.70%
Main business data of the prior year restated according to the changed statistical caliber for the Reporting Period
□ Applicable √ Not applicable
(3) Whether revenue from physical sales is higher than service revenue
√ Yes □ No
Business segment Item Unit 2015 2014 +/-%
Sales volume Ton 71,829.51 66,608.13 7.84%
Distilled spirits
Output volume Ton 77,105.07 65,680.19 17.39%
brewage
Inventory Ton 8,262.69 2,987.13 176.61%
Reason for any over 30% YoY movements in the data above
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
√ Applicable □ Not applicable
Mainly due to an increase in our orders, the closing inventory stood at 8,262.69 tons, representing a year-on-year surge of176.61%.
(4) Execution progress of major signed sales contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of operating costs
By business segment
Unit: RMB
2015 2014
As a percentage As a percentage
Business segment Item +/-%
Amount of operating costs Amount of operating costs
(%) (%)
Food
Direct materials 1,084,012,660.40 73.29% 1,041,435,552.23 73.01% 0.28%
manufacturing
Food
Direct labor cost 164,561,013.89 11.13% 147,507,978.36 10.34% 0.78%
manufacturing
Food Manufacturing
127,413,435.90 8.61% 101,989,180.53 7.15% 1.46%
manufacturing expenses
Food
Fuels 80,798,764.23 5.46% 83,662,436.07 5.87% -0.40%
manufacturing
By product
Unit: RMB
2015 2014
Product As a percentage of As a percentage of +/-%
Amount Amount
operating costs (%) operating costs (%)
Distilled spirits 1,456,785,874.42 96.51% 1,374,595,147.19 94.21% 5.98%
Hotel services 34,151,473.72 2.26% 41,303,525.82 2.83% -17.32%
Other 18,598,751.14 1.23% 43,174,240.23 2.96% -56.92%
(6) Changes in the scope of the consolidated financial statements for the Reporting Period
√ Yes □ No
In order to make full use of our environmental protection facilities, technology and talents, we decided, upon deliberation, to
incorporate Anhui Yuanqing Environmental Protection Co., Ltd. with a registered capital of RMB16 million. We held 100% equity
interests of the new subsidiary, which was included in the scope of our consolidated financial statements for the year 2015.
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
(7) Major changes in the business, products or services in the Reporting Period
□ Applicable √ Not applicable
(8) Main customers and suppliers
Main customers
Total sales to top five customers (RMB) 1,079,135,971.01
Total sales to top five customers as a percentage of the
20.54%
total sales for the Reporting Period (%)
Information about top five customers
As a percentage of the total sales for the
No. Customer Sales amount (RMB)
Reporting Period (%)
1 Distributor A 531,197,951.92 10.11%
2 Distributor B 165,056,283.86 3.14%
3 Distributor C 148,418,510.37 2.83%
4 Distributor D 144,039,703.63 2.74%
5 Distributor E 90,423,521.23 1.72%
Total -- 1,079,135,971.01 20.54%
Other information about the main customers
□ Applicable √ Not applicable
Main suppliers
Total purchases from top five suppliers (RMB) 416,084,731.49
Total purchases from top five suppliers as a percentage of
30.53%
the total purchases for the Reporting Period (%)
Information about top five suppliers
As a percentage of the total purchases for
No. Supplier Purchase amount (RMB)
the Reporting Period (%)
1 Supplier A 209,135,946.13 15.34%
2 Supplier B 60,749,348.79 4.46%
3 Supplier C 51,130,858.45 3.75%
4 Supplier D 48,763,195.22 3.58%
5 Supplier E 46,305,382.90 3.40%
Total -- 416,084,731.49 30.53%
Other information about the main suppliers
□ Applicable √ Not applicable
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
3. Expense
Unit: RMB
2015 2014 +/-% Reason for any significant change
Selling expenses 1,557,800,618.96 1,304,206,036.06 19.44%
Administrative expenses 543,822,606.51 579,424,693.56 -6.14%
The earnings cycles of bank financial
Financial costs -20,334,406.40 -37,751,610.36 46.14%
products changed.
4. R&D input
√ Applicable □ Not applicable
We carried out R&D projects in the current year to study and develop new products, improve the quality of our products, study the
intelligent brewage technique and new brewage technique.
Our achievements in R&D: 2 achievements won as one of the Ten Excellent Scientific and Technological Achievements in Chinese
Distilled Spirits Science and Technology Convention, 1 achievement won the Second Prize among Science and Technology Progress
Prizes issued by China Alcoholic Drinks Association, 1 achievement won the Third Prize among Science and Technology Progress
Prizes in Anhui province
Information about R&D input
2015 2014 +/-%
Number of R&D personnel 506 423 19.62%
R&D personnel as a percentage
8.65% 7.12% 1.53%
in the total employees
R&D input (RMB) 162,495,000.00 152,790,000.00 6.35%
R&D input as a percentage in
3.09% 3.29% -0.20%
operating revenues
Capitalized R&D input (RMB) 0.00 0.00 0.00%
Capitalized R&D input as a
percentage in the total R&D 0.00% 0.00% 0.00%
input
Reasons for any significant YoY change in the percentage of the R&D input in the operating revenues
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of the capitalized R&D input and rationale
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
Item 2015 2014 +/-%
Subtotal of operating cash
6,505,710,652.03 5,470,924,405.02 18.91%
inflow
Subtotal of operating cash 5,715,601,117.02 5,083,430,115.13 12.44%
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
outflow
Net operating cash flow 790,109,535.01 387,494,289.89 103.90%
Subtotal of investment cash
2,279,338,189.57 2,383,026,644.60 -4.35%
inflow
Subtotal of investment cash
2,610,714,434.30 3,218,831,202.66 -18.89%
outflow
Net investment cash flow -331,376,244.73 -835,804,558.06 60.35%
Subtotal of financing cash
100,720,000.00 176,260,000.00 -42.86%
outflow
Net financing cash flow -100,720,000.00 -176,260,000.00 42.86%
Net increase in cash and cash
358,013,290.28 -624,570,268.17 157.32%
equivalents
Explanation of why the data above varied significantly
√ Applicable □ Not applicable
1. Mainly due to an increase in our orders, the net operating cash flow for the Reporting Period was RMB790,109,535.01,
representing a surge of103.90% from the year earlier.
2. Mainly because the payment for construction decreased as the industrial park was almost completed, the net investment cash flow
for the Reporting Period was RMB-331,376,244.73 up 60.35% from last year.
3. Mainly due to a decrease in the distributed cash dividends, the net financing cash flow for the Reporting Period was
RMB-100,720,000.00, rising 42.86% on a year-on-year basis.
4. Mainly due to an increase in the order proceeds, the net increase in cash and cash equivalents for the Reporting Period was
RMB358,013,290.28, soaring157.32% from last year.
Reason for any big difference between the net operating cash flow and the net profit for the Reporting Period
□ Applicable √ Not applicable
III Analysis of non-core business
□ Applicable √ Not applicable
IV Analysis of assets and liabilities
1. Significant changes in the asset composition
Unit: RMB
31 December 2015 31 December 2014
As a As a Change in
percentage of percentage of percentage Reason for any significant change
Amount Amount
total assets total assets (%)
(%) (%)
Monetary funds 1,087,319,158.77 15.14% 718,460,442.79 11.20% 3.94%
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Accounts
4,948,074.84 0.07% 4,337,953.26 0.07% 0.00%
receivable
Inventories 1,396,712,050.87 19.44% 1,227,182,774.09 19.13% 0.31%
Investment
9,715,451.89 0.14% 32,074,356.24 0.50% -0.36%
property
Fixed assets 1,691,028,804.32 23.54% 1,724,134,467.11 26.88% -3.34%
Construction in
62,562,971.78 0.87% 61,637,510.96 0.96% -0.09%
progress
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Profit/loss on
Cumulative fair Impairment
fair value Purchased in Sold in the
Opening value changes provided in the Closing
Item changes in the the Reporting Reporting
balance charged to Reporting balance
Reporting Period Period
equity Period
Period
Financial assets
1. Financial
assets measured
at fair value with
fair value
changes included
in the profit and 303,919.60 42,203.41 0.00 0.00 2,706,702.10 10,530,672.80 322,223.28
loss for the
Reporting Period
(excluding
derivative
financial assets)
2.
Available-for-sale 65,332,932.00 0.00 50,416,376.59 0.00 98,131,881.88 0.00 213,881,190.47
financial assets
Subtotal of
65,636,851.60 42,203.41 50,416,376.59 0.00 100,838,583.98 10,530,672.80 214,203,413.75
financial assets
Total of the
65,636,851.60 42,203.41 50,416,376.59 0.00 100,838,583.98 10,530,672.80 214,203,413.75
above
Financial
0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Significant changes in the measurement attributes of the main assets in the Reporting Period
□ Yes √ No
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
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
Cumulat
Variety s on fair
Account ive fair Purchas Sold in Gain/los
Code of Name of Initial value
of ing Opening value ed in the the s in the Closing Account Source
changes
securitie securitie investm measure book changes Reporti Reporti Reporti book
securitie in the
ment value charged ng ng ng value ing title of funds
s s ent cost Reporti
s model to Period Period Period
ng
equity
Period
Availabl
Domesti Fair e-for-sal
29,532, 39,944, -1,406,0 3,506,7 42,045, Own
c/overse 601988 ZGYH value 0.00 0.00 0.00 e
821.53 580.00 97.39 68.39 251.00 funds
as stock method financia
l asset
Availabl
Domesti Fair e-for-sal
20,571, 25,388, -2,265,0 3,491,11 26,614, Own
c/overse 000001 PAYH value 0.00 0.00 0.00 e
856.79 352.00 25.89 6.69 442.80 funds
as stock method financia
l asset
Availabl
Domesti Fair e-for-sal
91,133, 54,087, 91,133, 145,221 Own
c/overse 600373 ZWCM value 0.00 0.00 0.00 0.00 e
996.80 499.87 996.80 ,496.67 funds
as stock method financia
l asset
141,238 65,332, 50,416, 98,131, 220,055 213,881,
Total -- 0.00 0.00 0.00 --
,675.12 932.00 376.59 881.88 ,562.60 190.47
~ 18 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Disclosure date of the
announcement about the
boards consent for the
securities investment
Disclosure date of the
announcement about the
general meetings consent
for the securities
investment (if any)
(2) Investment in financial derivatives
√ Applicable □ Not applicable
Unit: RMB'0,000
Ratio of
investm
ent
amount
at the
Investm Investm
Amount end of
Type of ent Pursed Sold in
Actual ent
Related-p Initial provided amount the
derivati amount in the the
gain/lo
Operati Relati arty investm Commence Terminat for period
ve at the Reporti Reporti at the ss for
ng party on transactio ent ment date ion date impairm to the
investm beginnin ng ng end of the
n or not amount ent (if Compan
ent g of the Period Period the period
any) y's net
period period
asset at
the end
of the
period
(%)
Reverse Reverse
repurch repurch
16 Dec. 18,071.2 18,262.
ase of N/A No ase of 0 6 Jan. 2015 0.00 0.00% 191.26
2015 2 48
national national
debt debt
18,071.2 18,262.
Total 0 -- -- 0.00 0.00% 191.26
2 48
Source of derivatives investment
All from the Company's own funds
funds
Lawsuit (if applicable) No lawsuits
Disclosure date of the
30 Aug. 2013
announcement about the boards
~ 19 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
consent for the derivative
investment (if any)
Disclosure date of the
announcement about the general
meetings consent for the derivative
investment (if any)
Risk analysis and risk control
measures for positions held in
derivatives in the Reporting Period The Company had controlled the relevant risks strictly according to the Derivatives Investment
(including but not limited to market Management System.
risk, liquidity risk, credit risk,
operational risk, legal risk, etc.)
Changes in market price or fair
value of derivatives invested in the
Reporting Period (specific methods
used and relevant assumption and Naught
parameter settings shall be disclosed
for analysis of fair value of
derivatives)
Significant changes in the
Companys accounting policies and
specific accounting principles for Naught
derivatives in the Reporting Period
as compared to the prior 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
Special opinions expressed by
corresponding supervision mechanism for the financial derivative instrument business and
independent directors concerning
formulated reasonable accounting policy as well as specific principles of financial accounting;
the Companys derivatives
the derivative Investment business developed separately took national debts as mortgage object,
investment and risk control
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.
5. Use of funds raised
√ Applicable □ Not applicable
(1) Overview of the use of raised funds
√ Applicable □ Not applicable
~ 20 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Unit: RMB'0,000
Total
Proportion
Total amount of Amount
Total amount of the total
amount the raise Total Usage and of the
Total amount of the amount of
Total of the funds amount of whereabouts raise
of the accumulative the
Raised Raised amount of used raise which the raise of the raise funds
accumulative raise funds accumulative
years methods the raise funds of changed funds had funds had which left
used raise which raise funds
funds the the usage not been not been unused
funds changed the which
Reporting during the used used over 2
usage changed the
Period Reporting years
usage
Period
Deposited
in the
Private special
2011 122,749.95 2,856.64 107,012.74 0 0 0.00% 7,006.93 0
offering account for
raised
proceeds
Total -- 122,749.95 2,856.64 107,012.74 0 0 0.00% 7,006.93 -- 0
Overview of the use of raised funds
The usage of the raise funds of the Company executed steadily as planed without any change.
(2) Projects invested with raised funds as promised
√ Applicable □ Not applicable
Unit: RMB0,000
Date
Project Investment when the Material
Projects invested Accumulative Profit Reach
changed Raised Investment Input in progress project change in
with raised capital input up to generated the
or not capital after the up to the reaches the
as promised and the in the expected
(including input as adjustment Reporting period-end the project
investments with period-end Reporting profit or
partially promised (1) Period (%) (3)＝ expected feasibility
over-raised capital (2) Period not
changed) (2)/(1) usable or not
condition
Commitment investment projects
Technological
Couldnt be
Transform on the 30 Apr.
Brewage of No 13,500 12,194.42 477.74 12,247.9 100.44% individually Yes No
High-quality Base 2014
measured
Wine
Construction of
Couldnt be
Base Wine 30 Apr.
Blending & Filling No 68,600 65,921.06 2,239.9 59,643.42 90.48% individually Yes No
Centre and 2014
measured
Ancillary Facilities
~ 21 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Couldnt be
Construction of 30 Apr.
Marketing No 27,500 27,500 139 18,096.36 65.80% individually Yes No
Network 2014
measured
Couldnt be
Construction of 31 Dec.
No 17,000 17,000 0 17,025.06 100.15% individually Yes No
Brand Promotion 2012
measured
Subtotal of
promised -- 126,600 122,615.48 2,856.64 107,012.74 -- -- -- --
investment projects
Investments of over-raised capital
N/A
Total -- 126,600 122,615.48 2,856.64 107,012.74 -- -- -- --
Reason for failing
to reach scheduled
progress or
projected income Naught
(explain one
project by one
project)
Explanation on
significant changes
Naught
in feasibility of
projects
Amount, usage and
usage progress of Not applicable
over-raised capital
Change of the
implementation
location of any Not applicable
raised funds
investment project
Adjustment of the
implementation
method of any Not applicable
raised funds
investment project
Advanced input Applicable
and exchange of In accordance with the explanation of the Particulars on the Private Issuance of A-share of Anhui Gujing
any raised funds Distillery Co., Ltd. and the Listing Announcement, “Before the raised proceeds being in place, the Company can
investment project use the self-raised proceeds to input preliminarily in accordance with the actual progress of raised proceeds
~ 22 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
investment projects; after the raised proceeds being in place, the Company can use the raised proceeds to replace
the self-raised proceeds preliminarily input”. And the Proposal on Using the Raised Proceeds to Replace the
Self-raised Proceeds Preliminarily Input to the Raised Proceeds Investment Projects was reviewed and approved
at the 7th Session of the 6th Board of Directors, which agreed to use the raised proceeds to replace the self-raised
proceeds of RMB27,058,143.42 preliminarily input to the raised proceeds investment projects. The above funds
replacement was completed on 6 January 2012.
Idle raised capital
for temporarily
Not applicable
supplementing
working capital
Applicable
1. The Company strictly carried out the purchase system and the project bidding way, which better controlled the
project construction and purchase cost and under the premise of guaranteeing the project quality with the
Outstanding raised
principles of practicing strict economy, the Company further strengthened the project expenses control,
funds in project
supervisor and management in the process of the execution which reduced the total cost of the investment project
implementation
of the raised funds. 2. The surplus reason of the marketing network construction project was due to the rather big
and reasons
changes of the liquor market environment and the third party logistics system gradually becoming more and
more mature and at the same time, the Company would no more execute the center project of Hefei Logistics for
reducing the fixed operating cost of the Company, which caused the capital surplus of the project.
Usage and
whereabouts of
Deposited in the special account for raised proceeds.
unused raise
capital
Problems found in
the usage and
disclosure affairs N/A
of raised capital
and other situations
(3) Change of projects invested with raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of major assets and equity interests
1. Sale of major assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
~ 23 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
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 Companys net profits
Unit: RMB
Relationshi Main business
Company Registered Operating Operating
p with the scope Total assets Net assets Net profits
name capital revenues profits
Company
Wholesales of
distilled spirit,
Bozhou construction
84,864,497. 1,494,601,431. 155,661,630. 5,113,240,885. 662,143,680. 483,232,704.
Gujing Sales Subsidiary materials,
89 83 62 14 79 55
Co., Ltd feeds and
assistant
materials
Bozhou Manufacture
86,660,268. 157,218,771. 37,460,100.9 28,229,912.8
Gujing Glass Subsidiary and sale of 194,396,540.66 208,446,436.73
98 73 4 4
Co., Ltd glass products
Bozhou Collect and
Gujing sale of
1,000,000.0
Waste Subsidiary recycled glass 1,829,671.38 1,404,806.20 12,404,132.88 151,718.37 136,074.09
0
Reclamation bottle, glass,
Co., Ltd wastebasket
Production,
publish, design
and proxy of
Anhui
ads in China;
Jinyunlai
ceremony 2,000,000.0
Culture & Subsidiary 73,327,063.32 2,966,248.30 370,990,579.32 6,487,924.48 4,712,523.95
service for 0
Media Co.,
conferences as
Ltd.
well as sales
of gifts in
arts and crafts
Bozhou Administrative
Gujing license items: 30,000,000. 31,128,392.4
Subsidiary 31,405,113.57 4,036,747.86 592,510.36 445,261.86
Packing Co., Naught; 00 3
Ltd. General
~ 24 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
operating
items:
providing
packing for
Gujing Brand,
serials wine,
fruit and
vegetable
wine, health
wine of Gujing
Brand
Bozhou
Transportation
Gujing 6,945,195.6
Subsidiary , sales and 3,587,200.60 2,475,117.02 0.00 0.00 0.00
Transportatio 4
repair service
n Co., Ltd
Hotel
management
(Except for
catering
management
and hotel
operation);
Shanghai self-owned
Gujing housing rental;
54,000,000. 101,542,679. 10,060,938.2
Jinhao Hotel Subsidiary establish 223,789,626.33 76,758,815.82 7,526,499.96
00 29 3
Management branch. (If the
Co., Ltd. enterprise
operation
involves the
administrative
licensing, it
shall operate
based on the
license).
Accommodati
on and parking
services; lunch
Bozhou processing,
Gujing Hotel Subsidiary sales of 628,000.00 1,516,297.89 631,477.80 6,359,990.00 663,325.23 574,173.56
Co., Ltd. alcohol and
tobacco and
sales of daily
commodity
~ 25 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Research and
promotion of
the
engineering
and
technology;
information
System
planning and
design;
computer
software and
hardware,
network
Anhui communicatio
Swisse Will n system
50,000,000. 51,153,420.9
Science & Subsidiary design, 62,424,784.49 9,168,068.19 5,275,143.78 5,008,722.78
00 4
Technology development
Co., Ltd. and sales;
enterprise
management
consulting and
services. (If
the enterprise
operation
involves the
administrative
licensing or
qualification,
it shall operate
based on the
license or
qualification)
Production
Anhui
and sales of
Subway 30,000,000. 27,939,973.8
Subsidiary other liquor 31,403,553.42 1,438,397.73 -2,063,076.14 -2,060,026.14
Cordial Wine 00 6
(compound
Co., Ltd.
wine)
Anhui Production,
Yuanqing release, design
16,000,000. 16,000,000.0
Environment Subsidiary and acting of 16,000,000.00 0.00 0.00 0.00
00 0
al Protection the domestic
Co., Ltd. advertising;
~ 26 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
meeting
etiquette
service and
craft gift sales
Subsidiaries obtained or disposed in the Reporting Period
√ Applicable □ Not applicable
How subsidiary was obtained or disposed
Subsidiary name Impact on overall operation and results
in the Reporting Period
Anhui Yuanqing Environmental Protection
Set up
Co., Ltd.
Information about the main controlled and joint stock companies
Notes: see the “IX Equities in the subsidiaries of Section X”.
VIII Structured bodies controlled by the Company
□ Applicable √ Not applicable
IX Outlook for the future development of the Company
(I) Industrial development prospect of the company
In recent two years, with slowdown of economic growth of China, Chinese economy has entered a new normal. And supply-side
reform enables motive force for economic transformation and upgrade to accumulate and break through. Accordingly, liquor sector of
China has entered a new normal for development at medium and low speed, high-speed growth period of the sector has gone, and the
sector is in an adjustment and restructuring period. Structural division has appeared, and it takes time for the sector to walk out of the
winter all-roundly. The following features are mainly manifested in liquor sector in 2016:
1) Consumption structure is being adjusted and competition on mid-end market is keener
With continuous in-depth adjustment of the sector, consumption has returned to be rational, price for products has gradually returned
to a reasonable level, and mass consumption has become a main force of consumer products. With rise of mass consumption,
demands for medium-and-low-end liquors will keep an inflexible growth, and competition on medium-end market will be keener.
2) The industry has entered a new normal and integration has become a trend
With change of macro-economic situation and in-depth adjustment of the sector, growth speed of liquor sector will slow down,
competition will be further keener, and it will enter a struggling and crawling development stage. The sector will start entering an
all-round competition era in terms of brand influence, product quality, marketing level and innovation capability, competition in the
sector will be keener and integration in the sector will be accelerated.
3) New and old channels will be integrated and marketing will be innovated constantly
With rapid development of the internet, Internet Plus has become a general trend, and new sales modes and emerging channels
represented by B2B, B2C and O2O have been maturing and growing constantly. Internet renovation for traditional channels has been
speeding up, liquor enterprises have been transforming and reforming gradually, integrating with the internet, marketing has been
innovated constantly, and delicacy management for corporate marketing has been implemented.
4) Personalized products in terms of tailoring and crowd funding embrace large-scale development
Liquor will return to its original consumption nature, a consumer sovereignty era will come, consumer demands will be manifested in
diversification, differentiation, personality and experiencing, liquor enterprises will speed up expansion of their business of tailored
liquors, and market of tailored liquors will be a fighting place for manufacturers. With increase of online crowd funding projects of
~ 27 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
liquors on mainstream websites such as Taobao and JD, crow funding for liquors has been developing rapidly, and more and more
internet crowd funding products will be launched in the future.
5) Healthy liquors build new consumption habit
With upgrade of consumption, age structure and consumption habit of consumers are changing, they pay more attention to wine
drinking in a healthy and civilized way. To meet demands of consumers, liquor enterprises have been developing healthy liquors and
building new habits for liquor consumption.
(II) Development strategy of the company
1) Stick to developing in optimization, speed up the process of adjustment, upgrade, renovation and transformation, adjust structure
of products, improve their quality, enhance human resource development and management, improve the pressure transmission
mechanism, intensify assessment execution, improve quality of personnel, optimize the talent structure and build a corporate team for
harmonious and win-win development.
2) Stick to implementing all-round innovation strategy, improve self-reliant innovation capability, combine technical, managerial,
institutional and concept innovations, speed up corporate informatization construction, achieve optimized configuration of resources
and information sharing and give to full play of coordination effect.
3) Stick to implementing brand promotion, enhance brand building, improve brand image all-roundly and endeavor to become the
best liquor enterprise in China.
4) Become an enterprise with social responsibility, venture to shoulder the responsibility for stockholders, customers, partners, the
society and the environment, and build a harmonious enterprise actively.
(III) Operating revenue plan of the company in 2016
Efforts will be made in achieving growth of operating revenue of the company in 2016 on the basis of maintaining the figure in 2015.
(IV) Operating risk of the company
1) Macro-economy has entered a new normal, economic development has slowed down, liquor sector is facing continuous
adjustment, and quite a few uncertain and unfavorable factors exist on the market.
2) Structure of products is being upgraded and adjusted, consumption is being developed in a diversified way, consumption has
returned to be rational, mass consumption has become a main trend, and competition of medium and low grade liquors has been
keener.
3) Reform of marketing channels, transformation of consumption groups and consumption structure and impact of the internet on
traditional marketing channels.
4) Unfavorable impact of fake and inferior products and right-infringing products and false propaganda.
(V) Operating measures
In 2016, facing the industrial development situation, combining strategic development target of the company and its operating plan in
2016, the company will set liquor, its main line, as the core, and carry out 5+5 Strategies all-roundly, namely operate with five-star
standard centering round Strategy 5.0 and advance to the strategic target of the company steadily following the spirits of the 18th
National Peoples Congress of CCP and the third, fourth and fifth plenary sessions of the 18th National Peoples Congress of CCP.
1) Marketing
Further improve brand building, innovate marketing modes, optimize brand structure, explore brand internationalization road and
promote global transmission of liquor culture actively. Follow 5+5 Strategies of the company, set Strategy 5.0 as an approach,
intensify implementation of Three Links and build a model market with solid strength, physical entities and actual efficiency. Explore
small enterprise assessment mode actually, arouse initiative of individuals and make innovations of modes according to actual market
situation
2) Production operation
Enhance cost control in production process, push forward internal marketing operation of the company and further accelerate
automation, informatization and intelligence process. And explore green brewing and smart manufacture in accordance with 5+5
Strategies of the company supported with Strategy 5.0.
~ 28 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
3) Quality management
Ensure quality of products, following high levels of relevant standards, inspection of products and scientific and research
technologies. Stick to bottom line of food safety standard without wavering, enhance research and development strength and improve
traditional production techniques constantly. Further implement 125 Lean Quality management mode and improve quality of
products continuously following 5+5 Strategies of the company.
4) Corporate cultural construction
In 2016, the company will continue carrying out its core values of “Behaving decently, brewing good wines, cultivating moral
character of employees and benefiting the society”, and implementing cultural construction in place. Combine the spirit of “Being
Strict and Practical in Three Aspects” and cultural construction of the company so as to propel cultural construction of the enterprise
steadily.
The year of 2016 is the starting year of the 13th Five-year Plan of the country, a critical year for its deepening reform
comprehensively, and a critical year for Gujing Group to seize opportunities and push its operating performance to a higher level.
The board of directors of the company will lead the whole staff to brave difficulties, unit with utmost sincerity, venture to shoulder
responsibilities and endeavor to achieve its established operating objective.
X Visits paid to the Company for purposes of research, communication, interview, etc.
1. In the Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor Index to main inquiry information
See the record chart of the investor
relation activities disclosed on the
11 Nov. 2015 Field research Institution
irm.cninfo.com.cn of SZSE on 11
November 2015
Times of visit 1
Number of visiting institutions 38
Number of visiting individuals 0
Number of other visitors 0
Significant undisclosed information disclosed,
否
revealed or leaked
~ 29 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section V Significant Events
I Profit distribution and converting capital reserves into share capital for common
shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, for common shareholders in the
Reporting Period
□ Applicable √ Not applicable
The Companys plans (preplans) for distributing common stock dividend and turning capital reserve into share capital for the recent
three years (including the reporting year):
1. 2013 profits distribution proposal of the Company: distributed the cash of RMB3.5 (tax included) for every 10 shares without any
converting capital reserve into share capital;
2.2014 profits distribution proposal of the Company: distributed the cash of RMB2 (tax included) for every 10 shares without any
converting capital reserve into share capital;
3. 2015 profits distribution proposal of the Company: distributed the cash of RMB1 (tax included) for every 10 shares without
converting capital reserve into share capital
Cash dividend distribution of the Company to common shareholders over the past three years (including the Reporting Period)
Unit: RMB
Net profits Proportion in net
attributable to profits attributable
common to common
Cash dividends shareholders of the shareholders of the Ratio of cash
Cash dividends in
Year dividends in other
(tax included) Company in the Company in the other forms
forms
consolidated consolidated
statements for the statements for the
year year (%)
2015 50,360,000.00 715,578,369.68 7.04% 0.00 0.00%
2014 100,720,000.00 597,041,887.34 16.87% 0.00 0.00%
2013 176,260,000.00 622,004,915.79 28.34% 0.00 0.00%
The Company made profits in the Reporting Period and the profits distributable to common shareholders of the Company was
positive, but it did not put forward a preliminary plan for cash dividend distribution to its common shareholders
□ Applicable √ Not applicable
II Preliminary plan for profit distribution and converting capital reserves into share capital
for the Reporting Period
√ Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
~ 30 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Dividend for every 10 shares (RMB) (tax included) 1.00
Additional shares converted from capital reserves
0
for every 10 shares (share)
Total shares as the basis for the preliminary plan for 503,600,000
profit distribution (share)
Total cash dividends (RMB) (tax included) 50,360,000.00
Distributable profits (RMB) 2,587,051,422.29
Percentage of cash dividends in the total distributed 100.00%
profits
Cash dividend policy
Other
Details about the preliminary plan for profit distribution and converting capital reserves into share capital
The Company planed to based on the total shares at the year-end of 503,600,000 shares to distribute the dividends with a cash of
RMB1(tax included) to the whole shareholders for each 10 shares which was of RMB50,360,000.00 and the retained profits of
RMB2,536,691,422.29would all transfer to the next year.
III Fulfillment of commitments
1. Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors,
senior management staff or other related parties fulfilled in the Reporting Period or ongoing at the
period-end
□Applicable √ Not applicable
No such cases in the Reporting Period.
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable √ Not applicable
IV Occupation of the Company’s funds by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
V Explanations given by the Board of Directors, the Supervisory Committee and the
independent directors (if any) regarding the “auditor’s non-standard report” issued by the
CPAs firm for the Reporting Period
□ Applicable √ Not applicable
~ 31 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
VI YoY changes in accounting policies, estimations and methods
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VII Retroactive restatement due to correction of material accounting errors in the Reporting
Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY changes in the scope of the consolidated financial statements
√ Applicable □ Not applicable
For fully exerting the effectiveness of the current environmental protection facilities resources, technologies resources and the talants
resources, after the research, the Company decided to set up Anhui Yuanqing Environmental Protection Co., Ltd. with the registered
capital of RMB16 million. The Company held 100% controll right of which and included which into the scope of the 2015
consolidated finanical statement.
IX Engagement and disengagement of CPAs firm
CPAs firm at present
Name of the domestic CPAs firm Ruihua CPAs (LLP)
The Companys payment for the domestic CPAs firm
110
(RMB0,000)
Consecutive years of the audit service provided by
3
the domestic CPAs firm
Names of the certified public accountants from the
Lin Wanqiang, yangganlin
domestic CPAs firm
Reengage the CPAs firm at current period or not?
□ Yes √ No
CPAs firm, financial advisor or sponsor engaged for internal control audit
√ Applicable □ Not applicable
In 2015, the Company engaged the Ruihua CPAs (LLP) as the internal control audit CPAs of the Company.
X Possibility of listing suspension or termination after disclosure of this Report
□ Applicable √ Not applicable
XI Bankruptcy and reorganization
□ Applicable √ Not applicable
~ 32 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
No such cases in the Reporting Period.
XII Significant litigations and arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Punishments and rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit conditions of the Company as well as its controlling shareholder and actual
controller
□ Applicable √ Not applicable
XV Implementation of any equity incentive plan, employee stock ownership plan or other
incentive measures for employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Significant related-party transactions
1. Related-party transactions relevant to routine operation
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-party transactions regarding purchase or sales of assets or equity interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-party transitions regarding joint investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
~ 33 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
5. Other significant related-party transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII 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. Entrusted cash management
(1) Entrusted asset management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Entrusted loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other significant contracts
□ Applicable √ Not applicable
~ 34 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
No such cases in the Reporting Period.
XVIII Other significant events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIX Significant events of subsidiaries
□ Applicable √ Not applicable
XX Social responsibilities
√ Applicable □ Not applicable
As for the social responsibilities executed by the Company in the Reporting Period, please refer to the Report of the Social
Responsibilities disclosed on www.cninfo.com.cn on 26 April 2016.
Whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental protection authorities
of China
□ Yes √ No □ Not applicable
XXI Corporate bonds
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
~ 35 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section VI Share Changes and Information about Shareholders
I. Share changes
1. Share changes
Unit: share
Before Increase/decrease (+/-) After
Increase
New Bonus from
Number Percentage Other Subtotal Number Percentage
issues shares capital
reserves
I. Restricted shares 900 0.00% 900 0.00%
3 Shares held by other
900 0.00% 900 0.00%
domestic investors
Among which: Shares held
900 0.00% 900 0.00%
by domestic corporations
II. Non-restricted shares 503,599,100 100.00% 503,599,100 100.00%
1 RMB common shares 383,599,100 76.17% 383,599,100 76.17%
2 Domestically listed foreign
120,000,000 23.83% 120,000,000 23.83%
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 common 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
~ 36 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
II Issuance and listing of securities
1. Securities (excluding preference shares) issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes in total shares of the Company and the shareholder structure, as well as the asset and liability
structures
□ Applicable √ Not applicable
3. Existing staff-held shares
□ Applicable √ Not applicable
III Shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total number
of preference
shareholders
Total number of
with resumed
common Total number of
Total number voting rights
shareholders at the preference shareholders
of common Not applicab at the prior Not
23,539 prior month-end 19,299 with resumed voting
shareholders at le month-end applicable
before the rights at the period-end
the period-end before the
disclosure of this (if any) (see Note 8)
disclosure of
Report
this Report (if
any) (see
Note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 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 Status of Number of
shareholder shareholder
(%) period-end Reporting Period shares shares held shares shares
held
ANHUI GUJING
GROUP State-owned
53.89% 271,404,022 50,000 271,404,022 Pledged 114,000,000
COMPANY corporation
LIMITED
UBS Foreign
2.43% 12,233,480 2,769,182 12,233,480
(LUXEMBOURG) corporation
~ 37 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
S.A.
GAOLING Foreign
2.21% 11,110,642 7,324,208 11,110,642
FUND,L.P. corporation
Foreign
NORGES BANK 1.99% 10,002,859 4,282,547 10,002,859
corporation
CHINA
SECURITIES
State-owned
FINANCE 1.88% 9,447,999 9,447,999 9,447,999
corporation
CORPORATION
LIMITED
GREENWOODS
Foreign
CHINA ALPHA 1.71% 8,627,598 -759,375 8,627,598
corporation
MASTER FUND
CENTRAL
HUIJIN State-owned
1.30% 6,543,600 6,543,600 6,543,600
INVESTMENT corporation
CO., LTD.
CHINA INT'L
CAPITAL CORP
Foreign
HONG KONG 1.12% 5,647,960 5,452,360 5,647,960
corporation
SECURITIES
LTD
BANK OF
CHINA LIMITED
－ FULLGOAL
REFORM
Other 0.85% 4,300,021 4,300,021 4,300,021
POWER HYBRID
SECURITIES
INVESTMENT
FUNDS
CHINA
MERCHANTS State-owned
0.77% 3,852,802 -75,442 3,852,802
SECURITIES corporation
(HK) CO., LTD.
Strategic investor or general
corporation becoming a top ten
Inapplicable
shareholder due to placing of
new shares (if any) (Notes 3)
Explanation on associated Among the shareholders above, no affiliated relationship exists between the Companys controlling
relationship or persons acting in shareholder—Anhui Gujing Group Company Limited—and other shareholders, nor they are parties
concert among the acting in concert as defined in the Administrative Measures on Information Disclosure of Changes
~ 38 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
above-mentioned shareholders: in Shareholding of Listed Companies. As for other shareholders, the Company does not know
whether they are related parties or whether they belong to parties acting in concert as defined in the
Administrative Measures on Information Disclosure of Changes in Shareholding of Listed
Companies.
Shares held by the top ten non-restricted share holders
Type of shares
Name of shareholder Number of non-restricted shares held at the period-end
Type Number
RMB
ANHUI GUJING GROUP
271,404,022 ordinary 271,404,022
COMPANY LIMITED
share
Domestically
UBS (LUXEMBOURG) S.A. 12,233,480 listed foreign 12,233,480
share
Domestically
GAOLING FUND,L.P. 11,110,642 listed foreign 11,110,642
share
Domestically
NORGES BANK 10,002,859 listed foreign 10,002,859
share
CHINA SECURITIES RMB
FINANCE CORPORATION 9,447,999 ordinary 9,447,999
LIMITED share
Domestically
GREENWOODS CHINA
8,627,598 listed foreign 8,627,598
ALPHA MASTER FUND
share
RMB
CENTRAL HUIJIN
6,543,600 ordinary 6,543,600
INVESTMENT CO., LTD.
share
CHINA INT'L CAPITAL CORP Domestically
HONG KONG SECURITIES 5,647,960 listed foreign 5,647,960
LTD share
BANK OF CHINA LIMITED－
FULLGOAL REFORM RMB
POWER HYBRID 4,300,021 ordinary 4,300,021
SECURITIES INVESTMENT share
FUNDS
Domestically
CHINA MERCHANTS
3,852,802 listed foreign 3,852,802
SECURITIES (HK) CO., LTD.
share
Explanation on associated Among the shareholders above, no affiliated relationship exists between the Companys controlling
~ 39 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
relationship or/and persons shareholder—Anhui Gujing Group Company Limited—and other shareholders, nor they are parties
acting in concert among the top acting in concert as defined in the Administrative Measures on Information Disclosure of Changes
ten tradable shareholders and in Shareholding of Listed Companies. As for other shareholders, the Company does not know
between the top ten tradable whether they are related parties or whether they belong to parties acting in concert as defined in the
shareholders and the top ten Administrative Measures on Information Disclosure of Changes in Shareholding of Listed
shareholders Companies.
Explanation on the top 10
The first majority shareholder of the Company—Gujing Group—started to conduct “refinancing
shareholders participating in the
securities lending” from November 2014, which ceased at the beginning of April 2015. Up to 31
margin trading business (if any)
December 2015, the lent shares have been all returned.
(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.
2. Information about the controlling shareholder
Nature of the controlling shareholder: Local state-owned holding
Type of the controlling shareholder: Corporation
Name of controlling Legal representative
Date of establishment Credibility code Main business scope
shareholder / company principal
Making beverage,
ANHUI GUJING GROUP
Liang Jinhui 16 Jan. 1995 151947437 construction materials and
COMPANY LIMITED
plastic products
Shares held by the controlling
shareholder in other listed
companies by holding or Naught
shareholding during the
reporting period
Change of the controlling shareholder during the Reporting Period
□ Applicable √ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.
3. Information about the actual controller
Nature of the actual controller: Local management organization for state-owned assets
Type of the actual controller: Corporation
Legal
Date of
Name of actual controller representative / Organization code Business scope
establishment
company
~ 40 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
principal
The Peoples Government of
Not applicable Not applicable Not applicable
Bozhou
Shares held by the controlling
shareholder in other listed
companies by holding or Not applicable
shareholding during the
Reporting Period
Change of the actual controller during the Reporting Period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the Reporting Period.
Ownership and control relations between the actual controller and the Company
The Peoples Government of Bozhou
Anhui Gujing Group Company Limited
Anhui Gujing Distillery Company Limited
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. Other corporate shareholders with a shareholding percentage above 10%
□ Applicable √ Not applicable
5. Limits on the Company’s shares held by its controlling shareholder, actual controller, reorganizer and
other commitment subjects
□ Applicable √ Not applicable
~ 41 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section VII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
~ 42 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section VIII Directors, Supervisors, Senior Management and
Employees
I Changes in shareholdings of directors, supervisors and senior management
Increase Decrease
Opening in the in the Other Closing
Starting Ending
Name Office title Incumbent/former Gender Age date of date of shareholding Reporting Reporting increase/decrease shareholding
tenure tenure
(share) Period Period (share) (share)
(share) (share)
Chairman
Liang
of the Current Male 51 2014-06-20 2017-06-19
Jinhui
Board
Zhou Director,
Current Male 42 2014-06-20 2017-06-19
Qingwu GM
Director,
Deputy
General
Ye Manager,
Current Male 42 2014-06-20 2017-06-19
Changqing Secretary of
the Board,
Chief
Accountant
Wang
Director Current Male 51 2014-06-20 2017-06-19
Feng
Yang
Director Current Male 48 2014-06-20 2017-06-19
Xiaofan
Director,
Yan Lijun Current Male 45 2014-06-20 2017-06-19
GM
Wang Independent
Current Male 54 2014-06-20 2017-06-19
Ruihua director
Independent
Wang Gao Current Male 51 2014-06-20
director 2017-06-19
Song Independent
Current Male 54 2014-11-17
Shuyu director 2017-06-19
Chairman
of the
Xu Peng Current Male 46 2014-06-20 2017-06-19
Supervisory
Committee
Niu Supervisor Current Male 45 2014-06-20 2017-06-19
~ 43 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Haiting
Fu
Supervisor Current Male 46 2014-06-20 2017-06-19
Qiangxin
Hu
Supervisor Current Male 50 2014-06-20 2017-06-19
Wenchao
Lu
Supervisor Current Male 36 2014-06-20 2017-06-19
Duicang
General
Zhai
Manager Current Male 45 2014-06-20 2017-06-19 1,200 1,200
Liangdong
Assistant
General
Zhang
Manager Current Male 47 2014-06-20 2017-06-19
Lihong
Assistant
Total -- -- -- -- -- -- 1,200 1,200
II Particulars about changes of Directors, Supervisors and Senior Executives
N/A
III Resumes of important personnel
Main working experience of current directors, supervisors and senior management staff
(I) Mr. Liang Jinhui, 51year-old, is Political Engineer who has educational experience of graduate student, incumbent Director and
president of the Company and Gujing Group， secretary of the party committee。 He ever took the post of MD of Sales Company,
GM, Deputy GM, GM, Supervisor of Third Supervisory Committee and Director of the Fourth, Fifth and Sixth Board of Directors
(II) Mr. Zhou Qingwu, 42 year-old, is Economist who has educational experience of graduate student. At present, he is Director and
General Manager of the Company, Vice Secretary of CPC of Gujing Group. He had ever acted as Chairman and General Manager of
Bozhou Gujing Packing Material Co., Ltd.; Director of the 5th and 6th Board of Directors and Vice General Manager.
(III) Mr. Ye Changqing, 42 year-old, holder of master degree and International Certified Internal Auditor. Incumbent Director, Chief
Accountant and acting Secretary of Board of Directors of the company; had ever acted Chief Auditor of Audit Department, Vice
Manager of Audit Department and Vice Supervisor and Supervisor of Auditing& Supervision Department; and Supervisor of the
Fourth Supervisory Committee; Director and Secretary of the 5th and 6th Board of Directors, Chief Accountant.
(IV) Mr. Wang Feng, 51 year-old, is Senior Economic Engineer who is postgraduate degree holder, incumbent Director, Deputy
Secretary of CPC of Gujing Group and Secretary of Discipline Inspection Commission. He had ever acted as Director, Secretary of
the board, Vice General Manager, and General Manager of the Second Board of Directors; Director and Chairman of the Third Board
of Directors, and Director as well as Chairman of the Fourth Board of Directors; Director of the 5th and 6th Board of Directors.
(V) Mr. Yang Xiaofan, 48 year-old, holder of master degree. At present, he is Director and Vice President of Gujing Group. Vice
President and General Manager of Anhui Gujing Real Estates Group Co., Ltd., Director and Assistant Chairman, Vice President of
Gujing Group; Director of the 5th and 6th Board of Directors.
(VI) Yan Lijun, male, 45 year-old, bachelor degree with Senior Taster. Now he is Director, Assistant of GM of the Company, GM of
Bozhou Gujin Sale Co., Ltd. He once worked as salesman of Sale Company, District Manager, Director of Market Research, Vice
Manager of Planning Department, Director of Hefei Strategic Operations Center and GM of the Company
~ 44 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
(VII) Mr. Wang Ruihua, 54 year-old, doctor degree in accounting, Not Practicing Certified Public Accountant. Accounting Professor
of School of Business of Central University of Finance and Economics, tutor of PHD student, Independent Director of ZHONG KE
SAN HUAN, DATANG TELECOM TECHNOLOGY CO., LTD. and Sinolink Securities Co Ltd.
(VIII) Wang Gao, Male, 51 years old, Doctor of Sociology，Professor of Marketing in China Europe International Business School.
Academic Director of Chief Marketing Officer (CMO) Project, Co-Director of Chinese Enterprise Globalization Research Center. He
once worked as Associate Professor, Deputy Dean of Department of Marketing in School of Economics and Management, Tsinghua
University, deputy director of China's Retail Research Center Academic Director of Harvard - central Europe - tsinghua university
senior managers (SEPC) project. Strategic Analysis Manager of Minute Maid Branch of Coca-Cola Company and senior counselor of
The Information Resources Co., Ltd. (IRI).
(IX) Song Shuyu, male, 54 years old, who has educational experience of graduate student. Senior Engineer, Master of Chinese wine.
Now, he is Deputy Secretary General of China Alcoholic Drinks Association, Secretary-general of Liquor Branch Association,
Secretary General of Market Professional Committee, Secretary General of White Wine Club Technical Committee, specialist who
enjoy the special allowance of the state council. He also is member of Chinese liquor standardization technical committee, Deputy
Secretary General of strong-flavor, Feng-flavour, soybean-flavor and rice flavour Liquor Technical Committee of Chinese Liquor
Standardization Technical Committee, Chairman of Committee of Te-flavour Chinese spirits and Laobaigan-flavour Chinese spirits
standardization technical committee.
(X) Mr. Xu Peng, 46 year-old, has educational experience of undergraduate college. He is incumbent Chief Supervisor of the
Company. And he had ever acted as Deputy Director and Director of Finance Second Office of Finance Department of the Company,
Manager of Finance Department of Anhui Laobada Co., Ltd., and Vice Manager and Manager of Finance Department of the
Company, Deputy General Manager and Chief Supervisor of Market Supervision Department of Bozhou Gujing Sales Company.
(XI) Mr. Niu Haiting, 45 year-old, has educational experience of undergraduate college. He is incumbent Supervisor of the Company,
Director of Gujing Group,Hefei Office, Secretary-general of Anhui Wine Industry Association, Member of Party Committee,
Chairman of the Labor Union and member of Commission for Disciplinary Inspection. He had ever acted as Personnel Administrator,
Vice Chief Supervisor of Human Resource Department of Anhui Gujing Group, Director of the Office Party and Chief Inspector of
Safety Management Center, Chairman of The Labor Union.
(XII) Mr. Fu Qiangxin, 46 year-old, bachelor degree, accountant, incumbent Supervisor and Vice Secretary of Discipline Inspection
Commission of Audit. He ever took posts of accountant of Bozhou Gujing Hotel, Manager of Finance of Bozhou Gujing Integrated
Services Company and Bozhou Gujing Import and Export Trade Company, clerk of Planning and Finance Department of Gujing
Group, Chief Inspector of Internal Audit Center.
(XIII) Mr. Hu Wenchao, is 50 year-old, Registered Senior Human Resource Specialist who has educational experience of
undergraduate college, National Trainer Grade 2 and one of Administrators recommended by China Human Resource Development
Association. Now he is incumbent Supervisor of the Company, Chief of HR Center of Anhui Gujing Group Co., Ltd. He had ever
acted as Labor Allocation Clerk and Deputy GM of Personnel Department, Vice Manager of HR Department of Anhui Gujing Group
Co., Ltd., Vice Manager of HR Department of Anhui Gujing Distillery Company Limited.
(XIV) Mr. Lu Duicang, 36 year-old, has educational experience of undergraduate college, Senior Accountant. Now, he is incumbent
Supervisor of the Company and GM of Hui Xin Finance. He had ever acted as Accountant, Vice Director and Director of Finance
Department First Center of the Company, Factory Manager of Liquor Filling Branch Factory and Manager of Finished Products
Department, Director of Finance Management Center of Gujing Group.
(XV)Mr. Zhai Liangdong, Male, 45-year-old, achieved the Master degree. He is now acting as General Manager Assistant of the
Company, Chairman of the Board of Bozhou Ruineng Heat and Power Co., Ltd. He once acted as clerk of Labor Union Office of
Gujing Group; clerk, Secretary, Deputy Director, Director of Gujing Group Office; Director of corporate office and Chief Inspector
of Administrative Center.
(XVI) Mr. Zhang Lihong, Male, 47-year-old, economic engineering, achieved the Bachelor degree. He is now acting as General
~ 45 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Manager Assistant of the Company, Chief of HR Center. He once acted as clerk of Bozhou Gujing Sales Co., Ltd., Secretary of
Corporate Operation Department, Secretary of Market Development Department,Vice General Manager of Bozhou Gujing Sales Co.,
Ltd., Director of Comprehensive Office, and Chief Inspector of Comprehensive Service Center, Director of Human Resource
Center of the Company.
Post-holding in shareholder units
√Applicable □ Not applicable
Name of the
Position in
person holding Receives payment
the Beginning date Ending date of
any post in any Name of the shareholder unit from the
shareholder of office term office term
shareholder shareholder unit?
unit
unit
Chairman of
the Board of
Directors,
Liang Jinhui Anhui Gujing Group Co., Ltd. 2014-05-01 Yes
Chairman of
Party
Committee
Deputy
Chairman of
Party
Committee,
Wang Feng Anhui Gujing Group Co., Ltd. 2010-08-01 Yes
Chairman of
Discipline
Inspection
Committee
Vice
Yang Xiaofan Anhui Gujing Group Co., Ltd. 2009-11-01 Yes
President
Deputy
Chairman of
Zhou Qingwu Anhui Gujing Group Co., Ltd. 2009-11-01 No
Party
Committee
Director of
Niu Haiting Anhui Gujing Group Co., Ltd. Anhui Hefei 2015-10-16 Yes
Office
Chief
Inspector of
Fu Qiangxin Anhui Gujing Group Co., Ltd. Financial 2014-07-01 Yes
Management
Center
Chief of HR
Hu Wenchao Anhui Gujing Group Co., Ltd. 2012-06-01 Yes
Center
~ 46 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Notes to
The above-mentioned personnel, though they take posts in shareholders entities, comply with the relevant
post-holding in
employment requirements of Company Law, Securities Law and never were disciplined by CSRC, other relevant
shareholder
departments and the Stock Exchange.
units
Post-holding in other units
√Applicable □ Not applicable
Name of the
Receives payment
person holding Position in Beginning date Ending date of
Name of other unit from the
any post in any other unit of office term office term
shareholder unit?
shareholder unit
Anhui Huixin Finance Investment Group
Lu Duicang GM 2014-07-01 Yes
Co., Ltd.
Notes to
post-holding in Anhui Huixin Finance Investment Group Co., Ltd. is the wholly own subsidiary of Anhui Gujing Group Co., Ltd.
other units
Particulars about the Company's current directors, supervisors and senior executives punishments from Securities Regulatory
Institution of recent three years in Reporting Period
□ Applicable √ Not applicable
IV Remuneration for directors, supervisors and senior management
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior
management
Decision-making procedure, determination basis and actual remuneration payment of directors, supervisors and senior management
The Remuneration & Appraisal Committee under the Board of Directors is in charge of drafting appraisal index of senior
management and checking accomplishment of annual index.
(II) Basis for determining the remuneration of directors, supervisors and senior management
Remuneration of directors, supervisors and senior management is calculated by appraisal index drafted in year-begin and weight.
Financial index is on base of Auditors Report issued by certified public accountant, and comprehensive appraisal index is appraised
and discussed by the Remuneration & Appraisal Committee under the Board of Directors.
(III) Actual payment of the remuneration of directors, supervisors and senior management
Payment of the remuneration of directors, supervisors and senior management is with certain amount in advance monthly and
distributed annually according to check.
Remuneration of the directors, supervisors and senior management of the Company during the reporting period is as follow:
Unit: RMB0,000
Whether gained
Total
remuneration
remuneration
Name Position Gender Age Current/former from the related
gained from the
parties of the
Company
Company
~ 47 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Chairman of the
Liang Jinhui Male 51 Current Yes
Board
Zhou Qingwu Director, GM Male 42 Current 98.62 No
Director, Deputy
General Manager,
Ye Changqing Secretary of the Male 42 Current 90.46 No
Board,Chief
Accountant
Wang Feng Director Male 51 Current Yes
Yang Xiaofan Director Male 48 Current Yes
Yan Lijun Director, GM Male 45 Current 101.22 No
Independent
Wang Ruihua Male 54 Current 7.5 No
director
Independent
Wang Gao Male 51 Current 7.5 No
director
Independent
Song Shuyu Male 54 Current 7.5 No
director
Chairman of the
Xu Peng Supervisory Male 46 Current 82.61 No
Committee
Niu Haiting Supervisor Male 45 Current Yes
Fu Qiangxin Supervisor Male 46 Current Yes
Hu Wenchao Supervisor Male 50 Current Yes
Lu Duicang Supervisor Male 36 Current Yes
General Manager
Zhai Liangdong Male 45 Current 82.61 Yes
Assistant
General Manager
Zhang Lihong Male 47 Current 82.61 No
Assistant
Total -- -- -- -- 560.63 --
Situations of equity incentives awarded to the directors, supervisors and senior management of the Company during the Reporting
Period
□ Applicable √ Not applicable
V About employees
1. Number of employee, professional structure and education
Amount of the incumbent employees of the Company 5,141
~ 48 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Amount of the incumbent employees of the main subsidiaries 707
Total amount of the incumbent employees 5,848
Total number of employees accepted salaries(person) 5,848
Number of retirees whose retirement pension shall be borne by
693
the Company and the main subsidiaries
Professional structure
Category Number
Production personnel 4,436
Sales personnel 550
Technicians 279
Financial personnel 103
Administrative personnel 480
Total 5,848
Education
Category Number
High school or below 4,516
Junior college 722
Bachelor 586
Master or above 24
Total 5,848
2. Remuneration policy
The remuneration policy was conducted strictly in line with the related law and regulations of the state, and the plan of operation
performance and profits of the Company and the relevant remuneration policy management.
3. Employee training plans
Employee training is significant in the Human resource management. The Company always pay high attention to the employee
training and development, the Company sets up effective training plan combining with the current situation of the Company, annual
plan, nature of the post and the demand of employee learning, which includes new employee induction training, on-job training,
front-line employee operating skills training, management improvement training and part-time study. Continuously improve the
whole quality of the employees, realized a win-win situation and progress between the Company and the employees.
4. Particulars about labor outsourcing
□ Applicable √ Not applicable
~ 49 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section IX Corporate Governance
I Basic details of corporate governance
Since foundation, the Company constantly perfects corporate governance structure and standardize its management strictly in
accordance with the Company Law, Securities Law, Standard for Governance of Listed Companies, Guide Opinion on Setting up
Independent Directors Systems for Listed Companies as well as principles and requirements of other relevant laws, regulations and
normative documents.
In the reporting period, the Company developed internal control activity, implemented Rules on Management of Assets Provision for
Impairment, The Policy on the Liability of Disclosing Materially Inaccurate Information in Annual Report, Rules for Management of
External Information User and Rules for Management of Insider of Inner Information, perfected internal control system step by step,
promoted normative operation and healthy development. The Board of Directors, the Supervisory Committee and the management of
the Company make decisions, perform rights and assume obligation strictly according to the standard operation rules and inner
control system so as to make sure the standard operation of the Company in the frame of rules and systems.
In the reporting period, according to requirements of China Securities Regulatory Commission and Rules for Listing of Shares in
Shenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriously and timely performed information
disclosure obligation and guaranteed that the information disclosed is true, accurate and complete, free from fictitious presentation,
misleading statements or important omissions, so that all the shareholders will equally acquaint themselves with all the notices of the
Company.
After the reporting period, the Company will continuously optimize and perfect the corporate governance of listed companies, further
improve the standard operation of the Company.
Whether it exists any difference between the corporate governance and the Company Law and relevant rules of CSRC or not?
□ Yes √ No
There is no difference between the corporate governance and the Company Law and relevant rules of CSRC.
II Particulars about the Company’s separation from the controlling shareholder in respect of
business, personnel, assets, organization and financial affairs
The company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five independences in terms of business,
personnel, assets, organizations and financial affairs, with separate independent calculation, independent and complete business,
independent operation ability, and independent responsibilities and risks. Majority shareholders cannot surpass the shareholders
general meeting to directly or indirectly interfere with the companys decisions and legal production and operation activities, and
there is no same trade competition state of the same products between the company and majority shareholders.
III Horizontal competition
□ Applicable √ Not applicable
~ 50 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
IV Particulars about the annual shareholders’ general meeting and special shareholders’
general meetings held during the reporting period
1. Particulars about the shareholders’ general meeting in reporting period
Proportion of
Index to the
Session Type investors' Convening date Disclosure date
disclosed
participation
On the cninfo
website
The Annual
The Annual Announcement on
Shareholders
Shareholders 4.35% 2015-05-26 2015-05-27 Resolutions Passed
General Meeting
General Meeting on the 2014 Annual
of 2014
Shareholders
General Meeting
2. Special Shareholders’ General Meeting applied by the preferred stockholder with restitution of voting
right
□ Applicable √ Not applicable
V Performance of the Independent Directors
1. Particulars about the independent directors attending the board sessions and the shareholders’ general
meetings
1. Particulars about the independent directors attending the board sessions
Independent Sessions Attendance in Attendance by Entrusted Absence rate Non-attendanc
director required to person way of presence e in person for
attend during telecommunica (times) two
the reporting tion consecutive
period times
Wang Ruihua 3 0 3 0 0 No
Wang Gao 3 0 3 0 0 No
Song Shuyu 3 0 3 0 0 No
General meetings sat in on by 1
independent directors
Note to non-attendance in person for two consecutive times
2. Particulars about independent directors proposing objection on relevant events
Whether independent directors propose objection on relevant events or not?
~ 51 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
□ Yes √ No
During the reporting period, no independent directors proposed any objection on relevant events of the Company.
3. Other explanations about the duty performance of independent directors
whether advices to the Company from independent directors were adopted or not
√ Yes □ No
Explanation on the advices of independent directors for the Company being adopted or not adopted
VI Performance of the Special Committees under the Board during the reporting period
1. Duty performance of the Strategy Committee
The Strategy Committee is under the leadership of the Board of Directors. In the reporting period, in strict compliance with the
Specific Implementation Rules for the Strategy Committee, the Strategy Committee conscientiously performed its duties, making a
lot of constructive suggestions for the efficient execution of the Companys strategy.
2. Duty performance of the Audit Committee
In the reporting period, five members of the Audit Committee diligently and responsibly performed their duties as stipulated in the
relevant rules of the Company:
(1) It reviewed the periodical reports of the Company in 2015.
(2) Upon discussion with Ruihua Certified Public Accountants for the 2015 annual audit, it determined the schedule for the financial
report and internal control audit for 2015.
(3) It communicated in advance with the CPAs firm and independent directors before the CPAs firm came to the Company and
started the 2015 annual audit.
(3) It reviewed the short form of the preliminary financial statements prepared by the financial department of the Company for the
first time before the annual auditor came to the Company and made some helpful suggestions.
(5) After the annual auditor came to the Company and started the audit, it communicated with the registered accountants on the
problems found in the audit and the submission time of the audit report.
(6) After the annual auditor issued the preliminary audit opinion, it reviewed the 2015 annual financial statements again and made the
final resolution.
3. Duty performance of the Nomination Committee
In the reporting period, in strict compliance with the Specific Implementation Rules of the Nomination Committee, the Nomination
Committee vigorously worked on various tasks, which ensured that the senior management staffs of the Company were hired in
compliance with laws and regulations.
(1) In the reporting period, the senior management staff hired by the Company satisfied the requirements of the Company Law and
other relevant laws and regulations. They were qualified as senior management staff. They were not in such a case where the
Company Law should forbid them from being senior management staff. Nor they were forbidden by CSRC from entering the
securities market.
(2) In the reporting period, the senior management staff of the Company were nominated and hired in line with the Company Law
and the Companys Articles of Association. The hired personnel have never been punished by CSRC, other relevant authorities or
stock exchanges.
4. Duty performance of Remuneration and Appraisal Committee
~ 52 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
(1) The Remuneration and Appraisal Committee affiliated to the Board of Directors, according to relevant regulations of
Implementation Rules of Remuneration and Appraisal Committee successfully completed the annual performance appraisal to
directors, supervisors and senior executives in line with standards and procedures of performance appraisal during the reporting
period.
(2) Through the deliberation and assessment of the committee, the consistent opinion was that the general remuneration level
complied with development of the Company; the remuneration level of directors, supervisors and senior executives accurately
reflected the overall performance situation of the Company and individual work performance, which complied with the remuneration
management system; the remuneration plan and procedure of issuing remuneration were in accordance with the laws and did not
violate relevant national laws and regulations.
VII Performance of the Supervisory Committee
During the reporting period, the Supervisory Committee found whether there was risk in the Company in the supervisory activity
□ Yes √ No
The Supervisory Committee has no objection on the supervised events during the reporting period.
VIII Performance Evaluation and Incentive Mechanism for Senior Management Staff
The Company has set up a Performance Appraisal and Incentive Mechanism for Senior Executives, which links remuneration of
senior executives with the Company performance, the decision-making management adopts the assessment and incentive measures
by linking the annual remuneration with the Company economic indexes & management achievement. To promote the standard,
healthy and orderly development of the company and keep the stability of the senior executives, the company annually sets up the
assessment index for them and signs a written responsibility of business target at the year-begin, then decides their remuneration and
the rewards & punishment at the year-end according to their personal work performance and completion of the Companys operating
target.
IX Internal Control
1. Particulars about significant defects found in the internal control during reporting period
□ Yes √ No
2. Self-appraisal report on internal control
Disclosure date of the Self-appraisal
2016-04-26
Report on Internal Control
Disclosure index of the Self-appraisal Cninfo website (www.cninfo.com.cn) “ Anhui Gujing Distillery Company Limited
Report on Internal Control 2015 Annual Self-assessment Report of Internal Control”
The proportion of total assets included in
evaluation scope entities in the
99.82%
Company's total assets of the consolidated
financial statements
The proportion of operation revenue 99.90%
~ 53 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
included in evaluation scope entities in
the Company's operation revenue of the
consolidated financial statements
Defect judging standards
Category Section XI. Financial Report Non-Financial Report
Critical defect: Separate defect or other
defects that result in failure in preventing,
finding out and correcting major wrong
reporting in financial report in time. The
following circumstances are deemed as
critical defects: (1) Ineffective in controlling
Any of the following circumstances shall
the environment; (2) Malpractice of
be deemed as a critical defect, and other
directors, supervisors and senior
circumstances shall be deemed as major
management officers; (3) According to
or minor defects according to their
external auditing, theres major wrong
degree of impact.
reporting in current financial report, which
fails to be found by the company in its (1) Violate national laws, regulations or
operating process; (4) Major defects found standardized documents;
and reported to the top management fail to (2) Major decision making procedure is
Qualitative criteria
be corrected within a reasonable period of not scientific;
time; (5) The supervision of audit committee (3) Lack of systems results in systematic
of the company and its internal audit failure;
department for internal control is ineffective; (4) Critical or major defects fail to be
(6) Other defects that may affect correct rectified;
judgment of users of statements. Major (5) Other circumstances that have major
defect: Separate defect or other defects that impact on the company.
result in failure in preventing, finding out
and correcting wrong reporting in financial
report in time, which shall be noted by the
top management despite of not attaining or
exceeding critical level. Minor defect: Other
internal control defects not constituting
critical or major defects.
Critical defect:
Critical defect: The defect with direct
(1) Wrong reporting ≥0.5% of total operating property loss amounting to over RMB10
revenue; million, has great negative impact on the
(2) Wrong reporting ≥5% of total profit; company and is disclosed in public in the
Quantitative criteria (3) Wrong reporting ≥0.5% of total assets; form of announcement.
(4) Wrong reporting ≥0.5% of total owners Major defect: The defect with direct
equity. property loss amounting to RMB 1
Major defect: million to RMB10 million (included), or
is penalized by governmental authority
(1) Wrong reporting ≥0.2% but ＜0.5% of
~ 54 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
total operating revenue; of the country but has not resulted in
(2) Wrong reporting ≥2% but ＜5% of total negative impact on the company.
profit; Minor defect: The defect with direct
(3) Wrong reporting ≥0.2% but ＜0.5% of property loss no more than RMB 1
total assets; million (included), or is penalized by
(4) Wrong reporting ≥0.2% but ＜0.5% of governmental authority of the
total owners equity. provincial-level or below but has not
resulted in negative impact on the
Minor defect:
company.
(1) Wrong reporting ＜ 0.2% of total
operating revenue;
(2) Wrong reporting＜2% of total profit;
(3) Wrong reporting＜0.2% of total assets;
(4) Wrong reporting＜0.2% of total owners
equity.
Number of significant defects of financial
0
report (Piece)
Number of significant defects of non-
0
financial report (Piece)
Number of important defects of financial
0
report (Piece)
Number of important defects of
0
non-financial report (Piece)
X Audit report on internal control
√Applicable □ Not applicable
Audit opinion paragraphs in the Audit Report on Internal Control
Particulars about Audit Report on
Disclosure
Internal Control
Disclosure date of the Audit Report
2016-04-26
on Internal Control
Disclosure index of the Audit
Cninfo website (www.cninfo.com.cn) “Audit Report of Internal Control”
Report on Internal Control
Type of Audit Report on Internal
Unqualified auditor's report
Control
Whether there is significant defect
No
in non-financial report
Whether the CPAs firm issues an Audit Report on Internal Control with non-standard opinion or not?
~ 55 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
□ Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report from the Board or
not?
√ Yes □ No
~ 56 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section X Financial Report
I Audit Report
Type of audit opinion Standard unqualified audit opinion
Date of signing audit report 25 April 2016
Ruihua Certified Public Accountants (Special General
Name of audit institution
Partnership)
Reference number of audit report Ruihua SZ [2016] No.48390003
Name of CPA Lin Wanqiang, yangganlin
Audit Report
To the Shareholders of Anhui Gujing Distillery Co., Ltd.:
We have audited the attached financial statements of Anhui Gujing Distillery Co., Ltd. (“Gujing”), which comprise the consolidated
and the Companys balance sheet as at December 31, 2015, the consolidated and the Companys income statement, the consolidated
and the Companys cash flow statement, the consolidated and the Companys statement of changes in owners equity for the year
then ended, and the notes to financial statements.
I. Responsibilities of the management concerning the financial statements
The management of the Company is responsible for the preparation of these financial statements and fair presentation. These
responsibilities include: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and
make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
II. Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with the Chinese Certified Public Accountants' Auditing Standards. These standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financial statements. The
procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entitys preparation of the consolidation financial statements and fair presentation in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control.
An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Opinion
In our opinion, the financial statements have been prepared in accordance with the requirements of the Enterprises Accounting
Standards promulgated by the Peoples Republic of China in all material respects, and present fairly the consolidated operating
results of Anhui Gujing Distillery Co., Ltd. and its subsidiaries as at December 31, 2015 and consolidated operating results and cash
flow in 2015 as well as the operating results at December 31, 2015 and the operating results & cash flow in 2015 of Anhui Gujing
Distillery Co., Ltd..
II Financial statements
Unit of statements in the notes appended to financial report is RMB Yuan
1. Consolidated balance sheet
Prepared by Anhui Gujing Distillery Company Limited
31 December 2015
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,087,319,158.77 718,460,442.79
Settlement reserves
Intra-group lendings
Financial assets measured at fair 322,223.28 303,919.60
value of which changes are recorded in
~ 57 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
current profits and losses
Derivative financial assets
Notes receivable 539,442,903.31 505,893,430.66
Accounts receivable 4,948,074.84 4,337,953.26
Accounts paid in advance 80,373,083.59 35,711,617.98
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable 0.00 4,274,666.66
Dividend receivable
Other accounts receivable 8,617,955.68 7,967,903.24
Financial assets purchased under
agreements to resell
Inventories 1,396,712,050.87 1,227,182,774.09
Assets held for sale
Non-current assets due within 1 year
Other current assets 1,500,970,860.37 1,501,552,476.11
Total current assets 4,618,706,310.71 4,005,685,184.39
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 313,881,190.47 88,332,932.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment
Investing real estate 9,715,451.89 32,074,356.24
Fixed assets 1,691,028,804.32 1,724,134,467.11
Construction in progress 62,562,971.78 61,637,510.96
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 298,372,239.96 306,488,782.60
R&D expense
Goodwill
Long-term deferred expenses 127,815,668.37 131,921,179.23
Deferred income tax assets 61,065,003.63 63,243,753.50
Other non-current assets
Total of non-current assets 2,564,441,330.42 2,407,832,981.64
Total assets 7,183,147,641.13 6,413,518,166.03
Current liabilities:
Short-term borrowings
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-group borrowings
Financial liabilities measured at fair
~ 58 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
value of which changes are recorded in
current profits and losses
Derivative financial liabilities
Notes payable 93,768,583.00 258,452,214.00
Accounts payable 378,187,452.07 404,634,196.58
Accounts received in advance 608,565,152.50 377,503,471.86
Financial assets sold for repurchase
Handling charges and commissions
payable
Payroll payable 253,901,700.72 220,198,521.28
Tax payable 358,087,353.80 468,679,523.63
Interest payable
Dividend payable
Other accounts payable 452,193,188.94 368,868,463.74
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities held for sale
Non-current liabilities due within 1
year
Other current liabilities 138,135,604.82 87,704,041.68
Total current liabilities 2,282,839,035.85 2,186,040,432.77
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 46,123,314.33 40,839,961.86
Deferred income tax liabilities 20,463,660.87 5,586,793.44
Other non-current liabilities
Total non-current liabilities 66,586,975.20 46,426,755.30
Total liabilities 2,349,426,011.05 2,232,467,188.07
Owners equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,294,938,493.19 1,294,938,493.19
Less: Treasury stock
Other comprehensive income 54,481,886.51 16,669,604.07
Specific reserves
~ 59 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Surplus reserves 256,902,260.27 256,902,260.27
Provisions for general risks
Retained profits 2,723,798,990.11 2,108,940,620.43
Total equity attributable to owners of
4,833,721,630.08 4,181,050,977.96
the Company
Minority interests
Total owners equity 4,833,721,630.08 4,181,050,977.96
Total liabilities and owners equity 7,183,147,641.13 6,413,518,166.03
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 548,650,832.84 593,001,536.78
Financial assets measured at fair
value of which changes are recorded in 322,223.28 278,509.60
current profits and losses
Derivative financial assets
Notes receivable 288,101,188.68 286,449,264.42
Accounts receivable 4,350,437.24 1,608,829.64
Accounts paid in advance 5,876,678.41 5,506,676.65
Interest receivable 4,274,666.66
Dividend receivable
Other accounts receivable 107,625,019.85 124,826,309.55
Inventories 1,374,311,894.88 1,197,978,799.15
Assets held for sale
Non-current assets due within 1 year
Other current assets 1,500,000,000.00 1,497,612,148.31
Total current assets 3,829,238,275.18 3,711,536,740.76
Non-current assets:
Available-for-sale financial assets 313,881,190.47 88,332,932.00
Held-to-maturity investments
Long-term accounts receivable 4,793,366.46
Long-term equity investment 354,089,408.32 338,089,408.32
Investing real estate 9,715,451.89 30,151,635.36
Fixed assets 1,471,584,047.66 1,525,364,298.59
Construction in progress 62,355,022.07 61,531,773.90
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 187,468,810.92 192,318,384.28
R&D expense
~ 60 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Goodwill
Long-term deferred expenses 127,815,668.37 131,864,366.43
Deferred income tax assets 42,154,627.44 35,421,614.18
Other non-current assets
Total of non-current assets 2,569,064,227.14 2,407,867,779.52
Total assets 6,398,302,502.32 6,119,404,520.28
Current liabilities:
Short-term borrowings
Financial liabilities measured at fair
value of which changes are recorded in
current profits and losses
Derivative financial liabilities
Notes payable 828,583.00 93,602,214.00
Accounts payable 371,636,772.06 402,837,653.24
Accounts received in advance 659,484,624.07 1,064,055,921.66
Payroll payable 88,513,920.05 79,329,070.21
Tax payable 237,459,964.06 168,778,299.92
Interest payable
Dividend payable
Other accounts payable 268,035,753.60 225,495,751.43
Liabilities held for sale
Non-current liabilities due within 1
year
Other current liabilities 61,660,494.13 29,569,559.37
Total current liabilities 1,687,620,110.97 2,063,668,469.83
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 46,123,314.33 40,839,961.86
Deferred income tax liabilities 20,463,660.87 5,584,087.19
Other non-current liabilities
Total non-current liabilities 66,586,975.20 46,424,049.05
Total liabilities 1,754,207,086.17 2,110,092,518.88
Owners equity:
Share capital 503,600,000.00 503,600,000.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,247,162,107.35 1,247,162,107.35
Less: Treasury stock
Other comprehensive income 54,481,886.51 16,669,604.07
~ 61 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Specific reserves
Surplus reserves 251,800,000.00 251,800,000.00
Retained profits 2,587,051,422.29 1,990,080,289.98
Total owners equity 4,644,095,416.15 4,009,312,001.40
Total liabilities and owners equity 6,398,302,502.32 6,119,404,520.28
3. Consolidated income statement
Unit: RMB
Item Closing balance Opening balance
I. Total operating revenues 5,253,411,479.40 4,650,855,881.72
Including: Sales income 5,253,411,479.40 4,650,855,881.72
Interest income
Premium income
Handling charge and commission
income
II. Total operating costs 4,392,354,606.21 3,980,555,815.23
Including: Cost of sales 1,509,536,099.28 1,459,072,913.24
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 790,205,631.87 666,912,988.72
Selling and distribution expenses 1,557,800,618.96 1,304,206,036.06
Administrative expenses 543,822,606.51 579,424,693.56
Financial expenses -20,334,406.40 -37,751,610.36
Asset impairment loss 11,324,055.99 8,690,794.01
Add: Gain/(loss) from change in fair
42,203.41 121,035.00
value (“-” means loss)
Gain/(loss) from investment (“-”
69,256,030.30 105,142,601.27
means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (“-” means
loss)
III. Business profit (“-” means loss) 930,355,106.90 775,563,702.76
Add: non-operating income 44,974,004.61 28,566,056.14
Including: Gains on disposal of
68,505.82 625,342.92
non-current assets
Less: non-operating expense 9,059,670.65 7,925,251.76
Including: Losses on disposal of
1,059,201.01 2,759,691.62
non-current assets
IV. Total profit (“-” means loss) 966,269,440.86 796,204,507.14
Less: Income tax expense 250,691,071.18 199,162,619.80
~ 62 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
V. Net profit (“-” means loss) 715,578,369.68 597,041,887.34
Net profit attributable to owners of
715,578,369.68 597,041,887.34
the Company
Minority shareholders income
VI. After-tax net amount of other
37,812,282.44 17,512,833.57
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to 37,812,282.44 17,512,833.57
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and 37,812,282.44 17,512,833.57
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
under the equity method
2. Gains and losses on fair
value changes of available-for-sale 37,812,282.44 17,512,833.57
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to
minority shareholders
VII. Total comprehensive incomes 753,390,652.12 614,554,720.91
Attributable to owners of the
753,390,652.12 614,554,720.91
Company
Attributable to minority
shareholders
VIII. Earnings per share
(I) Basic earnings per share 1.42 1.19
(II) Diluted earnings per share 1.42 1.19
Legal representative: Liang Jinhui Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
~ 63 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
4. Income statement of the Company
Unit: RMB
Item 2015 2014
I. Total sales 3,007,068,150.18 2,640,452,479.82
Less: cost of sales 1,536,318,251.80 1,476,012,978.04
Business taxes and surcharges 748,278,391.57 631,981,946.23
Distribution expenses 194,497,701.34 128,260,320.96
Administrative expenses 393,964,851.14 385,897,886.00
Financial costs -19,235,711.99 -31,777,767.71
Impairment loss 8,555,178.79 9,067,474.85
Add: gain/(loss) from change in fair
53,028.41 110,210.00
value (“-” means loss)
Gain/(loss) from investment (“-”
574,517,573.20 572,118,594.50
means loss)
Including: income from
investment on associates and joint
ventures
II. Business profit (“-” means loss) 719,260,089.14 613,238,445.95
Add: non-operating income 32,153,857.76 17,634,363.74
Including: Gains on disposal of
585,411.86
non-current assets
Less: non-operating expense 6,944,814.78 3,669,574.78
Including: Losses on disposal of
494,461.74 1,788,158.02
non-current assets
III. Total profit (“-” means loss) 744,469,132.12 627,203,234.91
Less: Income tax expense 46,777,999.81 50,140,859.93
IV. Net profit (“-” means loss) 697,691,132.31 577,062,374.98
V. After-tax net amount of other
37,812,282.44 17,512,833.57
comprehensive incomes
(I) Other comprehensive incomes that
will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and 37,812,282.44 17,512,833.57
losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair value
changes of available-for-sale financial 37,812,282.44 17,512,833.57
assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
~ 64 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes 735,503,414.75 594,575,208.55
VII. Earnings per share
(I) Basic earnings per share 1.39 1.15
(II) Diluted earnings per share 1.39 1.15
5. Consolidated cash flow statement
Unit: RMB
Item 2015 2014
I. Cash flows from operating activities:
Cash received from sale of
6,316,130,596.88 5,299,356,137.71
commodities and rendering of service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the central
bank
Net increase of funds borrowed from
other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase of deposits of policy
holders and investment fund
Net increase of disposal of financial
assets measured at fair value of which
changes are recorded into current gains
and losses
Cash received from interest, handling
charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 13,999,000.00 107,163.11
Other cash received relating to
175,581,055.15 171,461,104.20
operating activities
Subtotal of cash inflows from operating
6,505,710,652.03 5,470,924,405.02
activities
Cash paid for goods and services 1,758,283,730.78 1,517,387,902.41
Net increase of customer lendings
and advances
Net increase of funds deposited in the
central bank and amount due from
banks
Cash for paying claims of the original
insurance contracts
Cash for paying interest, handling
~ 65 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 1,000,365,212.81 989,911,967.81
Various taxes paid 1,872,063,119.51 1,620,441,094.09
Other cash payment relating to
1,084,889,053.92 955,689,150.82
operating activities
Subtotal of cash outflows from
5,715,601,117.02 5,083,430,115.13
operating activities
Net cash flows from operating activities 790,109,535.01 387,494,289.89
II. Cash flows from investing activities:
Cash received from withdrawal of
2,205,995,542.82 2,287,057,026.56
investments
Cash received from return on
63,870,974.91 92,975,082.74
investments
Net cash received from disposal of
fixed assets, intangible assets and other 87,371.84 1,144,535.30
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
9,384,300.00 1,850,000.00
investing activities
Subtotal of cash inflows from investing
2,279,338,189.57 2,383,026,644.60
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 237,769,057.80 387,438,488.77
assets
Cash paid for investment 2,372,945,376.50 2,831,392,713.89
Net increase of pledged loans
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
2,610,714,434.30 3,218,831,202.66
investing activities
Net cash flows from investing activities -331,376,244.73 -835,804,558.06
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses and
100,720,000.00 176,260,000.00
distribution of dividends or profit
Including: dividends or profit
~ 66 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
paid by subsidiaries to minority
shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
100,720,000.00 176,260,000.00
financing activities
Net cash flows from financing activities -100,720,000.00 -176,260,000.00
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
358,013,290.28 -624,570,268.17
equivalents
Add: Opening balance of cash
682,360,442.79 1,306,930,710.96
and cash equivalents
VI. Closing balance of cash and cash
1,040,373,733.07 682,360,442.79
equivalents
6. Cash flow statement of the Company
Unit: RMB
Item 2015 2014
I. Cash flows from operating activities:
Cash received from sale of
3,095,958,832.08 3,109,799,921.89
commodities and rendering of service
Tax refunds received 13,999,000.00 107,163.11
Other cash received relating to
83,789,843.81 99,709,660.72
operating activities
Subtotal of cash inflows from operating
3,193,747,675.89 3,209,616,745.72
activities
Cash paid for goods and services 1,750,534,302.48 1,657,562,664.94
Cash paid to and for employees 439,242,793.90 444,498,190.80
Various taxes paid 1,069,706,330.70 964,627,298.20
Other cash payment relating to
58,446,169.89 67,606,275.31
operating activities
Subtotal of cash outflows from
3,317,929,596.97 3,134,294,429.25
operating activities
Net cash flows from operating activities -124,181,921.08 75,322,316.47
II. Cash flows from investing activities:
Cash received from retraction of
2,152,485,489.19 1,961,242,567.80
investments
Cash received from return on
569,743,711.19 557,438,369.11
investments
Net cash received from disposal of
fixed assets, intangible assets and other 0.00 1,059,792.33
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
9,384,300.00 1,850,000.00
investing activities
Subtotal of cash inflows from investing
2,731,613,500.38 2,521,590,729.24
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 219,472,454.26 373,798,440.05
assets
~ 67 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Cash paid for investment 2,323,189,828.98 2,502,613,426.39
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
2,542,662,283.24 2,876,411,866.44
investing activities
Net cash flows from investing activities 188,951,217.14 -354,821,137.20
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses and
100,720,000.00 176,260,000.00
distribution of dividends or profit
Other cash payments relating to
financing activities
Sub-total of cash outflows from
100,720,000.00 176,260,000.00
financing activities
Net cash flows from financing activities -100,720,000.00 -176,260,000.00
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
-35,950,703.94 -455,758,820.73
equivalents
Add: Opening balance of cash
584,601,536.78 1,040,360,357.51
and cash equivalents
VI. Closing balance of cash and cash
548,650,832.84 584,601,536.78
equivalents
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
7. Consolidated statement of changes in owners’ equity
2015
Unit: RMB
2015
Equity attributable to owners of the Company
Item Other equity instruments Minority Total owners
Less: Other General
Specific
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve risk Retained profit interests equity
Other reserve
shares bonds stock incomes reserve
I. Balance at the end of
503,600,000.00 1,294,938,493.19 16,669,604.07 256,902,260.27 2,108,940,620.43 4,181,050,977.96
the previous year
Add: change of
accounting policy
Correction of errors
in previous periods
Business mergers
under the same control
Other
II. Balance at the
503,600,000.00 1,294,938,493.19 16,669,604.07 256,902,260.27 2,108,940,620.43 4,181,050,977.96
beginning of the year
III. Increase/ decrease in
the period (“-” means 37,812,282.44 614,858,369.68 652,670,652.12
decrease)
(I) Total
37,812,282.44 715,578,369.68 753,390,652.12
comprehensive incomes
(II) Capital increased
and reduced by owners
1. Common shares
increased by
shareholders
2. Capital increased
by holders of other
equity instruments
3. Amounts of
share-based payments
recognized in owners
~ 69 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
equity
4. Other
(III) Profit distribution -100,720,000.00 -100,720,000.00
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
-100,720,000.00 -100,720,000.00
owners (or shareholders)
4. Other
(IV) Internal
carry-forward of owners
equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
(V) Specific reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
IV. Closing balance 503,600,000.00 1,294,938,493.19 54,481,886.51 256,902,260.27 2,723,798,990.11 4,833,721,630.08
2014
Unit: RMB
2014
Item
Equity attributable to owners of the Company Minority Total owners
~ 70 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Other equity instruments Less: Other General interests equity
Specific
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve risk Retained profit
Other reserve
shares bonds stock incomes reserve
I. Balance at the end of
503,600,000.00 1,294,938,493.19 -843,229.50 256,902,260.27 1,688,158,733.09 3,742,756,257.05
the previous year
Add: change of
accounting policy
Correction of
errors in previous
periods
Business mergers
under the same control
Other
II. Balance at the
503,600,000.00 1,294,938,493.19 -843,229.50 256,902,260.27 1,688,158,733.09 3,742,756,257.05
beginning of the year
III. Increase/ decrease in
the period (“-” means 17,512,833.57 420,781,887.34 438,294,720.91
decrease)
(I) Total
17,512,833.57 597,041,887.34 614,554,720.91
comprehensive incomes
(II) Capital increased
and reduced by owners
1. Common shares
increased by
shareholders
2. Capital
increased by holders of
other equity instruments
3. Amounts of
share-based payments
recognized in owners
equity
4. Other
(III) Profit
-176,260,000.00 -176,260,000.00
distribution
1. Appropriations
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
to owners (or -176,260,000.00 -176,260,000.00
shareholders)
4. Other
(IV) Internal
carry-forward of
owners equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
(V) Specific reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
IV. Closing balance 503,600,000.00 1,294,938,493.19 16,669,604.07 256,902,260.27 2,108,940,620.43 4,181,050,977.96
8. Statement of changes in owners’ equity of the Company
2015
Unit: RMB
~ 72 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
2015
Other equity instruments Less: Other
Item Specific Total owners
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve Retained profit
Other reserve equity
shares bonds stock incomes
I. Balance at the end of the
503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
previous year
Add: change of
accounting policy
Correction of errors
in previous periods
Other
II. Balance at the
503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
beginning of the year
III. Increase/ decrease in
the period (“-” means 37,812,282.44 596,971,132.31 634,783,414.75
decrease)
(I) Total comprehensive
37,812,282.44 697,691,132.31 735,503,414.75
incomes
(II) Capital increased
and reduced by owners
1. Common shares
increased by shareholders
2. Capital increased
by holders of other equity
instruments
3. Amounts of
share-based payments
recognized in owners
equity
4. Other
(III) Profit distribution -100,720,000.00 -100,720,000.00
1. Appropriations to
surplus reserves
2. Appropriations to
-100,720,000.00 -100,720,000.00
owners (or shareholders)
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Gujing Distillery Original Chinese Spirits The 2015 Annual Report
3. Other
(IV) Internal
carry-forward of owners
equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
(V) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(VI) Other
IV. Closing balance 503,600,000.00 1,247,162,107.35 54,481,886.51 251,800,000.00 2,587,051,422.29 4,644,095,416.15
2014
Unit: RMB
2014
Other equity instruments Less: Other
Item Specific Total owners
Share capital Preferred Perpetual Capital reserve treasury comprehensive Surplus reserve Retained profit
Other reserve equity
shares bonds stock incomes
I. Balance at the end of
503,600,000.00 1,247,162,107.35 -843,229.50 251,800,000.00 1,589,277,915.00 3,590,996,792.85
the previous year
Add: change of
accounting policy
Correction of errors
in previous periods
Other
II. Balance at the
503,600,000.00 1,247,162,107.35 -843,229.50 251,800,000.00 1,589,277,915.00 3,590,996,792.85
beginning of the year
~ 74 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
III. Increase/ decrease in
the period (“-” means 17,512,833.57 400,802,374.98 418,315,208.55
decrease)
(I) Total comprehensive
17,512,833.57 577,062,374.98 594,575,208.55
incomes
(II) Capital increased
and reduced by owners
1. Common shares
increased by shareholders
2. Capital increased
by holders of other equity
instruments
3. Amounts of
share-based payments
recognized in owners
equity
4. Other
(III) Profit distribution -176,260,000.00 -176,260,000.00
1. Appropriations to
surplus reserves
2. Appropriations to
-176,260,000.00 -176,260,000.00
owners (or shareholders)
3. Other
(IV) Internal
carry-forward of owners
equity
1. New increase of
capital (or share capital)
from capital public
reserves
2. New increase of
capital (or share capital)
from surplus reserves
3. Surplus reserves
for making up losses
4. Other
~ 75 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
(V) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(VI) Other
IV. Closing balance 503,600,000.00 1,247,162,107.35 16,669,604.07 251,800,000.00 1,990,080,289.98 4,009,312,001.40
~ 76 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Section XI Documents Available for Reference
Note 1: Company Profile
Anhui Gujing Distillery Co., Ltd. (hereafter ―the Company‖ or "Company") was the company limited by shares approved by Administration Bureau
of State-owned Property of Anhui province following the approval WanGuoZiGongZi (1996) NO. 053 (皖国资工字(1996)第053号文), Anhui
Gujing Group Co., Ltd. as the sole sponsors, established net assets in the assessment of main production operating assets of its core company
Anhui Bozhou Gujing distillery 377.1677 million transferred into the 155,000,000 state-owned shares, and the registered location was the Bozhou
City of People's Republic of China. The company was registered in the The People's Republic of China on 5 March 1996 and was approved by
People’s Government of Anhui province following the approval WanZhengMin (1996) NO.42 (皖政秘(1996)42 号文). The company convoked the
founding meeting on 28 May 1996, and registrated on 30 May 1996 by Administration for Industry and Commerce of Anhui province. The
registration number of Business License for Enterprise as a Legal Person is: 14897271-1.
The Company has been issued 60,000,000 domestic listed foreign shares (hereafter ―B‖ shares) in June 1996 and 20,000,000 domestic listed
CNY ordinary shares (hereafter ―A‖ shares) in September 1996, the par value of ordinary shares is CNY1.00 per share. Both A share and B share
are listed in Shenzhen Stock exchange.
The headquarters of the company is located in Gujing town, Bozhou city, Anhui province. The company and the subsidiaries (collectively called
―Group‖) is mainly engaged in liquor production and sales, it belongs to the food manufacturing industry.
The original registered capital was CNY 235 million, the total amount of shares were 235 million, including state-owned shares 155 million and
domestic listed foreign shares 60 million, the par value is CNY 1 per share.
On 29 May 2006, the shareholder meeting for the Company’s shareholdings reform of A-share market have been discussed and approved the
proposal of the shareholdings reform, and that has been implemented in June 2006. After the Company’s shareholdings reform implemented, all
shares of the Company became floating shares, which including 147,000,000 shares with restrict condition on disposal, represent 62.55% of
total share capital, and 88,000,000 shares without restrict condition on disposal, represent 37.45% of total share capital.
On 27 June 2007, the Company issued the
restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the conversion date is on 29 June
2007. Hence, outstanding shares with restrict condition on disposal are 135,250,000 shares, representing 57.55% of total share capital, the
share without restrict condition on disposal are 99,750,000 shares, representing 42.45% of total share capital.
On 17 July 2008, the Company issued the
restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the conversion date is on 18 July
2008. Hence, outstanding shares with restrict condition on disposal are 123,500,000 shares, representing 52.55% of total share capital, the
share without restrict condition on disposal are 111,500,000 shares, representing 47.45% of total share capital.
On 24 July 2009, the Company issued the
123,500,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the
conversion date is on 29 July 2009. Hence, all shares of the Company were became outstanding shares without restrict condition on disposal.
According to the approval by China Securities Regulatory Commission (the authorization file No. zhengjianxuke[2011]943), on 15th July 2011, the
Company private issued 16,800,000 shares of ordinary share (A shares) to specific investors, the par value in CNY 1 per share, and the offering
price is CNY 75 per share, the funds raised amounting to CNY 1,260 million, deduct those sundry issuing charges amounting to CNY
32,500,549.73, the actual funds raised net amounting to CNY 1,227,499,450.27. The above funds have been reviewed by Reanda Certified Public
Accountants Co., Ltd., and issued the Capital Verification Report (REANDA YAN ZI[2011]No.1065). After private issued, the share capital was
increased to CNY 251.8 million.
According to the resolution of 2011 annual general meeting of stockholders, every 10 shares transferred to increase 10 shares by capital reserves
~ 77 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
used the base of the 251.8 million shares on 31 December, 2011, the total amount of increase by transferring were 251.8 million shares and has
been implemented in 2012. After increase by transferring the registered capital was increased to CNY 503.6 million.
Up to 31 December 2015, the accumulated total amount of issued capital was 503.6 million shares, see the note 6.24.
The company registered in Gujing town, Bozhou city, Anhui province.
As of the reporting date, cumulative number of shares of the Company was 503.6 million See Note 6.24 for details.The approved business scope
of the Company: grain procurement (operation by license), manufacture of distilled spirits, beer, red wine, facilities for wine making, packaging
materials, and glass bottles, alcohol, feeds, grease (limited to the by-products from alcohol manufacture), development of high-tech,
biotechnology development agricultural and sideline products deep processing, sales of goods from own production.
The parent company of the group and ultimate parent company is the Anhui Gujing Group Co., Ltd.
The financial statement is approved by the resolution of board of directors on 25 April, 2016. According to the articles of association, the financial
statements will be submitted to the shareholders meeting for consideration.
The combination scope includes total 11 subsidiaries in 2015, please see the note 8 ―The equity in other main entities‖ for details. The combination
scope increase 1 subsidiary than prior year and please see the note 7 ―Changes of scope of consolidation financial statements‖ for details.
Note 2: Basis for preparation of the financial statements
The financial statements of company have been prepared on basis of going concern in conformity with Chinese Accounting Standards for Business
Enterprises and the Accounting Systems for Business Enterprises issued by the Ministry of Finance of People’s Republic of China (Ministry of
Finance issued order No.33, the Ministry of Finance revised order No.76) on15 February 2006, and revised Accounting Standards (order 41 of the
Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – General Provisions
on Financial Reports (2014 Revision) issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the company has adopted the accrual
basis of accounting. Except for certain financial instruments which are measured by at fair value, the Company adopts the historical cost as the
principle of measurement in the financial statements. Where assets are impaired, provisions for asset impairment are made in accordance with
relevant requirements.
Note 3: Statement of Compliance with Enterprise Accounting Standards
The financial statements of the company are recognized and measured in accordance with the regulations in the Chinese Accounting Standards for
Business Enterprises and they give a true and fair view of the financial position, business result and cash flow of the Company as of 31 December
2015. In addition, the financial statements of the company comply, in all material respects, with the revised disclosing requirements for financial
statements and the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions on
Financial Reports (2014 Revision) issued by China Securities Regulatory Commission (CSRC) in 2014.
Note 4: Important Accounting Principles and Accounting Estimates
The company and subsidiaries are mainly engaged in liquor production and sales. The company formulates the specific accounting policies and
accounting estimates for revenue recognition and other transactions and events in accordance with the actual business operation characteristics of
~ 78 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
the company and subsidiaries, and provisions of the relevant accounting standard for business enterprises, please see the note 4.23 ―Revenue‖ for
details. The description of significant account judgment and estimates made by management please see the note 4.28 ―Significant account
judgment and estimates‖.
4.1 Accounting period
The accounting period of the Company is classified as interim period and annual period. Interim period refers to the reporting period shorter than a
complete annual period. The accounting period of the Company is the calendar year from 1 January to 31 December.
4.2 Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets for processing until. The company has
a 12 -month operating cycle, and its assets and liabilities as liquidity criteria for the classification.
4.3 Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the
Company and its domestic subsidiaries choose CNY as their functional currency. The Company adopts CNY to prepare its functional statements.
4.4 Business combination
A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations
are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under
common control.
4.4.1 Business combination involving entities under common 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 combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another
enterprise participating in the combination is the absorbing party, while that other enterprise participating in the combination is a party being
absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party being absorbed.
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 the capital premium (or share premium) in the capital reserve. If the balance of the capital premium
(or share premium) is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an
expense through profit or loss for the current period when incurred.
4.4.2 Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not
ultimately controlled by the same party or parties both before and after the business combination.
For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another
enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition
~ 79 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition
date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the
acquirer in respect of auditing, legal services, valuation and consultancy services etc and other associated administrative expenses attributable to
the business combination are recognized in profit or loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If, within the
12 months after acquisition, additional information can prove the existence of related information at acquisition date and the contingent
consideration need to be adjusted, goodwill can be adjusted.
Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured
by the fair value at the acquisition date. Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable
net assets, the difference shall be recognized as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the acquirer shall reassess the
measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination;
(ii) if after that reassessment, the cost of combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net
assets, the acquirer shall recognize the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions applied for recognition of
deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition
date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved,
relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the
current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of deferred income tax assets is related to
the combination.
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 Business Enterprises No.33 - Consolidated Financial Statements‖ on the ―package deal‖ criterion (see Note
4.5.2), to judge the multiple exchange transactions whether they are the "package deal". If it belong to the ―package deal‖ in reference to the
preceding paragraphs of this section and the Notes described in 4.13 ―long-term investment‖ accounting treatment, if it does not belong to the
―package deal‖ to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's equity investment before the acquisition date and the cost of
new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in
other comprehensive income, in the disposal of the investment will be in other comprehensive income associated with the use of infrastructure and
the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity
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method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or liabilities other than in the corresponding
share of the lead, and the rest into the current investment income).
In the combination financial statements, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value
at the acquisition date, with any difference between its fair value and its carrying amount is recorded as investment income. The previously-held
equity interest in the acquiree involved in other comprehensive income and other comprehensive income associated with the purchase of the
foundation should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in
accordance with the equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities or net
assets due to a corresponding share of the rest of the acquisition date into current investment income).
4.5 Preparation of the consolidated financial statements
4.5.1 The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the
financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope of consolidation includes the
Company and all of the subsidiaries. Subsidiary is an enterprise or entity under the control of the Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involved in the control of the change, the
company will be re-evaluated.
4.5.2 Preparation of the consolidated financial statements
The subsidiary of the Company is included in the consolidated financial statements from the date when the control over the net assets and business
decisions of the subsidiary is effectively obtained, and excluded from the date when the control ceases.
For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the date when control is lost) are
included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For a subsidiary disposed during the
period, no adjustment is made to the opening balance of the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the
date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no
adjustment is made to the opening balance and comparative figures in the consolidated financial statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under common control, the
financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in
the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common
control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
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. Where a
subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements was
reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions, and any
unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements.
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Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet
within shareholders’/ owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately
as minority interest in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ portion
of the opening balance of shareholders’/equity of the subsidiary, the excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity
investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received
from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the
interest in the former subsidiary’s net assets immediately before the loss of the control is recognized as investment income for the current period
when control is lost. Other comprehensive income related to the former subsidiary's equity investment, using the foundation and the acquiree
directly related to the disposal of the same assets or liabilities are accounted when the control is lost (ie, in addition to the former subsidiary is
remeasured at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest are transferred to the current investment
income). The retained interest is subsequently measured according to the rules stipulated in the - ―Chinese Accounting Standards for Business
Enterprises No.2 - Long-term equity investment‖ or ―Chinese Accounting Standards for Business Enterprises No.22 - Determination and
measurement of financial instruments‖. See Note 4.13 Long-term equity investments and Note 4.9 Financial instruments for details.
Where loss of control over a subsidiary results from multiple transactions (agreements), asssessment shall be made as to whether the multiple
agreements shall be viewed as a whole as a single transaction. Multiple agreements giving rise to loss of control over a subsidiary is generally
viewed as a whole as a single transaction if the terms, conditions and economic implications of the multiple agreements satisfy one or more of the
following conditions: 1) the agreements are entered into simultaneously or taking into account the implication of each other; 2) the business
objective cannot be achieved without successful completion of all the agreements; 3)the occurrance of one agreement is dependent on the result of
at least another one agreement; and/or 4) any one single agreement is not recognised as economic and the agreements as a whole is economic.
Where multiple agreements do not satisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted
for in accordance with the provisions of disposal of long-term equity investments not resulting loss of control (see Note 4.13.2.4) or loss of control
due to disposal of shares or other events (see the previous paragraph). Where nultiple agreements satisfy the conditions of being viewed as a
single transaction, each agreement shall be treated and accounted for as a transaction which results in loss of control; differences between the
consideration for disposals prior to loss of control and the net assets proportionate to the shares disposed prior to loss of control are recognised as
other comprehensive income in the consolidated financial statements and transfered to profit or loss at the time of loss of control.
4.6 Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control. A joint arrangement is either a joint operation or a joint
venture, depending of the rights and obligation of the Company in the joint arrangement. A joint operation is a joint arrangement whereby the
Company has rights to the assets, andobligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the
Company has rights to the net assets of the arrangement.
The Company accounts for joint ventures using the equity method, see Note 4.13.2.2 for details.
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The company, a joint operator, recognizes in relation to its interest in a joint operation:(a)its assets, including its share of any assets held
jointly;(b)its liabilities, including its share of any liabilities incurred jointly;(c)its revenue from the sale of its share of the output arising from the joint
operation;(d)its share of the revenue from the sale of the output by the joint operation; and (e)its expenses, including its share of any expenses
incurred jointly.
When the Company enters into a transaction with a joint operation in which it is a joint operator, such as a sale or contribution of assets, the
Company, prior to disposal of the assets to a third party by the joint operation, recognizes gains and losses resulting from such a transaction only to
the extent of the other parties' interests in the joint operation. When there is evidence of a reduction in the net realizable value of the assets to be
sold or contributed to the joint operation, or of an impairment loss of those assets which is in line with provision stipulated by CAS 8, those losses
are recognized fully by the Company. When there is evidence of a reduction in the net realizable value of the assets to be purchased or of an
impairment loss of those assets, the Company shall recognize its share of those losses.
4.7 Cash equivalent
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will
be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be
measured reliably and have low risks of change.
4.8 Foreign exchange
4.8.1 Translation in foreign exchange transactions
Transactions denominated in foreign currencies are translated into the functional currency using the transaction-date spot exchange rates. Where a
transaction is conducted purely for the purpose of exchange one currency into another currency, the exchange rate used to translate the foreign
currency into the functional currency is the exchange rate that is actually used for the currency exchange.
4.8.2 Translation of monetary foreign currency and non-monetary foreign currency
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 ①those 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, ②hedging 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.
4.9 Financial instruments
4.9.1 Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length
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transaction. For a financial instrument which has an active market, the Company uses quoted price in the active market to establish its fair value.
The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations,
pricing authorities; it represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Company establishes fair value by using a valuation technique. Valuation
techniques include using recent arm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of
another instrument that is substantially the same, discounted cash flow analysis and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at the value of a competitor’s interest rate swap quoted by
a recognised financial institution as at the Company’s balance sheet date in accordance with the principle of consistency.
4.9.2 Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, the Company’s
financial assets are classified into one of the four categories, including financial assets at fair value though profit or loss, held-to maturity
investments, loans and receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value. In the case of
financial assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and loss of the current period;
transaction costs relating to financial assets of other categories are included in the amount initially recognized.
4.9.2.1 Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there is objective evidence
indicating that the enterprise recently manages this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financial guarantee contract, or
a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose
fair value cannot be reliably measured. For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of relevant gains or losses that would
otherwise arise from measuring the financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is reported to the enterprise’s key
management personnels. Formal documentation regarding risk management or investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes in the fair
value and any dividends or interest income earned on the financial assets are recognized in the profit or loss.
4.9.2.2 Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the
positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortized cost using the effective
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interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial asset or financial
liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow considering all contractual terms of the financial asset or
financial liability without considering future credit losses, and also consider all fees paid or received between the parties to the contract giving rise to
the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
4.9.2.3 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an active market. Financial assets
classified as loans and receivables by the Company include note receivables, account receivables, interest receivable dividends receivable and
other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition,
impairment or amortization is recognized in profit or loss.
4.9.2.4 Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and
financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
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 included in the capital reserve, except that impairment losses and exchange differences related to
amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are
derecognized, at which time the gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are
recognized in investment gains.
4.9.3 Impairment of financial assets
The Group 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.
4.9.3.1 Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The
difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it
is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial
assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the
reserving date.
4.9.3.2 Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an
available-for-trade financial asset is impaired.
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When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital
reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the
acquisition cost with deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that financial asset
previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively
related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment
loss on available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is
recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on
a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
4.9.4 Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
a. the rights to receive cash flows from the asset have expired;
b. the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
c. the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards
of the asset, or (b) has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according
to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk by the financial
asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of the financial asset transferred;
and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive
income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the
part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a)
the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative
gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or
loss.
4.9.5 Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial
liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the
current period, and transaction costs relating to other financial liabilities are included in the initial recognition amounts.
4.9.5.1 Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to be measured by the fair
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value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to
be measured by the fair value and their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted for subsequent
measurement. All the gains or losses on the change of fair value and the expenses on dividends or interests related to these financial liabilities are
recognized in profit or loss for the current period.
4.9.5.2 Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and their fair value cannot be
measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for the current period.
4.9.6 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has
expired. An agreement between the Company (an existing borrower) and existing lender to replace original financial liability with a new financial
liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability
(or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed)
in profit or loss.
4.9.7 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 gain or loss caused by the fair value change of the hedging instrument which the hedging is highly
efficiency will be recorded into specific period in accordance with the hedging accounting according the hedging relationship. Except for the hedging
above, the resulting gain and loss of other derivatives is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial
liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded
derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms
as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately
either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at fair
value through profit or loss.
4.9.8 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.
4.9.9 Equity instruments
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An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The
consideration received from issuing equity instruments, net of transaction costs, are added to shareholders’ 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.
4.10 Receivables
The receivables by the Company include account receivables, and other receivables.
4.10.1 Impairment of receivables
Receivables are assessed for impairment on balance sheet dates. An impairment allowance for receivables is recognised if any of the following is
present upon assessment:
a. significant financial difficulty of the issuer or obligor; or
b. a breach of contract, such as a default or delinquency in interest or principal payments; or
c. it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
d. other objective evidence indicating impairment.
4.10.2 Impairment allowance for receivables
4.10.2.1 Receivables of individual significance subject to individual assessment and the relevant impairment allowance
Individual receivables equal to or over CNY 2,000,000.00 are classified as receivables of individual significance.
Receivables of individual significance are individually assessed for impairment. Receivables of individual significance assessed as non-impaired
upon individual assessment are incorporated into portfolios of financial assets of similar credit risk characteristics for assessment for impairment
by portfolio. Receivables of individual significance assessed as impaired upon individual assessment are no longer subject to assessment for
impairment by portfolio.
4.10.2.2 Portfolios of receivables of similar credit risk characteristics and the relevant impairment allowance
A. Classification of portfolios
Receivables of individual insignificance and non-impaired receivables of individual significance upon individual assessment are classified into
portfolios of financial assets on the basis of similarity and relevance of credit risk characteristics. Credit risk characteristics represent the ability of
the issuers or obligors to make payments in accordance with contracts and future cash flows of the relevant assets.Evidence of portfolios：
Portfolio Criteria
Portfolio by age Age of receivables
Related party portfolios Entities within the scope of the consolidation.
B. Impairment allowance for portfolios
Impairment allowance for portfolios is measured with reference to portfolio structure, credit risk characteristics (the ability of the issuers or obligors
to make payments in accordance with contracts) of each portfolio, historical experience, current market economic conditions, and recognised
impairment in each portfolio.
Measurement method for impairment allowance for portfolios
Portfolio Measurement method
Portfolio by age Age analysis method
Related party portfolios No allowance for bad debt
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a. Impairment allowance measured by age analysis
Age group Proportion to accounts receivable (%) Proportion to other receivables (%)
Less than 1 year (inclusive, same applies to the
following)
Including: 1 to 6 months 1.00 1.00
7 to 12 months 5.00 5.00
1 to 2 years 10.00 10.00
2 to 3 years 50.00 50.00
Over 3 years 100.00 100.00
4.10.2.3 Receivables of individual insignificance subject to individual assessment
Receivables of individual insignificance are individually assessed for impairment is any of the following is present:
there is disagreement with the issuer or obligor; or are subject to litigation; or it is clearly evidential that the issuer or obligor is very likely not
capable of fulfilling its commitments.
When a receivable of individual insignificance is impaired upon individual assessment for impairment, impairment loss is recognised as the excess
of its carrying amount over the present value of its future cash flows and an impairment allowance of the same amount is recognised.
4.10.3 Reversal of impairment allowance for receivables
After the impairment is recognised, if events subsequent to the recognition of the impairment are objectively evidential that the impairment no
longer exists, the impairment allowance and impairment loss are reversed; however, the reversal shall not cause the carrying amount of the
receivable exceeds its carrying amount as at the reversal date as if no impairment allowance was recognised.
4.11 Inventories
4.11.1 Classification of inventory
The Company’s inventory mainly includes raw materials, semi-finished product, work-in-progress and finished products.
4.11.2 Costing of inventories
Inventories are initially carried at the actual cost. Cost of inventories includes purchase cost, conversion cost and other cost. Cost of issue is
measured using the weighted average method.
4.11.3 Determination of net realisable value of inventories and impairment allowance for inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs
necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into
consideration the purpose of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is below the cost
of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is determined normally by the
difference of the cost of individual item less its realizable value. For large quantity and low value items of inventories,
provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line that are produced and
marketed in the same geographical area, have the same or similar end users or purposes, and cannot be practicably evaluated separately from
other items in that product line provision for decline in value is determined on an aggregate basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below
cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for decline in value is reversed
and the reversal is included in profit or loss for the period.
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4.11.4 Physical inventories are managed by the perpetual inventory taking system.
4.11.5 Amortisation of low value consumables and packaging materials
Low value consumables and packaging materials are fully amortised at the time of issuance.
4.12 Held-for-sale assets
A non-current asset is classified as held-for-sale if all of the following conditions are satisfied:
a. the asset is immediately sellable at its current condition per usual sales term applicable to the type of assets to which it belongs;
b. the Company's has completed official decision to dispose the asset;
c. the Company has entered into irrevokable sales contract with the purchaser; and
d. the sales will be completed within one year.
Amortisation or depreciation of the held-for-sale asset ceases at the time of classification. The asset is measured at the lower of its book value and
its classification date fair value minus disposal costs upon classification. Held-for-sale non-current assets include individual assets and disposal
groups. If a disposal group satisfy the conditions of the asset group defined by CAS 8 - Asset Impairment and includes goodwill arising from
business combination allocated in accordance with CAS 8 or the disposal group is an operation with an asset group, the disposal group include
goodwill arising from business combination.
Individual non-current assets held for sale and assets of disposal groups held for sale are collectively presented on the (consolidated) statement of
financial position as a line item of current assets. Liabilities of disposal groups held for sale are collectively presented on the (consolidated)
statement of financial position as a line item of current liabilities.
A held-for-sale asset or held-for-sale disposal group is reclassified from held-for-sale when the conditions for classification of the asset (disposal
group) as held-for-sale are no longer satisfied and is measured at the lower of its classification date book value minus cumulative depreciation,
amortisation and impairment as if it has not been reclassified as held-for-sale and it recoverable amount as of the date on which the conditions for
classification of the asset (disposal group) as held-for-sale are no longer satisfied.
4.13 Long-term equity investments
Long-term equity investments in this section refers to the long-term investment through which the Company has control, joint control, or material
influence on the investee. Long-term equity investments through which the Company does not have control, joint control or material influence on
the investee shall be recognised as available-for-sale financial assets or financial assets measured by fair value with changes in fair value
recognised in profit or loss. See Note 4.9 for details.
Joint control is the contractually agreed sharing of control over an economicactivity, and exists only when the strategic financial and operating
decisionsrelating to the activity require the unanimous consent of the parties sharingcontrol. Significant influence is the power to participate in the
financial and operatingpolicy decisions of the investee but is not control or joint control over thosepolicies.
4.13.1 Determination of Investment cost
Long-term equity investment acquired through business combination under common control are measured at the acquirer's share of the
combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the
initial cost and cash paid, non-monetary assets transferred and liabilities assumed by is adjusted to capital reserves, and to retained earnings if
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capital reserves are insufficient. If the consideration is paid by issuing equity instruments, the initial cost is measured at the acquirer's share of the
combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements, with the face value of the
equity instruments issued recognised as share capital and the difference between the intial cost and the face value of the equity instruments issued
adjusted to capital reserves, and to retained earnings if capital reserves is insufficient.For business combination involving entities under common
control achieved through multiple transactions (acquistion in stages), the multiple agreements are assessed to determine whether they should be
viewed as a lump-sum purchase. Where multiple agreements of an acquisition in stages are viewed as a lump-sum purchase, the transactions are
viewed as one transation that acquire the control power. Where multiple agreements of an acquisition fail the conditions of a lump-sum purchase,
long-term equity investment acquired through business combination under common control are measured at the acquirer's share of the combination
date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the initial cost,
and the book value of the long-term equity investment before combination date and considerations paid to acquire new shares on the combination
date, is adusted to capital reserves, and toretained earnings if capital reserves are insufficient.
Long-term equity investment acquired through business combination not under common control is measured at combination cost on the
combination date. The combination cost includes assets contributed by the purchaser, lialilities iccurred or assumed by, and fair value of the equity
instruments issued by the acquirer. For business combination involving entities not under common control achieved through multiple transactions
(acquistion in stages), the multiple agreements are assessed to determine whether they should be viewed as a lump-sum purchase. Where multiple
agreements of an acquisition in stages are viewed as a lump-sum purchase, the transactions are viewed as one transation that acquire the control
power. Where multiple agreements of an acquisition fail the conditions of a lump-sum purchase, long-term equity investment acquired through
business combination not under common control are measured at the sum of the original book value of the equity investment on the investee and
the new investment cost, which is regarded as the new initial cost of the long-term investment when transferred to cost method. If the original equity
is measured by equity method, not accounting treatment is applied to relevant other comprehensive income temporarily.
Audit, legal services, valuation, and other directly associated administrative expenses incurred by the acquirer are recognised in profit or loss on the
transaction dates.
Long-term equity investments acquired not through business combination are measured at cost on initial recognition. Depending on the way of
acquisition, the cost of acquisition can be the total cash paid, the fair value of equity instrument issued, the contract price, the fair value or book
value of the assets given away in the case of non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost
of acquisition of a long-term equity investment acquired not through business combination also includes all directly associated expenses, applicable
taxes and fees, and other necessary expenses. When the Company increase investment to have material influence or joint control, but not control
over the investee, long-term investments are measured at the sum of fair value of initial equity investment and cost of new investment as defined in
CAS22-Recognition and Measurement of Financial Assets.
4.13.2 Subsequent measurement and recognition and measurement of gain or loss
Where a long-term equity investment gives the Company either joint control or significant influence over the respective investee, the investment is
subsequently measured using the equity method.
Where a long-term equity investment gives the Company control over the respective investee, the investment is subsequently measured at cost.
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4.13.2.1 Long-term equity investments measured at cost
A long-term equity investment is measured at cost of investment, excluding declared cash dividends or profit pending distribution included in the
consideration paid. Investment income for the relevant period from a long-term equity investment measured at cost is recognised as the Company's
share of the cash dividends or profit declared for distribution by the investee.
4.13.2.2 Long-term equity investments measured using the equity method
When the cost of a long-term equity investment measured using the equity method on initial recognition exceeds the Company's share of the fair
value of the respective investee's net identifiable assets, no adjustment is made to the cost of the investment for the excess. When the Company's
share of the fair value of an investee's net identifiable assets exceeds the cost of the respective long-term equity investment measured using the
equity method on initial recognition, adjustment is made to the cost of the investment for the difference and the difference is carried to profit or loss
for the period during which the investment is recognised.
Investment income or loss and other comprehensive income for the relevant period from a long-term equity investment measured using the equity
method is measured at the Company's share of the net profit or loss and other comprehensive income of the respective investee for the relevant
period, and the book value of long-term equity investments is adjusted accordingly. If the investee declares profit distribution or cash dividends,
long-term equity investments are reduced by the Company’s share of declared profit distribution or cash dividends in the investee.Long-term equity
investments will be adjusted and capital reserves are recognised with variationsother than net profit or loss, other comprehensive income, and profit
distribution. When computing the Company's share of the net profit or loss of the investee for the relevant period, net profit or loss of the investee
for the relevant period is adjusted, if necessary, for the fair value of the investee's identifiable assets and identifiable liabilities on acquisition and the
Company's accounting policies and accounting period. Investment income and other comprehensive income is recognised accordingly. The
computation of the Company's share of the net profit or loss of the investee for the relevant period also eliminates unrealised profit and lossarising
from transactions between the Company and the investee (a joint venture or associate, whichever is applicable) and contributing or selling assets to
the investee which forms an operation,to the extent of the Company's share calculated by the Company's shareholding in the investee for the
relevant period, except for the unrealised loss resulted from impairment of transferred assets. When contributing assets to the joint venture or
associate by the Company forms an operation and the investor acquires the long-term equity investment without control, long-term equity
investments are measured at fair value of the contributed operations, with the difference between initial investment cost and book value of the
contributed operation fully recognised in profit or loss for the period. When selling assets to the joint venture or associate by the Company forms an
operation, the difference between considerations received and book value of the operation is fully recognised in profit and loss for the period. When
purchasing assets from the joint venture or associate by the Company belongs to an operation, income and losses are fully recognised as specified
in CAS20-Business Combination.
When the Company's share of an investee's net loss exceeds the sum of the carrying amount of the respective long-term equity investment
measured using the equity method and other investments in the investee, the carrying amount of the long-term equity investment and other
investments in the investee is reduced to zero. If the Company is obliged to share loss of the investee after its long-term equity investment and
other investments have been reduced to zero, an investment loss and provision is recognised to the extent of the estimated obligation. If the
investee reports profit in subsequent periods, the Company only recognises its share of profit after its share of profit equals the share of loss not
recognised.
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For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption of new
accounting standards, where the initial investment cost of a long-term equity investment exceeds the Company’s share in the investee’s net assets
at the time of acquisition, the excess is amortised and is recognised in profit or loss on a straight line basis over the original remaining life.
4.13.2.3 Acquisition of minority interests
If minority interests in an investee is acquired by the Company, during the Company's preparation of the consolidated financial statements, the
difference between the Company's cumulative share of the investees net assets calculated on the basis of the new shareholding in the investee
from the acquisition date (or combination date) and the Company's investment in the investee following the minority interest acquisition is adjusted
to capital reserves, and to retained earnings if capital reserves is insufficient.
4.13.2.4 Disposal of long-term equity investments
On the consolidated financial statements, when partly disposal of a long-term equity investment in a subsidiary which does not cause loss of control
over the subsidiary, the difference between the consideration for disposal and the net identifiable asset given away proportionate to the disposed
shares in the subsidiary is recognised in equity; partly disposal of a long-term equity investment in a subsidiary which cause loss of control over the
subsidiary is accounted for in accordance with Note 4.5.2.
The difference between the consideration for disposal of long-term equity investments and the carrying amount of the long-term equity investments
disposed is recognised in profit or loss for the period during which the investments are disposed.
When a long-term equity investment measured using the equity method is disposed and the residual equity after disposal is still measured using
equity method, the respective cumulative other comprehensive income recognised in equity proportionate to the disposed investment shall adopt
the same accounting treatment as the investee disposes relevant assets or liabilities directly. Movement in invstee’s equity other than changes in
net profit or loss, other comprehensive income, and profit distribution is recognised in profit or loss proportionally.
When a long-term equity investment measured using the cost method is disposed and the residual equity after disposal is still measured using cost
method, other comprehensive income,which is recognised by equity method or recognition and measurement applicable to financial instruments
prior to the Company's acquisition of control over the investee, shall adopt the same accounting treatment as the the investee disposes relevant
assets or liabilities directly on the date of loss of control, and profit or loss is recognised proportionally. Movement in invstee’s equity other than
changes in net profit or loss, other comprehensive income, and profit distribution is recognised in profit or loss proportionally.
Where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company continues to have
significant influence over the investee after the partial disposal, the investment is measured by equity method in the Company's separate financial
statements; where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company ceases to
have significant influence over the investee after the partial disposal, the investment is measured in accordance with the recognition and
measurement principles applicable to financial instruments in the Company's separate financial statements and the difference between the fair
value and book value of the remaining investment at the date of loss of control is recognised in profit or loss. Cumulative other comprehensive
income relevant to the investment, which is recognised by equity method or recognition and measurement principles applicable to financial
instruments prior to the Company's acquisition of control over the investee,shall adopt the same accounting treatment as the the investee disposes
relevant assets or liabilities directly on the date of loss of control, The investee's equity movement other than changes in net profit or loss, other
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comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss when control is lost. Where
the remaining investment is measured by equity method, the fore-mentioned other comprehensive income and other equity movement are
recognised in profit or loss proportionate to the disposal; Where the remaining investment is measured in accordance with the recognition and
measurement principles applicable to financial instruments, the fore-mentioned other comprehensive income and other equity movement are fully
recognised in profit or loss.
Where the Company's joint control or significant influence over an investee is lost due to partial disposal of investment in the investee, the
remaining investment in the investee is measured in accordance with the recognition and measurement principles applicable to financial
instruments, the difference between the fair value and the book value of the remaining investment at the date of loss of joint control or significant
influence is recognised in profit or loss.Cumulative other comprehensive income relevant to the investment, which is recognised by equity method
or recognition and measurement principles applicable to financial instruments prior to the Company's acquisition of control over the investee, shall
adopt the same accounting treatment as the the investee disposes relevant assets or liabilities directly on the date of loss of control, The investee's
equity movement other than changes in net profit or loss, other comprehensive income and profit distribution, as a result of accounting by equity
method, is reocgnised in profit or loss when control is lost.
Where the Company's control over an investee is lost through multiple disposals and the multiple disposals can be viewed as a lum-sum
transaction, the multiple disposals is accounted for one single transaction which results in the Company's loss of control over the investee.
Difference between the consideration received and the book value of the investment disposed at each time of disposal is recognised in other
comprehensive income and reclassified in full to profit or loss at the period when control over the investee is lost.
4.14 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. 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 expenditure in the profit or loss when it incurred.
The Group 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 20 ―Non-current and non-financial 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.
Investment property change into the Owner-occupied real estate, since the change of date for the investment property is transferred to fixed assets
or intangible assets. Change the owner-occupied property held to earn rentals or for capital appreciation, since the change of date, the fixed assets
or intangible assets to investment property. Conversion occurs when converted to investment property using the cost model, as the book value
before the conversion of the recorded value after the conversion; converted to investment property measured at fair value model, the fair value of
the conversion date as the recorded value after conversion.
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Derecognised when the investment property is disposed of or permanently withdrawn from use and the expected economic benefits can not be
obtained from the disposal of investment property. Proceeds on disposal of investment property is sold, transferred, retired or damaged through
profit or loss after deducting the book value and related taxes.
4.15 Fixed assets
4.15.1 Definition
Fixed assets refers to the tangible assets that 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.
4.15.2 Depreciation of fixed assets
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement. From the following month of
state of intended use, depreciation method of the straight-line method is used for different categories of fixed assets to take depreciation. The
recognition of the classification, useful life and estimated residual rate are as follows:
Estimated residual value
Category Expected useful life Depreciation (%)
(%)
Houses and building 8.00-35.00 3.00-5.00 2.70-12.10
Machineries 8.00-10.00 3.00-5.00 9.50-12.10
Vehicles 4.00 3.00 24.25
Administrative equipment and others 3.00 3.00 32.33
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.
4.15.3 Assessment for impairment and impairment allowance
Impairment and provisions of fixed assets are disclosed on Note 4.20 Impairment of non-current and non-financial assets.
4.15.4 Recognition and measurement of fixed assets held under financial lease
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.
4.15.5 Other relevant information
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.
4.16 Construction in progress
The cost of construction in progress is measured at the actual expenditure incurred, including construction expenditure and capitalisation of
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borrowing costs and other applicable costs incurred prior to the completion. An item of construction in progress is reclassified to fixed asset upon
completion.
See Note 4.20 for details of assessment for impairment of construction in progress and impairment allowance for construction in progress.
4.17 Borrowing costs
Borrowing costs include interests on loans, amortisation of discount or premium, ancillary expenses, and foreign exchange difference on loans
denominated in foreign currencies. Borrowing costs directly associated with the acquisition of construction of a qualifying asset are eligible for
capitalisation. Capitalisation starts when expenditure on the qualifying asset is incurred, borrowing costs are incurred, or production or
construction of the qualifying asset for its intended use or sales is started, whichever is later. Capitalisation stops when the qualifying assets reach
the condition of its intended use or sales. All other borrowing costs are recognised in profit or loss for the period during which they are incurred.
When a loan is taken out specifically for the construction of a particular qualifying asset, the interest expense capitalised for a particular period is
the residual amount after deducting interest income from unused facilities for the period and/or income from temporary investment of the unused
facilities for the period from the interest expense incurred for the period. Borrowing costs on general purpose financing is calculated by multiplying
the weighted average of the excess of cumulative capital expenditure over the designated financing facilities with the capitalisation rate of general
purpose financing. Capitalisation rate of general purpose financing is calculated as the weighted average of the interest rates of general purpose
financing.
Foreign exchange difference on designated financing denominated in foreign currencies incurred during the capitalisation period is wholly
capitalised. Foreign exchange difference on general purpose financing denominated in foreign currencies is recognised in profit or loss for the
period during which it is incurred.
A qualifying asset is an item of fixed assets, investment property, inventories, etc. which requires substantial period of time for the construction or
production for its intended use of sales.
If the construction or production of a qualifying asset stops for a period longer than three months, capitalisation of borrowing costs is suspended
until the construction or production is resumed.
4.18 Intangible assets
4.18.1 Intangible asset
An intangible asset is an identifiable non-monetary asset without a physical form which is owned or control by the Company.
Intangible assets are measured at cost on initial recognition. If it is probable that economic benefits associated with expenditure directly
associated with an item of intangible assets will flow to the Company and the cost of the expenditure can be reliably measured, the expenditure is
measured as part of the intangible asset's initial cost; all other expenditure is recognised in profit or loss for the period during which it is incurred.
Land use rights acquired are generally recognised as intangible assets. In the case of self-constructed building, the costs of acquiring the
respective land use right(s) and the costs of building construction are separately recognised and measured as intangible assets and fixed assets
respectively. In the case of purchased building, the costs of acquisition are allocated to land use right(s) and building; if the reasonable allocation
is impossible, the costs of acquisition as a whole are recognised and measured as fixed assets.
For an item of intangible assets which is with a finite useful life, the residual amount after deducting its estimated residual value and previously
recognised impairment from its cost is amortised over its estimated remaining useful life using the straight-line method starting from the month in
which it reaches the conditions of its intended use of sales. Intangible assets with infinite useful life are not amortised.
Useful lives of intangible assets are review on each balance-sheet date. If circumstances indicate that there is a change in the useful life of an
item of intangible assets with a finite useful life, a change in accounting estimates is carried out. If circumstances indicate that the useful life of an
item of intangible assets with infinite useful life becomes finite, the useful life of the intangible asset is estimated and the intangible asset is
amortised accordingly.
4.18.2 Research and development expenditure
A research and development project is divided into research stage and development stage.
Expenditure incurred during the research stage is recognised in profit or loss for the period during which it is incurred.
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Expenditure incurred during the development stage is recognised as intangible assets if all of the following conditions are satisfied:
a. it is technically feasible to complete the intangible asset so that it can be used or sold; and
b. the Company has clear intention to complete the intangible asset and to use it or sell it; and
c. it is evidential that the intangible asset will generate economic benefits either by selling the intangible asset itself or the goods produced by the
intangible asset or by using it internally; and
d. there are sufficient technical, financial and other resources to complete the intangible asset and the Company is able to use it or sell it, and
e. expenditure incurred in the development stage of the intangible asset can be reliably measured.
Where a research and development project cannot be separated into the research stage and development stage, all expenditure incurred for the
project is recognised in profit or loss for the period during which it is incurred.
4.18.3 Assessment for impairment and impairment allowance
See Note 4.20 for details of assessment for impairment of intangible assets and impairment allowance for intangible assets.
4.19 Deferred charges
An item of deferred charges is an expense incurred which brings economic benefits to the Company for a period exceeding one year starting from
transaction date. An item of deferred charges is amortised over its estimated useful life using the straight-line method.
4.20 Impairment of non-current assets
Non-current non-monetary assets, such as fixed assets, construction in progress, intangible assets with finite useful life, investment property
measured by cost, and long-term equity investments in subsidiaries, joint ventures and associates, are assessed for impairment on each
balance-sheet date. If circumstances on a balance-sheet date indicate that a non-current non-monetary asset is impaired, the recoverable amount
of the asset is estimated. The recoverable amounts of goodwill, intangible assets with infinite useful live and intangible assets which have not yet
reached the conditions of their intended use or sales are estimated at least once a year regardless of whether there is indication of impairment.
If the carrying amount of a non-current non-monetary asset exceeds its estimated recoverable amount, the excess of the carrying amount over the
estimated recoverable amount is recognised as impairment allowance and an impairment loss of the same amount is recognised. The estimated
recoverable amount of an asset is the higher of the residual amount after deducting disposal expense of the asset from its fair value and the
present value of its future cash flows. Where there is a sales contract for an asset and the contract is entered into for an arm's length transaction,
the fair value of the asset is the contract price; where there isn't a sales contract for an asset but there is an active market for it, the fair value of
the asset is price offered by the buyer; where there is neither a sales contract nor an active market for an asset, the fair value of the asset is best
estimate based on all available information. The disposal cost of an asset includes legal expenses, applicable taxes and fees and transportation
costs directly associated with the asset's disposal and all direct costs necessary to bring the asset to its sellable condition. The present value of an
asset's future cash flows is calculated by multiplying the cash flows arising from continual use of the asset and its disposal by an appropriate
discount rate. Impairment allowance is generally calculated on the basis of individual assets. If it is not possible to estimate the recoverable
amount of a individual asset, the recoverable amount of a cash-generating unit to which the asset belongs is estimated. A cash-generating unit is
the smallest combination of assets that is capable of cash flow generation.
Goodwill separately presented on the (consolidated) financial statements is allocated to cash-generating units or groups of units that are expected
to benefit from the synergy of business combination for impairment testing. Where the recoverable amount a cash-generating unit (or group of
units) is lower than its carrying amount, an impairment loss is recognised. The impairment loss is firstly allocated to the goodwill allocated to the
unit (or group of units) and then to individual assets pro rota on the basis of the carrying amount of each asset in the unit (or group of unites)
Impairment loss recognised in accordance with this section is irreversible in subsequent periods.
4.21 Employee Benefits
The employee benefits of the company include short-term employee benefits, post-employment benefits, termination benefits and other long-term
employee benefits:
Short-term employee benefits includes wages, bonuses, allowances and subsidies, welfare, health insurance , maternity insurance, work injury
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insurance, housing funds, labor union funds, employee education funds, non-monetary benefits and etc. Short-term employee benefits are
recognised as liabilitiesand profit or loss account or the costs associated with the asset during the accounting period when employees actually
provide services.The non -monetary benefits are measured at fair value.
Post-employment benefits include defined contribution plans and defined benefit plans. Defined contribution plan which includes the basic pension,
unemployment insurance and annuities shall be recognised as cost of related assets or profit or loss.
When the Company terminates the labor relationship with employees prior to the employment contracts, or encourages employees to accept
voluntary redundancy compensation proposals in this company, a provision shall be recognised for the compensation arising from the termination
of employment relationship with employees at the time when the Company can not unilaterally withdraw layoff proposal termination benefits
provided due to termination of employment, or the company ensures the costs related to the payment for termination benefits related to the
restructuring, which one is early to confirm employee benefits liabilities, and recorded as profit or loss. However, if termination benefits can not be
fully paid after twelve months of the reporting date,the liability shall be processed in accordance with other long-term employee benefits.
Retirement plan adopts the same principles as the termination benefits. The salaries and insurance to be paid from the date when employees stop
providing services to the date of normal retirementshall be recognised in profit or loss (termination benefits) when satisfying the requirements of a
provision.
Other long-term employee benefits provided by the company to employees that is in line with defined contribution plans shall adopt the accounting
treatment in accordance with defined contribution plans, otherwise the accounting treatment of defined benefit plans.
4.22 Provisions
A contingent liability is recognised as provision if all or the following conditions are satisfied:
a. it is a present obligation assumed by the Company; and
b. it is probable that the fulfillment of the obligation will cause economic benefit flows from the Company; and
c. the amount of the obligation can be reliably measured.
A provision is measured on a balance-sheet date as the best estimate of the amount that is required for the fulfillment of the present obligation
after taking into account of the risks and uncertainty associated with the respective contingent events and the time value of money.
If the amount required for settlement of a provision is wholly or partly reimbursed by a third party, the reimbursement is recognised separately as
an asset to the extent of the carrying amount of the provision if it is probable that the reimbursement becomes receivable.
4.23 Revenue
4.23.1 Revenue from sales of goods
Revenue arising from sales of goods are recognised if all of the following conditions are satisfied: significant risks and rewards attached to the
ownership of the goods have been transferred to the buyer; and the Company neither retains continual involvement with management generally
associated with the ownership of the goods nor exercise effective control over the goods sold; and the amount of revenue can be reliably
measured; and it is probable that economic benefits arising from the sales will flow to the Company; and expenses incurred or to be incurred
associated with the goods sold can be reliably measured.
Revenue arising from domestic sales of goods is recognized when goods are dispatched and delivered to the buyer, when significant risks and
rewards attached to the ownership of the goods sold are passed to the buyer, when neither continual involvement in the rights normally associated
with the ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising from the goods sold is
reliably measurable, when inflow of future economic benefits is probable, and when cost incurred or to be incurred associated with the goods sold
is reliably measurable. Revenue arising from non-domestic sales of goods is recognized when goods are loaded on board and when the export
clearance with the custom is completed.
4.23.2 Revenue from rendering of services
When the outcome of service rendered can be reliably estimated, revenue arising from rendering of the service is recognised based on
percentage of completion on the respective balance-sheet date. The percentage of completion of service rendered is determined by the proportion
that costs incurred to date bear to the estimated total costs.
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The outcome of service rendered can be reliably estimated if all of the following conditions are satisfied: a. the amount of revenue can be reliably
measured; b. it is probable that associated economic benefits will flow to the Company; c. the percentage of completion of service rendered can
be reliably measured; and d. costs incurred to date and to be incurred can be reliably measured.
When the outcome of service rendered cannot be reliably estimated, revenue is recognised to the extent that costs incurred to date and to be
incurred are expected to be reimbursed and costs incurred to date are recognised in profit or loss for the periods during which they are incurred.
When costs incurred are not expected to be reimbursed, no revenue is recognised.
If a contract entered into by the Company and a counter party involves both sales of goods and rendering of services and revenue arising from
goods sold and services rendered can be distinguished, revenue from sales of goods and rendering of services are separately accounted for; if,
however, revenue arising from goods sold and services rendered cannot be distinguished or can be distinguished but cannot be separately
measured, all revenue is accounted for as revenue arising from sales of goods.
4.23.3 Royalty income
Royalties are recognised on an accrual basis in accordance with the substance of the relevant agreement.
4.23.4 Interest income
Interest income is determined by the length of time over which the Company's finance resources are used by other parties using the effective
interest rate method.
4.24 Government Grants
A government grant is a transfer of monetary and non-monetary assets from the government to the Company for no consideration, excluding
resources transferred to the Company by the government in the capacity of shareholder. Government grants include grants related to assets and
grants related to income.
Government grants obtained by the Company which are relevant to construction or acquisition of long-term assets are classified as asset-related
government grants; all other government grants are classified as revenue-related government grants. For government grants without speficied
beneficiary, the Company performs classification in accordance with the following criteria.
a. Where a grant is obtained for a specified project, the grant is spitted into asset-related and revenue related portions proportionate to the project's
investment to expense ratio; the classification is reviewed on each balance sheet date and revised if necessary.
b. Where a grant is obtained for general purpose, the grant as a whole is classified as a revenue-related government grant.
If a government grant is in the form of monetary assets, it is measured at the amount received or receivable. If a government grant is in the form of
non-monetary assets, it is measured by fair value of the assets; if the fair value of the assets granted cannot be reliably measured, the grant is
measured by nominal value of the assets and is recognised immediately in profit or loss for the relevant period.
In general, the Company recognises a government grant when it is actually received and measures at the amount actually received. However, a
government grant may be recognised as receivable if it is objectively evidential on the reporting date that conditions for the grant receipt are
satisfied and that the grant is receivable. A government grant is recognised as receivable if all following conditions are satisfied:
a. the amount of the grant is expressly stipulated in official publication by the authorised governmental agency or can be reasonably estimated in
accordance with fiscal pronouncement issued by the authorised governmental agency and the estimate is not subject to significant uncertainty;
b. the grant is offcially disclosed as part of publicly disclosed fiscal subsidised projects by the local fiscal government bodies in accordance with the
Government Information Disclosure Directives and is managed in accordance with the fiscal plan published and the management of the grant if not
entity specific, ie. every eligible entity is entitled to apply;
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c. the term for payment is expressly stipulated in the offical pronouncement and the payment is backed by fiscal planning so that it is reasonable to
expect receipt within the term of the payment; and
d. other conditions (in applicable) need to be satisfied taking into account the Company's circumstances.
Grants related to assets are recognised as deferred income and amortised over the useful life of the relevant assets using the straight-line method.
A grant related to income is recognised as deferred income if it is related to expenses or loss to be incurred in the future and is carried to profit or
loss for the period during which the relevant expenses or loss are recognised; it is recognised in profit or loss for the period during which it is
received or becomes receivable if it is related to expenses or loss already incurred.
Where a recognised grant becomes repayable, the amount repayable is firstly charged to the remaining deferred income (if any); the remaining
amount after charge to deferred income is recognised in profit or loss for the period during which it becomes repayable.
4.25 Deferred tax assets and deferred tax liabilities
4.25.1 Current income tax
The current income tax liability (asset) on a balance-sheet date is measured at the amount of current income tax payable (receivable) computed in
accordance with the relevant tax law. Current income tax expense is computed on the basis of taxable profit (loss) which is the amount after the
adjustment of the relevant accounting profit (loss) in accordance with the relevant tax law.
4.25.2 Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are recognised on an accrual basis for the temporary difference between the carrying amounts of
assets and liabilities and their tax bases and the temporary difference arising from difference in recognition criteria for assets and liabilities between
CAS and relevant tax provisions.
No deferred tax liability is recognised for the taxable temporary difference arising from the initial recognition of goodwill and the initial recognition of
assets and liabilities acquired or assumed resulting from transactions which are not business combination and which do not have impact on both
accounting profit and taxable profit (deductable tax loss) at the time of their occurrence. Similarly, deferred tax liability is not recognised for taxable
temporary difference associated with investments in subsidiaries, associates and joint ventures if the Company can control the reverse of the
temporary difference and it is probable that the temporary difference is not expected to reverse in the foreseeable future. Except for the
circumstances described hereabove, deferred tax liability is recognised for all other taxable temporary difference.
No deferred tax asset is recognised for the deductable temporary difference arising from the initial recognition of assets and liabilities acquired or
assumed resulting from transactions which are not business combination and which do not have impact on both accounting profit and taxable profit
(deductable tax loss) at the time of their occurrence. Similarly, deferred tax asset is not recognised for deductable temporary difference associated
with investments in subsidiaries, associates and joint ventures if the Company can control the reverse of the temporary difference and it is probable
that the temporary difference is not expected to reverse in the foreseeable future. Except for the circumstances described hereabove, deferred tax
asset is recognised for all other deductable temporary difference to the extent that it is probable that taxable profit will be available against which
the deductible temporary difference can be utilised.
Deferred tax asset is recognised for deductable tax loss and tax credit carrying forward to the extent that it is probable that taxable profit will be
available against which the deductable tax loss and tax credit carrying forward can be utilised.
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Deferred tax assets and deferred tax liabilities are measured on a balance-sheet date on the basis of tax rates expected to be applicable in
accordance with relevant tax law at the time when the relevant assets are recovered or relevant liabilities settled.
The carrying amount of deferred tax assets is reviewed on each balance-sheet date. If it is probable that insufficient taxable profit is available to
utilise the deferred tax assets, the carrying amount of deferred tax assets is reduced. When it is probable that sufficient taxable profit becomes
available after the carrying amount of deferred tax assets has been reduced, the reduction is reversed.
4.25.3 Income tax expenses
Income tax expenses include current income tax expenses and deferred income tax expenses.
All current income tax expenses (credit) and deferred income tax expenses (gains) are recognised in profit or loss for the relevant period except for
a. current income tax and deferred income tax on transactions and events which are accounted for in other comprehensive income or directly in
equity, which are included in other comprehensive income or directly recognised in equity depending on the treatment of its underlying transactions
and events, and b. deferred income tax arising from business combination, which is accounted for as an adjustment to the carrying amount of the
respective goodwill.
4.25.4 Offsetting of income tax
A current income tax liability and current income tax asset are presented on (consolidated) financial statements after netting only if the Company is
permitted by law to settle the asset and liability net in cash and is planning to do so or to simultaneously recover the asset and settle the liability.
A deferred tax asset and deferred tax liability are presented on (consolidated) financial statements after netting only if all of the following conditions
are satisfied: the Company is permitted by law to settle the current asset and liability related to an income tax net in cash; and the deferred tax
asset and deferred tax liability arising from that income tax is levied by the same tax authority on the same entity or on different entities but the
relevant entities are planning to settle the underlying income tax net in cash or simultaneously recover the relevant assets and settle the relevant
liabilities during each future period during which significant deferred tax assets and deferred tax liabilities are reversed.
4.26 Lease
A financial lease is a lease which in substance transfers all risks and rewards attached to the ownership of the leased asset to the leasee although
the ownership of the leased asset ultimately may or may not be transferred. An operating lease is any lease that does not fall within the meaning of
a financial lease.
4.26.1 Operating lease to which the Company is the leasee
Lease payments for a operating lease to which the Company is the leasee is amortised over the lease term using the straight-line method and
recognised in the cost of the relevant asset or as expense, whichever is applicable. Initial expenses incurred for activities directly attributable to the
lease are recognised in profit or loss for the period during which they are incurred. Contingent rental payments are recognised in profit or loss when
they are incurred.
4.26.2 Operating lease to which the Company is the leasor
Rental income from an operating lease to which the Company is the leasor is amortised over the lease term using the straight-line method.
Significant initial expenses incurred for activities directly attributable to the lease are capitalised at the time when they are incurred and amortised
over the lease term in the same manner as the amortisation of rental income; insignificant expenses initial expenses incurred for activities directly
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attributable to the lease are recognised in profit or loss for the period during which they are incurred. Contingent rental income is recognised in
profit or loss when it is received or becomes receivable.
4.26.3 Financial lease to which the Company is the leasee
At the commencement of a financial lease to which the Company is the Leasee, the lower of the lease-commencement-date fair value of the leased
asset and the present value of the minimum lease payment is recognised as the cost of the leased asset; the minimum lease payment is
recognised as a long-term payable; and the excess of the long-term payable over the amount recognised as the cost of the leased asset is
recognised as unrecognised lease expenditure. Expenses incurred during the negotiation and signing of the lease contract for activities directly
attributable to the lease are recognised as part of the cost of the leased asset. The residual amount after deducting the unrecognised lease
expenditure from the long-term payable is divided into non-current liability and non-current liability due within one year depending on maturity and
presented on (consolidated) financial statements separately.
The unrecognised lease expenditure is amortised over the lease term using the effective interest rate method and the amortisation is recognised as
lease expense in profit or loss for the relevant period. Contingency lease rental is recognised in profit or loss when it is incurred.
4.26.4 Financial lease to which the Company is the leasor
At the commencement of a financial lease to which the Company is the leasor, the sum of the minimum lease rental receivable and the initial
expenses incurred for activities directly attributable to the lease is recognised as the initial amount of the respective financial lease rental receivable;
unguaranteed residual value is recorded, if any; the excess of the present value of the sum of the minimum lease rental receivable, the initial
expenses incurred for activities directly attributable to the lease and the unguaranteed residual value over the sum itself is recognised as
unrecognised lease income. The residual amount after deducting the unrecognised lease income from the financial lease rental receivable is
divided into non-current receivable and non-current receivable due within one year depending on maturity and presented on (consolidated) financial
statements separately.
The unrecognised lease income is amortised over the lease term using the effective interest rate method and the amortisation is recognised as
lease income in profit or loss for the relevant period. Contingency lease rental income is recognised in profit or loss when it is received or becomes
receivable.
4.27 Changes in major accounting policies and accounting estimates
4.27.1 Change of accounting policies
There is no significant change of accounting policies for the company during the reporting period.
4.27.2 Change of accounting estimates
There is no significant change of accounting estimates for the company during the reporting period.
4.28 Significant account judgment and estimates
During the application of accounting policies, judgements, estimates and presumption need to be made for elements of financial statements which
cannot be precisely measured due to inherent uncertainty existing in operation activities. The judgements, estimates and presumption are made on
the basis of the Company's past experience and other relevant factors. The exercise of judgements, estimates and presumption has impact on the
measurement of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities on the balance-sheet date. However, the
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inherent uncertainty of the judgements, estimates and presumption may result in future significant adjustments to be made to the measurement of
the affected assets and liabilities.
The judgements, estimates and presumption are reviewed regularly on the basis of going concern. Where a change in accounting estimates is
applicable, its impact on financial statements is recognised in the period during which the change occurs if the change has impact on the financial
statements for that period only; and in subsequent periods if the change also has impact on the financial statements for subsequent periods.
Significant elements of financial statements and areas that are subject to judgements, estimates and presumption on the balance-sheet date
include the following.
4.28.1 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.
4.28.2 Recognition of impairment allowance for receivables
In accordance with accounting policies applicable to receivables, loss arising from impairment of receivables is accounted for by allowance.
Impairment of receivables are assessed on the basis of the collectability of receivables and the assessment requires judgements and estimates
exercised by the management. Difference between actual results and the estimates will have impact on the carrying amount of receivables and the
recognition and reverse of impairment allowance for receivable for the period during which the estimates are changed.
4.28.3 Recognition of impairment allowance for inventories
In accordance with accounting policies applicable to inventories, impairment allowance for inventories is recognised for inventories of which the
carrying amount exceeds the net realisable value and inventories which are obsolete or have impaired salability. Loss arising from impairment of
inventories is measured on the basis of the salability and net realisable value of the respective inventories. Judgements and estimates regarding
impairment allowance for inventories require conclusive evidence obtained by the management and consideration of the purpose of inventory
holding, impact of post balance-sheet-date events and other relevant factors. Difference between actual results and the estimates will have impact
on the carrying amount of inventories and the recognition and reverse of impairment allowance for inventories for the period during which the
estimates are changed.
4.28.4 Fair value of financial instruments
Fair value of financial instruments which are not quoted in an active market are measured by valuation techniques such as the discounted cash flow
model, etc. Estimates of future cash flows, credit risks, market movement and relevance and choice of the appropriate discount rates are required
for the measurement. Inherent uncertainty is inevitable in making these estimates and the change of estimates will have impact of the fair value of
the respective financial instruments.
4.28.5 Impairment of financial assets available-for-sale
Impairment of available-for-sale financial assets and hence recognition of impairment loss recognised in profit or loss general depend on estimates
and presumption made by the management. In making the judgements and estimates, the Company assesses the extent and duration that the cost
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of an available-for-sale financial asset exceeding its fair value and considers the investee's financial position and short-term prospects, including
factors such as industry environment, technology advances, credit rating, default rates, and risks faced by peer entities.
4.28.6 Impairment of non-financial, non-current assets
Non-current assets are assessd for indication of impairment on each balance-sheet date. In addition, intangible assets with infinite useful life are
subject to impairment testing on each balance-sheet date and whenever there is evidence indicating impairment; other non-financial non-current
assets are subject to impairment testing only if there evidence indicating that the carrying amount becomes non-collectible.
Impairment exists when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, which is higher of the residual
amount after deducting necessary expenses for disposal from its fair value and the present value of its future cash flows.
An asset's residual amount after deducting necessary expenses for disposal is determined by reference to the residual amount after deducting the
incremental costs to dispose the asset from the selling price provided by contracts for sales of similar assets or the observable market price of
similar assets.
When estimating the present value of future cash flows of an asset or cash-generating unit, significant judgements have to be made regarding the
production capacity, selling price, relevant operating costs of the asset or cash-generating unit and relevant discount rates for discounting the cash
flows. The Company considers all available relevant information when determining the recoverable amount, including estimates regarding future
production capacity, selling price and relevant operating costs made on the basis of reasonable and supportive presumption.
Goodwill is assessed for impairment at least annually. The assessment involves estimate of the present value of the future cash flows associated
with the assets or groups of assets to which goodwill has been allocated. The estimate takes into account the future cash flows associated with the
assets or groups of assets to which goodwill has been allocated and the applicable discount rates for cash flow discounting.
4.28.7 Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated (amortised) over their useful lives using the straight-line method after taking
into account of their residual value. Useful lives of these assets are reviewed regularly for the purpose of determining the depreciation and
amortisation recognised for each period. Useful lives are determined on the basis of the Company's past experience on similar assets and expected
new technology development. If existing estimates change significantly, adjustment is made to the depreciation and amortisation for future periods.
4.28.8 Deferred tax assets
All unutilised tax loss are recognised as deferred tax assets to the extent it is probable that taxable profit will be available against which the
deductable tax loss can be utilised. Significant judgements are required to estimate the timing and amount of future taxable profit and to consider
tax planning strategy so as to determine the amount of deferred tax assets to be recognised.
4.27.9 Income tax
During the ongoing operation of the Company, there is uncertainty in the treatment for and amounts of certain transactions for income tax purpose.
For example, the deductibility of certain expenses for income tax purpose is subject to the approval by relevant tax authority. If the ultimate outcome
of the uncertainty differs from the original estimate, the difference will have impact on the current income tax expenses and deferred income tax
expenses for the relevant period.
4.28.10 Accrued liabilities
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Provision is recognised for product warranty, onerous contract, buy-back obligation, etc. on the basis of contract terms, current knowledge and past
experiences. A provision is recognised when a contingent event has resulted in a present obligation, the fulfillment of the present obligation will
result in outflow of economic benefits. The amount recognised is the best estimate of expenses that would be incurred to fulfill the present
obligation. The recognition and measurement of provisions significantly depend on judgements of the management. In exercising judgement, the
Company assesses risks and uncertainty associated with the contingent events and time value of money, etc.
Note 5: Taxation
5.1 Major taxes and tax rate
Tax Tax rate (%)
Revenues from sales of products and raw materials at the rate of 6, 17% , and use the
Value added tax
balance after deduct the deductible input tax to pay the VAT
The consumption taxes have been provided at the rate of CNY 1.00 yuan per kg or 1,000
Consumption tax ml follow the quantity, and the consumption tax have been provided at the rate of 20% of
the taxable sales.
Business tax Business tax rate is the 5% of taxable income
Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable for the
and construction surcharge reporting period, and exempt and deductible tax at the rate of 1, 5, 7%.
Sum of VAT payable, consumption duty payable and business tax payable for the
Education surcharge
reporting period, and exempt and deductible tax at the rate of 3%.
Sum of VAT payable, consumption duty payable and business tax payable for the
Local education surcharge
reporting period, and exempt and deductible tax at the rate of 2%.。
Corporate income tax Income tax is calculated with the ratio of 25%.
Note 6: Notes to significant elements of the financial statements
Unless otherwise stated (incl. notes to significant elements of the financial statements is), the current year is 2015, prior year is 2014 respectively.
6.1 Monetary funds
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Cash in hand 373,724.24 349,833.07
Bank deposit 1,040,000,008.83 713,744,608.33
Other monetary fund 46,945,425.70 4,366,001.39
Total 1,087,319,158.77 718,460,442.79
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Items Balance as at 31/12/2015 Balance as at 31/12/2014
Including: The total amount of deposit abroad 0.00 0.00
Note: The ownership restrictions on monetary funds which is the deposit of bank acceptance is CNY 46,945,425.70 on 31 Dec 2015.
6.2 Financial assets measured by fair value with changes in fair value recognised in profit or loss
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Held for trading financial assets 322,223.28 303,919.60
Including: invest in equity instrument 322,223.28 303,919.60
Total 322,223.28 303,919.60
6.3 Notes receivable
6.3.1 Disclosure by classification
Classification Balance as at 31/12/2015 Balance as at 31/12/2014
Bank acceptance 539,442,903.31 505,893,430.66
Total 539,442,903.31 505,893,430.66
6.3.2 Pledged notes receivable at the end of current year
Item Amount
Bank acceptance 56,069,046.29
Total 56,069,046.29
6.3.3 Immature notes receivable transferred at the end of current year
Item Amount derecognised as at 31/12/2015 Amount not derecognised as at 31/12/2015
Bank acceptance 254,038,961.31 0.00
Total 254,038,961.31 0.00
6.4 Accounts receivable
6.4.1 Disclosure by classification
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual significance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Accounts receivable portfolio subject to 6,226,590.29 100.00 1,278,515.45 20.53 4,948,074.84
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Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
impairment by credit risk:
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 6,226,590.29 100.00 1,278,515.45 20.53 4,948,074.84
(Continued)
Balance as at 31/12/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual significance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Accounts receivable portfolio subject to
5,393,735.97 100.00 1,055,782.71 19.57 4,337,953.26
impairment by credit risk:
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 5,393,735.97 100.00 1,055,782.71 19.57 4,337,953.26
Disclosure by age:
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Within 1 year
Including: within 6 months 4,186,976.99 41,869.77 1.00
7– 12 months 338,796.00 16,939.80 5.00
Within1year 4,525,772.99 58,809.57 1.30
1-2years 24,811.41 2,481.14 10.00
2-3years 917,562.30 458,781.15 50.00
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Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Over3years 758,443.59 758,443.59 100.00
Total 6,226,590.29 1,278,515.45 20.53
6.4.2 Recognisation, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognised during the year is CNY222,732.74.
6.4.3 Accounts receivable written off during the current reporting period.
There has no accounts receivable written off during the current reporting period.
6.4.4 Details of top five accounts receivable
The total amount of top five accounts receivables summaried by debtors as at the end of current year is CNY 3,692,555.89, accounting for 59.30%
of the total accounts receivable as at the end of current year, the total corresponding allowance for bad debts is CNY656,790.35.
6.5 Advances to suppliers
6.5.1 Disclosure by age
Balance as at 31/12/2015 Balance as at 31/12/2014
Age
Amount % of total Amount % of total
Within 1 year 80,083,715.48 99.64 35,406,358.00 99.14
1 to 2 years 285,694.11 0.36 163,485.98 0.46
2 to 3 years 0.00 0.00 141,774.00 0.40
Over 3 years 3,674.00 0.00 0.00 0.00
Total 80,373,083.59 100.00 35,711,617.98 100.00
6.5.2 Details of top five advance to suppliers
The total amount of top five advance to suppliers as at the end of current year is CNY71,522,656.25, accounting for 88.99% of the total advance
to suppliers.
6.6 Interest recveivables
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Interest of structuraldeposit 0.00 4,274,666.66
Total 0.00 4,274,666.66
6.7 Other receivables
6.7.1 Disclosure by classification
Balance as at 31/21/2015
Items
Carrying amount Allowance for bad debt Book value
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Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 41,342,938.53 81.90 41,342,938.53 100.0 0.00
impairment
Other receivable portfolio subject to
9,134,457.26 18.10 516,501.58 5.65 8,617,955.68
impairment by credit risk:
Other receivable of individually insignificance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Total 50,477,395.79 100.00 41,859,440.11 82.93 8,617,955.68
(Continued)
Balance as at 31/21/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 50,727,440.55 85.92 50,727,440.55 100.00 0.00
impairment
Other receivable portfolio subject to
8,310,068.17 14.08 342,164.93 4.12 7,967,903.24
impairment by credit risk:
Other receivable of individually insignificance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Total 59,037,508.72 100.00 51,069,605.48 86.50 7,967,903.24
6.7.1.1 Other receivables of individual significance and subject to individual impairment assessment
Balance as at 31/21/2015
Debtor Carrying Allowance for Rate of
Reason for allowance
amount bad debt Allowance (%)
Jianqiao Securities 11,840,500.00 11,840,500.00 100.00 Enterprise is in the proceeding of liquidation bankruptcy
Hengxin Securities 29,502,438.53 29,502,438.53 100.00 Enterprise is in the proceeding ofliquidation bankruptcy
Total 41,342,938.53 41,342,938.53 100.00
6.7.1.2 Accounts receivable using the age analysis method for measurement of impairment allowances:
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Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Within 1 year
Including: within 6 months 6,326,797.14 63,267.97 1.00
7-12 months 955,701.70 47,785.09 5.00
Subtotal within one year 7,282,498.84 111,053.06 1.52
1-2 years 1,552,504.42 155,250.44 10.00
2-3 years 98,511.84 49,255.92 50.00
Over 3years 200,942.16 200,942.16 100.00
Total 9,134,457.26 516,501.58 5.65
6.7.2 Recognization, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognized during the current year is CNY245,494.65.
6.7.3 The situation of other receivable the is written off in current year
The amount of allowance for bad debts written off during the current year is CNY9,455,660.02.
6.7.4 The classification of other receivable
Nature Balance at 31/12/2015 Balance at 31/12/2014
Investment in securities 41,342,938.53 50,727,440.55
Deposit and guarantee 1,642,346.71 1,786,964.87
Loan for business trip 2,789,864.26 3,772,242.50
Rent and water, electric and gas expense 2,432,526.57 903,964.37
Others 2,269,719.72 1,846,896.43
Total 50,477,395.79 59,037,508.72
6.7.5 Details of top five other receivable:
Allowance
Debtor nature Carrying amount age % of total amount balance at the
year end
The first Investment in securities 29,502,438.53 Over 3 years 58.45 29,502,438.53
The second Investment in securities 11,840,500.00 Over 3 years 23.46 11,840,500.00
The third Prepaid for oil fee 2,054,847.05 Within 6 months 4.07 20,548.47
The forth Payment of alcoholic drink 789,120.00 Within 6 months 1.56 7,891.20
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Allowance
Debtor nature Carrying amount age % of total amount balance at the
year end
The fifth Loan for salesman 609,048.00 Within 6 months 1.21 6,090.48
Total 44,795,953.58 88.75 41,377,468.68
6.8 Inventories
6.8.1 Disclosure by classification
Balance as at 31/12/2015
Items
Carrying amount before impairment allowance Impairment allowance Net carrying amount
Raw material 102,293,838.52 6,976,129.27 95,317,709.25
Work in progress 1,130,825,408.23 0.00 1,130,825,408.23
Finished goods 177,900,253.21 7,331,319.82 170,568,933.39
Total 1,411,019,499.96 14,307,449.09 1,396,712,050.87
(Continued)
Balance as at 31/12/2014
Items
Carrying amount before impairment allowance Impairment allowance Net carrying amount
Raw material 112,077,576.03 8,700,056.13 103,377,519.90
Work in progress 1,061,359,515.77 0.00 1,061,359,515.77
Finished goods 67,034,474.15 4,588,735.73 62,445,738.42
Total 1,240,471,565.95 13,288,791.86 1,227,182,774.09
6.8.2 Impairment allowance for inventories
Increase in current year Decrease in current year
Balance as at Balance as at
Items Recovered or
31/12/2014 Accrual Other Other 31/12/2015
Written off
Raw material 8,700,056.13 5,483,342.42 0.00 7,207,269.28 0.00 6,976,129.27
Self-manufactured
0.00 0.00 0.00 0.00 0.00 0.00
semi-finished goods
Finished goods 4,588,735.73 5,207,785.37 0.00 2,465,201.28 0.00 7,331,319.82
Total 13,288,791.86 10,691,127.79 0.00 9,672,470.56 0.00 14,307,449.09
6.8.3 Reason for impairment recognition and reversal or written-off
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The reason of recovering The reasons for inventory
The basis of recognition of impairment allowance
Items impairment allowance for impairment writen-off at current
for inventories
inventories year
Market prices decrease, and resulting in raw
Raw material Material scrap and application
material’s net realizable value lower than cost
Market prices decrease, and resulting in Finished
Finished goods Scrap of the product
goods’ net realizable value lower than cost
6.9 Other current assets
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Financial products 1,500,000,000.00 1,320,000,000.00
Repurchase of government pledged bond 0.00 180,712,225.81
Deductible tax 970,860.37 840,250.30
Total 1,500,970,860.37 1,501,552,476.11
6.10 Available-for-sale financial assets
6.10.1 The situation of available-for-sale financial assets
Balance as at 31/12/2015 Balance as at 31/12/2014
Items Net carrying Net carrying
Carrying amount Impairment Carrying amount Impairment
amount amount
Available for sale equity
213,881,190.47 0.00 213,881,190.47 65,332,932.00 0.00 65,332,932.00
instruments
Including: measured by fair
213,881,190.47 0.00 213,881,190.47 65,332,932.00 0.00 65,332,932.00
value
Measured by cost 0.00 0.00 0.00 0.00 0.00 0.00
Other 100,000,000.00 0.00 100,000,000.00 23,000,000.00 0.00 23,000,000.00
Total 313,881,190.47 0.00 313,881,190.47 88,332,932.00 0.00 88,332,932.00
6.10.2 The available for sale financial asset which is measured by fair value at the year end
Equity instrument Debt instrument
Classification of the available for sale financial asset Total
available for sale available for sale
The cost of the equity instrument or the amortized cost of the debt instrument 141,238,675.12 0.00 141,238,675.12
Fair value 213,881,190.47 0.00 213,881,190.47
~ 112 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Equity instrument Debt instrument
Classification of the available for sale financial asset Total
available for sale available for sale
The amount of the fair value change recognized intocomprehensive income 72,642,515.35 0.00 72,642,515.35
Impairment allowance 0.00 0.00 0.00
6.10.3 The measurement of the cost of available for sale financial assets at the end of current year
Balance as at 31/12/2015 Impairment
Increase in Decrease Balance as
Investee Balance as at Increase in Decrease in Balance as at Balance as at
current in current at
31/12/2014 current year current year 31/12/2015 31/12/2014
year year 31/12/2015
Anmian No.11
group trust 23,000,000.00 0.00 23,000,000.00 0.00 0.00 0.00 0.00 0.00
plan
Hongtai No.55
assembled 0.00 100,000,000.00 0.00 100,000,000.00 0.00 0.00 0.00 0.00
funds trust plan
Total 23,000,000.00 100,000,000.00 23,000,000.00 100,000,000.00 0.00 0.00 0.00 0.00
6.11 Investment property
6.11.1 Investment property measured using the historical cost
Items Houses and buildings Land use rights Total
1. Cost:
1.1 Balance as at 31/12/2014 74,748,266.02 2,644,592.00 77,392,858.02
1.2 Increased in current year 3,901,940.41 0.00 3,901,940.41
1.3 Decreased in current year 55,501,392.68 0.00 55,501,392.68
1.4 Balance as at 31/12/2015 23,148,813.75 2,644,592.00 25,793,405.75
2. Accumulated Depreciation and accumulated amortization
2.1Balance as at 31/12/2014 44,927,757.41 390,744.37 45,318,501.78
2.2 Increased in current year 1,575,157.77 103,312.25 1,678,470.02
2.2.1 Accrual or amortization 628,937.37 103,312.25 732,249.62
2.2.2 Others 946,220.40 0.00 946,220.40
2.3 Decreased in current year 30,919,017.94 0.00 30,919,017.94
~ 113 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Houses and buildings Land use rights Total
2.4 Balance as at 31/12/2015 15,583,897.24 494,056.62 16,077,953.86
3. Impairment allowance
3.1Balance as at 31/12/2014 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00
3.3 Decreased in current year 0.00 0.00 0.00
3.4 Balance as at 31/12/2015 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2015 7,564,916.51 2,150,535.38 9,715,451.89
4.2 Carrying amount as at 31/12/2014 29,820,508.61 2,253,847.63 32,074,356.24
6.12 Fixed assets
6.12.1 Circumstance of fixed assets
Items Houses and buildings Machineries Vehicles Office equipment and other Total
1. Cost:
1.1 Balance as at 31/12/2014 1,576,781,874.52 736,224,507.49 49,463,729.87 56,353,173.45 2,418,823,285.33
1.2 Increased in current year 118,598,032.49 66,875,357.28 3,888,646.09 6,358,146.30 195,720,182.16
1.2.1 Purchase 0.00 23,843,108.67 3,888,646.09 6,346,180.48 34,077,935.24
1.2.2 Transferred from
63,096,639.81 43,032,248.61 0.00 11,965.82 106,140,854.24
construction in-progress
1.2.3 Recovered from rental housing 55,501,392.68 0.00 0.00 0.00 55,501,392.68
1.3 Decreased in current year 34,138,666.09 28,499,565.31 667,877.04 2,502,622.33 65,808,730.77
1.3.1 Disposal or scrap 1,729,551.47 12,020,808.21 667,877.04 2,502,622.33 16,920,859.05
1.3.2 Transfer to construction in-progress for
0.00 16,478,757.10 0.00 0.00 16,478,757.10
technical improvement
1.3.3 Rental housing 3,901,940.41 0.00 0.00 0.00 3,901,940.41
1.3.4 Project final accounts adjustment 28,507,174.21 0.00 0.00 0.00 28,507,174.21
1.4 Balance as at 31/12/2015 1,661,241,240.92 774,600,299.46 52,684,498.92 60,208,697.42 2,548,734,736.72
2. Accumulated Depreciation
2.1 Balance as at 31/12/2014 376,591,354.84 232,008,403.62 35,510,538.63 43,891,172.49 688,001,469.58
~ 114 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Houses and buildings Machineries Vehicles Office equipment and other Total
2.2 Increased in current year 101,449,657.10 78,139,835.81 7,385,938.98 4,173,251.14 191,148,683.03
2.2.1 Accrual 70,530,639.16 78,139,835.81 7,385,938.98 4,173,251.14 160,229,665.09
2.2.2 Recovered from rental housing 30,919,017.94 0.00 0.00 0.00 30,919,017.94
2.3 Decreased in current year 2,586,922.73 22,018,603.81 640,794.56 2,472,029.36 27,718,350.46
2.3.1 Disposal or scrap 1,640,702.33 10,515,576.25 640,794.56 2,472,029.36 15,269,102.50
2.3.2 Transfer to construction in-progress for
0.00 11,503,027.56 0.00 0.00 11,503,027.56
technical improvement
2.3.3 Rental housing 946,220.40 0.00 0.00 0.00 946,220.40
2.4 Balance as at 31/12/2015 475,454,089.21 288,129,635.62 42,255,683.05 45,592,394.27 851,431,802.15
3. Impairment allowance
3.1Balance as at 31/12/2014 4,133,377.10 2,553,971.54 0.00 0.00 6,687,348.64
3.2 Increased in current year 0.00 164,700.81 0.00 0.00 164,700.81
3.2.1 Accrual 0.00 164,700.81 0.00 0.00 164,700.81
3.3 Decreased in current year 0.00 577,919.20 0.00 0.00 577,919.20
3.3.1 Disposal or scrap 0.00 577,919.20 0.00 0.00 577,919.20
3.4 Balance as at 31/12/2015 4,133,377.10 2,140,753.15 0.00 0.00 6,274,130.25
4. Carrying amount
4.1 Carrying amount as at 31/12/2015 1,181,653,774.61 484,329,910.69 10,428,815.87 14,616,303.15 1,691,028,804.32
4.2 Carrying amount as at 31/12/2014 1,196,057,142.58 501,662,132.33 13,953,191.24 12,462,000.96 1,724,134,467.11
6.12.2 Temporarily idle fixed assets
Item Carrying value Depreciation Impairment Book value Notes
Houses and buildings 15,719,043.63 11,411,262.48 4,133,377.10 174,404.05
Machineries 10,820,633.53 8,666,644.69 2,140,753.15 13,235.69
Total 26,539,677.16 20,077,907.17 6,274,130.25 187,639.74
6.12.3 Fixed assets with pending ownership registration
Item Book value The reason of pending ownership registration
Office building 55,371,763.72 Registration together after the industrial park finished
~ 115 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Item Book value The reason of pending ownership registration
Fire station 978,570.51 Registration together after the industrial park finished
No.3 shift work building 5,888,959.60 Registration together after the industrial park finished
No.1 mold culture building 11,073,966.82 Registration together after the industrial park finished
No.2 mold culture building 11,073,966.82 Registration together after the industrial park finished
No.3 mold culture building 11,073,966.82 Registration together after the industrial park finished
No.4 mold culture building 11,803,951.62 Registration together after the industrial park finished
No.5 mold culture building 11,816,197.34 Registration together after the industrial park finished
No.1 distillery workshop 23,105,225.43 Registration together after the industrial park finished
No.2 distillery workshop 23,278,029.02 Registration together after the industrial park finished
No.3 distillery workshop 23,622,439.27 Registration together after the industrial park finished
No.4 distillery workshop 23,586,361.15 Registration together after the industrial park finished
Generator building 329,815.39 Registration together after the industrial park finished
Bran storehouse 30,017,391.42 Registration together after the industrial park finished
Auxiliary workshop office building 981,299.11 Registration together after the industrial park finished
Sewage treatment station 10,197,582.79 Registration together after the industrial park finished
Blending workshop, wine storehouse and stainless
19,631,528.76 Registration together after the industrial park finished
steel tank area
No.2 and 3 stainless steel tank area 21,463,492.25 Registration together after the industrial park finished
1-4 floor pottery jars wine library building projects 46,157,034.97 Registration together after the industrial park finished
No.1 distillery filling house 32,922,675.09 Registration together after the industrial park finished
No.2 distillery filling house 39,518,260.69 Registration together after the industrial park finished
No.6 distillery filling house 21,772,619.52 Registration together after the industrial park finished
No.8 distillery filling house 24,654,361.68 Registration together after the industrial park finished
Reception room 24,564,432.04 Registration together after the industrial park finished
Research and integrated management center 27,496,295.08 Registration together after the industrial park finished
Logistics office building, canteen, waste station 4,314,681.18 Registration together after the industrial park finished
Apartment 9,927,102.69 Registration together after the industrial park finished
~ 116 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Item Book value The reason of pending ownership registration
Heat power station 34,008,873.42 Registration together after the industrial park finished
No.5 distillery workshop 21,478,502.87 Registration together after the industrial park finished
No.7 distillery workshop 25,147,528.40 Registration together after the industrial park finished
No.3 distillery filling house 42,932,012.58 Registration together after the industrial park finished
Hefei sale and demand center 137,429,204.00 Project has not final settlement of account
Total 787,618,092.05
6.13 Construction in progress
6.13.1 Details of construction in progress
Balance as at 31/21/2015 Balance as at 31/21/2014
Carrying amount Carrying amount
Items impairment Net carrying impairment Net carrying
before impairment before impairment
allowance amount allowance amount
allowance allowance
Based liquor relocation of the
transformation and facilities 32,051.44 0.00 32,051.44 59,085,920.04 0.00 59,085,920.04
projects
Gujing operating network system 3,305,555.56 0.00 3,305,555.56 1,753,888.88 0.00 1,753,888.88
Information integration system 1,186,500.00 0.00 1,186,500.00 0.00 0.00 0.00
Gujing CRM system 769,230.77 0.00 769,230.77 0.00 0.00 0.00
Renovation project of potential
47,025,894.49 0.00 47,025,894.49 0.00 0.00 0.00
safety concerns
Wine culture museum remould 2,167,605.55 0.00 2,167,605.55 632,135.92 0.00 632,135.92
Light and shadow show digital
3,657,367.52 0.00 3,657,367.52 0.00 0.00 0.00
demonstration project
Automation transformation 965,000.00 0.00 965,000.00 0.00 0.00 0.00
Shanghai experience centre 2,299,961.53 0.00 2,299,961.53 0.00 0.00 0.00
Other 1,153,804.92 0.00 1,153,804.92 165,566.12 0.00 165,566.12
Total 62,562,971.78 0.00 62,562,971.78 61,637,510.96 0.00 61,637,510.96
6.13.2 Movement of significant construction in progress
~ 117 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Increase during Transferred to Other decrease
the current fixed assets during the
Balance as at Balance as at
Items Budgeted cost reporting during the current
31/12/2014 31/12/2015
period current reporting
Amount reporting period period
Based liquor relocation of the
800,000,000.00 59,085,920.04 20,955,895.38 74,962,803.18 5,046,960.80 32,051.44
transformation and facilities projects
Gujing operating network system 8,350,000.00 1,753,888.88 1,743,824.78 0.00 192,158.10 3,305,555.56
Information integration system 6,000,000.00 0.00 1,186,500.00 0.00 0.00 1,186,500.00
Gujing CRM system 8,000,000.00 0.00 769,230.77 0.00 0.00 769,230.77
Renovation project of potential safety
119,667,581.00 0.00 56,647,575.60 6,001,351.16 3,620,329.95 47,025,894.49
concerns
Wine culture museum remould 6,900,000.00 632,135.92 2,861,824.29 280,000.00 1,046,354.66 2,167,605.55
Light and shadow show digital
5,500,000.00 0.00 3,657,367.52 0.00 0.00 3,657,367.52
demonstration project
Automation transformation 5,880,000.00 0.00 2,556,453.00 1,591,453.00 0.00 965,000.00
Shenzhe experience centre 12,100,000.00 0.00 6,328,360.00 0.00 6,328,360.00 0.00
Shanghai experience centre 16,000,000.00 0.00 2,299,961.53 0.00 0.00 2,299,961.53
Thermal power generator 3,500,000.00 0.00 1,755,042.73 1,755,042.73 0.00 0.00
Glass company and the supplementary
14,999,000.00 0.00 11,030,508.05 11,030,508.05 0.00 0.00
equipment renovation project
Glass company automatic mixing
5,800,000.00 0.00 5,230,912.22 5,230,912.22 0.00 0.00
system
Other 11,015,382.00 165,566.12 9,636,249.67 5,288,783.90 3,359,226.97 1,153,804.92
Total 1,023,711,963.00 61,637,510.96 126,659,705.54 106,140,854.24 19,593,390.48 62,562,971.78
(Continued)
~ 118 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
The Including: Capitalisation
Weight of cost cumulative interests rate applicable
Stage of Source of
Items to date in amount of capitalised to the current
completion finance
budgeted cost interest during the current reporting
capitalized reporting period period %
Based liquor relocation of the transformation and facilities
92.62% 100.00% 0.00 0.00 0.00 Owned fund
projects
Gujing operating network system 41.89% 85.00% 0.00 0.00 0.00 Owned fund
Information integration system 19.78% 35.00% 0.00 0.00 0.00 Owned fund
Gujing CRM system 9.62% 5.00% 0.00 0.00 0.00 Owned fund
Renovation project of potential safety concerns 47.34% 95.00% 0.00 0.00 0.00 Owned fund
Wine culture museum remould 50.64% 80.00% 0.00 0.00 0.00 Owned fund
Light and shadow show digital demonstration project 66.50% 80.00% 0.00 0.00 0.00 Owned fund
Automation transformation 43.48% 78.00% 0.00 0.00 0.00 Owned fund
Shenzhe experience centre 98.31% 100.00% 0.00 0.00 0.00 Owned fund
Shanghai experience centre 14.37% 50.00% 0.00 0.00 0.00 Owned fund
Thermal power generator 50.14% 100.00% 0.00 0.00 0.00 Owned fund
Glass company and the supplementary equipment
73.54% 100.00% 0.00 0.00 0.00 Owned fund
renovation project
Glass company automatic mixing system 90.19% 100.00% 0.00 0.00 0.00 Owned fund
Other 88.94% 98.00% 0.00 0.00 0.00 Owned fund
Total - - 0.00 0.00 0.00
6.14 Intangible assets
Items Land rights Patents Software Total
1. Cost:
1.1 Balance as at 31/12/2014 351,249,420.80 38,150,000.00 4,465,480.74 393,864,901.54
1.2 Increased in current year 0.00 0.00 403,921.94 403,921.94
1.2.1 Purchase 0.00 0.00 403,921.94 403,921.94
~ 119 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Land rights Patents Software Total
1.3 Decreased in current year 0.00 0.00 0.00 0.00
1.4 Balance as at 31/12/2015 351,249,420.80 38,150,000.00 4,869,402.68 394,268,823.48
2. Accumulated amortization
2.1 Balance as at 31/12/2014 47,205,017.04 38,090,000.00 2,081,101.90 87,376,118.94
2.2 Increased in current year 7,554,369.41 60,000.00 906,095.17 8,520,464.58
2.2.1 Accrual 7,554,369.41 60,000.00 906,095.17 8,520,464.58
2.3 Decreased in current year 0.00 0.00 0.00 0.00
2.4 Balance as at 31/12/2015 54,759,386.45 38,150,000.00 2,987,197.07 95,896,583.52
3. Impairment allowance
3.1 Balance as at 31/12/2014 0.00 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00 0.00
3.3 Decreased in current year 0.00 0.00 0.00 0.00
3.4 Balance as at 31/12/2015 0.00 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2015 296,490,034.35 0.00 1,882,205.61 298,372,239.96
4.2 Carrying amount as at 31/12/2014 304,044,403.76 60,000.00 2,384,378.84 306,488,782.60
6.15 Long-term deferred charge
Amortisation for Other
Balance as at Increase in Balance as at
Items the current decrease in
31/12/2014 current year 31/12/2015
reporting period current year
Mold culture shelf and Mold culture bed 4,441,727.75 0.00 1,523,358.84 0.00 2,918,368.91
Transformation of high - quality base
11,026,663.52 0.00 3,721,401.72 0.00 7,305,261.80
liquor
Wine library shelves 0.00 1,690,683.77 281,780.64 0.00 1,408,903.13
Decoration works of exclusive Shop 31,138,198.70 618,565.76 14,530,127.50 0.00 17,226,636.96
Decoration works of Beijing experience
19,390,786.73 0.00 1,935,357.69 0.00 17,455,429.04
center
Relocation compensation of Beijing 13,125,000.00 0.00 1,758,500.00 0.00 11,366,500.00
~ 120 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Amortisation for Other
Balance as at Increase in Balance as at
Items the current decrease in
31/12/2014 current year 31/12/2015
reporting period current year
experience center
Pottery jars storeage 0.00 21,750,395.16 2,533,876.57 0.00 19,216,518.59
Decoration works of spirits culture
74,686.00 1,292,722.34 326,048.66 0.00 1,041,359.68
Museum
improvement project of Sewage
5,450,000.00 0.00 600,000.00 0.00 4,850,000.00
Treatment Plant
Green cost 37,098,217.07 4,467,660.33 13,862,719.02 0.00 27,703,158.38
Decoration project of Gujing villa 6,174,098.69 0.00 987,238.37 244,911.99 4,941,948.33
Potential safety hazard transfermation 0.00 4,533,053.55 925,192.32 0.00 3,607,861.23
Shenzhen experience center 0.00 6,328,360.00 111,023.86 0.00 6,217,336.14
Hangzhou experience center project 56,812.80 0.00 56,812.80 0.00 0.00
Other 3,944,987.97 404,606.48 1,793,208.27 0.00 2,556,386.18
Total 131,921,179.23 41,086,047.39 44,946,646.26 244,911.99 127,815,668.37
6.16 Deferred tax assets and deferred tax liabilities
6.16.1 Details of Rrecognized deferred tax assets
Balance as at 31/12/2015 Balance as at 31/12/2014
Items Deductible temporary Deductible
Deferred tax assets Deferred tax assets
difference temporary difference
Allowance for bad debt 43,137,779.39 10,784,271.97 52,125,136.19 13,031,224.13
Allowance for inventories impairment 14,307,449.09 3,576,862.28 13,288,791.86 3,322,197.97
Allowance for fixed assets impairment 6,246,132.79 1,561,533.20 6,685,305.34 1,671,326.34
Unrealized internal buying and selling profit 0.00 0.00 965,447.20 241,361.80
Deferred income 46,123,314.33 11,530,828.58 40,839,961.86 10,209,990.47
Accrued expenses 134,446,030.45 33,611,507.60 87,066,783.07 21,766,695.77
Salary deductible in next period 0.00 0.00 52,003,828.06 13,000,957.02
Total 244,260,706.05 61,065,003.63 252,975,253.58 63,243,753.50
6.16.2 Details of Rrecognized deferred tax liabilities
~ 121 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Balance as at 31/12/2015 Balance as at 31/12/2014
Items Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Changes in fair value of tradable financial asset 163,238.41 40,809.60 121,035.00 30,258.75
Changes in fair value of available-for-sale financial assets 72,642,515.35 18,160,628.84 22,226,138.76 5,556,534.69
Difference in addional deduction of fixed assets 9,048,889.73 2,262,222.43 0.00 0.00
Total 81,854,643.49 20,463,660.87 22,347,173.76 5,586,793.44
6.16.3 Unrecognized deferred tax assets
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Deductible temporary difference 28,173.63 2,295.30
Taxable temporary differences 2,059,849.97 1,179,384.41
Total 2,088,023.60 1,181,679.71
6.16.4 The deductible losses of unrecognized deferred tax assets will be expired in the following year
Year Balance as at 31/12/2015 Balance as at 31/12/2014 Note
Year2018 0.00 724,118.08
Year 2019 0.00 455,266.33
Year 2020 2,059,849.97 0.00
Total 2,059,849.97 1,179,384.41
6.17 Notes payable
Type Balance as at 31/12/2015 Balance as at 31/12/2014
Bankers' acceptance 92,940,000.00 192,850,000.00
Trade acceptance 828,583.00 65,602,214.00
Total 93,768,583.00 258,452,214.00
Note: The unpaid matured notes payable is amount CNY828,583.00 as at year ended and due to the supplayer do not make the solution pay
on matured note.
6.18 Accounts payable
6.18.1 Detail for accounts payable
Item Balance as at 31/12/2015 Balance as at 31/12/2014
Within 1 year 299,081,452.13 311,334,691.25
~ 122 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Item Balance as at 31/12/2015 Balance as at 31/12/2014
Over 1 year 79,105,999.94 93,299,505.33
Total 378,187,452.07 404,634,196.58
6.18.2 The details of significant accounts payable remaining unsettled for more than 1 year
Creditors Balance as at 31/12/2015 Reason(s) for unsettlement
A company 11,525,200.00 Residual project balance pending settlement
B company 7,544,026.71 Residual project balance pending settlement
C company 4,781,307.05 Residual project balance pending settlement
D company 4,731,649.45 Residual project balance pending settlement
E company 4,062,897.10 Residual project balance pending settlement
Total 32,645,080.31
6.19 Advances from customers
Item Balance as at 31/12/2015 Balance as at 31/12/2014
Payment for goods 608,565,152.50 377,503,471.86
Total 608,565,152.50 377,503,471.86
6.20 Employment benefits payable
6.20.1 Disclosure by classification
Balance as at Increase during the Decrease during the Balance as at
Items
31/12/2014 current year current year 31/12/2015
1. Short-term employee benefits 219,746,810.75 977,667,222.47 944,037,757.68 253,376,275.54
2. Post-employment benefits 451,710.53 56,865,181.31 56,791,466.66 525,425.18
3. Termination benefits 0.00 0.00 0.00 0.00
4. Other benefits due within one year 0.00 0.00 0.00 0.00
Total 220,198,521.28 1,034,532,403.78 1,000,829,224.34 253,901,700.72
6.20.2 Disclosure by classification of short-term employee benefits
Balance as at Increase during the Decrease during the Balance as at
Category
31/12/2014 current year current year 31/12/2015
1. Wages, salaries and subsidies 177,114,565.35 851,846,398.87 826,822,127.28 202,138,836.94
2. Employee welfare 0.00 26,955,175.64 26,955,175.64 0.00
~ 123 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Balance as at Increase during the Decrease during the Balance as at
Category
31/12/2014 current year current year 31/12/2015
3. Social insurance: 41,191.24 24,355,063.12 24,359,380.39 36,873.97
Including: Medical insurance 31,975.35 19,903,369.65 19,908,265.05 27,079.95
Employment injury insurance 4,420.00 2,779,903.94 2,779,552.44 4,771.50
Maternity insurance 4,795.89 1,671,789.53 1,671,562.90 5,022.52
4.Housing provident fund 12,228,186.84 54,811,708.10 54,255,117.74 12,784,777.20
5.Labour union fee and employee education fee 30,362,867.32 19,698,876.74 11,645,956.63 38,415,787.43
Total 219,746,810.75 977,667,222.47 944,037,757.68 253,376,275.54
6.20.3 Disclosure by defined contribution plan
Balance as at Increase during the Decrease during the Balance as at
Items
31/12/2014 current year current year 31/12/2015
1. Basic pension 425,679.81 52,076,337.34 52,002,570.69 499,446.46
2. Unemployment insurance 26,030.72 4,788,843.97 4,788,895.97 25,978.72
Total 451,710.53 56,865,181.31 56,791,466.66 525,425.18
6.21 Taxes and fees payable
Tax (Fee) Balance as at 31/12/2015 Balance as at 31/12/2014
VAT 87,099,637.75 103,775,137.73
Consumption tax 137,743,836.68 67,865,349.26
Business tax 1,567,227.74 1,265,824.75
Enterprise income tax 70,375,692.68 267,763,285.42
Personal income tax 2,747,356.67 2,283,345.14
Urban construction and maintenance tax 10,339,184.61 6,287,946.00
Stamp duty 1,096,999.83 3,388,215.38
Education surcharge 10,327,628.89 6,277,797.04
Others 36,789,788.95 9,772,622.91
Total 358,087,353.80 468,679,523.63
6.22 Other payables
~ 124 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Detail for other payable
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Security deposit 349,397,678.43 272,037,012.38
Business trip borrowing 1,369,843.17 1,372,502.75
Guarantee 42,153,589.56 38,824,726.91
Personal housing provident fund paid by company 12,784,777.20 12,149,262.63
Others 46,487,300.58 44,484,959.07
Total 452,193,188.94 368,868,463.74
6.23 Other current liabilities
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Accrued expense 138,135,604.82 87,704,041.68
Total 138,135,604.82 87,704,041.68
6.24 Deferred income
Balance as at Increase during Decrease during Balance as at
Items Reasons
31/12/2014 the current year the current year 31/12/2015
Receive government grants
Government grants 40,839,961.86 9,384,300.00 4,100,947.53 46,123,314.33
concerning assets
Total 40,839,961.86 9,384,300.00 4,100,947.53 46,123,314.33 —
Involving government grants’ project:
Amount
Recognised Other
Balance as at recognised as Balance as at Related to asset or
Items during current movemen
31/12/2014 non-operating 31/12/2015 income
year t
income
Wine production system technical
0.00 500,000.00 57,291.63 0.00 442,708.37 Related to asset
transformation
Instrument subsidies 0.00 1,764,000.00 110,250.00 0.00 1,653,750.00 Related to asset
Intelligent solid brewing technology
0.00 250,000.00 5,208.34 0.00 244,791.66 Related to asset
innovation project
Anhui province development of direct
0.00 2,000,000.00 34,146.38 0.00 1,965,853.62 Related to asset
funds of service industry
~ 125 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Anhui provience subsidies of innovative
province construction capacity for 0.00 4,870,300.00 0.00 0.00 4,870,300.00 Related to asset
independent innovation
Energy efficiency renovation project for
624,750.00 0.00 153,000.00 0.00 471,750.00 Related to asset
coal industrial boiler and glass furnace
Bozhou Logistics Center Project 300,000.00 0.00 60,000.00 0.00 240,000.00 Related to asset
Special funds for finance prevention
650,000.12 0.00 650,000.12 0.00 0.00 Related to asset
and treatment sewage
Finance subsidy for energy saving
2,060,827.48 0.00 531,623.44 0.00 1,529,204.04 Related to asset
projects
Finance subsidy for technical
2,552,816.98 0.00 534,221.52 0.00 2,018,595.46 Related to asset
reconstruction
Within financial budget, interest subsidy
43,333.41 0.00 39,999.96 0.00 3,333.45 Related to asset
for deposit technical reconstruction
Within financial budget, Enterprise
172,500.00 0.00 30,000.00 0.00 142,500.00 Related to asset
development funds
IOT traceability system project 7,425,000.00 0.00 1,113,750.00 0.00 6,311,250.00 Related to asset
Rebate of land 25,313,858.83 0.00 550,206.18 0.00 24,763,652.65 Related to asset
Electric machine improvement for
962,500.04 0.00 137,499.96 0.00 825,000.08 Related to asset
energy saving project
Product quality online monitor 734,375.00 0.00 93,750.00 0.00 640,625.00 Related to asset
Total 40,839,961.86 9,384,300.00 4,100,947.53 0.00 46,123,314.33
6.25 Share capital
Balance as at Movements during the current reporting period (+、－) Balance as at
Items
31/12/2014 Share issue Bonus issue Conversion from reserves Others Subtotal 31/12/2015
Total shares 503,600,000.00 0.00 0.00 0.00 0.00 0.00 503,600,000.00
6.26 Capital reserves
Items Balance as at Increase during Decrease during the Balance as at
~ 126 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
31/12/2014 the current year current year 31/12/2015
Share premium 1,262,552,456.05 0.00 0.00 1,262,552,456.05
Other capital reserves 32,386,037.14 0.00 0.00 32,386,037.14
Total 1,294,938,493.19 0.00 0.00 1,294,938,493.19
6.27 Other comprehensive income
Total amount in current year
Less:
previously
recognized in After tax After tax
Balance as at Balance as at
Items Amount for the other Less: Income attributable to attributable
31/12/2014 31/12/2015
year before tax comprehensive tax expense the parent to minority
income company shareholders
transferred into
profit or loss
1.Other comprehensive income that will
not be reclassified into income or loss in 0.00 0.00 0.00 0.00 0.00 0.00 0.00
the future
2.Other comprehensive income that will
be reclassified into income or loss in the 16,669,604.07 50,416,376.59 0.00 12,604,094.15 37,812,282.44 0.00 54,481,886.51
future
Including: fair value change of financial
16,669,604.07 50,416,376.59 0.00 12,604,094.15 37,812,282.44 0.00 54,481,886.51
asset available for sale
Total of other comprehensive income 16,669,604.07 50,416,376.59 0.00 12,604,094.15 37,812,282.44 0.00 54,481,886.51
6.28 Surplus reserves
Increase during the Decrease during the
Items Balance as at 31/12/2014 Balance as at 31/12/2015
current year current year
Statutory surplus reserve 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
Note: In accordance with the Company Lows and regulations in PRC, statutory surplus reserve is accrued at 10 % of net profit of the Company
until accumulated amount of such reserve balance reaches 50% of the Company’s registered capital.
After the company draws the statutory surplus reserve, it may, upon a resolution made by the shareholders' meeting or the shareholders’
assembly, draw a discretionary surplus reserve from the after-tax profits. Discretionary surplus reserve as approved by the shareholders in our
shareholders' meeting can be used to make good previous years’ losses or to increase the capital.
~ 127 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
6.29 Retained earning
Items Current year Prior year
Pre-adjustment balance brought forward 2,108,940,620.43 1,688,158,733.09
Total adjustment to retained earnings b/f (+, -) 0.00 0.00
Retained earnings b/f after adjustment 2,108,940,620.43 1,688,158,733.09
Add: Net profit attributable to shareholders of the parent 715,578,369.68 597,041,887.34
Less: Appropriation to statutory surplus reserve 0.00 0.00
Appropriation to discretionary surplus reserve 0.00 0.00
General reserve 0.00 0.00
Ordinary dividends declared 100,720,000.00 176,260,000.00
Ordinary dividends transformed into capital share 0.00 0.00
Balance carrying forward 2,723,798,990.11 2,108,940,620.43
6.30 Operating revenues and costs
Current year Prior year
Items
Operating revenues Operating costs Operating revenues Operating costs
Principal operating income 5,217,544,152.04 1,479,038,970.28 4,612,235,437.15 1,426,359,089.71
Other operating income 35,867,327.36 30,497,129.00 38,620,444.57 32,713,823.53
Total 5,253,411,479.40 1,509,536,099.28 4,650,855,881.72 1,459,072,913.24
6.31 Business tax and surcharges
Items Current year Prior year
Consumption tax 650,932,115.38 554,437,281.01
Business tax 5,550,244.99 4,268,096.77
Urban maintenance and construction tax, Education surcharge 132,834,880.86 107,437,775.94
Other 888,390.64 769,835.00
Total 790,205,631.87 666,912,988.72
Note: The provision standards for taxes and surcharges refer to Note 5 Taxation.
6.32 Sales expenses
Items Current year Prior year
Employment benefits 192,032,269.16 102,455,485.58
~ 128 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Current year Prior year
Travel 72,490,928.96 58,761,813.78
Advertisement 397,458,962.42 439,671,581.42
Transportation charges 26,799,503.76 24,060,769.19
Sales promotion costs 421,404,543.74 289,923,860.69
Sample wine 151,639,742.58 105,417,088.10
Service fee 241,596,791.54 255,026,142.27
Other sales expenses 54,377,876.80 28,889,295.03
Total 1,557,800,618.96 1,304,206,036.06
6.33 General and administrative expenses
Items Current year Prior year
Employment benefits 279,870,693.46 314,434,120.98
Office 16,719,397.83 41,139,729.33
Taxes and surcharges 39,314,997.74 32,504,277.38
Maintenance expenses 31,218,976.13 24,260,572.70
Depreciation 48,065,605.86 29,083,486.30
Amortization of intangible assets 8,520,464.58 8,996,822.71
Pollution discharge 14,585,009.71 15,713,644.29
Spillage of material 44,837,410.39 56,062,592.97
Travel expenses 2,216,750.98 3,865,395.06
Water and electricity charges 9,692,830.19 8,600,696.17
Others 48,780,469.64 44,763,355.67
Total 543,822,606.51 579,424,693.56
6.34 Financial costs
Items Current year Prior year
Interest expenses 0.00 0.00
Less: Interest income 28,676,438.02 38,165,430.61
Less: Capitalised interest 0.00 0.00
~ 129 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Current year Prior year
Exchange gain or loss 367,172.57 0.00
Less: Capitalised exchange gain or loss 0.00 0.00
Others 7,974,859.05 413,820.25
Total -20,334,406.40 -37,751,610.36
6.35 Impairment loss on assets
Items Current year Prior year
Allowance for bad debt 468,227.39 -20,962.68
Allowance for inventory impairment 10,691,127.79 8,017,738.58
Allowance for intangible assets impairment 164,700.81 694,018.11
Total 11,324,055.99 8,690,794.01
6.36 Gain from changes in fair value
Source of fair value change Current year Prior year
Financial assets measured by fair value with changes in fair value recognised in profit or loss 42,203.41 121,035.00
Including: Derivative financial assets 0.00 0.00
Total 42,203.41 121,035.00
6.37 Investment income
Items Current year Prior year
Investment income from financial assets measured by fair value with changes
0.00 0.00
in fair value recognized in profit or loss during the holding period
Investment income from disposal of financial assets measured by fair value
7,800,070.97 1,254,456.02
with changes in fair value recognised in profit or loss
Investment income from available for sale financial asset during the holding
61,455,959.33 88,030,527.27
period
Investment income from disposal of financial assets available for sale 0.00 15,857,617.98
Total 69,256,030.30 105,142,601.27
6.38 Non-operating income
~ 130 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Recognized into current
Items Current year Prior year year non-recurring profit
and loss
Gain on non-current asset disposals 68,505.82 625,342.92 68,505.82
Including : Gain on fixed asset disposals 68,505.82 625,342.92 68,505.82
Government grants (See details of government grants) 19,931,320.03 6,045,394.97 19,931,320.03
Income from penalties 13,447,521.81 10,695,244.40 13,447,521.81
Sales of wastes 5,824,298.47 7,025,600.00 5,824,298.47
Accounts payable no need to pay back 232,103.59 88,951.50 232,103.59
Others 5,470,254.89 4,085,522.35 5,470,254.89
Total 44,974,004.61 28,566,056.14 44,974,004.61
Details of government grant:
Related to assets or
Government assistance Current year Prior year
income
Energy-saving subsidies 105,000.00 0.00 Related to income
Science and technology innovation award 258,400.00 617,000.00 Related to income
Standardization of the government reward 120,000.00 0.00 Related to income
Gujing industrial park land use tax, house property tax refund 13,999,000.00 0.00 Related to income
River water pollution prevention and control of special funds 590,000.00 0.00 Related to income
Technology innovation demonstration funds 300,000.00 0.00 Related to income
Trademark reward 100,000.00 100,000.00 Related to income
Business development special funds 64,800.00 0.00 Related to income
Business bureau subsidies 59,000.00 0.00 Related to income
Social security subsidies 208,750.00 0.00 Related to income
Other payments to the state Treasury pay center 25,422.50 222,947.80 Related to income
The provincial government quality funds 0.00 500,000.00 Related to income
Work reward 0.00 140,000.00 Related to income
Assets amortization related government for deferred revenue 4,100,947.53 4,465,447.17 Related to assets
Total 19,931,320.03 6,045,394.97
6.39 Non-operating expenses
~ 131 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Recognized in current year
Items Current year Prior year
non-recurring profit and loss
Loss on non-current asset disposals 1,059,201.01 2,759,691.62 1,059,201.01
Within: Loss on fixed asset disposals 1,059,201.01 2,759,691.62 1,059,201.01
Late fee 6,245,908.75 0.00 6,245,908.75
Others 1,754,560.89 5,165,560.14 1,754,560.89
Total 9,059,670.65 7,925,251.76 9,059,670.65
6.40 Income tax expenses
6.40.1 Classification
Items Current year Prior year
Current tax calculated in accordance with relevant tax law 246,239,548.03 219,285,294.18
Deferred tax 4,451,523.15 -20,122,674.38
Total 250,691,071.18 199,162,619.80
6.40.2 The adjustment process of accounting profit and income tax expenses
Items Current year
Profit before tax 966,269,440.86
According to the statutory/applicable tax rate calculation of the income tax expenses 241,567,360.22
Influence of different tax rates of subsidiaries 0.00
The effect of adjustment prior period income tax 1,957,224.17
The influence of the untaxable income -786,756.35
The influence of the undeduction of costs, expenses and losses 11,739,822.33
The influence of using the preliminary period deductible losses of unconfirmed deferred income tax
-295,419.93
assets
The influence of the unconfirmed deferred income tax assets attributable to the deductible
515,006.54
temporary difference or deductible losses
Tax rate adjustment to the beginning balance of deferred income tax assets/liabilities 0.00
Income tax credits -580,000.00
Collectively deductions -3,426,165.80
Income tax expenses 250,691,071.18
6.41 Other comprehensive income
~ 132 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Please see Note 6.26 for detail.
6.42 Notes to the statement of cash flows
6.42.1 Other cash received relating to operating activities
Items Current year Prior year
Guarantee deposit 77,505,284.21 37,008,070.73
Government grants 1,831,372.50 1,579,947.80
Interest income 30,890,237.41 29,206,434.58
Others 29,254,161.03 28,666,651.09
Withdrawn pledged deposit 36,100,000.00 75,000,000.00
Total 175,581,055.15 171,461,104.20
6.42.2 Other cash payments relating to operating activities
Items Current year Prior year
Cash paid in sales expenses and general and administrative expense 1,029,809,058.13 914,009,770.42
To issue notes payable and the pledge of deposit or store paper margin 46,945,425.70 36,100,000.00
Others 8,134,570.09 5,579,380.40
Total 1,084,889,053.92 955,689,150.82
6.42.3 Other cash received relating to investing activities
Items Current year Prior year
Government grants related to assets 9,384,300.00 1,850,000.00
Total 9,384,300.00 1,850,000.00
6.43 Supplementary information to the statement of cash flows
6.43.1 Reconciliation of cash flows from operating activities to net profit
Items Current year Prior year
① Reconciliation of cash flows from operating activities to net profit:
Net profit 715,578,369.68 597,041,887.34
Add: Loss on asset impairment -7,804,074.59 3,733,850.18
Depreciation of fixed assets, oil and gas assets, biological assets held for
160,229,665.09 130,655,842.48
production
Amortisation of Investment properties 732,249.62 3,113,723.42
Amortisation of intangible assets 8,520,464.58 8,996,822.71
~ 133 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Current year Prior year
Amortisation of Long-term deferred expenditure 44,946,646.26 28,275,251.66
Loss on non-current assets disposal (gain presented by "-" prefix) 990,695.19 2,134,348.70
Loss on scrap of fixed assets (gain presented by "-" prefix) 0.00 0.00
Loss on fair value changes (gain presented by "-" prefix) -42,203.41 -121,035.00
Financial costs (gain presented by "-" prefix) -2,060,867.27 -4,684,329.37
Investment loss (gain presented by "-" prefix) -69,256,030.30 -105,142,601.27
Decrease of deferred tax assets (increase presented by "-" prefix) 2,178,749.87 -20,152,933.13
Increase of deferred tax liabilities (increase presented by "-" prefix) 2,272,773.28 30,258.75
Decrease of inventories (increase presented by "-" prefix) -170,547,934.01 -155,210,431.54
Decrease of operating receivables (increase presented by "-" prefix) -73,439,119.87 -259,515,795.42
Increase of operating payables (decrease presented by "-" prefix) 181,911,098.42 162,804,877.55
Amortization of deferred income -4,100,947.53 -4,465,447.17
Net cash flows generated from operating activities 790,109,535.01 387,494,289.89
② Significant investing and financing activities involve no cash:
Debt-to-capital conversion 0.00 0.00
Convertible loan due within one year 0.00 0.00
Fixed assets acquired under financial lease 0.00 0.00
③ Movement of cash and cash equivalents:
Cash as at 31/12/2015 1,040,373,733.07 682,360,442.79
Less: Cash as at 1/1/2015 682,360,442.79 1,306,930,710.96
Add: Cash equivalents as at 31/12/2015 0.00 0.00
Less: Cash equivalents as at 1/1/2015 0.00 0.00
Net increase of cash and cash equivalents 358,013,290.28 -624,570,268.17
6.43.2 Composition of cash and cash equivalents
Items Current year Prior year
① Cash 1,040,373,733.07 682,360,442.79
Including: Cash at hand 373,724.24 349,833.07
~ 134 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Current year Prior year
Demand bank deposit 1,040,000,008.83 677,644,608.33
Demand other monetary funds 0.00 4,366,001.39
② Cash equivalents 0.00 0.00
Including: Debt instrument matured within three months 0.00 0.00
③ Cash and cash equivalents as at 31/12/2015 1,040,373,733.07 682,360,442.79
6.44 Asses of which using rights are limited
Items Balance at 31/12/2015 Reasons for limited
Monetary funds 46,945,425.70 Bank acceptance deposit
Notes receivable 56,069,046.29 Deposit as assurance to get bank acceptance
Total 103,014,471.99
Note 7: Changes of scope of consolidation financial statements
7.1 Other reasons that cause the scope change
The company has newly set up the subsidiary company Anhui Yuanqing environmental protection Co., Ltd.
Note 8: The equity in other main entities
8.1 The equity in subsidiaries
8.1.1 The construction of the group
Place of Place Nature Holding proportion %
Subsidiaries Acquired method
operation of registration of business Directly Indirectly
Bozhou Gujing Sales Co., Ltd.
Anhui Bozhou Anhui Bozhou Commercial trade 100.00 Set up
(hereafter Gujing Sales)
Bozhou Gujing Transportation Co.,
Anhui Bozhou Anhui Bozhou Motor transport 99.00 1.00 Set up
Ltd. (hereafter Gujing Transportation)
Bozhou Gujing Glass Co., Ltd.
Anhui Bozhou Anhui Bozhou Manufacture 99.00 1.00 Set up
(hereafter Gujing Glass)
Bozhou Gujing Waste Reclamation
Anhui Bozhou Anhui Bozhou Waste recycle 100.00 Set up
Co., Ltd. (hereafter Gujing Waste)
Anhui Jinyunlai Culture & Media Advertisement
Anhui Hefei Anhui Hefei 100.00 Set up
Co.,Ltd. (hereafter Jinyunlai) marketing
~ 135 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Place of Place Nature Holding proportion %
Subsidiaries Acquired method
operation of registration of business Directly Indirectly
Bozhou Gujing Packaging Co., Ltd.
Anhui Bozhou Anhui Bozhou Manufacture 100.00 Set up
(hereafter Gujing Packaging)
Anhui Ruisiweier Technology Co., Ltd. Anhui Bozhou Anhui Bozhou Technical research 100.00 Set up
Anhui colorful taste wine co., Ltd. Anhui Bozhou Anhui Bozhou Manufacture 100.00 Set up
Bussiness
Shanghai Gujing Jinhao hotel
Shanghai Shanghai Hotel manage 100.00 Combinations Under
management company
the Same control
Bussiness
Bozhou Gujing hotel Co.Ltd Anhui Bozhou Anhui Bozhou Hotel operating 100.00 Combinations Under
the Same control
Anhui Yuanqing environmental
Anhui Bozhou Anhui Bozhou Sewage treatment 100.00 Set up
protection Co., Ltd.
Note 9: The risk associated with financial instruments
The main financial instruments of the Company include equity investments, financial products, trust investment, accounts receivable, accounts
payable and etc., please see Note 6 for detail of related items. The risk associated with financial instruments, and risk management policies which
the company uses to reduce these risks are described below. The management of the Company manages and supervises the risks to ensure that
the risks can be controlled within a limited range.
9.1 The targets and policies of risks management
The target of risks management is to obtain the proper balance between the risks and benefits, to reduce the negative impact that is caused by the
risk of the Company to the lowest level, and to maximize the benefits of shareholders and other equity investors. Based on the targets of risk
management, the basic strategy of the Company’s risk management is to identify and analyze the risks which are faced by the Company, establish
suitable risk tolerance baseline and proceed the risk management, and supervise a variety of risks timely and reliably, and control the risk within a
limited range.
9.1.1 Market Risk
9.1.1.1 Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The main business of the company is in the mainland of
China and trading with RMB, the market risk is very small
9.1.1.2 Interest rate risk - the risk of changes in cash flow
The operating fund of the company is sufficient and there is no loan in recent years, so that the risk of interest is very small for the company.
9.1.1.3 Other price risk
The financial asset available for sale and financial asset for trading of the company are measured by fair value. So the company bears the risk of
the change of security market. To decrease the risk, the company hold a combination of several equities and securities.
9.1.2. Credit Risk
The maxmum risk exposure that could cause the Company’s financial losses is associated with the default by the other party of a transation and the
~ 136 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
financial guarantee provided by the Company as at 31 December 2015. The detail is listed below:
The carrying value of the Financial assets that is recognized in the consolidated financial statement. For the financial instrument measured by fair
value, the carrying value only represents the risk exposre, but the maxmum risk exposure will change with the future fair value.
The company only trade with authorized company with high credit record and large scale. According to the policies of the company, the client needs
to pay first then receive the goods. Only a few companies are provided with credit. Credit review is performed for customers trading with credit.
The current asset of the company is deposited in the bank with the high credit record. So the credit risk of the current asset is low
9.1.3 Liquidity risk
When managing liquidity risk, the Companymaintains and monitors adequate cash and cash equivalents decided by the management in order to
meet the needs of operation of the Company, and to reduce the impact of fluctuations in cash flows.
Note 10: Disclosure of the fair value
10.1 The fair value at the end of current year of assets and liabilities which are measured by fair value
The fair value at the end of current year
The first level The second level The third level
Items
measured by fair measured by fair measured by fair Total
value value value
1. Continuous measurement by fair value
1.1 The financial assets are measured by fair
value and the changes are recognized into current 322,223.28 322,223.28
profit or loss
1.1.1 Trading financial assets 322,223.28 322,223.28
Equity instruments investment 322,223.28 322,223.28
1.2 Financial asset available for sale 213,881,190.47 213,881,190.47
Equity instruments investment 213,881,190.47 213,881,190.47
Total amount of liabilities continuous
214,203,413.75 214,203,413.75
measurement by fair value
10.2 Determined on the basis of continuous first level for fair value measurement of the market of project
The sustaining fair value measurement project is the stock that publicly traded in Shanghai stock exchange or Shenzhen stock exchange, and the
price is confirmed based on the stock’s closing price on the balance sheet date. If the holdings of shares in a restricted period, in accordance with
the securities and futures commission as stated in the KUAIJI ZI [2007] 21 HAO related valuation method to determine the value.
~ 137 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Note 11: Related parties and related party transaction
11.1 Details of the parent
Registered Shareholding Voting right
Parents Relationship Nature of business
capital in the Company % in the Company %
Controlling shareholders Drink, building
Gujing Group Anhui 1,000,000,000.00 53.89 53.89
materials, manufacture plastic products
Note: The ultimate controller is the government of Bozhou, Anhui province.
11.2 Subsidiaries
See Note 8.1 The equity in subsidiaries for details.
11.3 Details of other related parties
Other related parties Relationship
Anhui Ruifuxiang Food Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruijing catering management Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruijing Business Travel (Group) Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Guesthouse Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Real Estate Group Co., Ltd. Affiliate of the actual controller and controlling shareholder
Orient Ruijing Enterprise Investment Development Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Hengxin Pawn Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Ruineng Thermal Power Co., Ltd. Affiliate of the actual controller and controlling shareholder
Hefei Gujing Holiday Hotel Co., Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Furuixiang high protein feed Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruijing restaurant management Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Ruixin pawn Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Zhongxin finance lease Co. Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Huixin finance invest group Co.Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Anxin Micro Finance Co., Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Ecological industrial park management Co.Ltd. Affiliate of the actual controller and controlling shareholder
Dazhongyuan Wine valley culture tourism development Co., Ltd. Affiliate of the actual controller and controlling shareholder
~ 138 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Other related parties Relationship
Anhui gujing hotel management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Youxin Financing guarantee Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Aoxin Real estate development Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Lixin Electronic commerce Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Xinxin Property management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Huishenglou Catering Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Bozhou Gujing Junlai Hotel management Co.,Ltd Affiliate of the actual controller and controlling shareholder
Anhui Gujing Property management Co.,Ltd. Affiliate of the actual controller and controlling shareholder
Anhui Gujing Real estate development Co.,Ltd. Affiliate of the actual controller and controlling shareholder
11.4 Transactions with related parties
11.4.1 Transactions through purchase or sell goods and accept or supply services
11.4.1.1 The situation of purchases goods or accepts services
Content Total amount during Total amount during
Related parties
of transaction current year prior year
Anhui Ruifuxiang Food Co., Ltd Purchase of material 2,852,022.30 5,228,142.02
Accept catering and
Bozhou Guesthouse Co., Ltd. 1,217,174.90 824,672.70
accommodation service
Anhui Ruijing Catering management Co., Ltd Purchase of goods 0.00 894,456.00
Anhui Ruijing Catering management Co., Ltd Accept restaurant service 0.00 22,945.00
Hefei Gujing Holiday Hotel Purchase of goods 3,359,534.47 3,864,897.72
Accept restaurant and hotel
Hefei Gujing Holiday Hotel 141,502.71 174,385.19
service
Accept restaurant and hotel
Anhui gujing hotel management Co.,Ltd. 121,487.00 0.00
service
Accept restaurant and hotel
Bozhou Gujing Junlai Hotel management Co.,Ltd 552,171.00 0.00
service
Accept restaurant and hotel
Anhui Gujing Huishenglou Catering Co.,Ltd. 4,378,795.00 0.00
service
~ 139 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Content Total amount during Total amount during
Related parties
of transaction current year prior year
Total 12,622,687.38 11,009,498.63
11.4.1.2 The situation of sells goods or rendering services
Total amount during Total amount
Related parties Content of transaction
current year during prior year
Gujing Group Sales of micro metrail 200,364.98 26,844.05
Gujing Group Provide catering service 294,505.60 200,741.00
Anhui Ruifuxiang Food Co., Ltd Sales of distilled spirit 199,461.54 129,538.46
Bozhou Guesthouse Co., Ltd. Sales of distilled spirit 131,538.47 189,538.45
Bozhou Guesthouse Co., Ltd. Sales of micro metrail 0.00 520.17
Bozhou Gujing Hotel Co., Ltd. Sales of distilled spirit 10,153.85 615.38
Anhui Gujing Real Estate Group Co., Ltd. Sales of distilled spirit 44,692.31 79,384.61
Anhui Gujing Real Estate Group Co., Ltd. Provide catering service 5,550.00 0.00
Anhui Ruijing catering Co., Ltd. Sales of distilled spirit 109,786.32 39,538.46
Bozhou Ruineng Thermal Power Co., Ltd. Sales of distilled spirit 132,923.07 56,692.31
Bozhou Ruineng Thermal Power Co., Ltd. Provide advertisment service 14,245.28 0.00
Anhui Hengxin Pawn Co., Ltd. Sales of distilled spirit 4,692.31 2,538.47
Bozhou Anxin Micro fiannce Co., Ltd Sales of distilled spirit 2,230.77 3,461.54
Anhui Ruijing Business Travel (Group) Co., Ltd Sales of distilled spirit 1,045,620.52 1,538.46
Hefei Gujing Holiday Hotel Co., Ltd Sales of distilled spirit 703,846.16 1,411,692.31
Bozhou Ruifuciang high protein feed Co., Ltd Sales of distilled spirit 15,073.07 11,692.30
Anhui gujing hotel management Co.,Ltd. Sales of distilled spirit 453,495.71 121,307.69
Anhui Zhongxin finance lease Co. Ltd. Sales of distilled spirit 1,999.99 1,538.46
Anhui Ruixin pawn Co. Ltd. Sales of distilled spirit 2,153.85 923.08
Anhui Huixin finance invest group Co.Ltd. Sales of distilled spirit 17,307.69 2,000.00
Anhui Huixin finance invest group Co.Ltd. Provide advertisment service 5,566.04 0.00
Anhui Ruifuxiang Food Co., Ltd. Provide catering service 0.00 6,150.00
~ 140 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Total amount during Total amount
Related parties Content of transaction
current year during prior year
Bozhou Furuixiang high protein feed Co. Ltd. Sales of metrail 45,853.01 80,984.62
Anhui Youxin Financing guarantee Co.,Ltd. Sales of distilled spirit 3,445.57 0.00
Anhui Youxin Financing guarantee Co.,Ltd. Provide advertisment service 2,830.19 0.00
Dazhongyuan Wine valley culture tourism development Co., Ltd. Sales of distilled spirit 2,230.77 0.00
Dazhongyuan Wine valley culture tourism development Co., Ltd. Sales of micro metrail 43,506.53 0.00
Anhui Aoxin Real estate development Co.,Ltd. Sales of distilled spirit 1,230.76 0.00
Anhui Lixin Electronic commerce Co.,Ltd. Sales of distilled spirit 1,076.92 0.00
Anhui Xinxin Property management Co.,Ltd. Sales of distilled spirit 10,615.39 0.00
Anhui Gujing Huishenglou Catering Co.,Ltd. Sales of distilled spirit 151,598.29 0.00
Bozhou Gujing Junlai Hotel management Co.,Ltd Sales of distilled spirit 6,153.85 0.00
Anhui Gujing Property management Co.,Ltd. Sales of distilled spirit 14,538.46 0.00
Anhui Gujing Real estate development Co.,Ltd. Sales of distilled spirit 180,923.07 0.00
Anhui Gujing Ecological industrial park management Co.Ltd. Sales of micro metrail 251,503.76 0.00
Total 4,110,714.10 2,367,239.82
11.4.2 Lease between related parties
11.4.2.1 The Company is as the Leasee
Lease rental recognized in Lease rental recognized in
leasor Classification
current year prior year
Gujing Group Buildings and constructions 1,800,000.00 1,800,000.00
Gujing Group Buildings and constructions 500,000.00 500,000.00
11.4.2.2 The Company is as the leasor
Lease rental recognized in Lease rental recognized in
Leasee Classification
current year prior year
Anhui gujing hotel management Co.,Ltd. Buildings and constructions 201,055.54 0.00
11.5 The balance of payables and receivables among related parties
11.5.1 Receivables owed by related parties
Related party Balance as at 31/12/2015 Balance as at 31/12/2014
~ 141 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Related party Balance as at 31/12/2015 Balance as at 31/12/2014
Other receivables:
Dazhongyuan Wine valley culture tourism development Co., Ltd. 6,186.47 0.00
Total 6,186.47 0.00
11.5.2 Payables owed to related parties
Related party Balance as at 31/12/2015 Balance as at 31/12/2014
Receivable in advance:
Anhui Ruijing catering management Co., Ltd. 299,280.01 108,000.00
Hefei Gujing Holiday Hotel Co., Ltd. 16,100.00 0.00
Bozhou Guesthouse Co., Ltd. 10,000.00 0.00
Anhui Gujing Real Estate Group Co., Ltd. 5,015.00 0.00
Anhui Lixin Electronic commerce Co.,Ltd. 2,419.20 0.00
Total 332,814.21 108,000.00
Accounts payable
Anhui Gujing Huishenglou Catering Co.,Ltd. 10,000.00 0.00
Total 10,000.00 0.00
Other payable:
Anhui Gujing Huishenglou Catering Co.,Ltd. 24,500.00 0.00
Anhui Ruifuxiang Food Co., Ltd. 2,000.00 2,000.00
Hefei Gujing Holiday Hotel Co., Ltd. 24,000.00 0.00
Anhui gujing hotel management Co.,Ltd. 3,600.00 0.00
Anhui Ruijing restaurant management Co., Ltd. 1,200.00 0.00
Anhui Ruijing Business Travel (Group) Co., Ltd 69,568.74 0.00
Bozhou Guesthouse Co., Ltd. 23,400.00 0.00
Total 148,268.74 2,000.00
Note 12: Commitments and contingencies
12.1 Important commitments
Irrevocable lease contracts under performance and their financial effects as at the end of current year.
~ 142 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Items Balance as at 31/12/2015 Balance as at 31/12/2014
The minimum lease payments of irrevocable operating lease
contracts:
1st year after the balance sheet date 2,300,000.00 2,300,000.00
2nd year after the balance sheet date 2,300,000.00 2,300,000.00
3rd year after the balance sheet date 2,300,000.00 2,300,000.00
Subsequent years 26,258,333.33 28,558,333.33
Total 33,158,333.33 35,458,333.33
12.2 Contingencies
Due to the infringement of the company’s trademark on existence market, the company filed a lawsuit procedure of the behavior of trademark
infringement. Because of the individual and the whole amount are small, involving lawsuit is not expected to have a significant impact on the
company.
Note 13: Post reporting date events
On 25 March 2016, the Company held 8th meeting of seventh session board of directors which approved profit distribution plan for the year of 2015.
The company plan to use the total share of 503,600,000.00 of the company at 31/12/2015 as a base, to distribute 1 RMB (Containing tax) every 10
shares, and as result to distribute RMB 50,360,000.00 to the whole shareholder. The profit distribution plan is pending resolution by the
shareholders’ meeting.
Note 14: Other signification events
Operation division information
The company donot confirmed the operation division in accordance with the internal organizational structure, management requirements and
internal reporting system, so that there has no need to disclose division information report on the basis of the operation division.
Note 15: Notes to the main elements of the separate financial statement of the Company
15.1 Accounts receivable
15.1.1 Disclosure by classification
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual significance
0.00 0.00 0.00 0.00 0.00
subject to individually assessment for
~ 143 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
impairment
Accounts receivable portfolio subject to
4,940,776.33 100.00 590,339.09 11.95 4,350,437.24
impairment by credit risk
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 4,940,776.33 100.00 590,339.09 11.95 4,350,437.24
(Continued)
Balance as at 31/12/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual significance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Accounts receivable portfolio subject to
2,199,491.74 100.00 590,662.10 26.85 1,608,829.64
impairment by credit risk
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 2,199,491.74 100.00 590,662.10 26.85 1,608,829.64
15.1.1.1 Accounts receivable using the age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Within 1 year
Include：within 6 months 256,808.87 2,568.09 1.00
7-12 months 0.00 0.00 0.00
Subtotal within 1 year 256,808.87 2,568.09 1.00
1 to 2 year 0.00 0.00 0.00
2 to 3 year 0.00 0.00 0.00
Over 3 years 587,771.00 587,771.00 100.00
~ 144 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Total 844,579.87 590,339.09 69.90
15.1.1.2 Accounts receivable using the other method for measurement of allowance for bad debt
Balance as at 31/12/2015
Related parties
Carrying amount Allowance for bad debt % of total
Related parties 4,096,196.46 0.00 0.00
Total 4,096,196.46 0.00 0.00
15.1.2 Recognization, recovery and reversal of allowance for bad debt
Reversal of the allowance is RMB 323.01.
15.1.3 Accounts receivable written off during the current year
There is no accounts receivable written off during the current year.
15.1.4 Details of top five accounts receivable
The total amount of top five accounts receivables which are summaried by the balance as at the end of current year is CNY4,940,776.33,
accounting for 100% of the total accounts receivable balance as at the end of current year, the total amount of corresponding allowence for bad
debts is CNY590,339.09.
15.2 Other receivable
15.2.1 Disclosure by classification
Balance as at 31/21/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 41,342,938.53 27.69 41,342,938.53 100.00 0.00
impairment
Other receivable portfolio subject to
107,957,715.78 72.31 332,695.93 0.31 107,625,019.85
impairment by credit risk
Other receivable of individually insignificance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Total 149,300,654.31 100.00 41,675,634.46 27.91 107,625,019.85
~ 145 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
(Continued)
Balance as at 31/21/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 50,727,440.55 28.86 50,727,440.55 100.00 0.00
impairment
Other receivable portfolio subject to
125,054,444.71 71.14 228,135.16 0.18 124,826,309.55
impairment by credit risk
Other receivable of individually insignificance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Total 175,781,885.26 100.00 50,955,575.71 28.99 124,826,309.55
15.2.1.1 Other receivable of individual significance subject to individually assessment for impairment
Balance at 31/12/2015
Other receivable
Other receivable Allowance % of total Reasons
Jiaoqiao securities 11,840,500.00 11,840,500.00 100.00 Company went through bankrupt
Hengxin securities 29,502,438.53 29,502,438.53 100.00 Company went through bankrupt
Total 41,342,938.53 41,342,938.53 ——
15.2.1.2 Other receivables using the age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Within 1 year
Include：within 6 months 718,002.24 7,180.02 1.00
7 to 12 months 800,296.40 40,014.82 5.00
Subtotal within one year 1,518,298.64 47,194.84 3.11
1 to 2 years 738,223.90 73,822.39 10.00
2 to 3 years 29,029.08 14,514.54 50.00
Over 3 years 197,164.16 197,164.16 100.00
~ 146 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Total 2,482,715.78 332,695.93 13.40
15.2.1.3 Accounts receivable using the other method for measurement of allowance for bad debt
Balance as at 31/12/2015
Related parties
Carrying amount Allowance for bad debt % of total
Related parties 105,475,000.00 0.00 0.00
Total 105,475,000.00 0.00 0.00
15.2.2 Recognition, recovery and reversal of allowance for bad debt
Recognition of allowance for bad debts is CNY104,560.77 during current year. Recovery and reversal amount during current year is CNY0.00.
15.2.3 Accounts receivable written off during the current year
Accounts receivable written off is CNY9,384,502.02 during the current year.
15.2.4 Classification of other receivable
Nature Balance at 31/12/2015 Balance at 31/12/2014
Related party balance in consolidation 105,475,000.00 121,205,957.03
Investment in securities 41,342,938.53 50,727,440.55
Deposit and Assurant 1,295,081.09 1,670,464.25
Employee borrowing 209,766.20 284,256.89
Rent, water and gas 327,679.52 903,964.37
Others 650,188.97 989,802.17
Total 149,300,654.31 175,781,885.26
15.2.5 Details of top five other receivable:
Balance as at Allowance balance at
Debtor Nature Age % of total amount
31/12/2015 the year end
The first Related party balance 105,475,000.00 0-5 years 70.65 0.00
The second Invest in securities 29,502,438.53 Over 3 years 19.76 29,502,438.53
The third Invest in securities 11,840,500.00 Over 3 years 7.93 11,840,500.00
The forth Deposit 689,658.09 1-2 years 0.46 68,965.81
~ 147 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Balance as at Allowance balance at
Debtor Nature Age % of total amount
31/12/2015 the year end
The fift Deposit 500,000.00 6-12 months 0.33 25,000.00
Total — 148,007,596.62 — 99.13 41,436,904.34
15.3 Long-term equity investments
15.3.1 Disclosure by classification
Balance as at 31/12/2015 Balance as at 31/12/2014
Items allowance for bad Net carrying allowance for Net carrying
Carrying amount Carrying amount
debts amount bad debts amount
Invest to
354,089,408.32 0.00 354,089,408.32 338,089,408.32 0.00 338,089,408.32
subsidiaries
Total 354,089,408.32 0.00 354,089,408.32 338,089,408.32 0.00 338,089,408.32
15.3.2 Details of long-term equity investments
Carrying
Decrease amount of
Balance as at Increase during Balance as at Impairment
Name during current impairment
31/12/2014 current year 31/12/2015 allowance
year allowance as
at 31/12/2015
Gujing Sales 84,864,497.89 0.00 0.00 84,864,497.89 0.00 0.00
Gujing Glass 85,793,666.00 0.00 0.00 85,793,666.00 0.00 0.00
Shanghai Gujing Jinhao 49,906,854.63 0.00 0.00 49,906,854.63 0.00 0.00
Gujing Hotel 648,646.80 0.00 0.00 648,646.80 0.00 0.00
Gujing Transportation 6,875,743.00 0.00 0.00 6,875,743.00 0.00 0.00
Gujing Packaging 30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Anhui Ruisiweier 50,000,000.00 0.00 0.00 50,000,000.00 0.00 0.00
Anhui colorful taste
30,000,000.00 0.00 0.00 30,000,000.00 0.00 0.00
Co.Ltd
Anhui Yuanqing
0.00 16,000,000.00 0.00 16,000,000.00 0.00 0.00
environmental
~ 148 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Carrying
Decrease amount of
Balance as at Increase during Balance as at Impairment
Name during current impairment
31/12/2014 current year 31/12/2015 allowance
year allowance as
at 31/12/2015
protection Co., Ltd.
Total 338,089,408.32 16,000,000.00 0.00 354,089,408.32 0.00 0.00
15.4 Operating revenues and costs
Current year Prior year
Items
Revenue Costs Revenue Costs
Revenue from principal operating activities 2,964,146,832.70 1,505,986,199.51 2,594,480,546.56 1,443,435,704.23
Revenue from other operating activities 42,921,317.48 30,332,052.29 45,971,933.26 32,577,273.81
Total operating revenue 3,007,068,150.18 1,536,318,251.80 2,640,452,479.82 1,476,012,978.04
15.5 Investment income
Items Current year Prior year
Investment income from long term equity investment using cost mothed 505,901,386.51 467,513,453.43
Investment income from disposal of financial assets measured by fair
7,160,227.36 1,104,622.26
value with changes in fair value recognised in profit or loss
Investment income from available for sale financial asset during the
61,455,959.33 87,642,900.83
holding period
Investment income from disposal of available for sale financial assets 0.00 15,857,617.98
Total 574,517,573.20 572,118,594.50
Note 16: Supplementary information
16.1 Extraordinary gains or losses for current year
Supplemental information Total amount Explanation
Gains or losses arising from disposal of non-current assets -990,695.19
Tax repayments or waiving of taxes not officially authorized or not with proper authorization
Government grants accounted for through profit or loss for the current reporting period (excl. 19,931,320.03
~ 149 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Supplemental information Total amount Explanation
grants directly associated with the Company’s operations and subject to national quotas)
Cost of monetary funds charged on non-financial institutions accounted for through profit or loss
0.00
for the current reporting period
Gains from the investment costs paid less than the acquirer’s interest in the fair value of the
0.00
bargainor’s identifiable net assets( During acquire subsidiary、joint venture and associates)
Gains or losses arising from non-monetary assets exchange 0.00
Gains or losses arising from entrusted assets and investments 0.00
Impairment allowances arising from force majeure, such as natural disasters 0.00
Gain or loss arising from debt restructuring 0.00
Restructuring expenses, such as employee settlement and relocation costs and costs of
0.00
integration
Gains or losses arising from transactions of which the prices are deemed unfair (the difference
0.00
between the price and the fair value)
Net profit or loss of subsidiaries acquired through business combination under common control
0.00
from the beginning of the current reporting period to the combination dates.
Gains or losses arising from contingent events not associated with the Company’s operating
0.00
activities
Gains or losses arising from changes in the fair values of financial instruments held for trading
(excl. effective hedging instruments associated with the Company’s operating activities) or
7,842,274.38
disposal of financial instruments held for trading and available-for-sale financial assets (excl.
effective hedging instruments associated with the Company’s operating activities)
Recovery of impairment allowance for receivables subject to individual assessment for
0.00
impairment
Gains or losses arising from entrusted borrowings 0.00
Gains or losses arising from changes in the fair values of investment property measured at fair
0.00
value
Impact of one-off adjustment required by tax laws, accounting standards and relevant regulations
0.00
on the profit or loss for the current reporting period
Revenue arising from entrusted operation 0.00
~ 150 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Supplemental information Total amount Explanation
Other non-operating revenue and non-operating expenses not listed above 16,973,709.12
Other gains or losses satisfying the definition of extraordinary gains or losses 0.00
Subtotal 43,756,608.34
Less: Effect of corporate income tax 10,939,033.52
Less: Net amount attributable to minority interests (after tax) 0.00
Total 32,817,574.82
Note: Extraordinary gains or losses event use ―+‖express revenue and income, ―-‖ express loss and expenditure.
The Company recognized non-recurring categories of activities in accordance with the Explanatory Announcement regarding Information Disclosure
by Publicly Listed Company No. 1 - Non-recurring Profit and Loss (ZhengjianhuiGonggao [2008] No.43).
16.2 Yield Rate of Net Assets and Earnings Per Share
Weighted average yield rate Earnings Per Share(Yuan per share)
Profits for the reporting period
of net assets% Basic EPS Diluted EPS
Net profits attributable to ordinary
15.91% 1.42 1.42
shareholders
Net profits attributable to ordinary
shareholders (excl. extraordinary gains or 15.18% 1.36 1.36
losses)
~ 151 ~
Gujing Distillery Original Chinese Spirits The 2015 Annual Report
Secction XI.Documents Available for Reference
1.The accounting statements with personal signatures and seals of Legal Representative,Chief Accountant and the person in
charge of the accounting agency(Accountant in charge).
2.The original of the Auditors Report with the seals of the CPA firm,as well as the signatures and seals of the registered
accountants.
3.The originals of all the documents and public notices disclosed on china Securities Journal and Ta Kung Pao by the Company
during the reporting period.
4.Other relevant documents.
~ 152 ~
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