Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report
Yantai Changyu Pioneer Wine Co. Ltd.
2015 Annual Report
2016 Final 01
April, 2016
1
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report
I. Important Notice, Contents and Definition
The Board of Directors，the Board of Supervisors，directors, supervisors & senior managers
of the Company collectively and individually accept full responsibility for the truthfulness，
accuracy and completeness of the information contained in this report and confirm that to the
best of their knowledge and belief there are no unfaithful facts, significant omissions or
misleading statements.
Mr. Sun Liqiang (Chairman of the Company), Mr. Leng Bin (Chief Financial Officer) and Mr.
Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the
financial report in the annual report.
All directors personally attended the meeting for deliberating the annual report.
1. The Company may face significant risks in production and operation, please refer to
“8.expectation for the Company’s future development” sector of “5. Risks likely to occur”
part in the chapter four named “Board of Directors’ Report”. We advise investors to read
carefully and pay attention to the investment risks. 2. The business plan and target in the
report do not represent the earnings forecast of the listed company in 2016, which depends on
several factors including the changes of market conditions and the effort extent of managing
team etc. with a great uncertainty, so the investors should be in a special attention.
The Company’s preliminary scheme of profit distribution deliberated and passed by the board
of the directors is as following: “ Based on the Company total 685,464,000 shares on 31
December 2015，we plan to pay CNY 5 in cash as dividends for every 10 shares (including
tax) to the Company’s all shareholders, send 0 bonus(including tax) and capital reserve will
not be transferred to equity. ”
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report
Contents
I、Important Notice，Contents and Definition..............................................................................2
II、Brief Introduction for the Company and Main Financial Indicators .................................. 5
III、Summary of the Company’s Businesses .............................................................................. 10
IV、Management Discussion and Analysis ................................................................................. 13
V、Major issues ............................................................................................................................. 33
VI、Changes in Shares and the Shareholders’ Situation ...........................................................50
VII、Related Situation of Preferred Shares ................................................................................59
VIII、 Situation for Directors, Supervisors, Senior Management and Staffs...........................60
IX、 Corporate Governance ........................................................................................................ 70
X、 Financial Report .................................................................................................................... 80
XI、Reference Documents............................................................................................................ 180
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company Refers to Yantai Changyu Pioneer Wine Co. Ltd.
Changyu Group/Controlling Refers to
Yantai Changyu Group Co. Ltd.
Shareholder
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
Refers to Deloitte Hua Yong Certified Public Accountants
Deloitte Hua Yong
Co., LTD (special general partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
II. Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Code number of the
Abbreviation of the Shares: Changyu A、Changyu B 000869、200869
Shares
Abbreviation of the Shares
_
after alteration (if have)
Place of listing of the Shares Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Chinese
张裕
name
Legal Name in English (if
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
have)
Abbreviation of English name
CHANGYU
(if have)
Legal Representative Mr. Sun Liqiang
Registered Address 56 Dama Road, Yantai, Shandong, China
Postal Code 264000
Office Address 56 Dama Road, Yantai, Shandong, China
Postal Code 264000
Website http://www.changyu.com.cn
E-mail webmaster@changyu.com.cn
2. Contact person and information
Secretary to the Board of Authorized Representative of the
Directors Securities Affairs
Name Mr. Qu Weimin Mr. Li Tingguo
56 Dama Road, Yantai, Shandong, 56 Dama Road, Yantai,
Address
China Shandong, China
Tel 0086-535-6633656 0086-535-6633656
Fax 0086-535-6633639 0086-535-6633639
E-mail quwm@changyu.com.cn stock@changyu.com.cn
3. Information disclosure and filing location
The newspapers in which the “China Securities Newspaper” , “Securities Times” and
Company’s information is disclosed “Hong Kong Commercial Daily”
Web Site assigned by CSRC to carry
http://www.cninfo.com.cn
the annual report
Filing location Board of Directors’ Office of the Company,
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
56 Dama Road, Yantai, Shandong
4. Registration changes
Organization Code 26710003-5
On 18th September 1997 the Company’s operating scope was the
production, processing and sales of wine, distilled liquor, healthy
liquor, fruit liquor, non-alcohol beverages, fruit jam, packing
materials and winemaking machines.
On 17th April 2008, after the deliberation of 2007 shareholders’
meeting, the Company’s operating scope is amended to “the
Company, legally registered, is in business of production, processing
Changes for the main and sales of wine, distilled liquor, medicated liquor, fruit liquor,
business of the Company non-alcohol beverages, fruit jam, packing materials and winemaking
machines; licensed import and export.”
since it was listed
(if have) On 12th May 2010, after the deliberation of 2009 shareholders’
meeting, the Company revised its operating scope to “the Company,
legally registered, is in business of production, processing and sales
of wine, distilled liquor, medicated liquor, fruit liquor, non-alcohol
beverages, fruit jam, packing materials and its products, winemaking
machines; licensed import and export; external investments according
to governmental policies.
Changes for all previous
controlling shareholders No.
(if have)
5. Other documents
The accountant appointed by the Company
Deloitte Hua Yong Certified Public Accountants Co., LTD
Name
(special general partnership)
Address No. 1 East Chang'an Avenue, Dongcheng District, Beijing
Name of signatory accountants Xu Zhaohui, Li Xu
The sponsor agency the Company appointed to perform the duty of continuous supervision
during the report period
□Available Not available
The financial adviser the Company appointed to perform the duty of continuous supervision
during the report period
□Available Not available
6. Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of
previous fiscal years because of changes of accounting policy and/or accounting errors.
□Yes No
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
More or less
Item 2015 2014 than 2013
Last year (%)
Business revenue 4,649,722,368.00 4,156,727,525.00 11.86% 4,320,948,572.00
Net profit attributed
to the shareholders
1,030,073,860.00 977,707,711.00 5.36% 1,048,185,927.00
of the listed
company
Net profit attributed
to the shareholders
of the listed
company after 993,268,823.00 950,191,379.00 4.53% 1,017,348,285.00
deducting the
irregular profit and
loss
Net cash flows
from the operating 1,143,046,367.00 1,070,083,296.00 6.82% 735,074,307.00
activities
Basic earnings per
1.50 1.43 4.90% 1.53
share
Diluted earnings
1.50 1.43 4.90% 1.53
per share
Weighted average
for earning rate of 14.40% 13.96% 0.44% 16.45%
the net assets
More or less
Dec. 31st 2015 Dec. 31st 2014 than Dec. 31st 2013
Last year (%)
Total assets 10,344,211,461.00 8,912,232,640.00 16.07% 7,997,930,542.00
Net Assets
attributed to the
7,564,099,003.00 6,840,452,145.00 10.58% 6,208,279,705.00
shareholders of the
listed company
7. Differences in accounting data under PRC accounting standards and international
accounting standards
(1) Differences of net profit and net asset in the financial report disclosed according to
both international accounting standards and PRC accounting standards
□Available Not available
There are no differences of net profit and net asset in the financial report disclosed according
to both international accounting standards and PRC accounting standards during the report
period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
(2) Differences of net profit and net asset in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences of net profit and net asset in the financial report disclosed according
to both foreign accounting standards and PRC accounting standards during the report period.
8. Key financial indicators by quarter
Unit：CNY
st nd rd th
1 Quarter 2 Quarter 3 Quarter 4 Quarter
Business revenue 1,825,212,207.00 1,000,581,043.00 860,434,812.00 963,494,306.00
Net profit attributed to
the shareholders of the 530,248,397.00 215,811,851.00 136,798,209.00 147,417,173.00
listed company
Net profit attributed to
the shareholders of the
listed company after 526,745,613.00 212,686,390.00 133,641,945.00 120,396,645.00
deducting the irregular
profit and loss
Net cash flows from the
697,396,327.00 229,766,733.00 292,071,264.00 -76,187,957.00
operating activities
Whether there are differences between the above mentioned financial indicators or their sum
and the related financial indicators in the quarterly reports and semi-annual reports disclosed
by the Company.
□Yes No
9. Item and amount of irregular profit and loss
V Available □Not available
Unit：CNY
Item 2015 2014 2013 Explanation
Gain on disposal of non-current
assets, including the reversal of 136,061.00 -5,086,545.00 271,989.00
accrued impairment provision
Tax refund or exemption that is either
non-recurring or without proper 13,405,520.00
approval
Government grants credited in profit
and loss (except for those recurring
government grants that are closely
38,952,919.00 27,140,194.00 36,659,754.00
related to the entity's operation, in line
with related regulations and have
proper basis of calculation)
Reversal of impairment loss for 192,908.00
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
receivables which was separately
undertaken impairment test
Other non-operating income and
non-operating expenses except the 9,071,448.00 166,987.00 3,302,760.00
aforementioned items
Less. Income tax effect 11,355,391.00 8,302,732.00 9,396,861.00
Total 36,805,037.00 27,516,332.00 30,837,642.00 --
The reasons shall be made clear and definitely as to the irregular profit and loss that the
Company has defined by virtue of the Explanatory Announcement on Public Company’s
Information Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular
profit and loss as recurrent profit and loss as specified in the Explanatory Announcement on
Public Company’s Information Disclosure No.1 - Irregular Profit and Loss.
□Available V Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent
profit and loss in accordance with the Explanatory Announcement on Public Company’s
Information Disclosure No.1 - Irregular Profit and Loss during the report period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. Summary of the Company’s Businesses
1. Main businesses during the report period
During the report period, the Company’s main businesses is to produce and operate wine and brandy, thus providing the domestic and foreign
consumers with healthy and fashionable alcoholic drinks. Compared with earlier stage, there are no significant changes happened to the
Company’s main businesses. The wine industry that the Company involve in is still in the growth stage, the whole domestic wine market is on
the rising trend. The Company takes the dominant position in the domestic wine market.
2. Significant changes of main assets
(1) Significant changes of main assets
Main assets Explanation of significant changes
Equity asset No significant changes
A year-on-year growth of 21.98% owing that parts of
construction projects have completed construction and put into
Fixed asset
production and hence related investment is turned from
construction in process to fixed asset
Intangible asset No significant changes
An increase of 17.97% owing to the increased investment in
Construction in process construction in process, such as Changyu International Wine
City and so on
(2) Main overseas assets condition
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Available □Not available
Details Formation Assets scale Location Operation mode Control measures Earning The proportion of Whether there
of assets reasons for condition overseas assets in the are significant
safeguarding of Company’s net impairment risks
asset security assets
Equity Acquisition 435,177,537 Spain Wine production 807,079 5.84% No
asset of equity and operation
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
3. Analysis of core competitiveness
Compared with the participants in the arena of the Chinese wine sector, we believe that the
Company is provided with the following advantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years,
“Changyu”, “Jiebaina” and “AFIP” are Chinese famous trademarks that have strong influence
and good reputation.
Secondly, the Company has set up a nationwide marketing network, formed a “three-level”
marketing network system mainly composed of the company’s salesmen and distributors,
possessed the strong marketing ability and market exploitation ability.
Thirdly, the Company has already had strong research strength and a product R&D system,
owned a one and only “State-level Wine R&D Center”, made mastery of advanced
winemaking technology and production processes, been powerful enough in product
innovation and established a perfect quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases to meet its future
development, having developed a great deal of vineyards in the most suitable areas for wine
grape growing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Shanxi, whose
scales and structures have generally met the Company’s needs for development.
Fifthly, the Company has a great variety of products composed of all grades, its wine and
brandy of over 100 sorts can meet different consumers’ demands. The Company has taken
the lead in the domestic wine sector through rapid development in the past 10-odd years and
has possessed comparative superiority in the future competition.
All in all, the Company has built up a strong core competitive edge and obtained and
maintained a relatively dominant position in the long-term market competition.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IV. Management Discussion and Analysis
1. Summarization
In 2015, influenced by the slowdown of domestic economic growth, the overall domestic
wine industry is relatively stable, the effective demands for top-level products is weakness,
the medium-and-low-level products suitable for mass consumption maintains a favorable
growth tendency. Because of the overwhelming flow of foreign wine into Chinese market,
the market competition is further intensified, which has brought bigger challenges for the
Company to achieve sustained and steady growth. Facing quite a lot of external
disadvantages, the Company insists to focus on the market, adjust the marketing tactics and
product structure, strive to develop medium and low level products, optimize the market
layout, perfect the marketing channels and effort to promote product sales, achieving good
results and realizing business income of CNY 4649.72 million, an increase of 11.86%
compared with last year; but due to the impact of decreasing the proportion of the sales in the
products with high gross profit margin and increasing the proportion of the sales in the
products with the low profit margin, the Company realized net profit of CNY 1030.07 million
belonging to the parent company’s shareholders , an increase of 5.36% compared with last
year.
2. Analysis of main business
(1) Summarization
Description Increase or decrease of Cause of significant changes
the end of the period
over the end of last year
Operating revenue 11.86%Mainly because of increased sales volume
Operating cost 10.21%Mainly because of the increase of sales volume,
especially the proportion of sales in medium-low
price products increased
Sales expense 20.39%Mainly because of reduction of advertising expense in
2015
Management expense 22.18%Mainly because of increase of wage & welfare,
depreciation and Property tax in 2015 over the last
year before
R&D investment 10.18%Mainly because of increase of expenses for the
development of technology research in 2015
Financial expense 165.41%Mainly because of reduction of interest income due to
decrease of time deposit balance, and the increase
of loan interest expenditure.
Net amount of cash flow 6.82%Mainly because of increased sale volume that makes
generated in operating activities cash inflow of business activities increased
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Net amount of cash flow 4.57%Mainly because of decline of cash expenditure for the
generated in investment investment projects
activities
Net amount of cash flow -1.57%Mainly because of decline of other received cash
generated in capital-raising related with financing activities
activities
Review and summary of the process of the Company’s early-disclosed development strategy
and business plan during the report period
During the report period, influenced by the decelerated growth on the demand for domestic
wine and intensified market competition, the Company has realized the business income of
CNY 4.65 billion, increased by 11.86 % compared with the last year, exceeding the target
fixed in the beginning of the year of realizing business income no less than CNY 4.4 billion.
In order to deal with the unfavorable business environment, the Company carried out the
operation strategy of steady development in the medium and high-end wines, and vigorous
expansion for the low-level wines, brandy and imported wines with own brands. While
making efforts to promote the development of medium and high-end wines, the Company
made an appropriate tilt on marketing resources to the medium and low level wines, brandy
and imported wines with own brands for meeting the market demand, which played an
important part in realizing the increase on the business income. The main work in the report
period is as following:
Firstly, the Company further strengthened the construction of marketing system, optimized
product structure, increased the marketing promotion efforts and enhanced the marketing
capability. The Company further improved the multi-channel and multi-company marketing
framework, making the sales system more smoothly from the top down; By increasing the
investment in the wine market, strengthening the inspection of terminal work, and strongly
pushing the increase in sales of medium-and-low level wines and the promotion of brandy,
the Company accelerated the sales of terminal and acquired greater improvement in
marketing capability.
Secondly, the production management was strengthened and the production cost was reduced
constantly. The control of major production costs was strengthened and the management
methods of both equipment repairing fee and fuel-power fee were improved. The Company
strengthened the management of quota funds, perfected the examination and evaluation
system to occupied funds, and realized dynamic management and paid use to fund
occupation of each unit within the company. The procurement cost of raw materials was
further reduced by increasing the centralized procurement. Based on above measures, cost
per ton of comparable products reduced CNY 181 over the same period of previous year.
Thirdly, the research for new products and new technologies was continued being conducted
and the quality management was strengthened in order to improve technological level and
product quality. In 2015, the Company implemented 14 key technologies and conducted 57
technological development projects; focused on ‘Quality Day’ in every month to further
intensify the examination and supervision of quality system construction; further deepened
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
the quality control of package materials, standardized the legality of package materials in
combination with newly-implemented ‘Food Safety Law’ and ‘Advertisement Law’. Based
on above measures, the inner quality of the company’s products got a stable improvement.
Koyac XO Porcelain Barrel Brandy won Gold medal in Conours Mondial de Bruxelles
2015-Spirits Selection and the Icewine won Gold medal in ‘Quality Wine-Producing Areas
of International Leaders Contest’.
Fourthly, the procurement of raw materials such as grapes was completed successfully and
the management of grape base was further strengthened. The Company completed the whole
year work of grapes procurement and processing according to the plan, which provides a
reliable guarantee of raw material for adapting the development of market; stregnthented the
budget management of various expense in self-supporting bases, took comprehensive
professional training for farmers and strengthened the classified management and classified
evaluation of contractual bases; imported 102 mechanized equipment, further improving the
machinery utilization rate of Yantai self-supporting bases and each chateau base. By taking
above mentioned measures, the Company’s grape base management has become more
standardized and the quality of grape has been much improved.
Fifthly, the construction of technological upgrading projects is steadily promoted to
strengthen momentum for future development. During the report period, the Company has
overcomed the various problems and difficulties, steadily carry forward the construction of 9
investment projects which were defined at the beginning of the year, the key investment
projects run smoothly with good engineering quality.
(2) Revenue and cost
Composition of operating incomes
Unit: CNY
2015 2014
Proportion Proportion Year-on-year
in in increase or
Amount Amount
operating operating decrease (%)
incomes incomes
Total
operation 4,649,722,368.00 100% 4,156,727,525.00 100% 11.86%
revenue
Industry-classified
Industry of
liquor and
4,649,722,368.00 100.00% 4,156,727,525.00 100.00% 11.86%
alcoholic
beverage
Product-classified
Wine 3,659,597,234.00 78.71% 3,201,368,831.00 77.02% 14.31%
Brandy 883,276,247.00 19.00% 813,417,868.00 19.57% 8.59%
Others 106,848,887.00 2.30% 141,940,826.00 3.41% -24.72%
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Area-classified
Domestic 4,481,598,915.00 96.38% 4,072,037,577.00 97.96% 10.06%
Abroad 168,123,453.00 3.62% 84,689,948.00 2.04% 98.52%
The condition of sectors, products or areas accounting for over 10% in the
Company’s operating incomes or operating profits
Available □Not available
Unit: CNY
Year-on
Year-on- Year-on-
-year
year year
increase
increase increase
Gross or
or or
Operating income Operating cost profit decrease
decrease decrease
rate (%) of
(%) of (%) of
gross
operating operating
profit
income cost
rate
Industry-classified
Industry
of liquor
and 4,649,722,368.00 1,512,503,035.00 67.47% 11.86% 10.21% 0.49%
alcoholic
beverage
Product-classified
Wine 3,659,597,234.00 1,145,785,230.00 68.69% 14.31% 13.35% 0.27%
Brandy 883,276,247.00 307,213,390.00 65.22% 8.59% 10.72% -0.67%
Area-classified
Domestic 4,481,598,915.00 1,456,071,487.00 67.51% 10.06% 8.45% 0.48%
Whether the Company’s sales revenue for material object is more than labor income
Yes □No
Sector Project Unit 2015 2014 Year-on-year
increase or
decrease (%)
Wine Sales volume Ton 86,318 71,854 20.13%
Brandy Sales volume Ton 40,074 37,462 6.97%
Explanation on the causes of over 30% year-on-year changes of the related comparison data.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
□Available Not available
The fulfillment of major sales contract signed by the Company up to the report
period
□Available Not available
Composition of operating costs
Unit: CNY
Sector Project 2015 2014 Year-on-yea
Amount Proportio Amount Proportio r increase or
n in the n in the decrease
operating operating (%)
cost (%) cost (%)
Blending 813,179,854.0 749,104,077.0
54.76% 55.29% -0.53%
liquor 0 0
Liquor Packing 515,456,922.0 446,560,533.0
and 34.71% 32.96% 1.75%
material 0 0
alcoholic
Wages 55,456,767.00 3.73% 53,632,561.00 3.96% -0.22%
beverage
Productio 100,900,541.0 105,480,406.0
6.79% 7.79% -0.99%
n cost 0 0
Explanation
No
Whether there are changes of consolidation scope during the report period
Yes □No
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in
detail. For detail of changes in consolidation scope of the year, please refer to Notes VII
"Change in consolidation scope".
Major changes or adjustments of the Company’s products or services during the
report period
□Available Not available
Information of major customers and major suppliers
The Company’s important customers
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
The total sales amount of the top five customers（CNY） 162,300,452.00
Total sales of the top five customers accounting for the
3.49%
proportion in total sales for the year（%）
Information on the Company’s 5 biggest customers
Sales Amount Proportion in Total Sales for
No. Customer Name
（CNY） the year（%）
ChangyueXin Trade Company in Shenzhen
1 35,452,036.00 0.76%
city
Baicheng Trade Distribution Center in
Hanjiang district of Putian city (New
Baicheng Food Trade Company in Hanjiang
2 district of Putian city, Zhongheng Food 33,579,353.00 0.72%
Trade Company in Chengxiang district of
Putian city, Baicheng Commerce and Trade
Company Limited in Putian city )
Dali Qianxingrong Wine Shop in Nanhai
3 district of Foshan city (Xiqiaolizhi Shop in 32,892,494.00 0.71%
Nanhai district of Foshan city )
Wal-Mart (China) Investment Company
4 31,879,636.00 0.69%
Limited
Huhaipengcheng Liquor Industry Company
5 28,496,932.00 0.61%
Limited in Zhuhai city
Total — 162,300,452.00 3.49%
Other situation explanation of main customers
□Available Not available
Information on the Company’s important suppliers
The total purchase amount of the top 5 suppliers 57,512,952.00
The proportion of the total purchase amount of the top 5 suppliers in the annual
3.56%
purchase amount
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Information on the Company’s top 5 biggest suppliers
Purchase Amount Proportion in Total Purchase
No. Supplier Name
(CNY) for the year（%）
1 Yantai Shenma Packaging Co., Ltd. 153,891,013.00 9.52%
2 Yantai Changyu Glass Co.,Ltd. 136,649,691.00 8.46%
Liquan Sales Department of
3 102,003,625.00 6.31%
Shandong Yantai Winery Co.,Ltd.
152 regiment of the eighth
4 79,434,236.00 4.92%
agriculture production division
5 Yantai Wanfutai Winery Co., Ltd 57,512,952.00 3.56%
Total 529,491,518.00 32.77%
Other situation explanation of main customers
□Available Not available
(3) Costs
Unit: CNY
Year-on-year Explanation of
2015 2014 increase or significant
decrease (%) changes
Mainly because
of increased
Sales expense 1,211,127,163.00 1,006,009,364.00 20.39% advertising
expense in
2015
Mainly because
of increased
wage, welfare
Management
313,968,409.00 256,980,018.00 22.18% expense，
expense
depreciation
and building
tax
Mainly because
Financial of decreased
11,287,685.00 -17,256,721.00 165.41%
expense interest income
resulting from
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
the decline of
fixed deposit
balance and
increased loan
interest
expenditure
(4) Research and development expenditure
□Available Not available
(5) Cash flow
Unit: CNY
Year-on-year
Item 2015 2014 increase or
decrease (%)
Subtotal of cash inflow in
5,045,321,545.00 4,830,092,384.00 4.46%
operating activities
Subtotal of cash outflow in
3,902,275,178.00 3,760,009,088.00 3.78%
operating activities
Net amount of cash flow
1,143,046,367.00 1,070,083,296.00 6.82%
generated in operating activities
Subtotal of cash inflow in
70,956,457.00 333,107,299.00 -78.70%
investment activities
Subtotal of cash outflow in
1,008,811,136.00 1,315,841,068.00 -23.33%
investment activities
Net amount of cash flow
-937,854,679.00 -982,733,769.00 -4.57%
generated in investment activities
Subtotal of cash inflow in
604,498,188.00 644,550,372.00 -6.21%
capital-raising activities
Subtotal of cash outflow in
679,633,059.00 720,926,810.00 -5.73%
capital-raising activities
Net amount of cash flow
generated in capital-raising -75,134,871.00 -76,376,438.00 -1.63%
activities
Net increase of cash and cash
134,207,390.00 3,913,342.00 3,329.48%
equivalents
20
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Explanation of main influence factors contributing to great changes in related data on
year-on-year basis
Available □Not available
During the report period, comparing with the same period of last year, subtotal of cash inflow
in investment activities was reduced by 78.7%, mainly due to the significant decrease in the
fixed deposit whose duration is more than 3 months; subtotal of cash outflow in investment
activities was reduced by 23.33%, mainly due to the significant decrease in cash paid for
purchasing and constructing fixed assets, intangible assets and other long-term assets; net
increased amount of cash and cash equivalents increased by 3329.48%, mainly due to the
significant growth of net amount of cash flow generated both in operating activities and in
investment activities.
Explanation on the causes of the major differences between the net cash flow generated by
the Company’s operating activities and this year’s net profit during the report period.
Available □Not available
3. Analysis to non-main business
□Available Not available
4. Assets and liabilities situation
(1) Major changes of assets
Unit: CNY
At the end of 2015 At the end of 2014
Proportio Proportio Proportion
Explanation
n in the n in the increase or
on major
Amount total Amount total decrease
changes
assets assets (%)
(%) (%)
Monetary No major
1,285,362,414.00 12.43% 1,145,365,071.00 12.85% -0.42%
funds changes
No major
Receivables 197,795,091.00 1.91% 145,672,411.00 1.63% 0.28%
changes
21
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
No major
Inventory 2,260,852,964.00 21.86% 2,087,376,398.00 23.42% -1.56%
changes
Investment No major
0.00% 0.00% 0.00%
real estate changes
Long-term
No major
equity 0.00% 0.00% 0.00%
changes
investments
No major
Fixed assets 3,089,245,185.00 29.86% 2,532,682,355.00 28.42% 1.44%
changes
Constructio
No major
n in 2,005,990,308.00 19.39% 1,700,466,500.00 19.08% 0.31%
changes
progress
Short-term No major
665,581,921.00 6.43% 300,000,000.00 3.37% 3.06%
borrowings changes
Long-term No major
71,686,629.00 0.69% 209,380,000.00 2.35% -1.66%
borrowings changes
(2) Measuring assets and Liabilities at Fair Value
□Available Not available
22
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
5. Investment situation
(1) Overall situation
Available □Not available
Investment amount during the Investment amount of the same
Variation
report period (CNY) period of last year (CNY)
842,060,000.00 562,596,634.00 49.67%
(2) Situation of acquired main equity investments during the report period
Available □Not available
Unit: CNY
Invested Main Investment Investment Shareholding Capital Partner Investment Product Progress Estimated Profit and Whether Disclosure Disclosure index (if have
company business mode amount rate source period type up to the profit loss of involved date if
name balance investment in have
sheet date during this lawsuits
period
Discot Production Acquisition 18625.00 75% Self-owned Comercial 50 years wine completed 5,800,00.00 807,079.00 no 2015.08.28 http://www.cninfo.com.cn/finalp
Partners, and capital Gatar, age/2015-08-28/1201509186.PD
S.L operation S.L. and F
of wine estion
and other Ganuza,
alcoholic S.L.
products
Société Production Acquisition 2363.00 90% Self-owned Vignobles 50 years wine completed 1,400,000.00 0.00 no 2015.11.25 http://www.cninfo.com.cn/finalp
Civile of capital et age/2015-11-25/1201786784.PD
23
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Agricole top-level Domaines F
du Bordeaux Castel
Chteau wine
de
Mirefleurs
Total 20,988.00 7,200,000.00 807,079.00
(3) Situation of main ongoing non-equity investments during the report period
Available □Not available
Unit: CNY
Project Investment Whether Involved Investment Accumulated Capital Process Estimated profit Accumulated Reasons Disclosure Disclosure
name mode it sectors Amount actual source of realized for date (if index (if
belongs during this investment project profit up unreached have) have)
to fixed report period amount up to the end planning
assets to the end of the schedule
investment of the report report and
period period estimated profit
Yantai Self- Yes Liquor and 265,000, 673,630,000. Owned 75.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Changyu constructed alcoholic 000.00 00 funds o.com.cn/finalpa
International beverage ge/2015-04-28/
Wine City sector 1200918766.PDF
Blending and
Cooling
Center
Yantai Self- Yes Liquor and 190,000, 481,690,000. Owned 85.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Changyu constructed alcoholic 000.00 00 funds o.com.cn/finalpa
24
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
International beverage ge/2015-04-28/
Wine City sector 1200918766. PDF
Bottling
Center
Yantai Self- Yes Liquor and 86,000, 199,440,000. Owned 95.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Changyu constructed alcoholic 000.00 00 funds o.com.cn/finalpa
International beverage ge/2015-04-28/
Wine City sector 1200918766. PDF
Logistics
Center
Changyu Vine Self- Yes Liquor and 49,940, 90,760,000. Owned 40.00% 0.00 0.00 — 2015.04.28 http://www.cninf
and Wine constructed alcoholic 000.00 00 funds o.com.cn/finalpa
Research beverage ge/2015-04-28/
Institute sector 1200918766. PDF
Treasure Self- Yes Liquor and 17,210, 47,990,000. Owned 40.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Wine Chateau constructed alcoholic 000.00 00 funds o.com.cn/finalpa
beverage ge/2015-04-28/
sector 1200918766. PDF
Koyac Brandy Self- Yes Liquor and 0.00 98,000,000. Owned 40.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Chateau constructed alcoholic 00 funds o.com.cn/finalpa
beverage ge/2015-04-28/
sector 1200918766. PDF
Changyu Self- Yes Liquor and 4,290,00 43,700,000. Owned 80.00% 0.00 0.00 — 2015.04.28 http://www.cninf
International constructed alcoholic 00 funds o.com.cn/finalpa
Wine City beverage ge/2015-04-28/
Grape Base sector 1200918766. PDF
Greening Self- Yes Liquor and 1,740,000. 38,640,000. Owned 70.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Investment constructed alcoholic 00 00 funds o.com.cn/finalpa
25
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
beverage ge/2015-04-28/
sector 1200918766. PDF
Pioneer Self- Yes Liquor and 18,000, 35,550,000. Owned 60.00% 0.00 0.00 — 2015.04.28 http://www.cninf
Monopoly constructed alcoholic 000.00 00 funds o.com.cn/finalpa
Shop beverage ge/2015-04-28/
sector 1200918766. PDF
Total -- -- -- 632,180, 1,709,400, -- -- 0.00 0.00 -- -- --
000.00 000.00
26
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
(4) Financial assets investment
Security investment situation
□Available Not available
There is no security investment for the Company during the report period.
Derivatives investment
□Available Not available
There is no entrust financing for the Company during the report period.
(5) The usage situation of the raised capital
□Available Not available
There is no usage situation of the raised capital for the Company during the report period.
(6) Sale of major assets and equities
Sale of major assets
□Available Not available
There is no sale of major assets during the report period.
Sale of major equities
□Available Not available
(7) Analysis to the major holding and joint stock companies
Available □Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the
Company’s net profit
Unit: CNY
Company Company Main Registered Total Net Operation Operation Net
name type business capital asset asset revenue profit Profit
Yantai To 274,79
Subsidia USD 5 82,896, 98,894,4 7,573,6
Changyu research, 5,419.0
ry million 983.00 99.00 41.00
-Castle produce 0
27
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Wine and sell
Chateau wine and
Co. sparkling
LTD. wine as
well as the
tourism
service
Langfang
Joint
Castel- To produce USD
stock 53,339, 45,425, 51,602,8 862,10
Changyu and sell 6,108,81
compan 634.00 677.00 97.00 3.00
Wine Co. wine 8
y
LTD.
Chateau Subsidia To
Changyu ry research,
CNY 739,79 149,28
AFIP produce 170,037, 25,424,
110 5,780.0 3,921.0
Global and sell 611.00 015.00
million 0 0
brandy and
wine
Chateau Subsidia
Liaoning ry CNY
To produce 72,547, 59,823, 51,657,5 -4,223,
Changyu 26.30
ice wine 094.00 627.00 43.00 249.00
Ice Wine million
Co., Ltd.
Xinjiang Subsidia To plant
Tianzhu ry grape,
Winery produce
182,72 161,83
Co., Ltd. and sell CNY 75 107,683, -37,548
8,427.0 8,245.0
grape million 230.00 .00
0 0
juice, bulk
wine and
fruit wine
Acquisition and disposal of subsidiaries during the report period
Available □Not available
Company name Acquisition and disposal Influence to overall production and
Mode of subsidiaries Operation as well as performance
during the report period
Dicot Partners, S.L. Equity Acquisition Beneficial for enriching the Company’s
product structure and improving profitability
Société Civile Equity Acquisition Beneficial for enriching the Company’s
Agricole du Chteau product structure and improving profitability
de Mirefleurs
28
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Information of main holding and joint stock companies
No
(8) Main part situation of the special purpose being controlled by the Company
□Available Not available
(9) Expectation for the Company’s future development
On the basis of our limited experience and special skills, we make the following estimation of the
wine sector and the Company’s future development:
(1)The sector competition setup and development trend
Due to the continuous limitation for the domestic consumption of premium wine in the future long
time, the continuing entrance of imported wines to Chinese market, and the great impact for the
traditional sales channels caused by the new channels such as E-commerce, the competition in the
domestic wine industry will still be awfully fierce in the current and future long time, the
consumption for high-end wine maybe continue to remain weak. But in the long run, thanks to
increase of their incomes, people’s pursuits to health and fashion life, the people are favoring
wines which fit well with the trend of consumption, it will ceaselessly stimulate their demand for
quality wine. That’s to say, the Chinese wine sector still has huge potential to tap. Especially the
medium-low level wine with high performance-to-price ratio can have a faster growth. In such a
case of long-term coexistence of opportunities and challenges, only those enterprises that possess
strong branding influence and marketing ability, catch the opportunities, actively take adjustments
and make full use of oncoming and traditional sales channels, can timely get the run of the
consumers’ demands and provide products of high performance-to-price ratio will have an
opportunity to be the final winners of competition and form a new structure of the future Chinese
wine market.
(2)The Company’s development strategy
The Company will continue to adhere to the strategy of taking wine as pillar product while
developing all kinds of products, actively expand the scope of consumption and marketing mode,
revise the sales decreased trend of high-end wine; develop middle-level wines and brandy,
strengthen the promotion of sparkling wine, make efforts to provide consumers with a rich variety
of products in high cost performance.
(3) Management plan in a new year
In 2016, the Company will try its best to realize business income of not less than CNY4.6 billion
and control the main operating costs and three period charges below CNY3.0 billion.
(4) The measures the Company will take
The Company will emphasize the following aspects in 2016, so as to better catch the opportunities
and face the challenges:
Firstly, it is to stick to market-orientation and promote the integrated development of various
kinds of wine. The Company will continue adhering to wine-based development strategy firmly,
improve the construction of sales system for chateau wines, as well as the incentive measures to
dealers and the company’s staff, so as to promote the sales volume of chateau wines. The
governance of market order will be enhanced to consolidate the brand advantages of middle-end
wines (represented as Jiebaina). The market promotion of low-end wines will be strengthened to
increase the market shares. The appearance of sparkling wine with low alcohol and Tinlot Reserva
29
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
products on the market will be completed and the appearance of wines in small package on the
market will be quickened. The company will strengthen the construction of Brandy sales system
and improve its market promotion. The Koyac Brandy products will be improved and their sales
system will be built. In the meantime that the company pay attention to domestic brands, the sales
of imported products by the company acting as agency in China, especially products whose brands
are acquired by the company, will be boosted to satisfy the demands of customers.
Secondly, it is to strengthen the control for major production costs and expenses, further
compressing production cost and reducing expenses. The Company will further reinforce financial
management and audit supervision, improve management methods of major expenses in
production system, improve centralized procurement rules, improve profit accounting system in
subordinate production and operation units, make a good fund plan, enhance fund occupation
management and make efforts to reduce production costs and expenses; establish and improve the
financial management and auditing system of industrial park, grape bases and overseas investment
companies; improve and perfect financial early warning analysis system to prevent operating risks;
optimize products’ pricing mechanism and strive to improve products’ gross profit margin.
Thirdly, it is to strengthen the management for vineyards, continually increase the products
quality. The Company will carry out the normalization construction and management for the
vineyards in accordance with the criterion of scalization, standardization and mechanization,
continue to practice the tracking and management of winemakers for the vineyards. For
self-supporting bases, the company will enhance the corresponding simulation profit evaluation,
build the informatization management system in self-supporting bases, and improve the
management level of bases. Besides, the company will fully push the mechanization planting
pattern to further reduce the planting cost. For contractual bases, in order to improve the
management level of bases, the classified management of grape bases will be continued being
implemented and the advanced planting technical training for contracted farmers will also be
continued being enhanced. In addition, the company will strengthen the legal education of quality
and safety to improve farmers’ consciousness of food safety. The layout of raw material bases will
be implemented worldwide to form the pattern that the quality and quantity of raw materials in
domestic bases could be complementary with that in foreign bases. The Company will perfect the
classification standards for bulk wine, the quality tracking of bulk wine whole usage process and
assessment mechanization, optimize winemaking technology, reinforce the applied research on
oak barrels, further improve production quality, strengthen to develop new products, constantly
enrich products variety. Further distinguish and clear the products characteristic of general wine in
different varieties, form the products line with distinctive and unique style.
Fourthly, it is to steadily carry forwards investment projects construction, scientific arrange the
progress of construction, guarantee the engineering quality. The Company will continuously
promote the projects of Yantai Changyu International Wine City (namely Yantai Changyu
Industrial Park) and the construction for pioneer monopoly shops, reinforce the management of
construction budget to investment projects, strengthen projects’ cost review and completion audit,
strictly control the investment amount on projects, make sure to finish the construction for all
projects and put them into operation on the basis of scheduled progress and quality.
(5) Potential risks
A) Risks in price fluctuation of raw materials
Grapes are the Company’s main raw materials. The grape’s yield and quality are affected to a
certain extent by the natural factors such as drought, wind, rain, frost and snow. These force
majeure factors greatly influence the quantity and price of the grapes in this Company orders and
30
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
add the uncertainty to the Company’s production and operation. Therefore, the Company will
lower the risks that are likely to affect grape quality and result in price fluctuation by means of
expanding the self-run vineyards, strengthening the vineyard management and optimizing the
layout of vineyards.
B) Risks in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development, the
Company has input more and more capital in the market and the sales expense has taken up a
higher percentage point in the business revenue. The input-output ratio will affect the Company’s
operating results to a great extent and the risk that some investments may not reach the
expectations is likely to occur. Therefore, the Company will strengthen market research and
analysis, enhance market forecast accuracy and continue to perfect the input-output evaluation
system to ensure the investments in market to be satisfactory as expected.
C) Risks in product transport
The Company’s products are fragile and sent to different places all over the world, mostly by sea,
railway and expressway. The peak season of sales is usually in cold winter and close to the spring
festival when market has a great demand. At that time, the natural and human factors such as
serious shortage of transport capacity resulting from busy flow of people and goods, wind, snow,
freezing as well as traffic accidents make the transport departments difficult to send products to
markets in time and safely. As a result, it makes this Company have to face the risks of missing
the peak season of sales. Therefore, the Company will adopt all methods possible like making
precise sales prediction and well designed connection of production and sales, reasonably
arranging production and transport means and making use of more available warehouses in
different places to lower these kinds of risks.
D) Risks in investment faults
According to the plan, currently the Company has finished the production layout at home, and the
next step is to pay more attention to the overseas merge and acquisition in the same industry.
Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park) has
those features such as the big investment amount, long-term construction period and many
uncertain factors; more unforeseeable factors for the overseas merge and acquisition projects in
the progress of M&A, it is difficult to make sure the fair and reasonable transaction price, the
integration and management after M&A is also hard. Under the influence of uncertain factors for
individual projects, It leads to have the risks of facing with the investment amount out of budget
or hardly taking back the expected investment earnings. The Company will take an adequate
argument and scientific decision-making for investment projects, try hard to reduce and avoid
investment risks.
10. The Company’s receptions, studies, communications and visits
Available □Not available
Reception method Reception object type Basic information
Reception Time
index of studies
2015.05.22 Field survey Institution -
2015.05.22 Field survey Individual -
31
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Number of
Reception
Number of
received institution
Number
of received
individual
Number of other
object
Whether disclose, No
reveal or betray
no-public
import information
32
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
V. Major issues
1. The Company’s common stock profit distribution and increasing equity with capital
reserve
Promulgation, implementation or adjustment of common stock profit distribution policies
especially cash dividends policies during the report period
Available □Not available
According to the auditing result made by The Deloitte HuaYong certified public accountants
co., LTD, the net profit that the Company made in 2014 was CNY977.707711million. After
deducting the minority shareholders’ profit and loss, the net profit belong to the Company’s
shareholders is CNY977.707711 million. After the deliberation of the Company’s Board of
Directors and the Shareholders’ Meeting, the profit plan of 2014 is as following: Because the
left amount of legal earned surplus reserve is less than 50% of the registered capital, while
making profit distribution, the legal earned surplus reserve will not be drawn. Then based on
the Company’s 685,464,000 shares at total up to December 31, 2014, we plan to pay CNY4.4
in cash as dividends for every ten shares (including tax) to the Company’s all shareholders,
totaling up to CNY301.60416 million, accounting for 30.85% of the net profit CNY
977.707711 million attributable to the shareholders of the parent company in the consolidated
statement, the retained and undistributed profit of CNY 676.103551 million will be reserved
for the distribution of next year. This plan is in line with the provisions of the Company’s
Articles of Association. On July 5, 2015, the Company published the Implementation
Announcement of 2014 Annual Equity Distribution on China Securities Journal, Securities
Times and www.cninfo.com.cn, determining that the share registration day of A Stock was
on July 10, 2015 and the ex-dividend day was on July 13, 2015, the last trading day of B
Stock was on July 10, 2015, the share registration day was on July 15, 2015 and the
ex-dividend day was on July 13, 2015. The Company also distributed equity before July 30,
2015 to the Company’s all A Stock holders registered after closing of Shenzhen Stock
Exchange on the afternoon of July 10, 2015 at China Securities Depository and Clearing
Corporation Limited Shenzhen Company and the Company’s all B Stock holders registered
after closing of Shenzhen Stock Exchange on the afternoon of July 15, 2015 at China
Securities Depository and Clearing Corporation Limited Shenzhen Company.
Special explanation
Whether it is in accordance with the requirements of the regulation in the Articles Yes
of Association and the resolution of shareholders
Whether the distribution standard and proportion is clear and definite Yes
Whether the relative decision process and mechanism is complete Yes
Whether the independent directors perform their responsibilities and play the roles. Yes
Whether the small and middle shareholders have the chance to express their Yes
advices and appeals, as well as their lawful right and interest is in an enough
protection.
Whether it is legal and transparent for the condition and process while adjusting Yes
33
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
and amending the cash dividends distribution policy.
The Company’s plan (preliminary scheme) of common stock profit distribution and
increasing equity with capital reserve in the recent three years (including the report period).
The Company’s profit distribution plan in 2013 is as following: Because the left amount of
legal earned surplus reserve reaches 50% of the registered capital, while making profit
distribution, the legal earned surplus reserve will not be drawn. Then based on the
Company’s 685,464,000 shares at total up to December 31, 2013, we plan to pay CNY 5 in
cash as dividends for every ten shares (including tax) to the Company’s all stockholders,
totaling up to CNY 342.732 million, accounting for 32.70% of the net profit CNY
1048.185927 million attributable to the shareholders of the parent company in the
consolidated statement, the retained and undistributed profit of CNY 705.453927 million will
be reserved for the distribution of next year.
The Company’s profit distribution in 2014 is as following: Because the left amount of legal
earned surplus reserve reaches 50% of registered capital, while making profit distribution, the
legal earned surplus reserve will be not drawn. Based on the Company’s 685.464 million
shares at total up to December 31, 2014, we plan to pay CNY 4.4 in cash as dividends for
every ten share (including tax) to the Company’s all shareholders, totaling up to CNY
301.60416 million accounted for 30.85% of net profits CNY977.707711 million attributable
to shareholders of parent company in the consolidated statements. The retained and
undistributed profit of CNY 676.103551 million will be reserved for distribution in the next
year.
The Company’s preliminary scheme of profit distribution plan in 2015 is as following:
Because the left amount of legal earned surplus reserve reaches 50% of the registered capital,
while making profit distribution, the legal earned surplus reserve will not be drawn. Then
based on the Company’s 685,464,000 shares at total up to December 31, 2015, we plan to pay
CNY 5 in cash as dividends for every ten shares (including tax) to the Company’s all
stockholders, totaling up to CNY 342.732 million, accounting for 33.27% of the net profit
CNY 1030.07386 million attributable to the shareholders of the parent company in the
consolidated statement, the retained and undistributed profit of CNY 687.34186 million will
be reserved for the distribution of next year.
The Company’s common stock cash dividend record in recent three years (including the
report period)
Unit: CNY
Net profit Proportion in the Amount of cash Proportion of cash
Amount of
belonging to the net profit belonging dividends in other dividends in other
Year of cash dividend
listed company’s to the listed ways ways
distribution (including
stockholders in the company’s
tax)
consolidated stockholders in the
34
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
statement of the consolidated
distribution year statement (%)
342,732,000.
2015 1,030,073,860.00 33.27% 0.00 0.00%
00
301,604,160.
2014 977,707,711.00 30.85% 0.00 0.00%
00
342,732,000.
2013 1,048,185,927.00 32.70% 0.00 0.00%
00
During the report period the Company earned profit, the profit of the parent company that
could be distributed to common stock shareholders was positive but without proposing
common stock cash dividend distribution.
□Available Not available
2. The Company’s preliminary scheme of profit distribution and preliminary scheme of
increasing equity with capital reserve
Available □Not available
Number of sending bonus shares per ten shares (share) 0
Number of dividend payout per ten shares (CNY) (including tax) 5
Number of transferring per ten shares(share) 0
The cardinal number of the capital stocks for the preliminary distribution
685,464,000
scheme (shares)
Total cash dividend distribution （CNY）(including tax) 342,732,000.00
Distributable profit (CNY) 1,030,073,860.00
The proportion of cash dividend distribution in the total profit distribution 100.00%
Cash dividend
If the Company’s development is in growth stage, while making profit distribution, the
proportion of cash dividends should takes up no less than 20% in this profit distribution
Detailed explanation for the preliminary scheme of profit distribution or increasing equity
with capital reserve
According to the audit result from Deloitte Hua Yong, the net profit belonging to the parent
company’s stockholders in the consolidated statement is CNY1030.07386million, the net
profit of the parent company in financial statement is CNY1553.520098 million in 2015.
According to PRC accounting standard, the situation for the attributable profit of
consolidation and parent company in 2015 is as following:
Unit: CNY
Consolidation Parent company
Undistributable profit at the end the year 5,980,390,074 5,872,392,075
Including: net profit in 2015 1,030,073,860 1,553,520,098
Distributable profit carried over to the 5,251,920,374 4,620,476,137
beginning of the year
35
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Distribution for 2014 dividend 301,604,160 301,604,160
Withdrawing for the legal earned surplus 0 0
reserve
According to regulation of 157th item in the Articles of Association, which is that the
Company can distribute dividends either in cash or by stock, the profit to be distributed each
year is not less than 25% of the distributable profit realized in the same year and the
accumulated sum of profit to be distributed in cash in the next three years is not less than
30% of the yearly average distributable profit to be realized in the next three years,
meanwhile, considering the large amount on the capital expenditure in 2016, under the
condition of not influencing the normal production and operation, the Company put forward
preliminary scheme on profit distribution in 2015 as following:
Because the left amount of legal earned surplus reserve reaches 50% of the registered capital,
while making profit distribution, the legal earned surplus reserve will not be drawn. Then
based on the Company’s 685,464,000 shares at total up to December 31, 2015, we plan to pay
CNY 5 in cash as dividends for every ten shares (including tax) to the Company’s all
stockholders, totaling up to CNY 342.732 million, accounting for 33.27% of the net profit
CNY 1030.07386 million attributable to the shareholders of the parent company in the
consolidated statement, the retained and undistributed profit of CNY 687.34186 million will
be reserved for the distribution of next year. The cash dividend for the shareholders of B
share listed overseas was paid in Hongkong dollar according to the middle rate between CNY
and Hongkong dollar issued by the People’s Bank of China on the first working day after the
resolution date of 2015 shareholders’ meeting.
3. Implementation of commitments
(1) Commitments that the Company, shareholders, actual controllers, acquirers, directors,
supervisors, senior managers and other related parties have implemented during the report
period and have not implemented up to the end of the report period
Available □Not available
Commitment Commitment Commitment Commitment Implementat
Commitments Commitment type
party content time period ion
Commitments at
－ － － －
share reform
Commitments
made in
acquisition － － － －
report or equity
changes report
Commitments at
asset － － － －
restructuring
Commitments at Yantai Solve horizontal Non-horizontal 18thMay 1997 Forever Has been
36
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
the initial public Changyu competition competition performing
offering or Group Co. strictly
refinancing Ltd.
Yantai Clear the purpose According to
Changyu of brand royalty Trademark
Group Co. License
Ltd. Contract, the
Company will
pay trademark
royalty for the
‘‘Changyu’’
products of
Yantai
Changyu
Group Co., Ltd Has been
every year, 18thMay 1997 Forever performing
Yantai strictly
Changyu
Group Co., Ltd
will use
trademark
royalty to
advertise
‘‘Changyu’’
trademarks and
Contracted
products in this
contract.
Equity incentive
－ － － － －
commitments
Commitments at
middle and
small － － － －
－
shareholders of
the Company
Commitment Yes
under timely
implementation
or not
Whether or not No
to have specific
reasons of the
unimplemented
commitment and
next steps(if
37
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
any)
(2) The Company should make a statement on the achieved original profit forecast of
assets or projects and its reason if there is profit forecast of Company’s assets or
projects and the report period is still in the profit forecast period
□Available Not available
4. Non-business capital occupying of listed company by controlling shareholder and its
related parties
□Available Not available
There are no non-business capitals occupying of listed company by controlling shareholder
and its related parties during the report period.
5. Explanation of Non-standard Audit Report given by accounting firm in the report
period from board of directors, board of supervisors and independent directors (if
have)
□Available Not available
6. Compared with the previous year’s financial report, explanation for the changes of
accounting policy, accounting estimation and accounting method
□Available Not available
There are no changes of accounting policy, accounting estimation and accounting method
during the report period.
7. During the report period, the situation explanation for the correction of major accounting
errors which need to be retrospect and restated.
□Available Not available
There is no situation for the correction of major accounting errors which need to be retrospect and
restated.
8. Compared with the previous year’s financial report, explanation for the changes of
the consolidated statements scope.
Available □Not available
38
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in
detail. For detail of changes in consolidation scope of the year, please refer to Notes VII
"Change in consolidation scope".
9. The appointment and dismissal of certified public accountants
Currently appointed accounting firm
Deloitte Hua Yong Certified Public Accountants Co., Ltd.
Domestic accounting firm name
(special general partnership)
Reward for domestic accounting firm
195
(CNY‘0000)
Consecutive period for the audit
3
services of domestic accounting Firm
Name of Certified public accountant
for the audit services of domestic Xu Zhaohui, Li Xu
accounting Firm
Overseas accounting firm name (if
－
have)
Reward for overseas accounting firm
0
(CNY‘0000) (if have)
Consecutive period for the audit
－
services of overseas accounting Firm
Name of Certified public accountant
for the audit services of overseas －
accounting Firm
Whether or not to dismiss the accounting firm during the report period
□Yes No
To employ internal control audit accounting firms, financial adviser or sponsor.
□Available Not available
10. Face of suspension and termination of listing after the disclosure of annual report
□Available Not available
11. Bankruptcy reorganization
□Available Not available
There is no bankruptcy reorganization during the report period.
39
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
12. Material litigation and arbitration
□Available Not available
There are no material litigation and arbitration during the report period.
13. Penalty and rectification
□Available Not available
There are no penalties or rectifications during the report period.
14. Credit of the Company, holding shareholders and actual controllers
□Available Not available
15. Implementation of the Company’s equity inventive plan, employee stock ownership plan
or other employee incentive measures
□Available Not available
There are no implementation of the Company’s equity inventive plan, employee stock ownership
plan and other employee incentive measures.
16. Significant related transactions
(1) Related transactions in relation to routine operations
Available □Not available
40
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Approved Whether or
Amount of Proportion transaction not
Pricing Settlement
Type of Content of Price of related in the same quota exceeds
Related Interrelationshi principle of method of Market Date of Disclosure
related related related transaction kind of the
party p related related price disclosure index
transaction transaction transaction (CNY transaction approved
transaction transaction
‘0000) (%) transaction
credit
Procurement
Related of
Yantai
party’s commodity
Shenma Under the same Agreement http://www.
commodity and － 15,389 11.08% 19,000 No Check － 2015.04.25
Packing parent company price cninfo.com.cn
and labor acceptance
Co., Ltd.
transaction of labor from
related party
Total -- -- 15,389 -- 19,000 -- -- -- --
Details of rejection of big sales No
If a prediction is made to the total amount of routine No
related transactions to occur during this period by
type, what is the actual implementation result during
the report period (if have)
Cause of bigger differences in between transaction The transaction price is fixed in reference to market price, no obvious difference.
price and market reference price (if applicable)
41
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
(2) Related transactions in relation to acquisition and sales of assets or equity
□Available Not available
There are no related transactions in relation to acquisition or sales of assets or equity during the report period.
(3) Related transactions in relation to common foreign investment
□Available Not available
There are no related transactions in relation to common foreign investment during the report period.
(4) Related current credit and debt
Available □Not available
Whether or not exists non-operating related current credit and debt
□Yes No
There are no non-business related current credit and debt.
(5) Other major related transactions
Available □Not available
42
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Detailed information about other related routine transactions among the Company, the Company’s controlling shareholder Yantai Changyu Group
Company Limited and its subsidiaries, please see Part 7 ‘‘Relation Among Related Parties and Their Transactions’’ in the financial statement of this
report.
Disclosure website of major related transactions’ temporary reports for related query
Name of Disclosure date of Disclosure website name
Temporary announcement Temporary announcement of temporary announcement
Announcement about 2015 2015.04.28 Cninf (http://www.cninfo.com.cn)
annual routine related
transactions
17. Major and important contracts and execution results
(1) Trusteeship, contract and leasehold issues
Trusteeship situation
□Available Not available
There is no trusteeship situation during the report period.
Contract situation
Available □Not available
Contract situation description
During the report period, about the Company’s contract operation situation, please see ‘‘1. Subsidiary’’ in Annex 5 ‘‘The Consolidation Scope
of Consolidated Financial Statements’’ in the financial report of this report.
43
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available Not available
There are no contract projects in gains and losses for the Company to achieve more than 10% of the total profit during the report period.
Leasehold situation
Available □Not available
Leasehold situation description
On 1st January 2012, the Company renewed the Space Lease Agreement with the controlling shareholder Changyu Group, the Company leased
the space with 57749.77 square meters located at 174 Shihuiyao Road, Zhifu District,Yantai City and the space with 3038 square meters located
at 56 Dama Road, Zhifu District, Yantai City, which are all under the name of controlling shareholder. The rent of the above spaces per year is
CNY 5.858 million with a period of 5 years from 1st January 2012 to 31st December 2016.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available Not available
There are no leasehold projects in gains and losses for the Company to achieve more than 10% of the total profit during the report period.
(2) Major guarantee
Available □Not available
Guarantee situation
44
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Unit: CNY’0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Disclosure date of
Whether or
related Actual date of Actual Whether or
Guarantee object Guarantee Guarantee Guarantee not belong to
announcement occurrence (date guarantee not complete
name quota type Period related-party
about guarantee of agreement) amount implement
guarantee
quota
HSBC Bank 2014.11.2
(China) Company 7-
2015.04.28 12500 2014.11.27 11991 Pledge Yes No
Limited Qingdao 2015.11.2
Branch 6
Total of the external guarantee quota Total of the actual external
approved during the report period 0 guarantee amount during 0
(A1) the report period (A2)
Balance of the actual
Total of the external guarantee quota
external guarantee by the
approved by the end of the report 12500 11991
end of the report period
period (A3)
(A4)
Guarantee between the Company and subsidiaries
Disclosure date of Whether
Whether or
related Actual date of Actual or not
Guarantee object Guarantee Guarantee Guarantee not belong to
announcement occurrence (date guarantee complete
name quota type Period related-party
about guarantee of agreement) amount implemen
guarantee
quota t
Total of the guarantee quota approved Total of the actual
0 0
to subsidiaries during the report guarantee amount for
45
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
period (B1) subsidiaries during the
report period (B2)
Balance of the actual
Total of the guarantee quota approved
guarantee for subsidiaries
to subsidiaries by the end of the report 0 0
by the end of the report
period (B3)
period (B4)
Guarantee between subsidiaries
Disclosure date of Whether
Whether or
related Actual date of Actual or not
Guarantee object Guarantee Guarantee Guarantee not belong to
announcement occurrence (date guarantee complete
name quota type Period related-party
about guarantee of agreement) amount implemen
guarantee
quota t
Total of the actual
Total of the guarantee quota approved
guarantee amount for
to subsidiaries during the report 0 0
subsidiaries during the
period (C1)
report period (C2)
Balance of the actual
Total of the guarantee quota approved
guarantee for subsidiaries
to subsidiaries by the end of the report 0 0
by the end of the report
period (C3)
period (C4)
Total of the Company’s guarantee amount（Total of above three major items）
Total of the actual
Total of the approved guarantee quota guarantee amount during
0 0
during the report period（A1+B1+C1） the report period
（A2+B2+C2）
Total of the approved guarantee quota 12500 Balance of the actual 11991
46
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
by the end of the report period guarantee by the end of the
（A3+B3+C3） report period（A4+B4+C4）
The proportion of Actual total guarantee amount (A4+B4+C4) in the
1.59%
Company’s net asset
Among :
The amount of guarantee for shareholders, actual controllers and their
0
related parties（D）
The amount of debt guarantee for the guaranteed objects whose
0
asset-liability ratio is more than 70% directly or indirectly（E）
Total amount of guarantee that exceeds 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
Explanation for undue guarantees that have happened warranty
liability or may take joint payback liabilities during the report period No
（if have）
Explanation for violating due process to provide external guarantee
No
（if have）
Specific explanation on adopting complex guarantee type
Illegal external guarantee
□Available Not available
There is no illegal guarantee situation during the report period.
(3) Entrusting others to manage cash assets
47
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Financial management entrustment
□Available Not available
There is no financial management entrustment during the report period.
Loan entrustment
□Available Not available
There is no loan entrustment during the report period.
(4) Other important contracts
□Available Not available
There are no other important contracts during the report period.
18. Other explanation of major issues
□Available Not available
There are no other major issues need to be explained during the report period.
19. Major issues of Company’s subsidiaries
□Available Not available
20. Social Responsibility
48
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Available □Not available
During the report period, considering the fulfillment of the Company’s social responsibility, please see 2015 Annual Social Responsibility Report
disclosed on www.cninfo.com.cn on 29th April 2016.
The listed company and its subsidiaries are whether or not to belong to the heavy pollution industry stipulated by the state environmental
protection department.
□Yes No □Not available
21. Related corporation bonds situations
Whether or not the Company has the corporation bonds issued in public, listed in the stock exchange, not due on the annual report’s authorized issue
date or failed to pay in full on the due date.
No
49
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
(1) Changes in shares
Unit: share
Amount before this change Change (+, -) Amount after this change
Transfer
Percentage Allot Distribute other Percentage
Amount new capital to others Sub total Amount
% bonus share %
share share
capital
1、Unrestricted shares 685,464,000 100% 685,464,000 100%
(1)、A shares 453,460,800 66.15% 453,460,800 66.15%
(2)、B shares 232,003,200 33.85% 232,003,200 33.85%
2、Total shares 685,464,000 100% 685,464,000 100%
Cause of share change
□Available Not available
Approval of share change
□Available Not available
Transfer of changed shares
50
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
□Available Not available
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the
latest period, net asset per share belonging to the Company’s common shareholders, etc.
□Available Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available Not available
(2) Changes in restricted shares
□Available Not available
2. Securities issuance and listing situation
(1) Securities issuance (exclude preferred share) during report period
□Available Not available
(2) Explanation of change in Company’s total shares and shareholding structure and change in Company’s assets and liability structure
51
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
□Available Not available
(3) Current employee shares
□Available Not available
3. Situation for shareholders and the actual controllers
(1) The number of shareholders of the Company and the shareholdings
Unit：share
Total number of preferred
Total number of Total number of preferred
shareholder recovering
shareholders by the end of shareholder recovering
Total shareholders in voting power by the end of
36,963 last month before the 36502 voting power by the end 0 0
the report period last month before the
disclosure day of the ofreport period (if have)
disclosure day of the annual
annual report (see note 8)
report (if have) (see note 8)
Shareholders holding more than 5% or the top 10 shareholders holding situation
Number Pledged or frozen
Changes
Name of Percentag Shares held until the during the of Number of
Character of shareholders e restricte unrestricted
Shareholders end of the report period report Share status Amount
(%) d shares
period
shares
YANTAI
Domestic non-state-owned 345,473,85
CHANGYU GROUP 50.4% 345,473,856 0 0 0
legal person 6
CO. LTD.
GAOLING Foreign legal person
3.11% 21,300,919 -2,876,078 0 21,300,919 0
FUND,L.P.
52
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CHINA State-owned legal person
SECURITIES 2.33% 15,997,455 15,997,455 0 15,997,455 0
FINANCE CORP
BBH BOS S/A
FIDELITY FD - Foreign legal person 2.27% 15,576,126 -530,200 0 15,576,126 0
CHINA FOCUS FD
GREENWOODS
CHINA ALPHA Foreign legal person 1.26% 8,617,471 8,617,471 0 8,617,471 0
MASTER FUND
GOLDEN CHINA
Foreign legal person 1.08% 7,389,916 5,415,971 0 7,389,916 0
MASTER FUND
NORGES BANK Foreign legal person 0.83% 5,698,452 1,187,206 0 5,698,452 0
CENTRAL HUIJIN
ASSET
State-owned legal person 0.69% 4,761,200 4,761,200 0 4,761,200 0
MANAGEMENT
LTD.
GUOTAI JUNAN
SECURITIES
Foreign legal person 0.68% 4,669,572 1,188,656 0 4,669,572 0
(HONGKONG)
LIMITED
FUGUO REFORM
POWER MIXED
Domestic non-state-owned
SECURITIES 0.58% 4,000,000 4,000,000 0 4,000,000 0
legal person
INVESTMENT
FUNDS
Strategic investors or legal result of the placement of new
No
shares to become a top 10 shareholders(if have)(see note 3)
53
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no
The explanation for the associated relationship and
associated relationship or accordant action relationship with the other 9 listed shareholders,
accordant action
and the relationship among the other shareholders is unknown.
The top 10 shareholders with unrestricted shares
Number of unrestricted Type of share
Name of Shareholders shares held until the end of
Type of share Amount
the year
YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A 345,473,856
GAOLING FUND,L.P. 21,300,919 B 21,300,919
CHINA SECURITIES FINANCE CORP 15,997,455 A 15,997,455
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,576,126 B 15,576,126
GREENWOODS CHINA ALPHA MASTER FUND 8,617,471 B 8,617,471
GOLDEN CHINA MASTER FUND 7,389,916 B 7,389,916
NORGES BANK 5,698,452 B 5,698,452
CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A 4,761,200
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED 4,669,572 B 4,669,572
FUGUO REFORM POWER MIXED SECURITIES INVESTMENT FUNDS 4,000,000 A 4,000,000
The explanation for the associated relationship and accordant action of the top 10 Among the top 10 shareholders, Yantai Changyu Group Company
shareholders with unrestricted shares, the the associated relationship and Limited has no associated relationship or accordant action
accordant action between the top 10 shareholders with unrestricted shares and the relationship with the other 9 listed shareholders, and the relationship
top 10 shareholders among the other shareholders is unknown.
Explanation for the top 10 shareholders who involved in financing activities and The top 10 shareholders do not involve in financing activities and
stock trading business stock trade business.
Whether or not the Company’s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the
report period
□Yes No
54
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
There is no agreed repurchase trading taken by the Company’s top 10 common shareholders and shareholders with unrestricted shares during the
report period.
(2) Situation for the controlling shareholders of the Company
Property of holding shareholders
Type of holding shareholders: Legal representative
Legal Establishment Organization
Name of controlling shareholder Main business
representative date code
Production and distribution of wine,
healthy liquor, distilled liquor and
non-alcohol beverages, planting of
Yantai Changyu Group Co. Ltd. Sun Liqiang 1997.04.27 26564582－4
agricultural products and export
business under the scope of
permission.
Equity situation for the other domestic listed
companies controlled or shared by the
No.
controlling shareholders during the report
period
Changes in the controlling shareholder during the report period
□Available Not available
There are no changes in the controlling shareholder during the report period.
55
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
(3) Situation for the actual controllers of the Company
Property of actual controllers: domestic other institutions; foreign other institutions
Type of actual controllers: Legal representative
Name of actual Legal Establishment Organization
Main business
controllers representative date code
Under state permission, property investment, tenancy of machine and facility,
Yantai Yuhua Investment wholesale and retail of construction material, chemical products (chemical
Jiang Hua 2004.10.28 76779294－7
& Development Co. Ltd hazard products excluded), hardware and electronical products, grape
plantation.
Directly or indirectly conduct the production and distribution of food
ILLVA Saronno Holding Philippe LE products (alcoholic products included) as well as industrial, commercial,
1984.07.25 －
Spa HOUEROU financial and service activities of any other kinds through joint-stock
companies and organizations
International Finance Corporation is one of the members of World Bank,
mainly dedicated to investment in private sectors of developing countries
International Finance while providing technical support and consultation service. The corporation
Corporation Cai Jinyong 1956.07.25 － is a multilateral financial institution that ranks first in the world in terms of
providing capital stock and loans to developing countries. Its purpose is to
promote sustainable investments of private sectors of developing countries in
order to alleviate poverty and improve people’s life.
Operating management of state-owned property right (stock right) authorized
by State-owned Assets Supervision and Administration Commission of
Yantai Guofeng Yantai Municipal Government; Financing, investment and operating
Investment Holdings Co., Chen Dianxin 2009.02.12 00426068-6 management of government projects, such as strategic investment and
Ltd industrial investment and so on; Capital operation (including acquisition,
reintegration and transfer, etc) of state-owned property right and state-owned
stock right within the scope of authorization; Venture capital investment
56
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
business; Agency of venture capital investment business of other venture
investment enterprises or individuals; Participation in the establishment of
venture capital investment enterprises and venture capital investment
management consultant institutions; Investment and financing service
business; Investment and financing consultant business; Other business
authorized by State-owned Assets Supervision and Administration
Commission of Yantai Municipal Government.(Projects need to be
authorized in accordance with the law could carry out business activities only
after the approval of relevant departments )
Equity situation for the
other domestic listed
companies controlled by No
the actual controller
during the report period
Changes of the actual controllers during the report period
□Available Not available
There are no changes in actual controllers during the report period.
57
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Introduction for property right and control relations between the Company and its actual
controllers
Yantai Guofeng Investment
Illva Saronno Holding Spa Holdings Co., Ltd
Actual controller controls the Company through a trust or other asset management ways
□Available Not available
(4) Other institutional shareholders holding more than 10% shares
□Available Not available
(5) Shares reduction situations of holding shareholders, actual controllers, restructuring
side and other commitment subjects
□Available Not available
58
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VII. Related Situation of Preferred Shares
□Available Not available
There are no preferred shares during the report period.
59
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VIII. Situation for Directors, Supervisors, Senior Management and Staffs
1. Changes in shareholdings of directors, supervisors and senior management
Shares Increased
Decreased
Beginning Ending held at the shares Other Shares held at
shares
Name Post Status Gender Age date of the date of the beginning during changes of the end of the
during the
post post of the the shares held period
period
period period
Chairman to the present
Sun Liqiang M 68 2013.05.14. 2016.05.13 0 0 0 0 0
Board of Directors incumbent
Vice-chairman to
Zhou the Board of present
M 51 2013.05.14. 2016.05.13 0 0 0 0 0
Hongjiang Directors and incumbent
general manager
Director and present
Leng Bin vice-general M 53 2013.05.14. 2016.05.13 0 0 0 0 0
manager incumbent
Director,
Vice-general present
Qu Weimin manager and M 58 2013.05.14. 2016.05.13 0 0 0 0 0
Secretary to the incumbent
Board of Directors
present
Chen Jizong Director M 40 2013.05.14. 2016.05.13 0 0 0 0 0
incumbent
Augusto present
Director M 75 2013.05.14. 2016.05.13 0 0 0 0 0
Reina incumbent
Aldino Director present M 63 2013.05.14. 2016.05.13 0 0 0 0 0
Marzorati
60
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
incumbent
Antonio present
Director M 77 2013.05.14. 2016.05.13 0 0 0 0 0
Appignani incumbent
present
Dai Hui Director F 50 2014.05.23 2016.05.13 0
incumbent
Independent present
Xiao Wei M 55 2013.05.14. 2016.05.13 0 0 0 0
director incumbent
Wang Independent present
M 51 2014.05.23 2016.05.13 0
Zhuquan director incumbent
Present
Wang Shigang Independent M 50 2013.05.14. 2016.05.13 0 0 0 0
director incumbent
Chairman for the present
Kong Board of M 43 2013.05.14. 2016.05.13 0 0 0 0 0
Qingkun incumbent
Supervisors
present
Zhang Lanlan Supervisor F 46 2013.05.14. 2016.05.13 0 0 0 0 0
incumbent
present
Guo Ying Supervisor F 41 2013.05.14. 2016.05.13 0 0 0 0 0
incumbent
Vice-general present
Yang Ming M 57 0 0 0 0 0
manager incumbent
present
Li Jiming Chief engineer M 49 0 0 0 0 0
incumbent
Vice-general present
Jiang Hua M 52 0 0 0 0 0
manager incumbent
Vice-general present
Sun Jian M 49 0 0 0 0 0
manager incumbent
present
Jiang Jianxun Finance manager M 49 0 0 0 0 0
incumbent
61
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
2. Changes in the Company’s directors, supervisors and senior management
Name Position Type Date Reason
- - Leave post owing to -
expiration of the term of
office
3. Situation for work experience
The professional background, main work experiences and present positions of the Company’s
directors, supervisors and senior management
The main work experiences of the Company’s directors, supervisors and senior management
in the recent 5 years
(1) Members of Board of Directors
Mr. Sun Liqiang, a college graduate and senior economist, was the representative of 10th and
11th National People’s Congress. Now he is the Party Secretary, Chairman and General
Manager of Changyu Group. He began serving as chairman of the Company on September
18th , 1997 and has held the position ever since.
Mr. Zhou Hongjiang, a doctoral graduate and senior engineer, now is the vice chairman of
Changyu Group ,and the representative of 12th National People’s Congress. He began serving
as general manager of the Company on December 28th , 2001, Director, Vice Chairman and
concurrently as General Manager of the Company on May 20th , 2002, he has held the
position ever since.
Mr. Leng Bin, a postgraduate and senior accountant and now is the Director of Changyu
Group. He began serving as a director of the Company on June 15th, 2000 and held the
position ever since.
Mr. Qu Weimin, a bachelor of engineering and senior economist, has been serving as director,
vice General Manager and concurrently as Secretary to the board of directors of the Company
since September 18th , 1997.
Mr. Chen Jizong, a university graduate, the qualifications of statistician and accountant, now
is the union director of property management department of SASAC Yantai and Director of
Changyu Group. He has been director of the Company since May 13th 2010.
Mr. Augusto Reina is serving as chief executive officer of several companies including Illva
Saronno Holding SpA and Illva Saronno Investment SRL, member of the board of directors
of Barberini Spa, director of Federvini (Italian Alcohols Production and Export Association),
director of Istituto Del Liquore (Wine Research Institute), director of Assovini (Sicily
Viniculture and Wine Production Association) and director of Changyu Group. He has been
director of the Company since April 27th, 2006.
Mr. Aldino Marzorati, a university graduate, is the General Manager of Illva Saronno
Holding SpA and director of the board of directors of some branches under the group
company and the director of Changyu Group. He has been director of the Company since
April 27th, 2006.
Mr. Antonio Appignani, a university graduate, is vice chairman of Italian Business
Consultation Committee, chief of Professional Ethics Committee, teacher of vocational
training course of Industrial and Commercial Consultation Committee, member of Economic
and Commercial Committee of the public university “G. D Annunzio” and concurrently
62
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
serving as member of the board of directors of different companies and member of the board
of directors of several companies under Illva Group and the director of Changyu Group. He
has been director of the Company since April 27th, 2006.
Mr. Dai Hui, born in 1965, MBA, former project manager of Government Transfer Loan
Department in China FOTIC (staying in Beijing), former manager assistant of High Net
Worth Center in First Pacific Bank (staying in Hongkong), representative of Rabobank
Beijing Office (staying in Beijing) and chief representative of Rabobank Beijing Office
(staying in Beijing), is now consultant of IFC, director of Changyu Group Company and
director of Listed Company.
Mr. Xiao Wei, a postgraduate and a lawyer, now is the partner of Jun He Law Office. He has
been serving as independent director of the Company since September 1st, 2010.
Mr. Wang Zhuquan, doctor of management (accountancy), first batch of national accounting
academic leading personals of Financial Department, the entrant of accountant master
cultivation project of Financial Department, Government Special Allowance expert, acted as
independent director from 13th May 2010 to 12th May 2013. Now he is the professor and the
doctoral supervisors of the Ocean University of China as well as independent director of
some listed companies which could be exemplified as Qingdao DoubleStar Co., Ltd. He acts
as the independent director of the Company again from 23rd May 2014.
Mr. Wang Shigang, MBA and qualification of China Certified Public Accountant, now is the
board chairman of Shandong Tianhengxin Construction Cost Consultion Co. Ltd., He
previously served as independent director of the Company. He acts as the independent
director again from 14th May 2013.
(2) Members of board of supervisors
Mr. Kong Qingkun, MBA and economist, used to be the section member of production
department in the healthy liquor branch; the clerk and vice manager of general manager
office, now he is the manager of general manager office.
Ms. Zhang Lanlan, a university graduate and economist, used to be vice-manager of
import/export company, manager of import department; she is manager of board of directors
office now.
Ms. Guo Ying, a university graduate and senior accountant, used to be the member of
financial audit department of Yantai Yiqing Industry Company; senior staff of operating
supervision department of SASAC Yantai, senior staff and vice director of directors &
supervisor office; now she is vice director of directors & supervisor office of SASAC Yantai.
(3) Other senior managers
Mr. Yang Ming, a university graduate and applied researcher, has been serving as Vice
General Manager of the Company since August 12th, 1998.
Mr. Li Jiming, a doctor and applied researcher, has been serving as Chief Engineer of the
Company since September 14th, 2001.
Mr. Jiang Hua, a postgraduate and senior engineer has been serving as Vice General Manager
of the Company since September 14th, 2001.
Mr. Sun Jian, an MBA and economist, has been serving as Vice General Manager of the
Company since March 22nd, 2006.
Mr. Jiang Jianxun, an MBA and accredited accountant, has been serving as Financial
Manager of the Company since May 20th, 2002.
63
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Post in the shareholder’s company
Available □Not available
Paid by
Beginning date Ending date of
Name Shareholder’s Company Post shareholder’s
of the post the post
company or not
Chairman and
Sun Liqiang Yantai Changyu Group Co. Ltd. general manager 2013.10.08 2017.10.07 No
Zhou Hongjiang Yantai Changyu Group Co. Ltd. Vice chairman 2013.10.08 2017.10.07 No
Li Jiming Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Sun Jian Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Chen Jizong Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Augusto Reina Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Aldino Marzorati Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Antonio Appignani Yantai Changyu Group Co. Ltd. Director 2013.10.08 2017.10.07 No
Dai Hui Yantai Changyu Group Co. Ltd. Director 2014.03.06 2017.10.07 No
Explanation for the post in the
No.
shareholder’s company
Post at other companies
√ Available □ Not Available
Beginning Ending date of Paid by other
Name Other’s Company Post at other company
date of the the post company or not
64
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
post
Yantai Changyu Zhongya
Director and
Leng Bin Medicine & Healthy Liquor Co., 2012.09.10 No
legal representative
Ltd
Explanation for the post in the
No.
shareholder’s company
Disciplinary actions taken by securities regulators in recent 3 years to the Company’s directors, supervisors and senior management both on the
job and left during the report period
□Available Not available
4. Salary of directors, supervisors and senior management
Decision-making process, the basis for determining, the actual payments of directors, supervisors and senior management
The salary for the independent directors is paid according to the resolution of shareholders’ meeting. The salary for the chairman, directors with
administration duty, supervisors, managers and other senior management should be paid on basis of the evaluation result according to the
Proposal on Assessment Methods of the Company’s Senior Officers’ Performance from 2014 to 2017 which was passed during the Board of
Directors’ meeting.
Salary of directors, supervisors and senior management during the report period
Unit: CNY’0000
Whether get
Total reward from
reward from
Name Post Gender Age Status the company
related parties of
before tax
the company
Chairman to the Board of M
Sun Liqiang 68 present incumbent 135 No
Directors
Vice-chairman to the Board of M
Zhou Hongjiang 51 present incumbent 135 No
Directors and general manager
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Director and vice-general M
Leng Bin 53 present incumbent 95 No
manager
Director, Vice-general manager
Qu Weimin and Secretary to the Board of M 58 present incumbent 94 No
Directors
Chen Jizong Director M 40 present incumbent 0 No
Augusto Reina Director M 75 present incumbent 0 No
Aldino Marzorati Director M 63 present incumbent 0 No
Antonio Appignani Director M 77 present incumbent 0 No
Dai Hui Director F 50 present incumbent 0 No
Xiao Wei Independent Director M 55 present incumbent 5 No
Wang Zhuquan Independent Director M 51 present incumbent 5 No
Wang Shigang Independent Director M 50 present incumbent 5 No
Chairman for the Board of M
Kong Qingkun 43 present incumbent 66 No
supervisors
Zhang Lanlan supervisor F 46 present incumbent 19 No
Guo Ying supervisor F 41 present incumbent 0 No
Yang Ming Vice-general manager M 57 present incumbent 88 No
Li Jiming Chief Engineer M 49 present incumbent 85 No
Jiang Hua Vice-general manager M 52 present incumbent 95 No
Sun Jian Vice-general manager M 49 present incumbent 83 No
Jiang Jianxun Finance manager M 49 present incumbent 66 No
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Total - - - - 976 -
The awarded equity incentives for the directors, supervisors and senior management of the Company during the report period
□Available Not available
5. Staff of the Company
(1) Staff number, specialty constitution and education degree
Incumbent staff number of parent company (people) 1,845
Incumbent staff number of major subsidiary companies (people) 3,155
Total incumbent staff (people) 5,000
Total staff getting paid in current period (people) 5,000
Retired staff number whose expenses are undertaken by parent 0
company or subsidiary companies (people)
Specialty constitution
Category Number of people (people)
Production staff 1,434
Sales staff 2,563
Technical staff 194
Financial staff 190
Administrative staff 619
Total 5,000
Education degree
Category Number (People)
Bachelor and above 1,324
Junior College 2,299
Technical secondary school 791
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Senior high school and below 586
Total 5,000
(2) Remuneration policy
The Company builds and improves the remuneration and welfare system, including salary system, incentive mechanism, social security and
health insurance and so on, to make sure that all staff could be insured. In accordance with the law, the Company buys social old-age insurance,
medical insurance, occupational injury insurance, unemployment insurance and maternity insurance, and pay housing fund for staff. Based on
the principle of “distribution according to work, equal pay for equal work”, the Company pay the staff’s remuneration timely. With the increase
of the Company’s profitability, the Company steadily improves the staff’s remuneration and welfare, and provides the competitive salary income
and development space of equal opportunity for staff.
(3) Training plan
In order to further improve the employees’ comprehensive quality and professional skill, the 2016 training plan for the Company’s major
employee is shown as follows:
① Senior and Middle-level Managers
Firstly, it is commonality training. Training topics related with industrial development, business orientation and management philosophy would
be chosen to open the senior and middle-level managers’ minds, to promote operation philosophy and also to improve scientific decision-making
capacity and operation capacity. The Company plans to employ professional lecturers to give lectures in the company or through remote internet
videos. There will be four topics arranged for senior and middle-level managers within the year, one topic in each quarter and one to two days
for each topic.
Secondly, it is professional training. Based on personnel work, senior and middle-level managers would be organized in batches to attend
high-end forum and summit of entrepreneur and to visit domestic and foreign successful enterprises for studying. Middle-level managers would
be encouraged to take participation in MBA and other master degree. The professional managers related with finance, equipment, safety,
technology quality and other professional fields would be organized to attend vocational qualification test to get vocational qualification
certificate. Senior and middle-level managers would attend special training organized by the Company’s professional management department
for safety, technology, equipment, finance and tourism and so on, no less than twice a year.
② Section Chief and Ordinary Staff Members
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Firstly, it is commonality training. Courses would be arranged in order to improve capability of management, innovation and execution. In
addition, professional lecturers or college teachers would be employed to give lectures in the company, twice a year and one day for each time.
They would attend commonality trainings about enterprise culture, rules and regulation, and various alcohol product knowledge which should be
known and grasped.
Secondly, it is professional training. Professional and responsible senior managers would choose one book for their subordinate administrative
personnel to study on their own. At the end of the year these administrative personnel should propose suggestion for the company’s development
on the basis of their own work. Eligible general administrative personnel would be encouraged to take participation in MBA and other master
degree. The professional administrative personnel related with finance, equipment, safety, technology quality and other professional fields would
be organized to attend vocational qualification test to get vocational qualification certificate. Based on their undertaking work, they would attend
special training organized by the Company’s professional management department no less than twice a year, which involve safety, technology,
equipment, finance, tourism and comprehensive management and other special projects.
③ Marketing Personnel
Firstly, it is commonality training. They would study training materials related with the Company’s management system, product knowledge and
sales responsibility system.
Secondly, it is professional training. For personnel whose level is or above manager assistant in the city marketing management company, the
Company would invite professional lecturers to the company or by means of remote internet video to give lectures about successful cases and
economic situation research in current domestic and foreign wine industry, once a quarter and one day for each time. For city marketing manager,
the Company would strengthen their training for marketing skills as well as execution ability of the company’s sales policy. The Company
would invite its professional management cadre or employ professional lecturers to take closed training for these managers, once at the
beginning of each month and one day for each time. For business directors and other personnel, every marketing management company should
be based on the local business and adopt training methods of employing professional lecturers combined with going outside for visit and learning
so as to make all marketing personnel within its jurisdiction attend training about successful marketing cases and marketing management
philosophy. The frequency of this training is once a quarter and one day for each time.
(4) Labor outsourcing
□Available Not available
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IX. Corporate Governance
1. Current Corporate Governance Situation of the Company
The Company has, according to relevant national laws and rules including the Company Law
of the People’s Republic of China, Securities Law of the People’s Republic of China,
Guidelines on Corporate Governance of Listed Companies, Listing Guidelines at Shenzhen
Stock Exchange and also other laws and rules issued by CSRC and Shenzhen Stock
Exchange, and combining the own actual situation, established Articles of Associations and
other internal governance regulations, constantly improved its legal entity structure and
internal management rules, legally conducted its activities and strengthened the information
disclosure. The Company’s governance structure is in accord with requirements of relevant
regulatory documents on listing company’s governance issued by CSRC.
(1)、About shareholders and shareholders’ meeting
The Company has already set up the Deliberation Rules of Shareholders’ Meeting, and
convened the shareholders’ meetings in strict accordance with requirements of standard
opinion of shareholders’ meeting, made the great effort to provide convenient conditions for
more shareholders to participate the shareholders’ meeting, and ensured all shareholders to
enjoy same equity and well exercised their rights. The Company drew great attention to the
communication and exchange with shareholders, actively responded the shareholders’
inquiry and questions, and widely listened to the suggestions and comments from
shareholders.
(2)、About the Company and holding shareholder
The Company has independent power on business and self-management, and also be
independent of its holding shareholder on business, staff, assets, organization and finance.
The Board of Directors, Board of Supervisors, management team and also internal
organizations operated independently in the Company. The holding shareholder of the
Company could regulate its activities, no other behavior was found that surpassed the
shareholders’ meeting to directly or indirectly interfere with the decision-making and
business activities of the Company, or occupied any assets of the Company which damaged
the Company’s and medium & small shareholders’ interests.
(3)、About the director and board of directors
The Company strictly appoints all directors in light of Company Law and Articles of
Associations. The qualifications of all directors are in line with the requirements of laws and
regulations. In accordance with the requirements of Corporate Governance Guidelines, the
Company has already carried out the cumulative voting system. At present, the Company has
three independent directors accounting for one fourth of all directors, and the number and
composition of board of directors was basically in accord with requirements of regulations
and also Articles and Associations. All directors of the Company could work in the light of
regulations including Rules of Board of Directors’ Procedure and Working Rules for
Independent Directors, punctually attended board of directors’ and shareholders’ meetings,
actively took part in relevant knowledge training, knew very well about the laws and
regulations concerned, had a deep knowledge and long experience of practitioners, and
70
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
performed their duties according to the law and regulations. The Board of Directors
convened the meetings in accordance with related rules and regulations.
(4)、About supervisor and board of supervisors
The Company strictly elected all supervisors in light of Company Laws and Articles of
Associations. At present, board of supervisors has three people among which one supervisor
is representative for staff, the number and composition of board of supervisor was in accord
with requirements of regulations and rules. All supervisors of the Company could follow the
requirement of Rules of Board of Supervisors’ Procedure, insist the principle of
responsibility to all shareholders, seriously perform their duties, effectively supervise and
present their independent opinion on important issues, interrelated deals, financial status, the
duty performance of directors and managers of the Company.
(5)、 About performance evaluation and incentive system
The engagement of managers was open and transparent, and accorded with laws and
regulations. The Company has established and gradually improved the performance
evaluation standard and formed efficient incentive system, so as to ensure the salary of staff
to be linked with job performance.
(6)、 About the party with relevant benefit
The Company could fully respect and safeguard the legal rights of the party with relevant
benefit, cooperate actively with the stakeholders, jointly drive the Company to develop
continually and stably, pay great attention to the issues such as local environmental
protection and public utilities etc., and assume full responsibilities for the social
responsibility.
(7)、 About the information disclosure and transparency
The Company has appointed the secretary to Board of Directors to be responsible for
investor relation management including information disclosure, investor relations
management and reception of shareholders’ visit and consultation. The Company has also
assigned China Securities Newspaper, Securities Times, Honkong Commercial Daily and
web site http://www.cninfo.com.cn/ to disclose information, punctually, accurately and truly
disclosed any information in the light of requirement of relevant laws and rules, and also
ensured all shareholders to have same opportunity to acquire any information.
In order to further perfect the Company’s governance system, during the report period, the
Company formulates Evaluation and Management Methods of Self-supporting Vineyards in
2015, Management Methods of Self-supporting Bases in Yantai, Changyu Company
Examination and Evaluation Methods of Contractual Base in 2015, Management Methods of
Overseas Enterprises, Evaluation Methods of SAP operating maintenance staff in
information management department, Opinions of Strengthening the construction of
Provincial and City-level Manager Team, and Opinions of Currently Strengthening Human
Resource Management, etc. In addition, the Company also modify and improve some
management systems, such as Management Methods of Labor Contract and Opinions of Staff
Training at All Levels in Both Production And Organ Systems, etc.
Whether or not there is significant variance between the Company’s actual situation of
corporate governance and the normative documents about listed company governance issued
by China Securities Regulatory Commission.
□Yes No
71
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
There is no significant variance between the Company’s actual situation of corporate
governance and the normative documents about listed company governance issued by China
Securities Regulatory Commission.
2. Relative to the controlling shareholder, independence of the Company on business,
personnel, assets, organization and finance
(1) 、 Personnel Arrangement: the Company’s general manager, vice general managers and
other senior officers, all of whom were paid by the Company did not hold any post in the
controlling parties. The Company was entirely independent in personnel arrangement,
conclusion and adjustment of labor contracts thanks to its sound and independent system for
labor, personal and salary management.
(2) 、 Assets: Tangible assets and Intangible assets including trademark, industrial property
right and non-patent technologies were all clearly divided between the Company and the
controlling shareholder, and all legal formalities were completed. The Company being a legal
independent entity consistently conducted business activities legally and provided no
guarantee in any form with its assets for its shareholders or individuals’ liabilities or any
other legal persons or natural persons. The Company has already transferred free the
trademarks to the Company including “黄金冰谷”, “爱斐堡”, “爱菲堡”, “爱斐” and “AFIP”,
etc. However, due to some issues from the past, the Company permitted to use “Changyu” etc
the intangible assets such as part of trademark ownership and patent still held by the
controlling shareholders.
(3)、Finance: The Company has independent finance department, chief account and financial
staff, and also complete, independent and standardized accounting system. The Company has
also established its own bank accounts, duly and legally paying taxes, workers insurance fund.
All financial individuals do not hold any concurrent posts in associated companies and are
able to make financial decisions independently. The Company has its own audit department,
which is especially responsible for the internal audit work of the Company.
(4)、Offices: The Company has set up a sound organizational framework, in which the Board
of Directors and Board of Supervisors operate independently, no superior and subordinate
relationship exists between the functional departments of the controlling shareholder. The
Company has its own independent production & business offices, all functional departments
are independent to exercise their powers and carry out the production and business activities
independently.
(5) 、 Operations: the operations of the Company are independent of the controlling
shareholder, the Company owns itself completely independent systems covering research and
development, accounting, workforce and labor, quality control, raw materials purchase,
production and sales, and is possessed of self-run capabilities, and has neither relationship
with the controlling shareholder in terms of supply and sales by proxy nor competition with
the other.
Progress of the Company’s special activities in terms of corporate governance as well as
formulation and implementation of inside information source registration and management
rules
In order to strengthen management of inside information source and prevent occurrence of
backstage deals, the Company’s 5th session of Board of Directors’ 10th meeting deliberated
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
and passed the Inside Information Source Registration and Management Rule on April 18,
2012. The founding of the system standardized the approval process of insid e information
reporting, defined the scope of inside information source, and set up a prevention and
punishment mechanism of inside information. During the report period, the Company has
strictly managed staffs who contact with inside information Source against material inside
information of the sensitive disclosure etc such as reporting information insiders’ registration,
and informing timely to supervisory department. During the report period, there were no in
the Company the information insiders’ transactions of the Company’s shares by taking
advantage of the sensitive inside information that affects the Company’s share price before it
was disclosed and no supervisory departments’ punishment records, either.
3. Situation for Horizontal Competition
□Available Not available
4. Information for the shareholders’ meeting and temporary shareholders’ meeting held
during the report period
(1) Information for the shareholders’ meeting during the report period
Participation Convening Disclosure
Session Meeting type Disclosure Index
ratio of investors date date
Notice of 2014
Annual Annual http://www.cninfo.com.
Shareholders’ shareholders’ 62.32% 2015.05.22 2015.05.23 cn/finalpage/2015-05-23
Meeting meeting /1201050607.PDF
Resolution
(2) Request for convening temporary shareholders’ meeting by priority shareholders
owing recovered voting right
□Available Not available
5. Performance of independent directors during the report period
(1) Attendance of independent directors for the board of directors and the shareholders’
meeting
Attendance of independent directors for the board of directors
Whether or
not to attend
Required
Personal Communication Authorized the meetings
Name attendance Absence
attendance attendance attendance personally for
time
successive
twice
73
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Wang
4 3 1 0 0 No.
Zhuquan
Xiao Wei 4 1 1 2 0 No.
Wang
4 3 1 0 0 No.
Shigang
Attendance time of
independent directors for
1
the shareholders’
meeting
Explanation for not personally attending the Board of Directors’ meetings for successive
twice
No
(2) Any objections for the Company’s projects from the independent directors
Whether or not the independent directors raised any objections for the Company’s projects.
□Yes No
During the report period, the independent directors did not raise any objections for the
Company’s projects.
(3) Other explanations on independent directors’ performance
The independent directors’ propositions are accepted by the Company or not
Yes □No
Explanation on acceptance or refusal of the independent directors’ propositions
Independent directors propose suggestions on enhancing the feasibility study of investment
projects. The Company has organized many times both domestic and foreign experts to make
study to major investment projects repeatedly and to demonstrate many times, laying
foundation for board of directors’ scientific decision.
6. Performance of the special committees under the Board of Directors during the
report period
(1) Summary report of the Board of Directors’ Audit Committee
1 On March 23th , 2015, after the certified public accountants responsible for annual audits
had introduced their preliminary opinions, the independent directors on behalf of the Audit
Committee communicated with them and made written comments which read that “we
communicated in detail with the certified public accountants responsible for auditing of the
Company’s 2014 Annual Report who expounded the main standards, main emphasis audited
field, the problems and the matters necessary to adjust that were found during the auditing.
We’ve noticed that the Company has adjusted the matters as the accountants suggested. On
the basis of our communication with the accountants, the production and operation results
that the Company’s management reported to us as well as the progress of important events,
we believe that we have no objection to the Company’s 2014 Annual Financial Statement
preliminarily examined by Deloitte Hua Yong Certified Public Accounts Co., Ltd. and the
preliminary audit opinions of that Services.”
2 On 26rd April 2015, the Board of Directors’ Audit Committee deliberated and passed 2014
Annual Auditing Report, Proposal on 2014 Annual Profit Distribution, Proposal on
74
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Appointment for Certified Public Accountants Firm, 2014 Annual Self Assessment Report on
the Company's Internal Control and 2015 Annual Internal Audit Plan issued by Deloitte Hua
Yong Certified Public Accounts Co., Ltd.
All of committee members unanimously agree to submit the above proposals to the
Company’s 6th Session Board of Directors’ 4th Meeting for deliberation.
The meeting reached the following consensus:
(A) The clean-opinion auditing report on the Company’s 2014 Annual Financial Statement
issued by Deloitte Hua Yong Certified Public Accounts Co., Ltd reflects the Company’s
financial condition, operating results and cash flow truly, objectively and correctly.
(B) The profit distribution scheme that the Company formulated is relatively acceptable,
taking the shareholders’ interest into account while paying attention to the Company’s
long-term development.
(C) Considering the strict maintenance of objective and fair standpoint as well as the high
audit quality and reasonable arrangement for audit progress during the process of the
Company’s 2014 annual financial audit and internal control audit taken by Deloitte Hua
Yong Certified Public Accounts Co., Ltd, it is proposed that the Company will reappoint
Deloitte Hua Yong Certified Public Accounts Co., Ltd as the 2015 annual auditor of the
Company. The employment period is one year and the audit will be taken from two aspects
shown as follows.
On one hand, Deloitte will take the audit of 2015 annual financial report and issue a Financial
Audit Report. On the other hand, Deloitte will take the audit of 2015 annual internal control
audit and issue an Internal Control Audit Report.
The annual auditing fee for the above parts are CNY 1.95million, including travel expense
and all service charges.
(D) The Company’s 2014Annual Self Assessment Report on the Company's Internal Control
has truly and objectively mirrored out the present standing of the Company’s internal control
and can basically ensure the effective implementation of its policies and realization of its
strategic goals.
(E) The Company’s 2015 Annual Internal Audit Plan is comparatively perfect and practicable,
based on which the Company’s Audit Department will conduct the 2015 annual internal
audit.
3 On 26th August 2015, the Board of Directors’ Audit Committee deliberated and passed
2015 Semiannual Report and 2015 Semiannual Profit Distribution. The meeting reached the
following consensus:
The Company’s 2015 Semiannual Financial Statements reflected the Company’s financial
condition, operating results and cash flow truly, objectively and correctly.
As the Company just realized 2014 Annual Profit Distribution Scheme in middle July, we
propose neither to distribute profits for the first half of 2015 nor to increase the Company’s
capital stock with accumulated public fund. The net profit made in the first half of this year
will be reserved and distributed at the end of the year. Our Auditing Committee considers the
suggestion to be reasonable.
All of Committee members unanimously agree to submit the above proposals to the
Company’s 6th Session Board of Directors’ 10th Meeting for deliberation.
(2) Summary report of the Board of Directors’ Emolument Committee
The Board of Directors’ Emolument Committee is responsible for assessment of the
economic responsibilities of the directors and the senior managers who receive salaries from
75
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
the Company and examination of the salary policy and scheme designed for the Company’s
directors and senior managers.
1 Propose on Company’s 2014 Annual Senior Executive’s Performance Assessment Results
was deliberated and passed by the Board of Directors’ Emolument Committee on 26th April
2015, who thought that this document was in compliance with Performance Assessment
Methods for Company’s Senior Executive from 2014 to 2017 approved by the Company’s 6th
Session Board of Directors’ 4th Meeting.
All committee members unanimously agree to submit the above proposals to the Company’s
6th Session Board of Directors’ 8th Meeting for deliberation.
2During the report period, the Board of Directors’ Emolument Committee also examined the
2014 annual payroll records of the directors and the senior managers who receive salaries
from the Company. The committee believes that the Company’s directors, supervisors and
senior managers got paid completely in line with the processes of the Company’s economic
responsibility assessment system and the salaries the Company made public were in
conformity with the actually paid amount.
7. The work of the Board of Supervisors
During the report period, whether the board of supervisors found any existence of risk for the
Company during their oversight activities.
□Yes No
During the report period, the board of supervisors has no objection during their oversight
activities.
8. Performance Evaluation and Incentive to Senior Management
The Company has already established a sound system for evaluation of achievement of senior
management and the related incentive system which linked the reward with the Company’s
benefit and personal achievement. The Emolument Committee under Board of Directors
assumed the responsibility of stipulating the policy and appraising the scheme for salaries and
rewards. Based on the Company’s annual production and business goals, this committee
examined senior personals and also their responsible subsidiaries or departments according to
their management achievement and index, and took these as a criteria of awards or penalties.
During the report period, because of not finishing the annual business plan deliberated and
passed in the Board of Directors’ meeting at the beginning of the year, the total salaries and
rewards of the senior management are basically equal to that of last year.
9. Internal Control
(1) Specific circumstances for the significant defects of the internal control found during
the report period
□Yes No
(2) Self-assessment report on internal control
76
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Disclosure date for the full text of the
2016.04.29
internal control self-assessment report
Disclosure index for the full text of the
www.cninfo.com.cn
internal control self-assessment report
Standards of Defect Identification
Category Financial report Non-financial report
Qualitative criteria Significant defects: one defect of internal Significant defects: Any situations listed
control, individually or together with other below appears, it can be regarded as
defects, has the reasonable probability to cause significant defects. Operation: Unable to
the significant misstatements, which can not be achieve all operation target or key business
promptly prevented, or found and corrected index, widely out of budget in various
timely in the financial report. For example: aspects. Safety accident effects: Cause no
Company’s Directors, Supervisors and Senior less than one person death, or more than 3
Management have fraudulent practices; person serious injuries. Major negative
Company makes corrections for the published effects: Negative information frequently
financial report; The audit of external appears in the medias with involving a wide
intermediary agent finds significant scope in the international and national
misstatement existing in the current financial mainstream media. Environment effects:
report, but Company does not realize it during Create irreparable damages to environment,
the operation process; Negative information and cause massive public complains.
frequently appears in the medias with involving Major defects: Any situations listed below
a wide scope; Company’s audit committee appears, it can be regarded as major defects.
and internal audit department makes an Operation: Unable to achieve partly
inefficient supervision for internal control; operation target, a big margin out of budget in
Other situations maybe cause significant various aspects. Safety accident effects:
misdirection which guides the report users to Without reaching the person loss or the
make the right judgment. number of serious injury of significant
Major defects ： The defect of internal control, defects. Major negative effects: Negative
individually or together with other defects, has news appears in the media with influencing a
the reasonable probability to cause the wide scope in the provincial mainstream
significant misstatements, which can not be media. Environment effects: Cause heavy
promptly prevented, or found and corrected environment damages and massive public
timely in the financial report, although the complains, ought to carry out the significant
misstatements neither achieves nor exceeds the remedial measures.
importance level but still arising the attention General defects: Any situations listed below
of Board of Directors and management team. appears, it can be regarded as general defects.
Failure to select and apply accounting Operation: Other effects unable to
regulations in accordance with generally constitute the significant defects or major
accepted accounting principles; Failure to defects. Safety accident effects: Personal
establish the anti-fraud procedures and control injury less than the quantitative standards of
measures; Failure to set up corresponding major defects. Major negative effects:
control mechanism or to carry out and take Other defects unable to constitute the
corresponding compensating control for the significant defects or major defects.
accounting treatments with irregular and Environment effects: Other environment
77
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
special deal; Negative news appears in the effects unable to constitute the significant
media with influencing a wide scope; One or defects or major defects.
more defects exist in the control during the
process of the ending financial report, and the
target of achieving truthfulness and integrality
cannot be reasonably guaranteed in the
financial report; General defects refer to the
other control defects, which do not constitute
the significant and major defects.
Quantitative criterion For total assets/Owner’s equity: For direct property loss:
Significant defects: misstatements ≧1% Significant defects: More than CNY10
Major defects: 0.5%≦misstatements<1% million
General defects: misstatements<0.5% Major defects: CNY 1 million-10 million
For operation revenue: (including 1 million)
significant defects: misstatements ≧1% General defects: Less than CNY 1 million
Major defects: 0.5%≦misstatements<1%
General defects: misstatements<0.5%
For pretax profit:
Significant defects: misstatements ≧5%
Major defects: 2%≦misstatements<5%
General defects: misstatements<2%
Number of significant 0
defect in financial
report
Number of significant 0
defect in non-financial
report
Number of major 0
defect in financial
report
Number of major 0
defect in non-financial
report
10. Internal control audit report
Available □Not available
Audit opinions of the internal control audit report
We believe that Yantai Changyu Pioneer Wine Co., Ltd. is in accordance with the rules of General
Criteria of Company’s Internal Control and other related rules, all significant aspects keep effective
internal control in the financial report.
Disclosure of the internal control audit Disclosure
78
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
report
Disclosure date for the full text of the
29th April 2016
internal control audit report
Disclosure index for the full text of the Document name: 2015 Annual Internal Control Report
internal control audit report on Self Assessment. Website address: www.cninfo.com.cn
Opinion type of the internal control audit
Standard without reserved opinion
report
Whether or not exists significant defects in
No
non-financial reports
Whether or not the certified public accountants issued a non-standard advice for the audit
report of internal control.
□Yes No
Whether the audit report of internal control issued by the certified public accountants is in
consistency with the self-assessment report of the board of directors.
Yes □No
79
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
X. Financial Report
1. Audit Report
Type of audit opinion Standard unqualified audit opinion
Date signed on audit report 25th April, 2015
Deloitte Hua Yong certified public accountants co.,
Audit agency name
Ltd. (special general partnership)
Certified public accountant's name Xu Zhaohui Li Xu
De Shi Bao (Shen) Zi (15) No. P1560
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
We have audited the accompanying financial statements of Yantai Changyu Pioneer Wine
Company Limited and its subsidiaries which comprise the consolidated and company's balance
sheets as at 31 December 2015, and the consolidated and company's income statements, the
consolidated and company's cash flow statements and the consolidated and company's statements
of changes in shareholders' equity for the year then ended, and the notes to the financial
statements.
1. Management' responsibility for the financial statements
Management of the Company is responsible for the preparation and fair presentation of these
financial statements. This responsibility includes: (1) preparing the financial statements in
accordance with Accounting Standards for Business Enterprises to achieve fair presentation of the
financial statements; (2) designing, implementing and maintaining internal control which is
necessary to enable that the financial statements are free from material misstatement, whether due
to fraud or error.
2. Auditor's responsibility
Our responsibility is to express an audit opinion on these financial statements based on our audit.
We conducted our audit in accordance with China Standards on Auditing. China Standards on
Auditing require that we comply with the Code of Ethics for Chinese Certified Public
Accountants and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing audit procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
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, Certified Public
Accountants consider the internal control relevant to the preparation and fair presentation of the
financial statements 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 internal control. An
- 80 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
audit also includes evaluating the appropriateness of accounting policies used and the
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.
- 81 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
AUDITOR'S REPORT
TO THE SHAREHOLDERS OF
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED - continued
3. Opinion
In our opinion, the financial statements of Yantai Changyu Pioneer Wine Company Limited
present fairly, in all material respects, the consolidated and company's financial position as of 31
December 2015, and the consolidated and company's results of operations and cash flows for the
year then ended in accordance with Accounting Standards for Business Enterprises.
Deloitte Touche Tohmatsu Chinese Certified Public Accountant
Certified Public Accountants LLP Xu Zhao Hui (Signature and seal)
Shanghai, China Li Xu (Signature and seal)
27 April 2016
- 82 -
Yantai Changyu Pioneer Wine Co. Ltd. 2013 Annual Report.
CONSOLIDATED BALANCE SHEETS
YEAR ENDED 31 DECEMBER 2015
ASSETS Notes Closing balance Opening balance
RMB RMB
CURRENT ASSETS
Cash and bank VI-1 1,285,362,414 1,145,365,071
Notes receivable VI-2 113,988,122 138,315,319
Accounts receivables VI-3 197,795,091 145,672,411
Prepayments VI-4 3,591,098 8,073,786
Interest receivable VI-5 8,019,338 3,619,429
Other receivables VI-6 46,146,487 31,362,302
Inventories VI-7 2,260,852,964 2,087,376,398
Other current assets VI-8 48,449,551
____________ 29,662,076
____________
Total current assets 3,964,205,065
____________ 3,589,446,792
____________
NON-CURRENT ASSETS
Available-for-sale financial assets VI-9 402,814 -
Fixed assets VI-10 3,089,245,185 2,532,682,355
Construction in progress VI-11 2,005,990,308 1,700,466,500
Bearer biological assets VI-12 192,198,283 151,723,241
Intangible assets VI-13 463,899,916 452,951,194
Goodwill VI-14 105,504,426 13,112,525
Long-term prepaid expenses VI-15 175,124,167 201,911,605
Deferred tax assets VI-16 302,406,656 254,186,823
Other non-current assets VI-17 45,234,641
____________ 15,751,605
____________
Total non-current assets 6,380,006,396
____________ 5,322,785,848
____________
Total assets 10,344,211,461 8,912,232,640
____________ ____________
83
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CONSOLIDATED BALANCE SHEETS
YEAR ENDED 31 DECEMBER 2015 - continued
LIABILITIES AND EQUITY Notes Closing balance Opening balance
RMB RMB
CURRENT LIABILITIES
Short-term borrowings VI-18 665,581,921 300,000,000
Notes payable VI-19 29,000,000 10,000,000
Accounts payable VI-20 569,278,368 357,811,822
Receipts in advance VI-21 234,566,504 215,127,598
Employee benefits payable VI-22 190,239,451 158,948,592
Taxes payable VI-23 41,285,107 87,504,048
Interest payable 977,304 3,475,641
Deferred income VI-24 11,241,873 12,398,718
Other payables VI-25 509,226,395 469,804,317
Non-current liabilities due within one year VI-26 156,335,647
____________ -
____________
Total current liabilities 2,407,732,570
____________ 1,615,070,736
____________
NON-CURRENT LIABILITIES
Long-term borrowings VI-27 71,686,629 209,380,000
Deferred income VI-24 69,836,411 76,024,992
Deferred tax liabilities VI-16 34,350,349 4,565,636
Other non-current liabilities VI-28 4,047,476
____________ 3,998,352
____________
Total non-current liabilities 179,920,865
____________ 293,968,980
____________
Total liabilities 2,587,653,435
____________ 1,909,039,716
____________
EQUITY
Share capital VI-29 685,464,000 685,464,000
Capital reserve VI-30 565,955,441 563,139,042
Other comprehensive income VI-31 (10,442,512) (2,803,271)
Surplus reserve VI-32 342,732,000 342,732,000
Retained earnings VI-33 5,980,390,074
____________ 5,251,920,374
____________
Equity attributable to shareholders
of the Company 7,564,099,003 6,840,452,145
Non-controlling interests 192,459,023
____________ 162,740,779
____________
Total equity 7,756,558,026
____________ 7,003,192,924
____________
Total liabilities and equity 10,344,211,461 8,912,232,640
____________ ____________
The accompanying notes form an integral part of these financial statements.
The financial statements on pages 3 to 98 were signed by the following:
Legal Representative: _________________________________
Person in Charge of the Accounting Body: _________________
Chief Accountant: ____________________________________
- 84 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
BALANCE SHEET OF THE COMPANY
YEAR ENDED 31 DECEMBER 2015
ASSETS Notes Closing balance Opening balance
RMB RMB
CURRENT ASSETS
Cash and bank XIV-1 280,818,833 496,138,263
Notes receivable XIV-2 38,429,319 98,158,251
Accounts receivable XIV-3 2,392,870 1,516,518
Prepayments XIV-4 445,619 1,710,787
Interest receivable XIV-5 8,019,338 3,580,811
Dividend receivable XIV-6 788,092,349 402,596,884
Other receivables XIV-7 5,734,456,129 4,708,836,276
Inventories XIV-8 728,173,107 681,696,774
Other current assets 22,700,317
____________ 14,996,807
____________
Total current assets 7,603,527,881
____________ 6,409,231,371
____________
NON-CURRENT ASSETS
Available-for-sale financial assets VI-8 - -
Long-term equity investments XIV-9 1,423,725,152 1,093,437,027
Fixed assets XIV-10 369,506,014 403,210,655
Construction in progress XIV-11 7,990,777 182,765
Bearer biological assets XIV-12 110,961,189 83,631,722
Intangible assets XIV-13 74,381,525 76,760,678
Deferred tax assets XIV-14 37,938,692
____________ 27,053,571
____________
Total non-current assets 2,024,503,349
____________ 1,684,276,418
____________
Total assets 9,628,031,230 8,093,507,789
____________ ____________
- 85 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
BALANCE SHEET OF THE COMPANY
YEAR ENDED 31 DECEMBER 2015 - continued
LIABILITIES AND EQUITY Notes Closing balance Opening balance
RMB RMB
CURRENT LIABILITIES
Short-term borrowings VI-18 601,297,447 300,000,000
Accounts payable XIV-15 273,091,182 228,052,722
Employee benefits payable XIV-16 71,058,615 70,233,251
Taxes payable XIV-17 19,331,311 18,205,124
Interest payable 977,304 3,475,641
Deferred income 1,767,054 3,017,898
Other payables XIV-18 994,821,281 1,030,604,819
Non-current liabilities due within one year VI-26 127,345,600
____________ -
____________
Total current liabilities 2,089,689,794
____________ 1,653,589,455
____________
NON-CURRENT LIABILITIES
Long-term borrowings VI-27 56,761,600 209,380,000
Deferred income 21,824,352 22,747,915
Other non-current liabilities 1,944,955
____________ 1,895,828
____________
Total non-current liabilities 80,530,907
____________ 234,023,743
____________
Total liability 2,170,220,701
____________ 1,887,613,198
____________
EQUITY
Share capital VI-29 685,464,000 685,464,000
Capital reserve XIV-19 557,222,454 557,222,454
Surplus reserve VI-32 342,732,000 342,732,000
Retained earnings 5,872,392,075
____________ 4,620,476,137
____________
Total equity 7,457,810,529
____________ 6,205,894,591
____________
Total liabilities and equity 9,628,031,230 8,093,507,789
____________ ____________
- 86 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
RMB RMB
I. Revenue VI-34 4,649,722,368 4,156,727,525
Less: Cost of sales VI-34 1,512,503,035 1,372,444,612
Taxes and surcharges VI-35 258,013,524 269,446,774
Selling expenses VI-36 1,211,127,163 1,006,009,364
Administrative expenses VI-37 313,968,409 256,980,018
Impairment loss of assets VI-38 2,823,115 1,995,877
Financial expenses VI-39 11,287,685
____________ (17,256,721)
____________
II. Operating profit 1,339,999,437 1,267,107,601
Add: Non-operating income VI-40 50,065,317 43,996,405
Including: gains from disposal
of non-current assets 192,945
121,113
Less: Non-operating expenses VI-41 1,904,889 8,370,249
Including: losses from disposal
of non-current assets 56,884
5,207,658 ____________ ____________
III. Profit before tax 1,388,159,865 1,302,733,757
Less: Income tax VI-42 357,884,235
____________ 325,026,046
____________
IV. Profit for the year 1,030,275,630
____________ 977,707,711
____________
Attribute to shareholders of the Company 1,030,073,860 977,707,711
Minority interest income 201,770 -
____________ ____________
V. Other comprehensive income (post-tax)
Other comprehensive income attributable
to shareholders of the Company
Other comprehensive income
to be reclassified to profit and loss
Foreign currency statement translation difference (7,639,241)
(2,803,271)
Other comprehensive income attributable
to minority interest (102,535)
____________ -
____________
Other comprehensive income (post-tax) (7,741,776)
____________ (2,803,271)
____________
VI. Total comprehensive income
Attribute to shareholders of the Company 1,022,434,619 974,904,440
Attribute to minority interest of the Company 99,235 -
____________ ____________
Total comprehensive income 1,022,533,854
____________ 974,904,440
____________
VII. Earnings per share
(I) Basic earnings per share VI-43 1.50 1.43
____________ ____________
(II) Diluted earnings per share VI-43 N/A N/A
____________ ____________
- 87 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
INCOME STATEMENT OF THE COMPANY
YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
RMB RMB
I. Revenue XIV -20 1,383,184,483 1,647,825,652
Less: Cost of sales XIV -20 1,154,834,509 1,406,987,744
Taxes and surcharges XIV -21 128,127,130 157,026,901
Administrative expenses XIV -22 131,187,795 112,051,545
Impairment loss/(reverse) of assets XIV -23 - (192,908)
Financial expenses XIV -24 18,852,697 (11,053,553)
Investment income XIV -25 1,587,303,643
____________ 1,164,089,666
____________
II. Operating Profit 1,537,485,995 1,147,095,589
Add: Non-operating income 5,229,734 6,371,028
Including: gains from disposal
of non-current assets 160,609
105,236
Less: Non-operating expenses 921,076 5,801,396
Including: losses from disposal
of non-current assets 44,269
5,181,727 ____________ ____________
III. Profit before tax 1,541,794,653 1,147,665,221
Less: Income tax (11,725,445)
____________ (4,096,824)
____________
IV. Profit for the year
and total comprehensive income 1,553,520,098 1,151,762,045
____________ ____________
- 88 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
RMB RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods
and the rendering of services 5,005,115,064 4,787,289,147
Receipts of tax refunds 17,833,465 18,259,690
Other cash receipts relating to operating activities VI-44(1) 22,373,016
__________ 24,543,547
__________
Sub-total of cash inflows from operating activities 5,045,321,545
__________ 4,830,092,384
__________
Cash payments for goods purchased and services received 1,106,430,193 1,255,567,298
Cash payments to and on behalf of employees 400,245,285 (358,415,330)
Payment of various types of taxes 1,312,212,563 1,301,077,872
Other cash payments relating to operating activities VI-44(2) 1,083,387,137
__________ 844,948,588
__________
Sub-total of cash outflows from operating activities 3,902,275,178
__________ 3,760,009,088
__________
Net cash flows from operating activities VI-45(1) 1,143,046,367
__________ 1,070,083,296
__________
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in term deposits over 3 months 58,245,260 307,694,951
Proceeds from return on investments 9,337,943 24,230,453
Proceeds from disposal of fixed assets 3,373,254
__________ 1,181,895
__________
Sub-total of cash inflows from investing activities 70,956,457
__________ 333,107,299
__________
Cash paid for acquisition of properties, plants and equipment,
intangible assets and other long-term assets 775,468,190 1,238,293,585
Cash paid for term deposits over 3 months 20,000,000 77,547,483
Cash paid for the purchase subsidiaries and other equity 213,342,946
__________ -
__________
Sub-total of cash outflows from investing activities 1,008,811,136
__________ 1,315,841,068
__________
Net cash flows from investing activities VI-44(3) (937,854,679)
__________ (982,733,769)
__________
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings 598,060,185 515,368,080
Other cash received from financing activities 4,000,000
__________ 129,182,292
__________
Sub-total of cash inflows from financing activities 602,060,185
__________ 644,550,372
__________
Cash paid for dividends, profits and interests 326,060,259 353,707,371
Cash paid for borrowings 325,272,800 242,219,439
Cash paid for acquisition minority interest 150,000 -
Cash paid from other financing activities VI-44(4) 28,150,000
__________ 125,000,000
__________
Sub-total of cash outflows from financing activities 679,633,059
__________ 720,926,810
__________
Net cash flows from financing activities (77,572,874)
__________ (76,376,438)
__________
Effect of foreign exchange rate changes
on cash and cash Equivalents 4,150,573 (7,059,747)
NET INCREASE OF CASH AND CASH EQUIVALENTS 131,769,387 3,913,342
ADD: CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR VI-45(2) 960,472,274
__________ 956,558,932
__________
CASH AND CASH EQUIVALENTS AT END OF THE YEAR VI-45(2) 1,092,241,661 960,472,274
__________ __________
- 89 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CASH FLOW STATEMENT OF THE COMPANY
YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
RMB RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods
and the rendering of services 1,407,696,475 1,827,219,301
Other cash receipts relating to operating activities 1,050,628
__________ 12,168,205
__________
Sub-total of cash inflows from operating activities 1,408,747,103
__________ 1,839,387,506
__________
Cash payments for goods purchased and services received 944,400,045 1,302,377,275
Cash payments to and on behalf of employees 149,896,172 151,732,255
Cash payment of various types of taxes 191,387,102 257,237,660
Other cash payment relating to operating activities 1,128,236,602
__________ 1,594,026,341
__________
Sub-total of cash outflows from operating activities 2,413,919,921
__________ 3,305,373,531
__________
Net cash flows from operating activities XIV-26 (1,005,172,818)
__________ (1,465,986,025)
__________
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from equity investment 350,000 -
Cash receipts from deposits over 3 months 46,245,260 295,694,951
Cash receipts from return on investments 1,211,082,256 1,530,610,338
Cash receipts from disposals of fixed assets 190,205
__________ 550,824
__________
Sub-total of cash inflows from investing activities 1,257,867,721
__________ 1,826,856,113
__________
Cash payments for acquisition of fixed assets,
intangible assets and other long-term assets 42,104,159 52,003,088
Cash payments for term deposits over 3 months 20,000,000 53,547,483
Cash payments for subsidiary investment 330,638,125
__________ 37,980,500
__________
Sub-total of cash outflows from investing activities 392,742,284
__________ 143,531,071
__________
Net cash flows from investing activities 865,125,437
__________ 1,683,325,042
__________
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings 595,268,270 515,368,080
Other cash received from financing activities -
__________ 129,182,292
__________
Cash inflows from financing activities 595,268,270
__________ 644,550,372
__________
Cash paid for dividends, profits and interests 325,424,652 351,636,158
Cash paid for borrowings 323,051,320 242,219,439
Cash paid from other financing activities -
__________ 125,000,000
__________
Cash outflows from financing activities 648,475,972
__________ 718,855,597
__________
Net cash flows from financing activities (53,207,702)
__________ (74,305,225)
__________
Effect of foreign exchange rate changes
on cash and cash Equivalents 3,807,697 (6,939,315)
INCREASE/(DECREASE) OF CASH
AND CASH EQUIVALENTS (189,447,386) 136,094,477
ADD: CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR XIV-27 333,245,466
__________ 197,150,989
__________
CASH AND CASH EQUIVALENTS AT END OF THE YEAR XIV-27 143,798,080 333,245,466
__________ __________
- 90 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
CONSOLIDATED SATATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2015
2015
Attributable to shareholders of the Company
Issued Capital Other comprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total
RMB RMB RMB RMB RMB RMB RMB
I. Opening balance
of the current year _______
685,464,000 _______
563,139,042 _______ ________ ________
(2,803,271) 342,732,000 5,251,920,374 _______
162,740,779 ________
7,003,192,924
II. Changes for the year
(I) Total comprehensive income - - (7,639,241) - 1,030,073,860 99,235 1,022,533,854
(II) Shareholders investment and
Divestment
1. Acquisition subsidiary (VII-1) - - - - - 32,585,408 32,585,408
2. Transaction with non-controlling
interests - 2,816,399 - - - (2,966,399) (150,000)
(III) Profit distribution
Distributions to
shareholders (VI-33) _______
- _______
- _______ ________ ________
- - (301,604,160) _______
- ________
(301,604,160)
III. Closing balance of
the current year 685,464,000 565,955,441 (10,442,512) 342,732,000 5,980,390,074 192,459,023 7,756,558,026
_______ _______ _______ ________ ________ _______ ________
2014
Attributable to shareholders of the Company
Issued Capital Other comprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total
RMB RMB RMB RMB RMB RMB RMB
I. Opening balance
of the current year _______
685,464,000 _______
563,139,042 _____
- ________ ________
342,732,000 4,616,944,663 _______
162,740,779 ________
6,371,020,484
II. Changes for the year
(I) Total comprehensive income - - (2,803,271) - 977,707,711 - 974,904,440
(II) Profit distribution
Distributions to
shareholders (VI-33) _______
- _______
- _____
- ________ ________
- (342,732,000) _______
- ________
(342,732,000)
III. Closing balance
of the current year 685,464,000 563,139,042 (2,803,271) 342,732,000 5,251,920,374 162,740,779 7,003,192,924
_______ _______ _____ ________ ________ _______ ________
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
STATEMENT OF CHANGES IN EQUITY OF THE COMPANY
YEAR ENDED 31 DECEMBER 2015
2015
Issued capital Capital reserve Surplus reserve Retained earnings Total
RMB RMB RMB RMB RMB
I. Opening balance
of the current year 685,464,000
________ 557,222,454
________ 342,732,000
________ 4,620,476,137
_________ 6,205,894,591
_________
II. Changes for the year
(I) Total comprehensive income - - - 1,553,520,098 1,553,520,098
(II) Profit distribution
Distributions to shareholders (VI-33) -
________ -
________ -
________ (301,604,160)
_________ (301,604,160)
_________
III. Closing balance
of the current year 685,464,000 557,222,454 342,732,000 5,872,392,075 7,457,810,529
________ ________ ________ _________ _________
2014
Issued capital Capital reserve Surplus reserve Retained earnings Total
RMB RMB RMB RMB RMB
I. Opening balance
of the current year 685,464,000
________ 557,222,454
________ 342,732,000
________ 3,811,446,092
_________ 5,396,864,546
_________
II. Changes for the year
(I) Total comprehensive income - - - 1,151,762,045 1,151,762,045
(II) Profit distribution
Distributions to shareholders (VI-33) -
________ -
________ -
________ (342,732,000)
_________ (342,732,000)
_________
III. Closing balance
of the current year 685,464,000 557,222,454 342,732,000 4,620,476,137 6,205,894,591
________ ________ ________ _________ _________
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
I. CORPORATE INFORMATION
Yantai Changyu Pioneer Wine Co., Ltd. (the "Company") was incorporated as a joint stock
limited company in accordance with the Company Law of the People's Republic of China (the
"PRC") in a reorganization carried out by Yantai Changyu Group Co., Ltd. ("Changyu Group
Company"), in which Changyu Group Company injected certain assets and liabilities in relation to
the brandy, wine, and sparkling wine production and sales businesses to the Company. The
Company and its subsidiaries (the "Group") are principally engaged in the production and sales of
wine, brandy, sparkling wine. Registration place of the Company is Yantai, Shandong.
Headquarter of the Company is located at No. 56 Da Ma Lu, Zhifu District, Yantai, Shandong,
PRC.
As at 31 December 2015 the total shares issued by the Company amounts to 685,464,000 shares.
Please refer to Notes VI-29 in detail.
The holding company of the Group is Changyu Group Company, which is jointly controlled by
Yantai SASAC, ILLVA Saronno Investment Italy, International Finance Corporation and Yantai
Yuhua Investment and Development Company Limited.
The financial statements have been authorized by the board of directors on 27 April 2015.
According to the Company's articles of association, the financial statements will be reviewed by
shareholders on the shareholder's meeting.
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in detail.
For detail of changes in consolidation scope of the year, please refer to Notes VII "Change in
consolidation scope".
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
1. Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by
the Ministry of Finance (“MoF”). In addition, the Group has disclosed relevant financial
information in accordance with Information Disclosure and Presentation Rules for Companies
Offering Securities to the Public No. 15 - General Provisions on Financial Reporting (Revised in
2014).
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS - continued
2. Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. The Group 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.
Under the historical cost measurement, an asset is measured at the fair value of consideration paid
in cash and cash equivalents at the date of the purchase. Liability is measured at the value of asset
received through taking current obligation, the contract value for taking current obligation, or the
cash and cash equivalents value estimated for repaying debt in daily business activity.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. Fair value for
measurement and/or disclosure purposes in these consolidated financial statements is determined
on such a basis.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
2) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
3) Level 3 inputs are unobservable inputs for the asset or liability.
3. Going concern
As at 31 December 2015, the Group evaluated the profitability ability in the foreseeable 12
months and did not notice any event or circumstance that would constitute significant doubt on
going concern ability of the Group. Therefore, the financial statements have been prepared on a
going concern basis.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
1. Declaration for implementing CAS
The financial statements are prepared in accordance with CAS, which showing a true and fair
view of the financial position on 31 December 2015, financial performance and cash flow in 2015
of the Company and the Group.
2. Accounting year
The accounting year of the Group is from 1 January to 31 December of each calendar year.
3. Business cycle
Business cycle refers to the period from purchasing assets to be processed to receiving cash or
cash equivalents by the Company. The business cycle of the Company is 12 months.
4. Reporting currency
Renminbi ("RMB") 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 RMB as their functional currency. The Company's foreign subsidiary chooses Currency
Euro as its functional currency on the basis of the primary economic environment in which it
operates. The Company adopts RMB to prepare its financial statements.
5. Business combination
5.1Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for
control of the acquiree. 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 recognised in profit or loss
when they are incurred.
Qualified identifiable assets, liabilities and contingent liabilities obtained by acquirer in the
acquisition are measured using fair value at the acquisition date.
The cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is
measured at cost on initial recognition. Within the 12 month after acquisition, adjustment for the
provisional recognised value will be regarded as the recognition and measurement at acquisition
date.
At the end of the year for acquisition, if the fair value for qualified identifiable assets, liabilities
and contingent liabilities can be determined temporarily, temporally determined fair value will be
recognised as consideration for recognition and measurement of acquisition.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
5. Business combination - continued
5.1Business combinations not involving enterprises under common control and
goodwill-continued
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements. It is tested for
impairment at least at the end of each year.
6. Preparation of consolidated financial statements
6.1 Preparation of consolidated financial statements
The scope of consolidation in 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 Group will re-evaluate if changes in relevant
facts and circumstances results in changes in relevant factors involved in the above definition of
control.
Consolidation of subsidiary starts from the control on the subsidiary by the Group and ends at the
loss of control on the subsidiary by the Group.
For a subsidiary disposed of by the Group, 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 acquired through a business combination not involving enterprises under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative
figures in the consolidated financial statements.
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as
non-controlling interests and presented as "non-controlling interests" in the consolidated balance
sheet within shareholders' equity. The portion of net profits or losses of subsidiaries for the period
attributable to non-controlling interests is presented as "non-controlling interests" in the
consolidated income statement below the net profit line item.
When the amount of loss for the period attributable to the non-controlling shareholders of a
subsidiary exceeds the non-controlling shareholders' portion of the opening balance of owners'
equity of the subsidiary, the excess amount are still allocated against non-controlling interests.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
6. Preparation of consolidated financial statements - continued
6.1 Preparation of consolidated financial statements - continued
For the transaction that Purchase minority interest or disposal part of the equity does not loss the
control of the subsidiaries, it should treated as equity transaction, and adjust the equity attributable
to shareholders and minority interest in order to reflex the changes of equity in subsidiaries. The
difference between minority interest adjustment and fair value of received/paid consideration will
adjust in capital reserve, and if capital reserve is not enough for offset, will adjust surplus reserve.
7. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
8. Translation of transactions and financial statements denominated in foreign currencies
8.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot
exchange rates at the balance sheet date. Exchange differences arising from the differences
between the spot exchange rates prevailing at the balance sheet date and those on initial
recognition or at the previous balance sheet date are recognised in profit or loss for the period,
except that (1) exchange differences related to a specific-purpose borrowing denominated in
foreign currency that qualify for capitalisation are capitalised as part of the cost of the qualifying
asset during the capitalisation period; (2) exchange differences related to hedging instruments for
the purpose of hedging against foreign currency risks are accounted for using hedge accounting;
(3) exchange differences arising from available-for-sale non-monetary items denominated in
foreign currencies and changes in the carrying amounts of available-for-sale monetary items are
recognised as other comprehensive income and included in capital reserve.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions and the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate) and is
recognised in profit and loss or as other comprehensive income included in capital reserve.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
8. Translation of transactions and financial statements denominated in foreign currencies - continued
8.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for retained earnings are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the distribution of profits are translated at the spot exchange rates on the
dates of the transactions; the opening balance of retained earnings is the translated closing balance
of the previous year's retained earnings; the closing balance of retained earnings is calculated and
presented on the basis of each translated income statement and profit distribution item. The
difference between the translated assets and the aggregate of liabilities and shareholders' equity
items is separately presented as the exchange differences arising on translation of financial
statements denominated in foreign currencies of other comprehensive income under the
shareholders' equity in the balance sheet.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign
subsidiary are translated at the spot exchange rate on the date of the cash flows. The effect of
exchange rate changes on cash and cash equivalents is regarded as a reconciling item and
presented separately in the cash flow statement as "effect of exchange rate changes on cash and
cash equivalents".
The opening balances and the comparative figures of previous year are presented at the translated
amounts in the previous year's financial statements.
9. Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial liabilities are initially
measured at fair value. For other financial assets and financial liabilities, transaction costs are
included in their initial recognised amounts.
9.1 Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability (or a group of financial assets or financial liabilities) and of allocating the
interest income or interest expense over the relevant period, using the effective interest rate. The
effective interest rate is the rate that exactly discounts 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 Group estimates future cash flows considering all
contractual terms of the financial asset or financial liability (without considering future credit
losses), and also considers 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.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
9. Financial instruments - continued
9.2 Classification, recognition and measurement of financial assets
On initial recognition, the Group's financial assets are classified into one of the four categories,
including financial assets at fair value through profit or loss, held-to-maturity investments, loans
and receivables, and available-for-sale financial assets. All regular way purchases or sales of
financial assets are recognised and derecognised on a trade date basis. Financial assets of the
Group are loans and receivables and available-for-sale financial assets.
9.2.1 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Financial assets classified as loans and receivables by
the Group include cash and bank, notes receivable, accounts receivable, interest receivable,
dividends receivable, and other receivables.
Loans and receivables are subsequently measured at amortised cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortisation is recognised in
profit or loss.
9.2.2 Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on
initial recognition as available for sale, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.
For investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured, they are measured at cost.
9.3 Impairment of financial assets
The Group assesses at each balance sheet date the carrying amounts of financial assets other than
those at fair value through profit or loss. If there is objective evidence that a financial asset is
impaired, the Group determines the amount of any impairment loss. Objective evidence that a
financial asset is impaired is evidence that, arising from one or more events that occurred after the
initial recognition of the asset, the estimated future cash flows of the financial asset, which can be
reliably measured, have been affected.
Objective evidence that a financial asset is impaired includes the following observable events:
(1) Significant financial difficulty of the issuer or obligor;
(2) A breach of contract by the borrower, such as a default or delinquency in interest or
principal payments;
(3) The Group, for economic or legal reasons relating to the borrower's financial difficulty,
granting a concession to the borrower;
(4) It becoming probable that the borrower will enter bankruptcy or other financial
reorganisations;
(5) The disappearance of an active market for that financial asset because of financial
difficulties of the issuer;
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
9. Financial instruments - continued
9.3 Impairment of financial assets - continued
(6) Upon an overall assessment of a group of financial assets, observable data indicates that
there is a measurable decrease in the estimated future cash flows from the group of
financial assets since the initial recognition of those assets, although the decrease cannot
yet be identified with the individual financial assets in the group. Such observable data
includes:
- Adverse changes in the payment status of borrower in the group of assets;
- Economic conditions in the country or region of the borrower which may lead to a
failure to pay the group of assets;
(7) Significant adverse changes in the technological, market, economic or legal environment in
which the issuer operates, indicating that the cost of the investment in the equity
instrument may not be recovered by the investor;
(8) A significant or prolonged decline in the fair value of an investment in an equity instrument
below its cost;
(9) Other objective evidence indicating there is an impairment of a financial asset.
- Impairment of financial assets measured at amortised cost
If financial assets carried at amortised cost are impaired, the carrying amounts of the financial
assets are reduced to the present value of estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial asset's original effective interest
rate. The amount of reduction is recognised as an impairment loss in profit or loss. If,
subsequent to the recognition of an impairment loss on financial assets carried at amortised cost,
there is objective evidence of a recovery in value of the financial assets which can be related
objectively to an event occurring after the impairment is recognised, the previously recognised
impairment loss is reversed. However, the reversal is made to the extent that the carrying
amount of the financial asset at the date the impairment is reversed does not exceed what the
amortised cost would have been had the impairment not been recognised.
For a financial asset that is individually significant, the Group assesses the asset individually for
impairment. For a financial asset that is not individually significant, the Group assesses the asset
individually for impairment or includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. If the Group determines that
no objective evidence of impairment exists for an individually assessed financial asset (whether
significant or not), it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively reassesses them for impairment. Assets for which an impairment
loss is individually recognised are not included in a collective assessment of impairment.
- Impairment of available for sale assets measured at cost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without
a quoted price in an active market) whose fair value cannot be reliably measured, or on a
derivative financial asset that is linked to and must be settled by delivery of such an unquoted
equity instrument, the carrying amount of the financial asset is reduced to the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial
asset. The amount of reduction is recognised as an impairment loss in profit or loss. The
impairment loss on such financial asset is not reversed once it is recognised.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
9. Financial instruments - continued
9.4 Transfer of financial assets
The Group derecognises a financial asset if one of the following conditions is satisfied: (1) the
contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has
been transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (3) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the
difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of
the consideration received from the transfer and any cumulative gain or loss that has been
recognised in other comprehensive income, is recognised in profit or loss.
9.5 Classification, recognition and measurement of financial liabilities
Debt and equity instruments issued by the Group are classified into financial liabilities or equity
on the basis of the substance of the contractual arrangements and definitions of financial liability
and equity instrument.
On initial recognition, financial liabilities are classified into financial liabilities at fair value
through profit or loss and other financial liabilities. The financial liabilities in group are other
financial liabilities, including short-term borrowings, notes payables, account payables, interest
payables, other payables and long-term borrowings etc.
9.5.1 Other financial liabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with gain or loss arising from derecognition or amortisation recognised in profit or loss.
9.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged.
When the Group derecognises a financial liability or a part of it, it recognises the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognised and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
9. Financial instruments - continued
9.7 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial
assets and financial liabilities, and intends either to settle on a net basis, or to realise the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall
not be offset.
9.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. The Group does not recognise any changes in the fair value of
equity instruments. The equity instruments transaction expenses deducted from equity.
The Group treats distribution to equity instrument holders as profit distributions. Shareholder
equity is not affected by share dividend distributed.
10. Account Receivables
10.1 Receivables that are individually significant and for which bad debt provision is individually
assessed
A receivable that exceeds RMB 3,000,000 is deemed as an individually significant receivable by
the Group.
For receivables that are individually significant, the Group assesses the receivables individually
for impairment. For a financial asset that is not impaired individually, the Group includes the asset
in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Receivables for which an impairment loss is individually recognised are not
included in a collective assessment of impairment.
10.2 Receivables that are not individually significant but for which bad debt provision is
individually assessed
For receivables that are not individually significant but for which bad debt provision is
individually assessed, when objective evidence suggests that the Group cannot collect receivables
in accordance with original clauses, the Group would recognize impairment loss and provide bad
debts according to the difference between carrying amount and present value of future cash flows.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
11. Inventories
11.1 Categories of inventories
The Group's inventories mainly include raw materials, work in progress and finished goods.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other expenditures incurred in bringing the inventories to their present
location and condition.
11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
Agricultural products harvested are reported in accordance with the CAS 1 Inventories.
11.3 Basis for determining net realisable value of inventories and provision methods for decline in
value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value.
If the net realisable value is below the cost of inventories, a provision for decline in value of
inventories is made. Net realisable 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 realisable value is determined on the basis of clear evidence obtained, and
takes into consideration the purposes of holding inventories and effect of post balance sheet
events.
Provision for decline in value of other inventories is made based on the excess of cost of
inventory over its net realisable value on an item-by-item 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
realisable 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.
11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
11.5 Amortisation method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortised using the
immediate write-off method.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
12. Long term equity investments
12.1 Basis for determining control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Joint control is the contractually agreed sharing of control over an
economic activity, and exists only when the strategic financial and operating policy decisions
relating to the activity require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies. When determining whether an investing
enterprise is able to exercise control or significant influence over an investee, the effect of
potential voting rights of the investee (for example, warrants and convertible debts) held by the
investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
12.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, the
investment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition are
expensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognised using
original cost.
12.3 Subsequent measurement and recognition of profit or loss
12.3.1 Long-term equity investment accounted for using the cost method
The Group accounts for long-term equity investment using the cost method. A subsidiary is an
investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Long-term equity investment is adjusted when capital is added or recollected. Investment income
is recognised in the period in accordance with the attributable share of cash dividends or profit
distributions declared by the investee.
12.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognised in profit or loss for the period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
13. Fixed assets
13.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognised only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognised. Other subsequent expenditures are recognised in profit or loss in
the period in which they are incurred.
13.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net
residual value rate and annual depreciation rate of each category of fixed assets are as follows:
Estimated Estimated Annual
useful life residual rate depreciation rate
Buildings 20-40years 0-5% 2.4%-5.0%
Machinery 5-20years 0-5% 4.8%-20.0%
Motor Vehicles 4-12years 0-5% 7.9%-25.0%
Estimated net residual value assumes the situation where a fixed asset expire for its estimated
useful life and is in its expected final status. Estimated net residual value is the amount that the
Group can obtain from the disposal less expected disposal fees.
13.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognised in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and account for any change
as a change in an accounting estimate.
14. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalised before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
15. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalised when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalisation of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is suspended abnormally and when
the suspension is for a continuous period of more than 3 months. Capitalisation is suspended until
the acquisition, construction or production of the asset is resumed. Other borrowing costs are
recognised as an expense in the period in which they are incurred.
16. Biological assets
16.1 Bearer biological assets
Bearer biological assets are biological assets, for example, held for the production of agricultural
produce, provision of services or rental, Bearer biological assets in the Group are vines. A bearer
biological asset is initially measured at cost. The cost of a bearer biological asset self-grown or
self-bred comprises those costs necessarily incurred and directly attributable to the asset before
the asset becomes available for its intended production and operating purposes, and any
borrowing cost meeting the capitalisation criteria.
The Group charge deprecation for productive biological assets which satisfy expected production,
and record the deprecation in balance sheet and income statement. The Group uses straight line
method to calculate the deprecation, and details as follows:
Estimated Estimated Annual
Category useful life residual rate depreciation rate
Vines 20 years - 5%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biological assets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and
the depreciation method applied at least once at each financial year-end, and account for any
change as a change in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological
asset, the proceeds on disposal net of the carrying amount and relevant taxes is recognised in
profit or loss for the current period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
17. Intangible assets
Intangible assets include land use rights, software, etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite
useful life is available for use, its original cost less net residual value and any accumulated
impairment losses is amortised over its estimated useful life using the straight-line method. The
useful lives of the intangible assets are as follows:
Annual
Item Useful life Net residual value amortization rate
Land use rights 40-50 years - 2-2.5%
Software 5-10 years - 10-20%
Trademark 10 years - 10%
For an intangible asset with a finite useful life, the Group reviews the useful life and amortisation
method at the end of the period, and makes adjustments when necessary.
18. Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixed
assets, construction in progress, bearer biological asset and intangible assets with finite useful life
at the end of each year. If the assets exist impairment, the Group estimates the recoverable amount
of the assets.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which the
asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value
less costs of disposal and the present value of the future cash flows expected to be derived from
the asset.
If recoverable amount of assets is less than book value, the difference is recognised as impairment
provision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets group (s), i.e., goodwill is
reasonably allocated to the related assets group (s) or each of assets group (s) expected to benefit
from the synergies of the combination. An impairment loss is recognised if the recoverable
amount of the assets group or sets of assets groups (including goodwill) is less than its carrying
amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill
allocated to such assets group or sets of assets groups, and then to the other assets of the group
pro-rata on the basis of the carrying amount of each asset (other than goodwill) in the group.
The impairment is recognised in profit or loss for the period in which it is incurred and will not be
reversed in any subsequent period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
19. Long term prepaid expenses
Long term prepaid expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5 years
Leasehold improvement 3-5years
Others 3 years
20. Employee benefits
20.1 Short-term employee benefits
In an accounting period in which an employee has rendered service to the Group, the Group
recognises the actual employee benefits for that service as a liability. The employee benefits of
the Group are either included in cost of related assets or charged to profit or loss in the period
when they are incurred. Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing
funds, labor union and employee education fees paid by the Group for employees, are recognised
as relevant liability in the period in which the employees provide service, in accordance with the
regulated recognition basis and percentage. The related expenditures are either included in cost of
related assets or charged to profit or loss in the period when they are incurred.
20.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
In the period in which the employees provide service, the Group recognise liability in accordance
with the amounts to be paid calculated according to the predetermined provision plan, and the
related expenditures are either included in cost of related assets or charged to profit or loss in the
period when they are incurred.
20.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognise employee benefits
payroll resulting from termination benefits at the earlier of: the Group cannot unilaterally
withdraw from the termination plan or the redundancy offer; the Group recognise relevant costs
and expenses related to the payment of termination benefits in reconstructuring.
- 108 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
21. Revenue
21.1 Revenue from sale of goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods. The Group retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold. The amount of revenue can be measured reliably and it is probable that the
associated economic benefits will flow to the Group. The associated costs incurred or to be
incurred can be measured reliably.
21.2 Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction shall be recognized by reference the stage of completion
of the transaction at the reporting date. The outcome of a transaction can be estimated reliably.
When the outcome of the transaction involving the rendering of services cannot be estimated
reliably, revenue is recognised only to the extent of the costs incurred that will be recoverable,
and the costs incurred are recognised as expenses for the period. When it is not probable that the
costs incurred will be recovered, revenue is not recognised.
22. Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government
to the Group at no consideration. The income is accounted for as either a government grant related
to an asset or a government grant related to income based on its nature.
A government grant is recognised only when the Group can comply with the conditions attaching
to the grant and the Group will receive the grant. Monetary government grants are measured by
the amount received or receivable.
22.1 Government grant related to an asset
A government grant related to an asset is recognised as deferred income, and evenly amortised to
profit or loss over the useful life of the related asset.
22.2 Government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, the grant is recognised as deferred income, and
recognised in profit or loss over the periods in which the related costs are recognised. If the grant
is a compensation for related expenses or losses already incurred, the grant is recognised
immediately in profit or loss for the period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
23. Deferred tax assets/deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
23.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
23.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognised as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognised using the balance sheet liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for
deductible temporary differences are recognised to the extent that it is probable that taxable
profits will be available against which the deductible temporary differences can be utilised.
However, for temporary differences associated with the initial recognition of goodwill and the
initial recognition of an asset or liability arising from a transaction (not a business combination)
that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognised to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group
is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be taxable profits against which to utilise
the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates,
according to tax laws, that are expected to apply in the period in which the asset is realised or the
liability is settled.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
- continued
23. Deferred tax assets/deferred tax liabilities - continued
23.2 Deferred tax assets and deferred tax liabilities - continued
Current and deferred tax expenses or income are recognised in profit or loss for the period, except
when they arise from transactions or events that are directly recognised in other comprehensive
income or in shareholders' equity, in which case they are recognised in other comprehensive
income or in shareholders' equity; and when they arise from business combinations, in which case
they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilised. Such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
23.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously,
in each future period in which significant amounts of deferred tax assets or liabilities are expected to
be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
24. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease accounting methods
Operating lease payments are recognised on a straight-line basis over the term of the relevant
lease, and are either included in the cost of related asset or charged to profit or loss for the period.
Initial direct costs incurred are charged to profit or loss for the period.
- 111 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IV. CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES
In the application of accounting policies as set out in Note III, the Group is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainties of the operating
activities. These judgments, estimates and assumptions are based on historical experience of the
Group's management as well as other factors that are considered to be relevant. Actual results
may differ from these estimates.
The Group periodically review the judgments, estimates and assumptions above on a going
concern basis. For those changes in accounting policies that only affect current financial
statements, the influences are recognized in current period. For those changes in accounting
policies that affect both current and future financial statements, the influences are recognized in
both current and prospective periods.
Significant accounting judgments and accounting estimates
The following are key assumptions for after balance sheet date event and other factors of
uncertain estimation. They may cause material adjustment on balance sheet in following
accounting period.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilized. Significant management
judgment is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and level of future taxable profits together with future tax planning
strategies.
Depreciation
As set out in Note III-13, the depreciation is calculated on the straight line basis to write-off the
cost of each item of fixed assets to its residual value over its estimated useful life. The Group's
management determines the estimated useful lives for its fixed assets. This estimate is based on
the historical experience of the actual useful lives of fixed assets of similar nature and functions.
If the previous estimates have significant changes, and depreciation expenses will be adjusted in
the future periods.
Useful life of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical
experience of the actual useful lives of intangible assets of similar nature and functions as well as
considering the contractual rights and statutory rights applicable to the intangible assets.
When the estimated useful lives of finite intangible assets are shortened or extended, the
amortization periods should be adjusted accordingly.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IV. CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Significant accounting judgments and accounting estimates - continued
Impairment of non-current assets
The Group assesses whether the recoverable amount is lower than the book value. If there are
any indicators that the book value of non-current assets cannot be fully recoverable, impairment
losses should be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value
of the future cash flows expected to be derived from an asset. As it is difficult for the Group to
obtain the quoted market price of the assets (or assets group), the fair value of the assets cannot be
reliably estimated. When the management make estimation on the expected future cash flows
from the asset or cash generating unit, estimates should be made on choosing a suitable
production volume, selling price and related operating costs discount rate in order to calculate the
present value of those cash flows. When recoverable amounts are undertaken, management may
use all available for use information, including the forecast on production volume, selling price
and related operating costs in reasonable and supportable assumptions.
Estimated provision for accounts receivable
A provision for impairment of trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the original terms of
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy are considered indicators that the trade receivable is impaired. The provision is
reassessed at the end of each year.
Inventory provision based on net realizable value
The inventory are measured on the lower of carrying value and net realizable value, and provision
should be made for impairment on obsolete and slow moving inventories. The group will
reassess whether the net realizable value is lower than the carrying cost at the end of each year.
Inventory provision based on net realizable value
The inventory are measured on the lower of carrying value and net realizable value, and provision
should be made for impairment on obsolete and slow moving inventories. The group will
reassess whether the net realizable value is lower than the carrying cost at the end of each year.
- 113 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
V. TAXES
1. The main taxes and tax rate are as follows:
(1) China
Value added tax VAT is levied at 17% on the invoiced amount after deduction
of eligible input VAT.
Consumption tax The consumption tax of the group is levied on gross revenue
at rates ranging from 10% to 20%.
Business tax The Group is subject to a business tax of 5% on its taxable revenue.
City development tax Levied at 7% of total business tax payment.
Corporate income tax The Group is subject to a corporate income tax rate of 25%
on its taxable income.
(2) France
Value added tax VAT is levied at 19.6% on the invoiced amount after deduction
of eligible input VAT.
Corporate income tax The Group is subject to a corporate income tax rate of 33%
on its taxable income.
(3) Spain
Value added tax VAT is levied at 21% on the invoiced amount after deduction
of eligible input VAT.
Corporate income tax The Group is subject to a corporate income tax rate of 30%
on its taxable income.
Other than tax incentives stated in Notes-V (2), applicable tax rates of the Group in 2015 and
2014 are all stated as above.
2. Tax incentives and relative permit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group,
whose principal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region.
According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income
Tax Measures for Implementation, Ningxia Changyu Grape Growing Co., Ltd. enjoys an
exemption of corporate income tax.
A subsidiary of the Company, Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu") which is a wine
production enterprise incorporated in Xinjiang Weizu Autonomous. In accordance with (Caishui
[2011] No.60) and (Xinzhengfa [2010] No.105), which is from 2012 to 2015, the company apply
a privileged corporate income tax rate of 15% besides the exemption of corporate income tax
which belongs to local government. The corporate income tax applicable for current year is 9%.
A subsidiary of the Company, Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau")
which is a wine production enterprise incorporated in Xinjiang Weizu Autonomous. In
accordance with (Caishui [2011] No.60) and (Xinzhengfa [2010] No.105), which is from 2011 to
2015, the company apply a privileged corporate income tax rate of 15% besides the exemption of
corporate income tax which belongs to local government. The corporate income tax applicable
for current year is 9%.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank
Closing balance Opening balance
RMB RMB
Cash 179,488 101,660
Bank balance 1,103,705,354 1,010,259,393
Other currency fund 181,477,572
____________ 135,004,018
____________
Total 1,285,362,414 1,145,365,071
____________ ____________
As at 31 December 2015, the balance of restricted cash of the Group is RMB 2,643,181 (31
December 2014: RMB 2,643,519), which is the Company's housing fund.
As at 31 December 2015, the Group's other monetary assets include security of RMB 125,000,000
pledged for a short-term borrowing from HSBC of HKD 152,000,000 (translated as RMB
127,345,600); deposit of RMB 370,000 for letter of credit; Yantai Changyu Wine Research and
Development Co., Ltd. (“R&D Centre”) pledged deposit of RMB 26,100,000; refundable deposit
for notes payable of Shihezi Chateau of RMB 20,000,000, Xinjiang Tianzhu of RMB 7,000,000
and Xinjiang Changyu Trading Co., Ltd(“Xinjiang Trading”) of RMB 3,000,000; company cards
deposit guarantee of RMB 7,572.
As at 31 December 2015, the Group's overseas cash and bank deposit is RMB 6,019,640 (31
December 2014: RMB 43,746,008).
As at 31 December 2015, The Group's term deposits with original maturity of more than three
months when acquired is RMB 9,000,000 (31 December 2014: RMB 47,245,260) with interest
rates ranging from 1.38%-1.69%.
2. Notes receivable
(1) Categories of notes receivable
Closing balance Opening balance
RMB RMB
Bank acceptances 113,988,122 138,315,319
__________ _________
(2) Notes receivable which have been pledged as security at the end of the period:
As at 31 December 2015, there was no pledged notes receivable (31 December 2014: Nil).
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Notes receivable - continued
(3) Notes endorsed by the Group to other parties which are not yet due at the end of the period
Closing balance Opening balance
RMB RMB
Bank acceptances 84,677,596 47,805,224
__________ _________
As at 31 December 2015, notes endorsed by the Group to other parties which are not yet due at
the end of the period is RMB 84,677,596 (31 December 2014: RMB 47,805,224). The notes are
used for payment to suppliers. The Group believes that due to good reputation of bank, the risk of
notes not accepting by bank on maturity is very low, and almost all the risks and rewards on
ownership of the notes receivable have been transferred to the supplier, therefore derecognise the
note receivables endorsed. If the bank is unable to pay the notes on maturity, according to the
relevant laws and regulations of China, the Group would undertake limited liability for the notes.
(4) Notes receivable reclassified to accounts receivable due to the drawers' inability to settle the note on
maturity
As at 31 December 2015, no notes receivable were reclassified as accounts receivable due to the
default of drawer (31 December 2014: Nil).
3. Accounts receivables
(1) Disclosure of accounts receivables by categories:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount
RMB % RMB % RMB RMB % RMB % RMB
Accounts receivable that are
individually significant and
for which bad debt provision
has been assessed individually 74,538,738 37.7 - - 74,538,738 67,557,319 46.4 - - 67,557,319
Accounts receivable that are
not individually significant but
for which bad debt provision
______ ___
62.3
has been assessed individually 123,256,353 ____
- ____ ______ ______ ___
- 123,256,353 78,115,092 53.6 ____
- ____ ______
- 78,115,092
Total 197,795,091 100.0 - - 197,795,091 145,672,411 100.0 - - 145,672,411
______ ___ ____ ____ ______ ______ ___ ____ ____ ______
- 116 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Accounts receivable - continued
(1) Disclosure of accounts receivable by categories: - continued
The normal credit term is one month, which can be extended to one year for certain major
customers. The accounts receivable are interest-free.
As at 31 December 2015, ownership restricted accounts receivable is RMB 23,880,775(31
December 2014: Nil), referring to Note VI 46.
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 197,653,190 145,672,411
1 to 2 years 141,901
__________ -
__________
197,795,091 145,672,411
__________ __________
(2) Recognitions, collections and reversals during the current period:
As at 31 December 2015, there was no bad debt provision for accounts receivable (31 December
2014: Nil). There was no bad debt provision made, reversed or written-off by management in
2015 (2014: Nil).
(3) Top five entities with the largest balances of accounts receivable:
Relationship Percentage of
with the Group Amount Aging total receivables
RMB %
Nonggongshang Supermarket
(Group) Co., Ltd Third party 19,222,933 Within 1 year 9.7
Wal-Mart (China) Investment Co., Ltd. Third party 12,943,338 Within 1 year 6.5
DIA Market Third party 8,698,247 Within 1 year 4.4
SCHENK GmbH Third party 8,404,733 Within 1 year 4.2
Suguo Supermarket Co., Ltd Third party 7,032,205
________ Within 1 year 3.6
___
56,301,456 28.4
________ ___
- 117 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Prepayments
(1) The aging analysis is as follows:
Closing balance Opening balance
Amount Ratio Amount Ratio
RMB % RMB %
Within 1 year 3,096,223 86.2 8,073,786 100.0
1 to 2 years 494,875 13.8 - -
_________ _____ _________ _____
3,591,098 100.0 8,073,786 100.0
_________ _____ _________ _____
(2) As at 31 December 2015, the top 5 of prepayments are as follows:
Reason Percentage of
Relationship for being total advances
with the Group Amount Aging outstanding to suppliers
RMB %
Shandong Electricity Company
Yantai branch Third party 423,749 Within 1 year electricity purchase 11.8
Beijing Diaoyutai Wine Co. Third party 400,800 1 to 2 years goods not received 11.1
Via Zorzal Third party 255,427 Within 1 year goods not received 7.1
DONELLIVINI S.P.A Third party 224,874 Within 1 year goods not received 6.3
BONFILS Co., Ltd Third party 149,309
________ Within 1 year goods not received 4.2
___
1,454,159 40.5
________ ___
5. Interest receivable
(1) Categories of interest receivable
Closing balance Opening balance
RMB RMB
Interests of term deposits 8,019,338 3,619,429
________ ________
(2) Overdue interest
As at 31 December 2015, there was no overdue interest receivable (31 December 2014: Nil).
- 118 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables
(1) Disclosure of other receivables by categories
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount
RMB % RMB % RMB RMB % RMB % RMB
Other receivables that are
individually significant and
for which bad debt provision
has been assessed individually 32,390,931 60.7 (7,199,521) 22.2 25,191,410 16,540,213 42.9 (7,199,521) 43.5 9,340,692
Other receivables that are
not individually significant but
for which bad debt provision
has been assessed individually ______ ___ _____
20,955,077 39.3 - ___- ______ ______ ___ _____
20,955,077 22,021,610 57.1 - ___- ______
22,021,610
Total 53,346,008 100.0
______ ___ (7,199,521)
_____ 14.0 46,146,487
___ ______ ______ ___ (7,199,521)
38,561,823 100.0
_____ 18.7 31,362,302
___ ______
Other receivables that are individually significant and for which bad debt provision has been
assessed individually:
As at 31 December 2015, the bad debt provision for individually significant balance is as follows:
Balance Bad debts provision Percentage Reason for provision
RMB RMB %
The debtor is in the
process of
liquidation
Tiantong Security Co., Ltd. 7,199,521 7,199,521 100 Unable to repay
_______ _______
The aging analysis is as follows:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Amount provision amount Amount provision amount
Amount Proportion Amount Amount Amount Proportion Amount Amount
RMB % RMB RMB RMB % RMB RMB
Within 1 year 36,271,669 68.0 - 36,271,669 22,513,054 58.4 - 22,513,054
1 to 2 years 2,725,644 5.1 - 2,725,644 7,422,977 19.3 - 7,422,977
2 to 3 years 6,840,476 12.8 - 6,840,476 976,083 2.5 - 976,083
Over 3 years _______
7,508,219 ____
14.1 _______
(7,199,521) _______
308,698 _______
7,649,709 ____
19.8 _______
(7,199,521) _______
450,188
Total 53,346,008 100.0 (7,199,521) 46,146,487 38,561,823 100.0 (7,199,521) 31,362,302
_______ ____ _______ _______ _______ ____ _______ _______
(2) Accrual, reversal and written-off during the current period
No bad debt accrued or reversed in 2015 (2014: bad debt was reversed RMB 192,908).
(3) Other receivables written off in the reporting period
No other receivable written off in 2015.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Other receivables - continued
(4) Disclosure of other receivables by categories
Closing balance Opening balance
RMB RMB
Deposit 27,424,926 8,651,139
Investment fund 7,199,521 7,199,521
Petty cash receivable 6,679,122 3,138,780
Refund of consumption tax, real estate tax 635,482 8,772,123
Others 11,406,957
__________ 10,800,260
_________
53,346,008 38,561,823
__________ _________
(5) Top five entities with the largest balances of other receivables
As at 31 December 2015, the top 5 of other receivables are as follows:
Percentage of total Bad debt
Nature Amount Aging other receivable Amount
RMB % RMB
Yantai Development Zone Construction
Enterprise Pension Security
Management Office Construction deposit 12,325,300 Within 1 year 23.1 -
Yantai Development Zone
Finance Bureau Construction deposit 7,866,110 Within 1 year 14.8 -
Tiantong Security Co., Ltd. Investment fund 7,199,521 Over 3 years 13.5 7,199,521
Yantai Development Zone Construction
Industry Association Construction deposit 5,000,000 2-3 years 9.4 -
Canada Oros Ice-wine Co., Ltd Foreign investment fund ________
2,050,000 Within 1 year ___3.8 _______
-
34,440,931 64.6 7,199,521
________ ___ _______
7. Inventories
(1) Disclosure of inventories by categories
Closing balance Opening balance
Net carrying Net carrying
Balance Provision amount Balance Provision amount
RMB RMB RMB RMB RMB RMB
Raw material 89,256,433 - 89,256,433 74,820,215 - 74,820,215
Work in progress 1,247,023,301 - 1,247,023,301 919,070,983 - 919,070,983
Finished goods 942,720,720
_________ (18,147,490)
_______ 924,573,230
_________ 1,108,809,575 (15,324,375)
_________ _______ 1,093,485,200
_________
2,279,000,454 (18,147,490)
_________ 2,260,852,964 2,102,700,773
_______ _________ _________ (15,324,375)
_______ 2,087,376,398
_________
(2) Inventory provision
2015 Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Finished goods 15,324,375 2,823,115 - 18,147,490
________ _______ ________ ________
- 120 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Other current assets
Closing balance Opening balance
RMB RMB
Prepaid taxes 31,782,345 22,462,248
Prepaid rent 16,667,206
__________ 7,199,828
__________
48,449,551 29,662,076
__________ __________
9. Available-for-sale financial assets
(1) Available-for-sale financial assets
Closing balance Opening balance
Amount Impairment Carrying amount Amount Impairment Carrying amount
RMB RMB RMB RMB RMB RMB
Available-for-sale
equity instruments
measured at cost 10,402,814 (10,000,000) 402,814 10,000,000 (10,000,000) -
_________ _______ ______ _________ _______ ______
(2) Available-for-sale financial assets measured at cost
Carrying amount Provision for impairment losses Proportion of
voting power in Cash dividend
Investee Opening Increase Decrease Closing Opening Increase Decrease Closing the investee (%) for the period
RMB RMB RMB RMB RMB RMB RMB RMB RMB
Yantai Dingtao
Construction and
Development Co., Ltd. 10,000,000 - - 10,000,000 10,000,000 - - 10,000,000 18.0
Other(Note) - 428,062 (25,248) 402,814 - - - - Less than1% -
10,000,000 428,062 (25,248) 10,402,814 10,000,000 - - 10,000,000
Note: the Group holding equity ratios of investment companies are less than 1%. Investment
companies are all unlisted companies, and their fair value cannot be measured reliably, therefore,
the Group uses cost method to measure these available-for-sale financial assets.
- 121 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Fixed assets
(1) Details of fixed assets
Buildings Machinery Motor Vehicles Total
RMB RMB RMB RMB
I. Total original carrying amount
1. Opening balance 2,059,698,368 1,373,974,100 25,774,703 3,459,447,171
2. Increase
(1)Purchase 1,221,540 37,341,344 2,682,690 41,245,574
(2)Transfer from CIP 483,914,646 54,214,495 - 538,129,141
(3)Acquisition increase 102,584,131 41,163,681 - 143,747,812
3. Decrease
Disposal -
__________ (8,074,470)
__________ -
________ (8,074,470)
__________
4. Closing balance 2,647,418,685 1,498,619,150 28,457,393 4,174,495,228
__________ __________ ________ __________
II. Total accumulated depreciation
1. Opening balance 269,635,846 636,170,373 20,958,597 926,764,816
2. Increase
Additions 66,803,588 94,435,359 2,083,557 163,322,504
3. Decrease
Disposal -
__________ (4,837,277)
__________ -
________ (4,837,277)
__________
4. Closing balance 336,439,433 725,768,456 23,042,154 1,085,250,043
__________ __________ ________ __________
III. Total carrying amount
1. Closing carrying amount 2,310,979,252 772,850,694 5,415,239 3,089,245,185
__________ __________ ________ __________
2. Opening carrying amount 1,790,062,522 737,803,727 4,816,106 2,532,682,355
__________ __________ ________ __________
As at 31 December 2015, fixed assets with ownership restricted are RMB 18,405,000 (31
December 2014: Nil), referring to Note VI 46.
As at 31 December 2015, there was no temporary idle fixed assets, no fixed assets leased under
finance leases , no leased out under operating leases and no held for sale at the end of the period.
(2) Fixed assets of which certificates of title have not been obtained
As at 31 December 2015, buildings without property certificate are as follows:
Reasons why certificates
Items Amount of title have not been obtained
RMB
Xinjiang Shihezi Chateau factory building 260,886,798 Processing
Beijing Chateau European town, main, service building 226,944,579 Processing
Changan Chateau Dormitory building, main building 153,634,358 Processing
Ningxia Wine production factory and office building 149,892,083 Processing
Ding Luo Te Chateau main building 93,911,036 Processing
Sales Company office buildings 43,885,709 Processing
Xinjiang Tianzhu fermentations and storage warehouse 19,701,916 Processing
Ice Wine Chateau office building and packing workshop 10,121,819 Processing
Fermentation centre office, experiment building and workshop 6,251,433 Processing
Jingyang factory fermentation building 4,679,099 Processing
Kylin Packaging finished goods warehouse and workshop 2,668,884 Processing
__________
972,577,714
__________
- 122 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Construction in progress
(1) Construction in progress
Closing balance Opening balance
RMB RMB
R&D centre (“Changyu Wine integrational
Construction”) Project 1,799,097,086 1,127,641,913
Xianyang Chateau Construction Project 61,308,522 224,737,964
Sales Company construction project 55,645,386 39,316,089
Huanren factory construction project 29,502,825 26,261,424
Shihezi Chateau Construction Project 28,105,618 75,812,215
Ningxia Chateau Construction Project 13,709,767 131,515,731
The Company's reconstruction project 7,990,777 182,767
Ding Luo Te Chateau Project 5,000,221 73,517,357
AFIP plaza reconstruction project 3,659,245 28,000
Jingyang Wine fermentation workshop
reconstruction project 997,645 794,385
Other companies construction project 973,216
____________ 658,655
____________
2,005,990,308 1,700,466,500
____________ ____________
(2) Changes in significant construction in progress
Accumulated
Opening Transfer to Opening expenditure/b
Budget balance Addition PPE balance udget Status Financed by
RMB RMB RMB RMB RMB %
Self-raised
R&D centre (“Changyu Wine
3,505,780,000 1,127,641,913 671,455,173 - 1,799,097,086 51.3 51.3
integrational Construction”) Project Self-raised
Xianyang Chateau Construction
620,740,000 224,737,964 63,730,354 (227,159,796) 61,308,522 99.5 99.5
Project Self-raised
Sales Company construction project 161,350,000 39,316,089 17,584,827 (1,255,530) 55,645,386 99.1 99.1 Self-raised
Shihezi Chateau Construction Project 780,000,000 75,812,215 28,685,268 (76,391,865) 28,105,618 86.1 86.1 Self-raised
Ningxia Chateau Construction Project 414,150,000 131,515,731 29,906,086 (147,712,050) 13,709,767 97.9 97.9 Self-raised
Ding Luo Te Chateau project 192,400,000 73,517,357 13,363,563 (81,880,699) 5,000,221 93.3 93.3 Self-raised
Huanren factory construction project 31,000,000 3,241,401 - 29,502,825 95.2 95.2
26,261,424 Self-raised
1,698,802,693 827,966,672 (534,399,940) 1,992,369,425
There was no interest capitalized in construction in progress in 2015.
(3) As at 31 December 2015, there was no indication of impairment, therefore no provision was made.
- 123 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Bearer biological assets
Bearer biological assets measured in cost method
Planting RMB
I. Total original carrying amount
1. Opening balance 161,384,261
2. Increase
Self-cultivated 42,183,596
__________
3. Closing balance 203,567,857
__________
II. Total accumulated depreciation
1. Opening balance 9,661,020
2. Increase
Accrual 1,708,554
__________
3. Closing balance 11,369,574
__________
III. Total net carrying amount
1. Closing net carrying amount 192,198,283
__________
2. Opening net carrying amount 151,723,241
__________
As at 31 December 2015, there is no biological asset with ownership restricted.
As at 31 December 2015, biological assets of the Group include mature bearer biological assets of
RMB 59,391,773 (2014: RMB 23,758,058) and immature bearer biological assets of RMB
132,806,510. (2014: RMB 127,965,183)
As at 31 December 2015, there is no indication that biological assets may be impaired, and no
provision was made.
- 124 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Intangible assets
(1) Intangible asset
Land use rights Software use rights Trademark Total
RMB RMB RMB RMB
I. Total original carrying amount
1. Opening balance 459,367,374 37,017,024 - 496,384,398
2. Increase
(1)Purchase 8,238,062 636,764 - 8,874,826
(2)Acquisition increase -
__________ -
__________ 15,237,653
________ 15,237,653
__________
3. Closing balance 467,605,436
__________ 37,653,788
__________ 15,237,653
________ 520,496,877
__________
II. Total accumulated depreciation
1. Opening balance 36,283,156 7,150,048 - 43,433,204
2. Increase
Additions 10,366,556
__________ 2,676,143
__________ 121,058
________ 13,163,757
__________
3. Closing balance 46,649,712
__________ 9,826,191
__________ 121,058
________ 56,596,961
__________
III. Total carrying amount
1. Closing carrying amount 420,955,724 27,827,597 15,116,595 463,899,916
__________ __________ ________ __________
2. Opening carrying amount 423,084,218 29,866,976 - 452,951,194
__________ __________ ________ __________
As at 31 December 2015, there was no intangible asset with restricted ownership.
14. Goodwill
Investee Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Etablissements Roullet
Fransac (“Fransac Sales”) 13,112,525 - - 13,112,525
Dicot Partners, S.L
(“Dicot”) -
_________ 92,391,901
________ -
______ 92,391,901
_________
Total 13,112,525 92,391,901 - 105,504,426
_________ ________ ______ _________
As mentioned in VII 1, the Group acquired Dicot in September 2015. To determine the fair value
of assets and liabilities of Dicot, the Company has brought in the assets appraisal agency to
proceed the evaluation. At the reporting date for 2015 financial statement, due to the fair value
assessment has not accomplished, a provisional estimate fair value is recognised as the fair value
of Dicot at the acquisition date in consolidated financial statement. The assessment will be
finished within 12 month from the acquisition date. Therefore, by the end of the acquisition date,
the Group has recognised provisional goodwill for the acquisition RMB 92,391,901.
The Group recognised goodwill of RMB 13,112,525 in regard to the acquisition of Fransac Sales,
and of RMB 92,391,901 in regard to Dicot. The goodwill has been allocated to relevant asset
groups to undertake impairment test.
- 125 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Goodwill - continued
The recoverable amount of an asset group is determined based on the present value of expected
future cash flows. Future cash flow projections are made based on financial budgets approved by
management covering a 5-year period (projecting period) and presume that cash flows after the
projecting period (subsequent period) remain unchanged. According to the corporate financial
structure and local corporate income tax rate, discount rate used in calculating Fransac Sales and
Dicot recoverable amount are 8.8% and 7.5% respectively. One key assumption in projecting
future cash flows is the growth rate in projecting period, which is computed based on the expected
growth rate of the industry. Growth rate of sales in subsequent period is 2%. Management of the
Group believes that any reasonable changes in the above assumptions will not cause book value of
the subsidiary exceeds its recoverable amount.
According to the assessment, the Group confirms that no impairment provision need to be made
for goodwill in the reporting period.
15. Long-term prepaid expenses
Opening balance Increase Amortization Closing balance
RMB RMB RMB RMB
Land lease prepayments 60,810,188 - (1,481,601) 59,328,587
Land requisition fee 47,506,370 - (1,096,606) 46,409,764
Greening fee 40,596,058 4,730,175 (11,096,456) 34,229,777
Leasehold improvement 36,733,685 - (12,776,295) 23,957,390
Others 16,265,304
_________ 532,670
________ (5,599,325)
________ 11,198,649
_________
201,911,605 5,262,845 (32,050,283) 175,124,167
_________ ________ ________ _________
16. Deferred tax assets/liabilities
Deferred tax assets and deferred tax liabilities are not related to income tax of the same tax
authorities of the same tax subjects, thus not presented with the net amount after netting.
(1) Recognised deferred tax assets not presented at the net amount after offset：
Closing balance Opening balance
Temporary Temporary
Items differences Deferred tax assets differences Deferred tax assets
RMB RMB RMB RMB
Unrealized profit from intra
- company transactions 691,741,084 172,935,271 632,127,732 158,031,933
Unpaid bonus 133,017,447 33,254,362 95,326,160 23,831,540
Retirement benefit 16,147,369 4,036,842 15,936,065 3,984,016
Asset impairment provision 35,347,011 8,836,753 32,523,896 8,130,974
Deductable losses 265,793,269 66,448,318 176,375,554 44,093,889
Deferred income 81,078,284 16,895,110 88,423,710 16,114,471
1,223,124,464 302,406,656 1,040,713,117 254,186,823
- 126 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Deferred tax assets/liabilities - continued
(2) Recognised deferred tax liabilities not presented at the net amount after offset：
Closing balance Opening balance
Taxable temporary Deferred Taxable temporary Deferred
Item difference tax liability difference tax liability
RMB RMB RMB RMB
Revaluation surplus in
business combination
Not under common control 117,475,753 34,350,349 18,262,543 4,565,636
(3) Deferred tax assets and liabilities not recognized:
Closing balance Opening balance
RMB RMB
Deductable losses 41,690,051 1,363,422
_________ _________
(4) Deductable losses not recognized as deferred tax assets will expire in:
Closing balance Opening balance
RMB RMB
2015 - 1,363,422
2020 41,690,051
_________ -
_________
41,690,051 1,363,422
_________ _________
17. Other non-current assets
Closing balance Opening balance
RMB RMB
Prepaid investment fund for Société Cilile
Agricole du Chteau de Mirefleurs(“Mirefleurs”) 28,096,895 -
Receivable from transfer of biological assets 17,137,746
__________ 15,751,605
_________
45,234,641 15,751,605
__________ _________
- 127 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Short-term borrowings
Categories of short-term borrowings
Closing balance Opening balance
RMB RMB
Credit loans 640,290,788 300,000,000
Mortgaged loans 25,291,133
__________ -
__________
665,581,921 300,000,000
__________ __________
As at 31 December 2015, short-term borrowings detail is as follows:
Loans amount Exchange rate RMB Nature of Interest rate
interest %
Credit loans (RMB) 498,000,000 1.0000 498,000,000 Floating 4.14%~5.40%
Credit loans (EUR) 2,875,797 7.0952 20,404,354 Fixed 2.14%~4.00%
Credit loans (EUR) 2,619,938 7.0952 18,588,987 Floating 1.55%~2.50%
Credit loans (HKD) 123,296,070 0.8378 103,297,447 Floating 3M HIBOR+1.75%
Mortgaged loans (EUR) 3,564,541 7.0952 25,291,133
________ Fixed 6.14%
665,581,921
________
As at 31 December 2015, mortgaged loans are factoring of accounts receivables from Banco de
Sabadell, S.A. etc. EUR 3,365,765 (translated as RMB 23,880,775), mortgage loans with fixed
assets EUR 1,341,693 (translated as RMB 9,519,579), as collateral from Banco Sabadell, S.A. in
EUR 198,776 (translated as RMB 1,410,358) by Dicot.
19. Notes payables
Closing balance Opening balance
RMB RMB
Bank acceptances 29,000,000 10,000,000
_________ _________
As at 31 December 2015, there was no due notes payable unpaid (31 December 2014: Nil). Notes
payables are all due within one year.
- 128 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Accounts payable
The aging analysis of accounts payable are as follows
Closing balance Opening balance
RMB RMB
Within 1 year 567,791,049 357,811,822
1 to 2 years 1,487,319
__________ -
__________
569,278,368 357,811,822
__________ __________
21. Advances from customers
The aging analysis of advances from customers are as follows
Closing balance Opening balance
RMB RMB
Within 1 year 229,993,684 208,769,108
1 to 2 years 286,001 1,898,868
2 to 3 years 530,799 4,459,622
Over 3 years 3,756,020
__________ -
__________
234,566,504 215,127,598
__________ __________
22. Employee benefit payable
(1) Employee benefit payable
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Short-term payroll 142,954,964 394,695,816 (363,588,874) 174,061,906
Post-demission benefits
- predetermined provision plan 57,563 31,147,810 (31,175,197) 30,176
Termination benefits 15,936,065
_________ 5,692,518
_________ (5,481,214)
_________ 16,147,369
_________
158,948,592 431,536,144 (400,245,285) 190,239,451
_________ _________ _________ _________
- 129 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Employee benefit payable - continued
(2) Short-term payroll
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Salaries and bonus 139,917,954 357,468,679 (326,666,178) 170,720,455
Staff benefit 5,968 11,858,825 (11,685,715) 179,078
Staff welfare 161,489 13,284,150 (13,177,620) 268,019
Includes:
Medical insurance 158,487 11,154,228 (11,044,696) 268,019
Injury insurance 1,572 1,175,925 (1,177,497) -
Maternity insurance 1,430 953,997 (955,427) -
Housing fund 70,236 8,855,073 (8,877,991) 47,318
Union fee and education fee 2,799,317
_________ 3,229,089
_________ (3,181,370)
_________ 2,847,036
_________
142,954,964 394,695,816 (363,588,874) 174,061,906
_________ _________ _________ _________
(3) Predetermined provision plan
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Pension 55,963 29,499,285 (29,525,253) 29,995
Unemployment insurance 1,600
_____ 1,648,525
________ (1,649,944)
________ 181
_____
57,563 31,147,810 (31,175,197) 30,176
_____ ________ ________ _____
The Group participates in pension insurance and unemployment insurance plans established by
government institution. According to those plans, the Group pays pension and unemployment
insurance each month on the basis of 14%-21% and 1%-2% last period salary respectively. Apart
from these monthly expenses, the Group does not bear any further payment obligation. This year
the Group should pay RMB 29,499,285 and RMB 1,648,525 (2014: RMB 29,060,721 and RMB
1,549,044) respectively into pension insurance and unemployment insurance. As at 31 December
2015, the Group has unpaid pension and unemployment insurance of RMB 29,995 and RMB 181
respectively (31 December 2014: RMB 55,963 and RMB 1,600), which is due to the pension
insurance and unemployment insurance plan at the end of the reporting period. These payments
have been paid after the end of the reporting period.
- 130 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Taxes payable
Closing balance Opening balance
RMB RMB
Value added tax (45,821,559) (62,755,555)
Consumption tax 18,638,837 18,849,955
Business tax 509,491 1,005,135
Corporation income tax 49,020,665 109,836,980
Urban land use tax 2,812,536 1,519,318
Individual income tax 6,587,254 6,644,281
City construction tax 4,197,401 4,831,936
Property tax 855,668 898,914
Others 4,484,814
__________ 6,673,084
__________
41,285,107 87,504,048
__________ __________
24. Deferred income
Closing balance Opening balance
RMB RMB
Government grants
Current liabilities 11,241,873 12,398,718
Non-current liabilities 69,836,411
_________ 76,024,992
_________
81,078,284 88,423,710
_________ _________
- 131 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income - continued
Government grants
Recognized in Related to
Opening Addition non-operating income Closing Assets/Income
RMB RMB RMB RMB
Miyun Propaganda Department transfer 3,555,780 - (888,945) 2,666,835 Assets
Wine base liquor brewage project 9,044,116 - (1,434,873) 7,609,243 Assets
Shihezi chateau project funds 16,116,600 - (2,280,000) 13,836,600 Assets
Industry revitalization and technology
reconstruction specific funds 21,330,000 - (1,422,000) 19,908,000 Assets
Ningxia industry revitalization and
technology reconstruction funds 11,065,000 - (3,389,000) 7,676,000 Assets
Wine grape subsidies 470,000 - - 470,000 Income
Modern agriculture grape production
development subsidies 324,000 - - 324,000 Income
WuYouYiXin industrial cluster specific funds 120,000 - (60,000) 60,000 Assets
Agricultural technology subsidies 632,400 312,000 (122,400) 822,000 Income
(Huanren) wine production construction funds - 4,000,000 - 4,000,000 Assets
Wine electronic tracking system
specific funds 5,193,474 - (667,055) 4,526,419 Assets
Wine industry specific funds 930,000 - - 930,000 Assets
Shandong Peninsula Blue Economic
Area construction funds 10,000,000 - - 10,000,000 Assets
863 Program subsidy funds for scientific research 62,900 - (3,010) 59,890 Income
Information system construction
project technology funds 5,220,000 - (580,000) 4,640,000 Assets
Integration projects subsidies 100,000 - (71,200) 28,800 Income
Cross-border e-Business projects subsidies 2,179,440 143,600 (662,543) 1,660,497 Income
Red wine phenolics research projects funds - 300,000 - 300,000 Income
Grape base construction project _______
2,080,000 ______- _______
(520,000) _______
1,560,000 Assets
Total 88,423,710 4,755,600 (12,101,026) 81,078,284
_______ ______ _______ _______
Less: Non-current liabilities due within one year _______
12,398,718 _______
11,241,873
Other non-current liabilities 76,024,992 69,836,411
_______ _______
As at 31 December 2015, the Group recognise current liability for deferred income to be
accounted in profit or loss within one year, and recognise non-current liability for deferred income
to be accounted in profit or loss over one year.
- 132 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Other payables
(1) Natures of other payables are as follows
Closing balance Opening balance
RMB RMB
Deposit from distributors 114,475,163 134,470,408
Payables for equipment and construction 92,580,929 90,857,839
Payables for transportation 29,713,956 24,388,114
Royalty fee 86,001,287 77,809,993
Advertising costs 76,818,144 43,488,770
Capital increment from minority interest (Note) 22,522,636 22,522,636
Employee deposit 16,078,904 10,005,000
Deposits from suppliers 5,644,909 2,263,984
Payables for contracting fee 32,936,900 27,132,371
Others 32,453,567
__________ 36,865,202
__________
509,226,395 469,804,317
__________ __________
(2) Description of significant other payables aged more than one year
Company Amount Reasons
RMB
Beijing Qinglang agriculture science and technology
development limited company 18,630,431 unfinished capital increment(Note)
Beijing Qinglang agriculture science and technology 12,092,414 Payables for contracting fee
development limited company
Yantai De'an Investment Company Limited 3,892,205 unfinished capital increment (Note)
Yantai De'an Investment Company Limited 4,533,932
_________ Payables for contracting fee
39,148,982
_________
Note: unfinished capital increment is the investment fund from minority shareholders for the
subsidiary of the Company. As at 31 December 2015, capital increment procedures have not
finished.
26. Non-current liabilities due within one year
Closing balance Opening balance
RMB RMB
Long-term borrowings due within one year 156,335,647 -
__________ _________
As at 31 December 2015, Long-term borrowings due within one year refers to Note IV 27
- 133 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
27. Long-term borrowings
Categories of long-term borrowings
Closing balance Opening balance
RMB RMB
Credit loan 66,868,836 89,467,200
Mortgaged loan 4,817,793 -
Secured loan -
___________ 119,912,800
___________
71,686,629 209,380,000
___________ ___________
As at 31 December 2015, loans detail is as follows:
Loans amount Exchange rate RMB Nature Interest rate Due within Due over
of interest % one year one year
Credit loans (EUR) 190,150 7.0952 1,349,156 Fixed 3.80% 1,064,090 285,066
Credit loans (EUR) 13,143,957 7.0952 93,259,001 Floating 1.75%~5.84% 26,675,231 66,583,770
Mortgaged loans (EUR) 855,299 7.0952 6,068,519 Fixed 4.50%~6.14% 1,250,726 4,817,793
Secured loan (HKD) 152,000,000 0.8378 ______
127,345,600 Floating3M HIBOR+1.95% _______
127,345,600 _______ -
228,022,276 156,335,647 71,686,629
______ _______ _______
As at 31 December 2015, mortgaged loans are Dicot using fixed assets EUR 1,252,314 (translated as
RMB 8,885,421) as collateral for loans from Popular Espaol, S.A. and Banco Cajamar in total EUR
855,299 (translated as RMB 6,068,519).
As at 31 December 2015, secured loan is borrowed by the Company from Qingdao Branch of
HSBC with the bank deposit of RMB 125,000,000 as custody. The borrowing amount is HKD
152,000,000(translated as RMB 127,345,600) with quarterly paid interest rate of the 3 month
Hong Kong interbank offered rates plus 195 basis points and borrowing period from 4 July 2014
to 3 July 2016. As at 31 December 2015, the interest rate of secured loan is 2.35%.
28. Other non-current liabilities
Closing balance Opening balance
RMB RMB
Employee benefit 4,047,476 3,998,352
_________ _________
As at 31 December 2015, employee benefit represents deposit from bonus accrued for managers and
above. According to the bonus payment schedule of 2015, the bonus is expected to be paid during 2017
to 2019.
- 134 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Share capital
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Unrestricted shares
A shares 453,460,800 - - 453,460,800
B shares 232,003,200
_________ -
______ -
______ 232,003,200
_________
Total of unrestricted shares
and total shares 685,464,000 - - 685,464,000
_________ ______ ______ _________
30. Capital reserve
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Share premium 557,222,454 2,816,399 - 560,038,853
Other 5,916,588
_________ -
______ -
______ 5,916,588
_________
Total 563,139,042 2,816,399 - 565,955,441
_________ ______ ______ _________
In April 2015, the Company’s subsidiary, Beijing Changyu AFIP Wine Chateau Co., Ltd (“Beijing Chateau”) brought Beijing
AFIP Tourism and Culture Company(“AFIP Tourism”) 30% shareholding from Beijing Qinglang agriculture science and
technology development Co., Ltd and Yantai De'an Investment Co., Ltd, with RMB 150,000 cash consideration. The difference
between consideration and book value of non-controlling interest RMB 2,816,399 is recognised in capital reserve. After the
purchase, Beijing Chateau holds 100% shareholding of AFIP Tourism.
31. Other comprehensive income
2015
Less: last year other Post-tax Post-tax
Before-tax comprehensive income Less: attributable attributable
Items Opening balance amount in P/L current year tax expense to parent to NCI Closing balance
Other comprehensive
income to be reclassified
to profit and loss (2,803,271) (7,741,776) - - (7,639,241) (102,535) (10,442,512)
Foreign currency statement
translation difference (2,803,271) (7,741,776) - - (7,639,241) (102,535) (10,442,512)
____ _____ ____ ____ _____ ____ _____
32. Surplus reserve
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Statutory surplus reserve 342,732,000
_________ -
______ -
______ 342,732,000
_________
342,732,000 - - 342,732,000
_________ ______ ______ _________
- 135 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Surplus reserve - continued
In accordance with the Company Law of the People's Republic of China and the Articles of
Association of the Company, the Company is required to appropriate 10% of the net profit to the
statutory surplus reserve until the accumulated balance of the statutory surplus reserve reaches
50% of the registered share capital. The Company does not appropriate net profit to the surplus
reserve in 2015.
The Company can appropriate discretionary surplus reserve after appropriation of the statutory
surplus reserve. Discretionary surplus reserve can be utilized to offset the deficit or increase the
share capital after approval.
33. Retained earnings
Closing balance Opening balance
RMB RMB
Retained earnings brought forward 5,251,920,374 4,616,944,663
Add: profit attributable to shareholders of the Company 1,030,073,860 977,707,711
Less: Dividends paid in respect prior year's profit (301,604,160)
____________ (342,732,000)
____________
Retained earnings carried forward 5,980,390,074 5,251,920,374
____________ ____________
(1) Appropriation to surplus reserve by subsidiaries
As at 31 December 2015, the balance of the Group's unappropriated profits include appropriation
to surplus reserve by subsidiaries amounting to RMB 54,946,701 (31 December 2014: RMB
49,484,644).
(2) Cash dividends approved by general meeting
According to the annual general meeting on 22 May 2015, dividends distribution plan has been
made. On the basis of 685,464,000 issued share capital, RMB 4.4 (including taxes) for every 10
shares was distributed to shareholders, in total RMB 301,604,160 cash dividends.
(3) Profit distribution decided after the balance sheet date
According to a proposal of the board of directors approved on 27 April 2016, on the basis of
685,464,000 issued shares in 2015, cash dividends of RMB 5.0 (including taxes) for every 10 share
will be distributed to all the shareholders. The aggregate amount of cash dividend is RMB
342,732,000. The above proposal regarding dividends distribution is yet to be approved in a
shareholders' meeting.
- 136 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Operating income and costs
Operating income is analysed as follows:
2015 2014
RMB RMB
Principal operating income 4,589,025,348 4,113,169,270
Other operating income 60,697,020
____________ 43,558,255
____________
4,649,722,368 4,156,727,525
____________ ____________
Operating cost is analysed as follows:
2015 2014
RMB RMB
Principal operating cost 1,484,994,084 1,354,777,577
Other operating cost 27,508,951
____________ 17,667,035
____________
1,512,503,035 1,372,444,612
____________ ____________
The operating income for the Group is mainly from the sales of wine, brandy and sparkling wine.
In 2015, Over 98% (2014: over 99%) of the sales generated in PRC.
35. Taxes and surcharges
2015 2014
RMB RMB
Consumption tax 160,472,712 171,424,114
Business Tax 3,613,680 2,853,114
City construction tax 50,491,173 51,051,930
Education fee and surcharges 36,625,254 36,830,754
Others 6,810,705
__________ 7,286,862
__________
258,013,524 269,446,774
__________ __________
For detail standards of tax rate please refer to Notes V.
- 137 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Selling expenses
2015 2014
RMB RMB
Advertising costs 547,276,390 466,868,778
Freight 124,662,391 120,998,488
Salary and employee benefit 237,132,890 183,841,797
Trademark fee 83,734,976 77,809,993
Warehouse leasing expenses 70,352,917 50,816,255
Travelling expenses 25,946,093 20,986,441
Depreciation cost 18,866,370 9,123,380
Labor fee 25,367,133 22,283,617
Renovation costs 19,140,522 1,835,863
General expense 6,794,673 5,079,767
Logistics service charge 6,644,156 7,033,039
Packing cost 5,090,563 2,430,519
Property management fee 4,487,152 3,421,047
Low-value consumable amortization 3,627,241 9,158,438
Security and sanitation fee 3,617,320 1,482,628
Sales commissions 3,417,859 2,926,165
Others 24,968,517
____________ 19,913,149
____________
1,211,127,163 1,006,009,364
____________ ____________
37. General and administrative expense
2015 2014
RMB RMB
Salary and employee benefit 59,832,416 42,752,029
Depreciation 38,123,017 33,086,559
Insurance fee 30,645,834 28,953,319
Property tax, stamp duty and other taxes 28,441,366 13,585,138
Contracting fee 19,144,698 16,539,989
Administrative expenses 16,772,528 14,472,830
Maintenance fee 15,686,214 16,559,436
Virescence fee 15,154,393 16,207,197
Service fee 14,878,018 4,158,814
Amortization 12,129,490 10,961,304
Leasing expenses 9,190,948 11,063,572
Cleaning fee 6,573,075 6,860,665
Entertainment fee 5,660,174 3,786,968
Travelling expenses 5,018,296 5,290,745
Technology development fee 3,006,614 3,057,225
Others 33,711,328
__________ 29,644,228
__________
313,968,409 256,980,018
__________ __________
- 138 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Loss on impairment of assets
2015 2014
RMB RMB
Reversal of impairment loss - (192,908)
Inventory impairment 2,823,115
_________ 2,188,785
_________
2,823,115 1,995,877
_________ _________
39. Financial income
2015 2014
RMB RMB
Interest income (16,778,280) (23,614,179)
Exchange loss(gain) 4,349,534 (7,031,076)
Less: Interest expenses 21,957,762 12,298,953
Bank charges 1,758,669
__________ 1,089,581
__________
11,287,685 (17,256,721)
__________ __________
40. Non-operation income
Recognized in
extraordinary
2015 2014 profit and loss
RMB RMB RMB
Gains on disposal of non-current assets 192,945 121,113 192,945
Including: gain on disposal of plant
property and equipment 192,945 121,113 192,945
Government grants 38,952,919 40,545,714 38,952,919
Penalty income 7,246,157 637,531 7,246,157
Others 3,673,296
_________ 2,692,047
_________ 3,673,296
_________
50,065,317 43,996,405 50,065,317
_________ _________ _________
- 139 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Non-operation income - continued
Government grants recognized in the income statement is as follows:
Assets/income
2015 2014 related
RMB RMB
Major projects support fund 7,134,819 6,878,819 Assets related
Small and medium enterprises
support fund 4,107,054 5,010,153 Assets related
Tax refund 17,833,465 18,259,690 Income related
Others 9,877,581
_________ 10,397,052
_________ Income related
38,952,919 40,545,714
_________ _________
41. Non-operation expenses
Recognized in
extraordinary
2015 2014 profit and loss
RMB RMB RMB
Loss on disposal of non-current assets 56,884 5,207,658 56,884
Including: losses from disposal
of fixed assets 56,884 114,390 56,884
losses from disposal
of biological assets - 5,093,268 -
Compensation and penalty loss 1,102,893 705,333 1,102,893
Donation 288,009 434,352 288,009
Others 457,103
_________ 2,022,906
_________ 457,103
_________
1,904,889 8,370,249 1,904,889
_________ _________ _________
- 140 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Income tax
2015 2014
RMB RMB
Current income tax 407,380,757 421,450,258
Deferred income tax (49,496,522)
__________ (96,424,212)
__________
357,884,235 325,026,046
__________ __________
Reconciliation between income tax expenses and profits is as follows:
2015 2014
RMB RMB
Profit before tax 1,388,159,865 1,302,733,757
Income tax expense at statutory tax rate 25% (2014:25%) 347,039,966 325,683,439
Effect of different tax rates applied by certain subsidiaries (3,509,042) (1,356,542)
Unrecognised deductable loss 10,422,513 -
Non-deductible expenses 3,930,798
____________ 699,149
____________
Income tax expenses at the Group's effective tax rate 357,884,235 325,026,046
____________ ____________
43. Basic and dilutive earnings per share
The calculation of basic earnings per share is based on the consolidated profit attributable to
ordinary shareholders of the Company during the year and the weighted average number of
outstanding ordinary shares.
2015 2014
RMB RMB
Earnings
Consolidated profit attributable to ordinary
shareholders of the Company 1,030,073,860
____________ 977,707,711
____________
Shares
Weighted average number of outstanding
ordinary shares 685,464,000
____________ 685,464,000
____________
Basic earnings per share 1.50 1.43
____________ ____________
The Company does not have potential dilutive ordinary shares.
From the balance sheet date to the date of approval of this report, there are no subsequent events
which would affect the numbers of the weighted average number of outstanding of ordinary
shares.
- 141 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Notes to consolidated cash flow statement
(1) Cash received relating to other operating activities:
2015 2014
RMB RMB
Government grants 9,774,028 22,286,024
Penalty income 7,246,157 637,531
Others 5,352,831
_________ 1,619,992
_________
22,373,016 24,543,547
_________ _________
(2) Cash paid relating to other operating activities:
2015 2014
RMB RMB
Selling expenses 949,202,920 726,232,000
General and administrative expenses 110,003,182 107,585,895
Note payable deposit 20,000,000 4,034,004
Others 4,181,035
____________ 7,096,689
____________
1,083,387,137 844,948,588
____________ ____________
(3) Cash paid for the purchase subsidiaries and other equity:
2015 2014
RMB RMB
Cash paid for acquisition of Dicot 190,148,125 -
Less: cash and cash equivalents for Dicot
at acquisition date 4,902,074 -
Prepaid investment fund for Mirefleurs 28,096,895
__________ -
__________
213,342,946 -
__________ __________
(4) Cash paid relating to other financing activities:
2015 2014
RMB RMB
Pledged security of short-term borrowing - 125,000,000
Development Zone Trading pledged deposit 26,100,000 -
Canada Oros investment fund return 2,050,000
__________ -
__________
28,150,000 125,000,000
__________ __________
- 142 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Supplementary information to consolidated cash flow statement
(1) Supplementary information to consolidated cash flow statement
2015 2014
RMB RMB
Cash flows from operating activities
calculated by adjusting the net profit:
Net profit 1,030,275,630 977,707,711
Add: Loss for impairment of assets 2,823,115 1,995,877
Depreciation of fixed assets 163,322,504 127,149,785
Amortization of intangible assets 13,163,757 11,396,496
Amortization of Biological assets 1,708,554 865,855
Amortization of long-term prepaid expenses 32,050,283 15,799,878
Loss/(gain) on disposal of property
plant and equipment (136,061) 5,086,545
Finance expense 6,516,142 (7,012,502)
Increase in deferred tax assets (48,219,833) (95,653,733)
Decrease in deferred tax liabilities (1,276,689) (770,479)
Decrease in inventories 3,921,192 31,552,254
Decrease/ (increase) in operating receivables (175,316,875) 48,497,684
Increase/ (decrease) in operating payables 114,214,648
____________ (46,532,075)
____________
Net cash flows from operating activities 1,143,046,367 1,070,083,296
____________ ____________
(2) Cash and cash equivalent
Closing balance Opening balance
RMB RMB
Closing balance of cash and bank 1,285,362,414 1,145,365,071
Less:
restricted bank deposits 2,643,181 2,643,519
restricted other monetary funds 181,477,572 135,004,018
deposit with a period of over three months 9,000,000
____________ 47,245,260
____________
Closing balance of cash and cash equivalents 1,092,241,661 960,472,274
____________ ____________
- 143 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Supplementary information to consolidated cash flow statement - continued
(2) Cash and cash equivalent - continued
Closing balance Opening balance
RMB RMB
Cash 1,092,241,661 960,472,274
Including: Cash on hand 179,488 101,660
Bank deposits on demand 1,092,062,173
___________ 960,370,614
__________
Closing balance of cash and cash equivalents 1,092,241,661 960,472,274
___________ __________
46. Assets with restriction of ownership
Closing balance Opening balance
RMB RMB
Cash and bank 184,120,753 137,647,537
Account receivables 23,880,775 -
Fixed assets 18,405,000 -
__________ __________
As at 31 December 2015, cash and bank balances with restriction of ownership include: security
of RMB 125,000,000 pledged for a short-term borrowing from HSBC of HKD 152,000,000
(translated as RMB 127,345,600); R&D Centre pledged deposit of RMB 26,100,000; refundable
deposit for notes payable of Shihezi Chateau of RMB20,000,000, Xinjiang Tianzhu of RMB
7,000,000; Xinjiang Trading of RMB 3,000,000; the Group's housing fund of RMB 2,643,519;
deposit of RMB 370,000 for letter of credit and company cards deposit guarantee of RMB 7,572.
As at 31 December 2015, the restricted accounts receivables is EUR 3,365,765(translated as RMB
23,880,775) that Dicot conducted its accounts receivables for factoring from Banco de Sabadell,
S.A. etc.
As at 31 December 2015, the restricted fixed assets is Dicot mortgaged fixed assets for bank
borrowings including fixed assets EUR 1,341,693 (translated as RMB 9,519,579) for short-term
borrowings and EUR 1,252,314(translated as RMB 8,885,421) for long-term borrowings. Bank
borrowings refers to Note IV 18 and Note IV 27
- 144 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VI. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Foreign monetary items
(1) Foreign monetary items
The foreign monetary items located within China are as follows:
Closing foreign Exchange Closing translated
Items currency balance rate RMB balance
Cash and bank
EUR 21,387,251 7.0952 151,746,825
HKD 115,513 0.8378 96,777
__________ ______ __________
Short-term borrowings
HKD 123,296,070 0.8378 103,297,447
__________ ______ __________
Long-term borrowings due within one year
HKD 152,000,000 0.8378 127,345,600
__________ ______ __________
Long-term borrowings
EUR 8,000,000 7.0952 56,761,600
__________ ______ __________
(2) Overseas business entities
The Company’s overseas subsidiaries determine bookkeeping currency based on the primary
economic environment. The bookkeeping base currency of Dicot and Francs Champs
Participations SAS (“Francs Champs”) are all in Euro, and Dicot and Francs Champs have no
foreign monetary items at the year end.
- 145 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VII. CHANGE IN CONSOLIDATION SCOPE
1. Business combination under different control
(1) Business combination under different control in current period
Name of Equity Equity Equity Revenue from Net profit from
Equity Acquisition Basis of
acquisition acquisition acquisition acquisition acquisition date to acquisition date
acquisition date date acquisition date
company date ratio (%) method year end to year end
EUR Finish payment
Dicot 30 Sept 2015 75 Purchase 30 Sept 2015 RMB 76,202,513 RMB 807,079
26,250,000 and acquire equity
Other detail information:
According to the “Equity Transfer Agreement” signed between the Company and Comercial
Gatar, S.L. (“CG S.L.”) Gestión Ganuza, S.L. (“GG S.L.”) at 9 Jul 2015. The company paid in
consideration EUR 26,250,000(translated as RMB 190,148,125) to CG S.L. and GG S.L. for
37.5% and 37.5% shareholding of Dicot respectively.
The Company paid consideration in September 2015, acquired 75% of Dicot, arranged directors
into the board in accordance with the company’s article, and obtained the financial and
operational control of Dicot.
(2) Consideration and Goodwill
Consideration
Dicot
RMB
Cash 190,148,125
Total consideration 190,148,125
Less: acquired provisional value of net assets 97,756,224
__________
Goodwill 92,391,901
__________
- 146 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VII. CHANGE IN CONSOLIDATION SCOPE - continued
1. Business combination under different control - continued
(3) Recognised assets and liabilities of mergee at acquisition date
Dicot
Provisional value Book value
at acquisition date at acquisition
date
RMB RMB
Assets
Cash and bank 4,902,074 4,902,074
Accounts receivable 49,963,808 49,963,808
Other receivables 1,073,2471,073,247Inventories
180,220,873 176,311,076
Other current assets 1,853,758 1,853,758
Available-for-sale financial assets 428,062 428,062
Fixed assets 143,747,812 57,023,364
Intangible assets 15,237,653
____________ 2,333,891
____________
Total assets 397,427,287 293,889,280
____________ ____________
Liabilities
Accounts payable 119,276,204 119,276,204
Other payables 9,118,934 9,118,934
Short-term borrowings 88,954,565 88,954,565
Long-term borrowings 18,674,550 18,674,550
Deferred tax liabilities 31,061,402
____________ -
____________
Total liabilities 267,085,655 236,024,253
____________ ____________
Net assets 130,341,632 57,865,027
Less：Non-controlling interests 32,585,408
____________ 14,466,257
____________
Acquired net assets 97,756,224 43,398,770
____________ ____________
(4) Relevant explanation for unsettled fair value of recognised assets and liabilities of merge and
consideration at the acquisition date and at the year end
To determine the fair value of assets and liabilities of Dicot, the Company has brought in the
assets appraisal agency to proceed the evaluation. Because at the reporting date for 2015 financial
statement, fair value assessment has not finished, a provisional estimate fair value is recognised as
the fair value of Dicot at the acquisition date in consolidated financial statement. And provisional
goodwill is recognised in RMB 92,391,901. The assessment will be finished within 12 month
from the acquisition date. Assets and liabilities listed above will be adjust (if it is necessary)
according to the assessment report.
- 147 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VII. CHANGE IN CONSOLIDATION SCOPE - continued
2. Change in consolidation scope due to other reasons (new established subsidiaries)
Name Place and date of registration Legal representative Business nature Registered capital Principal activities Incorporate code
Subsidiaries acquired by establishment：
Lanzhou Changyu Pioneer 26 March 2015 Zhang, Pengfei Sales RMB 500,000 Wholesale of pre-packed foods 32541076-1
Sales Co. Ltd (“Lanzhou Pioneer”) Lanzhou Gansu, China
Yantai Fulangduo Import Wine Sales 22 January 2015 Zhou, Hongjiang Sales RMB 1,000,000 Wholesale and retail 32846634-9
Co. Ltd (“Yantai Fulangduo”) Yantai Shandong, China pre-packed foods
Hefei Changyu Pioneer 19 August 2014 Wang, Xiufeng Sales RMB 500,000 Wholesale and retail 39550778-8
Sales Co. Ltd (“Hefei Pioneer”) * Hefei, Anhui, China pre-packed and unpacked foods
Urumchi Changyu Pioneer 15 August 2014 Zhao, Changchun Sales RMB 500,000 Wholesale of pre-packed foods 31342623-X
Sales Co. Ltd (“Urumchi Pioneer”) * Urumchi Xinjiang, China
Guizhou Changyu Pioneer 2 February 2015 Sun xuefeng Sales RMB 500,000 Wholesale of pre-packed foods 32213485-3
Sales Co. Ltd (“Guizhou Pioneer”) Guiyang Guizhou, China
* As at 31 December 2014, these subsidiaries had completed registration but paid share
capital in 2015, therefore they are included in the consolidation scope of the Group in
2015.
- 148 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VIII. INTERESTS IN OTHER ENTITIES
1. Structure of the Group
Equity interest owned
by the company
Name Address Place of registration Nature Direct Indirect Acquisition method
Xinjiang Tianzhu (a) Shihezi, Xinjiang, China Shihezi, Xinjiang, China Manufacturing 60% - Subsidiary acquired in business combination
under non-common control
Fransac Sales Cognac, France Cognac, France Trading - 100% Subsidiary acquired in business combination
under non-common control
Dicot Navarra, Spain Navarra, Spain Sales 75% Subsidiary acquired in business combination
under non-common control
Beijing Changyu Sales and distribution Co., Ltd Beijing, China Beijing, China Sales 100% - Subsidiaries acquired by establishment
("Beijing Sales")
Yantai Kylin Packaging Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Manufacturing 100% - Subsidiaries acquired by establishment
("Kylin Packaging")
Yantai Changyu-Castel Wine Chateau Co., Ltd Yantai, Shandong, China Yantai, Shandong, China Manufacturing 70% - Subsidiaries acquired by establishment
("Changyu Chateau") (b)
Changyu (Jingyang) Wine Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Manufacturing 90% 10% Subsidiaries acquired by establishment
("Jingyang Wine")
Yantai Changyu Pioneer Wine Sales Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Sales 100% - Subsidiaries acquired by establishment
("Sales Company")
Langfang Development Zone Castel-Changyu Wine Lanfang, Hebei, China Lanfang, Hebei, China Manufacturing 39% 10% Subsidiaries acquired by establishment
Co., Ltd ("Langfang Castel") (c)
Changyu (Jingyang) Wine Sales Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Sales 10% 90% Subsidiaries acquired by establishment
("Jingyang Sales”)
Langfang Changyu Pioneer Wine Sales Co., Ltd Lanfang, Hebei, China Lanfang, Hebei, China Sales 10% 90% Subsidiaries acquired by establishment
("Langfang Sales")
Shanghai Changyu Sales and distribution Co., Shanghai, China Shanghai, China Sales 30% 70% Subsidiaries acquired by establishment
Ltd. ("Shanghai Sales")
Beijing Changyu AFIP Agriculture development Miyun, Beijing, China Miyun, Beijing, China Sales - 100% Subsidiaries acquired by establishment
Co., Ltd ("Agriculture Development")
Beijing Chateau (d) Beijing, China Beijing, China Manufacturing 70% - Subsidiaries acquired by establishment
Yantai ("Beijing Chateau") Changyu Wine Sales Yantai, Shandong, China Yantai, Shandong, China Sales 90% 10% Subsidiaries acquired by establishment
Co., Ltd. ("Wines Sales")
Yantai Changyu Pioneer International Co., Ltd. Yantai, Shandong, China Yantai, Shandong, China Sales 70% 30% Subsidiaries acquired by establishment
("Pioneer International")
Hangzhou Changyu Wine Sales Co., Ltd. Hangzhou, Zhejiang, China Hangzhou, Zhejiang, China Sales - 100% Subsidiaries acquired by establishment
("Hangzhou Changyu")
Ningxia Growing Yinchuang, Ningxia, China Yinchuang, Ningxia, China Planting 100% - Subsidiaries acquired by establishment
Huanren Changyu National Wines Sales Co., Ltd. Benxi, Liaoning, China Benxi, Liaoning, China Sales 100% - Subsidiaries acquired by establishment
("National Wines")
Liaoning Changyu Ice Wine Chateau Co., Ltd. Benxi, Liaoning, China Benxi, Liaoning, China Manufacturing 51% - Subsidiaries acquired by establishment
("Ice Chateau") (e)
Yantai Development Zone Changyu Trading Co., Yantai, Shandong, China Yantai, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Ltd ("Development Zone Trading")
Shenzhen Changyu Wine Marketing Ltd. Shenzhen, Guangdong, China Shenzhen, Guangdong, China Sales - 100% Subsidiaries acquired by establishment
("Shenzhen Marketing")
Yantai Changyu Fushan Trading Yantai, Shandong, China Yantai, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Company("Fushan Trading")
Beijing AFIP Meeting Center ("Meeting Center") Miyun, Beijing, China Miyun, Beijing, China Service - 100% Subsidiaries acquired by establishment
AFIP Tourism Miyun, Beijing, China Miyun, Beijing, China Tourism - 100% Subsidiaries acquired by establishment
Ningxia Wine Co.Ltd. ("Ningxia Wine"). Yinchuan, Ningxia, China Yinchuan, Ningxia, China Manufacturing 100% - Subsidiaries acquired by establishment
Yantai Changyu DingLuoTe Chateau. Yantai, Shandong China Yantai, Shandong China Retail and 65% 35% Subsidiaries acquired by establishment
("Ding Luo Te Chateau") Sales
Qing Tong Xia Changyu Wine Marketing Qing Tong Xia, Ningxia, China Qing Tong Xia, Ningxia, China Sales - 100% Subsidiaries acquired by establishment
Ltd("Qing Tong Xia Sales")
Shihezi Chateau Shihezi, Xinjiang, China Shihezi, Xinjiang, China Manufacturing 100% - Subsidiaries acquired by establishment
Ningxia Moser 15th Changyu Wine Chateau Co., Yinchuan, Ningxia, China Yinchuan, Ningxia, China Manufacturing 100% - Subsidiaries acquired by establishment
Ltd. (" Ningxia Chateau")
Shanxi Changyu Rina Castle Chateau Co., Ltd. Xianyang, Shanxi, China Xianyang, Shanxi, China Manufacturing 100% - Subsidiaries acquired by establishment
(" Chang'an Chateau")
R&D Centre Yantai, Shandong China Yantai, Shandong China Manufacturing 100% - Subsidiaries acquired by establishment
Changyu (HuanRen) Wine Co., Ltd Benxi LiaoNing China Benxi LiaoNing China Wine production 100% - Subsidiaries acquired by establishment
("Huan Ren Wine") Projecting
Xinjiang Sales Shihezi Xinjiang China Shihezi Xinjiang China Sales - 100% Subsidiaries acquired by establishment
Xinjiang Changyu Winery Co., Ltd Shihezi Xinjiang China Shihezi Xinjiang China Manufacturing - 100% Subsidiaries acquired by establishment
("Xinjiang Winery")
Ningxia Changyu Trading Co., Ltd Yinchuan Ningxia China Yinchuan Ningxia China Sales - 100% Subsidiaries acquired by establishment
("Ningxia Trading")
Shanxi Changyu Rina Wine Sales Co., Ltd Xianyang Shanxi China Xianyang Shanxi China Sales - 100% Subsidiaries acquired by establishment
("Shanxi Sales")
Penglai Changyu Wine Sales Co., Ltd Penglai Shandong China Penglai Shandong China Sales - 100% Subsidiaries acquired by establishment
("Penglai Sales")
Laizhou Changyu Wine Sales Co., Ltd Laizhou Shandong China Laizhou Shandong China Sales - 100% Subsidiaries acquired by establishment
("Laizhou Sales")
Francs Champs Cognac, France Cognac, France Investment and 100% - Subsidiaries acquired by establishment
trading
Lanzhou Changyu Wine Sales Co. Ltd ("Lanzhou Lanzhou Gansu, China Lanzhou Gansu, China Sales - 100% Subsidiaries acquired by establishment
Sales")
Beijing Retailing Co. Ltd("Beijing Retailing") Beijing, China Beijing, China Sales - 100% Subsidiaries acquired by establishment
Tianjin Changyu Pioneer Sales Co. Ltd (“Tianjin Tianjin, China Tianjin, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Fuzhou Changyu Pioneer Sales Co. Ltd (“Fuzhou Fuzhou Fujian, China Fuzhou Fujian, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Nanjing Changyu Pioneer Sales Co. Ltd Nanjing, Jiangsu, China Nanjing, Jiangsu, China Sales - 100% Subsidiaries acquired by establishment
(“Nanjing Pioneer”)
Xianyang Changyu Pioneer Sales Co. Ltd Xianyang, Shanxi, China Xianyang, Shanxi, China Sales - 100% Subsidiaries acquired by establishment
(“Xianyang Pioneer”)
Shenyang Changyu Pioneer Sales Co. Ltd Shenyang, Liaoning, China Shenyang, Liaoning, China Sales - 100% Subsidiaries acquired by establishment
(“Shenyang Pioneer”)
Jinan Changyu Pioneer Sales Co. Ltd (“Jinan Jinan, Shandong, China Jinan, Shandong, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Shanghai Changyu Pioneer Sales Co. Ltd Shanghai, China Shanghai, China Sales - 100% Subsidiaries acquired by establishment
(“Shanghai Pioneer”)
Fuzhou Changyu Pioneer Sales Co. Ltd (“Fuzhou Fuzhou, Jiangxi, China Fuzhou, Jiangxi, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Shijiazhuang Changyu Pioneer Sales Co. Ltd Shijiazhuang, Hebei, China Shijiazhuang, Hebei, China Sales - 100% Subsidiaries acquired by establishment
(“Shijiazhuang Pioneer”)
Hangzhou Yuzefeng Sales Co. Ltd (“Hangzhou Hangzhou, Zhejiang, China Hangzhou, Zhejiang, China Sales - 100% Subsidiaries acquired by establishment
Yuzefeng”)
Jilin Changyu Pioneer Sales Co. Ltd ("Jilin Changchun, Jilin, China Changchun, Jilin, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Beijing Changyu Pioneer Sales Co. Ltd (“Beijing Beijing, China Beijing, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Haerbin Changyu Pioneer Sales Co. Ltd Haerbin, Heilongjiang, China Haerbin, Heilongjiang, China Sales - 100% Subsidiaries acquired by establishment
(“Haerbin Pioneer”)
Hunan Changyu Pioneer Sales Co. Ltd (“Hunan Changsha, Hunan, China Changsha, Hunan, China Sales - 100% Subsidiaries acquired by establishment
Pioneer”)
Yinchuan Changyu Pioneer Sales Co. Ltd Yinchuan, Ningxia, China Yinchuan, Ningxia, China Sales - 100% Subsidiaries acquired by establishment
(“Yinchuan Pioneer”)
Kunming Changyu Pioneer Sales Co. Ltd Kunming, Yunnan, China Kunming, Yunnan, China Sales - 100% Subsidiaries acquired by establishment
(“Kunming Pioneer”)
Chongqing Changyu Pioneer Sales Co. Ltd Chongqing, China Chongqing, China Sales - 100% Subsidiaries acquired by establishment
(“Chongqing Pioneer”)
Zhengzhou Changyu Pioneer Sales Co. Ltd Zhengzhou, Henan, China Zhengzhou, Henan, China Sales - 100% Subsidiaries acquired by establishment
(“Zhengzhou Pioneer”)
Wuhan Changyu Pioneer Sales Co. Ltd ("Wuhan Wuhan, Hubei, China Wuhan, Hubei, China Sales - 100% Subsidiaries acquired by establishment
Pioneer")
VIII. CHANGE IN CONSOLIDATION SCOPE - continued
- 149 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
1. Structure of the Group - continued
Equity interest owned
by the company
Name Address Place of registration Nature Direct Indirect Acquisition method
Wuhan Changyu Pioneer Sales Co. Ltd ("Wuhan Wuhan, Hubei, China Wuhan, Hubei, China Sales - 100% Subsidiaries acquired by establishment
Pioneer")
Taiyuan Changyu Pioneer Sales Co. Ltd Taiyuan, Shanxi, China Taiyuan, Shanxi, China Sales - 100% Subsidiaries acquired by establishment
(“Taiyuan Pioneer”)
Huhehaote Changyu Pioneer Sales Co. Ltd Huhehaote Inner Mongolia, China Huhehaote Inner Mongolia, Sales - 100% Subsidiaries acquired by establishment
(“Huhehaote Pioneer”) China
Chengdu Changyu Pioneer Sales Co. Ltd Chengdu, Sichuan, China Chengdu, Sichuan, China Sales - 100% Subsidiaries acquired by establishment
(“Chengdu Pioneer”)
Nanning Changyu Pioneer Sales Co. Ltd Nanning, Guangxi, China Nanning, Guangxi, China Sales - 100% Subsidiaries acquired by establishment
(“Nanning Pioneer”)
Lanzhou Pioneer Lanzhou Gansu, China Lanzhou Gansu, China Sales - 100% Subsidiaries acquired by establishment
Yantai Fulangduo Yantai Shandong, China Yantai Shandong, China Sales - 100% Subsidiaries acquired by establishment
Hefei Pioneer Hefei, Anhui, China Hefei, Anhui, China Sales - 100% Subsidiaries acquired by establishment
Urumchi Pioneer Urumchi Xinjiang, China Urumchi Xinjiang, China Sales - 100% Subsidiaries acquired by establishment
Guizhou Pioneer Guiyang Guizhou, China Guiyang Guizhou, China Sales - 100% Subsidiaries acquired by establishment
Explanation in difference between holding interests and voting rights in subsidiaries:
(a) Xinjiang Tianzhu was acquired by the Company, accounting for 60% of Xinjiang Tianzhu's
equity interest. Through agreement arrangement, the Company has the full power to
control Xinjiang Tianzhu's strategic operating, investing and financing policies. The
agreement arrangement will be terminated on 31 December 2018.
(b) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 70% of Changyu Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Changyu Chateau's strategic
operating, investing and financing policies. The agreement arrangement will be
terminated on 31 December 2022.
(c) Langfang Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 49% of Langfang Chateau's equity interest by the Company and
subsidiaries. Through agreement arrangement, the Company has the full power to
control Langfang Chateau's strategic operating, investing and financing policies. The
agreement arrangement will be terminated on 31 December 2022.
(d) Beijing Chateau is a limited liability company established by the Company and domestic
investors, accounting for 70% of Beijing Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Beijing Chateau's strategic
operating, investing and financing policies. The agreement arrangement will be
terminated on 2 September 2019.
(e) Ice Chateau is a Sino-foreign joint venture established by the Company and a foreign
investor, accounting for 51% of Ice Chateau's equity interest. Through agreement
arrangement, the Company has the full power to control Ice Chateau's strategic operating,
investing and financing policies. The agreement arrangement will be terminated on 31
December 2016.
- 150 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
VIII. INTERESTS IN OTHER ENTITIES - continued
2. Non-wholly owned subsidiaries
Minority Profit and loss belongs Closing balance of
Name shareholder ratio to minority interest minority interest
Xinjiang Tianzhu 40% - 56,093,912
Dicot 25% 201,770 32,684,643
Changyu Chateau 30% - 12,365,016
Langfang Castel 51% - 22,702,522
Beijing Chateau 30% - 35,293,868
Ice Chateau 49% - 33,319,062
Explanation in difference between share percentage and voting power of non-controlling interests:
Please see Note VIII -1.
3. Key financial information of important non-wholly owned subsidiaries
Closing balance Opening balance
Name Current Non-current Total Current Non-current Total Current Non-current Current Non-current Total
Total assets
assets assets assets liabilities liabilities liabilities assets assets liabilities liabilities liabilities
Xinjiang Tianzhu 101,018,712 81,709,715 182,728,427 15,554,068 5,336,114 20,890,182 86,541,666 89,469,815 176,011,481 7,165,015 5,336,114 12,501,129
Changyu Chateau 156,538,810 118,256,609 274,795,419 191,898,436 - 191,898,436 56,430,830 113,883,719 170,314,549 88,220,921 - 88,220,921
Langfang Castel 30,867,940 22,471,694 53,339,634 7,913,957 - 7,913,957 29,986,460 24,229,921 54,216,381 7,753,321 - 7,753,321
Beijing Chateau 216,643,935 523,151,845 739,795,780 588,733,969 1,777,890 590,511,859 113,589,773 544,577,614 658,167,387 549,595,386 2,666,835 552,262,221
Ice Chateau 43,224,419 29,322,675 72,547,094 12,623,467 100,000 12,723,467 43,424,068 30,796,802 74,220,870 10,073,994 100,000 10,173,994
Dicot 277,879,914 157,297,623 435,177,537 259,625,473 44,813,493 304,438,966 N/A N/A N/A N/A N/A N/A
2015 2014
Name Total Total
Operating activities Operating activities
Revenue Net profit (loss) comprehensive Revenue Net profit (loss) comprehensive
cash flows cash flows
income income
107,683,2
Xinjiang Tianzhu
30 (37,548) (37,548) 44,250,338 86,483,652 1,470,239 1,470,239 (5,590,904)
98,894,49
Changyu Chateau
9 7,573,641 7,573,641 22,609,230 110,684,738 1,887,415 1,887,415 30,351,075
51,602,89
Langfang Castel
7 862,103 862,103 1,995,967 50,335,802 (507,895) (507,895) (2,788,417)
170,037,6
Beijing Chateau
11 25,424,015 25,424,015 72,629,545 160,547,230 20,881,532 20,881,532 29,246,144
51,657,54
Ice Chateau
3 (4,223,249) (4,223,249) 3,294,895 51,973,176 1,599,580 1,599,580 (9,712,584)
76,202,51 N/A N/A N/A N/A
Dicot (Note)
3 807,079 396,939 (3,682,122)
Note: This is amount incurred in the period between acquisition date and 31 December 2015.
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT
The Group's major financial instruments include cash and bank, notes receivable, accounts
receivable, interest receivables, other receivables, available-for-sale financial assets, other
non-current assets, short-term borrowings, notes payables, accounts payable, other payables,
interest payables, and long-term borrowings. Details of these financial instruments are disclosed
in Note VI. The risks associated with these financial instruments and the policies on how to
mitigate these risks are set out below. Management manages and monitors these exposures to
ensure the risks are monitored at a certain level.
The Group adopts sensitivity analysis technique to analyse how the profit and loss for the period
and shareholders' equity would have been affected by reasonably possible changes in the relevant
risk variables. As it is unlikely that risk variables will change in an isolated manner, and the
interdependence among risk variables will have significant effect on the amount ultimately
influenced by the changes in a single risk variable, the following are based on the assumption that
the change in each risk variable is on a stand-alone basis.
- 151 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies
The Group's risk management objectives are to achieve a proper balance between risks and yield,
minimise the adverse impacts of risks on the Group's operation performance, and maximise the
benefits of the shareholders and other stakeholders. Based on these risk management objectives,
the Group's basic risk management strategy is to identify and analyse the Group's exposure to
various risks, establish an appropriate maximum tolerance to risk, implement risk management,
and monitors regularly and effectively these exposures to ensure the risks are monitored at a
certain level.
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates.
The Group's exposure to the currency risk is primarily associated with EUR and HKD. Several of
the Group's subsidiaries have purchases and sales denominated in EUR and HKD while the
Group's other principal activities are denominated and settled in RMB. As at 31 December 2015,
the balance of the Group's assets and liabilities are both denominated in RMB except that the
assets and liabilities set out below are denominated in EUR and HKD. Currency risk arising from
the assets and liabilities denominated in foreign currencies may have impact on the Group's
performance.
Closing balance Opening balance
RMB RMB
Bank and cash (EUR) 151,746,825 344,061
Bank and cash (HKD) 96,777 -
Short-term borrowings (HKD) 103,297,447 -
Non-current liabilities due within one year (HKD) 127,345,600 -
Long-term borrowings (EUR) 56,761,600 89,467,200
Long-term borrowings (HKD) - 119,912,800
___________ ___________
The Group closely monitors the effects of changes in the foreign exchange rates on the
Group's currency risk exposures. The Group currently does not take any measures to hedge
currency risk exposures.
- 152 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
Sensitivity analysis on currency risk
Where all other variables are held constant, the reasonably possible changes in the foreign
exchange rate may have the following pre-tax effect on the profit or loss for the period and
shareholders' equity:
Current year Prior year
Effect on Effect on
shareholders' shareholders'
Change in exchange rate Effect on profit equity Effect on profit equity
RMB RMB RMB RMB RMB
HKD 5% increase against RMB (11,527,314) (11,527,314) (5,995,640) (5,995,640)
HKD 5% decrease against RMB 11,527,314 11,527,314 5,995,640 5,995,640
EUR 5% increase against RMB 4,749,261 4,749,261 (4,456,157) (4,456,157)
EUR 5% decrease against RMB (4,749,261) (4,749,261) 4,456,157 4,456,157
________ ________ ________ ________
1.1.2 Interest rate risk - risk of changes in cash flows
The Group's cash flow interest rate risk of financial instruments relates primarily to variable-rate
bank borrowings (see Note VI 1, Note VI 18 and Note VI 27 for details). It is the Group's policy
to keep its borrowings at floating rate of interests so as to eliminate the fair value interest rate risk.
The sensitivity analysis on interest rate risk
The sensitivity analysis on interest rate risk is based on the changes in the market interest rate may
influence the interest income or expense of the variable rate financial instruments.
Management of the Group believes interest rate risk on bank deposit is not significant, therefore
does not disclose sensitivity analysis for interest rate risk.
Where all other variables are held constant, the reasonably possible changes in the interest rate may
have the following pre-tax effect on the profit or loss for the period and shareholders' equity
Current year Prior year
Effect on Effect on
Items Change in interest rate Effect on profit owners' equity Effect on profit owners' equity
Bank borrowings 50% increase (2,528,430) (2,528,430) (1,044,435) (1,044,435)
Bank borrowings 50% decrease 2,528,430 2,528,430 1,044,435 1,044,435
- 153 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.2 Credit risk
As at 31 December 2015, the Group's maximum exposure to credit risk which will cause a financial
loss to the Group due to failure to discharge an obligation by the counterparties
In order to minimise the credit risk, the Group has adopted a policy to ensure that all sales customers
have good credit records. The Group has delegated a team responsible for determination of credit limits,
credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover
overdue debts. For transactions that are not denominated in the functional currency of the relevant
operating unit, the Group does not offer credit terms without the specific approval of the Department of
Credit Control in the Group. In addition, the Group reviews the recoverable amount of each individual
trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable
amounts. In this regard, the management of the Group considers that the Group's credit risk is
significantly reduced.
Since the Group trades only with recognized and creditworthy third parties, there is no requirement
for collateral. Concentrations of credit risk are managed by customer/counterparty, by geographical
region and by industry sector. As at 31 December 2015, 28.4% of the Group trade receivables are due
from top 5 customers (31 December 2014: 33.6%). There is no collateral or other credit enhancement on
the balance of the trade receivables of the Group.
Analysis of individually impaired financial assets
As at 31 December 2015, the Group has provided full bad debts provision for the individually
impaired account receivable due from Tiantong Security Co., Ltd., which has been in insolvency.
1.3 Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of
bank borrowings and ensures compliance with loan covenants.
The following is the maturity analysis for financial assets and financial liabilities held by the Group
which is based on undiscounted remaining contractual obligations:
Non-derivative financial liabilities
Less than one month 1-3 months 3-12 months 1-5 years Total
RMB RMB RMB RMB RMB
Short-term borrowings 5,241,848 153,757,762 527,166,145 - 686,165,755
Notes payables - 13,000,000 16,000,000 - 29,000,000
Account payables 174,469,862 348,939,723 45,868,783 - 569,278,368
Other payables 138,985,668 108,891,483 261,349,244 - 509,226,395
Interest payables 749,357 227,947 - - 977,304
Non-current liabilities
due within one year 298,377 5,138,599 154,467,154 - 159,904,130
213,462
Long-term borrowings ________ 445,888
________ 2,197,833
_________ 74,004,070
________ 76,861,253
__________
319,958,574 630,401,402 1,007,049,159 74,004,0702,031,413,205
________ ________ _________ ________ __________
- 154 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
IX. FINANCIAL INSTRUMENT AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.4 Fair value disclosure - Financial assets and liabilities not measured using fair value
As at 31 December 2015, management of the Group believes that book value of financial assets
measured under amortised cost method is approximately equal to their fair value.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS
1. Parent company
Name of Type of Place of Legal Scope Registered Percentage Percentage Incorporate
parent company Relation enterprise registration representative of business capital of shares of voting rights Code
RMB % %
Controlling Limited
Company Company Yantai SunLiqiang Manufacturing 50,000,000 50.4 50.4 265645824
During the year ended 31 December 2015, there is no change in parent company's registered
capital, shares holding or voting power.
2. Subsidiaries: Please refer to Note VIII.
3. Other related parties
Name of related parities Nature of related parties Incorporate code
Yantai Changyu Wine Culture Museum Company controlled 258258654
Co., Ltd.("Wine Culture Museum") by the same parent
Yantai Changyu International Window of the Company controlled 672208146
Wine City Co., Ltd.("Window of the Wine City) by the same parent
Yantai ShenMa Packing Co., Ltd. Company controlled 553393350
("ShenMa Packing") by the same parent
Yantai Zhongya Pharmaceutical Tonic Company controlled 726203923
Wine Co., Ltd.("Zhongya Pharmaceutical") by the same parent
- 155 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
4. Significant related party transactions
(1) Purchases from and sales to related parties
Purchase from related parties
The content of related 2015 2014
party transactions RMB RMB
ShenMa Packing product purchase 153,891,013 149,536,913
Zhongya Pharmaceutical product purchase 9,856,685 5,205,207
Wine Culture Museum product purchase 6,047,453 934,085
Window of the Wine City product purchase 730,488
__________ 4,161,708
__________
170,525,639 159,837,913
__________ __________
All related party transactions are based on the negotiated price.
In 2015, purchases from related parties accounted for 10.5% of the Group's total purchase (2014:
11.8%)
Sales to related parties
The content of related 2015 2014
party transactions RMB RMB
Wine Culture Museum goods sales 7,371,180 10,111,288
Window of the Wine City goods sales 7,578,711 7,083,716
Zhongya Pharmaceutical goods sales 2,723,976 2,596,070
ShenMa Packing goods sales 1,820,232
__________ 1,684,486
__________
19,494,099 21,475,560
__________ __________
All related party transactions are based on the negotiated price.
In 2015, sales to related parties accounted for less than 1% of the Group's total sales (2014: less
than 1%).
(2) Property leased from a related party
The Group as Lessee
2015 Assets leased Beginning date Ending date Rental expense
Changyu Group Company Warehouse and office building 2012/1/1 2016/12/31 5,858,000
______
Pursuant to the lease agreement entered into between the Company and Changyu Group
Company on 1 January 2012, starting from 1 January 2012, the Company rented properties from
Changyu Group Company for operation purposes at a basic annual rental of RMB 5,858,000, and
till 31 December 2016. For the year ended 31 December 2015, the rental payable to Changyu
Group Company amounted to RMB 5,858,000 (2014: RMB 5,858,000).
- 156 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
4. Significant related party transactions - continued
(3) Other significant related party transactions
Note 2015 2014
RMB RMB
Royalty fee (a) 86,001,287 77,809,993
Patents fee (b) 50,000 50,000
_________ _________
All related party transactions are based on the negotiated price.
(a) Royalty fee
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Company may use certain trademarks of Changyu Group Company, which have been
registered with the PRC Trademark Office. An annual royalty fee at 2% of the Group's
annual sales is payable to Changyu Group Company. The license is effective until the
expiry of the registration of the trademarks.
During 2015, royalty fee paid to related company accounted for 100% of the Group (2014:
100%).
(b) Patents fee
Pursuant to a patents implementation license dated 18 May 1997, starting from 18
September 1997, the Company may use the patents of Changyu Group Company. The
annual patents usage fee payable by the Company to Changyu Group Company was RMB
50,000. The contract was expired on 20 December 2005. The Company renewed the
contract on 20 August 2006 for 10 years. The annual patents usage fee payable by the
Company to Changyu Group Company remained RMB 50,000. For the year ended 31
December 2015, the patents usage fee payable to Changyu Group Company is amounted
to RMB 50,000 (2014: RMB 50,000).
During 2015, patent fee paid to related company accounted for 100% of the Group (2014:
100%).
(4) Remuneration of the management
2015 2014
RMB RMB
Remuneration of the management 9,744,790 8,884,459
_________ ________
- 157 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
X. RELATED PARTY AND RELATED PARTY TRANSACTIONS - continued
5. Balance due from/ to related parties
(1) Balance due from related parties
Closing balance Opening balance
Accounts receivable Balance Provision Balance Provision
RMB RMB RMB RMB
Zhongya Pharmaceutical 2,240,282 - 1,378,843 -
Shen Ma Packing. 169,300 - 15,820 -
Window of the Wine City 7,812
_______ -
_____ -
_______ -
_____
2,417,394 - 1,394,663 -
_______ _____ _______ _____
The above amounts due from related parties are unsecured, interest-free and have no fixed terms
of repayment.
(2) Balance due to related parties
Closing balance Opening balance
RMB RMB
Accounts payable
Shen Ma Packing 53,735,915 53,027,076
Zhongya Pharmaceutical 7,272,656 6,550,051
Wine Culture Museum 1,928,504 1,043,208
Window of the Wine City 145,861
_________ 59,668
_________
Total 63,082,936 60,680,003
_________ _________
Other payable
Royalty fee payable to parent company 86,001,287 77,809,993
Shen Ma Packing -
_________ 200,000
_________
Total 86,001,287 78,009,993
_________ _________
The above amounts due to related parties are unsecured, interest-free and have no fixed terms of
repayment.
XI. COMMITMENT
1. Important commitments
(1) Capital commitments
Closing balance Opening balance
RMB'000 RMB'000
Capital commitment for
purchasing non-current assets 1,580,280 687,460
________ ________
XI. COMMITMENT- continued
- 158 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
1. Important commitments - continued
(2) Operating lease commitment
As lessee
Significant operating lease: Total future minimal lease payments under non-cancelable contract
with lessor are as follow:
Closing balance Opening balance
RMB'000 RMB'000
Within 1 year 50,369 53,274
1 to 2 years 35,100 37,256
2 to 3 years 24,265 27,278
3 years and above 44,466
_________ 40,402
______
154,200 158,210
_________ ______
2. Contingent liability
The Group and the Company do not have any significant contingent liabilities as at balance sheet
date.
XII. POST BALANCE SHEET DATE EVENT
According to the board of the director resolution raised on 27 April 2016, the Company proposed
a cash dividend of RMB 5.0 (including taxes) for every 10 shares in respect of 2015 based on the
issued shares of 685,464,000. The aggregate amount of cash dividend is RMB 342,732,000. The
resolution is to be approved by the annual general meeting.
XIII. OTHER SIGNIFICANT EVENTS
Segment report
The Group is principally engaged in the production and sales of wine, brandy, and champagne in
China, France and Spain. In accordance with the Group's internal organization structure,
management requirements and internal reporting system, the Group's operation is divided into
three parts: China, France and Spain. The management periodically evaluates segment results, in
order to allocate resources and evaluate performances. In 2015, more than 98.4% revenue and
more than 99.9% profit derived from China, and more than 93.8% assets are located in China.
Therefore the Group does not need to disclose additional segment report information.
- 159 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS
1. Cash and bank
Closing balance Opening balance
RMB RMB
Cash 10,804 5,847
Bank balance 155,430,457 371,128,398
Other currency fund 125,377,572
____________ 125,004,018
__________
Total 280,818,833 496,138,263
____________ __________
As at 31 December 2015, the balance of restricted cash of the Company is RMB 2,643,181 (31
December 2014: RMB 2,643,519), which is the Group's housing fund.
As at 31 December 2015, other currency fund of the Company include: security of RMB
125,000,000 (31 December 2014: RMB 125,000,000) pledged for a short-term borrowing from
HSBC of HKD 152,000,000(translated as RMB 127,345,600), deposit of RMB 370,000 for letter
of credit and company cards deposit guarantee of RMB 7,572 (31 December 2014: RMB 4,018).
As at 31 December 2015, The Company's term deposits with original maturity from three months
to six months when acquired is RMB 9,000,000 (31 December 2014: RMB 35,245,260 ) with
interest rates ranging from 1.38%-1.69% .
2. Notes receivable
(1) Categories of notes receivable
Closing balance Opening balance
RMB RMB
Bank acceptances 38,429,319 98,158,251
_________ _________
(2) Pledged notes receivable
As of 31 December 2015, there was no pledged notes receivable (31 December 2014: Nil).
- 160 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
2. Note receivable - continued
(3) Notes endorsed by the Group to other parties which are not yet due at the end of the period
Closing balance Opening balance
RMB RMB
Bank acceptances 59,952,558 52,895,804
__________ _________
As at 31 December 2015, notes endorsed by the Company to other parties which are not yet due at
the end of the period is RMB 59,952,558 (31 December 2014: RMB 52,895,804). It is for the
payment to suppliers. The Company believes that due to bank good reputation, the risk of
maturity cannot be cashed is very low, these notes receivable ownership of the risks and rewards
have been transferred to the supplier, therefore confirm the termination of the endorsement note
receivables. If bank is unable to settle the notes on maturity, according to the relevant laws and
regulations of China, the Group would undertake limited liability for the notes.
(4) Notes receivable were reclassified as accounts receivable due to the default of drawer
As at 31 December 2015, there was no notes receivable were reclassified as accounts receivable
due to the default of drawer (31 December 2014: Nil).
3. Accounts receivable
(1) The aging analysis is as follows:
Closing balance Opening balance
Balance Bad debts provisions Carrying Amount Balance Bad debts provisions Carrying Amount
Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount
RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB
Accounts receivable
that are individually
not significant and
for which bad debt
provision has been
assessed individually 2,392,870 100.0 - - 2,392,870 1,516,518 100.0 - - 1,516,518
______ ___ ____ ____ ______ ______ ___ ____ ____ ______
The normal credit term of trade receivables is one month, which can be extended to one year for
certain major customers. The trade receivables are interest free.
There was no individually significant and for which bad debt provision has been assessed
individually account receivable.
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 2,392,870 1,516,518
_________ ________
- 161 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
3. Accounts receivable - continued
(2) Provision, reversals and collections during the current period:
As at 31 December 2015, there was no provision provided for trade receivables (31 December
2014: Nil). The Company did not provide, reverse or write off any provision during 2015 (31
December 2014: Nil)
(3) Top three entities with the largest balances of accounts receivable
Relationship Proportion of
with the Group Amount Aging total receivables
RMB %
Zhongya Pharmaceutical Other related parties 1,341,924 Within 1 year 56.1
Yantai Huibao arts and
crafts Manufacturing Co., Ltd. Third party 1,050,946
________ Within 1 year 43.9
____
2,392,870 100.0
________ ____
4. Prepayments
(1) The aging analysis is as follows:
Closing balance Opening balance
Amount Proportion Amount Proportion
RMB % RMB %
Within 1 year 445,619 100.0 1,710,787 100.0
_______ ____ ________ ____
(2) Top three entities with the largest balances of prepayments
Reason for Percentage of
Relationship being total advances
with the Group Amount Aging outstanding to suppliers
RMB %
Shandong Electricity Company
Yantai branch Third party 423,749 Within 1 year electric fee 95.1
Sinopec Shandong Yantai
Oil Products Company Third party 20,847 Within 1 year gas fee 4.7
Shandong Tongyuan Project
Cost Consultation Company Third party 1,023
_______ Within 1 year consulting fee 0.2
___
445,619 100.0
_______ ___
- 162 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
5. Interest receivable
(1) Categories of interest receivable
Closing balance Opening balance
RMB RMB
Interests of bank deposits 8,019,338 3,580,811
________ ________
(2) Overdue interest
As at 31 December 2015, there was no overdue interest receivable (31 December 2014: Nil).
6. Dividend receivables
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Within 1 year
Including: Sales Company 402,596,884 1,404,700,197 (1,083,037,892) 724,259,189
Wines Sales - 65,465,163 (45,000,000) 20,465,163
Changyu Chateau - 6,770,286 (6,770,286) -
Langfang Sales - 1,000,000 (1,000,000) -
Jingyang Sales - 21,000,000 (21,000,000) -
National Wines - 45,000,000 (45,000,000) -
Pioneer International -
_________ 43,367,997
__________ __________- 43,367,997
_________
Total 402,596,884 1,587,303,643 (1,201,808,178) 788,092,349
_________ __________ __________ _________
7. Other receivables
(1) Disclosure of other receivables by categories:
Closing balance Opening balance
Balance Bad debts provisions Carrying Amount Balance Bad debts provisions Carrying Amount
Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount
RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB
Other receivables that are
individually significant
and for which bad debt
provision has been
assessed individually 5,727,534,401 99.8 (7,199,521) 0.1 5,720,334,880 4,701,016,368 99.7 (7,199,521) 0.2 4,693,816,847
Other receivables that are
not individually significant
and for which bad debt
provision has been
assessed individually ______ ___0.2
14,121,249 _____ - ___- ______
14,121,249 ______
15,019,429 ___0.3 _____ - ___- ______
15,019,429
Total
______ ___
5,741,655,650 100.0
_____
(7,199,521)
___ ______
0.1 5,734,456,129
______
4,716,035,797
___
100.0
_____
(7,199,521)
___ ______
0.2 4,708,836,276
- 163 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
7. Other receivables - continued
(1) Disclosure of other receivables by categories: - continued
Other receivables that are individually significant and for which bad debt provision has been
assessed individually:
As at 31 December 2015, other receivables that are individually significant at the end of the
period but for which bad debt provision has been assessed individually:
Bad debt
Balance provision Percentage Reason for provision
RMB RMB %
The debtor is in
the process of liquidation
Tiantong Security Co., Ltd. 7,199,521 7,199,521 100 Unable to repay
_______ _______
The aging analysis is as follows:
Closing balance Opening balance
Bad debts Carrying Bad debts Carrying
Balance provision amount Balance provision amount
Amount Proportion Amount Amount Amount Proportion Amount Amount
RMB % RMB RMB RMB % RMB RMB
Within 1 year 4,849,743,585 84.5 - 4,849,743,585 4,708,620,670 99.8 - 4,708,620,670
1 to 2 years 884,540,581 15.4 - 884,540,581 215,606 0.0 - 215,606
2 to 3 years 171,963 0.0 - 171,963 -
Over 3 years ________
7,199,521 ____0.1 _______
(7,199,521) ________ - ________ ____0.2 (7,199,521)
7,199,521 ______ ________ -
5,741,655,650
________ 100.0 (7,199,521) 5,734,456,129 4,716,035,797 100.0
______ 4,708,836,276
____ _______ ________ ________ ____ (7,199,521) ________
(2) Accrual, reversal and written-off during the current period:
No bad debt accrued or reversed in 2015 (2014: bad debt was reversed RMB 192,908).
(3) Other receivable written off current year
No other receivable written off in 2015.
- 164 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
7. Other receivables - continued
(4) Disclosure of other receivables by nature
Closing balance Opening balance
RMB RMB
Receivable from subsidiary 5,732,654,756 4,699,819,825
Investment fund 7,199,521 7,199,521
Consumption tax refund - 1,924,913
Receivable deposit 103,834 -
Others 1,697,539
____________ 7,091,538
____________
5,741,655,650 4,716,035,797
____________ ____________
(5) Top five entities with the largest balances of other receivables
As at 31 December 2015, the particulars of top five other receivables are as follows:
Proportion of total
Nature Amount Aging prepayments
RMB %
R&D Centre Internal balance 1,635,214,371 Within 2 year 28.5
Changan Chateau Internal balance 772,647,858 Within 1 year 13.5
Shihezi Chateau Internal balance 661,131,888 Within 1 year 11.5
Beijing Chateau Internal balance 637,225,867 Within 1 year 11.1
Ningxia Wine Internal balance 528,078,958
__________ Within 1 year 9.2
___
4,234,298,942 73.8
__________ ___
8. Inventories
Closing balance Opening balance
Net carrying Net carrying
Balance Provision amount Balance Provision amount
RMB RMB RMB RMB RMB RMB
Raw material 5,200,748 - 5,200,748 8,061,194 - 8,061,194
Work in progress 680,061,444 - 680,061,444 605,911,810 - 605,911,810
Finished goods 42,910,915
_________ -
_____ 42,910,915
_________ 67,723,770
_________ -
_____ 67,723,770
_________
728,173,107 - 728,173,107 681,696,774 - 681,696,774
_________ _____ _________ _________ _____ _________
- 165 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
9. Long-term equity investments
Movement Cash Dividends
2015 Cost Opening balance for the year Closing balance Share holding Voting power for the year
RMB RMB RMB RMB % % RMB
Cost Method
Xinjiang Tianzhu (a) 60,000,000 60,000,000 - 60,000,000 60 100 -
Kylin Packaging 23,176,063 23,176,063 - 23,176,063 100 100 -
Changyu Chateau (a) 28,968,100 28,968,100 - 28,968,100 70 100 6,770,286
AFIP Tourism (b) - 350,000 (350,000) - - 100 -
Pioneer International (c) 3,500,000 3,500,000 - 3,500,000 70 100 43,367,997
Ningxia Growing 1,000,000 1,000,000 - 1,000,000 100 100 -
National Wines 2,000,000 2,000,000 - 2,000,000 100 100 45,000,000
Ice Chateau (a) 30,440,500 30,440,500 - 30,440,500 51 100 -
Beijing Chateau (a) 77,000,000 77,000,000 - 77,000,000 70 100 -
Sales Company 7,200,000 7,200,000 - 7,200,000 100 100 1,404,700,197
Langfang Sales (c) 100,000 100,000 - 100,000 10 100 1,000,000
Langfang Castel (a) 19,835,730 19,835,730 - 19,835,730 39 100 -
Wine Sales 4,500,000 4,500,000 - 4,500,000 90 100 65,465,163
Shanghai Sales(c) 300,000 300,000 - 300,000 30 100 -
Beijing Sales 850,000 850,000 - 850,000 100 100 -
Jingyang Sales (c) 100,000 100,000 - 100,000 10 100 21,000,000
Jingyang Wine (c) 900,000 900,000 - 900,000 90 100 -
Ningxia Wine 1,000,000 1,000,000 - 1,000,000 100 100 -
Ningxia Chateau 2,000,000 2,000,000 - 2,000,000 100 100 -
Dingluote Chateau (c) 80,000,000 80,000,000 - 80,000,000 65 100 -
Shihezi Chateau 150,000,000 150,000,000 - 150,000,000 100 100 -
Changan Chateau 20,000,000 20,000,000 - 20,000,000 100 100 -
R&D Centre 500,000,000 500,000,000 - 500,000,000 100 100 -
Huanren Wine 11,000,000 11,000,000 - 11,000,000 100 100 -
Francs Champs 209,706,634 69,216,634 140,490,000 209,706,634 100 100 -
Dicot _______
190,148,125 _______ - ______
190,148,125 _______
190,148,125 75 75 _______ -
1,423,725,152 1,093,437,027 330,288,125 1,423,725,152 1,587,303,643
_______ _______ ______ _______ _______
(a) The Company has 100% voting power of those subsidiaries by the way of indirect
controlling, referring to Note VIII 1.
(b) In April 2015, the Company sold 70% equity interest of AFIP Tourism to Beijing Chateau
with cash consideration RMB 350,000; and Beijing Chateau acquired remaining 30%
equity interest from other shareholders, referring to Note VI 30. The Company indirectly
holds 100% of voting shares of AFIP Tourism through Beijing Chateau.
(c) The Company has 100% voting power of these subsidiaries by the way of indirect
controlling through wholly owned subsidiaries.
During 2015, there was no significant restriction on the remittance of fund from the
investees to the Company.
- 166 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
10. Fixed assets
(1) Fixed assets
Buildings Machinery Motor vehicles Total
RMB RMB RMB RMB
I. Total original carrying amount
1. Opening balance 303,890,821 592,474,281 13,102,597 909,467,699
2. Increase
Purchase 416,867 1,707,476 76,410 2,200,753
CIP transfer 1,342,211 - - 1,342,211
3. Decrease
Disposal -
_________ (1,479,084)
_________ -
_________ (1,479,084)
_________
4. Closing balance 305,649,899
_________ 592,702,673
_________ 13,179,007
_________ 911,531,579
_________
II. Total accumulated depreciation
1. Opening balance 103,023,133 393,306,776 9,927,135 506,257,044
2. Increase
Accrual 10,197,419 26,299,551 676,770 37,173,740
3. Decrease
Disposal -
_________ (1,405,219)
_________ -
_________ (1,405,219)
_________
4. Closing balance 113,220,552
_________ 418,201,108
_________ 10,603,905
_________ 542,025,565
_________
III. Total net carrying amount
1. Closing net carrying amount 192,429,347 174,501,565 2,575,102 369,506,014
_________ _________ _________ _________
2. Opening net carrying amount 200,867,688 199,167,505 3,175,462 403,210,655
_________ _________ _________ _________
As at 31 December 2015, there was no fixed assets with ownership restricted.
As at 31 December 2015, the Company has no temporary idle fixed assets, fixed assets held for
sale, fixed assets leased in under finance leases and fixed assets leased out under operating leases.
(2) Fixed assets of which certificates of title have not been obtained:
As at 31 December 2015, buildings without property certificate are as follows：
Reasons why
certificates of title have
Items Amount not been obtained
RMB
Fermentation center office,
experiment building and workshop 6,251,433 Processing
__________
- 167 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
11. Construction in progress
(1) Construction in progress
Closing balance Opening balance
RMB RMB
Reconstruction of boiler heating systems 7,990,777 -
The Company's reconstruction project - 182,765
__________ _______
(2) Current year movement on important construction
Accumulated
Opening Transfer to Closing expenditure/b The progress of
Budget balance Addition PPE balance udget construction Financed by
RMB RMB RMB RMB RMB %
Reconstruction of
boiler heating systems 13,000,000 - 7,990,777 - 7,990,777 61.5 61.5 Self-raised
There was no interest capitalized in construction in progress in 2015.
(3) As at 31 December 2015, there was no provision was made for the construction in process.
12. Bearer biological asset
Biological asset measured at cost
Planting
RMB
I. Total original carrying amount
1. Opening balance 90,669,532
2. Increase
Self-cultivated 27,916,372
__________
3. Closing balance 118,585,904
__________
II. Total accumulated depreciation
1. Opening balance 7,037,810
2. Increase
Accrual 586,905
__________
3. Closing balance 7,624,715
__________
III. Total net carrying amount
1. Closing net carrying amount 110,961,189
__________
2. Opening net carrying amount 83,631,722
__________
As at 31 December 2015, there is no biological asset with ownership restricted.
- 168 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
12. Bearer biological asset - continued
As at 31 December 2015, the Company's accumulated depreciation of biological assets is RMB
7,624,715 (31 December 2014: RMB 7,037,810).
As at 31 December 2015, biological assets of the Company include mature bearer biological
assets of RMB 7,336,311 (31 December 2014: RMB 7,923,216) and immature bearer biological
assets of RMB 103,624,878. (31 December 2014: RMB 75,708,506)
As at 31 December 2015, there is no indication that biological assets may be impaired, and no
provision was made.
13. Intangible assets
Intangible assets
Land use right
RMB
I. Total original carrying amount
Opening and closing balance 96,594,766
__________
II. Total accumulated depreciation
1. Opening balance 19,834,088
2. Increase
Accrual 2,379,153
__________
3. Closing balance 22,213,241
__________
III. Total net carrying amount
1. Closing net carrying amount 74,381,525
__________
2. Opening net carrying amount 76,760,678
__________
As at 31 December 2015, there was no intangible assets with restricted ownership.
- 169 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
14. Deferred tax assets and liabilities
Deferred tax assets and deferred tax liabilities that are not presented at the net amount after offset
Recognised deferred tax assets not presented at the net amount after offset
Closing balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary difference tax assets temporary difference tax assets
RMB RMB RMB RMB
Unrealized profit from intra
company transactions 9,159,340 2,289,835 9,000,404 2,250,101
Unpaid bonus 26,378,467 6,594,617 28,548,564 7,137,141
Retirement benefit 12,914,345 3,228,586 11,514,647 2,878,662
Asset impairment provision 17,199,521 4,299,880 17,199,521 4,299,880
Deductable losses 62,511,688 15,627,922 16,185,336 4,046,334
Deferred income 23,591,406 5,897,852 25,765,813 6,441,453
151,754,767 37,938,692 108,214,285 27,053,571
15. Trade payables
The aging analysis is as follows:
Closing balance Opening balance
RMB RMB
Within 1 year 271,603,863 228,052,722
1 to 2 years 1,487,319
__________ -
__________
273,091,182 228,052,722
__________ __________
16. Employee benefit
(1) Employee benefit
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Short-term salaries and welfare 58,718,604 133,680,530 (134,254,864) 58,144,270
Post-demission benefits
- predetermined provision plan - 11,358,698 (11,358,698) -
Termination benefit 11,514,647
_________ 5,682,308
_________ (4,282,610)
_________ 12,914,345
_________
70,233,251 150,721,536 (149,896,172) 71,058,615
_________ _________ _________ _________
- 170 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
16. Employee benefit - continued
(2) Short-term salaries and welfare
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Salaries and bonus 56,173,932 114,080,026 (114,744,741) 55,509,217
Staff benefit 3,500 8,736,237 (8,737,217) 2,520
Staff welfare - 5,922,208 (5,922,208) -
Includes:
Medical insurance - 4,555,425 (4,555,425) -
Injury insurance - 773,683 (773,683) -
Maternity insurance - 593,100 (593,100) -
Housing fund - 3,806,689 (3,806,689) -
Union fee and education fee 2,541,172
_________ 1,135,370
_________ (1,044,009)
_________ 2,632,533
_________
58,718,604 133,680,530 (134,254,864) 58,144,270
_________ _________ _________ _________
(3) Predetermined provision plan
Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Pension - 10,505,200 (10,505,200) -
Unemployment insurance -
_____ 853,498
_________ (853,498)
_________ -
_____
- 11,358,698 (11,358,698) -
_____ _________ _________ _____
The Company participates in pension insurance and unemployment insurance plans established by
government institution. According to those plans, the Company pays pension and unemployment
insurance each month on the basis of 18% and 1% last period salary respectively. Apart from
these monthly expenses, the Company does not bear any further payment obligation. This year the
Company should pay RMB 10,505,200 and RMB 853,498 (2014: RMB 9,325,372 and RMB
735,069) respectively into pension insurance and unemployment insurance. As at 31 December
2015, the Company does not have unpaid pension and unemployment insurance (31 December
2014: Nil) which is due to the pension insurance and unemployment insurance plan and not paid
at the end of the reporting period.
- 171 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
17. Taxes payable
Closing balance Opening balance
RMB RMB
Value added tax (2,238,737) (7,183,464)
Consumption tax 11,536,745 12,157,986
Corporation income tax 651,459 3,034,692
Urban land use tax 837,367 837,367
Individual income tax 6,136,634 6,213,385
City construction tax 1,084,656 1,510,366
Property tax 270,408 355,417
Others 1,052,779
__________ 1,279,375
_________
19,331,311 18,205,124
__________ _________
18. Other payables
(1) Natures of other payables are as follows
Closing balance Opening balance
RMB RMB
Payable to subsidiaries 983,151,732 1,013,237,829
Payables for equipment and construction 4,600,199 7,437,012
Payables for transportation 495,093 306,238
Deposits from suppliers 537,800 436,271
Others 6,036,457
____________ 9,187,469
____________
994,821,281 1,030,604,819
____________ ____________
(2) As at 31 December 2015, there were no significant outstanding balance aged over than one year.
19. Capital reserve
2015 Opening balance Increase Decrease Closing balance
RMB RMB RMB RMB
Share premium 557,222,454 - - 557,222,454
_________ ______ ______ _________
- 172 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
20. Revenue and cost of sales
Revenue is as follows:
2015 2014
RMB RMB
Principal operating income 1,383,184,483 1,647,825,652
____________ ____________
Cost of sales is as follows:
2015 2014
RMB RMB
Principal operating cost 1,154,834,509 1,406,987,744
____________ ____________
21. Tax and surcharges
2015 2014
RMB RMB
Consumption tax 106,640,172 129,159,521
City construction tax 11,533,643 14,952,818
Education fee and surcharges 8,306,059 10,672,202
Others 1,647,256
__________ 2,242,360
__________
128,127,130 157,026,901
__________ __________
22. General and administrative expense
2015 2014
RMB RMB
Salary and employee benefit 36,006,578 31,119,420
Insurance fee 23,511,879 21,720,066
Leasing expenses 6,575,996 7,569,488
Depreciation 4,423,980 3,860,257
Amortization 3,012,058 2,917,149
Administrative expenses 7,413,605 8,748,731
Travelling expenses 3,441,134 2,704,509
Entertainment fee 279,413 278,344
Property tax, stamp duty and other taxes 6,105,794 5,331,881
Maintenance fee 9,276,965 9,685,094
Service fee 12,329,601 4,047,362
Others 18,810,792
__________ 14,069,244
__________
131,187,795 112,051,545
__________ __________
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
23. Loss on impairment of assets
2015 2014
RMB RMB
Reversal of impairment loss - (192,908)
________ ________
24. Financial Expense
2015 2014
RMB RMB
Interest income (11,868,515) (15,866,780)
Exchange loss(gain) 8,543,586 (6,093,361)
Less: Interest expenses 21,322,155 10,227,740
Bank charges 855,471
_________ 678,848
_________
18,852,697 (11,053,553)
_________ _________
25. Investment income
2015 2014
RMB RMB
Long-term equity investment income accounted
for by using the cost method 1,587,303,643 1,164,089,666
____________ ____________
Among the long-term equity investment income accounted for by using cost method, the investees
with investment income accounting for more than 5% of the Company's total profit before tax are
as follows:
Investees 2015 2014
RMB RMB
Sales Company 1,404,700,197
____________ 1,013,615,384
____________
As at 31 December 2015 and at 31 December 2014, there was no significant restriction on the
remittance of investment income to the Company.
- 174 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
26. Supplement to cash flow statement
2015 2014
RMB RMB
Cash flows from operating activities
calculated by adjusting the net profit:
Net profit 1,553,520,098 1,151,762,045
Add: Impairment/(reverse) provision - (192,908)
Depreciation of fixed assets 37,173,740 37,892,938
Amortization of intangible assets 2,379,153 2,379,153
Amortization of biological assets 586,905 586,905
Losses/(gains) on disposal of property,
plant and equipment (116,340) 5,076,491
Finance expenses 7,609,550 (11,684,489)
Investment income (1,587,303,643) (1,164,089,666)
Increase in deferred tax assets (10,885,121) (4,096,824)
Decrease/(increase) in inventories (46,476,333) 99,587,415
Decrease/(increase) in trade receivables (973,578,831) (1,057,576,001)
Increase/(decrease) in trade payables 11,918,004
____________ (525,631,084)
____________
Net cash flows from operating activities (1,005,172,818) (1,465,986,025)
____________ ____________
27. Cash and cash equivalents
2015 2014
RMB RMB
Closing balance of cash and bank 280,818,833 496,138,263
Less:
Restricted bank deposits 2,643,181 2,643,519
Restricted other monetary assets 125,377,572 125,004,018
Deposit with a period of over three months 9,000,000
__________ 35,245,260
__________
Closing balance of cash and cash equivalents 143,798,080 333,245,466
__________ __________
2015 2014
RMB RMB
Cash and bank 143,798,080 333,245,466
Including: Cash on hand 10,804 5,847
Bank deposits on demand 143,787,276
__________ 333,239,619
__________
Closing balance of cash and cash equivalents 143,798,080 333,245,466
__________ __________
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
28. Related party transactions
(1) Purchase of materials
2015 2014
RMB RMB
Subsidiaries 319,040,340 275,537,285
Other related parties 111,273,050
__________ 105,807,546
__________
430,313,390 381,344,831
__________ __________
(2) Sales of goods
2015 2014
RMB RMB
Subsidiaries 1,374,745,130 1,640,615,167
Other related parties 8,439,353
____________ 7,210,485
____________
1,383,184,483 1,647,825,652
____________ ____________
29. Receivables and payables to related parties
(1) Trade receivables
Trade receivables Closing balance Opening balance
Balance Bad debts provision Balance Bad debts provision
RMB RMB RMB RMB
Other related parties 1,341,924 - 463,690 -
_______ _______ _______ _______
Other receivables Closing balance Opening balance
Balance Bad debts provision Balance Bad debts provision
RMB RMB RMB RMB
Subsidiaries 5,732,654,756 - 4,699,819,825 -
__________ _______ __________ _______
The above receivables due from related parties are unsecured, have no interest or fixed date of
repayment.
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Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XIV. NOTES TO COMPANY FINANCIAL STATEMENTS - continued
29. Receivables and payables to related parties - continued
(2) Trade payables
Trade Payables Closing balance Opening balance
RMB RMB
Other related parties 36,377,928
_________ 29,592,060
_________
36,377,928 29,592,060
_________ _________
Other payables Closing balance Opening balance
RMB RMB
Subsidiaries 983,151,732 1,013,237,829
Other related parties -
____________ 200,000
____________
983,151,732 1,013,437,829
____________ ____________
The above payables due to related parties are unsecured, have no interest or fixed date of
repayment.
- 177 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
APPENDIX I SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
I. DETAILS OF EXTRAORDINARY PROFIT AND LOSS
2015
RMB
Loss on disposal of non-current assets, including
reversal of accrued impairment provision 136,061
Government grants credited in profit and loss
(except for those recurring government grants
that are closely related to the Group's operation,
in line with related regulations and have proper basis of calculation) 38,952,919
Other non-operating income and expense 9,071,448
Corporate income tax effect (11,355,391)
__________
36,805,037
__________
__________
The Company's extraordinary profit and loss items are recognized in accordance with
the regulations of the "public offering of securities of the Company Disclosure
Explanatory Notice No. 1 - non-recurring profit and losses" (SFC [2008] No. 43).
All non-operation income and non-operation expenses are non-operating profit in
2015. Please refer to Note VI 40 and VI 41.
II. RETRUN ON EQUITY ("ROE") AND EARNINGS PRE SHARE ("EPS")
The Company's ROE and EPS are calculated in accordance with the CSRC
regulations of the "Information Preparing and Disclosure Rules of Public Company
No. 9 - calculation and disclosure of ROE and EPS" (Revised 2010).
Weighted average
2015 ROE Basic EPS
% RMB
Net profit attributable to shareholders of the Company 14.40 1.50
Net profit attributable to shareholders
of the Company deducting extraordinary profit and loss 13.89 1.45
_____ ____
_____ ____
The Company did not have any potential dilutive shares.
- 178 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
Weighted average
2014 ROE Basic EPS
% RMB
Net profit attributable to shareholders of the Company 15.11 1.43
Net profit attributable to shareholders
of the Company deducting extraordinary profit and loss 14.69 1.39
_____ ____
_____ ____
The Company did not have any potential dilutive shares.
- 179 -
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report.
XI、Reference Documents
(1)The original of Annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman, chief accountant and
accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997, the Prospectus
and The Shares’ Change & Public Offering Announcement for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public during
the report period in the newspapers designated by China Securities Regulatory Commission.
Yantai Changyu Pioneer Wine Co. Ltd.
Board of Directors
28th April 2016
- 180 -
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