ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2020
August 2020
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□ Yes √ No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
30 June 2020
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary assets 7418187475.71 5619749918.09
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 230264936.41 509031097.02
Derivative financial assets
Notes receivable 1036114364.10 1004217431.56
Accounts receivable 44592707.52 40776567.96
Accounts receivable financing
Prepayments 93705156.53 197453313.96
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 36472434.42 25746957.22
Including: Interest receivable 10600806.32 1908788.81
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 2920772885.04 3015051961.78
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 103093691.95 114439167.07
Total current assets 11883203651.68 10526466414.66
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 4624650.90 4678282.24
Investments in other equity
instruments
Other non-current financial assets
Investment property 4551514.78 4710086.02
Fixed assets 1629268366.99 1722572998.79
Construction in progress 258954824.33 183984816.07
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 890598069.49 785717932.76
Development costs
Goodwill 478283495.29 478283495.29
Long-term prepaid expense 57681212.58 70240106.82
Deferred income tax assets 121949134.77 90494544.51
Other non-current assets 574026.00 4148686.00
Total non-current assets 3446485295.13 3344830948.50
Total assets 15329688946.81 13871297363.16
Current liabilities:
Short-term borrowings 50094500.00 0.00
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 1020583475.29 703679646.86
Accounts payable 386356621.01 563494195.40
Advances from customers 0.00 529863011.73
Contract liabilities 727347929.08 0.00
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 298227276.86 454189532.89
Taxes payable 476872467.49 482903109.59
Other payables 2190846597.94 1315878229.01
Including: Interest payable
Dividends payable 755400000.00 0.00
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 306044574.61 197484121.41
Total current liabilities 5456373442.28 4247491846.89
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 74384425.08 72778437.92
Deferred income tax liabilities 115734840.78 118872366.61
Other non-current liabilities
Total non-current liabilities 190119265.86 191650804.53
Total liabilities 5646492708.14 4439142651.42
Owners’ equity:
Share capital 503600000.00 503600000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 25 25
Less: Treasury stock
Other comprehensive income
Specific reserve
Surplus reserves 256902260.27 256902260.27
General reserve
Retained earnings 7157740516.28 6888203911.92
Total equity attributable to owners of
the Company as the parent
9213648368.80 8944111764.44
Non-controlling interests 469547869.87 488042947.30
Total owners’ equity 9683196238.67 9432154711.74
Total liabilities and owners’ equity 15329688946.81 13871297363.16
Legal representative: Liang Jinhui The Company’s chief accountant: Ye Changqing
Head of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary assets 3777904155.80 2919818830.20
Held-for-trading financial assets 220264936.41 489861097.02
Derivative financial assets
Notes receivable 611813648.59 378740100.82
Accounts receivable 1591313.17 218558555.07
Accounts receivable financing
Prepayments 43507722.75 17906999.63
Other receivables 121302078.58 125219213.84
Including: Interest receivable 301888.89 301888.89
Dividends receivable
Inventories 2532862118.85 2688839871.27
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 10900000.00 1280998.32
Total current assets 7320145974.15 6840225666.17
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1148213665.32 1148213665.32
Investments in other equity
instruments
Other non-current financial assets
Investment property 4551514.78 4710086.02
Fixed assets 1230406181.70 1310704771.36
Construction in progress 112168345.25 84477784.02
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 354086966.94 243928047.95
Development costs
Goodwill
Long-term prepaid expense 39004662.92 48354967.15
Deferred income tax assets 27832342.65 31360809.87
Other non-current assets 574026.00 574026.00
Total non-current assets 2916837705.56 2872324157.69
Total assets 10236983679.71 9712549823.86
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 0.00 49114582.04
Accounts payable 313257868.54 450303984.53
Advances from customers 0.00 31724.77
Contract liabilities 96866235.95 0.00
Employee benefits payable 107051733.88 100357808.20
Taxes payable 305205907.01 371012223.50
Other payables 1055693921.51 274053511.54
Including: Interest payable
Dividends payable 755400000.00 0.00
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 13957054.12 11953800.20
Total current liabilities 1892032721.01 1256827634.78
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 31467109.09 33229246.47
Deferred income tax liabilities 20344502.23 22799814.64
Other non-current liabilities
Total non-current liabilities 51811611.32 56029061.11
Total liabilities 1943844332.33 1312856695.89
Owners’ equity:
Share capital 503600000.00 503600000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 1247162107.35 1247162107.35
Less: Treasury stock
Other comprehensive income
Specific reserve
Surplus reserves 251800000.00 251800000.00
Retained earnings 6290577240.03 6397131020.62
Total owners’ equity 8293139347.38 8399693127.97
Total liabilities and owners’ equity 10236983679.71 9712549823.86
3. Consolidated Income Statement
Unit: RMB
Item H1 2020 H1 2019
1. Revenue 5519621000.62 5988112999.09
Including: Operating revenue 5519621000.62 5988112999.09
Interest income
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 4162705858.66 4416581005.79
Including: Cost of sales 1313925592.48 1394156734.55
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
Taxes and surcharges 887997040.72 869527762.04
Selling expense 1618049637.27 1840489439.70
Administrative expense 395687673.15 302045457.13
R&D expense 15254382.98 14664237.67
Finance costs -68208467.94 -4302625.30
Including: Interest
expense
28973275.97 14173972.09
Interest
income
96891173.45 20466649.02
Add: Other income 14974353.66 30783918.68
Return on investment (“-” for loss) 18485972.20 77347047.53
Including: Share of profit or loss
of joint ventures and associates
-53631.34 -164994.19
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
-3596160.61 11320345.56
Credit impairment loss (“-” for
loss)
-388444.57 -476569.40
Asset impairment loss (“-” for loss) -5693185.77 -5945248.67
Asset disposal income (“-” for
loss)
77867.25 119488.56
3. Operating profit (“-” for loss) 1380775544.12 1684680975.56
Add: Non-operating income 20575161.54 11150763.53
Less: Non-operating expense 24273656.49 1737611.07
4. Profit before tax (“-” for loss) 1377077049.17 1694094128.02
Less: Income tax expense 370635522.24 419145404.31
5. Net profit (“-” for net loss) 1006441526.93 1274948723.71
5.1 By operating continuity
5.1.1 Net profit from continuing
operations (“-” for net loss)
1006441526.93 1274948723.71
5.1.2 Net profit from discontinued
operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to
owners of the Company as the parent
1024936604.36 1248316314.01
5.2.1 Net profit attributable to
non-controlling interests
-18495077.43 26632409.70
6. Other comprehensive income net of
tax
Attributable to owners of the Company
as the parent
6.1 Items that will not be
reclassified to profit or loss
6.1.1 Changes caused by
remeasurements on defined benefit
schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
investments in other equity instruments
6.1.4 Changes in the fair value
arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit
or loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Other comprehensive
income arising from the reclassification
of financial assets
6.2.4 Credit impairment
allowance for investments in other debt
obligations
6.2.5 Reserve for cash flow
hedges
6.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
6.2.7 Other
Attributable to non-controlling
interests
7. Total comprehensive income 1006441526.93 1274948723.71
Attributable to owners of the Company
as the parent
1024936604.36 1248316314.01
Attributable to non-controlling
interests
-18495077.43 26632409.70
8. Earnings per share
8.1 Basic earnings per share 2.04 2.48
8.2 Diluted earnings per share 2.04 2.48
Legal representative: Liang Jinhui The Company’s chief accountant: Ye Changqing
Head of the Company’s financial department: Zhu Jiafeng
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2020 H1 2019
1. Operating revenue 3297117172.49 3144682463.58
Less: Cost of sales 1317059263.62 1277918576.91
Taxes and surcharges 826730898.61 764598846.12
Selling expense 22901348.42 45886471.81
Administrative expense 287708363.27 202658261.68
R&D expense 9137959.37 9036129.81
Finance costs -44796771.26 -2059057.16
Including: Interest expense 28288982.29 14006847.09
Interest income 73155252.32 17740923.04
Add: Other income 4622731.11 3372718.25
Return on investment (“-” for
loss)
12434590.21 31883868.76
Including: Share of profit or
loss of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
-3596160.61 11320345.56
Credit impairment loss (“-” for
loss)
540745.12 -186067.78
Asset impairment loss (“-” for
loss)
-5693185.77 -5945248.67
Asset disposal income (“-” for
loss)
60176.99 36552.41
2. Operating profit (“-” for loss) 886745007.51 887125402.94
Add: Non-operating income 15201396.26 9342723.23
Less: Non-operating expense 20488855.01 1225313.77
3. Profit before tax (“-” for loss) 881457548.76 895242812.40
Less: Income tax expense 232611329.35 211262069.16
4. Net profit (“-” for net loss) 648846219.41 683980743.24
4.1 Net profit from continuing
operations (“-” for net loss)
648846219.41 683980743.24
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income net of
tax
5.1 Items that will not be reclassified
to profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
investments in other equity instruments
5.1.4 Changes in the fair value
arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
5.2.4 Credit impairment allowance
for investments in other debt
obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
5.2.7 Other
6. Total comprehensive income 648846219.41 683980743.24
7. Earnings per share
7.1 Basic earnings per share 1.29 1.36
7.2 Diluted earnings per share 1.29 1.36
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2020 H1 2019
1. Cash flows from operating activities:
Proceeds from sale of commodities
and rendering of services
6336568642.45 5352480704.00
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 3020222.21 15816253.89
Cash generated from other operating
activities
1323750535.31 276731904.68
Subtotal of cash generated from
operating activities
7663339399.97 5645028862.57
Payments for commodities and
services
733871614.50 899005913.59
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans
granted
Interest handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 1250084349.76 1006137070.65
Taxes paid 1853009320.89 2001653338.87
Cash used in other operating
activities
1484736014.18 696498790.63
Subtotal of cash used in operating
activities
5321701299.33 4603295113.74
Net cash generated from/used in
operating activities
2341638100.64 1041733748.83
2. Cash flows from investing activities:
Proceeds from disinvestment 309070000.00 2576300054.88
Return on investment 18539603.54 72002136.32
Net proceeds from the disposal of
fixed assets intangible assets and other
long-lived assets
92400.01 33700.00
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
investing activities
327702003.55 2648335891.20
Payments for the acquisition of fixed
assets intangible assets and other
long-lived assets
220906338.24 152296054.86
Payments for investments 44800000.00 1222560163.50
Net increase in pledged loans granted
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing 265706338.24 1374856218.36
activities
Net cash generated from/used in
investing activities
61995665.31 1273479672.84
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by
non-controlling interests to subsidiaries
Borrowings raised 50094500.00 0.00
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
50094500.00 0.00
Repayment of borrowings
Interest and dividends paid 290708.33 755400000.00
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing
activities
Subtotal of cash used in financing
activities
290708.33 755400000.00
Net cash generated from/used in
financing activities
49803791.67 -755400000.00
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
equivalents
2453437557.62 1559813421.67
Add: Cash and cash equivalents
beginning of the period
2944749918.09 835560865.12
6. Cash and cash equivalents end of the
period
5398187475.71 2395374286.79
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2020 H1 2019
1. Cash flows from operating activities:
Proceeds from sale of commodities
and rendering of services
3777524502.26 3351164696.89
Tax rebates
Cash generated from other operating
activities
936783738.07 248907013.29
Subtotal of cash generated from
operating activities
4714308240.33 3600071710.18
Payments for commodities and
services
1149042873.79 847532691.56
Cash paid to and for employees 450118968.16 355855901.15
Taxes paid 1415720556.26 1260288640.64
Cash used in other operating
activities
508102703.30 145296084.94
Subtotal of cash used in operating
activities
3522985101.51 2608973318.29
Net cash generated from/used in
operating activities
1191323138.82 991098391.89
2. Cash flows from investing activities:
Proceeds from disinvestment 276900000.00 1400740054.88
Return on investment 12434590.21 31890794.48
Net proceeds from the disposal of
fixed assets intangible assets and other
long-lived assets
68000.00 41304.23
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
investing activities
289402590.21 1432672153.59
Payments for the acquisition of fixed
assets intangible assets and other
long-lived assets
160840403.43 116751759.47
Payments for investments 21800000.00 726900163.50
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
activities
182640403.43 843651922.97
Net cash generated from/used in
investing activities
106762186.78 589020230.62
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings
Interest and dividends paid 0.00 755400000.00
Cash used in other financing
activities
Subtotal of cash used in financing
activities
0.00 755400000.00
Net cash generated from/used in
financing activities
0.00 -755400000.00
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
equivalents
1298085325.60 824718622.51
Add: Cash and cash equivalents
beginning of the period
2079818830.20 708172917.59
6. Cash and cash equivalents end of the
period
3377904155.80 1532891540.10
7. Consolidated Statements of Changes in Owners’ Equity
H1 2020
Unit: RMB
Item
H1 2020
Equity attributable to owners of the Company as the parent
Non-controlli
ng interests
Total owners’
equity Share capital
Other equity
instruments Capital
reserves
Less:
Treasur
y stock
Other
comprehensi
ve income
Specifi
c
reserve
Surplus
reserves
Gener
al
reserv
e
Retained
earnings
Othe
r
Subtotal
Preferre
d shares
Perpetu
al bonds
Othe
r
1. Balance as
at the end of
the prior year
503600000.
00
25
256902260.
27
6888203911.
92
8944111764.
44
488042947.3
0
9432154711.
74
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
Adjustment
for business
combination
under
common
control
Other
adjustments
2. Balance as
at the
beginning of
the year
503600000.
00
25
256902260.
27
6888203911.
92
8944111764.
44
488042947.3
0
9432154711.
74
3. Increase/
decrease in
the period
(“-” for
decrease)
269536604.36 269536604.36
-18495077.4
3
251041526.93
3.1 Total
comprehensi
ve income
1024936604.
36
1024936604.
36
-18495077.4
3
1006441526.
93
3.2 Capital
increased
and reduced
by owners
3.2.1
Ordinary
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4
Other
3.3 Profit
distribution
-755400000.0
0
-755400000.0
0
-755400000.0
0
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners
(or
shareholders)
-755400000.0
0
-755400000.0
0
-755400000.0
0
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset
by surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensi
ve income
transferred to
retained
earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of
the period
503600000.
00
25
256902260.
27
7157740516.
28
9213648368.
80
469547869.8
7
9683196238.
67
H1 2019
Unit: RMB
Item
H1 2019
Equity attributable to owners of the Company as the parent
Non-controlli
ng interests
Total owners’
equity Share capital
Other equity
instruments Capital
reserves
Less:
Treasur
y stock
Other
comprehensi
ve income
Specifi
c
reserve
Surplus
reserves
Gener
al
reserv
e
Retained
earnings
Othe
r
Subtotal
Preferre
d shares
Perpetu
al bonds
Othe
r
1. Balance as
at the end of
the prior year
503600000.
00
25
4794830.59
256902260.
27
5541281341.
47
7601984024.
58
427766092.8
2
8029750117.
40
Add:
Adjustment
for change in
accounting
policy
-4794830.5
9
4794830.59
Adjustment
for
correction of
previous
error
Adjustment
for business
combination
under
common
control
Other
adjustments
2. Balance as
at the
beginning of
the year
503600000.
00
25
256902260.
27
5546076172.
06
7601984024.
58
427766092.8
2
8029750117.
40
3. Increase/
decrease in
the period
(“-” for
decrease)
492916314.01 492916314.01 26632409.70 519548723.71
3.1 Total 1248316314. 1248316314. 26632409.70 1274948723.
comprehensi
ve income
01 01 71
3.2 Capital
increased
and reduced
by owners
3.2.1
Ordinary
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4
Other
3.3 Profit
distribution
-755400000.0
0
-755400000.0
0
-755400000.0
0
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners
(or
shareholders)
-755400000.0
0
-755400000.0
0
-755400000.0
0
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset
by surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensi
ve income
transferred to
retained
earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of
the period
503600000.
00
25
256902260.
27
6038992486.
07
8094900338.
59
454398502.5
2
8549298841.
11
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2020
Unit: RMB
Item
H1 2020
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
stock
Other
comprehensive
income
Specific
reserve
Surplus
reserves
Retained
earnings
Other
Total owners’
equity
Preferred
shares
Perpetual
bonds
Other
1. Balance as at the
end of the prior year
503600000.00 1247162107.35 251800000.00 6397131020.62 8399693127.97
Add: Adjustment for
change in accounting
policy
Adjustment for
correction of previous
error
Other adjustments
2. Balance as at the
beginning of the year
503600000.00 1247162107.35 251800000.00 6397131020.62 8399693127.97
3. Increase/ decrease
in the period (“-” for
decrease)
-106553780.59 -106553780.59
3.1 Total
comprehensive
income
648846219.41 648846219.41
3.2 Capital
increased and reduced
by owners
3.2.1 Ordinary
shares increased by
owners
3.2.2 Capital
increased by holders
of other equity
instruments
3.2.3
Share-based payments
included in owners’
equity
3.2.4 Other
3.3 Profit
distribution
-755400000.00 -755400000.00
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
owners (or
shareholders)
-755400000.00 -755400000.00
3.3.3 Other
3.4 Transfers within
owners’ equity
3.4.1 Increase in
capital (or share
capital) from capital
reserves
3.4.2 Increase in
capital (or share
capital) from surplus
reserves
3.4.3 Loss offset
by surplus reserves
3.4.4 Changes in
defined benefit
schemes transferred to
retained earnings
3.4.5 Other
comprehensive
income transferred to
retained earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in
the period
3.5.2 Used in the
period
3.6 Other
4. Balance as at the
end of the period
503600000.00 1247162107.35 251800000.00 6290577240.03 8293139347.38
H1 2019
Unit: RMB
Item H1 2019
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
stock
Other
comprehensive
income
Specific
reserve
Surplus
reserves
Retained
earnings
Other
Total owners’
equity
Preferred
shares
Perpetual
bonds
Other
1. Balance as at the
end of the prior year
503600000.00 1247162107.35 4794830.59 251800000.00 5162354747.41 7169711685.35
Add: Adjustment for
change in
accounting policy
-4794830.59 4794830.59
Adjustment for
correction of
previous error
Other adjustments
2. Balance as at the
beginning of the
year
503600000.00 1247162107.35 0.00 251800000.00 5167149578.00 7169711685.35
3. Increase/ decrease
in the period (“-” for
decrease)
-71419256.76 -71419256.76
3.1 Total
comprehensive
income
683980743.24 683980743.24
3.2 Capital
increased and
reduced by owners
3.2.1 Ordinary
shares increased by
owners
3.2.2 Capital
increased by holders
of other equity
instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit
distribution
-755400000.00 -755400000.00
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
owners (or
shareholders)
-755400000.00 -755400000.00
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from capital
reserves
3.4.2 Increase
in capital (or share
capital) from surplus
reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4 Changes
in defined benefit
schemes transferred
to retained earnings
3.4.5 Other
comprehensive
income transferred
to retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1 Increase
in the period
3.5.2 Used in
the period
3.6 Other
4. Balance as at the
end of the period
503600000.00 1247162107.35 0.00 251800000.00 5095730321.24 7098292428.59
~33~
Anhui Gujing Distillery Company Limited
Notes to Financial Statements for H1 2020
(Currency Unit Is RMB Unless Otherwise Stated)
1. BASIC INFORMATION ABOUT THE COMPANY
1.1 Corporate Information
Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property Anhui
Gujing Distillery Company Limited (“the Company”) was established as a limited liability company with net assets
of RMB377167700 and state-owned shares of 155000000 shares and considered Anhui Gujing Company as the
only promoter. The registration place was Bozhou Anhui China. The Company was established on 5 March 1996 by
document of WZM (1996) No.42 of Anhui People’s Government. The Company set up plenary session on 28 May
1996 and registered in Anhui on 30 May 1996 with business license of 14897271-1.
The Company has issued 60000000 domestic listed foreign shares (“B” shares) in June 1996 and 20000000ordinary shares (“A shares) on September 1996 ordinary shares are listed in national and par value is RMB1.00 pershare. Those A shares and B shares are listed in Shenzhen Stock exchange.Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries (the Company)
specialize in producing and selling white spirit.Registered capitals of the Company were RMB235000000 with stocks of 235000000 of which 155000000
shares were issued in China B shares of 60000000 shares and A shares of 20000000 shares. The book value of
the stocks of the Company was of RMB1 per share.
On 29 May 2006 a shareholder meeting was held to discuss and approval a program of equity division of A share
the program was implement in June 2006. After implementation all shares are outstanding share which include
147000000 shares with restrict condition on disposal represent 62.55% of total equity and 88000000 shares
without restrict condition on disposal represent 37.45% of total equity.The Company issued
on 27 June 2007 11750000 outstanding shares with restrict condition on disposal are listed in stock market on 29
June 2007. Up to that day outstanding shares with restrict condition on disposal are 135250000 representing
57.55% of total equity the share without restrict condition are 99750000 representing 42.45% of total equity.
The Company issued
on 17 July 2008 11750000 outstanding shares with restrict condition on disposal are listed in stock market on 18
July 2008. Up to that day outstanding shares with restrict condition on disposal are 123500000 representing
52.55% of total equity the share without restrict condition are 111500000 representing 47.45% of total equity.
The Company issued
on 24 July 2009 123500000 outstanding shares with restrict condition on disposal are listed in stock market on 29
~34~
July 2009. Up to that day the Company’s all shares are all tradable.
Approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943 the Company privately offered 16800000
ordinary shares (A-shares) to special investors on 15 July 2011 with a par value of RMB1 and the price of
RMB75.00 per share raising RMB1260000000.00 in total the net amount of raised funds stood at
RMB1227499450.27 after deducting RMB32500549.73 of various issuance expenses. Certified Public
Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi
[2011] No. 1065. After private issuance the share capital of the Company increased to RMB251.8 million.
Pursuant to the Resolution of The 2011 Annual General Meeting the Company that considered 251800000 sharesas base number on 31 December 2011 transferred capital reserve into share capital at a rate of “10 shares for per 10shares” accounting for 251800000 shares and implemented in the year of 2012. Upon the transference the
registered capitals increased to RMB503600000.
In April 2016 the Company entered a strategic cooperation agreement with Wuhan Tianlong Yellow Crane Tower
Co. Ltd. creating a new age for cooperation related to Chinese famous spirit. As the only Chinese famous spirit in
Hubei Province it features unique mellow taste elegant appearance and tempting smell. Moreover Yellow Crane
Tower White Spirit won the Golden Prize respectively in 1984 and 1989 National White Spirit Appraisal
Competition as one of the business card representing Hubei Province’s economy. At present the Company has
established three major bases in Wuhan Xianning and Suizhou of which Xianning Base has integrated modernism
ecologism and high technology as a new spirit-making base known as “the most beautiful chateau in China”. In
2016 Yellow Crane Tower Spirit won “2015 Top 10 Star Product in Hubei Province”.
By 30 June 2020 the Company issued 503600000 shares.
The Company is registered at Gujing Town Bozhou City Anhui Province.The approved business of the Company including procurement of grain (operating with business license)
manufacture of distilled spirits wine distilling facilities packaging material bottles alcohol grease (limited to
byproducts from wine manufacture) and research and development of high-tech biotechnology development
agricultural and sideline products deep processing as well as sale of self-manufacturing products.The Company as the parent and the final company as the parent is Anhui Gujing Company Co. Ltd in China.
Financial statement of the Company will be released on 28 August 2020 by the Board of Directors.
1.2 Scope of Consolidation and Changes Thereof
(1) Incorporated subsidiaries of the Company
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Proportion of Shareholding (or
similar equity interest) (%)
Direct Indirect
1 Bozhou Gujing Sales Co. Ltd. Gujing Sales 100.00 -
2 Anhui Jinyunlai Culture & Media Co. Ltd. Jinyunlai 100.00 -
~35~
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Proportion of Shareholding (or
similar equity interest) (%)
Direct Indirect
3 Anhui Ruisiweier Technology Co. Ltd. Ruisiweier 100.00
4 Anhui Colorful Taste Wine Co. Ltd. Colorful Taste Wine 100.00
5 Anhui Longrui Glass Co. Ltd. Longrui Glass 100.00
6 Bozhou Gujing Waste Recycling Co. Ltd. Gujing Waste 100.00
7
Shanghai Gujing Jinhao hotel management
company
Jinhao Hotel 100.00
8 Bozhou Gujing hotel Co. Ltd Gujing Hotel 100.00
9
Anhui Yuanqing environmental protection Co.
Ltd.Yuanqing
Environmental
Protection
100.00
10
Anhui Gujing Yunshang Electronic Commerce
Co. Ltd
Gujing Electronic
Commerce
100.00
11
Anhui Zhenrui Construction Engineering Co.
Ltd
Zhenrui Construction
Engineering
100.00
12 Anhui RunanxinkeTesting Tech. Co. Ltd. Runanxinke Testing 100.00
13 Yellow Crane Tower Wine Co. Ltd
Yellow Crane Tower
Wine
51.00
14 Yellow Crane Tower Wine (Suizhou) Co. Ltd
Suizhou Yellow Crane
Tower
51.00
15 Hubei Junhe Advertising Co. Ltd. Junhe Advertising
51.00
16 Hubei Yellow Crane Tower Beverage Co. Ltd.
Yellow Crane Tower
Beverage
51.00
17 Yellow Crane Tower Wine (Xianning) Co. Ltd.
Xianning Yellow Crane
Tower
51.00
18 Wuhan Yashibo tech. Co. Ltd. Yashibo
51.00
19
Wuhan Tianlong Jindi Technology
Development Co. Ltd.
Tianlong Jindi
51.00
~36~
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Proportion of Shareholding (or
similar equity interest) (%)
Direct Indirect
20 Wuhan Junya Sales Co. Ltd. Junya Sales
51.00
21 Xianning Junhe Sales Co. Ltd. Xianning Junhe
51.00
22 Suizhou Junhe Commercial Co. Ltd. Suizhou Junhe
51.00
For details of the subsidiaries mentioned above please refer to Note 7 INTEREST IN OTHER ENTITIES
(2) Change of the scope of consolidation
No change comprared with that of the same period of last year.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis for Preparation
On the basis of continuous operations the Company shall confirm and measure actual transactions and events in
accordance with the Accounting Standards for Business Enterprises and its Application Guidelines and
Interpretation of the Standards and prepare financial statements. Besides the Company also discloses relevant
financial information in accordance with the China Securities Regulatory Commission (CSRC) Rules No. 15 on the
Compilation and Reporting of Corporate Information on Public Offerings -- General Provisions on Financial
Reports (2014 Revision).
2.2 Continuation
The Company has assessed its ability to continually operate for the next twelve months from the end of the
reporting period and no any matters that may result in doubt on its ability as a going concern were noted. Therefore
it is reasonable for the Company to prepare financial statements on the going concern basis.
3. Important Accounting Policies and Estimations
The following important accounting policies and estimates of the Company shall be formulated in accordance with
the Accounting Standards for Business Enterprises. The business not mentioned shall be carried out in accordance
with the relevant accounting policies in the Accounting Standards for Business Enterprises.
3.1 Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting
Standards for Business Enterprises which factually and completely present the Company’s financial positions
changes of owners’ equity business results and cash flows and other relevant information.
3.2 Fiscal Period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is one year.
~37~
3.4 Currency Used in Bookkeeping
The Company's functional currency is RMB and its overseas subsidiaries are operated in the currency of the main
economic environment in which they operate.
3.5 Accounting Treatment of Business Combinations under and not under Common Control
(a) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common control shall be
measured at their carrying amount of the acquired entity at the combination date. If the accounting policy adopted
by the acquired entity is different from that adopted by the acquiring entity the acquiring entity shall according to
accounting policy it adopts adjust the relevant items in the financial statements of the acquired party based on the
principal of materiality. As for the difference between the carrying amount of the net assets obtained by the
acquiring entity and the carrying amount of the consideration paid by it the capital reserve (capital premium or
share premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not sufficient to
absorb the difference any excess shall be adjusted against retained earnings.
For the accounting treatment of business combination under common control by step acquisitions please refer to
Note 3.6 (6).(b) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common control shall be
measured at their fair value at the acquisition date. If the accounting policy adopted by the acquired entity is
different from that adopted by the acquiring entity the acquiring entity shall according to accounting policy it
adopts adjust the relevant items in the financial statements of the acquired entity based on the principal of
materiality. The acquiring entity shall recognise the positive balance between the combination costs and the fair
value of the identifiable net assets it obtains from the acquired entity as goodwill. The acquiring entity shall
pursuant to the following provisions treat the negative balance between the combination costs and the fair value of
the identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets liabilities and contingent liabilities it
obtains from the acquired entity as well as the combination costs;
(ii) If after the review the combination costs are still less than the fair value of the identifiable net assets it obtains
from the acquired entity the balance shall be recognised in profit or loss of the reporting period.
For the accounting treatment of business combination under the same control by step acquisitions please refer to
Note 3.6 (f).(c) Treatment of business combination related costs
The intermediary costs such as audit legal services and valuation consulting and other related management costs
that are directly attributable to the business combination shall be charged in profit or loss in the period in which
they are incurred. The costs to issue equity or debt securities for the consideration of business combination shall be
~38~
recorded as a part of the value of the respect equity or debt securities upon initial recognition.
3.6 Method of Preparing the Consolidated Financial Statements
(a) Scope of consolidation
The scope of consolidated financial statements shall be determined on the basis of control. It not only includes
subsidiaries determined based on voting power (or similar) or other arrangement but also structured entities under
one or several contract arrangements.
Control exists when the Company has all the following: power over the investee; exposure or rights to variable
returns from the Company’s involvement with the investee; and the ability to use its power over the investee to
affect the amount of the investor’s returns. Subsidiaries are the entities that controlled by the Company (including
enterprise a divisible part of the investee and structured entity controlled by the enterprise). A structured entity
(sometimes called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights are
not the dominant factor in deciding who controls the entity.(b) Special requirement as the parent company is an investment entity
If the parent company is an investment entity it should measure its investments in particular subsidiaries as
financial assets at fair value through profit or loss instead of consolidating those subsidiaries in its consolidated and
separate financial statements. However as an exception to this requirement if a subsidiary provides
investment-related services or activities to the investment entity it should be consolidated.The parent company is defined as investment entity when meets following conditions:
a. Obtains funds from one or more investors for the purpose of providing those investors with investment
management services;
b. Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation
investment income or both; and
c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.If the parent company becomes an investment entity it shall cease to consolidate its subsidiaries at the date of the
change in status except for any subsidiary which provides investment-related services or activities to the
investment entity shall be continued to be consolidated. The deconsolidation of subsidiaries is accounted for as
though the investment entity partially disposed subsidiaries without loss of control.When the parent company previously classified as an investment entity ceases to be an investment entity subsidiary
that was previously measured at fair value through profit or loss shall be included in the scope of consolidated
financial statements at the date of the change in status. The fair value of the subsidiary at the date of change
represents the transferred deemed consideration in accordance with the accounting for business combination not
under common control.(c) Method of preparing the consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial statements of the
~39~
Company and its subsidiaries and using other related information.
When preparing consolidated financial statements the Company shall consider the entire group as an accounting
entity adopt uniform accounting policies and apply the requirements of Accounting Standard for Business
Enterprises related to recognition measurement and presentation. The consolidated financial statements shall
reflect the overall financial position operating results and cash flows of the group.(i) Like items of assets liabilities equity income expenses and cash flows of the parent are combined with those
of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against the parent’s
portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or between
subsidiaries and when intragroup transactions indicate an impairment of related assets the losses shall be
recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements when subsidiaries are acquired or
disposed in the reporting period
(i) Acquisition of subsidiaries or business
Subsidiaries or business acquired through business combination under common control
When preparing consolidated statements of financial position the opening balance of the consolidated balance
sheet shall be adjusted. Related items of comparative financial statements shall be adjusted as well deeming that
the combined entity has always existed ever since the ultimate controlling party began to control.Incomes expenses and profits of the subsidiary incurred from the beginning of the reporting period to the end of
the reporting period shall be included into the consolidated statement of profit or loss. Related items of comparative
financial statements shall be adjusted as well deeming that the combined entity has always existed ever since the
ultimate controlling party began to control.
Cash flows from the beginning of the reporting period to the end of the reporting period shall be included into the
consolidated statement of cash flows. Related items of comparative financial statements shall be adjusted as well
deeming that the combined entity has always existed ever since the ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common control
When preparing the consolidated statements of financial position the opening balance of the consolidated
statements of financial position shall not be adjusted.Incomes expenses and profits of the subsidiary incurred from the acquisition date to the end of the reporting period
shall be included into the consolidated statement of profit or loss.
Cash flows from the acquisition date to the end of the reporting period shall be included into the consolidated
statement of cash flows.
~40~
(ii) Disposal of subsidiaries or business
When preparing the consolidated statements of financial position the opening balance of the consolidated
statements of financial position shall not be adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal date shall be included
into the consolidated statement of profit or loss.
Cash flows from the beginning of the subsidiary to the disposal date shall be included into the consolidated
statement of cash flows.(e) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised as treasury stock of
the Company which is offset with the owner’s equity represented as “treasury stock” under “owner’s equity” in the
consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking long-term equity
investment held by the Company to its subsidiaries as reference. That is the long-term equity investment is
eliminated (off- set) against the portion of the corresponding subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve and being different from retained
earnings and undistributed profit “Specific reserves” and “General risk provision” shall be recovered based on the
proportion attributable to owners of the parent company after long-term equity investment to the subsidiaries is
eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the consolidated statement
of financial position and their tax basis is generated as a result of elimination of unrealized inter-company
transaction profit or loss deferred tax assets of deferred tax liabilities shall be recognised and income tax expense
in the consolidated statement of profit or loss shall be adjusted simultaneously excluding deferred taxes related to
transactions or events directly recognised in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assets to its
subsidiaries shall be eliminated against “net profit attributed to the owners of the parent company” in full.Unrealized inter-company transactions profit or loss generated from the subsidiaries selling assets to the Company
shall be eliminated between “net profit attributed to the owners of the parent company” and “non-controllinginterests” pursuant to the proportion of the Company in the related subsidiaries. Unrealized inter-companytransactions profit or loss generated from the assets sales between the subsidiaries shall be eliminated between “netprofit attributed to the owners of the parent company” and “non-controlling interests” pursuant to the proportion ofthe Company in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the proportion of
non-controlling interest in this subsidiary at the beginning of the period non-controlling interest is still to be
written down.
~41~
(f) Accounting for Special Transactions
(i) Purchasing of non-controlling interests
Where the Company purchases non-controlling interests of its subsidiary in the separate financial statements of the
Company the cost of the long-term equity investment obtained in purchasing non-controlling interests is measured
at the fair value of the consideration paid. In the consolidated financial statements difference between the cost of
the long-term equity investment newly obtained in purchasing non-controlling interests and share of the
subsidiary’s net assets from the acquisition date or combination date continuingly calculated pursuant to the newly
acquired shareholding proportion shall be adjusted into capital reserve (capital premium or share premium). If
capital reserve is not enough to be offset surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactions
Business combination under common control in stages through multiple transactions
On the combination date in the separate financial statement initial cost of the long-term equity investment is
determined according to the share of carrying amount of the acquiree’s net assets in the ultimate controlling entity’s
consolidated financial statements after combination. The difference between the initial cost of the long-term equity
investment and the carrying amount of the long -term investment held prior of control plus book value of additional
consideration paid at acquisition date is adjusted into capital reserve (capital premium or share premium). If the
capital reserve is not enough to absorb the difference any excess shall be adjusted against surplus reserve and
undistributed profit in turn.In the consolidated financial statements the assets and liabilities acquired during the combination should be
recognized at their carrying amount in the ultimate controlling entity’s consolidated financial statements on the
combination date unless any adjustment is resulted from the difference in accounting policies. The difference
between the carrying amount of the investment held prior of control plus book value of additional consideration
paid on the acquisition date and the net assets acquired through the combination is adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference any excess shall
be adjusted against retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date and the equity
investment is accounted for under the equity method related profit or loss other comprehensive income and other
changes in equity which have been recognised during the period from the later of the date of the Company
obtaining original equity interest and the date of both the acquirer and the acquiree under common control of the
same ultimate controlling party to the combination date should be offset against the opening balance of retained
earnings at the comparative financial statements period respectively.
Business combination not under common control in stages through multiple transactions
On the consolidation date in the separate financial statements the initial cost of long-term equity investment is
determined according to the carrying amount of the original long-term investment plus the cost of new investment.
~42~
In the consolidated financial statements the equity interest of the acquired entity held prior to the acquisition date
shall be re-measured at its fair value on the acquisition date. Difference between the fair value of the equity interest
and its book value is recognised as investment income. The other comprehensive income related to the equity
interest held prior to the acquisition date calculated through equity method should be transferred to current
investment income of the acquisition period excluding other comprehensive income resulted from the
remeasurement of the net assets or net liabilities under defined benefit plan. The Company shall disclose
acquisition-date fair value of the equity interest held prior to the acquisition date and the related gains or losses due
to the remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control when the
Company prepares consolidated financial statements difference between consideration received from the disposal
and the corresponding share of subsidiary’s net assets cumulatively calculated from the acquisition date or
combination date shall be adjusted into capital reserve (capital premium or share premium). If the capital reserve is
not enough to absorb the difference any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of control
Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment when the
consolidated financial statements are prepared the retained equity interest should be re-measured at fair value at the
date of loss of control. The difference between i) the fair value of consideration received from the disposal plus
non-controlling interest retained; ii) share of the former subsidiary’s net assets cumulatively calculated from the
acquisition date or combination date according to the original proportion of equity interest shall be recognised in
current investment income when control is lost.Moreover other comprehensive income and other changes in equity related to the equity investment in the former
subsidiary shall be transferred into current investment income when control is lost excluding other comprehensive
income resulted from the remeasurement of the movement of net assets or net liabilities under defined benefit plan.
Disposal in stages
In the consolidated financial statements whether the transactions should be accounted for as “a single transaction”
needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction” in the separate financial statements for
transactions prior of the date of loss of control carrying amount of each disposal of long-term equity investment
need to be recognized and the difference between consideration received and the carrying amount of long-term
equity investment corresponding to the equity interest disposed should be recognized in current investment income;
in the consolidated financial statements the disposal transaction should be accounted for according to related
policy in “Disposal of long-term equity investment in subsidiaries without a loss of control”.
~43~
If the disposal in stages should be classified as “a single transaction” these transactions should be accounted for as
a single transaction of disposal of subsidiary resulting in loss of control. In the separate financial statements for
each transaction prior of the date of loss of control difference between consideration received and the carrying
amount of long-term equity investment corresponding to the equity interest disposed should be recognised as other
comprehensive income firstly and transferred to profit or loss as a whole when control is lost; in the consolidated
financial statements for each transaction prior of the date of loss of control difference between consideration
received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed should be
recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact the presence of one
or more of the following indicators may lead to account for multiple transactions as a single transaction:
(a) The transactions are entered into simultaneously or in contemplation of one another.(b) The transactions form a single transaction designed to achieve an overall commercial effect.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) One transaction when considered on its own merits does not make economic sense but when considered
together with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by the subsidiaries’
minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the subsidiaries which
resulted in the dilution of equity interest of parent company in these subsidiaries. In the consolidated financial
statements difference between share of the corresponding subsidiaries’ net assets calculated based on the parent’s
equity interest before and after the capital injection shall be adjusted into capital reserve (capital premium or share
premium). If the capital reserve is not enough to absorb the difference any excess shall be adjusted against retained
earnings.
3.7 Classification of Joint Arrangements and Accounting for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. Joint arrangement of the
Company is classified as either a joint operation or a joint venture.
(a) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the assets and obligations for the liabilities relating to the arrangement.The Company shall recognise the following items in relation to shared interest in a joint operation and account for
them in accordance with relevant accounting standards of the Accounting Standards for Business Enterprises:
(i) its assets including its share of any assets held jointly;
(ii) its liabilities including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
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(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses including its share of any expenses incurred jointly.(b) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of long-term equity
investment.
3.8 Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents include
short-term (generally within three months of maturity at acquisition) highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
3.9 Foreign Currency Transactions and Translation of Foreign Currency Financial Statements
(a) Determination of the exchange rate for foreign currency transactions
At the time of initial recognition of a foreign currency transaction the amount in the foreign currency shall be
translated into the amount in the functional currency at the spot exchange rate of the transaction date or at an
exchange rate which is determined through a systematic and reasonable method and is approximate to the spot
exchange rate of the transaction date (hereinafter referred to as the approximate exchange rate).(b) Translation of monetary items denominated in foreign currency on the balance sheet date
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The
balance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the
spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded into the
profits and losses at the current period. The foreign currency non-monetary items measured at the historical cost
shall still be translated at the spot exchange rate on the transaction date; for the foreign currency non-monetary
items restated to a fair value measurement shall be translated into the at the spot exchange rate at the date when the
fair value was determined the difference between the restated functional currency amount and the original
functional currency amount shall be recorded into the profits and losses at the current period.(c) Translation of foreign currency financial statements
Before translating the financial statements of foreign operations the accounting period and accounting policy shall
be adjusted so as to conform to the Company. The adjusted foreign operation financial statements denominated in
foreign currency (other than functional currency) shall be translated in accordance with the following method:
(i) The asset and liability items in the statement of financial position shall be translated at the spot exchange rates at
the date of that statement of financial position.. The owners’ equity items except undistributed profit shall be
translated at the spot exchange rates when they are incurred.(ii) The income and expense items in the statement of profit and other comprehensive income shall be translated at
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the spot exchange rates or approximate exchange rate at the date of transaction.(iii)Foreign currency cash flows and cash flows of foreign subsidiaries shall be translated at the spot exchange rate
or approximate exchange rate when the cash flows are incurred. The effect of exchange rate changes on cash is
presented separately in the statement of cash flows as an adjustment item.(iv) The differences arising from the translation of foreign currency financial statements shall be presented
separately as “other comprehensive income” under the owners’ equity items of the consolidated statement of
financial position.When disposing a foreign operation involving loss of control the cumulative amount of the exchange differences
relating to that foreign operation recognised under other comprehensive income in the statement of financial
position shall be reclassified into current profit or loss according to the proportion disposed.
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a financial liability
or equity instrument of another entity.(a) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial position when and only
when an entity becomes party to the contractual provisions of the instrument.
A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e. when the
obligation specified in the contract is discharged or cancelled or expires. An exchange of the Company (borrower)
and lender of debt instruments that carry significantly different terms or a substantial modification of the terms of
an existing liability are both accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade date
accounting. A regular-way purchase or sale of financial assets is a transaction under a contract whose terms require
delivery of the asset within the time frame established generally by regulations or convention in the market place
concerned. Trade date is the date at which the entity commits itself to purchase or sell an asset.(b) Classification and measurement of financial assets
At initial recognition the Company classified its financial asset based on both the business model for managing the
financial asset and the contractual cash flow characteristics of the financial asset: financial asset at amortised cost
financial asset at fair value through profit or loss (FVTPL) and financial asset at fair value through other
comprehensive income (FVTOCI). Reclassification of financial assets is permitted if and only if the objective of
the entity’s business model for managing those financial assets changes. In this circumstance all affected financial
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assets shall be reclassified on the first day of the first reporting period after the changes in business model;
otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets measured at FVTPL
transaction costs are recognised in current profit or loss. For financial assets not measured at FVTPL transaction
costs should be included in the initial measurement. Notes receivable or accounts receivable that arise from sales of
goods or rendering of services are initially measured at the transaction price defined in the accounting standard of
revenue where the transaction does not include a significant financing component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised cost
The financial asset at amortised cost category of classification applies when both the following conditions are met:
the financial asset is held within the business model whose objective is to hold financial assets in order to collect
contractual cash flows and the contractual term of the financial asset gives rise on specified dates to cash flows that
are solely payment of principal and interest on the principal amount outstanding. These financial assets are
subsequently measured at amortised cost by adopting the effective interest rate method. Any gain or loss arising
from derecognition according to the amortization under effective interest rate method or impairment are recognised
in current profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following conditions are met: the
financial asset is held within the business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and the contractual term of the financial asset gives rise on specified dates to cash
flows that are solely payment of principle and interest on the principal amount outstanding. All changes in fair
value are recognised in other comprehensive income except for gain or loss arising from impairment or exchange
differences which should be recognised in current profit or loss. At derecognition cumulative gain or loss
previously recognised under OCI is reclassified to current profit or loss. However interest income calculated based
on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument investments as
measured through FVTOCI. All changes in fair value are recognised in other comprehensive income except for
dividend income recognised in current profit or loss. At derecognition cumulative gain or loss are reclassified to
retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair value through
other comprehensive income (FVTOCI) should be classified as financial asset at fair value through profit or loss
(FVTPL). These financial assets should be subsequently measured at fair value. All the changes in fair value are
included in current profit or loss.
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(c) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or loss (FVTPL)
loan commitments at a below-market interest rate and financial guarantee contracts and financial asset at amortised
cost.Subsequent measurement of financial assets will be based on the classification:
(i)Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities
designated at FVTPL are classified as financial liabilities at FVTP. After initial recognition any gain or loss
(including interest expense) are recognised in current profit or loss except for those hedge accounting is applied.
For financial liability that is designated as at FVTPL changes in the fair value of the financial liability that is
attributable to changes in the own credit risk of the issuer shall be presented in other comprehensive income. At
derecognition cumulative gain or loss previously recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified contract terms.The provision of impairment losses of loan commitments shall be recognised based on expected credit losses
model.
Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the
original or modified terms of a debt instrument. Financial guarantee contracts liability shall be subsequently
measured at the higher of: The amount of the loss allowance recognised according to the impairment principles of
financial instruments; and the amount initially recognised less the cumulative amount of income recognised in
accordance with the revenue principles.(iii)Financial liabilities at amortised cost
After initial recognition the Company measured other financial liabilities at amortised cost using the effective
interest method.
Except for special situation financial liabilities and equity instrument should be classified in accordance with the
following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial instrument to fulfill a
contractual obligation this contractual obligation meet the definition of financial liabilities. Some financial
instruments do not comprise terms and conditions related to obligations of delivering cash or another financial
instrument explicitly they may include contractual obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments it should be
considered that the Company’s own equity instruments are alternatives of cash or another financial instrument or
to entitle the holder of the equity instruments to sharing the remaining rights over the net assets of the issuer. If the
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former is the case the instrument is a liability of the issuer; otherwise it is an equity instrument of the issuer.Under some circumstances it is regulated in the contract that the financial instrument must or may be settled in the
Company's own equity instruments where amount of contractual rights and obligations are calculated by
multiplying the number of the equity instruments to be available or delivered by its fair value upon settlement. Such
contracts shall be classified as financial liabilities regardless that the amount of contractual rights and liabilities is
fixed or fluctuate totally or partially with variables other than market price of the entity’s own equity instruments
(d) Derivatives and embedded derivatives
At initial recognition derivatives shall be measured at fair value at the date of derivative contracts are signed and
subsequently measured at fair value. The derivative with a positive fair value shall be recognized as an asset and
with a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into current profit
or loss except for the effective portion of cash flow hedges which shall be recognised in other comprehensive
income and reclassified into current profit or loss when the hedged items affect profit or loss.
An embedded derivative is a component of a hybrid contract with a financial asset as a host the Company shall
apply the requirements of financial asset classification to the entire hybrid contract. If a host that is not a financial
asset and the hybrid contract is not measured at fair value with changes in fair value recognised in profit or loss
and the economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host and a separate instrument with the same terms as the embedded derivative
would meet the definition of a derivative the embedded derivative shall be separated from the hybrid instrument
and accounted for as a separate derivative instrument. If the Company is unable to measure the fair value of the
embedded derivative at the acquisition date or subsequently at the balance sheet date the entire hybrid contract is
designated as financial assets or financial liabilities at fair value through profit or loss.(e) Impairment of financial instrument
The Company shall recognise a loss allowance based on expected credit losses on a financial asset that is measured
at amortised cost a debt investment at fair value through other comprehensive income a contract asset a lease
receivable a loan commitment and a financial guarantee contract.(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the respective
risks of a default occurring as the weights. Credit loss is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the cash flows that the Company expects to receive
discounted at the original effective interest rate or credit- adjusted effective interest rate for purchased or originated
credit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible default events over the
expected life of a financial instrument.
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12-month expected credit losses are the portion of lifetime expected credit losses that represent the expected credit
losses that result from default events on a financial instrument that are possible within the 12 months after the
reporting date (or the expected lifetime if the expected life of a financial instrument is less than 12 months).
At each reporting date the Company classifies financial instruments into three stages and makes provisions for
expected credit losses accordingly. A financial instrument of which the credit risk has not significantly increased
since initial recognition is at stage 1. The Company shall measure the loss allowance for that financial instrument at
an amount equal to 12-month expected credit losses. A financial instrument with a significant increase in credit risk
since initial recognition but is not considered to be credit-impaired is at stage 2. The Company shall measure the
loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses. A financial
instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. The Company shall
measure the loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date and measure the
loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
For financial instrument at stage 1 stage 2 and those have low credit risk the interest revenue shall be calculated
by applying the effective interest rate to the gross carrying amount of a financial asset. For financial instrument at
stage 3 interest revenue shall be calculated by applying the effective interest rate to the amortised cost after
deducting of impairment loss.
For notes receivable accounts receivable and accounts receivable financing no matter it contains a significant
financing component or not the Company shall measure the loss allowance at an amount equal to the lifetime
expected credit losses.Receivables
For the notes receivable accounts receivable other receivables accounts receivable financing and long-term
receivables which are demonstrated to be impaired by any objective evidence or applicable for individual
assessment the Company shall individually assess for impairment and recognise the loss allowance for expected
credit losses. If the Company determines that no objective evidence of impairment exists for notes receivable
accounts receivable other receivables accounts receivable financing and long-term receivables or the expected
credit loss of a single financial asset cannot be assessed at reasonable cost such notes receivable accounts
receivable other receivables accounts receivable financing and long-term receivables shall be divided into several
groups with similar credit risk characteristics and collectively calculated the expected credit loss. The determination
basis of groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
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For each group the Company calculates expected credit losses through default exposure and the lifetime expected
credit losses rate taking reference to historical experience for credit losses and considering current condition and
expectation for the future economic situation.
Determination basis of accounts receivable is as following:
Group 1: Accounts receivables due from the company within the scope of consolidation
Group 2: Accounts receivables due from other customers
For each group the Company calculates expected credit losses through preparing an aging analysis schedule with
the lifetime expected credit losses rate taking reference to historical experience for credit losses and considering
current condition and expectation for the future economic situation.
Determination basis of other receivables is as following:
Group 1: Other receivables due from the company within the scope of consolidation
Group 2: Other receivables due from others
For each group the Company calculates expected credit losses through default exposure and the 12-months or
lifetime expected credit losses rate taking reference to historical experience for credit losses and considering
current condition and expectation for the future economic situation.
Debt investment and other debt investment
For debt investment and other debt investment the Company shall calculate the expected credit loss through the
default exposure and the 12-month or lifetime expected credit loss rate based on the nature of the investment
counterparty and the type of risk exposure.(ii) Low credit risk
If the financial instrument has a low risk of default the borrower has a strong capacity to meet its contractual cash
flow obligations in the near term and adverse changes in economic and business conditions in the longer term may
but will not necessarily reduce the ability of the borrower to fulfill its contractual cash flow obligations.(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly since initial
recognition using the change in the risk of a default occurring over the expected life of the financial instrument
through the comparison of the risk of a default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of initial recognition.To make that assessment the Company shall consider reasonable and supportable information that is available
without undue cost or effort and that is indicative of significant increases in credit risk since initial recognition
including forward-looking information. The information considered by the Company are as following:
? Significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception
? Existing or forecast adverse change in the business financial or economic conditions of the borrower that
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results in a significant change in the borrower’s ability to meet its debt obligations；
? An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory economic or technological environment of the borrower；
? Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements which are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments or to otherwise have an effect on the probability of a default occurring;
? Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
? Expected changes in the loan documentation including an expected breach of contract that may lead to
covenant waivers or amendments interest payment holidays interest rate step-ups requiring additional
collateral or guarantees or other changes to the contractual framework of the instrument；
? Significant changes in the expected performance and behaviour of the borrower；
? Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments the Company shall assess whether the credit risk has
increased significantly since initial recognition on an individual financial instrument or a group of financial
instruments. When assessed based on a group of financial instruments the Company can group financial
instruments on the basis of shared credit risk characteristics for example past due information and credit risk
rating.Generally the Company shall determine the credit risk on a financial asset has increased significantly since initial
recognition when contractual payments are more than 30 days past due. The Company can only rebut this
presumption if the Company has reasonable and supportable information that is available without undue cost or
effort that demonstrates that the credit risk has not increased significantly since initial recognition even though the
contractual payments are more than 30 days past due.(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for financial asset at
amortised cost and debt investment at fair value through other comprehensive income. A financial asset is
credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred. Evidences that a financial asset is credit-impaired include observable data about the
following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract such as a default or past due event;
the lender(s) of the borrower for economic or contractual reasons relating to the borrower’s financial difficulty
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider；it is becoming
probable that the borrower will enter bankruptcy or other financial reorganisation；the disappearance of an active
market for that financial asset because of financial difficulties；the purchase or origination of a financial asset at a
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deep discount that reflects the incurred credit losses.(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition the Company shall at
each reporting date remeasure the expected credit loss and recognise in profit or loss as an impairment gain or loss
the amount of expected credit losses addition (or reversal). For financial asset at amortised cost the loss allowance
shall reduce the carrying amount of the financial asset in the statement of financial position; for debt investment at
fair value through other comprehensive income the loss allowance shall be recognised in other comprehensive
income and shall not reduce the carrying amount of the financial asset in the statement of financial position.(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the Company has no
reasonable expectations of recovering the contractual cash flow of a financial asset in its entirety or a portion
thereof. Such write-off constitutes a derecognition of the financial asset. This circumstance usually occurs when the
Company determines that the debtor has no assets or sources of income that could generate sufficient cash flow to
repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment loss.(f) Transfer of financial assets
Transfer of financial assets refers to following two situations:
? Transfers the contractual rights to receive the cash flows of the financial asset;
? Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of
the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset or 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 the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’s ability to sell the
asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to
exercise that ability unilaterally and without needing to impose additional restrictions on the transfer the Company
has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on the substance of
the transfer.If the transfer of financial asset qualifies for derecognition in its entirety the difference between the following shall
be recognised in profit or loss:
? The carrying amount of transferred financial asset;
? The sum of consideration received and the part derecognised of the cumulative changes in fair value
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previously recognised in other comprehensive income (The financial assets involved in the transfer are
classified as financial assets at fair value through other comprehensive income in accordance with Article 18
of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial
Instruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for derecognition the
previous carrying amount of the larger financial asset shall be allocated between the part that continues to be
recognised (For this purpose a retained servicing asset shall be treated as a part that continues to be recognised)
and the part that is derecognised based on the relative fair values of those parts on the date of the transfer. The
difference between following two amounts shall be recognised in profit or loss:
? The carrying amount (measured at the date of derecognition) allocated to the part derecognised；
? The sum of the consideration received for the part derecognised and part derecognised of the cumulative
changes in fair value previously recognised in other comprehensive income (The financial assets involved in
the transfer are classified as financial assets at fair value through other comprehensive income in accordance
with Article 18 of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement
of Financial Instruments).
(ii) Continuing involvement in transferred assets
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a transferred
asset and retains control of the transferred asset the Company shall continue to recognise the transferred asset to
the extent of its continuing involvement and also recognise an associated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which it is exposed to
changes in the value of the transferred asset
(iii) Continue to recognise the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset the
Company shall continue to recognise the transferred asset in its entirety and the consideration received shall be
recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accounting period the
Company shall continuously recognise any income (gain) arising from the transferred asset and any expense (loss)
incurred on the associated liability.(g) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial position and shall
not be offset. When meets the following conditions financial assets and financial liabilities shall be offset and the
net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; The Company intends
either to settle on a net basis or to realise the asset and settle the liability simultaneously.
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In accounting for a transfer of a financial asset that does not qualify for derecognition the Company shall not offset
the transferred asset and the associated liability.(h) Determination of fair value of financial instruments
Determination of financial assets and financial liabilities please refer to Note 3.11
3.11 Fair Value Measurement
Fair value refers to 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.The Company determines fair value of the related assets and liabilities based on market value in the principal
market or in the absence of a principal market in the most advantageous market price for the related asset or
liability. The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability assuming that market participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the greatest volume
and frequency. The most advantageous market is the market which maximizes the value that could be received
from selling the asset and minimizes the value which is needed to be paid in order to transfer a liability considering
the effect of transport costs and transaction costs both.If the active market of the financial asset or financial liability exists the Company shall measure the fair value
using the quoted price in the active market. If the active market of the financial instrument is not available the
Company shall measure the fair value using valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.? Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value including the market approach the income approach and the cost approach. The
Company shall use valuation techniques consistent with one or more of those approaches to measure fair value. If
multiple valuation techniques are used to measure fair value the results shall be evaluated considering the
reasonableness of the range of values indicated by those results. A fair value measurement is the point within that
range that is most representative of fair value in the circumstances.When using the valuation technique the Company shall give the priority to relevant observable inputs. The
unobservable inputs can only be used when relevant observable inputs is not available or practically would not be
obtained. Observable inputs refer to the information which is available from market and reflects the assumptions
that market participants would use when pricing the asset or liability. Unobservable Inputs refer to the information
which is not available from market and it has to be developed using the best information available in the
circumstances from the assumptions that market participants would use when pricing the asset or liability.
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? Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques
used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs and second to the
Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can access at the measurement date. 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. Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Inventories
(a) Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business in the process of
production for such sale or in the form of materials or supplies to be consumed in the production process or in the
rendering of services including raw materials work in progress semi-finished goods finished goods goods in
stock turnover material etc.(b) Measurement method of cost of inventories sold or used
Inventories are initially measured at the actual cost. Cost of inventories includes purchase cost processing cost and
other costs. Cost of the issue is measured using the weighted average method.(c) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year and surplus or
losses of inventory stocktaking shall be included in current profit and loss.(d) Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable value of
the inventories is recognised as provision for impairment of inventory and recognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained and factors
such as purpose of holding the inventory and impact of post balance sheet event shall be considered.(i) In normal operation process finished goods products and materials for direct sale their net realizable values are
determined at estimated selling prices less estimated selling expenses and relevant taxes and surcharges; for
inventories held to execute sales contract or service contract their net realizable values are calculated on the basis
of contract price. If the quantities of inventories specified in sales contracts are less than the quantities held by the
Company the net realizable value of the excess portion of inventories shall be based on general selling prices. Net
realizable value of materials held for sale shall be measured based on market price.(ii) For materials in stock need to be processed in the ordinary course of production and business net realisable
value is determined at the estimated selling price less the estimated costs of completion the estimated selling
expenses and relevant taxes. If the net realisable value of the finished products produced by such materials is higher
than the cost the materials shall be measured at cost; if a decline in the price of materials indicates that the cost of
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the finished products exceeds its net realisable value the materials are measured at net realisable value and
differences shall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For inventories with large
quantity and low unit price the provisions for inventory impairment are determined on a category basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date the amounts
written down are recovered and reversed to the extent of the inventory impairment which has been provided for.The reversal shall be included in profit or loss.(e) Amortisation method of low-value consumables
Low-value consumables: One-off writing off method is adopted
Package material: One-off writing off method is adopted
3.13 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of or significant influence
over an investee as well as equity investments in joint ventures. Associates of the Company are those entities over
which the Company has significant influence.(a) Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement and the arranged relevant activity must
be decided under unanimous consent of the parties sharing control. In assessing whether the Company has joint
control of an arrangement the Company shall assess first whether all the parties or a group of the parties control
the arrangement. When all the parties or a group of the parties considered collectively are able to direct the
activities of the arrangement the parties control the arrangement collectively. Then the Company shall assess
whether decisions about the relevant activities require the unanimous consent of the parties that collectively control
the arrangement. If two or more groups of the parties could control the arrangement collectively it shall not be
assessed as have joint control of the arrangement. When assessing the joint control the protective rights are not
considered.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is
not control or joint control of those policies. In determination of significant influence over an investee the
Company should consider not only the existing voting rights directly or indirectly held but also the effect of
potential voting rights held by the Company and other entities that could be currently exercised or converted
including the effect of share warrants share options and convertible corporate bonds that issued by the investee and
could be converted in current period.If the Company holds directly or indirectly 20% or more but less than 50% of the voting power of the investee it is
presumed that the Company has significant influence of the investee unless it can be clearly demonstrated that in
such circumstance the Company cannot participate in the decision-making in the production and operating of the
investee.
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(b) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
For a business combination involving enterprises under common control if the Company makes payment in cash
transfers non-cash assets or bears liabilities as the consideration for the business combination the share of carrying
amount of the owners’ equity of the acquiree in the consolidated financial statements of the ultimate controlling
party is recognised as the initial cost of the long-term equity investment on the combination date. The difference
between the initial investment cost and the carrying amount of cash paid non-cash assets transferred and liabilities
assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be offset undistributed
profit shall be offset in turn.
For a business combination involving enterprises under common control if the Company issues equity securities as
the consideration for the business combination the share of carrying amount of the owners’ equity of the acquiree
in the consolidated financial statements of the ultimate controlling party is recognised as the initial cost of the
long-term equity investment on the combination date. The total par value of the shares issued is recognised as the
share capital. The difference between the initial investment cost and the carrying amount of the total par value of
the shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be offset
undistributed profit shall be offset in turn.
For business combination not under common control the assets paid liabilities incurred or assumed and the fair
value of equity securities issued to obtain the control of the acquiree at the acquisition date shall be determined as
the cost of the business combination and recognised as the initial cost of the long-term equity investment. The audit
legal valuation and advisory fees other intermediary fees and other relevant general administrative costs incurred
for the business combination shall be recognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination the investment cost shall be
determined based on the following requirements:
For long-term equity investments acquired by payments in cash the initial cost is the actually paid purchase cost
including the expenses taxes and other necessary expenditures directly related to the acquisition of long-term
equity investments.
For long-term equity investments acquired through issuance of equity securities the initial cost is the fair value of
the issued equity securities.
For the long-term equity investments obtained through exchange of non-monetary assets if the exchange has
commercial substance and the fair values of assets traded out and traded in can be measured reliably the initial
cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of
the assets traded out together with relevant taxes. Difference between fair value and book value of the assets traded
out is recorded in current profit or loss. If the exchange of non-monetary assets does not meet the above criterion
the book value of the assets traded out and relevant taxes are recognised as the initial investment cost.
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For long-term equity investment acquired through debt restructuring the initial cost is determined based on the fair
value of the equity obtained and the difference between initial investment cost and carrying amount of debts shall
be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be accounted for at
cost method. Long-term equity investment to a joint venture or an associate shall be accounted for at equity
method.(i) Cost method
For Long-term equity investment at cost method cost of the long-term equity investment shall be adjusted when
additional amount is invested or a part of it is withdrawn. The Company recognises its share of cash dividends or
profits which have been declared to distribute by the investee as current investment income.(ii) Equity method
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable assets in the
investee at the date of investment the difference shall not be adjusted to the initial cost of long-term equity
investment; if the initial cost of the investment is in short of the share of the fair value of the net identifiable assets
in the investee at the date investment the difference shall be included in the current profit or loss and the initial cost
of the long-term equity investment shall be adjusted accordingly.The Company recognises the share of the investee’s net profits or losses as well as its share of the investee’s other
comprehensive income as investment income or losses and other comprehensive income respectively and adjusts
the carrying amount of the investment accordingly. The carrying amount of the investment shall be reduced by the
share of any profit or cash dividends declared to distribute by the investee. The investor’s share of the investee’s
owners’ equity changes other than those arising from the investee’s net profit or loss other comprehensive income
or profit distribution shall be recognised in the investor’s equity and the carrying amount of the long-term equity
investment shall be adjusted accordingly. The Company recognises its share of the investee’s net profits or losses
after making appropriate adjustments of investee’s net profit based on the fair values of the investee’s identifiable
net assets at the investment date. If the accounting policy and accounting period adopted by the investee is not in
consistency with the Company the financial statements of the investee shall be adjusted according to the
Company’s accounting policies and accounting period based on which investment income or loss and other
comprehensive income etc. shall be adjusted. The unrealized profits or losses resulting from inter-company
transactions between the company and its associate or joint venture are eliminated in proportion to the company’s
equity interest in the investee based on which investment income or losses shall be recognised. Any losses
resulting from inter-company transactions between the investor and the investee which belong to asset impairment
shall be recognised in full.Where the Company obtains the power of joint control or significant influence but not control over the investee
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due to additional investment or other reason the relevant long-term equity investment shall be accounted for by
using the equity method initial cost of which shall be the fair value of the original investment plus the additional
investment. Where the original investment is classified as available-for sale investment difference between its fair
value and the carrying value in addition to the cumulative changes in fair value previously recorded in other
comprehensive income shall be recogised into current profit or loss using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such as disposal of
equity investment the retained interest shall be measured at fair value and the difference between the carrying
amount and the fair value at the date of loss the joint control or significant influence shall be recognised in profit or
loss. When the Company discontinues the use of the equity method the Company shall account for all amounts
previously recognised in other comprehensive income under equity method in relation to that investment on the
same basis as would have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for sale
Any retained interest in the equity investment not classified as held for sale shall be accounted for using equity
method.When an equity investment in an associate or a joint venture previously classified as held for sale no longer meets
the criteria to be so classified it shall be accounted for using the equity method retrospectively as from the date of
its classification as held for sale. Financial statements for the periods since classification as held for sale shall be
amended accordingly.(f) Impairment testing and provision for impairment loss
For investment in subsidiaries associates or a joint venture provision for impairment loss please refer to Note 3.19.
3.14 Investment Properties
(a) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both including:
(i)Land use right leased out
(ii)Land held for transfer upon appreciation
(iii)Buildings leased out
(b) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For provision for
impairment please refer to Note 3.20.The Company calculates the depreciation or amortization based on the net amount of investment property cost less
the accumulated impairment and the net residual value using straight-line method.
3.15 Fixed Assets
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing commodities
rendering services renting or business management with useful lives exceeding one year.
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(a) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets if recognition criteria of fixed
assets are satisfied otherwise the expenditure shall be recorded in current profit or loss when incurred.(b) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intended use using
the straight-line-method. The estimated useful life and annual depreciation rates which are determined according to
the categories estimated economic useful lives and estimated net residual rates of fixed assets are listed as
followings:
Category
Depreciation
method
Estimated useful life
(year)
Residual
rates (%)
Annual depreciation rates
(%)
Buildings and constructions straight-line-method 8.00-35.00 3.00-5.00 2.70-12.10
Machinery equipment straight-line-method 5.00-10.00 3.00-5.00 9.50-19.40
Vehicles straight-line-method 4.00 3.00 24.25
Office equipment and others straight-line-method 3.00 3.00 32.33
For the fixed assets with impairment provided the impairment provision should be excluded from the cost when
calculating depreciation.
At the end of reporting period the Company shall review the useful life estimated net residual value and
depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjusted if it is changed
compared to the original estimation.(c) Recognition criteria valuation and depreciation methods of fixed assets obtained through a finance lease
If the entire risk and rewards related to the leased assets have been substantially transferred the Company shall
recognise the lease as a finance lease. The cost of the fixed assets obtained through a finance lease is determined at
the lower of the fair value of the leased assets and the present value of the minimum lease payment on the date of
the lease. The fixed assets obtained by a finance lease are depreciated in the method which is consistent with the
self-owned fixed assets of the Company. For fixed assets obtained through a finance lease if it is reasonably certain
that the ownership of the leased assets will be transferred to the lessee by the end of the lease term they shall be
depreciated over their remaining useful lives; otherwise the leased assets shall be depreciated over the shorter of
the lease terms or their remaining useful lives.
3.16 Construction in Progress
(a) Classification of construction in progress
Construction in progress is measured on an individual project basis.
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(b) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are ready for their
intended use including construction costs original price of machinery equipment other necessary expenses
incurred to bring the construction in progress to get ready for its intended use and borrowing costs of the specific
loan for the construction or the proportion of the general loan used for the constructions incurred before they are
ready for their intended use. The construction in progress shall be transferred to fixed asset when the installation or
construction is ready for the intended use. For construction in progress that has been ready for their intended use
but relevant budgets for the completion of projects have not been completed the estimated values of project
budgets prices or actual costs should be included in the costs of relevant fixed assets and depreciation should be
provided according to relevant policies of the Company when the fixed assets are ready for intended use. After the
completion of budgets needed for the completion of projects the estimated values should be substituted by actual
costs but depreciation already provided is not adjusted.
3.17 Borrowing Costs
(a) Recognition criteria and period for capitalization of borrowing costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition construction or
production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred and;
(iii) Acquisition construction or production activities that are necessary to prepare the assets for their intended use
or sale are in progress.Other borrowing cost discounts or premiums on borrowings and exchange differences on foreign currency
borrowings shall be recognized into current profit or loss when incurred.
Capitalization of borrowing costs is suspended during periods in which the acquisition construction or production
of a qualifying asset is interrupted abnormally and the interruption is for a continuous period of more than 3
months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired constructed or produced
become ready for their intended use or sale. The expenditure incurred subsequently shall be recognised as expenses
when incurred.(b) Capitalization rate and measurement of capitalized amounts of borrowing costs
When funds are borrowed specifically for purchase construction or manufacturing of assets eligible for
capitalization the Company shall determine the amount of borrowing costs eligible for capitalisation as the actual
borrowing costs incurred on that borrowing during the period less any interest income on bank deposit or
investment income on the temporary investment of those borrowings.Where funds allocated for purchase construction or manufacturing of assets eligible for capitalization are part of a
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general borrowing the eligible amounts are determined by the weighted-average of the cumulative capital
expenditures in excess of the specific borrowing multiplied by the general borrowing capitalization rate. The
capitalization rate will be the weighted average of the borrowing costs applicable to the general borrowing.
3.18 Intangible Assets
(a) Measurement method of intangible assets
Intangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 50 years Legal life
Patent right 10 years
The service life is determined by reference to the period that
can bring economic benefits to the Company
Software 3-5 years
The service life is determined by reference to the period that
can bring economic benefits to the Company
Trademark 10 years
The service life is determined by reference to the period that
can bring economic benefits to the Company
For intangible assets with finite useful life the estimated useful life and amortisation method are reviewed annually
at the end of each reporting period and adjusted when necessary. No change incurred in current year in the
estimated useful life and amortisation method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are regarded as
intangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every year
end. If the useful lives of those assets are still indefinite impairment test should be performed on those assets at the
balance sheet date.(iii) Amortisation of the intangible assets
For intangible assets with finite useful lives their useful lives should be determined upon their acquisition and
systematically amortised on a straight-line basis over the useful life. The amortisation amount shall be recognized
into current profit or loss according to the beneficial items. The amount to be amortised is cost deducting residual
value. For intangible assets which has impaired the cumulative impairment provision shall be deducted as well.The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless: there is a
commitment by a third party to purchase the asset at the end of its useful life; or there is an active market for the
asset and residual value can be determined by reference to that market; and it is probable that such a market will
exist at the end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses the useful lives of
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those assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite the
useful lives shall be estimated and the intangible assets shall be amortised systematically and reasonably within the
estimated useful lives.(c) Criteria of classifying expenditures on internal research and development projects into research phase
and development phase
Preparation activities related to materials and other relevant aspects undertaken by the Company for the purpose of
further development shall be treated as research phase. Expenditures incurred during the research phase of internal
research and development projects shall be recognised in profit or loss when incurred.
Development activities after the research phase of the Company shall be treated as development phase.
(d) Criteria for capitalization of qualifying expenditures during the development phase
Expenditures arising from development phase on internal research and development projects shall be recognised as
intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be available for use or sale;
(ii) Its intention to complete the intangible asset and use or sell it;
(iii) The method that the intangible assets generate economic benefits including the Company can demonstrate the
existence of a market for the output of the intangible assets or the intangible assets themselves or if it is to be used
internally the usefulness of the intangible assets;
(iv) The availability of adequate technical financial and other resources to complete the development and to use or
sell the intangible asset; and
(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
3.19 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries associates and joint ventures investment properties
fixed assets and constructions in progress subsequently measured at cost intangible assets shall be determined
according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an asset may be
impaired. If any such indication exists the Company shall estimate the recoverable amount of the asset and test for
impairment. Irrespective of whether there is any indication of impairment the Company shall test for impairment
of goodwill acquired in a business combination intangible assets with an indefinite useful life or intangible assets
not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and the
present values of the estimated future cash flows of the long-term assets. The Company estimate the recoverable
amounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset the
Company estimates the recoverable amount of the groups of assets that the individual asset belongs to.
Identification of an group of asset is based on whether the cash inflows from it are largely independent of the cash
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inflows from other assets or groups of assets.If and only if the recoverable amount of an asset or a group of assets is less than its carrying amount the carrying
amount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall be
recognised accordingly.
For the purpose of impairment testing goodwill acquired in a business combination shall from the acquisition date
be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevant group of
assets good will shall be allocated to relevant combination of asset groups. The relevant group of assets or
combination of asset groups is a group of assets or combination of asset groups that is benefit from the synergies of
the business combination and is not larger than the reporting segment determined by the Company.When test for impairment if there is an indication that relevant group of assets or combination of asset groups may
be impaired impairment testing for group of assets or combination of asset groups excluding goodwill shall be
conducted first and calculate the recoverable amount and recognize the impairment loss. Then the group of assets
or combination of asset groups including goodwill shall be tested for impairment by comparing the carrying
amount with its recoverable amount. If the recoverable amount is less than the carrying amount the Company shall
recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognised.
3.20 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred which shall be amortised over current and
subsequent periods with the amortisation period exceeding one year. Long-term deferred expenses are evenly
amortised over the beneficial period
3.21 Employee Benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for
service rendered by employees or for the termination of employment relationship. Employee benefits include
short-term employee benefits post-employment benefits termination benefits and other long-term employee
benefits. Benefits provided to an employee's spouse children dependents family members of decreased employees
or other beneficiaries are also employee benefits.
According to liquidity employee benefits are presented in the statement of financial position as “Employee benefitspayable” and “Long-term employee benefits payable”.(a) Short-term employee benefits
(i) Employee basic salary (salary bonus allowance subsidy)
The Company recognises in the accounting period in which an employee provides service actually occurred
short-term employee benefits as a liability with a corresponding charge to current profit except for those
recognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfare
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The Company shall recognise the employee welfare based on actual amount when incurred into current profit or
loss or related capital expenditure. Employee welfare shall be measured at fair value as it is a non-monetary benefit.(iii) Social insurance such as medical insurance work injury insurance and maternity insurance housing funds
labor union fund and employee education fund
Payments made by the Company of social insurance for employees such as medical insurance work injury
insurance and maternity insurance payments of housing funds and labor union fund and employee education fund
accrued in accordance with relevant requirements in the accounting period in which employees provide services is
calculated according to required accrual bases and accrual ratio in determining the amount of employee benefits
and the related liabilities which shall be recognised in current profit or loss or the cost of relevant asset.(iv) Short-term paid absences
The company shall recognise the related employee benefits arising from accumulating paid absences when the
employees render service that increases their entitlement to future paid absences. The additional payable amounts
shall be measured at the expected additional payments as a result of the unused entitlement that has accumulated.The Company shall recognise relevant employee benefit of non-accumulating paid absences when the absences
actually occurred.(v) Short-term profit-sharing plan
The Company shall recognise the related employee benefits payable under a profit-sharing plan when all of the
following conditions are satisfied:
(i) The Company has a present legal or constructive obligation to make such payments as a result of past events;
and
(ii) A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can be
made.(b) Post-employment benefits
(i) Defined contribution plans
The Company shall recognise in the accounting period in which an employee provides service the contribution
payable to a defined contribution plan as a liability with a corresponding charge to the current profit or loss or the
cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve months after
the end of the annual reporting period in which the employees render the related service they shall be discounted
using relevant discount rate (market yields at the end of the reporting period on high quality corporate bonds in
active market or government bonds with the currency and term which shall be consistent with the currency and
estimated term of the defined contribution obligations) to measure employee benefits payable.(ii) Defined benefit plan
The present value of defined benefit obligation and current service costs
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Based on the expected accumulative welfare unit method the Company shall make estimates about demographic
variables and financial variables in adopting the unbiased and consistent actuarial assumptions and measure defined
benefit obligation and determine the obligation period. The Company shall discount the obligation arising from
defined benefit plan using relevant discount rate (market yields at the end of the reporting period on high quality
corporate bonds in active market or government bonds with the currency and term which shall be consistent with
the currency and estimated term of the defined benefit obligations) in order to determine the present value of the
defined benefit obligation and the current service cost.The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognised as the present value of the defined
benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan it shall measure the net defined benefit asset at the
lower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or loss
Service cost comprises current service cost past service cost and any gain or loss on settlement. Other service cost
shall be recognised in profit or loss unless accounting standards require or allow the inclusion of current service
cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets interest cost on the
defined benefit obligation and interest on the effect of the asset ceiling shall be included in profit or loss.The amount recognised in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements including:
? Actuarial gains and losses the changes in the present value of the defined benefit obligation resulting from
experience adjustments or the effects of changes in actuarial assumptions;
? Return on plan assets excluding amounts included in net interest on the net defined benefit liability or asset;
? Any change in the effect of the asset ceiling excluding amounts included in net interest on the net defined
benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive income shall not be
reclassified to profit or loss in a subsequent period. However the Company may transfer those amounts recognised
in other comprehensive income within equity.(c) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefits liability for
termination benefits with a corresponding charge to the profit or loss of the reporting period at the earlier of the
following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment
termination plan or a curtailment proposal.
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(ii) When the Company recognises costs or expenses related to a restructuring that involves the payment of
termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual
reporting period the Company shall discount the termination benefits using relevant discount rate (market yields at
the end of the reporting period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined benefit obligations)
to measure the employee benefits.(d) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the conditions for
classifying as a defined contribution plan all those benefits payable shall be accounted for as employee benefits
payable at their discounted value.(ii) Meet the conditions of the defined benefit plan
At the end of the reporting period the Company recognised the cost of employee benefit from other long-term
employee benefits as the following components:
? Service costs;
? Net interest cost for net liability or asset of other long-term employee benefits
? Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits
In order to simplify the accounting treatment the net amount of above items shall be recognised in profit or loss or
relevant cost of assets.
3.22 Estimated Liabilities
(a) Recognition criteria of estimated liabilities
The Company recognises the estimated liabilities when obligations related to contingencies satisfy all the following
conditions:
(i) That obligation is a current obligation of the Company;
(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation; and
(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured at the best estimate of expenses required for the
performance of relevant present obligations. The Company when determining the best estimate has had a
comprehensive consideration of risks with respect to contingencies uncertainties and the time value of money. The
carrying amount of the estimated liabilities shall be reviewed at the end of every reporting period. If conclusive
evidences indicate that the carrying amount fails to be the best estimate of the estimated liabilities the carrying
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amount shall be adjusted based on the updated best estimate.
3.23 Principles and measurement methods of revenue recognition
Revenue is the total inflow of economic benefits formed in the daily activities of the Company which will lead to
the increase of shareholders' equity and is not related to the capital invested by shareholders.The Company has fulfilled the performance obligations in the contract that is the revenue is recognized when the
customer obtains the relevant commodity control rights. To gain control of relevant commodities means to be able
to dominate the use of the commodities and obtain almost all the economic benefits from them.If the contract contains two or more performance obligations the Company shall at the beginning of the contract
allocate the transaction price to each individual performance obligation according to the relative proportion of the
individual selling price of the commodities or services committed by each individual performance obligation and
measure the income according to the transaction price allocated to each individual performance obligation.The transaction price is the amount of consideration to which the Company is expected to be entitled as a result of
the transfer of goods or services to the customer excluding payments received on behalf of the third parties. When
determining the contract transaction price if there is a variable consideration the Company determines the best
estimate of the variable consideration in accordance with the expected value or the amount most likely to occur
and includes the transaction price in the amount not exceeding the amount that would most likely not result in a
significant reversal of the accumulated recognized revenue when the relevant uncertainties are eliminated. If there
is a significant composition of financing in the contract the Company will determine the transaction price by the
amount paid in cash according to when the customer get the commodities control. The difference between the
transaction price and the contract price shall be amortized by the effective interest rate method during the contract
period. If the interval between the transfer of control and the payment by the customer is not more than one year
the Company shall not consider the financing component.If one of the following conditions is met the performance obligations shall be performed within a certain period of
time; Otherwise the performance obligation shall be performed at a certain point:
①The client obtains and consumes the economic benefits brought by the Company's performance of the contract at
the same time;
②The customer can control the commodities under construction during the performance of the Company;
③The commodities produced by the Company during the performance of the contract shall have irreplaceable uses
and the Company shall be entitled to receive payment for the accumulated part of the performance of the contract to
date throughout the contract period.
For the performance obligations performed within a certain period of time the Company shall recognize the
income according to the performance progress within that period except where the performance progress cannot be
reasonably determined. The Company shall determine the performance progress of the service provided according
to the input method (or output method). When the performance schedule cannot be reasonably determined and the
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Company is expected to be compensated for the costs incurred the revenue shall be recognized according to the
amount of the costs incurred until the performance schedule can be reasonably determined.
For performance obligations performed at a certain point the Company recognizes revenue at the point when the
customer acquires control over the relevant commodities. In determining whether the customer has acquired control
over the goods or services the Company will consider the following indications:
①The Company has a current payment right in respect of the goods or services that is the customer has a current
payment obligation in respect of the goods;
②The Company has transferred the legal ownership of the commodity to the customer that is the customer has the
legal ownership of the commodity;
③The Company has transferred the physical goods to the customer that is the customer has physical possession of
the goods;
④The Company has transferred the main risks and remuneration on the ownership of the goods to the customer
that is the customer has acquired the main risks and remuneration on the ownership of the goods;
⑤The customer has accepted the goods.
3.24 Government Grants
(a) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.(b) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable and non-monetary
grants from the government shall be measured at their fair value or at a nominal value of RMB 1.00 when reliable
fair value is not available.(c) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the Company used for
purchase or construction or forming the long-term assets by other ways. Government grants pertinent to assets
shall be recognised as deferred income and should be recognised in profit or loss on a systematic basis over the
useful lives of the relevant assets. Grants measured at their nominal value shall be directly recognised in profit or
loss of the period when the grants are received. When the relevant assets are sold transferred written off or
damaged before the assets are terminated the remaining deferred income shall be transferred into profit or loss of
the period of disposing relevant assets.(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income. Government
~70~
grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses in
future periods such government grants shall be recognised as deferred income and included into profit or loss in
the same period as the relevant expenses or losses are recognised;
If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses
incurred such government grants are directly recognised into current profit or loss
For government grants comprised of part related to assets as well as part related to income each part is accounted
for separately; if it is difficult to identify different part the government grants are accounted for as government
grants related to income as a whole.Government grants related to daily operation activities are recognised in other income in accordance with the
nature of the activities and government grants irrelevant to daily operation activities are recognised in
non-operating income.(iii) Loan interest subsidy
When loan interest subsidy is allocated to the bank and the bank provides a loan at lower-market rate of interest to
the Company the loan is recognised at the actual received amount and the interest expense is calculated based on
the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company the subsidy shall be recognised as offsetting the
relevant borrowing cost.(iv) Repayment of the government grants
Repayment of the government grants shall be recorded by increasing the carrying amount of the asset if the book
value of the asset has been written down or reducing the balance of relevant deferred income if deferred income
balance exists any excess will be recognised into current profit or loss; or directly recognised into current profit or
loss for other circumstances.
3.25 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the statement of
financial position and its tax base at the balance sheet date. The Company recognise and measure the effect of
taxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities or
deferred tax assets using liability method. Deferred tax assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences the carryforward of unused tax
losses and the carryforward of unused tax credits to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences the carryforward of unused tax losses and the carryforward of
unused tax credits can be utilised at the tax rates that are expected to apply to the period when the asset is realised
unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that:
~71~
(i) Is not a business combination; and
(ii) At the time of the transaction affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognise a deferred tax asset for all deductible temporary differences arising from investments
in subsidiaries associates and joint ventures only to the extent that it is probable that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.
At the end of each reporting period if there is sufficient evidence that it is probable that taxable profit will be
available against which the deductible temporary difference can be utilized the Company recognises a previously
unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The Company
shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient
taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such
reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that are expected to
apply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
? The initial recognition of goodwill; or
? The initial recognition of an asset or liability in a transaction which: is not a business combination; and at the
time of the transaction affects neither accounting profit nor taxable profit (tax loss)
(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated with
investments in subsidiaries associates and joint ventures except to the extent that both of the following conditions
are satisfied:
? The Company 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.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business combination not
under common control a deferred tax liability or a deferred tax asset shall be recognised and simultaneously
goodwill recognised in the business combination shall be adjusted based on relevant deferred tax expense (income).(ii) Items directly recognised in equity
Current tax and deferred tax related to items that are recognised directly in equity shall be recognised in equity.
Such items include: other comprehensive income generated from fair value fluctuation of available for sale
investments; an adjustment to the opening balance of retained earnings resulting from either a change in accounting
~72~
policy that is applied retrospectively or the correction of a prior period (significant) error; amounts arising on initial
recognition of the equity component of a compound financial instrument that contains both liability and equity
component.(iii) Unused tax losses and unused tax credits
Unsused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law that can be offset
against taxable income in future periods. The criteria for recognising deferred tax assets arising from the
carryforward of unused tax losses and tax credits are the same as the criteria for recognising deferred tax assets
arising from deductible temporary differences. The Company recognises a deferred tax asset arising from unused
tax losses or tax credits only to the extent that there is convincing other evidence that sufficient taxable profit will
be available against which the unused tax losses or unused tax credits can be utilised by the Company. Income
taxes in current profit or loss shall be deducted as well.Unsused tax losses and unused tax credits arising from a business combination
Under a business combination the acquiree’s deductible temporary differences which do not satisfy the criteria at
the acquisition date for recognition of deferred tax asset shall not be recognised. Within 12 months after the
acquisition date if new information regarding the facts and circumstances exists at the acquisition date and the
economic benefit of the acquiree’s deductible temporary differences at the acquisition is expected to be realised the
Company shall recognise acquired deferred tax benefits and reduce the carrying amount of any goodwill related to
this acquisition. If goodwill is reduced to zero any remaining deferred tax benefits shall be recognised in profit or
loss. All other acquired deferred tax benefits realised shall be recognised in profit or loss.(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements if temporary difference between carrying value of the assets and
liabilities in the consolidated financial statements and their taxable bases is generated from elimination of
inter-company unrealized profit or loss deferred tax assets or deferred tax liabilities shall be recognised in the
consolidated financial statements and income taxes expense in current profit or loss shall be adjusted as well
except for deferred tax related to transactions or events recognised directly in equity and business combination.(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment during the period in which the expenses
are recognised according to the accounting standards the Company estimates the tax base in accordance with
available information at the end of the accounting period and the temporary difference arising from it. Deferred tax
shall be recognised when criteria of recognition are satisfied. If the amount of estimated future tax deduction
exceeds the amount of the cumulative expenses related to share-based payment recognised according to the
accounting standards the tax effect of the excess amount shall be recognised directly in equity.
3.26 Changes in Significant Accounting Policies and Accounting Estimates
~73~
(1) Changes in accounting polices
√ Applicable □ Not applicable
Contents of changes in accounting policies
and reasons thereof
Approval procedures Note
On 5 July 2017 the Ministry of Finance
issued the Notice on Revising and Issuing
the Accounting Standards for Business
Enterprises No.14-Revenue
(CK(2017)No.22 and required those
enterprises both listed in domestic and
aboard and those enterprises overseas
listed with International Financial
Reporting Standards or Accounting
Standards for Business Enterprises for
preparation of financial statements to
implement it since 1 January 2018
required other domestically listed
enterprises to implement it since 1 January
2020 and required non-listed enterprises
carrying out the Accounting Standards for
Business Enterprises to implement it since
1 January 2021. The Company starts to
implement the new accounting policy since
the date stipulated in above document and
starts to implement the new standards
governing revenue since 1 January 2020.Reviewed and approved on the 14
th
Meeting of the 8
th
Board of Directors and
the 11
th
Meeting of the 8
th
Supervisory
Committee
For details please refer to the
announcement on changes in accounting
policies disclosed on
http://www.cninfo.com.cn on 27 April
2020
The Ministry of Finance issued the Notice
on Revising and Issuing of Formats of
2019 Financial Statements for General
Enterprises (CK[2019]No.16) (hereinafter
referred to as “Revising Notice”) on 19
September 2019 in which the formats of
financial statements for general enterprises
are revised and non-financial enterprises
carrying out accounting standards for
business enterprises are required to prepare
the financial statements for 2019 and
subsequent periods in accordance with
provisions stipulated in accounting
standards for business enterprises and the
Revising Notice.Reviewed and approved on the 14
th
Meeting of the 8
th
Board of Directors and
the 11
th
Meeting of the 8
th
Supervisory
Committee
For details please refer to the
announcement on changes in accounting
policies disclosed on
http://www.cninfo.com.cn on 27 April
2020
(2) Changes in Accounting Estimates
~74~
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Revenue or Leases since 2020
Whether items of balance sheets at the beginning of the year need adjustment
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
Item 31 December 2019 1 January 2020 Adjusted
Current assets:
Monetary assets 5619749918.09 5619749918.09
Settlement reserve
Interbank loans granted
Held-for-trading financial
assets
509031097.02 509031097.02
Derivative financial assets
Notes receivable 1004217431.56 1004217431.56
Accounts receivable 40776567.96 40776567.96
Accounts receivable
financing
Prepayments 197453313.96 197453313.96
Premiums receivable
Reinsurance receivables
Receivable reinsurance
contract reserve
Other receivables 25746957.22 25746957.22
Including: Interest
receivable
1908788.81 1908788.81
Dividends
receivable
Financial assets purchased
under resale agreements
Inventories 3015051961.78 3015051961.78
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 114439167.07 114439167.07
~75~
Total current assets 10526466414.66 10526466414.66
Non-current assets:
Loans and advances to
customers
Investments in debt
obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity
investments
4678282.24 4678282.24
Investments in other equity
instruments
Other non-current financial
assets
Investment property 4710086.02 4710086.02
Fixed assets 1722572998.79 1722572998.79
Construction in progress 183984816.07 183984816.07
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 785717932.76 785717932.76
Development costs
Goodwill 478283495.29 478283495.29
Long-term prepaid
expense
70240106.82 70240106.82
Deferred income tax assets 90494544.51 90494544.51
Other non-current assets 4148686.00 4148686.00
Total non-current assets 3344830948.50 3344830948.50
Total assets 13871297363.16 13871297363.16
Current liabilities:
Short-term borrowings
Borrowings from the
central bank
Interbank loans obtained
Held-for-trading financial
liabilities
~76~
Derivative financial
liabilities
Notes payable 703679646.86 703679646.86
Accounts payable 563494195.40 563494195.40
Advances from customers 529863011.73 0.00 -529863011.73
Contract liabilities 0.00 529863011.73 529863011.73
Financial assets sold under
repurchase agreements
Customer deposits and
interbank deposits
Payables for acting trading
of securities
Payables for underwriting
of securities
Employee benefits payable 454189532.89 454189532.89
Taxes payable 482903109.59 482903109.59
Other payables 1315878229.01 1315878229.01
Including: Interest
payable
Dividends
payable
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly
associated with assets held
for sale
Current portion of
non-current liabilities
Other current liabilities 197484121.41 197484121.41
Total current liabilities 4247491846.89 4247491846.89
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred
shares
Perpetual
bonds
~77~
Lease liabilities
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income 72778437.92 72778437.92
Deferred income tax
liabilities
118872366.61 118872366.61
Other non-current
liabilities
Total non-current liabilities 191650804.53 191650804.53
Total liabilities 4439142651.42 4439142651.42
Owners’ equity:
Share capital 503600000.00 503600000.00
Other equity instruments
Including: Preferred
shares
Perpetual
bonds
Capital reserves 25 25
Less: Treasury stock
Other comprehensive
income
Specific reserve
Surplus reserves 256902260.27 256902260.27
General reserve
Retained earnings 6888203911.92 6888203911.92
Total equity attributable to
owners of the Company as
the parent
8944111764.44 8944111764.44
Non-controlling interests 488042947.30 488042947.30
Total owners’ equity 9432154711.74 9432154711.74
Total liabilities and owners’
equity
13871297363.16 13871297363.16
Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2019 1 January 2020 Adjusted
Current assets:
~78~
Monetary assets 2919818830.20 2919818830.20
Held-for-trading financial
assets
489861097.02 489861097.02
Derivative financial assets
Notes receivable 378740100.82 378740100.82
Accounts receivable 218558555.07 218558555.07
Accounts receivable
financing
Prepayments 17906999.63 17906999.63
Other receivables 125219213.84 125219213.84
Including: Interest
receivable
301888.89 301888.89
Dividends
receivable
Inventories 2688839871.27 2688839871.27
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 1280998.32 1280998.32
Total current assets 6840225666.17 6840225666.17
Non-current assets:
Investments in debt
obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity
investments
1148213665.32 1148213665.32
Investments in other equity
instruments
Other non-current financial
assets
Investment property 4710086.02 4710086.02
Fixed assets 1310704771.36 1310704771.36
Construction in progress 84477784.02 84477784.02
Productive living assets
~79~
Oil and gas assets
Right-of-use assets
Intangible assets 243928047.95 243928047.95
Development costs
Goodwill
Long-term prepaid
expense
48354967.15 48354967.15
Deferred income tax assets 31360809.87 31360809.87
Other non-current assets 574026.00 574026.00
Total non-current assets 2872324157.69 2872324157.69
Total assets 9712549823.86 9712549823.86
Current liabilities:
Short-term borrowings
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable 49114582.04 49114582.04
Accounts payable 450303984.53 450303984.53
Advances from customers 31724.77 0.00 -31724.77
Contract liabilities 0.00 31724.77 31724.77
Employee benefits payable 100357808.20 100357808.20
Taxes payable 371012223.50 371012223.50
Other payables 274053511.54 274053511.54
Including: Interest
payable
Dividends
payable
Liabilities directly
associated with assets held
for sale
Current portion of
non-current liabilities
Other current liabilities 11953800.20 11953800.20
Total current liabilities 1256827634.78 1256827634.78
Non-current liabilities:
Long-term borrowings
~80~
Bonds payable
Including: Preferred
shares
Perpetual
bonds
Lease liabilities
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income 33229246.47 33229246.47
Deferred income tax
liabilities
22799814.64 22799814.64
Other non-current
liabilities
Total non-current liabilities 56029061.11 56029061.11
Total liabilities 1312856695.89 1312856695.89
Owners’ equity:
Share capital 503600000.00 503600000.00
Other equity instruments
Including: Preferred
shares
Perpetual
bonds
Capital reserves 1247162107.35 1247162107.35
Less: Treasury stock
Other comprehensive
income
Specific reserve
Surplus reserves 251800000.00 251800000.00
Retained earnings 6397131020.62 6397131020.62
Total owners’ equity 8399693127.97 8399693127.97
Total liabilities and owners’
equity
9712549823.86 9712549823.86
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Revenue or Leases since 2020
□ Applicable √ Not applicable
4. Taxation
~81~
4.1 Main Taxes and Tax Rate
Category of taxes Basis of tax assessment Tax rate
VAT Taxable sales revenue 13%（16%）、10%、6%
Consumption tax Taxable price or ex factory price
Sales of wine RMB1 per 1000 ml or per kg to calculate the amount of
consumption tax a flat rate 20% of the annual turnover to calculate the
amount of consumption tax at valorem.Urban maintenance and
construction tax
Urban maintenance and
construction taxes are paid on
turnover taxes
7%、5%
Education expenses
surcharge
Educational surcharges are paid
on turnover taxes
3%
Local education
surcharge
Local educational surcharges are
paid on turnover taxes
2%
Enterprise income tax
Business taxes are calculated
and paid on taxable revenues
See the table below
Table of income tax rate of different entities:
Name of the entities Income tax rate
Anhui Longrui Glass Co. Ltd 15%
Anhui Ruisiweier Technology Co. Ltd 15%
Wuhan Yashibo Technology Co. Ltd 15%
Anhui Zhenrui Construction Engineering Co. Ltd 10%
Bozhou Gujin Rubbish Recycling Co. Ltd 5%
Hubei Junhe Advertising Co. Ltd. 5%
Hubei Yellow Crane Tower Beverage Co. Ltd. 5%
Anhui Gujing gongjiu Co. Ltd. and other subsidiaries 25%
4.2 Tax Preference
(i) According to Response Letter for the First Batch of High-tech Enterprises to be put on record in Anhui Province
for 2019 (guokehuozi [2019] No.216) issued by Department of Science and Technology of Anhui province
Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State Administration of
Taxation the subsidiary Longrui Glass was identified as a high-tech enterprise in 2019 therefore was given
High-tech Enterprise Certificate (Certificate Number: GR201934001625) which is valid for 3 years. According to
Enterprise Income Tax Law and other relevant regulations the company is subject to a national high-tech enterprise
~82~
income tax rate at 15% for three years from January 1 2019 to December 31 2021.(ii) According to Response Letter for the First Batch of High-tech Enterprises to be put on record in Anhui
Province for 2019 (guokehuozi [2019] No.216) issued by Department of Science and Technology of Anhui
province Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State
Administration of Taxation the subsidiary Ruisiweier was identified as a high-tech enterprise in 2019 therefore
was given High-tech Enterprise Certificate (Certificate Number: GR201934000355) which is valid for 3 years.
According to Enterprise Income Tax Law and other relevant regulations the company is subject to a national
high-tech enterprise income tax rate at 15% for three years from January 1 2019 to December 31 2021.(iii) According to Response Letter for the Second Batch of High-tech Enterprises to be put on record in Hubei
Province for 2018 (guokehuozi [2019] No.43) issued by Department of Science and Technology of Hubei province
Department of Finance of Hubei province and Hubei Provincial Taxation Bureau of State Administration of
Taxation the subsidiary Yashibo was identified as a high-tech enterprise in 2018 therefore was given High-tech
Enterprise Certificate (Certificate Number:GR201842002339) which is valid for 3 years. According to Enterprise
Income Tax Law and other relevant regulations the company is subject to a national high-tech enterprise income
tax rate at 15% for three years from January 1 2018 to December 31 2020.(iv) According to Notice from Ministry of Finance and State Administration of Taxation on the Implementation of
Inclusive Tax Reduction Policy for Small and Micro Enterprises (Caishui [2019] No.13) from January 1 2019 to
December 31 2021 the portion of the enterprise's annual taxable income which does not exceed 1 million yuan is
reduced to 25% as taxable income and income tax is paid at a tax rate of 20%. For the annual taxable income of
more than 1 million yuan but not more than 3 million yuan this part is reduced to 50% as taxable income income
tax is paid at the rate of 20%. The subsidiaries Gujing waste company Junhe Advertising and Yellow Crane Tower
Beverage meet the condition of annual taxable income not exceeding 1 million yuan while actual tax rate in H1
2020 was 5%. The subsidiary Zhenrui Construction meets the condition of annual taxable income exceeding 1
million yuan but not exceeding 3 million yuan while actual tax rate for H1 2020 was 10%.
5. Notes to Major Items in the Consolidated Financial Statements of the Company
5.1 Monetary Assets
Item 30 June 2020 31 December 2019
Cash on hand 254747.79 292465.36
Cash in bank 7417660747.68 5618712121.81
Other monetary assets 271980.24 745330.92
Total 7418187475.71 5619749918.09
Notes: (i) At 30 June 2020 the structural deposits that cannot be withdrawn in advance amounted to RMB1590
~83~
million fixed deposits that cannot be withdrawn in advance totaled RMB100 million and fixed deposits used to
pledge and issue bank acceptance bills totaled RMB330 million. Except for that no other monetary assets are
restricted to use or in some potential risks of recovery due to the mortgage pledge or freezing;
5.2 Trading Financial Assets
Item 30 June 2020 31 December 2019
Financial Assets at Fair Value through Profit or
Loss
230264936.41 509031097.02
Including: bank financial products 10000000.00 297146591.78
Fund investment 220264936.41 211884505.24
Total 230264936.41 509031097.02
5.3 Notes Receivable
(1) Notes Receivable Listed by Category
Category
30 June 2020 31 December 2019
Carrying amount
Bad debt
provision
Carrying value Carrying amount
Bad debt
provision
Carrying value
Bank acceptance
bills
1035170219.39 0.00 1035170219.39 1002758533.39 0.00 1002758533.39
Commercial
acceptance bills
993836.54 49691.83 944144.71 1493836.54 34938.37 1458898.17
Total 1036164055.93 49691.83 1036114364.10 1004252369.93 34938.37 1004217431.56
(2) Notes Receivable Pledged by the Company at the Period-end
Item Pledged amount
Bank acceptance bills 382801475.30
Total 382801475.30
(3) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due at the Period-end
Item Amount of derecognition Amount of recognition
Bank acceptance bills 1668974827.37 0.00
Total 1668974827.37 0.00
The issuing banks of the bank acceptance bill of the Company for endorsement or discount are commercial banks
with higher credit. Therefore when the bank acceptance bills are mature they are likely to get paid. The interest
rate risk related to the bill has been transferred to the bank so it can be judged that the main risks and rewards of
the bill ownership have been transferred so need to be derecogised.
~84~
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the
Contract or Agreement at the Period-end
(5) Notes Receivable by Bad Debt Provision Method
Category
30 June 2020
Carrying amount Bad debt provision
Carrying value
Amount Proportion Amount
Withdrawal
proportion
Provision for bad debt
recognised individually
Provision for bad debt
recognised collectively
1036164055.93 100.00 49691.83 0.00 1036114364.10
Including: Group 1 993836.54 0.10 49691.83 5.00 944144.71
Group 2 1035170219.39 99.90 0.00 0.00 1035170219.39
Total 1036164055.93 100.00 49691.83 0.00 1036114364.10
①Notes receivable with provision for bad debt provision withdrawn by group 1
Aging
30 June 2020
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Within 1 year 993836.54 49691.83 5.00
Of which:1-6 months
7-12 months 993836.54 49691.83 5.00
Total 993836.54 49691.83 5.00
②Notes receivable with bad debt provision withdrawn by group 2
On 30 June 2020 the Company measured bad debt provision of bank acceptance bill according to the duration of
expected credit loss. The Company believes that no significant credit risk exists in the bank acceptance bills and no
significant losses are arisen from default risk of banks or other issuer’ failure of fulfillment.Refer to Note III-10. Financial Instrument for recognition criteria and notes of withdrawal of bad debt provision by
group.
(6) Changes of bad debt provision during the Reporting Period
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Reversal or
recovery
Write-off
Commercial
acceptance bills
34938.37 14753.46
0.00 0.00
49691.83
~85~
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Reversal or
recovery
Write-off
Total 34938.37 14753.46 0.00 0.00 49691.83
4. Accounts Receivable
(1) Disclosure by aging
Aging 30 June 2020 31 December 2019
Within one year 43013302.45 41004875.62
Of which:1-6 months 31855517.41 37333246.24
7-12 months 11157785.04 3671629.38
1-2 years 2728605.43 365118.07
2-3 years 209.20 0.00
Over 3 years 0.00 141121.87
Subtotal 45742117.08 41511115.56
Less: Bad debt provision 1149409.56 734547.60
Total 44592707.52 40776567.96
(2) Disclosure by withdrawal method of bad debt provision
①30 June 2020
Category
30 June 2020
Carrying amount Bad debt provision
Carrying value
Amount Proportion (%) Amount
Withdrawal
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
45742117.08 100.00 1149409.56 2.51 44592707.52
Of which: Group 1
Group 2 45742117.08 100.00 1149409.56 2.51 44592707.52
Total 45742117.08 100.00 1149409.56 2.51 44592707.52
②31 December 2019
Category
31 December 2019
Carrying amount Bad debt provision Carrying value
~86~
Amount Proportion (%) Amount
Withdrawal
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
41511115.56 100.00 734547.60 1.77 40776567.96
Of which: Group 1
Group 2 41511115.56 100.00 734547.60 1.77 40776567.96
Total 41511115.56 100.00 734547.60 1.77 40776567.96
On 30 June 2020 Accounts receivable with bad debt provision withdrawn by group 2
Aging
30 June 2020
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Within one year 43013302.45 876444.43 2.04
Of which:1-6 months 31855517.41 318555.18 1.00
7-12 months 11157785.04 557889.25 5.00
1-2 years 2728605.43 272860.53 10.00
2-3 years 209.20 104.60 50.00
Over 3 years
Total 45742117.08 1149409.56 2.51
Refer to Note III-10. Financial Instrument for recognition criteria and notes of withdrawal of bad debt provision by
group.
On 31 December 2019 Accounts receivable with bad debt provision withdrawn by group 2
Aging
31 December 2019
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Within one year 41004875.62 556913.92 1.36
Of which:1-6 months 37333246.24 373332.45 1.00
7-12 months 3671629.38 183581.47 5.00
1-2 years 365118.07 36511.81 10.00
2-3 years
Over 3 years 141121.87 141121.87 100.00
~87~
Aging
31 December 2019
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Total 41511115.56 734547.60 1.77
Refer to Note III-10. Financial Instrument for recognition criteria and notes of withdrawal of bad debt provision by
group.
(3) Changes of bad debt provision during the Reporting Period
Category
31 December
2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Recovery or
reversal
Write-off
Accounts receivable with
insignificant amount but bad debt
provision withdrawn separately
Group 2: Bad debt provision
withdrawn by group
734547.60 414861.96 1149409.56
Total 734547.60 414861.96 1149409.56
(4) Top five closing balances by entity
Entity name Balance at 30 June 2020
Proportion of the balance to the total
accounts receivable (%)
Bad debt provision
No. 1 4956160.50 10.84 49561.61
No. 2 4316440.00 9.44 43164.40
No. 3 3193774.58 6.98 156016.38
No. 4 2901645.00 6.34 98327.80
No. 5 2547734.97 5.57 25477.35
Total 17915755.05 39.17 372547.54
5. Prepayment
(1) Disclosure by aging
Aging
30 June 2020 31 December 2019
Amount Proportion (%) Amount Proportion (%)
Within one year 90383425.38 96.45 196781962.46 99.66
1 to 2 years 3266389.16 3.49 647771.50 0.33
2 to 3 years 31761.99 0.03 - -
Over 3 years 23580.00 0.03 23580.00 0.01
~88~
Aging
30 June 2020 31 December 2019
Amount Proportion (%) Amount Proportion (%)
Total 93705156.53 100.00 197453313.96 100.00
(2) Top five closing balances by entity
Entity name Balance on 30 June 2020
Proportion of the balance to the
total prepayment (%)
No. 1 8490566.30 9.07
No. 2 7036794.75 7.51
No. 3 3980935.51 4.25
No. 4 3272798.50 3.49
No. 5 3152000.00 3.36
Total 25933095.06 27.68
6. Other Receivables
(1) Listed by category
Item 30 June 2020 31 December 2019
Interest receivable 10600806.32 1908788.81
Dividends receivable 0.00 0.00
Other receivables 25871628.10 23838168.41
Total 36472434.42 25746957.22
(2) Interest receivable
①Listed by category
Item 30 June 2020 31 December 2019
Interest on large-denomination
certificates of deposit
10600806.32 1908788.81
Less: Bad debt provision 0.00 0.00
Total 10600806.32 1908788.81
(3) Other Receivables
① Disclosure by aging
Aging 30 June 2020 31 December 2019
Within one year 24840606.02 21391891.49
Of which:1-6 months 22423471.08 16704667.12
~89~
Aging 30 June 2020 31 December 2019
7-12 months 2417134.94 4687224.37
1-2 years 1000035.64 2804920.23
2-3 years 951997.22 646513.23
Over 3 years 42130262.35 42087287.44
Subtotal 68922901.23 66930612.39
Less: Bad debt provision 43051273.13 43092443.98
Total 25871628.10 23838168.41
②Disclosure by nature
Nature 30 June 2020 31 December 2019
Investment in securities 40850949.35 40850949.35
Deposit and guarantee 5011416.41 5343741.34
Borrowing for business trip expenses 284063.80 884420.74
Rent utilities and gasoline charges 8139458.33 8479446.65
Other 14637013.34 11372054.31
Subtotal 68922901.23 66930612.39
Less: Bad debt provision 43051273.13 43092443.98
Total 25871628.10 23838168.41
③Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2020 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 28071951.88 2200323.78 25871628.10
Stage 2
0.00 0.00 0.00
Stage 3 40850949.35 40850949.35 0.00
Total 68922901.23 43051273.13 25871628.10
A1. As of 30 June 2020 bad debt provision at stage 1:
Category Carrying amount
12-month expected
credit losses rate
(%)
Bad debt provision Carrying value
Bad debt provision withdrawn separately
~90~
Category Carrying amount
12-month expected
credit losses rate
(%)
Bad debt provision Carrying value
Bad debt provision withdrawn by group 28071951.88 7.84 2200323.78 25871628.10
Of which: Group 1
Group 2 28071951.88 7.84 2200323.78 25871628.10
Total 28071951.88 7.84 2200323.78 25871628.10
On 30 June 2020 other receivables with bad debt provision withdrawn by group 2
Aging
30 June 2020
Carrying amount Bad debt provision Withdrawal proportion (%)
Within one year 24840606.02 345008.61 1.39
Of which:1-6 months 22423471.08 224151.86 1.00
7-12 months 2417134.94 120856.75 5.00
1-2 years 1000035.64 100003.56 10.00
2-3 years 951997.22 475998.61 50.00
Over 3 years 1279313.00 1279313.00 100.00
Total 28071951.88 2200323.78 7.84
A2. As of 30 June 2020 bad debt provision at stage 3:
Category Carrying amount
12-month expected
credit losses rate
(%)
Bad debt provision Carrying value
Bad debt provision withdrawn separately 40850949.35 100.00 40850949.35 0.00
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 40850949.35 100.00 40850949.35 0.00
On 30 June 2020 other receivables with bad debt provision withdrawn separately:
Name
30 June 2020
Carrying amount Bad debt provision
Withdrawal
proportion (%)
Withdrawal reason
Hengxin Securities Co. Ltd.
29010449.35 29010449.35 100.00
The enterprise enters the
bankruptcy liquidation
~91~
Name
30 June 2020
Carrying amount Bad debt provision
Withdrawal
proportion (%)
Withdrawal reason
procedure
Jianqiao Securities Co. Ltd.
11840500.00 11840500.00 100.00
The enterprise enters the
bankruptcy liquidation
procedure
Total 40850949.35 40850949.35 100.00 --
B. As of 31 December 2019 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 26079663.04 2241494.63 23838168.41
Stage 2 0.00 0.00 0.00
Stage 3 40850949.35 40850949.35 0.00
Total 66930612.39 43092443.98 23838168.41
B1. On 31 December 2019 bad debt provision at stage 1:
Category Carrying amount
12-month expected
credit losses rate
(%)
Bad debt provision Carrying value
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 26079663.04 8.59 2241494.63 23838168.41
Of which: Group 1 0.00 0.00 0.00 0.00
Group 2 26079663.04 8.59 2241494.63 23838168.41
Total 26079663.04 8.59 2241494.63 23838168.41
On 31 December 2019 other receivables with bad debt provision withdrawn by group 2
Aging
31 December 2019
Carrying amount Bad debt provision Withdrawal proportion (%)
Within one year 21391891.49 401407.90 1.88
Of which:1-6 months 16704667.12 167046.67 1.00
7-12 months 4687224.37 234361.23 5.00
1-2 years 2804920.23 280492.02 10.00
2-3 years 646513.23 323256.62 50.00
~92~
Aging
31 December 2019
Carrying amount Bad debt provision Withdrawal proportion (%)
Over 3 years 1236338.09 1236338.09 100.00
Total 26079663.04 2241494.63 8.59
B2. As of 31 December 2019 bad debt provision at stage 3:
Category Carrying amount
12-month expected
credit losses rate
(%)
Bad debt provision Carrying value
Bad debt provision withdrawn separately 40850949.35 100.00 40850949.35 0.00
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 40850949.35 100.00 40850949.35 0.00
On 31 December 2019 other receivables with bad debt provision withdrawn separately:
Name
31 December 2019
Carrying amount Bad debt provision
Withdrawal
proportion (%)
Withdrawal reason
Hengxin Securities Co. Ltd.
29010449.35 29010449.35 100.00
The enterprise enters the
bankruptcy liquidation
procedure
Jianqiao Securities Co. Ltd.
11840500.00 11840500.00 100.00
The enterprise enters the
bankruptcy liquidation
procedure
Total 40850949.35 40850949.35 100.00 --
④Changes of bad debt provision during the Reporting Period
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Recovery or
reversal
Write-off
Bad debt provision
withdrawn
separately
40850949.35 0.00 40850949.35
Bad debt provision
withdrawn by group
2241494.63 41170.85 2200323.78
~93~
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Recovery or
reversal
Write-off
Total 43092443.98 41170.85 43051273.13
⑤ Top five closing balances by entity
Entity name Nature Balance at 30 June 2020 Aging
Proportion of the
balance to the total
other receivables
(%)
Bad debt provision
No. 1 Securities
investment
29010449.35 Over 3 years 42.09 29010449.35
No. 2 Securities
investment
11840500.00 Over 3 years 17.18 11840500.00
No. 3 Oil cost 6436108.96 Within 6 months 9.34 64361.09
No. 4 Deposit 3953761.28 Within 6 months 5.74 39537.61
No. 5 Other 1576841.20 Within 6 months 2.29 15768.41
Total -- 52817660.79 -- 76.64 40970616.46
7. Inventories
(1) Category of inventories
Item
30 June 2020
Carrying amount Falling price reserves Carrying value
Raw materials and package
materials
151425817.44 19925649.07 131500168.37
Semi-finished goods and work
in process
2632022035.43 0.00 2632022035.43
Finished goods 160297894.70 3047213.46 157250681.24
Total 2943745747.57 22972862.53 2920772885.04
(Continued)
Item
31 December 2019
Carrying amount Falling price reserves Carrying value
Raw materials and package 177976566.48 14772001.80 163204564.68
~94~
materials
Semi-finished goods and work
in process
2291945127.85 0.00 2291945127.85
Finished goods 562948591.57 3046322.32 559902269.25
Total 3032870285.90 17818324.12 3015051961.78
(2) Falling price reserves of inventories
Items 31 December 2019
Increase Decrease
30 June 2020
Withdrawal Other
Reversal or
recovery
Other
Raw materials and
package materials
14772001.80 5258503.74 104856.47 19925649.07
Finished goods 3046322.32 434682.03 433790.89 3047213.46
Total 17818324.12 5693185.77 538647.36 22972862.53
8. Other Current Assets
Item 30 June 2020 31 December 2019
Deductible tax 92193691.95 114439167.07
Pledge-style repo of treasury bonds 10900000.00 0.00
Total 103093691.95 114439167.07
9. Long-term Equity Investment
Investees 31 December 2019
Changes in the Reporting Period
Additional
investments
Reduced
investments
Profit and loss on
investments
confirmed according
to equity law
Adjustment of
other
comprehensive
income
Changes in
other equity
I. Associated enterprises
Beijing Guge Trading
Co. Ltd.
4678282.24 -53631.34
Total 4678282.24 -53631.34
(Continued)
Investees Changes in the Reporting Period 30 June 2020 Balance of
~95~
Declaration of cash
dividends or
distribution of profit
Withdrawal of
impairment
provision
Other
impairment
provision
I. Associated enterprises
Beijing Guge Trading
Co. Ltd.
4624650.90
Total 4624650.90
10. Investment Property
(1) Investment property adopting cost measurement mode
11. Fixed Assets
(1) Listed by category
Item 30 June 2020 31 December 2019
Items Building and plants Land use rights Total
I. Original carrying value
1. Balance on 31 December 2019 8680555.75 2644592.00 11325147.75
2. Increase during the Reporting Period 0.00 0.00 0.00
3. Decrease during the Reporting Period 0.00 0.00 0.00
4. Balance on 30 June 2020 8680555.75 2644592.00 11325147.75
II. Accumulated depreciation and amortization:
1. Balance on 31 December 2019 5915361.87 699699.86 6615061.73
2. Increase during the Reporting Period 130557.96 28013.28 158571.24
(1) Withdrawal or amortization 130557.96 28013.28 158571.24
3. Decrease during the Reporting Period 0.00 0.00 0.00
4. Balance on 30 June 2020 6045919.83 727713.14 6773632.97
III. Impairment provision
1. Balance on 31 December 2019 0.00 0.00 0.00
2. Increase during the Reporting Period 0.00 0.00 0.00
3. Decrease during the Reporting Period 0.00 0.00 0.00
4. Balance on 30 June 2020 0.00 0.00 0.00
IV. Original carrying value
1. Carrying value on 30 June 2020 2634635.92 1916878.86 4551514.78
2. Carrying value on 31 December 2019 2765193.88 1944892.14 4710086.02
~96~
Item 30 June 2020 31 December 2019
Fixed assets 1629268366.99 1722572998.79
Disposal of fixed assets 0.00 0.00
Total 1629268366.99 1722572998.79
(2) Fixed assets
①General information of fixed assets
Items
Buildings and
constructions
Machinery
equipments
Vehicles
Office equipment
and other
Total
I. Original carrying value
1. Balance on 31
December 2019
2034543017.61 1002176887.05 60967511.99 170904070.21 3268591486.86
2. Increase during the
Reporting Period
0.00 8118223.00 2891743.16 5906716.55 16916682.71
(1) Acquisition 0.00 3670477.43 2891743.16 4207601.55 10769822.14
(2) Transfer from
construction in progress
0.00 4447745.57 0.00 1699115.00 6146860.57
3. Decrease during the
Reporting Period
6831022.80 14047285.07 279075.12 1119654.19 22277037.18
(1) Disposal or scrap 6831022.80 14047285.07 279075.12 1119654.19 22277037.18
4. Balance on 30 June
2020
2027711994.81 996247824.98 63580180.03 175691132.57 3263231132.39
II. Accumulated
depreciation
1. Balance on 31
December 2019
810920134.01 575262319.33 51633020.95 103244644.01 1541060118.30
2. Increase during the
Reporting Period
36210126.91 51670929.87 3060438.40 16674135.79 107615630.97
(1) Withdrawal 36210126.91 51670929.87 3060438.40 16674135.79 107615630.97
3. Decrease during the
Reporting Period
6174155.47 11556705.91 270702.87 1093536.48 19095100.73
(1) Disposal or scrap 6174155.47 11556705.91 270702.87 1093536.48 19095100.73
4. Balance on 30 June
2020
840956105.45 615376543.29 54422756.48 118825243.32 1629580648.54
III. Impairment provision
1. Balance on 31
December 2019
3311778.44 1053187.15 7047.07 586357.11 4958369.77
~97~
Items
Buildings and
constructions
Machinery
equipments
Vehicles
Office equipment
and other
Total
2. Increase during the
Reporting Period
0.00 0.00 0.00 0.00 0.00
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decrease during the
Reporting Period
520414.64 55838.27 0.00 0.00 576252.91
(1) Disposal or scrap 520414.64 55838.27 0.00 0.00 576252.91
4. Balance on 30 June
2020
2791363.80 997348.88 7047.07 586357.11 4382116.86
IV. Carrying value of
fixed assets
1. Carrying value on 30
June 2020
1183964525.56 379873932.81 9150376.48 56279532.14 1629268366.99
2. Carrying value on 31
December 2019
1220311105.16 425861380.57 9327443.97 67073069.09 1722572998.79
②Idle fixed assets
Item
Original carrying
value
Accumulated
depreciation
Impairment provision Carrying value Note
Buildings and
constructions
8155407.00 5263789.95 2791363.80 100253.25
Machinery equipments 6398959.48 5369319.30 997348.88 32291.30
Vehicles 58119.66 49329.00 7047.07 1743.59
Office equipment and
others
843135.27 244860.60 586357.11 11917.56
Total 15455621.41 10927298.85 4382116.86 146205.70
③Fixed assets without certificate of title
Items Carrying value Reason
Buildings and constructions 715850341.33 In process
Total 715850341.33 --
12. Construction in Progress
(1) Listed by category
Item 30 June 2020 31 December 2019
Construction in progress 258954824.33
183984816.07
~98~
Item 30 June 2020 31 December 2019
Engineering materials 0.00
0.00
Total 258954824.33
183984816.07
(2) Construction in progress
①General information of construction in progress
Item
30 June 2020 31 December 2019
Carrying amount
Depreciati
on reserve
Carrying value Carrying amount
Depreciati
on reserve
Carrying value
Brewing automatization
technological improvement project
84453154.26 84453154.26 74782393.43 74782393.43
Furnace project (No.5) 50058863.82 50058863.82 43893912.18 43893912.18
Suizhou new plant phase I project 81059874.07 81059874.07 40023041.23 40023041.23
Machine installment 11820431.52 11820431.52 10393296.42 10393296.42
Liquid filling line renovation
project
5934194.72 5934194.72 5934194.72 5934194.72
Gujing digital marketing project
Phase II
6479804.63 6479804.63 2150943.39 2150943.39
Renovation project of potential
safety concerns
0.00 0.00 387770.85 387770.85
Advanced sewage treatment
system
6262773.98 6262773.98 0.00 0.00
Intelligent technology renovation
of brewing production
391792.45 391792.45 0.00 0.00
Other individual project 12493934.88 12493934.88 6419263.85 6419263.85
Total 258954824.33 258954824.33 183984816.07 183984816.07
②Changes in significant projects of construction in progress
Project
Budget
(RMB’0000)
31 December
2019
Increase during
the Reporting
Period
Amount
transferred to
fixed asset
Decreas
e during
the
Reportin
g Period
30 June 2020
Brewing automatization
technological improvement project
27430.00
74782393.4
3
9938942.66 268181.83 0.00 84453154.26
Furnace project (No.5) 7134.35
43893912.1
6164951.64 0.00 0.00 50058863.82
~99~
8
Suizhou new plant phase I project 26000.00
40023041.2
3
41036832.84 0.00 0.00 81059874.07
Machine installment 4741.05
10393296.4
2
1692621.84 265486.74 0.00 11820431.52
Liquid filling line renovation project 4000.00
5934194.72
0.00 0.00 0.00 5934194.72
Gujing digital marketing project
Phase II
1656.75
2150943.39
4328861.24 0.00 0.00 6479804.63
Renovation project of potential
safety concerns
67.30 387770.85 166187.58 553958.43 0.00 0.00
Advanced sewage treatment system 2358.98 0.00 6262773.98 0.00 0.00 6262773.98
Intelligent technology renovation of
brewing production
828965.74 0.00 391792.45 0.00 0.00 391792.45
Other individual project 13018.00 6419263.85 11133904.60 5059233.57 0.00 12493934.88
Total 915372.17
183984816.
07
81116868.83 6146860.57 0.00
258954824.33
(Continued)
Project
Proportion of
project input to
budgets (%)
Schedule
(%)
Cumulative
amount of
interest
capitalization
Of which: Interest
capitalized during
the reporting
period
Interest
capitalization
during the
Reporting
Period (%)
Source of funds
Brewing automatization
technological improvement
project
39.21 80.00
Self-owned
fund
Furnace project (No.5) 70.17 100.00
Self-owned
fund
Suizhou new plant phase I
project
18.53 18.53
Self-owned
fund
Machine installment 24.93 89.00
Self-owned
fund
Liquid filling line
renovation project
14.84 50.00
Self-owned
fund
~100~
Project
Proportion of
project input to
budgets (%)
Schedule
(%)
Cumulative
amount of
interest
capitalization
Of which: Interest
capitalized during
the reporting
period
Interest
capitalization
during the
Reporting
Period (%)
Source of funds
Gujing digital marketing
project Phase II
39.11 60.00
Self-owned
fund
Renovation project of
potential safety concerns
82.31 100.00
Self-owned
fund
Advanced sewage treatment
system
26.55 8.00
Self-owned
fund
Intelligent technology
renovation of brewing
production
0.01 1.00
Self-owned
fund
Other individual project 62.00 62.00
Self-owned
fund
Total -- -- -- -- -- --
13. Intangible Assets
(1) General information of intangible assets
Item Land use rights Software Patents and trademark Total
I. Original carrying value
1. Balance on 31 December 2019 683451302.56 105085318.08 215006066.19 1003542686.83
2. Increase during the Reporting
Period
122043483.02 0.00 0.00 122043483.02
(1) Acquisition 122043483.02 0.00 0.00 122043483.02
(2) Transfer from construction in
progress
0.00 0.00 0.00 0.00
3. Decrease during the Reporting
Period
0.00 18867.92 0.00 18867.92
(1) Disposal 0.00 0.00 0.00 0.00
(2) Other 0.00 18867.92 0.00 18867.92
4. Balance on 30 June 2020 805494785.58 105066450.16 215006066.19 1125567301.93
II. Accumulated amortization:
1. Balance on 31 December 2019 143777958.04 27857857.39 46188938.64 217824754.07
2. Increase during the Reporting 7748741.11 9371698.38 24038.88 17144478.37
~101~
Item Land use rights Software Patents and trademark Total
Period
(1) Withdrawal 7748741.11 9371698.38 24038.88 17144478.37
3. Decrease during the Reporting
Period
0.00 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00 0.00
4. Balance on 30 June 2020 151526699.15 37229555.77 46212977.52 234969232.44
III. Impairment provision
1. Balance on 31 December 2019 0.00 0.00 0.00 0.00
2. Increase during the Reporting
Period
0.00 0.00 0.00 0.00
3. Decrease during the Reporting
Period
0.00 0.00 0.00 0.00
4. Balance on 30 June 2020 0.00 0.00 0.00 0.00
IV. Original carrying value
1. Carrying value on 30 June 2020 653968086.43 67836894.39 168793088.67 890598069.49
2. Carrying value on 31 December
2019
539673344.52 77227460.69 168817127.55 785717932.76
14. Goodwill
(1) Original carrying value of goodwill
Investees or matters that goodwill
arising from 31 December 2019
Increase Decrease
30 June 2020
Formed by
business
combination
Other Disposal Other
Yellow Crane Tower Distillery
Co. Ltd.
478283495.29 0.00 0.00 0.00 0.00 478283495.29
Total 478283495.29 0.00 0.00 0.00 0.00 478283495.29
(2) Impairment provision of goodwill
Investees or matters that goodwill
arising from 31 December 2019
Increase Decrease
30 June 2020
Withdrawal Other Disposal Other
Yellow Crane Tower Distillery
Co. Ltd.
0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00 0.00
~102~
According to relevant provisions of Accounting Standards for Business Enterprises No. 8-Assets Impairment and
Accounting Supervision Risk Prompts No. 8-Goodwill Impairment of China Securities Regulatory Commission
the Company shall implement the impairment testing to goodwill formed by business combination and the end of
the year.
15. Long-term Deferred Expenses
Item
31 December
2019
Increase
Decrease
30 June 2020
Amortization Other decrease
Experience center 26238799.46 0.00 3912625.17 0.00 22326174.29
Pottery 1836642.57 0.00 1836642.57 0.00 0.00
Sewage treatment project 3767377.05 0.00 461311.48 0.00 3306065.57
Yellow Crane Tower chateau
and museum
11496948.62 0.00 1757322.57 0.00 9739626.05
Gujing party building cultural
center
4727272.73 0.00 590909.09 0.00 4136363.64
Yantai wine museum project 1293370.71 0.00 221720.69 0.00 1071650.02
Other individual project with
insignificant amounts
20879695.68 103884.64 3882247.31 0.00 17101333.01
Total 70240106.82 103884.64 12662778.88 0.00 57681212.58
16. Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
Item
30 June 2020 31 December 2019
Deductible temporary
differences
Deferred tax assets
Deductible temporary
differences
Deferred tax assets
Asset impairment provision 27354979.39 6833265.18 22776693.89 5688693.81
Credit impairment provision 44250374.52 11046978.77 43861929.95 10955709.29
Unrealized intragroup profit 24800846.93 6200211.73 32086076.52 8021519.13
Deferred income 74384425.08 18187119.73 72778437.92 17941534.40
Deductible losses 47496756.92 11805516.94 0.00 0.00
Carry-over of payroll
payables deductible during
the next period
0.00 0.00 32995460.19 8248865.05
Accrued expenses and
discount
271504169.67 67876042.42 158552891.33 39638222.83
Total 489791552.51 121949134.77 363051489.80 90494544.51
~103~
(2) Deferred tax liabilities before offsetting
Item
30 June 2020 31 December 2019
Taxable temporary
differences
Deferred tax liabilities
Taxable temporary
differences
Deferred tax liabilities
Difference in accelerated
depreciation of fixed
assets
61113072.51 15278268.13 73614107.09 18403526.77
Assets appreciation arising
from business
combination not under the
same control
381561354.20 95390338.55 384290207.88 96072551.97
Changes in fair value of
trading financial assets
20264936.41 5066234.10 17585151.48 4396287.87
Total 462939363.12 115734840.78 475489466.45 118872366.61
(3) Unrecognized deferred tax assets
Item 30 June 2020 31 December 2019
Deductible losses 8243989.86 8072655.25
Total 8243989.86 8072655.25
17. Other Non-current Assets
Item 30 June 2020 31 December 2019
Prepayments for equipment and constructions 574026.00 4148686.00
Total 574026.00 4148686.00
18. Short-term Borrowings
Item 30 June 2020 31 December 2019
Credit borrowings 30094500.00 0.00
Guarantee borrowings 20000000.00 0.00
Total 50094500.00 0.00
19. Notes Payable
Category 30 June 2020 31 December 2019
Bank acceptance bills 1020583475.29 654965064.82
Commercial acceptance bills 0.00 48714582.04
Total 1020583475.29 703679646.86
20. Accounts Payable
(1) Listed by nature
~104~
Item 30 June 2020 31 December 2019
Payments for goods 242832951.18 399583249.41
Payments for constructions and equipment 80488599.59 88412144.22
Other 63035070.24 75498801.77
Total 386356621.01 563494195.40
(2) Significant accounts payable aging over one year
Item 30 June 2020 Reason
No. 1 2252093.02 Final payment
No. 2 577691.84 Final payment
No. 3 393392.70 Final payment
No. 4 348350.03 Final payment
No. 5 244906.28 Final payment
Total 3816433.87 --
21. Advances from Customers
(1) List of Advances from Customers
Item 30 June 2020 31 December 2019
Loan 0.00 529863011.73
Total 0.00 529863011.73
(2) There are no significant advances from customers aging over one year.
22. Contract Liabilities
(1) List of contract liabilities
Item 30 June 2020 31 December 2019
Loans 727347929.08 0.00
Total 727347929.08 0.00
(2) There are no significant contract liabilities aging over one year.
23. Payroll Payable
(1) List of payroll payable
Item 31 December 2019 Increase Decrease 30 June 2020
I. Short-term employee benefits 453674655.69 1071079133.49 1227668307.07 297085482.11
II. Post-employment 514877.20 23661037.84 23034120.29 1141794.75
~105~
Item 31 December 2019 Increase Decrease 30 June 2020
benefits-defined contribution plans
III. Termination benefits 0.00 0.00 0.00 0.00
Total 454189532.89 1094740171.33 1250702427.36 298227276.86
(2) List of short-term payroll payable
Item 31 December 2019 Increase Decrease 30 June 2020
I. Salaries bonuses allowances and
subsidies
357387670.42 925474559.57 1066882430.78 215979799.21
II. Employee benefits 45069.27 44330742.23 44330742.23 45069.27
III. Social insurance 607379.61 12927727.56 12983943.54 551163.63
Of which: Health insurance 590576.75 12540804.58 12603695.76 527685.57
Injury insurance 5730.43 384567.63 378878.03 11420.03
Birth insurance 11072.43 2355.35 1369.75 12058.03
IV. Housing accumulation fund 4465854.45 35906861.82 36227524.29 4145191.98
V. Labor union funds and employee
education funds
73606168.29 12803169.96 14427759.75 71981578.50
VI. Enterprise annuity 17562513.65 39636072.35 52815906.48 4382679.52
Total 453674655.69 1071079133.49 1227668307.07 297085482.11
(3) Defined contribution plans
Item 31 December 2019 Increase Decrease 30 June 2020
1. Basic endowment insurance 509340.98 22905408.65 22287978.80 1126770.83
2. Unemployment insurance 5536.22 755629.19 746141.49 15023.92
Total 514877.20 23661037.84 23034120.29 1141794.75
24. Taxes Payable
Item 30 June 2020 31 December 2019
VAT 134321025.20 16929480.44
Consumption tax 165311329.62 347582441.49
Enterprise income tax 139093438.30 94038327.53
Individual income tax 1791267.81 1173190.21
~106~
Item 30 June 2020 31 December 2019
Urban maintenance and construction tax 15163554.83 9328392.65
Stamp duty 965306.80 1058588.17
Educational surcharge 14929428.45 7991963.70
Other 5297116.48 4800725.40
Total 476872467.49 482903109.59
25. Other Payables
(1) Listed by category
Item 30 June 2020 31 December 2019
Interest payable 0.00 0.00
Dividends payable 755400000.00 0.00
Other payables 1435446597.94 1315878229.01
Total 2190846597.94 1315878229.01
(2) Dividends payable
Item 30 June 2020 31 December 2019
Ordinary stock dividends 755400000.00 0.00
Total 755400000.00 0.00
(3) Other payables
①Listed by nature
Item 30 June 2020 31 December 2019
Security deposit and guarantee 1323160418.91 1206935123.77
Warranty 45615013.51 42966560.82
Personal housing fund paid by company 4112923.98 4465854.45
Borrowing of business trip expenses 0.00 296993.67
Other 62558241.54 61213696.30
Total 1435446597.94 1315878229.01
②Significant other payables aging over one year
Other payables balance aging over one year totaled RMB495549588.71 which are mainly security deposit and
warranty not yet matured.
26. Other Current Liabilities
Item 30 June 2020 31 December 2019
Accrued expenses 306044574.61 197484121.41
~107~
Item 30 June 2020 31 December 2019
Total 306044574.61 197484121.41
27. Deferred Income
(1) General information of deferred income
Item 31 December 2019 Increase Decrease 30 June 2020 Reason
Government
grants
72778437.92 3870000.00 2264012.84 74384425.08
Grants received from
government
Total 72778437.92 3870000.00 2264012.84 74384425.08 --
(2) Items involved with government grants:
Item
31 December
2019
Increase during
the Reporting
Period
Recognized in
other income
during the
Reporting
Period
Other
changes
30 June 2020
Related to
assets/related to
income
Wine production system technical
transformation
192708.47 31249.98 161458.49 Related to assets
Instrument subsidy 1550437.50 76329.89 1474107.61 Related to assets
Intelligent solid brewing technology
innovation project
119791.53 15625.02 104166.51 Related to assets
Anhui province development of
direct funds of service industry
795122.12 146341.44 648780.68 Related to assets
Anhui province subsidy of
innovative province construction
capacity for independent innovation
1948120.00 365272.50 1582847.50 Related to assets
Equipment subsidy 1068028.16 102807.24 965220.92 Related to assets
Enterprise development funds 22500.00 15000.00 7500.00 Related to assets
Internet traceability system project 1856250.00 556875.00 1299375.00 Related to assets
Subsidy for Suizhou new factory
infrastructure
35338000.00 0.00 35338000.00 Related to assets
Motor and boiler energy-saving
technical transformation project
275000.24 68749.98 206250.26 Related to assets
Automation of check and storage
on-line monitoring of product
265625.00 46875.00 218750.00 Related to assets
~108~
quality
Funds for research projects of
koji-making Technology
1000000.00 0.00 1000000.00 Related to assets
Gujing Zhangji wine cellar
optimization and reconstruction
project
835208.43 23749.98 811458.45 Related to assets
Subsidy for food safety
improvement project
689655.25 68965.50 620689.75 Related to assets
Subsidy for key technical
cooperation project on the
authenticity of important food
isotopes
600000.00 0.00 600000.00 Related to assets
Comprehensive subsidy fund for air
pollution prevention and control
2345083.29 131500.02 2213583.27 Related to assets
Funds for strategic emerging
industry agglomeration development
base
798080.00 2000000.00 111360.00 2686720.00 Related to assets
Refund of Land payment 22562827.93 275103.09 22287724.84 Related to assets
Specific funds for side management
of power demand
516000.00 72000.00 444000.00 Related to assets
Project subsidy for coal to gas of 1#
furnace
0.00 1870000.00 156208.20 1713791.80 Related to assets
Total 72778437.92 3870000.00 2264012.84 74384425.08 --
28. Share Capital
Item 31 December 2019
Changes during the Reporting Period (+-)
30 June 2020
New issues
Bonus
issues
Capitalization
of reserves
Others Subtotal
The sum of
shares
503600000.00 503600000.00
29. Capital Reserves
Item 31 December 2019 Increase Decrease 30 June 2020
Capital premium (share
premium)
1262552456.05 1262552456.05
Other capital reserves 32853136.20 32853136.20
~109~
Item 31 December 2019 Increase Decrease 30 June 2020
Total 25 25
30. Surplus Reserves
Item 31 December 2019 Increase Decrease 30 June 2020
Statutory surplus
reserve
256902260.27 256902260.27
Total 256902260.27 256902260.27
Note: Pursuant to the Company Law of the People's Republic of China and Articles of Association the Company
appropriates 10% of net profit to the statutory surplus reserves. If the cumulative amount of the statutory surplus
reserve is more than 50% of the registered capital of the company it can be not appropriated any more.
31. Retained Earnings
Item Reporting Period Same period of last year
Beginning balance of retained earnings before adjustments 6888203911.92 5541281341.47
Total beginning balance of retained earnings before
adjustment (increase+ decrease-)
0.00 4794830.59
Beginning balance of retained earnings after adjustments 6888203911.92 5546076172.06
Add: Net profit attributable to owners of the Company as the
parent
1024936604.36 2097527739.86
Dividend of ordinary shares payable 755400000.00 755400000.00
Ending retained earnings 7157740516.28 6888203911.92
32. Operating Revenue and Cost of Sales
Item
Reporting Period Same period of last year
Operating revenue Costs of sales Operating revenue Costs of sales
Main operations 5495370627.67 1301529714.81 5958624293.86 1380565871.04
Other operations 24250372.95 12395877.67 29488705.23 13590863.51
Total 5519621000.62 1313925592.48 5988112999.09 1394156734.55
33. Taxes and Surcharges
Item Reporting Period Same period of last year
Consumption tax 731743604.96 711806689.93
Urban maintenance and construction tax and
educational surcharge
129960286.58 138007221.23
Land use tax 6984861.27 3447726.79
~110~
Item Reporting Period Same period of last year
Property tax 8847804.72 4547732.36
Stamp duty 4724705.33 5043756.63
Other 5735777.86 6674635.10
Total 887997040.72 869527762.04
34. Selling Expense
Item Reporting Period Same period of last year
Employment benefits 269309951.20 197359561.67
Travel fees 55722038.26 60001666.01
Advertisement fees 453767973.19 442193538.62
Transportation charges 24048795.64 27580054.90
Comprehensive promotion costs 445968323.13 787961795.81
Service fees 299367311.62 281570342.23
Other 69865244.23 43822480.46
Total 1618049637.27 1840489439.70
35. Administrative Expenses
Item Reporting Period Same period of last year
Employee benefits 253062668.21 180945738.54
Office fees 22537545.08 17415335.29
Maintenance expenses 26618712.24 17708807.57
Depreciation 36411144.00 30873944.56
Amortization of intangible assets 12940993.85 9656033.10
Pollution discharge 7786943.40 9730796.01
Travel expenses 3183652.98 1375252.69
Water and electricity charges 3790246.91 6162660.18
Other 29355766.48 28176889.19
Total 395687673.15 302045457.13
36. Development Costs
Item Reporting Period Same period of last year
Labor cost 11741116.01 8702736.52
Direct input costs 383301.13 1225388.53
~111~
Item Reporting Period Same period of last year
Depreciation expense 1658315.10 1633752.38
Other 1471650.74 3102360.24
Total 15254382.98 14664237.67
37. Finance Costs
Item Reporting Period Same period of last year
Interest expenses 28973275.97 14173972.09
Less: Interest income 96891173.45 20466649.02
Net interest expenses -67917897.48 -6292676.93
Net foreign exchange losses 13095.11 1577281.36
Bank charges and others -303665.57 412770.27
Total -68208467.94 -4302625.30
38. Other Income
Item Reporting Period
Same period of last
year
Related to assets /related
to income
I. Government grants recorded to other income
Of which: Government grant related to deferred
income
2264012.84 2450178.09 Related to assets
Government grant recorded to current profit
or loss
12710340.82 28333740.59 Related to income
Total 14974353.66 30783918.68 --
39. Investment Income
Item Reporting Period Same period of last year
Investment income from long-term equity investments under
equity method
-53631.34 -164994.19
Investment income from holding of trading financial assets 0.00 0.00
Other investment income 18539603.54 77512041.72
Total 18485972.20 77347047.53
40. Gains on Changes in Fair Values
Sources 2020 年 1-6 月 2019 年 1-6 月
Trading financial assets
Of which: Changes in fair value of designated as trading -3596160.61 11320345.56
~112~
Sources 2020 年 1-6 月 2019 年 1-6 月
financial assets
Total -3596160.61 11320345.56
41. Credit Impairment Loss
Item Reporting Period Same period of last year
Bad debt of notes receivable -14753.46 0.00
Bad debt of accounts receivable -414861.96 -75535.11
Bad debt of other receivables 41170.85 -401034.29
Total -388444.57 -476569.40
42. Asset Impairment Loss
Item Reporting Period Same period of last year
I. Inventory falling price loss -5693185.77 -5945248.67
II. Impairment loss of fixed assets 0.00 0.00
Total -5693185.77 -5945248.67
43. Gains on Disposal of Assets
Item Reporting Period Same period of last year
Gains/losses from disposal of fixed assets construction in
progress productive biological assets and intangible assets not
classified as held for sale
77867.25 119488.56
Of which: Fixed assets 77867.25 119488.56
Total 77867.25 119488.56
44. Non-operating Income
(1) Details of non-operating income
Item Reporting Period Same period of last year
Recognized in current
non-recurring profit or
loss
Gains from damage or scrapping of
non-current asset
588.35 146982.76 588.35
Government grants irrelevant to daily
operation activities
6377.80 20000.00 6377.80
Income from penalties and compensation 14641373.42 9154446.13 14641373.42
Sales of wastes 3144859.28 1527143.43 3144859.28
Other 2781962.69 302191.21 2781962.69
~113~
Item Reporting Period Same period of last year
Recognized in current
non-recurring profit or
loss
Total 20575161.54 11150763.53 20575161.54
(2) Government grants irrelevant to daily operation activities
Item Reporting Period Same period of last year
Related to assets/related to
income
Other rewards 6377.80 20000.00 Related to income
Total 6377.80 20000.00 --
45. Non-operating Expenses
Item Reporting Period Same period of last year
Recognized in current
non-recurring profit or loss
Loss from damage or scrapping of
non-current assets
2296765.56 576926.25
2296765.56
Other 21976890.93 1160684.82
21976890.93
Total 24273656.49 1737611.07 24273656.49
46. Income Tax Expenses
(1) Details of income tax expenses
Item Reporting Period Same period of last year
Current tax expenses 405227638.33 479158161.69
Deferred tax expenses -34592116.09 -60012757.38
Total 370635522.24 419145404.31
(2) Reconciliation of accounting profit and income tax expenses
Item Reporting Period
Profit before taxation 1377077049.17
Current income tax expense accounted at applicable tax rate of the
Company as the parent
344269262.29
Influence of applying different tax rates by subsidiaries -2506979.36
Influence of income tax before adjustment 20003127.36
Influence of non-taxable income 0.00
Influence of non-deductable costs expenses and losses 11060996.69
Influence of deductable losses of unrecognized deferred income
tax at the beginning of the Reporting Period
0.00
~114~
Influence of deductable temporary difference or deductable losses
of unrecognized deferred income tax in the Reporting Period
42833.65
Influence of development expense deduction -2233718.39
Tax rate adjustment to the beginning balance of deferred income
tax assets/liabilities
0.00
Income tax credits 0.00
Total 370635522.24
47. Notes to the Statement of Cash Flows
(1) Other cash received relating to operating activities
Item Reporting Period Same period of last year
Security deposit guarantee and warranty 118873747.83 103959881.28
Government grants 11109436.15 11786600.00
Interest income 88199155.94 20466649.02
Release of restricted monetary assets 1085000000.00 100200000.00
Other 20568195.39 40318774.38
Total 1323750535.31 276731904.68
(2) Other cash payments relating to operating activities
Item Reporting Period Same period of last year
Cash paid in sales and distribution expenses and
general and administrative expense
1031070499.98 657188029.24
Time deposits or deposits pledged for the
issuance of notes payable
30000000.00 13960226.78
Structured time deposits that cannot be
withdrawn in advance
400000000.00 0.00
Other 23665514.20 25350534.61
Total 1484736014.18 696498790.63
48. Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
Supplementary information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash flows generated from
operating activities:
Net profit 1006441526.93 1274948723.71
Add: Provisions for impairment of assets 6081630.34 6421818.07
~115~
Supplementary information Reporting Period Same period of last year
Depreciation of fixed assets investment properties oil and gas assets
and productive biological assets
107774202.21 102235366.57
Amortization of intangible assets 17144478.37 12195535.21
Amortization of long-term deferred expenses 12662778.88 13486720.57
Losses from disposal of fixed assets intangible assets and other
long-term assets (gains: negative)
-77867.25 -119488.56
Losses on scrapping of fixed assets (gains: negative) 2296177.21 429943.49
Losses on changes in fair value (gains: negative) 3596160.61 -11320345.56
Finance costs (gains: negative) 290708.33 14173972.09
Investment losses (gains: negative) -18485972.20 -77347047.53
Decreases in deferred tax assets (increase: negative) -31454590.26 -63337537.53
Increases in deferred tax liabilities (decrease: negative) -3137525.83 3324780.16
Decreases in inventories (increase: negative) 88585890.97 -14040094.66
Decreases in operating receivables (increase: negative) -350818607.86 146484134.95
Increases in operating payables (decrease: negative) 413475097.35 -463552554.06
Amortization of deferred income 2264012.84 -2450178.09
Other
*1
1085000000.00 100200000.00
Net cash flows from operating activities 2341638100.64 1041733748.83
2. Significant investing and financing activities without involvement
of cash receipts and payments
Conversion of debt into capital
Current portion of convertible corporate bonds
Fixed assets acquired under finance leases
3. Net increase/decrease of cash and cash equivalents:
Ending balance of cash 5398187475.71 2395374286.79
Less: Beginning balance of cash 2944749918.09 835560865.12
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 2453437557.62 1559813421.67
*1: Refer to impact of restricted funds on net cash flow generated from operating activities of the reporting period.
(2) The components of cash and cash equivalents
~116~
Item Reporting Period Same period of last year
I. Cash 5398187475.71 2395374286.79
Including: Cash on hand 254747.79 374122.81
Bank deposit on demand 5397660747.68 2394869696.55
Other monetary assets on demand 271980.24 130467.43
II. Cash equivalents 0.00 0.00
Of which: Bond investments maturing within three months 0.00 0.00
III. Ending balance of cash and cash equivalents 5398187475.71 2395374286.79
Of which: cash and cash equivalents with restriction to use in the
subsidies of the Company as the parent or Group
0.00 0.00
49. Assets with Restricted Ownership or Right of Use
Item Carrying value on 30 June 2020 Reason
Bank deposits 2020000000.00
Structured deposit and fixed deposit
which cannot be withdrawn in advance as
well as time deposits pledged for issuance
of bank acceptance bills
Notes receivable 382801475.30
Pledged for issuance of bank acceptance
bills
Total 2402801475.30 --
50. Government Grants
(1) Government grants related to assets
Item Amount
Item presented
in the
statement of
financial
position
Recognized in current profit or loss or
as deduct of related cost
Presented item
recorded to current
profit or loss or as
deduct of related
cost
Reporting Period
Same period of
last year
Technical transformation of
brewing production system
161458.49
Deferred
income
31249.98 31249.98 Other income
Equipment subsidy 1474107.61
Deferred
income
76329.89 110250.00 Other income
Intelligent solid brewing technology
innovation project
104166.51
Deferred
income
15625.02 15625.02 Other income
Guiding funds for the development
of service industry in Anhui
648780.68 Deferred 146341.44 146341.44 Other income
~117~
Province income
Subsidy for the construction of
independent innovation capacity of
Anhui Province
1582847.50
Deferred
income
365272.50 365272.50 Other income
Energy saving transformation
project of coal-fired industrial
boiler and glass furnace
0.00
Deferred
income
0.00 12750.00 Other income
Project fund of Bozhou logistics
center
0.00
Deferred
income
0.00 30000.00 Other income
Equipment subsidy 965220.92
Deferred
income
102807.24 101399.82 Other income
Financial subsidy for technological
transformation
0.00
Deferred
income
0.00 267110.76 Other income
Special funds for enterprise
development
7500.00
Deferred
income
15000.00 15000.00 Other income
Internet of things traceability
system project
1299375.00
Deferred
income
556875.00 556875.00 Other income
Electric motor and boiler energy
saving technology transformation
project
206250.26
Deferred
income
68749.98 68749.98 Other income
Whole process online monitoring of
hook and store automation and
product quality
218750.00
Deferred
income
46875.00 46875.00 Other income
Gujing Zhangji liquor warehouse
optimization and transformation
project
811458.45
Deferred
income
23749.98 23749.98 Other income
Subsidy for food safety
improvement project
620689.75
Deferred
income
68965.50 68965.50 Other income
Comprehensive subsidy fund for air
pollution prevention and control
2213583.27
Deferred
income
131500.02 131500.02 Other income
Funds for strategic emerging
industry agglomeration
development base
2686720.00
Deferred
income
111360.00 111360.00 Other income
Refund for land payment 22287724.84
Deferred
income
275103.09 275103.09 Other income
~118~
Suizhou new plant construction
subsidy
35338000.00
Deferred
income
0.00 0.00 Other income
Funds for research projects of
koji-making technology
1000000.00
Deferred
income
0.00 0.00 Other income
Subsidy for key technical
cooperation project on the
authenticity of important food
isotopes
600000.00
Deferred
income
0.00 0.00 Other income
Specific funds for side management
of power demand
444000.00
Deferred
income
72000.00 72000.00 Other income
Project subsidy of coal to gas in 1# 1713791.80
Deferred
income
156208.20 0.00 Other income
Total 74384425.08 -- 2264012.84 2450178.09
--
(2) Government grants related to income
Item Amount
Item presented in the
statement of financial
position
Recognized in current profit or loss or
as deduct of related cost
Presented item
recorded to
current profit or
loss or as deduct
of related cost
Reporting Period
Same period of
last year
Tax refund 2937700.91 Other income 2937700.91 15816253.89 Other income
2019 subsidy fund and
reward for being
manufacture province and
development policy of
private economy
600000.00 Other income 600000.00 0.00 Other income
Subsidy from Social
Security Bureau
910749.30 Other income 910749.30 0.00 Other income
Agriculture and Rural Areas
award of Xianning
50000.00 Other income 50000.00 0.00 Other income
Unemployment insurance
premium refund
2314709.05 Other income 2314709.05 2000.00 Other income
Provincial Skilled Master
Award
250000.00 Other income 250000.00 0.00 Other income
Tourism entrepreneurship
marketing subsidy
100000.00 Other income 100000.00 0.00 Other income
Fund of Wuhan Hanyang
Industrial and Commercial
50000.00 Other income 50000.00 0.00 Other income
~119~
Association
Financial support of Wuhan
Hanyang Treasury
Collection and Payment
Center
2364000.00 Other income 2364000.00 0.00 Other income
Subsidies for statisticians of
the Management
Committee of Xianning
Hi-tech Industrial
Development Zone
3600.00 Other income 3600.00 0.00 Other income
Tax breaks for veterans 90000.00 Other income 90000.00 0.00 Other income
Local financial funds of
Xianning High-tech
Industrial Development
Zone
350000.00 Other income 350000.00 0.00 Other income
Fund of Xianning Economy
and information Bureau
100000.00 Other income 100000.00 0.00 Other income
Subsidies for the municipal
Innovation Platform of
Xianning Science and
Technology Bureau in 2019
50000.00 Other income 50000.00 0.00 Other income
Additional deduction of
VAT
2539581.56 Other income 2539581.56 864686.70 Other income
2018 project funds for
being manufacture province
0.00 Other income 0.00 9180000.00 Other income
The State intellectual
property rights
demonstration enterprises
award
0.00 Other income 0.00 1200000.00 Other income
Grant from Xianning
Science and Technology
Bureau
0.00 Other income 0.00 50000.00 Other income
Subsidy for Wuhan Science
and Technology Bureau
commissioner workstation
0.00 Other income 0.00 200000.00 Other income
Subsidy for Xianning
High-tech Zone industrial
enterprise technology
project
0.00 Other income 0.00 200000.00 Other income
Bozhou Science and 0.00 Other income 0.00 50000.00 Other income
~120~
Technology Bureau award
Robot project subsidy of
Commission of Economy
and Information
Technology
0.00 Other income 0.00 300000.00 Other income
Other 0.00 Other income 0.00 470800.00 Other income
Other not related to daily
operation
0.00
Non-operating
income
0.00 20000.00
Non-operating
income
Total 12710340.82 -- 12710340.82 28353740.59 --
VI. Changes of Consolidation Scope
There was no change in the Reporting Period compared with the prior period.VII. Equity in Other Entities
1. Equity in Subsidiaries
(1) Subsidiaries
Name
Main operating
place
Registration
place
Nature of
business
Holding percentage (%)
Way of gaining
Directly Indirectly
Bozhou Gujing Sales Co. Ltd. Anhui Bozhou Anhui Bozhou
Commercial
trade
100.00
Investment
establishment
Anhui Longrui Glass Co. Ltd Anhui Bozhou Anhui Bozhou Manufacture 100.00
Investment
establishment
BozhouGujing Waste Reclamation
Co. Ltd.
Anhui Bozhou Anhui Bozhou Waste recycle 100.00
Investment
establishment
Anhui Jinyunlai Culture & Media
Co. Ltd.
Anhui Hefei Anhui Hefei
Advertisement
marketing
100.00
Investment
establishment
Anhui Ruisiweier Technology Co.
Ltd.
Anhui Bozhou Anhui Bozhou
Technical
research
100.00
Investment
establishment
Anhui Baiweilu Liquor Co. Ltd. Anhui Bozhou Anhui Bozhou Manufacture 100.00
Investment
establishment
Shanghai Gujing Jinhao Hotel
Management Co. Ltd.Shanghai Shanghai
Hotel
management
100.00
Business
combination
under the same
control
Bozhou Gujing Hotel Co. Ltd Anhui Bozhou Anhui Bozhou Hotel operating 100.00 Business
~121~
Name
Main operating
place
Registration
place
Nature of
business
Holding percentage (%)
Way of gaining
Directly Indirectly
combination
under the same
control
Anhui Yuanqing Environmental
Protection Co. Ltd.
Anhui Bozhou Anhui Bozhou
Sewage
treatment
100.00
Investment
establishment
Anhui Gujing Yunshang
E-commerce Co. Ltd.
Anhui Hefei Anhui Hefei
Electronic
commerce
100.00
Investment
establishment
Anhui Zhenrui Construction
Engineering Co. Ltd
Anhui Bozhou Anhui Bozhou Construction 100.00
Investment
establishment
Anhui RunAnXinKe Testing
Technology Co. Ltd.
Anhui Bozhou Anhui Bozhou Food testing 100.00
Investment
establishment
Yellow Crane Tower Distillery
Co. Ltd.
Hubei Wuhan Hubei Wuhan Manufacture 51.00
Business
combination not
under the same
control
Yellow Crane Tower Distillery
(Xianning) Co. Ltd.Hubei Xianning Hubei Xianning Manufacture 51.00
Business
combination not
under the same
control
Yellow Crane Tower Distillery
(Suizhou) Co. Ltd.Hubei Suizhou Hubei Suizhou Manufacture 51.00
Business
combination not
under the same
control
Hubei Junhe Advertising Co. Ltd. Hubei Wuhan Hubei Wuhan
Advertisement
marketing
51.00
Business
combination not
under the same
control
Hubei Yellow Crane Tower
Beverage Co. Ltd.
Hubei Xianning Hubei Xianning Manufacture 51.00
Investment
establishment
~122~
Name
Main operating
place
Registration
place
Nature of
business
Holding percentage (%)
Way of gaining
Directly Indirectly
Wuhan Yashibo Technology Co.Ltd.Hubei Wuhan Hubei Wuhan
Technology
development
51.00
Investment
establishment
Wuhan Tianlong Jindi Technology
Development Co. Ltd
Hubei Wuhan Hubei Wuhan
Commercial
trade
51.00
Business
combination not
under the same
control
Xianning Junhe Sales Co. Ltd Hubei Xianning Hubei Xianning
Commercial
trade
51.00
Business
combination not
under the same
control
Wuhan Junya Sales Co. Ltd Hubei Wuhan Hubei Wuhan
Commercial
trade
51.00
Investment
establishment
Suizhou Junhe Commercial Co.Ltd.Hubei Suizhou Hubei Suizhou
Commercial
trade
51.00
Investment
establishment
(2) Significant non-wholly owned subsidiaries
Name
Shareholding
proportion of
non-controlling
interests
The profit or loss
attributable to the
non-controlling interests
Declaring dividends
distributed to
non-controlling interests
Balance of non-controlling
interests at the period-end
Yellow Crane Tower
Distillery Co. Ltd.
49.00 -18495077.43 0.00 469547869.87
(3) Main financial information of significant non-wholly owned subsidiaries
Name
30 June 2020
Current assets
Non-current
assets
Total assets Current liabilities
Non-current
liability
Total liabilities
Yellow Crane
Tower Distillery
Co. Ltd.
686235476.83 777112835.05 1463348311.88 373556283.73 131531069.23 505087352.96
(Continued)
Name 31 December 2019
~123~
Current assets
Non-current
assets
Total assets
Current
liabilities
Non-current
liability
Total liabilities
Yellow Crane
Tower Distillery
Co. Ltd.
755439438.85 742229246.05 1497668684.90 369369757.38 132292912.62 501662670.00
(Continued)
Name
Reporting Period
Operating revenue Net profit
Total comprehensive
income
Cash flows from operating
activities
Yellow Crane Tower Distillery
Co. Ltd.
181381939.34 -37745055.98 -37745055.98 -107245907.79
(Continued)
Name
Same period of last year
Operating revenue Net profit
Total comprehensive
income
Cash flows from
operating activities
Yellow Crane Tower Distillery
Co. Ltd.
457947025.03 54351856.52 54351856.52 39866055.42
VIII. The Risk Related to Financial Instruments
Risks related to the financial instruments of the Company arise from the recognition of various financial assets and
financial liabilities during its operation including credit risk liquidity risk and market risk.Management of the Company is responsible for determining risk management objectives and policies related to
financial instruments. Operational management is responsible for the daily risk management through functional
departments. Internal audit department is responsible for the daily supervision of implementation of the risk
management policies and procedures and report their findings to the audit committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies to minimize the risks
without unduly affecting the competitiveness and resilience of the Company.
1. Credit Risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the other party of the
financial instrument fails to fulfill its obligation. The credit risk of the Company is related to cash and equivalent
notes receivable accounts receivables other receivables and long-term receivables. Credit risk of these financial
assets is derived from the counterparty’s breach of contract. The maximum risk exposure is equal to the carrying
amount of these financial instruments.
Cash and cash equivalent of the Company has lower credit risk as they are mainly deposited in such financial
~124~
institutions as commercial bank of which the Company thinks with higher reputation and financial position.
For notes receivable other receivables and long-term receivables the Company establishes related policies to
control their credit risk exposure. The Company assesses credit capability of its customers and determines their
credit terms based on their financial position possibility of the guarantee from third party credit record and other
factors. The Company monitors its customers’ credit record periodically and for those customers with poor credit
record the Company will take measures such as written call shortening or cancelling their credit terms so as to
ensure the overall credit risk of the Company is controllable.
2. Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering cash or other
financial assets. The Company is responsible for the capital management of all of its subsidiaries including
short-term investment of cash surplus and dealing with forecasted cash demand by raising loans. The Company’s
policy is to monitor the demand for short-term and long-term floating capital and whether the requirement of loan
contracts is satisfied so as to ensure to maintain adequate cash and cash equivalents.
3. Market Risk
(1) Foreign currency risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The core business of the
Company is on the mainland of China and trading with RMB. Foreign exchange risk is minimal.
(2) Interest rate risk
The operating fund of the Company is sufficient and there is no loan in recent years so that the risk of interest is
very small for the Company.
(3) Other price risk
The trading financial assets of the Company are measured by fair value. Therefore the Company bears the risk of
the change of security market. To decrease the risk the management decided that the Company held a combination
of several equities and securities.IX. The Disclosure of Fair Value
The inputs used in the fair value measurement in its entirety are to be classified in the level of the hierarchy in
which the lowest level input that is significant to the measurement is classified.Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are directly or indirectly
observable.Level 3: Inputs are unobservable inputs for the assets or liabilities
1. Assets and liabilities measured at fair value on 30 June 2020
Item Fair value on 30 June 2020
~125~
Fair value
measurement
items at level 1
Fair value
measurement items at
level 2
Fair value
measurement
items at level 3
Total
I. Consistent fair value measurement
(I) Trading financial assets
1. Financial assets assigned measured by fair
value and the changes be included in the current
gains and losses
230264936.41 230264936.41
(1) Debt instrument investment
(2) Equity instrument investment 230264936.41 230264936.41
(3) Derivative financial assets
Total assets consistently measured at fair value 230264936.41 230264936.41
The fair value of financial instruments traded in an active market is based on quoted market prices at the reporting
date. The fair value of financial instruments not traded in an active market is determined by using valuation
techniques. Specific valuation techniques used to value the above financial instruments include discounted cash
flow and market approach to comparable company model. Inputs in the valuation technique include risk-free
interest rates benchmark interest rates exchange rates credit spreads liquidity premiums discount for lack of
liquidity.
2. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
The items of fair value measurement in Level 2 of the Company are mainly about bank financial products and fund
investments. For bank financial products the Company shall calculate its rate of return based on the observable
market rate of return on the financial products so as to determine the gains or losses arising from the changes in fair
value and then finally recognize the value of trading financial assets. For fund investment the Company shall
determine the gains or losses arising from changes in fair value and the value of trading financial assets according
to the valuation table of securities investment fund provided by the asset management company.X. Related Party and Related-party Transactions
The recognition criteria of related party: related party is that one party controls or jointly controls the other party or
exerts significant influence on the other party and two or more parties are controlled by the same controller jointly
controlled or exerted significant influence.
1. General Information of the Parent Company
~126~
Name
Registration
place
Nature of business Registered capital
Proportion of share
held by the
Company as the
parent against the
Company (%)
Proportion of
voting rights
owned by the
Company as the
parent against the
Company (%)
Anhui Gujing Group
Co. Ltd.
Anhui
Bozhou
Beverages construction
materials manufacturing
plastic production
1000000000.00 53.89 53.89
① The ultimate controller of the Company: The ultimate controller is State-owned Assets Supervision and
Administration Commission of Bozhou Anhui.
2. General Information of Subsidiaries
Refer to Note VII-1. Equity in subsidiaries for details.
3. Other Related Parties of the Company
Name Relationship with the Company
Anhui Ruifuxiang Food Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Ruijing Catering Management Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Haochidian Catering Co. Ltd. An affiliate of the actual controller and controlling shareholder
Shanghai Beihai Hotel Co. Ltd An affiliate of the actual controller and controlling shareholder
Anhui Ruijing Business Travel (Group) Co. Ltd. An affiliate of the actual controller and controlling shareholder
Bozhou Hotel Co. Ltd. An affiliate of the actual controller and controlling shareholder
Orient Ruijing Enterprise Investment Development Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Hengxin Pawn Co. Ltd. An affiliate of the actual controller and controlling shareholder
Bozhou Ruineng Thermal Power Co. Ltd. An affiliate of the actual controller and controlling shareholder
Hefei Gujing Holiday Hotel Co. Ltd. An affiliate of the actual controller and controlling shareholder
Bozhou Ruifyxiang High Protein Feed Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Gujing Hotel Development Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Ruixin Pawn Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Zhongxin Finance Leasing Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Huixin Finance Investment Group Co. Ltd An affiliate of the actual controller and controlling shareholder
Hefei Longxin Financial Management Consulting Co. Ltd An affiliate of the actual controller and controlling shareholder
~127~
Name Relationship with the Company
Bozhou Anxin Micro Finance Co. Ltd. An affiliate of the actual controller and controlling shareholder
Dazhongyuan Wine Valley Culture Tourism Development Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Lvyuan Ecological Agriculture Development Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Youxin Financing Guarantee Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Lixin E-commerce Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Gujing Huishenglou Catering Co. Ltd. An affiliate of the actual controller and controlling shareholder
Bozhou Gujing Junlai Hotel Co. Ltd An affiliate of the actual controller and controlling shareholder
Anhui Gujing International Tourism Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Gujing Health Industry Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Lejiu Home Tourism Management Co. Ltd. An affiliate of the actual controller and controlling shareholder
Anhui Shenglong Commercial Co. Ltd. An affiliate of the actual controller and controlling shareholder
4. Related Party Transactions
(1) Purchases or sales of goods rendering or receiving of services
Purchases of goods receiving of services:
Related party Content Reporting Period Same period of last year
Anhui Gujing International Tourism Co. Ltd. Labor service 0.00 786329.00
Anhui Gujing International Development Co. Ltd. Labor service 103773.58 0.00
Anhui Gujing Group Co. Ltd. Labor service 0.00 63716.81
Anhui Gujing Group Co. Ltd. Purchase of materials 56952.00 0.00
Anhui Gujing Health Industry Co. Ltd. Purchase of materials 191893.81 19433.63
Anhui Gujing Hotel Development Co. Ltd.
Catering and
accommodation service
121508.00 16766.00
Anhui Gujing Hotel Development Co. Ltd. Labor service 3413.21 31.51
Anhui Haochidian Catering Co. Ltd. Labor service 991145.50 0.00
Anhui Haochidian Catering Co. Ltd.
Catering and
accommodation service
884017.40 34440.00
Anhui Haochidian Catering Co. Ltd. Purchase of materials 8757860.85 245594.50
Anhui Huixin Finance Investment Group Co. Ltd Labor service 0.00 55722.40
Anhui Lvyuan Ecological Agriculture Development Co.
Ltd.Labor service 0.00 25821.13
~128~
Anhui Lvyuan Ecological Agriculture Development Co.
Ltd.
Afforestation fees 0.00 404865.62
Anhui Ruijing Catering Management Co. Ltd.
Catering and
accommodation service
0.00 33725.00
Anhui Ruijing Business Travel (Group) Co. Ltd. Purchase of materials 525535.82 3076852.09
Anhui Xinyuan Municipal Garden Engineering Co. Ltd Afforestation fees 0.00 31849.06
Beijing Anhui Building
Catering and
accommodation service
0.00 1285.00
Bozhou Hotel Co. Ltd.
Catering and
accommodation service
1439005.95 3257170.88
Anhui Gujing Huishenglou Catering Co. Ltd.
Catering and
accommodation service
416771.00 2695540.00
Bozhou Gujing Junlai Hotel Co. Ltd
Catering and
accommodation service
0.00 234710.54
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Purchase of materials and
labor service
201143.63 0.00
Anhui Lejiu Home Tourism Management Co. Ltd.
Purchase of materials and
labor service
99546.43 0.00
Hefei Gujing Holiday Hotel Co. Ltd. Purchase of materials 149618.90 387017.20
Hefei Gujing Holiday Hotel Co. Ltd.
Catering and
accommodation service
63570.78 14865.26
Total -- 14005756.86 11385735.63
Sales of goods and rendering of services:
Related party Content Reporting Period Same period of last year
Anhui Gujing International Tourism Co. Ltd.
Catering and
accommodation
service
0.00 206.00
Anhui Gujing International Tourism Co. Ltd.
Sales of small
materials
0.00 404.78
Anhui Gujing International Tourism Co. Ltd. Sales of liquor 0.00 389.36
Anhui Gujing Group Co. Ltd.
Catering and
accommodation
service
28125.00 87090.19
Anhui Gujing Group Co. Ltd.
Sales of small
materials
35549.10 63778.94
Anhui Gujing Health Industry Co. Ltd.
Catering and
accommodation
service
1250.00 29059.00
Anhui Gujing Health Industry Co. Ltd. Labor service 232430.19 501596.23
~129~
Anhui Gujing Health Industry Co. Ltd. Sales of liquor 5738435.24 5473459.08
Anhui Gujing Health Industry Co. Ltd.
Sales of small
materials
1314.60 3136.93
Anhui Gujing Hotel Development Co. Ltd. Sales of liquor 94938.00 45325.31
Anhui Haochidian Catering Co. Ltd. Sales of liquor 48584.08 0.00
Anhui Hengxin Pawn Co. Ltd. Sales of liquor 6244.25 0.00
Anhui Huixin Finance Investment Group Co. Ltd Sales of liquor 21225.67 452567.02
Anhui Lejiu Home Tourism Management Co. Ltd. Sales of hydropower 51180.85 179311.29
Anhui Lejiu Home Tourism Management Co. Ltd. Labor service 7620.00 0.00
Anhui Lejiu Home Tourism Management Co. Ltd.
Sales of small
materials
0.00 5849.50
Anhui Lejiu Home Tourism Management Co. Ltd. Sales of liquor 4539.82 3114.91
Anhui Lixin E-commerce Co. Ltd. Sales of liquor 7461.93 63756.26
Anhui Ruijing Business Travel (Group) Co. Ltd.
Catering and
accommodation
service
600.00 22829.26
Anhui Ruijing Business Travel (Group) Co. Ltd. Sales of liquor 251495.58 2979148.41
Anhui Ruixin Pawn Co. Ltd. Sales of liquor 3512.39 2731.85
Anhui Shenglong Commercial Co. Ltd.
Catering and
accommodation
service
3800.00 5909.00
Anhui Shenglong Commercial Co. Ltd. Sales of liquor 1450295.22 6206.90
Anhui Youxin Financing Guarantee Co. Ltd. Sales of liquor 3122.12 2203.45
Anhui Zhongxin Finance Leasing Co. Ltd. Sales of liquor 8115.92 3956.90
Bozhou Anxin Micro Finance Co. Ltd. Sales of liquor 8506.19 3724.14
Bozhou Hotel Co. Ltd. Sales of liquor 50575.23 17379.31
Anhui Gujing Huishenglou Catering Co. Ltd. Sales of liquor 68654.87 17767.24
Bozhou Gujing Junlai Hotel Co. Ltd Sales of liquor 0.00 4655.17
Bozhou Ruifyxiang High Protein Feed Co. Ltd. Sales of liquor 0.00 11405.17
Bozhou Ruineng Thermal Power Co. Ltd. Sales of liquor 74150.45 190103.02
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Sales of small
materials
2631.13 841.63
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Catering and
accommodation
service
420.00 2735.00
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Labor service 2889.91 15665.68
~130~
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Sales of liquor 88799.29 902976.02
Dazhongyuan Wine Valley Culture Tourism Development
Co. Ltd.
Sales of hydropower 0.00 36105.11
Hefei Gujing Holiday Hotel Co. Ltd.
Catering and
accommodation
service
0.00 2937.76
Hefei Gujing Holiday Hotel Co. Ltd. Sales of liquor 14336.28 0.00
Shanghai Beihai Hotel Co. Ltd Sales of liquor 8601.77 7964.60
Anhui Lvyuan Ecological Agriculture Development Co. Ltd.
Sales of small
materials
0.00 3724.33
Anhui Gujing International Development Co. Ltd.
Sales of small
materials
5437.89 0.00
Anhui Gujing International Development Co. Ltd.
Catering and
accommodation
service
2820.00 0.00
Anhui Gujing International Development Co. Ltd. Sales of liquor 1700563.88 0.00
Total -- 10028226.85 11150014.75
(2) Related-party leases
The Company as lessor:
Name of lessee
Category of leased
assets
The lease income confirmed in
the Reporting Period
The lease income confirmed in
the same period of last year
Anhui Gujing Hotel Development Co. Ltd. Houses and buildings 417153.83 689124.81
Total -- 417153.83 689124.81
The Company as lessee:
Name of lessor
Category of leased
assets
The lease fee confirmed in the
Reporting Period
The lease fee confirmed in the
same period of last year
Anhui Gujing Group Co. Ltd. Houses and buildings 749786.08 1095238.10
Total -- 749786.08 1095238.10
5. Receivables and Payables with Related Parties
(1) Payables
Item Related party 30 June 2020 31 December 2019
Accounts payable Anhui Ruijing Business Travel (Group) Co. Ltd. 147120.00 147120.00
Accounts payable Anhui Haochidian Catering Co. Ltd. 280520.87 0.00
Advances from
customers
Anhui Ruijing Business Travel (Group) Co. Ltd. 788175.25 913047.40
~131~
Item Related party 30 June 2020 31 December 2019
Advances from
customers
Dazhongyuan Wine Valley Culture Tourism
Development Co. Ltd.
0.00 490292.90
Advances from
customers
Anhui Gujing Health Industry Co. Ltd. 704379.00 6625624.40
Advances from
customers
Bozhou Ruineng Thermal Power Co. Ltd. 0.00 2883.84
Advances from
customers
Anhui Gujing International Development Co. Ltd. 128004.36 1038479.00
Advances from
customers
Anhui Shenglong Commercial Co. Ltd. 0.00 144580.50
Other receivables Anhui Gujing Hotel Development Co. Ltd. 100000.00 50000.00
Other receivables Anhui Ruijing Business Travel (Group) Co. Ltd. 123500.00 85000.00
Other receivables
Dazhongyuan Wine Valley Culture Tourism
Development Co. Ltd.
0.00 50000.00
Other receivables Anhui Gujing International Development Co. Ltd. 0.00 16200.00
Other receivables Anhui Shenglong Commercial Co. Ltd. 0.00 4300.00
XI. Commitments and Contingency
1. Significant Commitments
As of 30 June 2020 there was no significant commitment for the Company to disclose.
2. Contingency
As of 30 June 2020 there was no contingency for the Company to disclose.
XII. Events after Balance Sheet Date
As of 30 June 2020 there was no event after balance sheet date to disclose.
XIII. Other Significant Events
Segment Information
The Company did not determine the operating segment in accordance with the internal organizational structure
management requirements and internal reporting system so there was no need to disclose segment information
report based on the operating segments.XIV. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure buy aging
Aging 30 June 2020 31 December 2019
~132~
Aging 30 June 2020 31 December 2019
Within one year 1591313.17 218558555.07
Of which:1-6 months 1591313.17 218558555.07
7-12 months 0.00 0.00
1-2 years 0.00 0.00
2-3 years 0.00 0.00
Over 3 years 0.00 141121.87
Subtotal 1591313.17 218699676.94
Less: Bad debt provision 0.00 141121.87
Total 1591313.17 218558555.07
(2) Disclosure by withdrawal method of bad debt provision
Item
30 June 2020
Carrying amount Bad debt provision
Carrying value
Amount Proportion (%) Amount
Withdrawal
proportion
(%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
1591313.17 100.00 0.00 0.00 1591313.17
Of which: Group 1 1591313.17 100.00 0.00 0.00 1591313.17
Group 2 0.00 0.00 0.00 0.00 0.00
Total 1591313.17 100.00 0.00 0.00 1591313.17
(Continued)
Item
31 December 2019
Carrying amount Bad debt provision
Carrying value
Amount Proportion (%) Amount
Withdrawal
proportion
(%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
218699676.94 100.00 141121.87 0.06 218558555.07
~133~
Item
31 December 2019
Carrying amount Bad debt provision
Carrying value
Amount Proportion (%) Amount
Withdrawal
proportion
(%)
Bad debt provision withdrawn
separately
Of which: Group 1 218558555.07 99.94 0.00 0.00 218558555.07
Group 2 141121.87 0.06 141121.87 100.00 0.00
Total 218699676.94 100.00 141121.87 0.06 218558555.07
On 30 June 2020 accounts receivable with bad debt provision withdrawn by group 1
Aging
30 June 2020
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Related parties within the scope of
consolidation
1591313.17 0.00 0.00
Total 1591313.17 0.00 0.00
On 30 June 2020 there was no account receivable with bad debt provision withdrawn by group 2.
On 31 December 2019 accounts receivable with bad debt provision withdrawn by group 1
Aging
31 December 2019
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Related parties within the scope of
consolidation
218558555.07 0.00 0.00
Total 218558555.07 0.00 0.00
On 31 December 2019 accounts receivable with bad debt provision withdrawn by group 2
Aging
31 December 2019
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Within one year
Of which:1-6 months
7-12 months
1-2 years
2-3 years
~134~
Aging
31 December 2019
Carrying amount Bad debt provision
Withdrawal proportion
(%)
Over 3 years 141121.87 141121.87 100.00
Total 141121.87 141121.87 100.00
Refer to Note III-10. Financial Instrument for recognition criteria and notes of withdrawal of bad debt provision by
group.
(3) Changes of bad debt provision during the Reporting Period
Investees 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Reversal or
recovery
Write-off
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
141121.87 141121.87
Total 141121.87 141121.87
(4) On 30 June 2020 top five ending balances by entity
Entity name Balance on 30 June 2020
Proportion of the balance to the total
accounts receivable (%)
Bad debt provision
No. 1 728777.34 45.80
No. 2 430560.24 27.06
No. 3 328613.03 20.65
No. 4 75977.37 4.77
No. 5 27385.19 1.72
Total 1591313.17 100.00
2. Other Receivables
(1) Listed by category
Item 30 June 2020 31 December 2019
Interest receivable 301888.89 301888.89
Dividends receivable 0.00 0.00
Other receivables 121000189.69 124917324.95
~135~
Item 30 June 2020 31 December 2019
Total 121302078.58 125219213.84
(2) Other receivables
①Disclosure by aging
Aging 30 June 2020 31 December 2019
Within one year 120530314.73 64773476.22
Of which:1-6 months 39092200.18 50595906.92
7-12 months 81438114.55 14177569.30
1-2 years 355158.20 59983186.13
2-3 years 392570.00 525794.00
Over 3 years 41228262.35 41540607.44
Subtotal 162506305.28 166823063.79
Less: Bad debt provision 41506115.59 41905738.84
Total 121000189.69 124917324.95
②Disclosure by nature
Nature 30 June 2020 31 December 2019
Related parties within the scope of consolidation 117715798.06 120200301.28
Security investment 40850949.35 40850949.35
Security deposit and guarantee 1882139.09 1850139.09
Rent water electricity and gas 277104.86 853843.90
Other 1780313.92 3067830.17
Total 162506305.28 166823063.79
③Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2020 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 121655355.93 655166.24 121000189.69
Stage 2 0.00 0.00 0.00
Stage 3 40850949.35 40850949.35 0.00
Total 162506305.28 41506115.59 121000189.69
A1. As of 30 June 2020 bad debt provision at stage 1:
~136~
Category Carrying amount
12-month expected credit
losses rate (%)
Bad debt provision Carrying value
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
by group
121655355.93 0.54 655166.24 121000189.69
Of which: Group 1 117715798.06 0.00 0.00 117715798.06
Group 2 3939557.87 16.63 655166.24 3284391.63
Total 121655355.93 0.54 655166.24 121000189.69
On 30 June 2020 other receivables with bad debt provision withdrawn by group 2
Aging
30 June 2020
Carrying amount Bad debt provision Withdrawal proportion (%)
Within one year 2814516.67 46052.42 1.64
Of which:1-6 months 2366835.25 23668.35 1.00
7-12 months 447681.42 22384.07 5.00
1-2 years 355158.20 35515.82 10.00
2-3 years 392570.00 196285.00 50.00
Over 3 years 377313.00 377313.00 100.00
Total 3939557.87 655166.24 16.63
A2. As of 30 June 2020 bad debt provision at stage 2:
Category Carrying amount
12-month expected credit
losses rate (%)
Bad debt provision Carrying value
Bad debt provision withdrawn
separately
40850949.35 100.00 40850949.35 0.00
Bad debt provision withdrawn
by group
0.00 0.00 0.00 0.00
Of which: Group 1 0.00 0.00 0.00 0.00
Group 2 0.00 0.00 0.00 0.00
Total 40850949.35 100.00 40850949.35 0.00
On 30 June 2020 other receivables with bad debt provision withdrawn separately:
Name 30 June 2020
~137~
Carrying amount Bad debt provision
Withdrawal
proportion
(%)
Withdrawal reason
Hengxin Securities Co. Ltd. 29010449.35 29010449.35 100.00
The enterprise enters the
bankruptcy liquidation procedure
Jianqiao Securities Co. Ltd. 11840500.00 11840500.00 100.00
The enterprise enters the
bankruptcy liquidation procedure
Total 40850949.35 40850949.35 -- --
B. As of 31 December 2019 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 125972114.44 1054789.49 124917324.95
Stage 2 0.00 0.00 0.00
Stage 3 40850949.35 40850949.35 0.00
Total 166823063.79 41905738.84 124917324.95
B1. On 31 December 2019 bad debt provision at stage 1:
Category Carrying amount
12-month expected credit
losses rate (%)
Bad debt provision Carrying value
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
by group
125972114.44 0.84 1054789.49 124917324.95
Of which: Group 1 120200301.28 0.00 0.00 120200301.28
Group 2 5771813.16 18.27 1054789.49 4717023.67
Total 125972114.44 0.84 1054789.49 124917324.95
On 31 December 2019 other receivables with bad debt provision withdrawn by group 2
Aging
31 December 2019
Carrying amount Bad debt provision Withdrawal proportion (%)
Within one year 4312272.07 77825.50 1.80
Of which:1-6 months 3444702.77 34447.03 1.00
7-12 months 867569.30 43378.47 5.00
1-2 years 244089.00 24408.90 10.00
~138~
Aging
31 December 2019
Carrying amount Bad debt provision Withdrawal proportion (%)
2-3 years 525794.00 262897.00 50.00
Over 3 years 689658.09 689658.09 100.00
Total 5771813.16 1054789.49 18.27
B2. As of 31 December 2019 bad debt provision at stage 3:
Category Carrying amount
12-month expected credit
losses rate (%)
Bad debt provision Carrying value
Bad debt provision withdrawn
separately
40850949.35 100.00 40850949.35 0.00
Bad debt provision withdrawn
by group
0.00 0.00 0.00 0.00
Of which: Group 1 0.00 0.00 0.00 0.00
Group 2 0.00 0.00 0.00 0.00
Total 40850949.35 100.00 40850949.35 0.00
On 31 December 2019 other receivables with bad debt provision withdrawn separately:
Name
31 December 2019
Carrying amount Bad debt provision
Withdrawal
proportion
(%)
Withdrawal reason
Hengxin Securities Co. Ltd.
29010449.35 29010449.35 100.00
The enterprise enters the
bankruptcy liquidation
procedure
Jianqiao Securities Co. Ltd.
11840500.00 11840500.00 100.00
The enterprise enters the
bankruptcy liquidation
procedure
Total 40850949.35 40850949.35 -- --
④Changes of bad debt provision during the Reporting Period
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Reversal or
recovery
Write-off
Bad debt provision withdrawn
separately
40850949.35
0.00 0.00 0.00
40850949.35
~139~
Category 31 December 2019
Changes in the Reporting Period
30 June 2020
Withdrawal
Reversal or
recovery
Write-off
Bad debt provision withdrawn by
group
1054789.49
0.00
399623.25
0.00
655166.24
Total 41905738.84 0.00 399623.25 0.00 41506115.59
⑤On 30 June 2020 top five ending balance by entity
Nature Balance at 30 June 2020 Aging
Proportion of
the balance to
the total other
receivables (%)
Bad debt
provision
No. 1
Related party within the
scope of consolidation
89300433.13 Within 1 year 54.95 0.00
No. 2
Security Investment 29010449.35 Over 3 years 17.85 29010449.35
No. 3
Related party within the
scope of consolidation
27950553.93 Within 1 year 17.20 0.00
No. 4
Security Investment 11840500.00 Over 3 years 7.29 11840500.00
No. 5
Related party within the
scope of consolidation
464811.00 Within 1 year 0.29 0.00
Total -- 158566747.41 -- 97.58 40850949.35
3. Long-term Equity Investments
Item
30 June 2020 31 December 2019
Carrying amount
Depreciation
reserve
Carrying value Carrying amount
Depreciation
reserve
Carrying value
Investment in
subsidiaries
1148213665.32 0.00 1148213665.32 1148213665.32 0.00 1148213665.32
Total 1148213665.32 0.00 1148213665.32 1148213665.32 0.00 1148213665.32
(1) Investments in subsidiaries
Investees 31 December 2019
Increase
during the
Reporting
Period
Decrease
during the
Reporting
Period
30 June 2020
Impairment
provision
during the
Reporting
Period
Provision for
impairment at
30 June 2020
Bozhou Gujing Sales Co. 68949286.89 0.00 0.00 68949286.89 0.00 0.00
~140~
Investees 31 December 2019
Increase
during the
Reporting
Period
Decrease
during the
Reporting
Period
30 June 2020
Impairment
provision
during the
Reporting
Period
Provision for
impairment at
30 June 2020
Ltd.
Anhui Longrui Glass Co. Ltd. 85267453.06 0.00 0.00 85267453.06 0.00 0.00
Shanghai Gujing Jinhao Hotel
Management Co. Ltd.
49906854.63 0.00 0.00 49906854.63 0.00 0.00
BozhouGujing Hotel Co. Ltd. 648646.80 0.00 0.00 648646.80 0.00 0.00
Anhui Ruisiweier Technology
Co. Ltd.
40000000.00 0.00 0.00 40000000.00 0.00 0.00
Anhui Baiweilu Liquor Co.
Ltd.
30000000.00 0.00 0.00 30000000.00 0.00 0.00
Anhui Yuanqing
Environmental Protection Co.
Ltd.
16000000.00 0.00 0.00 16000000.00 0.00 0.00
Anhui Gujing Yunshang
E-commerce Co. Ltd.
5000000.00 0.00 0.00 5000000.00 0.00 0.00
Anhui Zhenrui Construction
Engineering Co. Ltd.
10000000.00 0.00 0.00 10000000.00 0.00 0.00
Yellow Crane Tower
Distillery Co. Ltd.
816000000.00 0.00 0.00 816000000.00 0.00 0.00
Anhui Jinyunnlai Cultural
Media Co. Ltd.
15000000.00 0.00 0.00 15000000.00 0.00 0.00
Bozhou Gujing Waste
Recycling Co. Ltd.
1441423.94 0.00 0.00 1441423.94 0.00 0.00
Anhui RunanXinke Testing
Technology Co. Ltd.
10000000.00 0.00 0.00 10000000.00 0.00 0.00
Total 1148213665.32 0.00 0.00 1148213665.32 0.00 0.00
4. Operating Revenue and Cost of Sales
~141~
Item
Reporting Period Same period of last year
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 3264418953.05 1298189995.07 3104047962.07 1254351553.67
Other operations 32698219.44 18869268.55 40634501.51 23567023.24
Total 3297117172.49 1317059263.62 3144682463.58 1277918576.91
5. Investment Income
Item Reporting Period Same period of last year
Gains on disposal of available-for-sale financial assets
Investment income from trading financial assets during the holding
period
Other investment income 12434590.21 31883868.76
Total 12434590.21 31883868.76
XV. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Item Amount Note
Gains/losses on the disposal of non-current
assets
-2218309.96
Tax rebates reductions or exemptions due to
approval beyond authority or the lack of
official approval documents
Government grants recognized in the Current
Period except for those acquired in the
ordinary course of business or granted at
certain quotas or amounts according to the
government’s unified standards
14980731.46
Capital occupation charges on non-financial
enterprises that are recorded into current
gains and losses
Gains due to that the investment costs for the
Company to obtain subsidiaries associates
and joint ventures are lower than the
enjoyable fair value of the identifiable net
assets of the investees when making the
investments
Gain/loss on non-monetary asset swap
Gain/loss on entrusting others with
~142~
investments or asset management
Asset impairment provisions due to acts of
God such as natural disasters
Gains and losses from debt restructuring
Expenses on business reorganization such as
expenses on staff arrangements integration
etc.Gain/loss on the part over the fair value due
to transactions with distinctly unfair prices
Current net gains and losses of subsidiaries
acquired in business combination under the
same control from period-begin to
combination date
Profit and loss from contingencies irrelative
to the normal business operations of
company
Gain/loss from change of fair value of
trading financial assets and liabilities and
derivative financia l assets and liabilities and
investment gains from disposal of trading
financial assets and liabilities and derivative
financial assets and liabilities and
investment in other debt obligations other
than valid hedging related to the Company’s
common businesses
14943442.93
Depreciation reserves returns of receivables
and contract assets with separate
depreciation test
Gain/loss on entrustment loans
Gain/loss on change of the fair value of
investing real estate of which the subsequent
measurement is carried out adopting the fair
value method
Effect on current gains/losses when a one-off
adjustment is made to current gains/losses
according to requirements of taxation
accounting and other relevant laws and
regulations
Custody fee income when entrusted with
operation
~143~
Other non-operating income and expense
other than the above
-1408695.54
Project confirmed with the definition of
non-recurring gains and losses
Less: Income tax effects 7739708.20
Non-controlling interests effects 1539724.85
Total 17017735.84 --
2. Return on Net Assets and Earnings Per Share
Profit as of Reporting Period
Weighted average ROE
(%)
EPS (Yuan/share)
EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
Company
10.84
2.04 2.04
Net profit attributable to ordinary shareholders of the
Company after deduction of non-recurring profit and
loss
10.66 2.00 2.00
