金融界首页>行情中心>古井贡B>个股公告> 正文

-

-
(-%)
当前价  
当前价  
当前价  

个股公告正文

古井贡B:2013年年度报告(英文版)

日期:2014-04-18附件下载

                     2013 Annual Report of Anhui Gujing Distillery Company LimitedANHUI GUJING DISTILLERY COMPANY LIMITED
            2013 Annual Report
                April 2014
                                                    2013 Annual Report of Anhui Gujing Distillery Company Limited
        Section I. Important Reminders, Catalogue & ExplanationThe Board of Directors, the Supervisory Committee, directors, supervisors and senior managementstaff of Anhui Gujing Distillery Company Limited (hereinafter referred to as “the Company”)warrant that this report is factual, accurate and complete without any false record, misleadingstatement or material omission. And they shall be jointly and severally liable for that.All directors attended the board session for reviewing this report.The Company’s profit distribution preplan upon review and approval of this board session: Basedon the total shares of the Company as at 31 Dec. 2013, a cash dividend of RMB 3.50 (tax included)will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and nocapital reserve will be turned into share capital.Yu Lin, company principal, Ye Changqing, chief of the accounting work, and Zhu Jiafeng, chief ofthe accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed inthis report is factual, accurate and complete.This report involves futures plans and some other forward-looking statements, which shall not beconsidered as virtual promises to investors. Investors are kindly reminded to pay attention topossible risks.
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                  CatalogueSection I. Important Reminders, Catalogue & Explanation ........................................ 2Section II. Company Profile ....................................................................................... 6Section III. Accounting & Financial Indicator Highlights........................................... 9Section IV. Report of the Board of Directors ............................................................ 12V. Significant Events ................................................................................................ 31Section VI. Changes in Share Capital and Particulars about Shareholders ................ 36Section VII. Particulars about Directors, Supervisors, Senior Executives andEmployees of the Company ..................................................................................... 42Section VIII. Corporate Governance ........................................................................ 51Section IX Internal Control ...................................................................................... 55Section X. Financial report ....................................................................................... 57Section XI. Documents Available for Reference ..................................................... 166
                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
                                       Explanation
                                Refers
                   Term                                                 Contents
                                  to
                                Refers
    Company, the Company, Gu Jing            Anhui Gujing Distillery Company Limited
                                  to
                                Refers
    Group, the Group                         Anhui Gujing Distillery Company Limited (consolidated)
                                  to
                                Refers
    Gujing Group                             Anhui Gujing Group Co., Ltd.
                                  to
                                                2013 Annual Report of Anhui Gujing Distillery Company Limited
                              Reminder of Major Risks1. We have disclosed in this report the major risk factors that may prevent us from fulfillingour future development strategies and operating goals. Please refer to the possible risks in theoutlook of the future development of the Company in the report given by the 6th Board ofDirectors.2. China Securities Journal, Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn aredesignated by the Company as the media for information disclosure. All information of theCompany shall be subject to what is disclosed by the Company on the said media. AndInvestors are kindly reminded to pay attention to possible investment risks.3. This report is prepared in both Chinese and English. Should there be any understandingdiscrepancy between the two versions, the Chinese version shall prevail.
                                                                    2013 Annual Report of Anhui Gujing Distillery Company Limited
                                            Section II. Company ProfileI. Company information
    Stock abbreviation                 GJGJ, GJGB                            Stock code                 000596, 200596
    Stock exchange listed with         Shenzhen Stock ExchangeChinese name of the Company 安徽古井贡酒股份有限公司Abbr. of the Chinese name of
                                   古井the CompanyEnglish name of the Company
                                   ANHUI GUJING          DISTILLERY COMPANY LIMITED(if any)Abbr. of the English name of
                                   GU JINGthe Company (if any)Legal representative of the
                                   Yu LinCompany
    Registered address                 Gujing Town, Bozhou City, Anhui ProvincePostal code for the registered
                                   236820address
    Office address                     Gujing Town, Bozhou City, Anhui ProvincePostal code for the office
                                   236820address
    Internet   website     of    the
                                   http://www.gujing.comCompany
    Email address                      gjzqb@gujing.com.cnII. Contact us
                                                           Company Secretary                Securities Affairs Representative
    Name                                          Ye Changqing                             Ma Junwei
                                              Gujing Town, Bozhou City, Anhui          Gujing Town, Bozhou City, AnhuiAddress
                                              Province                                 Province
    Tel.                                          (0558)5712231                          (0558)5710057
    Fax                                           (0558)5317706                          (0558)5317706
    E-mail                                        ycq@gujing.com.cn                        gjzqb@gujing.com.cn
                                                                       2013 Annual Report of Anhui Gujing Distillery Company LimitedIII. About information disclosure and where this report is placedNewspapers designated by the Company for
                                                        China Securities Journal, Securities Times, Ta Kung Pao (HK)information disclosureInternet website designated by CSRC for
                                                        http://www.cninfo.com.cndisclosing this report
    Where this report is placed                             Company Secretary OfficeIV. Change of the registered information
                                                                                              Registration code of
                           Registration date      Registration place   Business license No.                          Organizational code
                                                                                                    taxation
                                                 Industrial &
                                                 Commercial
    Initial registration     30 May 1996             Administration        14897271-1             341600151940008        15194000-8
                                                 Bureau of Anhui
                                                 Province
                                                 Industrial &
                                                 CommercialAt the end of the
                         9 Jul. 2012             Administration        340000400001632        341600151940008        15194000-8reporting period
                                                 Bureau of Anhui
                                                 ProvinceChanges of the main business since listing
                                                 Unchanged(if any)Changes of the controlling shareholder (if
                                                 Unchangedany)V. Other informationThe CPAs firm hired by the Company:
    Name                                   Ruihua Certified Public Accountants LLP
                                       5-11 F, West Tower, China Overseas Property Plaza, Building No. 7, Courtyard No. 8, XiOffice address
                                       Binhe Road, Yong Ding Men, Dong Cheng District, Beijing, China
    Signing accountants                    Yang Ganlin, Zhang LipingSponsor engaged by the Company to conduct sustained supervision during the reporting period√ Applicable □ Inapplicable
              Name                             Office address              Sponsor representative        Consistent supervision period
                                   43/F, Metropolitan Plaza,
    GF Securities Co., Ltd.            183-187 Tianhe North Rd.,           He Xiaoshe, Yan Peng             15 Aug. 2011-31 Dec. 2013
                                   Tianhe District, Guangzhou,
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
                                Guangdong Province, ChinaFinancial consultant engaged by the Company to conduct sustained supervision during the reporting period□ Applicable √ Inapplicable
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limited
               Section III. Accounting & Financial Indicator HighlightsI. Major accounting data and financial indicatorsDoes the Company adjust retrospectively or restate accounting data of previous years due to change of theaccounting policy or correction of any accounting error?□ Yes √ No
                                                                                             Increase or decrease of
                                               2013                      2012                this year over last year         2011
                                                                                                       (%)
    Operating revenues (RMB Yuan)               4,580,575,654.71         4,197,057,315.26                         9.14%        3,307,979,236.00
    Net    profit        attributable   to
    shareholders    of     the   Company          622,004,915.79           725,589,286.31                        -14.28%         566,390,286.36(RMB Yuan)
    Net     profit    attributable toshareholders of the Company after
                                              593,950,787.12           711,934,788.75                        -16.57%         553,567,092.68extraordinary gains and losses(RMB Yuan)Net cash flows from operating
                                              638,255,355.31         1,086,867,364.46                        -41.28%         625,901,467.35activities (RMB Yuan)
    Basic EPS (RMB Yuan/share)                               1.24                         1.44                   -13.89%                    2.34
    Diluted EPS (RMB Yuan/share)                             1.24                         1.44                   -13.89%                    2.34
    Weighted average ROE (%)                              17.47%                     23.8%                        -6.33%                 31.65%
                                                                                             Increase or decrease of
                                         As at 31 Dec. 2013      As at 31 Dec. 2012          this year-end than last    As at 31 Dec. 2011
                                                                                                  year-end (%)
    Total assets (RMB Yuan)                     5,816,934,562.27         5,308,127,471.04                         9.59%        4,241,819,550.30
    Net    assets        attributable   to
    shareholders    of     the   Company        3,742,756,257.05         3,375,488,108.64                        10.88%        2,761,115,284.45(RMB Yuan)II. Differences between accounting data under domestic and overseas accounting standards1. Differences of net profit and net assets disclosed in financial reports prepared under international andChinese accounting standards
                                                                                                                             Unit: RMB Yuan
                                     Net profit attributable to shareholders of the          Net assets attributable to shareholders of the
                                                      Company                                                    Company
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limited
                                          2013                       2012                  Closing amount        Opening amountAccording to Chinese
                                         622,004,915.79              725,589,286.31          3,742,756,257.05       3,375,488,108.64accounting standardsItems and amounts adjusted according to international accounting standards2. Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards
                                                                                                                     Unit: RMB Yuan
                                    Net profit attributable to shareholders of the    Net assets attributable to shareholders of the
                                                     Company                                             Company
                                          2013                       2012                  Closing amount        Opening amountAccording to Chinese
                                         622,004,915.79              725,589,286.31          3,742,756,257.05       3,375,488,108.64accounting standardsItems and amounts adjusted according to overseas accounting standards3. Explain reasons for the differences between accounting data under domestic and overseas accountingstandardsIII. Items and amounts of extraordinary gains and losses
                                                                                                                     Unit: RMB Yuan
                     Item                             2013                   2012                 2011                 NoteGains/losses on the disposal of non-current
    assets (including the offset part of the asset       -1,394,990.98            465,158.50           186,246.05impairment provisions)Government grants recognized in the currentperiod, except for those acquired in the
    ordinary course of business or granted at             6,438,091.17          5,871,645.90         4,111,902.86certain quotas or amounts according to thegovernment’s unified standardsGains and losses on change in fair valuefrom tradable financial assets and tradablefinancial liabilities, as well as investmentincome from disposal of tradable financial
                                                     10,050,415.19assets and tradable financial liabilities andfinancial assets available for sales except foreffective hedging related with normalbusinesses of the CompanyImpairment provision reversal of accounts
                                                                                                 4,106,508.26receivable on which the impairment test is
                                                                    2013 Annual Report of Anhui Gujing Distillery Company Limitedcarried out separatelyNon-operating income and expense other
                                                    22,311,989.53        12,188,577.39         9,993,800.13than the above
    Less: Income tax effects                             9,351,376.24         4,870,884.23         5,575,263.62
    Total                                               28,054,128.67        13,654,497.56        12,823,193.68             --Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains andLosses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable √ Inapplicable
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited
                         Section IV. Report of the Board of DirectorsI. OverviewIn 2013, in strict compliance with the powers bestowed by the Company Law, the Securities Law and theCompany’s Articles of Association, the Board of Directors of the Company strictly executed all resolutions of theShareholders’ General Meeting, firmly adhered to the operating objectives and studied and judged the situationwith a clear and calm mind to make adaptive adjustments in response to changes in the industry and markets.Externally, we allocated resources on a rational basis, focused on markets, solidified the market basis and furtherenlarged the market share. Internally, we carried through the Lean Thinking, deepened cost control andimplemented the outstanding performance management, which helped steadily improve the operation &management capability.II. Main business analysis1. OverviewFor 2013, the Company achieved operating revenues of RMB 4,580,575,700, up 9.14% over last year; total profitof RMB 851,911,200, down 12.39% over last year; net profit of RMB 622,004,900, down 14.28% over last year;EPS of RMB 1.24/share, down 13.89% over last year; and net operating cash flows of RMB 638,255,400, down41.28% over last year.Review the progress of the previously disclosed development strategy and business plan in the reporting period:General operation of the Company in the reporting period(I) continuously concentrated on market construction, constantly strengthen internal operation and improvedbrand influence and promoted sales growth of the Company.During the reporting period, the Company based on the guidelines of “Persistence and Holding Fast, Mending andPromotion, Practicing Hard of Internal Work, Operating in Efficiency”, focused on the Anhui market andsignificant market construction out the province, made the sales channel constantly go deep, the vendor Relationsconstantly strengthened, the customer structure constantly optimized and the brand influence constantly reinforcedthrough the constant optimization of the organization team, which ensured the healthy improvement of the marketas well as the whole sales continued improving. In 2013, the Company had the honor to get the laurel of “Top 10of the Most International Influence China Wines of 2013 Annual Huazun Cup” with the brand value whichreached up to 26.165 billion and the products of the Company also be chosen as the sole assigned white spirit ofthe 2013 Snooker (ChinaHaikou) Casio World Open.(II) Promoted deeply of the outstanding performance management model, realized the nation-wide lean and thesteadily improved the products quality which had the honor to get the “Provincial Government Quality Prize”.For years, the Company constantly carried out the lean management thought through the deeply promotion of theoutstanding performance management model and recently had appeared the rudiment of lean enterprise prototypewith whole system, whole flow and whole coverage. In addition, the Company blended the lean thought in thequality management and started from each pass of the quality management which realized the risk screening,
                                                                  2013 Annual Report of Anhui Gujing Distillery Company Limitedmonitoring, improvement and enhancing of the products quality. In 2013, the task of the QC circle of theCompany acquired 1 national award, 3 provincial prizes and 7 industry awards and the lean training dojo ofGujing had officially completed and put into use as well as the Company became the enterprise which was thefirst to received the provincial government quality prize in the Anhui liquor industry.(III) Took the “Cost Control Year” as an opportunity, deeply developed the cost control activities, promoted andconstructed the long-term mechanism of cost control through dig out the connotative growth potential.In 2013, the Company took the “Cost Control Year” as an opportunity, combined with its actual situation,persisted in the principle of the whole staff participation and overall control, formulated the specific cost controlplan and target involved with the links such as management flow, products R&D, purchase, production, sales,human resources and investment and financing embraced the income increasing and expenditure reducing as wellas the cost decreasing and benefit increasing, each control unit executed well-aligned rectification and implementcontrasted with the established plan; after experienced the three phases promotion and execution of launching andenacting the plan and target, implementation and inspection, consolidation and enhancing, appeared a series ofexcellent cost control plan and gained favorable economic benefits, which laid a favorable foundation forpromoting the construction of the long-term mechanism of cost control.(IV) Reinforced the enterprise cultural construction, deeply developed the practice activity of theme education andconstantly strengthen the organization vitality through constantly behaving excelling in competition.During the reporting period, the enterprise cultural construction of the Company made steady headway, and the“Gujing Brewing Site” including the Northern Wei Dynasty Gujing, the Song Dynasty Gujing, Ming and QingDynasties Pits Communities and Ming and Qing Dynasties Brewing Site were among the list of the 7th NationalKey Cultural Relics Protection Units issued by the State Cultural Relics Bureau. The Company became theenterprise with most national historical relics, largest volume and longest history in the national liquor industrythat further enriched the properties of Gujing and enhanced the brand value of the Company; the Company alsocarried out the practice activity of theme education of “Making an Example Diligent, Incorruptible and Practical,Being a Pioneer with magnificent Gujing” that deepened the construction of excelling in competition which arosethe enthusiasm of the general staffs and caused favorable demonstration driving effect as well as reinforced theenterprise vitality.State the reasons why the Company’s actual business performance is 20% lower or higher than the earning forecast for the reportingperiod which has been publicly disclosed earlier:□ Applicable √ Inapplicable2. RevenuesExplanation:N/AAre the Company’s goods selling revenue higher than the service revenue?√ Yes □ No
         Industry                    Items                 2013 (ton)                2012 (ton)                YoY +/- (%)
                           Sales volume                            64,427.29                 54,529.63                    18.15%
    White spirit making        Output                                  66,309.20                 52,770.09                    25.66%
                           Stock                                     3,915.07                  2,033.16                   92.56%Reasons for any over-30% YoY movement of the data above:
                                                                       2013 Annual Report of Anhui Gujing Distillery Company Limited√ Applicable □ InapplicableThe inventory up to 31 Dec. 2013 increased 92.56% over last year and mainly because the Company stocked upfor the Spring Festival.Major orders held:□ Applicable √ InapplicableSignificant change or adjustment of the Company’s products or services during the reporting period:□ Applicable √ InapplicableMajor customers:
    Total sales to the top 5 customers (RMB Yuan)                                                                             1,020,515,628.42Ratio of the total sales to the top 5 customers to the
                                                                                                                                  22.28%annual total sales (%)Information about the top 5 customers:√ Applicable □ Inapplicable
    Serial No.                   Name of customer                      Sales (RMB Yuan)                Proportion in annual total sales
    1       Distributor A                                                      381,157,853.15                                      8.32%
    2       Distributor B                                                      310,785,023.86                                      6.78%
    3       Distributor C                                                      183,949,960.60                                      4.02%
    4       Distributor D                                                       77,680,272.68                                        1.7%
    5       Distributor E                                                       66,942,518.13                                      1.46%
    Total                             --                                    1,020,515,628.42                                       22.28%3. CostsClassified by industry:
                                                                                                                           Unit: RMB Yuan
                                                         2013                                    2012
                                                                Proportion in                           Proportion in
    Industry                 Item                                                                                         YoY +/- (%)
                                                Amount       operating costs           Amount       operating costs
                                                                    (%)                                     (%)
    Food making                               1,285,722,076.73             95.35% 1,138,829,249.65                    95.4%            -0.05%Classified by product:
                                                                                                                           Unit: RMB Yuan
                                                         2013                                    2012
                                                                Proportion in                           Proportion in
    Product                  Item                                                                                         YoY +/- (%)
                                                Amount       operating costs           Amount       operating costs
                                                                    (%)                                     (%)
    Distilled      spirit
                                          1,285,722,076.73             95.35% 1,138,829,249.65                    95.4%            -0.05%products
                                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
    Hotel revenue                             38,970,804.86            2.89%     39,515,901.20             3.31%            -0.42%
    Others                                    23,680,998.95            1.76%     15,382,786.48             1.29%             0.47%Explanation:NaughtMajor suppliersInformation about the top 5 suppliers:√ Applicable □ Inapplicable
                                                          Procurement amount (RMB       Proportion in annual total procurement
    Serial No.                 Name of supplier
                                                                    Yuan)                            amount (%)
      1        Supplier A                                              155,458,894.06                                    15.5%
      2        Supplier B                                               68,640,132.39                                    6.85%
      3        Supplier C                                               55,470,136.50                                    5.53%
      4        Supplier D                                               40,730,561.09                                    4.06%
      5        Supplier E                                               36,454,884.31                                    3.64%
    Total                          --                                  356,754,608.35                                   35.58%4. ExpenseFinancial expenses stood at RMB -47,011,977.06, down 46.84%, which was mainly because the raised funds wascontinued put into use and part of the self-owned funds was used for purchasing break-even floating incomewealth management products, with the principal used of fixed time deposit of bank and the corresponding interestrevenue decreased.5. R&D expensesThe R&D expenses in the reporting period stood at RMB 182,407,000, accounting for 4.87% of the net assets and3.98% of the operating revenues.6. Cash flows
                                                                                                                Unit: RMB Yuan
               Item                            2013                          2012                           YoY +/-Subtotal of cash inflows from
                                               5,681,044,259.07                5,409,722,258.53                          5.02%operating activitiesSubtotal of cash outflows from
                                               5,042,788,903.76                4,322,854,894.07                         16.65%operating activitiesNet cash flows from operating
                                                 638,255,355.31                1,086,867,364.46                        -41.28%activities
    Subtotal of cash inflows from                    948,305,978.93                     308,940.95                    306,853.80%
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limitedinvesting activitiesSubtotal of cash outflows from
                                                  2,437,480,975.37                     646,248,607.55                              277.17%investing activitiesNet cash flows from investing
                                                 -1,489,174,996.44                    -645,939,666.60                             -130.54%activitiesSubtotal of cash inflows from
                                                    251,800,000.00                     113,310,000.00                              122.22%financing activitiesSubtotal of cash outflows from
                                                   -251,800,000.00                    -113,310,000.00                             -122.22%financing activitiesNet cash flows from financing
                                                 -1,102,719,641.13                     327,617,860.76                             -436.59%activitiesReasons for any over-30% YoY movement of the data above:√ Applicable □ Inapplicable1. Net cash flows from operating activities stood at RMB 638,255,355.31 during the reporting period, down by41.28% over the same period of last year, which was mainly because the Company purchased products andaccepted labor service.2. Net cash flows from investing activities stood at RMB -1,489,174,996.44 during the reporting period, down by130.54% over the same period of last year, which was mainly because the Company invested in the financeproducts.3. Net cash flows from financing activities stood at RMB -251,800,000.00 during the reporting period, down by122.22% over the same period of last year, which was mainly because the Company distributed the bonus anddividend.Reasons for a big difference between the operating cash flows and the net profit:□ Applicable √ InapplicableIII. Breakdown of main business
                                                                                                                            Unit: RMB Yuan
                                                                                Increase/decrease                         Increase/decrease
                                                                                                     Increase/decrease
                          Operating                         Gross profit rate     of operating                             of gross profit
                                          Operating costs                                            of operating costs
                          revenues                                (%)           revenues over last                        rate over last year
                                                                                                     over last year (%)
                                                                                    year (%)                                     (%)Classified by industry:
    Manufacture            4,540,933,231.07 1,348,373,880.54             70.31%                9.45%               12.95%                -0.92%Classified by product:
    Distilled     spirit
                       4,438,676,469.44 1,285,722,076.73             71.03%                9.72%                12.9%                -0.82%products
    Hotel revenue             72,754,798.07     38,970,804.86            46.44%                2.11%               -1.38%                  1.89%
    Other                     29,501,963.56     23,680,998.95            19.73%               -7.52%               53.94%               -32.05%
                                                                         2013 Annual Report of Anhui Gujing Distillery Company LimitedClassified by region:
    Domestic           4,538,849,950.31 1,347,836,127.33 70.30%                      9.54%               13.05%                 -0.92%
    Overseas           2,083,280.76          537,753.21          74.19%              -59.91%             -63.45%                2.50%IV. Asset and liability analysis1. Major changes of asset items
                                                                                                                              Unit: RMB Yuan
                            As at 31 Dec. 2013                     As at 31 Dec. 2012
                                         Proportion in                                             Proportion
                                                                                 Proportion in                     Explain any major change
                          Amount          total assets          Amount                             change (%)
                                                                                total assets (%)
                                             (%)
    Monetary funds      1,381,930,710.96           23.76%        2,609,650,352.09            49.16%           -25.4%Accounts
                          6,374,469.99           0.11%           7,887,007.25              0.15%          -0.04%receivable
    Inventories         1,075,033,137.30           18.48%          782,399,498.85            14.74%           3.74%Investing real
                         35,188,079.66             0.6%         31,451,269.49              0.59%          0.01%estate
    Fixed assets        1,266,481,752.59           21.77%          783,740,205.15            14.76%           7.01%Construction in
                        377,338,939.54           6.49%         423,672,281.54              7.98%          -1.49%process2. Significant changes in liabilitiesNaught3. Assets and liabilities measured at fair value
                                                                                                                              Unit: RMB Yuan
                                   Gain/loss from Accumulative                               Amount
                                                                          Impairment                        Amount sold in       Closing
                    Opening        change in fair change in fair
       Item                                                              provision for     purchased in
                    balance         value in this value recorded                                              this period        balance
                                                                           this period
                                        year        into equity                             this periodFinancial assetsFinancial assets
    available for      27,991,376.84                         -3,915,689.84                                                         24,075,687.00saleWhether the measurement attributes of the main assets of the Company had significant changes during the reporting period or not?□ Yes √ No
                                                                          2013 Annual Report of Anhui Gujing Distillery Company LimitedV. Analysis to the core competitivenessDuring the reporting period, there was no significant change of the core competitiveness of the Company.VI. Analysis to the investment situation1. Particulars about external equity investment(1) Particulars about external investmentNaught(2) Particulars about holding equity of financial enterprisesNaught(3) Particulars about securities investment
                                                 Number Sharehold                     Sharehold               Gain/loss
                                      Initial                             Number                  Closing
                                                 of shares      ing                      ing                     for
                        Abbreviat investmen                               of shares                 book
    Variety of Code of                                held at    percentag                percentag               reporting Accounti Source of
                         ion of       t cost                               held at                 value
    securities securities                            period-be      e at                    e at                   period      ng title     stock
                        securities    (RMB                                period-en                (RMB
                                                    gin      period-be                period-en                (RMB
                                      Yuan)                               d (share)                Yuan)
                                                  (share)     gin (%)                  d (%)                   Yuan)
                                                                                                                          Available
                                     25,199,99                                                    24,075,68               -for-sale   Subscript
    Stock      002374       LPGF                     1,938,461      1.82% 3,489,229          1.82%
                                          3.00                                                         7.00               financial ion
                                                                                                                          assets
                                     25,199,99                                                    24,075,68
    Total                                            1,938,461       --       3,489,229      --                        0.00       --          --
                                          3.00                                                         7.00Explanation on holding equity of other listed companies□ Applicable √ Inapplicable2. Entrusted financial management, derivatives investment and entrustment loans(1) Entrusted financial managementNaught(2) Derivatives investment
                                                                                                            Unit: RMB Ten Thousand Yuan
    Operator Relation Related-p Type of              Initial    Start date    Ending     Opening Impairme Closing Proportio               Actual
                                                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
                                   arty     derivative investmen                    date    investmen       nt      investmen n of the       gain/loss
                              transactio investmen t amount                                  t amount provision t amount        closing         in
                              n or not             t                                                     (if any)              investmen reporting
                                                                                                                               t amount       period
                                                                                                                                 in the
                                                                                                                               Company
                                                                                                                               ’s closing
                                                                                                                               net assets
                                            Reverse
                                            repurchas
                                                                         2 Sep.
                              No            e of                     0                                                  8000      2.14%        366.62
                                                                         2013
                                            national
                                            debt
    Total                                                                0       --      --              0                  8000      2.14%        366.62
    Capital source for derivative investment                    Self-owned funds of the Company
    Cases involving lawsuit (if applicable)                     NaughtDisclosure date of the board announcement
    approving      the       wealth           management 30 Aug. 2013entrustment (if any)Analysis on risks and control measures ofderivative products held in the reporting
                                                            The Company had controlled the relevant risks strictly according to the Derivativesperiod (including but not limited to market
                                                            Investment Management System.risk, liquidity risk, credit risk, operationrisk, law risk, etc.)Changes of market prices or fair values inthe reporting period of the investedderivatives. And the analysis on the fair
                                                            Naughtvalue of the derivatives should include thespecific use methods and the relevantassumptions and parameters.Whether significant changes occurred tothe Company’s accounting policy and
    specific      accounting            principles         of Naught
    derivatives     in      the     reporting          periodcompared to the previous reporting period
                                                            Based on the sustainable development of the main business and the sufficient free idle
                                                            money, the Company increased the profits through investing in the reasonable financial
    Specific      opinion         from        independent derivative instruments, which was in favor of improving the service efficiency of thedirectors on the Company’s derivatives idle funds; in order to reduce the investment risks of the financial derivative
    investment and risk control                                 instruments, the Company had set up corresponding supervision mechanism for the
                                                            financial derivative instrument business and formulated reasonable accounting policy
                                                            as well as specific principles of financial accounting; the derivative Investment
                                                                          2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                 business developed separately took national debts as mortgage object, which was met
                                                 with the cautious and steady risks management principle and the interest of the
                                                 Company and shareholders. Therefore, agreed the Company to develop the derivative
                                                 Investment business of reverse repurchase of national debt not more than the limit of
                                                 RMB 0.3 billion.(3) Entrustment loansNaught3. Particulars about the use of raised funds(1) Overview of the use of raised funds
                                                                                                             Unit: RMB Ten Thousand Yuan
    Total amount of raised funds                                                                                                         122,749.95Total amount of raised funds input in the reporting
                                                                                                                                        34,152.30period
    Total amount of raised funds accumulatively input                                                                                       94,556.72
                                          Explanation on overview of the use of raised fundsThe Company’s raised funds were used stably as scheduled, without any changes.(2) Projects promised to be invested with raised funds
                                                                                                             Unit: RMB Ten Thousand Yuan
                                                                                                      Date
                           Project                                                      Investme
                                                                            Accumul                 when the                             Material
    Projects invested with   changed                                                          nt                    Profit
                                       Raised     Investment Input in         ative                  project                Reach the change in
    raised capital as      or not                                                       progress                generated
                                       capital        after         the     input up                 reaches                expected          the
    promised and         (includin                                                     up to the                in the
                                      input as adjustment reporting          to the                    the                  profit or     project
    investments with            g                                                        period-en               reporting
                                      promised        (1)        year       period-en               expected                   not       feasibility
    over-raised capital     partially                                                     d (%)(3)                 period
                                                                              d (2)                  usable                                or not
                          changed)                                                      =(2)/(1)
                                                                                                    conditionProjects invested with raised capital as promisedTechnological
    Transform on the                                                                                    April 30,
    Brewage of                No            13,500 12,194.42 1,999.74 9,302.24               76.28%                                          No
    High-quality Base                                                                                   2014WineConstruction of Base
    Wine Blending &                                                                                     April 30,
                          No            68,600 65,921.06 28,913.59 51,281.35             77.79%                                          No
    Filling Centre and                                                                                  2014Ancillary FacilitiesConstruction of
                          No            27,500         27,500    3,141.8 16,948.07       61.63% April 30,                                NoMarketing Network
                                                                        2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                                                                2014
                                                                                                             Cannot     Cannot
                                                                                                                  be          be
                                                                                                Decembe
    Construction of Brand                                                                                       calculate calculate
                      No                       17,000    17,000     97.17 17,025.06 100.15% r 31,                                  No
    Promotion                                                                                                          d          d
                                                                                                2012
                                                                                                            separatel separatel
                                                                                                                   y          ySubtotal of promised
                                   --         126,600 122,615.48 34,152.3 94,556.72      --         --             0     --             --investment projectsInvestments of over-raised capital
    Total                              --         126,600 122,615.48 34,152.3 94,556.72      --         --             0     --             --Reason for failing to High quality base liquor production technological transformation project and base liquor storage, filling
    reach         scheduled centers and facilities construction project fails to meet the schedule, the main reason is related equipmentprogress or projected and facilities are debugging.income (explain one Marketing network construction project fails to meet the schedule, the main reason is the municipalproject by one project) engineering construction leads to experience center cannot be planned construction.
    Explanation               onsignificant changes in Naughtfeasibility of projects
    Amount,     usage     and Inapplicable
    usage     progress        ofover-raised capital
    Change of the                  Inapplicableimplementationlocation of any raisedfunds investmentproject
    Adjustment of the              Inapplicableimplementationmethod of any raisedfunds investmentproject
                               Applicable
                               In accordance with the explanation of the Particulars on the Private Issuance of A-share of Anhui Gujing
                               Distillery Co., Ltd. and the Listing Announcement, “Before the raised proceeds being in place, the CompanyAdvanced input and
                               can use the self-raised proceeds to input preliminarily in accordance with the actual progress of raisedexchange of any raised
                               proceeds investment projects; after the raised proceeds being in place, the Company can use the raisedfunds investment
                               proceeds to replace the self-raised proceeds preliminarily input”. And the Proposal on Using the Raisedproject
                               Proceeds to Replace the Self-raised Proceeds Preliminarily Input to the Raised Proceeds Investment Projects
                               was reviewed and approved at the 7 th Session of the 6th Board of Directors, which agreed to use the raised
                               proceeds to replace the self-raised proceeds of RMB 27,058,143.42 preliminarily input to the raised
                                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
                             proceeds investment projects. The above funds replacement was completed on 6 Jan. 2012.
    Idle raised capital for      Inapplicabletemporarilysupplementing workingcapital
    Outstanding raised           Inapplicablefunds in projectimplementation andreasonsUsage and whereabouts
                             Deposited in the special account for raised proceedsof unused raise capitalProblems found in the
                             The actual used raised funds of the brand promotion project of the Company was of RMB 170,250, 600 thatusage and disclosure
                             exceeded RMB 250,600 investment of the original plan, which was the interest of the special account of theaffairs of raised capital
                             raised funds.and other situations(3) Change of projects invested with raised fundsNaught4. Analysis to main subsidiaries and stock-participating companiesMain subsidiaries and stock-participating companies
                                                                                                                          Unit: RMB Yuan
                                                  Main
    Company        Company                                      Registered                                Operating    Operating
                                   Industry   products/ser                  Total assets Net assets                                 Net profit
      name         variety                                        capital                              revenues      profit
                                                  vices
                                              Wholesales
                                              of distilled
    Bozhou                                        spirit,
    Gujing                         Business       construction 84,860,000. 1,253,140,9 156,265,783 4,437,393,2 689,673,402 522,992,729
               Subsidiary
    Sales Co.,                     trading        materials,     00                   06.37          .43        04.68             .19           .91
    Ltd                                           feeds and
                                              assistant
                                              materials
    Bozhou                                        Transportati
    Gujing                         Transportati on, sales        6,950,000.0 3,587,200.6 2,475,117.0
               Subsidiary                                                                                    0.00         0.00            0.00
    Transportati                   on             and repair     0                        0           2
    on Co., Ltd                                   service
    Bozhou                                        Manufactur
                               Manufactur                    86,660,300. 164,916,322 131,912,710 207,304,367 28,046,498. 21,438,909.
    Gujing         Subsidiary                     e and sale
                               e                             00                     .99          .53          .96             69            32
    Glass Co.,                                    of glass
                                                                    2013 Annual Report of Anhui Gujing Distillery Company Limited
    Ltd                                     products
                                        Collect andBozhou
                                        sale ofGujing
                          Waste         recycled        1,000,000.0 1,641,317.2 1,328,428.9 7,268,446.3
    Waste        Subsidiary                                                                                    32,742.29   12,904.66
                          recycle       glass bottle, 0                       7           2           4Reclamatio
                                        glass,n Co., Ltd
                                        wastebasket
                                        Production,
                                        publish,
                                        design and
                                        proxy of adsAnhui
                                        in China;Jinyunlai
                          Ads           ceremony        2,000,000.0 91,730,441. 3,883,307.2 433,122,447 6,277,603.8 4,685,918.1
    Culture &    Subsidiary
                          marketing     service for     0                   49            1         .44           5           7Media Co.,
                                        conferencesLtd.
                                        as well as
                                        sales of
                                        gifts in arts
                                        and crafts
                                        Administrat
                                        ive license
                                        items:
                                        Naught;
                                        General
                                        operating
                                        items:
    Bozhou                                  providing
                          Production
    Gujing                                  packing for 30,000,000. 40,887,564. 30,904,458. 10,111,658. 6,084,770.4 4,535,206.9
             Subsidiary   and
    Packing                                 Gujing          00                  20          89           04           8           9
                          manufacture
    Co., Ltd.                               Brand,
                                        serials wine,
                                        fruit and
                                        vegetable
                                        wine, health
                                        wine of
                                        Gujing
                                        Brand
    Shanghai                                Production,
    Hongbang                                publish,
    Culture                   Ads           design and      5,000,000.0 5,000,000.0 5,000,000.0 1,086,074.5
             Subsidiary                                                                                   543,193.07 401,346.14
    Communica                 marketing     proxy of ads 0                        0           0           9
    tion Co.,                               in China;
    Ltd.                                    ceremony
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limited
                                        service for
                                        conferences
                                        and sales of
                                        craft gifts
                                        Hotel
                                        managemen
                                        t (Except
                                        for catering
                                        managemen
                                        t、Except for
                                        hotel
                                        operation);
                                        Self-owned
    Shanghai                                housing
    Gujing                                  rental;
                           Hotel
    Jinhao                                  establish       54,000,000. 238,365,793 88,269,207. 70,406,145. 5,440,931.5 4,879,223.8
              Subsidiary   managemen
    Hotel                                   branch. (If     00                      .43         86            56             3           5
                           t
    Managemen                               the
    t Co., Ltd.                             enterprise
                                        operation
                                        involves the
                                        administrati
                                        ve
                                        licensing, it
                                        shall
                                        operate
                                        based on the
                                        license).
                                        Accommod
                                        ation and
                                        parking
                                        services;
    Bozhou                                  lunch
                           Hotel
    Gujing                                  processing,                                               3,776,562.0
              Subsidiary   managemen                    628,000.00       676,763.94 -177,230.56                 -176,312.03 -190,168.16
    Hotel Co.,                              sales of                                                           0
                           t
    Ltd.                                    alcohol and
                                        tobacco and
                                        sales of
                                        daily
                                        commodity
    Anhui Ruisi                             Research
                           Technology                   50,000,000.0 50,000,000.0 50,000,000.0
    Weier         Subsidiary                and                                                             0.00          0.00         0.00
                           research                     0            0                0
    Technology                              extension
                                                                    2013 Annual Report of Anhui Gujing Distillery Company Limited
    Co Ltd                                  engineering
                                        and
                                        technology;
                                        information
                                        systems
                                        planning,
                                        design;
                                        computer
                                        software
                                        and
                                        hardware,
                                        network
                                        communicat
                                        ion system
                                        design,
                                        developmen
                                        t, sales of
                                        enterprise
                                        managemen
                                        t consulting
                                        and
                                        services.
                                        (business
                                        involving
                                        administrati
                                        ve license
                                        or
                                        qualificatio
                                        n, by
                                        license or
                                        qualificatio
                                        n certificate
                                        managemen
                                        t)Explanation on main subsidiaries and stock-participating companiesParticulars about subsidiaries gained and disposed during the reporting period√ Applicable □ Inapplicable
                                     Purpose for acquiring or        Way of acquiring or disposing     Influence on the overall
       Name of subsidiary         disposing the subsidiary in the    the subsidiary in the reporting   production and business
                                         reporting period                        period                     performanceAnhui Swisse Will Science &
                                 Company development needs          EstablishmentTechnology Co., Ltd.5. Particulars about significant projects invested by non-raised funds
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                                                                        Unit: RMB Ten Thousand Yuan
                                                                        Accumulative
                                               Amount of input
                        Total planed amount                          amount         actually
    Name of project                            during the reporting                             Progress of project   Gains from project
                           of investment                             input    as    of   the
                                                     period
                                                                     period-endRelocation andTechnologicalTransform on the
    Brewage of Base                   80,000.00              32,419.58                 67,671.00                85.00%Wine and thesupporting facilitiesprojects
           Total                  80,000.00              32,419.58                 67,671.00           --                    --Notes: The investment project was belonging to the sub-project of the liquor industrial park project disclosed by the Company on 29Mar. 2012.VII. Predict the operating results of Jan.-Mar. 2014Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of thenext reporting period according to prediction, as well as explanations on the reasons:□ Applicable √ InapplicableVIII. Particulars about special purpose entities controlled by the CompanyNaughtIX. Outlook of the Company’s future development(I) Industry development prospects of the Company1. From macroscopic view: the GDP of our nation grew 7.7% on Y0Y basis in 2013 which was the lowest growthin 14 years. About the overseas demand, the economy of the developed countries maintained recovery and thegrowth of the emerging economies had slow down with the global economy continuous improved on the wholeand the overseas demand probably be mild and would rise again. About the domestic demand: influenced by thedecreased of the food and beverage revenue, the consumption growth rate declined and the combat corruption anduphold integrity in 2014 was still impacted the high-end consumption, while influenced by the base effect, theoverseas demand had get milder and the estimated domestic consumption growth rate was expected to recoverycompanied with the release of the reform bonus.2. From development tendency of the industry: the “Injunction” of 2014 had gradually upgraded, the supervisioncontinued raising, with the high-end consumption suffocated and the low-end competition aggravated, as well asthe integration of the industry accelerated and the white spirits demands got further intimated among citizens;preference of other consumers transferred with the succedaneums such as red wine, beer and health care winedeveloped rapidly and the alcohol consumption continued to be diversification; recently, the circulation channel ofwhite spirit faced up with significant transform, new modes and new channels such as e-commerce, 020 and chain
                                                           2013 Annual Report of Anhui Gujing Distillery Company Limitedemerged in endlessly, the age of “Channel Delayering and Elaboration” with continuous innovation had came.3. From future development of the Company: the industry adjustment continued deepen, the innovation andtransformation speed accelerated, the operation cost of the Company continued increased, the region pioneeringadvantages continued faced with challenges and the competition risks continued enlarged.(II) Operating measures of the Company in 20141. Carry out marketing innovation and constantly improve the driving force of the Company brand.The Company will reinforce the strategy research and make precise localization and optimized layout in practiceto strengthen the control power of the market; it should fully exert the radiation effect of Bozhou and Hefei andshould promote the national process with firm strategic insight when concentrate the superior resources on doingthorough the “Three Direct Links”; it should constantly innovate and enrich the channels and products structure,should develop new consumption channels such as e-commerce in order to adjust in the emerging buyingbehaviors; should continues to the strengthen the experiential marketing activities such as “Raw WineExploration” and convey the positive energy of the Chinese spirits culture.2. Carry out excellent performance and reinforce the quality control as well as constantly strengthen the technicalstudy.Quality is the theme of an enterprise and under the background of the maturing supervision, the Company is moreneeded to ensure the products quality, abide strictly by the standard as well as to ensure the high level of theproducts inspection and the scientific research and technology; it should stick to the bottom line of the food safetystandards unwaveringly, enlarge the R&D power, develop multiple topics research and prompt the technicalequipments become R&D ability; it should positively anticipate in the 3C Plan of the Chinese Liquor of “HonestQuality, Earnest Service and trustworthy Industry”, develop project application such as Chinese Quality Award; itshould constantly improve the traditional technique and constantly enrich the products system as well as improvethe quality brand by taking advantage of the superior resources of the whole process of production.3. Rely on the “Improving Year of Human Resources” and constantly enlarge the talents value.The Company will rely on the execution of the systems such as the “Improving Year of Human Resources” andmeasures to enhance the vitality of the talents, acknowledge, management and innovation; it should truly make themutual promotion between the employees treatment and the enterprise revenue and should forge the employeetraining channels and professional growth channel with multidirectional; it should base on the optimization andthe top-level design of the system and should constantly enlarge the talents value and fully dig out the employeepotency through system, organization and process construction.4. Further promote the construction of the target cost management and control system and enhance the low costoperation ability.The Company will construct the target cost management and control system which based on the market chain andsupported by business drivers, focus on the internal and external standard, search for the differences, alert of theabnormity, predict the performance as well as strengthen the systematic low-cost operation ability of the Companyand support the transformation of the products structure so thus to prompt the better and faster development.Y2014 is also a brand-new starting point and faced with the complex market environment, the Company willcontinue to strengthen its conviction, unite and cooperate, exploit and innovate and move ahead abreast to the“Magnificent Gujing” again.
                                                                   2013 Annual Report of Anhui Gujing Distillery Company LimitedX. Explanation of the Board of Directors on “Non-standard Auditor’s Report” issued by theCPA firm for the reporting periodNaughtXI. Explanation on change of accounting policy, accounting estimates and accountingmethods as compared with the financial report in last yearNaughtXII. Explanation on the retrospective restatement for correcting the significant accountingerrors during the reporting periodNaughtXIII. Explanation on changes in the consolidated scope compared with the financial report inlast yearThe subsidiaries, special purpose entities and operating entities with control right formed by entrusted operation or lease that newlyincluded in the consolidated scope
                  Name                              Closing net assets                          Net profit in current period
    Anhui    Swisse       Will   Science   &                           50,000,000.00                                                    0.00Technology Co., Ltd.Anhui Swisse Will Science & Technology Co., Ltd. was the subsidiary gained by establishment or investment in the year.XIV. Particulars about the profit distribution and dividend policy of the CompanyFormulation, execution or adjustment of the Company’s profit distribution policy, especially the cash dividend policy, during thereporting period:√ Applicable □ InapplicableAccording to the Proposal on the Profit Distribution of 2012 of the Company approved by the 2012 Annual General Meeting on 31May 2013, the Company distributed the cash dividends to the whole shareholders of RMB 0.5 per share which amounted to RMB251,800,000.00 calculated by the issued shares amount of 503,600,000 shares.
                                           Special explanation of the cash dividend policyWhether conformed with the regulations of the Articlesof association or the requirements of the resolutions of Yesthe shareholders’ meeting:Whether the dividend standard and the proportion were
                                                           Yesdefinite and clear:Whether the relevant decision-making process and the
                                                           Yessystem were complete:
    Whether the independent director acted dutifully and       Yes
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limitedexerted the proper function:Whether the medium and small shareholders had thechances to fully express their suggestions and appeals, of Yeswhich their legal interest had gained fully protection:Whether the conditions and the process met the
    regulations and was transparent of the adjustment or         Inapplicablealtered of the cash dividend policy:The Company’s preplans on profit distribution and turning capital reserve into share capital for the recent three years (including thereporting year):1. The Company’s preplan on cash distribution in 2013 was as follows: a cash of RMB 3.5 (tax included) wasdistributed for each 10 shares, with no capital reserves turned into share capitals.2. The Company’s plan on cash distribution in 2012 was as follows: a cash of RMB 5(tax included) wasdistributed for each 10 shares, with no capital reserves turned into share capitals.3. The Company’s plan on cash distribution in 2011 was as follows: a cash of RMB 4.5(tax included) wasdistributed for each 10 shares and dispatched the equity with capital reserves which turned into 10 shares of each10 shares.Cash dividend distribution of the Company over the recent three years:
                                                                                                                          Unit: RMB Yuan
                                                                         Net profit attributable to
                                                                                                        Ratio in net profit attributable to
                                                                            shareholders of listed
                                       Amount of cash dividend                                                shareholders of listed
              Year                                                          companies under the
                                            (tax included)                                                    companies under the
                                                                      consolidated statement in the
                                                                                                             consolidated statement
                                                                                    year
    2013                                                176,260,000.00                     622,004,915.79                             28.34%
    2012                                                251,800,000.00                     725,589,286.31                               34.7%
    2011                                                113,310,000.00                     566,390,286.36                             20.01%The Company (including its subsidiaries) made profit in the reporting period and the retained profit of the Company (withoutsubsidiaries) was positive, but it did not put forward a preplan for cash dividend distribution:□ Applicable √ InapplicableXV. Pre-plan for profit allocation and turning capital reserve into share capital for thereporting period
    Bonus to every 10 shares (shares)                                                                                                        0
    Dividends     to every 10 shares (shares) (tax
                                                                                                                                       3.50included)
    Equity base of the preplan for distribution (shares)                                                                         503,600,000
    Total of cash bonus (RMB Yuan) (tax included)                                                                             176,260,000.00
    Distributable profits (RMB Yuan)                                                                                        1,589,277,915.00
    Proportion of cash bonus in the total of profit                                                                                     100%
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limiteddistribution (%)
                                                          Cash dividend policy:
             Specific explanation of preplan for profit distribution or preplan for turning capital reserve into share capitalThe Company planed to based on the total shares at the year-end of 503,600,000 shares to distribute the dividends with a cash ofRMB 3.5 (tax included) to the whole shareholders for each 10 shares which was of RMB 176,260,000 and the retained profits ofRMB1,413,017,915.00would all transfer to the next year.XVI. Social responsibilitiesFor particulars about the social responsibilities performed by the Company during the reporting period, pleaserefer to the Report on Social Responsibilities disclosed on http://www.cninfo.com.cn dated 18 Apr. 2014.Whether the listed company and its subsidiaries were belongs to the heavily polluting industries stimulated by the state department ofenvironmental protection□ Yes √ No □ InapplicableWhether there were any significant society security problems of the listed company and its subsidiaries□ Yes √ No □ InapplicableWhether had been administrative punished in the reporting period□ Yes √ No □ InapplicableXVII. Particulars about researches, visits and interviews received in this reporting periodThere was no any activity of field researches, visits and interviews received during the reporting period of the Company.
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                V. Significant EventsI. Significant lawsuit or arbitration□ Applicable √ InapplicableThere was no significant lawsuit or arbitration during the reporting period.II. Media’s queries√ Applicable □ Inapplicable
         Explanation on media’s queries                      Disclosure date                         Disclosure index
    Media report of “On 25 Sep. 2013, the single                                           For details, please refer to the clarification
    day sales of the Company’s                                                             announcement No. 2013-017 disclosed by
                                                4 Nov. 2013
    products ”surmounted RMB 0.14 billion                                                  the Company on
    which again created a new record in history                                             http://www.cninfo.com.cn.III. Occupation of the Company’s capital by the controlling shareholder and its relatedparties for non-operating purposesNaughtIV. Bankruptcy and reorganizationNaughtV. Asset transactions1. Asset acquisitionNaught2. Sale of assetsNaught3. Business combinationNaughtVI. Implementation and influence of equity incentive plan of the CompanyNaught
                                                                        2013 Annual Report of Anhui Gujing Distillery Company LimitedVII. Significant related-party transactions1. Related-party transactions concerning routine operationNaught2. Related-party transactions arising from asset acquisition or saleNaught3. Significant related-party transactions concerning joint investment in external partiesNaught4. Credits and liabilities with related partiesWas there any non-operating credit or liability with related parties?□ Yes √ No5. Other significant related-party transactionsNaughtVIII. Particulars about significant contracts and their fulfillment1. Particulars about trusteeship, contract and lease(1) TrusteeshipExplanation on the trusteeshipNaughtThe trusteeship whose profits reaching more than 10% of the total profits of the Company in the reporting period□ Applicable √ Inapplicable(2) ContractExplanation on the contractNaughtThe contract whose profits reaching more than 10% of the total profits of the Company in the reporting period□ Applicable √ Inapplicable(3) LeaseExplanation on the leaseNaughtThe lease whose profits reaching more than 10% of the total profits of the Company in the reporting period□ Applicable √ Inapplicable
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited2. GuarantyNaught(1) Violation of the external guaranteesNaught3. Other significant contractsNaught4. Other significant transactionsNaughtIX. Performance of commitments1. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in thereporting period or such commitments carried down into the reporting periodNaught2. If the Company’s assets or projects existing earnings prediction, and the reporting period is among theprediction period, it shall explain on whether the assets or projects reach the original earnings predictionand relevant reasonNaughtX. Particulars about engagement and disengagement of CPAs firmCPAs firm engaged at present
    Name of domestic CPAs firm                             Ruihua Certified Public Accountants (LLP)Remuneration of domestic CPAs firm (RMB Ten
                                                       110Thousand Yuan)Consecutive years of the audit services provided by
                                                       1domestic CPAs firmName of the certified public accountants from the
                                                       Yang Ganlin, Zhang Lipingdomestic CPAs firmReengage the CPAs firm at current period or not?√ Yes □ NoChange the CPAs firm during the audit period or not?□ Yes √ No
                                                                      2013 Annual Report of Anhui Gujing Distillery Company LimitedExecute the approval procedure to change the CPAs firm or not?√ Yes □ NoExplain in detail the change of the CPAs firm:In view of the combination of the original audit institution RSM China Certified Public Accountants and Crowe Horwath CertifiedPublic Accountants which formed into Ruihua Certified Public Accountants, in order to maintain the continuity of the Company’saudit business and guarantee the audit quality, the whole Directors agreed to engage Ruihua Certified Public Accountants as the 2013financial and internal control audit institution. See details to the Announcement on the Resolution of the 18th Session of the 6thBoard of Directors (No. 2013-013) disclosed on http://www.cninfo.com.cn on 31 Oct. 2013.Particulars on engaging the audit firm for the internal control, financial adviser or sponsor√ Applicable □ InapplicableIn view of the combination of the original audit institution RSM China Certified Public Accountants and Crowe Horwath CertifiedPublic Accountants which formed into Ruihua Certified Public Accountants, in order to maintain the continuity of the Company’saudit business and guarantee the audit quality, the whole Directors agreed to engage Ruihua Certified Public Accountants as the 2013financial and internal control audit institution. See details to the Announcement on the Resolution of the 18th Session of the 6thBoard of Directors (No. 2013-013) disclosed on http://www.cninfo.com.cn on 31 Oct. 2013.XI. Explanation of the Supervisory Committee and Independent Directors (if applicable) onthe “Non-standard Auditor’s Report” issued by the CPAs firm during the reporting periodInapplicableXII. Punishment and rectificationExplanation on rectification:InapplicableParticulars about the directors, supervisors, senior management staffs and shareholders holding over 5% shares of the Companyinvolving in illegal trading the Company’s stocks and the Company has disclose to recover the illegal income□ Applicable √ InapplicableXIII. Particulars about trading suspension and termination faced after the disclosure ofannual reportNaughtXIV. Other significant eventsNaughtXV. Significant events of subsidiaries of the CompanyNaught
                                             2013 Annual Report of Anhui Gujing Distillery Company LimitedXVI. Corporate bonds issued by the CompanyNaught
                                                                       2013 Annual Report of Anhui Gujing Distillery Company Limited
           Section VI. Changes in Share Capital and Particulars about
                                                            ShareholdersI. Changes in share capital
                                                                                                                             Unit: Share
                                 Before the change                       Increase/decrease (+, -)                 After the change
                                                                               Capitalizat
                                                           Issuance               ion of
                                             Proportion               Bonus                                                  Proportio
                                Amount                     of new                public      Others   Subtotal   Amount
                                                (%)                   shares                                                   n (%)
                                                            shares               reserve
                                                                                  fundI. Shares subject to trading
                                     900              0%                                                               900         0%moratorium
    Other domestic shares                900              0%                                                               900         0%Shares of domestic natural
                                     900              0%                                                               900         0%person
    II. Shares not subject to 503,599,1                                                                              503,599,1
                                                 100%                                                                            100%
    trading moratorium                      00                                                                              00
    1.       Ordinary     shares 383,599,1                                                                           383,599,1
                                               76.17%                                                                          76.17%
    denominated in RMB                      00                                                                              00
    2.   Domestically      listed 120,000,0                                                                          120,000,0
                                               23.83%                                                                          23.83%
    foreign shares                          00                                                                              00
                                503,600,0                                                                        503,600,0
    III. Total shares                                100%                                                                            100%
                                        00                                                                              00Reason for the changes in share capitalApproval for changes in share capital□ Applicable √ InapplicableTransfer for changes in share capitalEffects of changes in share capital on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of theCompany and other financial indexes over the last year and last period□ Applicable √ InapplicableOther contents that the Company considers necessary or required by the securities regulatory authorities to disclose□ Applicable √ Inapplicable
                                                                         2013 Annual Report of Anhui Gujing Distillery Company LimitedII. Issuance and listing of securities1. Securities issued in the previous three yearsName of security
                                        Issuing price (or          Number of                           Number approved    Ending date of
    and its derivative      Issuing date                                                   Listing date
                                            interest rate)          issuance                              for listing         trade
    securityStockRMB ordinary
                     15 Jul. 2011      75                             16,800,000 3 Aug. 2011                 16,800,000sharesConvertible company bonds, bonds with attached warrant, company bonds, etc.WarrantExplanation on securities issuance over the past three years:The non-public stock offering plan for 2011 was reviewed and approved at the 26 th Session of the 5th Board ofDirectors held on 26 Nov. 2010 and later at the 1 st Special Shareholders’ General Meeting for 2011 held on 14 Jan.2011. The offering application documents were accepted by CSRC on 29 Jan. 2011, reviewed and approved by thePublic Offering Review Committee of CSRC on 20 May 2011 and then approved by CSRC (ZJXK [2011] No.943) on 15 Jun. 2011. The Company accomplished the issuance-related work of the private offering project on 15Jul. 2011. The Company issued a total of 16.80 million shares of RMB ordinary shares (A-shares) to 6 specificinvestors. Reanda Certified Public Accountants verified the raised capital upon its arrival and issued the CapitalVerification Report Reanda-Yan-Zi [2011] No. 1065.2. Change of the total shares, the shareholder structure, the asset structure and the liability structureNaught3. Existing shares held by employeesNaughtIII. Shareholders and actual controller1. Total number of shareholders and their shareholding
                                                                                                                                Unit: Share
                                                                   Total number of shareholders on the fifth trading
    Total number of shareholders at the                      40,772                                                                    40,533
                                                                   day
             Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 5 of them
                                                         Total     Increase/d Number                        Pledged or frozen shares
                                       Shareholdi                                          Number of
                                                        shares      ecrease       of
    Name of             Nature of           ng                                             tradable
                                                        held at    during the non-trada
    shareholder          shareholder    percentage                                            shares     Status of shares Number of shares
                                                             the   reporting ble shares
                                            (%)                                               held
                                                      period-en     period       held
                                                        2013 Annual Report of Anhui Gujing Distillery Company Limited
                                               dANHUI GUJING
    GROUP           State-owned                 271,404,0                  271,404,0
                                   53.89%                                          Pledged              114,000,000
    COMPANY         corporation                        22                         22LIMITEDAGREEDBUYBACK
                Domestic
    SPECIAL                                     15,000,00                  15,000,00
                non-stated-owned   2.98%
    ACCOUNT OF                                         0                           0
                corporationGF SECURITIESCO., LTD.
    KGI ASIA        Foreign
                                   1.63% 8,184,894                     8,184,894
    LIMITED         corporationUBS
                Foreign
    (LUXEMBOUR                         1.47% 7,386,523                     7,386,523
                corporationG) S.A.CHINA
    MERCHANTS       State-owned
                                   1.06% 5,357,732                     5,357,732
    SECURITIES      corporation(HK) CO., LTDGREENWOODS
                Foreign
    CHINA ALPHA                        0.99% 4,972,503                     4,972,503
                corporationMASTER FUNDGUOTAIJUNAN
                Foreign
    SECURITIES(H                       0.93% 4,708,153                     4,708,153
                corporationONGKONG)LIMITEDGOLDEN
                Foreign
    CHINA                              0.73% 3,678,234                     3,678,234
                corporationMASTER FUNDNATIONALSOCIAL
    SECURITY        Other              0.58% 2,899,575                     2,899,575FUNDPORTFOLIO 103CCB—BOSERATHEME
    INDUSTRY        Other              0.49% 2,490,533                     2,490,533STOCKSECURITIES
                                                                        2013 Annual Report of Anhui Gujing Distillery Company LimitedINVESTMENTFUNDS
    Strategic     investor    or     generalcorporation becoming a top ten
                                            Inapplicableshareholder due to placing of newshares (if any)
                                            Among the shareholders above, no affiliated relationship exists between the Company’s
                                            controlling shareholder—Anhui Gujing Group Company Limited—and other shareholders,
    Explanation        on          associated
                                            nor they are parties acting in concert as defined in the Administrative Measures onrelationship or persons acting in
                                            Information Disclosure of Changes in Shareholding of Listed Companies. As for otherconcert among the above-mentioned
                                            shareholders, the Company does not know whether they are related parties or whether theyshareholders:
                                            belong to parties acting in concert as defined in the Administrative Measures on Information
                                            Disclosure of Changes in Shareholding of Listed Companies.
                                            Shares held by the top ten non-restricted share holders
                                                                                                                  Type of shares
        Name of shareholder                 Number of non-restricted shares held at the period-end
                                                                                                               Type           Number
    ANHUI GUJING GROUP                                                                                    Renminbi
                                                                                       271,404,022                            271,404,022
    COMPANY LIMITED                                                                                       ordinary sharesAGREED BUYBACK SPECIAL
                                                                                                      Renminbi
    ACCOUNT OF GF SECURITIES                                                                15,000,000                                 15,000,000
                                                                                                      ordinary sharesCO., LTD.
                                                                                                      Domestically
    KGI ASIA LIMITED                                                                         8,184,894 listed foreign                   8,184,894
                                                                                                      shares
                                                                                                      Domestically
    UBS (LUXEMBOURG) S.A.                                                                    7,386,523 listed foreign                   7,386,523
                                                                                                      shares
                                                                                                      Domestically
    CHINA                    MERCHANTS
                                                                                         5,357,732 listed foreign                   5,357,732SECURITIES (HK) CO., LTD
                                                                                                      shares
                                                                                                      DomesticallyGREENWOODS CHINA ALPHA
                                                                                         4,972,503 listed foreign                   4,972,503MASTER FUND
                                                                                                      shares
    GUOTAI JUNAN                                                                                          Domestically
    SECURITIES(HONGKONG)                                                                     4,708,153 listed foreign                   4,708,153
    LIMITED                                                                                               shares
                                                                                                      Domestically
    GOLDEN CHINA MASTER FUND                                                                 3,678,234 listed foreign                   3,678,234
                                                                                                      shares
    National Social Security Fund 103                                                        2,899,575 Renminbi                         2,899,575
                                                                          2013 Annual Report of Anhui Gujing Distillery Company Limited
    Group                                                                                                  ordinary shares
    CCB—Bosera Theme Industry                                                                             Renminbi
                                                                                           2,490,533                              2,490,533
    Stock Securities Investment Funds                                                                      ordinary shares
                                              Among the shareholders above, no affiliated relationship exists between the Company’s
    Explanation           on         associated
                                              controlling shareholder—Anhui Gujing Group Company Limited—and other shareholders,relationship or/and persons acting in
                                              nor they are parties acting in concert as defined in the Administrative Measures onconcert among the top ten tradable
                                              Information Disclosure of Changes in Shareholding of Listed Companies. As for othershareholders and between the top ten
                                              shareholders, the Company does not know whether they are related parties or whether theytradable shareholders and the top ten
                                              belong to parties acting in concert as defined in the Administrative Measures on Informationshareholders
                                              Disclosure of Changes in Shareholding of Listed Companies.
    Explanation      on        the    top    10shareholders participating in the
                                              Inapplicablemargin trading business (if any) (seenote 4)Did any shareholder of the Company carry out an agreed buy-back in the reporting period?√ Yes □ NoThe shareholder of the agreed buyback special account of GF Securities Co., Ltd. was Puning Xinhong Industrial Investment Co., Ltd.The number of shares and the proportion involved in the agreed buy-tack at the beginning of the reporting period were the same withthose at the end of the reporting period, i.e. 15,000,000 shares, a stake of 2.98%.2. Particulars about the controlling shareholderCorporation
                                          Legal
                                                       Date of
       Name of controlling          representative
                                                     establishm     Organization code       Registered capital           Business scope
           shareholder                  / company
                                                         ent
                                        principal
                                                                                                                   Making beverage,
    ANHUI GUJING GROUP                                   16 Jan.
                                    Yu Lin                        151947437              353,380,000.00            construction materials
    COMPANY LIMITED                                      1995
                                                                                                                   and plastic productsOperating results, financialsituation, cash flow and
                                    Inapplicablefuture development strategy,etc.Shares held by thecontrolling shareholder in
    other listed companies by           Inapplicableholding or shareholdingduring the reporting periodChange of the controlling shareholder during the reporting period□ Applicable √ Inapplicable
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limited3. Particulars about the actual controllerCorporation
                                      Legal
                                                    Date of
                                  representative
    Name of the actual controller                      establishm   Organizational code    Registered capital    Main business scope
                                   / person in
                                                      ent
                                     chargeThe People’s Government ofBozhouOperating results, financialsituation, cash flow and
                                  Inapplicablefuture development strategy,etc.Shares held by thecontrolling shareholder in
    other listed companies by         Inapplicableholding or shareholdingduring the reporting periodChange of the actual controller during the reporting period□ Applicable √ InapplicableThe ownership and controlling relationship between the actual controller of the Company and the Company is detailed as follows:
                                                   The People’s Government of Bozhou
                                                                         60%
                                                   Anhui Gujing Group Company Limited
                                                                         53.89%
                                                      Anhui Gujing Distillery Co., Ltd.The actual controller controls the Company via trust or other ways of asset management□ Applicable √ Inapplicable4. Other corporate shareholders with a shareholding ratio over 10%NaughtIV. Particulars on shareholding increase scheme during the reporting period proposed orimplemented by the shareholders and act-in-concert personsNaughtExplanation of other situations
                                                              2013 Annual Report of Anhui Gujing Distillery Company LimitedNaught
         Section VII. Particulars about Directors, Supervisors, Senior
                        Executives and Employees of the CompanyI. Changes in shareholding of directors, supervisors and senior executives
                                                                                Shares at Increase of Decrease
                                                                                                                   Shares at
                                                       Beginning     Ending        the       shares    of shares
                       Incumbent                                                                                   the end of
    Name        Title                Gender   Age          date of     date of   beginning during this during this
                         or not                                                                                    this year
                                                       office term office term of the year   period     period
                                                                                                                    (share)
                                                                                 (share)     (share)    (share)
          Chairman
          of the                                       15 April    16 April
    YU LIN                 Incumbent Male             60
          Board of                                     2011        2014
          Directors
          General
    LIANG                                                  15 April    16 April
          Manager,     Incumbent Male             49
    JINHUI                                                 2011        2014
          Director
          Director,
    ZHOU      Executive                                    15 April    16 April
                       Incumbent Male             40
    QINGWU General                                         2011        2014
          Manager
          Vice
          General
          Manager,
          SecretaryYE
          of the                                       15 April    16 April
    CHANGQ                 Incumbent Male             40
          Board of                                     2011        2014ING
          Directors,
          Chief
          Accountan
          t
    WANG                                                   15 April    16 April
          Director     Incumbent Male             49
    FENG                                                   2011        2014
    YANG      Director     Incumbent Male             46 15 April      16 April
                                                                        2013 Annual Report of Anhui Gujing Distillery Company Limited
    XIAOFAN                                                        2011         2014
    WANG        Independe                                          15 April     16 April
                          Incumbent Male                  52
    RUIHUA nt Director                                             2011         2014
    WU          Independe                                          15 April     16 April
                          Incumbent Male                  52
    CISHENG nt Director                                            2011         2014
    LIU         Independe                                          15 April     16 April
                          Incumbent Male                  70
    LIBIN       nt Director                                        2011         2014
            Chairman
            of the
                                                               15 April     16 April
    XU PENG Supervisor Incumbent Male                         44
                                                               2011         2014
            y
            Committee
    NIU                                                            15 April     16 April
            Supervisor Incumbent Male                     43
    HAITING                                                        2011         2014FU
                                                               15 April     16 April
    QIANGXI Supervisor Incumbent Male                         44
                                                               2011         2014NHU
                                                               15 April     16 April
    WENCHA Supervisor Incumbent Male                          48
                                                               2011         2014OLU
                                                               15 April     16 April
    DUICAN Supervisor Incumbent Male                          34
                                                               2011         2014G
            General
    ZONG                                                           15 April     16 April
            Manage        Incumbent Male                  41
    ZHAOJI                                                         2011         2014
            Assistant
    ZHAI        General
                                                               15 April     16 April
    LIANGD Manager            Incumbent Male                  43                                 1,200                            1,200
                                                               2011         2014
    ONG         Assistant
            General
                                                               15 April     16 April
    FANG JI     Manager       Incumbent Male                  47
                                                               2011         2014
            Assistant
            General
    ZHANG                                                          15 April     16 April
            Manager       Incumbent Male                  45
    LIHONG                                                         2011         2014
            Assistant
    Total        --          --          --          --            --            --          1,200          0          0      1,200II. Particulars about the employmentThe main work experience of current directors, supervisors and senior executives over the past five years(I) Mr. Yu Lin, 60 year-old, is Economic Engineer who is postgraduate degree holder, incumbent Director,Chairman of the Board of the Company, Chairman of the Board of Anhui Gujing Group Co., Ltd. and Vice
                                                           2013 Annual Report of Anhui Gujing Distillery Company LimitedChairman of CPPCC of Bozhou ; had ever acted as worker, management of Chemical Fertilizer Plant of BozhouCounty, Chief of Corporate Management of Ministry of Agriculture and Economy of Bozhou City, Chief ofCorporate Bureau of County of Bozhou City, Deputy Secretary of Bozhou Municipal Government, Chief ofMinority Development Bureau of Bozhou City, Director of Ministry of Economy of Bozhou City, Secretary ofParty Leadership Group, Vice Chairman of Political Consultative Conference of Bozhou City.(II) Mr. Liang Jinhui, 49 year-old, is Political Engineer who has educational experience of graduate student,incumbent Director and General Manager of the Company. He ever took posts of Secretary of InformationResearch Office of the Company, Editor in Chief of Gujing Newspaper Office, Chief of Propaganda andEducation Section, Vice Manager of Market Development Department of the company, Supervisor of the SecondSupervisory Committee, Manager of Market Development Department, Chief of Market Research andSupervision Center, Supervisor of Third Supervisory Committee and Director of the Fourth and Fifth Board ofDirectors(III) Mr. Zhou Qingwu, 40 year-old, is Economist who has educational experience of undergraduate college. Atpresent, he is Director and Executive Deputy General Manager of the Company, Vice Secretary of CPC of GujingGroup. He had ever acted as Clerk and Deputy Sector Chief of Quality Control Section of BusinessAdministration Department of the Company, Director of Quality Control Center of Assets ManagementDepartment, Vice Manager and Manager of Quality Control Department, and Chairman and General Manager ofBozhou Gujing Packing Material Co., Ltd.; Director of the 5 th Board of Directors and Vice General Manager.(IV) Mr. Ye Changqing, 40 year-old, holder of master degree and International Certified Internal Auditor.Incumbent Director, Chief Accountant and acting Secretary of Board of Directors of the company; started to workin July 1997, had ever acted Chief Auditor of Audit Department, Vice Manager of Audit Department and ViceSupervisor and Supervisor of Auditing& Supervision Department; and Supervisor of the Fourth SupervisoryCommittee; Director and Secretary of the 5th Board of Directors, Chief Accountant.(V) Mr. Wang Feng, 49 year-old, is Senior Economic Engineer who is postgraduate degree holder, incumbentDirector, Deputy Secretary of CPC of Gujing Group. He had ever acted as Secretary of the League Committee ofBozhou Gujing Distillery; Deputy Director of Economy Development Department; Deputy Director of EnterprisesManagement Department; Manager of Assets Management Department of Gujing Group; Director, Secretary ofthe board, Vice General Manager, and General Manager of the Second Board of Directors; Director and Chairmanof the Third Board of Directors, and Director as well as Chairman of the Fourth Board of Directors; Director ofthe 5th Board of Directors.(VI) Mr. Yang Xiaofan, 46 year-old, holder of master degree. At present, he is Vice President of Gujing Group. Hebegan to work in 1987, ever took posts of middle school teacher, journalist of newspaper office, propagandist ofdistrict office, teacher of normal school, director of editors’ board of magazine; in Jul. 1993, he began to work inGujing, he successively acted as Director of the Editors’ Board of Gujing News, Chief of Propaganda, Manager ofPropaganda and Information Department, Vice President and General Manager of Anhui Gujing Real EstatesGroup Co., Ltd., Director and Assistant Chairman, Vice President of Gujing Group; Director of the 5th Board ofDirectors.(VII) Mr. Wang Ruihua, 52 year-old, doctor degree in accounting, Incumbent Independent Director of theCompany, Director of MBA Education Centre of Central University of Finance and Economics, Dean of School ofBusiness of Central University of Finance and Economics, tutor of PHD student, Independent Director ofZHONG KE SAN HUAN, DATANG TELECOM TECHNOLOGY CO., LTD. and Sinolink Securities Co Ltd. Heever took post of Deputy Director of the Graduate Student Department of Central University of Finance andEconomics. (VIII) Mr. Wu Cisheng, 52 year-old, who has Ph.D of Management Study, and is Professor ofManagement School, Dean of Business Administration Department of Hefei University of Technology,
                                                       2013 Annual Report of Anhui Gujing Distillery Company LimitedSuperintendent of Business Administration Research Institute, has gained Master’s Degree of IndustryEngineering in 1990, Ph. D of Business Administration in 2004; and had presided three national social sciencefund projects, project topics of National Ministry of Science & Technology and National Bureau of Statisticssuccessively; had issued more than 60 theses on magazines in domestic and abroad successively, and published 6works; and had gained provincial and ministerial advance prize of science and technology. He is incumbentindependent director of the Company.(IX) Mr. Liu Libin, 70 year-old, is incumbent Vice Chairman and Chief Secretary of China AdvertisingAssociation and President and Chief Editor of International Advertising. He is the Doctor’s Tutor ofCommunication University of China, Visiting Professor of many universities, Advisor of many brands,Superintendent of IAI International Advertising Institute, Chief Editor of Chinese Advertisement Works Almanacand Chief Editor of Chinese Marketing Creative Works Almanac. And he has acted as member of a reviewcommittee of various arts and advertisement exhibitions all around the country. And now he is incumbent theIndependent Director of the Company.(X) Mr. Xu Peng, 44 year-old, has educational experience of undergraduate college. He is incumbent ChiefSupervisor of the Company, Chief Inspector of Internal Audit Centre. And he had ever acted as Deputy Directorand Director of Finance Second Office of Finance Department of the Company, Manager of Finance Departmentof Anhui Laobada Co., Ltd., and Vice Manager and Manager of Finance Department of the Company, DeputyGeneral Manager and Chief Supervisor of Market Supervision Department of Bozhou Gujing Sales Company.(XI) Mr. Niu Haiting, 43 year-old, has educational experience of undergraduate college. He is incumbentSupervisor of the Company, Member of Party Committee, Chairman of the Labor Union and member ofCommission for Disciplinary Inspection. He had ever acted as Personnel Administrator, Vice Chief Supervisor ofHuman Resource Department of Anhui Gujing Group, Director of the Office Party and Chief Inspector of SafetyManagement Center.(XII) Mr. Fu Qiangxin, 44year-old, bachelor degree, accountant, incumbent Supervisor and Vice Secretary ofDiscipline Inspection Commission of Audit. He ever took posts of accountant of Bozhou Gujing Hotel, Managerof Finance of Bozhou Gujing Integrated Services Company and Bozhou Gujing Import and Export TradeCompany, clerk of Planning and Finance Department of Gujing Group, Chief Inspector of Internal Audit Center.(XIII) Mr. Hu Wenchao, is 48 year-old, Registered Senior Human Resource Specialist who has educationalexperience of undergraduate college, National Trainer Grade 2 and one of Administrators recommended by ChinaHuman Resource Development Association. Now he is incumbent Supervisor of the Company, Chief of HRCenter of Anhui Gujing Group Co., Ltd. He had ever acted as Labor Allocation Clerk and Deputy GM ofPersonnel Department, Vice Manager of HR Department of Anhui Gujing Group Co., Ltd., Vice Manager of HRDepartment of Anhui Gujing Distillery Company Limited.(XIV) Mr. Lu Duicang, 34 year-old, has educational experience of undergraduate college. Now, he is incumbentSupervisor of the Company and General Supervisor of Finance Department of Anhui Gujing Group Co., Ltd. Hehad ever acted as Accountant, Vice Director and Director of Finance Department First Center of the Company,Factory Manager of Liquor Filling Branch Factory and Manager of Finished Products Department.(XV) Mr. Zong Zhaoji, Male, 41-year-old, engineer, achieved the diploma of junior college. He is now acting asGeneral Manager Assistant of the Company, General Manager of Bozhou Gujing Sales Co., Ltd. He once acted asclerk of Production Engineering Department, Workshop Director of Jiufang Pharmaceuticals Company of GujingGroup, Salesman of Bozhou Gujing Sales Co., Ltd., Executive, Manager of Marketing Department, RegionalManager and Marketing Director.(XVI)Mr. Zhai Liangdong, Male, 43-year-old, achieved the Master degree. He is now acting as General ManagerAssistant of the Company, Chief Inspector of Administrative Center. He once acted as clerk of Labor Union
                                                               2013 Annual Report of Anhui Gujing Distillery Company LimitedOffice of Gujing Group; clerk, Secretary, Deputy Director, Director of Gujing Group Office; Director of corporateoffice.(XVII) Mr. Fang Ji, Male, 47-year-old, is an account, economic engineer and engineer. He is now acting asGeneral Manager Assistant of the Company, Chief Inspector of Brewing Management Center. He once acted asprogrammer of corporate computer room, headman of processing equipment team of Gujing Group, FactoryManager of Packaging Materials Factory, Manager of Production Material Control Department, Manager ofPower Department, Chief Inspector of Production Management Center.(XVIII) Mr. Zhang Lihong, Male, 45-year-old, economic engineering, achieved the Bachelor degree. He is nowacting as General Manager Assistant of the Company, Chief of HR Center. He once acted as clerk of BozhouGujing Sales Co., Ltd., Secretary of Corporate Operation Department, Secretary of Market DevelopmentDepartment, Vice General Manager of Bozhou Gujing Sales Co., Ltd., Director of Comprehensive Office, andChief Inspector of Comprehensive Service Center.Employment in shareholders’ entities√ Applicable □ Non-Applicable
                                                                                                            Whether receiving
                                                        Post held in Beginning date
                                                                                         Ending date of          subsidies and
    Name              Name of shareholders’ entity   shareholders’    of the office
                                                                                         the office term    remuneration from
                                                           entity              term
                                                                                                           shareholders’ entities
                                                       Chairman of
    YU LIN          Anhui Gujing Group Co., Ltd.           the Board of 2010 April                             Yes
                                                       Directors
                                                       Deputy
                                                       Chairman of
                                                       Party
                                                       Committee,
    WANG FENG Anhui Gujing Group Co., Ltd.                                  2010 August                        Yes
                                                       Chairman of
                                                       Discipline
                                                       Inspection
                                                       Committee
    YANG                                                   Vice             2009
                Anhui Gujing Group Co., Ltd.                                                               Yes
    XIAOFAN                                                President        November
                                                       Deputy
    ZHOU                                                   Chairman of 2009
                Anhui Gujing Group Co., Ltd.                                                               No
    QINGWU                                                 Party            November
                                                       Committee
                                                       Vice
                                                       Chairman of
    FU                                                     Discipline
                Anhui Gujing Group Co., Ltd.                            2010 August                        Yes
    QIANGXIN                                               Inspection
                                                       Committee,
                                                       Chief
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                              Inspector of
                                                              Audit
                                                              Inspection
                                                              Center
    HU                                                            Chief of HR
                 Anhui Gujing Group Co., Ltd.                                 2012 June                            Yes
    WENCHAO                                                       Center
                                                              Chief
                                                              Inspector of
                                                                              2008
    LU DUICANG Anhui Gujing Group Co., Ltd.                       Financial                                            Yes
                                                                              December
                                                              Management
                                                              CenterExplanation
    about            The above-mentioned personnel, though they take posts in shareholders’ entities, comply with the relevantemployment in employment requirements of Company Law, Securities Law and never were disciplined by CSRC, other relevant
    shareholders’   departments and the Stock Exchange.entitiesEmployment in other entities□ Applicable √ Non-ApplicableIII. Remuneration of directors, supervisors and senior executivesDecision-making procedure, basis for determination and actual payment of remuneration of directors, supervisors and seniorexecutives(I) Decision-making procedure for the remuneration of directors, supervisors and senior managementThe Remuneration & Appraisal Committee under the Board of Directors is in charge of drafting appraisal index ofsenior management and checking accomplishment of annual index.(II) Basis for determining the remuneration of directors, supervisors and senior managementRemuneration of directors, supervisors and senior management is calculated by appraisal index drafted inyear-begin and weight. Financial index is on base of Auditor’s Report issued by certified public accountant, andcomprehensive appraisal index is appraised and discussed by the Remuneration & Appraisal Committee under theBoard of Directors.(III) Actual payment of the remuneration of directors, supervisors and senior managementPayment of the remuneration of directors, supervisors and senior management is with certain amount in advancemonthly and distributed annually according to check.Particulars about remuneration of directors, supervisors and senior executives in the reporting period
                                                                                                     Unit: RMB Ten Thousand Yuan
                                                                                                         Total amount         Actual
                                                                                     Total amount
                                                                                                     of payment got payment got at
                                                                       Incumbent or of payment got
    Name             Title           Gender            Age                                                from the          the end of
                                                                           not            from the
                                                                                                         shareholders’      reporting
                                                                                          Company
                                                                                                            entities          period
                 Chairman of
    YU LIN           the Board of     Male                          60 Incumbent                                           100             100
                 Directors
                                       2013 Annual Report of Anhui Gujing Distillery Company Limited
             GeneralLIANG
             Manager,       Male    49 Incumbent               120.7                         120.7JINHUI
             Director
             Director,
    ZHOU         Executive
                            Male    40 Incumbent               91.97                         91.97
    QINGWU       General
             Manager
             Vice General
             Manager,
             Secretary ofYE
             the Board of   Male    40 Incumbent               80.21                         80.21CHANGQING
             Directors,
             Chief
             Accountant
    WANG FENG Director          Male    49 Incumbent                              93.41          93.41YANG
             Director       Male    46 Incumbent                              93.41          93.41XIAOFAN
    WANG         Independent
                            Male    52 Incumbent                 7.5                           7.5
    RUIHUA       Director
             Independent
    WU CISHENG                  Male    52 Incumbent                 7.5                           7.5
             Director
             Independent
    LIU LIBIN                   Male    70 Incumbent                 7.5                           7.5
             Director
             Chairman of
    XU PENG      the Supervisory Male   44 Incumbent               77.32                         77.32
             Committee
    NIU HAITING Supervisor      Male    43 Incumbent               28.67          26.84          55.51FU
             Supervisor     Male    44 Incumbent                              55.51          55.51QIANGXINHU
             Supervisor     Male    48 Incumbent               26.14          19.68          45.82WENCHAO
    LU DUICANG Supervisor       Male    34 Incumbent                              55.51          55.51
             GeneralZONG
             Manage         Male    41 Incumbent               98.17                         98.17ZHAOJI
             Assistant
             GeneralZHAI
             Manager        Male    43 Incumbent               72.57                         72.57LIANGDONG
             Assistant
             General
    FANG JI                     Male    47 Incumbent               76.26                         76.26
             Manager
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limited
                  Assistant
                  GeneralZHANG
                  Manager          Male                          45 Incumbent                 77.32                             77.32LIHONG
                  Assistant
    Total               --               --             --                 --               771.83           444.36        1,216.19Particulars about stock incentive granted to directors, supervisors and senior executives of the Company in the reporting period.□ Applicable √ Non-ApplicableIV. Particulars about resignation and dismissal of directors, supervisors and senior executivesNoneV. Particulars about changes in personnel of core technical team and crucial technical team(excluding directors, supervisors and senior executives) in the reporting periodNoneVI. EmployeesUp to 31 Dec. 2013, the total number of current employees in the Company is 5,9881. Particulars about professional categories
    Professional category              Number of                  Proportion
                               personnel
    Production staff              4,086                       75.11%
    Sales staff                   570                         10.48%
    Technical staff               278                         5.11%
    Financial staff               77                          1.42%
    Administrative                429                         7.89%staff
    Total                         5,440                       100.00%
                              Professional categories
                                                                  Production staff
                                                                  Sales staff
                                                                  Technical staff
                                                                  Financial staff
                                                                  Administrative staff2. Level of education
    Level               of        Number (person)          proportioneducation
    High school and                  4,305.00              79.14%below
                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited
    Junior college           574.00         10.55%
    Bachelor degree          544.00         10.00%
    Master degree or          17.00         0.31%above
    Total                  5,440.00         100.00%
                   Level of education
                                          High school and below
                                          Junior college
                                          Bachelor degree
                                          Master degree or above
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited
                                Section VIII. Corporate GovernanceI. Basic information about corporate governanceSince foundation, the Company constantly perfects corporate governance structure and standardize itsmanagement strictly in accordance with the Company Law, Securities Law, Standard for Governance of ListedCompanies, Guide Opinion on Setting up Independent Directors Systems for Listed Companies as well asprinciples and requirements of other relevant laws, regulations and normative documents.In the reporting period, the Company developed internal control activity, implemented Rules on Management ofAssets Provision for Impairment, The Policy on the Liability of Disclosing Materially Inaccurate Information inAnnual Report, Rules for Management of External Information User and Rules for Management of Insider ofInner Information, perfected internal control system step by step, promoted normative operation and healthydevelopment. The Board of Directors, the Supervisory Committee and the management of the Company makedecisions, perform rights and assume obligation strictly according to the standard operation rules and inner controlsystem so as to make sure the standard operation of the Company in the frame of rules and systems.In the reporting period, according to requirements of China Securities Regulatory Commission and Rules forListing of Shares in Shenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriouslyand timely performed information disclosure obligation and guaranteed that the information disclosed is true,accurate and complete, free from fictitious presentation, misleading statements or important omissions, so that allthe shareholders will equally acquaint themselves with all the notices of the Company.After the reporting period, the Company will continuously optimize and perfect the corporate governance of listedcompanies, further improve the standard operation of the Company.Whether there existed differences between the corporate governance and relevant regulations of Company Law and CSRC or not□ Yes √ NoThere existed no difference between the corporate governance and relevant regulations of Company Law and CSRC.Information about the progress of special activities of corporate governance and the formulation and implementation of registrationand management system for insidersIn order to further perfect the Company’s corporate governance, strengthen the management on the informationdisclosure for the Company, the Company promulgated the Management Rules for Information Insider andManagement Rules for Information Reporting, Submission to and Use by External Parties, which were reviewedand approved at the 20th Session of the 5th Board of Directors. In the reporting period, the company secretary wasresponsible for the disclosure of sensitive information. Before the disclosure of any significant information inperiodical reports or interim announcements, the personnel who had access to the insider information all filled inthe Registration Form for Information Insiders in a timely manner as required by Anhui Securities RegulatoryBureau and Shenzhen Stock Exchange. During the reporting period, no insider traded the Company’s sharesmaking use of the insider information before the disclosure of significant sensitive information that mightinfluence the Company’s stock price. During the reporting period, the Company strictly carried out theManagement Rules for Information Reporting, Submission to and Use by External Parties, effectively controllingthe reporting and submission of the Company’s business data, financial statements and other internal informationto external parties. No information of the Company was leaked against applicable laws and regulations.II. Particulars about annual shareholders’ general meetings and temporary shareholders’
                                                                         2013 Annual Report of Anhui Gujing Distillery Company Limitedgeneral meetings1. Particulars about annual shareholders’ general meetings
            Session       Opening date               Name of proposal              Resolution        Disclosure date      Index for disclosure
                                               2012 Annual Report of the
                                                                                                                          On the Cninfo
                                               Board of Directors, 2012
                                                                                                                          website
                                               Annual Report on Financial
                                                                                                                          Announcement on
                                               Statement, 2012 Annual
                                                                                                                          Resolutions Passed
    2012 Annual                                    Report and Abstract,             All the
                                                                                                                          on the 2012 Annual
    Shareholders’         May 31 2013             Proposal on 2012 Annual          proposals       Jun. 1 2013
                                                                                                                          Shareholders’
    General Meeting                                Profit Distribution and          were passed.
                                                                                                                          General Meeting
                                               Transfer of Capital Reserve
                                                                                                                          (No. 2013-009)
                                               to Common Shares, Proposal
                                                                                                                          http://www.cninfo.co
                                               on Employing Audit
                                                                                                                          m.cn
                                               Institution for 20132. Particulars about temporary shareholders’ general meeting
    Session                Opening date            Name of proposal           Resolution      Disclosure date         Index for disclosure
                                                                                                                  On the Cninfo website
                                                                                                                  Announcement on
       st
    The 1 Temporary                                                                                                   Resolutions Passed on the
                                               Proposal on Replacing All the
    Shareholders’                                                                                                    1st Temporary
                       Jan. 15 2013            2012 Annual Audit          proposals       Jan. 16 2013
    General Meeting in                                                                                                Shareholders’ General
                                               Institution                were passed.
    2013                                                                                                              Meeting in 2013(No.
                                                                                                                  2013-001)
                                                                                                                  http://www.cninfo.com.cnIII. Duty performance of independent directors in the reporting period1. Particulars about attendance of independent directors in the board meetings and shareholders’ generalmeetings
                             Particulars about attendance of independent directors in the board meetings
                          Number of
                                                                   Number of                                                     Whether being
                           meetings            Number of                               Number of              Number of
                                                                   meetings                                                       absent from
    Name of independent      independent            meetings                                  meetings         meetings skipped
                                                                 attended in the                                                  meetings in
            director     directors are       attended on the                           attended by              from
                                                                   means of                                                   person two times
                          supposed to             spot                                 mandatory
                                                                 communication                                                   in succession
                       attend during the
                        reporting period
    WANG RUIHUA                              4                   2                     2                   0                   0 No
    WU CISHENG                               4                   2                     2                   0                   0 No
    LIU LIBIN                                4                   1                     3                   0                   0 No
    Number of shareholders’ general                                                                                                                 2
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limitedmeetings attended by independentdirectorsNotes to being absent from meetings in person two times in succession2. Particulars about objections raised by independent directors about the relevant items of the CompanyWhether independent directors raised objections about the relevant items of the Company?□ Yes √ NoIn the reporting period, independent directors raised no objection about the relevant items of the Company.3. Other notes to duty performance of independent directorsWhether the advices of independent directors were taken by the Company?√ Yes □ NoExplanation about whether the advices of independent directors were taken by the CompanyIn 2013, the 6th Board of Directors fulfilled their duties faithfully and responsibly, issued independent opinions onSelf-appraisal Report of Internal Control and Routine Related Transactions with the Related Parties on the basis ofa detailed understanding of corporate operation. They raised many constructive opinions and advices, whichplayed an active part in the scientific and objective decisions of the Board of directors and the benigndevelopment of the Company.IV. Duty performance of special committees affiliated to the Board of Directors in thereporting period1. Duty performance of the Strategy CommitteeThe Strategy Committee is under the leadership of the Board of Directors. In the reporting period, in strictcompliance with the Specific Implementation Rules for the Strategy Committee, the Strategy Committeeconscientiously performed its duties, making a lot of constructive suggestions for the efficient execution of theCompany’s strategy.2. Duty performance of the Audit CommitteeIn the reporting period, five members of the Audit Committee diligently and responsibly performed their duties asstipulated in the relevant rules of the Company:(1) It reviewed the periodical reports of the Company in 2013.(2) Upon discussion with Ruihua Certified Public Accountants for the 2013 annual audit, it determined theschedule for the financial report and internal control audit for 2013.(3) It communicated in advance with the CPAs firm and independent directors before the CPAs firm came to theCompany and started the 2013 annual audit.(3) It reviewed the short form of the preliminary financial statements prepared by the financial department of theCompany for the first time before the annual auditor came to the Company and made some helpful suggestions.(5) After the annual auditor came to the Company and started the audit, it communicated with the registeredaccountants on the problems found in the audit and the submission time of the audit report.(6) After the annual auditor issued the preliminary audit opinion, it reviewed the 2013 annual financial statementsagain and made the final resolution.3. Duty performance of the Nomination CommitteeIn the reporting period, in strict compliance with the Specific Implementation Rules of the Nomination Committee,the Nomination Committee vigorously worked on various tasks, which ensured that the senior management staffsof the Company were hired in compliance with laws and regulations.(1) In the reporting period, the senior management staff hired by the Company satisfied the requirements of theCompany Law and other relevant laws and regulations. They were qualified as senior management staff. They
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limitedwere not in such a case where the Company Law should forbid them from being senior management staff. Northey were forbidden by CSRC from entering the securities market.(2) In the reporting period, the senior management staff of the Company were nominated and hired in line with theCompany Law and the Company’s Articles of Association. The hired personnel have never been punished byCSRC, other relevant authorities or stock exchanges.4. Duty performance of Remuneration and Appraisal Committee(1) The Remuneration and Appraisal Committee affiliated to the Board of Directors, according to relevantregulations of Implementation Rules of Remuneration and Appraisal Committee successfully completed theannual performance appraisal to directors, supervisors and senior executives in line with standards and proceduresof performance appraisal during the reporting period.(2) Through the deliberation and assessment of the committee, the consistent opinion was that the generalremuneration level complied with development of the Company; the remuneration level of directors, supervisorsand senior executives accurately reflected the overall performance situation of the Company and individual workperformance, which complied with the remuneration management system; the remuneration plan and procedure ofissuing remuneration were in accordance with the laws and did not violate relevant national laws and regulations.V. Information about work of the Supervisory CommitteeWhether there existed any risk in the Company according to the supervision of the Supervisory Committee in the reporting period□ Yes √ NoThe Supervisory Committee raised no objection about matters of the Company under its supervision in the reporting period.VI. Particulars about independence and completeness in business, personnel, assets,organizations and financial affairs between this company and controlling shareholdersThe company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five independences in terms of business,personnel, assets, organizations and financial affairs, with separate independent calculation, independent and complete business,independent operation ability, and independent responsibilities and risks. Majority shareholders can not surpass the shareholders’general meeting to directly or indirectly interfere with the company’s decisions and legal production and operation activities, andthere is no same trade competition state of the same products between the company and majority shareholders.VII. Particulars about horizontal competitionNoneVIII. Particulars about assessment and incentive mechanism to senior executives during thereport periodThe Company has set up a Performance Appraisal and Incentive Mechanism for Senior Executives, which links remuneration ofsenior executives with the Company’ performance, the decision-making management adopts the assessment and incentive measuresby linking the annual remuneration with the Company’ economic indexes & management achievement. To promote the standard,healthy and orderly development of the company and keep the stability of the senior executives, the company annually sets up theassessment index for them and signs a written responsibility of business target at the year-begin, then decides their remuneration andthe rewards & punishment at the year-end according to their personal work performance and completion of the Company’s operatingtarget.
                                                                     2013 Annual Report of Anhui Gujing Distillery Company Limited
                                          Section IX Internal ControlI. Construction of internal controlIn the reporting period, the Company, according to the requirements of normative documents including Basic Standards of CorporateInternal Control, Appraisal Guideline for Corporate Internal Control (hereinafter referred to as Appraisal Guideline) and Guidelinefor Internal Control of Listed Companies issued by Shenzhen Stock Exchange and the stipulations of Management Manual ofInternal Control, effectively managed and controlled in the aspects of strategic risks, financial risks, operating risks and market risks,legal risks, enhanced the level of corporate operation and management and the level of risk prevention. Note: for details seeSelf-assessment Report on 2013 Annual Internal Control published on the Cninfo website on 18 April 2014.II. Statement on the Responsibility for Internal Control from the Board of DirectorsThe Board of Directors and all its directors hereby ensure that this announcement contains no false information, misleading statementor material omission, and shall be jointly and severally liable for the factuality, accuracy and completeness of the information carriedin this announcement. Establishing, perfecting and effectively conducting internal control is the liability of the Board of Directors;establishment and implementation of internal control conducted by the Board is under the supervision of the supervisory committee;the management is responsible for organizing and guiding daily operation of internal control. The objective of internal control:reasonably guarantee the legality and compliance of the Company’s operating management, safety of assets, authenticity andcompleteness of financial report and relevant information; enhance operation efficiency and improve operation results; promote therealization of sustainable development.III. Basis of establishing internal control of financial statementsBasis of establishing internal control of financial statements: the Company established comparatively sound internal control systemof financial management, according to requirements of relevant normative documents like Accounting Law, Accounting Standardsfor Business Enterprises, Basic Standards of Corporate Internal Control, Evaluation Guideline for Corporate Internal Control.IV. Self-assessment report of internal controlSpecific details about significant defects of internal control during the reporting period found in self-assessment report of internal
                                                                controlNoneDisclosure date of whole article of
    self-assessment report of internal     Apr. 18 2014controlIndex for disclosure of whole
                                       Cninfo website (www.cninfo.com.cn) “2013 Annual Self-assessment Report of Internalarticle of self-assessment report of
                                       Control”internal controlV. Audit report of internal control√ Applicable □ Non-Applicable
                                        Audit opinion in audit report of internal controlRuihua Certified Public Accountants (Special General Partnership) believe, Anhui Gujing Distillery Co., Ltd.maintained effective internal control of financial statements in all significant aspects on 31 Dec. 2013 in
                                                                      2013 Annual Report of Anhui Gujing Distillery Company Limitedaccordance with Basic Standards for Internal Control and relevant regulations.Disclosure date of whole
    article of audit report of            Apr. 18 2014internal controlIndex for disclosure of whole
    article of audit report of    Cninfo website (www.cninfo.com.cn) “Audit Report of Internal Control”internal controlWhether the accounting firm issued non-standard audit report of internal control□ Yes √ NoWhether audit report of internal control issued by accounting firm was consistent with self-assessment report of the board of directors√ Yes □ NoVI. Establishment and implementation of institution of clarifying responsibility for majormistakes in annual reportIn order to improve the standard operation of the Company, strengthen the factuality, accuracy, completeness and promptness ofinformation disclosure and enhance the quality and transparency of information disclosed in annual reports, the Company formulatedSystem of Clarifying Responsibility for Major Mistakes in Information Disclosure of Annual Report and clarified the responsibilitiesfor major mistakes in information disclosure of annual reports, according to the relevant laws and regulations. In the reporting period,the Company strictly implemented the above system and did not conduct correction of major mistakes, supplementation forsignificant omitted information and revise of performance bulletin.
                                                       2013 Annual Report of Anhui Gujing Distillery Company Limited
                                   Section X. Financial reportI. Audit Report
    Type of audit opinion                                                 Standard unqualified audit opinion
    Date of signing audit report                                          Apr. 17 2014
                                                                      Ruihua Certified Public Accountants (Special GeneralName of audit institution
                                                                      Partnership)
    Reference number of audit report                                      Ruihua SZ [2014] No. 48390007
    Name of CPA                                                           Yang Ganlin, Zhang Liping
                                                Main body of audit reportTo the Shareholders of Anhui Gujing Distillery Co., Ltd.:We have audited the attached financial statements of Anhui Gujing Distillery Co., Ltd. (“Gujing”), which comprise theconsolidated and the Company’s balance sheet as at December 31, 2013, the consolidated and the Company’s incomestatement, the consolidated and the Company’s cash flow statement, the consolidated and the Company’s statement ofchanges in owners’ equity for the year then ended, and the notes to financial statements.I. Responsibilities of the management concerning the financial statementsThe management of the Company is responsible for the preparation of these financial statements and fair presentation.These responsibilities include: (1) preparing financial statements according to the Accounting Standards for BusinessEnterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal controlrelevant to the preparation of financial statements that are free from material misstatement, whether due to fraud orerror.II. Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conductedour audit in accordance with the Chinese Certified Public Accountants' Auditing Standards. These standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether thefinancial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity’s preparation of the consolidation financial statements and fairpresentation in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and reasonableness of accounting estimates made by management, as wellas evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.III. OpinionIn our opinion, the financial statements have been prepared in accordance with the requirements of the EnterprisesAccounting Standards promulgated by the People’s Republic of China in all material respects, and present fairly theconsolidated operating results of Anhui Gujing Distillery Co., Ltd. and its subsidiaries as at December 31, 2013, and
                                                     2013 Annual Report of Anhui Gujing Distillery Company Limitedconsolidated operating results and cash flow in 2013 as well as the operating results at 31 Dec. 2013 and the operatingresults & cash flow in 2013 of Anhui Gujing Distillery Co., Ltd..II. Financial StatementUnit of statements in the notes appended to financial report is RMB Yuan1. Consolidated balance sheetPrepared by Anhui Gujing Distillery Company Limited
                                                                                                      Unit: RMB Yuan
                  Item                                  Closing balance                             Opening balanceCurrent Assets:
    Monetary funds                                                    1,381,930,710.96                              2,609,650,352.09
    Settlement reserves
    Intra-group lendings
    Transactional financial assets
    Notes receivable                                                    154,408,425.31                                156,449,495.65
    Accounts receivable                                                      6,374,469.99                               7,887,007.25
    Accounts paid in advance                                                90,217,698.50                              85,305,973.47
    Premiums receivable
    Reinsurance premiums receivable
    Receivable      reinsurance      contractreserves
    Interest receivable                                                                                                 7,253,858.34
    Dividend receivable
    Other accounts receivable                                                6,296,326.20                              21,559,146.98
    Financial assets purchased under
                                                                          80,093,922.21agreements to resell
    Inventories                                                       1,075,033,137.30                                782,399,498.85
    Non-current assets due within 1 year
    Other current assets                                                900,000,000.00
    Total current assets                                                3,694,354,690.47                              3,670,505,332.63Non-current assets:
    Loans by mandate and advancesgranted
    Available-for-sale financial assets                                     24,075,687.00                              27,991,376.84
    Held-to-maturity investments
    Long-term accounts receivable
    Long-term equity investment
                                         2013 Annual Report of Anhui Gujing Distillery Company Limited
    Investing property                                      35,188,079.66                             31,451,269.49
    Fixed assets                                         1,266,481,752.59                            783,740,205.15
    Construction in progress                               377,338,939.54                            423,672,281.54
    Engineering materials
    Disposal of fixed assets
    Production biological assets
    Oil-gas assets
    Intangible assets                                      315,224,921.54                            320,716,225.67
    R&D expense
    Goodwill
    Long-term deferred expenses                             60,898,594.60                             30,959,542.67
    Deferred income tax assets                              43,371,896.87                             19,091,237.05
    Other non-current assets
    Total of non-current assets                            2,122,579,871.80                          1,637,622,138.41
    Total assets                                           5,816,934,562.27                          5,308,127,471.04Current liabilities:
    Short-term borrowings
    Borrowings from Central Bank
    Customer bank deposits and due tobanks and other financial institutions
    Intra-group borrowings
    Transactional financial liabilities
    Notes payable                                          235,770,000.00                            224,460,000.00
    Accounts payable                                       442,935,399.44                            461,112,575.26
    Accounts received in advance                           147,257,393.88                            114,610,235.81
    Financial assets sold for repurchase
    Handling charges and commissionspayable
    Employee’s compensation payable                       231,343,202.17                            178,726,582.68
    Tax payable                                            599,513,448.19                            645,410,021.57
    Interest payable
    Dividend payable
    Other accounts payable                                 373,903,452.51                            297,098,777.98
    Reinsurance premiums payable
                                               2013 Annual Report of Anhui Gujing Distillery Company Limited
    Insurance contract reserves
    Payables for acting trading ofsecurities
    Payables for acting underwriting ofsecurities
    Non-current liabilities due within 1year
    Other current liabilities                                      3,112,595.04                              2,120,250.11
    Total current liabilities                                    2,033,835,491.23                          1,923,538,443.41Non-current liabilities:
    Long-term borrowings
    Bonds payable
    Long-term payables
    Specific payables
    Estimated liabilities
    Deferred income tax liabilities                                                                              697,845.96
    Other non-current liabilities                                 40,342,813.99                              8,403,073.03
    Total non-current liabilities                                   40,342,813.99                              9,100,918.99
    Total liabilities                                            2,074,178,305.22                          1,932,639,362.40
    Owners’     equity   (or     shareholders’equity)
    Paid-up capital (or share capital)                           503,600,000.00                            503,600,000.00
    Capital reserves                                           1,294,095,263.69                          1,297,032,031.07
    Less: Treasury stock
    Specific reserves
    Surplus reserves                                             256,902,260.27                            218,736,964.73
    Provisions for general risks
    Retained profits                                           1,688,158,733.09                          1,356,119,112.84
    Foreign exchange differenceTotal equity attributable to owners of
                                                             3,742,756,257.05                          3,375,488,108.64the CompanyMinority interests
    Total owners’ (or shareholders’) equity                    3,742,756,257.05                          3,375,488,108.64Total liabilities and owners’ (or
                                                             5,816,934,562.27                          5,308,127,471.04shareholders’) equity
                                                 2013 Annual Report of Anhui Gujing Distillery Company Limited
    Legal representative: Yu Lin                          Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng2. Balance sheet of the CompanyPrepared by Anhui Gujing Distillery Company Limited
                                                                                                Unit: RMB Yuan
                   Item                               Closing balance                          Opening balanceCurrent Assets:
    Monetary funds                                                  1,040,360,357.51                            2,390,346,607.43
    Transactional financial assets
    Notes receivable                                                      81,472,414.44                          139,414,615.95
    Accounts receivable                                                    1,297,542.13                             1,293,202.89
    Accounts paid in advance                                               1,288,277.31                             1,151,359.52
    Interest receivable                                                                                             6,129,902.78
    Dividend receivable
    Other accounts receivable                                         139,654,563.53                             161,967,822.69
    Redemptory monetary capital for sale                                  80,093,922.21
    Inventories                                                     1,036,496,459.02                             748,777,364.57
    Non-current assets due within 1 year
    Other current assets                                              900,000,000.00
    Total current assets                                              3,280,663,536.15                            3,449,080,875.83Non-current assets:
    Available-for-sale financial assets                                   24,075,687.00                           27,991,376.84
    Held-to-maturity investments
    Long-term accounts receivable                                          4,494,950.37                             4,172,166.85
    Long-term equity investment                                       308,089,408.32                             258,089,408.32
    Investing property                                                    33,124,717.82                           29,814,360.87
    Fixed assets                                                    1,057,111,133.85                             562,993,821.32
    Construction in progress                                          377,239,903.56                             423,672,281.54
    Engineering materials
    Disposal of fixed assets
    Production biological assets
    Oil-gas assets
    Intangible assets                                                 197,787,553.94                             200,084,457.08
    R&D expense
                                               2013 Annual Report of Anhui Gujing Distillery Company Limited
    Goodwill
    Long-term deferred expenses                                   59,482,540.30                             27,338,996.93
    Deferred income tax assets                                    34,095,084.20                             18,496,292.51
    Other non-current assets
    Total of non-current assets                                  2,095,500,979.36                          1,552,653,162.26
    Total assets                                                 5,376,164,515.51                          5,001,734,038.09Current liabilities:
    Short-term borrowings
    Transactional financial liabilities
    Notes payable                                                 26,150,000.00                             80,000,000.00
    Accounts payable                                             437,297,694.54                            446,890,857.97
    Accounts received in advance                                 830,722,853.80                            714,794,965.38
    Employee’s compensation payable                              87,936,100.97                             79,627,703.42
    Tax payable                                                  205,717,464.45                            314,625,057.22
    Interest payable
    Dividend payable
    Other accounts payable                                       153,888,199.87                            168,504,557.80
    Non-current liabilities due within 1year
    Other current liabilities                                      3,112,595.04                              1,998,845.04
    Total current liabilities                                    1,744,824,908.67                          1,806,441,986.83Non-current liabilities:
    Long-term borrowings
    Bonds payable
    Long-term payables
    Specific payables
    Estimated liabilities
    Deferred income tax liabilities                                                                              697,845.96
    Other non-current liabilities                                 40,342,813.99                              8,403,073.03
    Total non-current liabilities                                   40,342,813.99                              9,100,918.99
    Total liabilities                                            1,785,167,722.66                          1,815,542,905.82
    Owners’     equity    (or    shareholders’equity)
    Paid-up capital (or share capital)                           503,600,000.00                            503,600,000.00
                                                 2013 Annual Report of Anhui Gujing Distillery Company Limited
    Capital reserves                                               1,246,318,877.85                             1,249,255,645.23
    Less: Treasury stock
    Specific reserves
    Surplus reserves                                                 251,800,000.00                              213,634,704.46
    Provision for general risks
    Retained profits                                               1,589,277,915.00                             1,219,700,782.58
    Foreign exchange difference
    Total owners’ (or shareholders’) equity                        3,590,996,792.85                             3,186,191,132.27
    Total   liabilities    and   owners’   (or
                                                                 5,376,164,515.51                             5,001,734,038.09shareholders’) equity
    Legal representative: Yu Lin                          Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng3. Consolidated income statementPrepared by Anhui Gujing Distillery Company Limited
                                                                                                Unit: RMB Yuan
                      Item                       Amount of this period                       Amount of last period
    I. Total operating revenues                                      4,580,575,654.71                             4,197,057,315.26
    Including: Sales income                                          4,580,575,654.71                             4,197,057,315.26
        Interest income
        Premium income
        Handling charge andcommission income
    II. Total operating cost                                         3,766,069,970.22                             3,243,155,636.29
    Including: Cost of sales                                         1,384,137,091.08                             1,220,831,141.50
        Interest expenses
        Handling charge andcommission expenses
        Surrenders
        Net claims paid
        Net amount withdrawn for theinsurance contract reserve
        Expenditure on policy dividends
        Reinsurance premium
        Taxes and associate charges                                631,171,183.76                              638,945,267.01
                                              2013 Annual Report of Anhui Gujing Distillery Company Limited
          Selling and distribution expenses                 1,279,550,577.02                             1,075,977,234.87
          Administrative expenses                             510,185,897.33                              393,028,645.85
          Financial expenses                                  -47,011,977.06                               -88,430,981.17
          Asset impairment loss                                 8,037,198.09                                 2,804,328.23Add: Gain/(loss) from change in fairvalue (“-” means loss)
        Gain/(loss) from investment (“-”
                                                               10,050,415.19means loss)Including: share of profits in associatesand joint venturesForeign exchange gains (“-” meansloss)
    III. Business profit (“-” means loss)                       824,556,099.68                              953,901,678.97
        Add: non-operating income                              31,597,842.75                               21,972,077.88
        Less: non-operating expense                             4,242,753.03                                 3,446,696.09Including: loss from non-current asset
                                                                2,120,610.71                                   511,271.68disposal
    IV. Total profit (“-” means loss)                           851,911,189.40                              972,427,060.76
        Less: Income tax expense                              229,906,273.61                              246,837,774.45
    V. Net profit (“-” means loss)                              622,004,915.79                              725,589,286.31
        Including: Net profit achieved bycombined parties before thecombinations
        Attributable to owners of the
                                                              622,004,915.79                              725,589,286.31Company
        Minority shareholders’ income
    VI. Earnings per share                                 --                                        --
        (I) Basic earnings per share                                    1.24                                         1.44
        (II) Diluted earnings per share                                 1.24                                         1.44
    VII. Other comprehensive incomes                               -2,936,767.38                                 2,093,537.88
    VIII. Total comprehensive incomes                             619,068,148.41                              727,682,824.19
        Attributable to owners of the
                                                              619,068,148.41                              727,682,824.19Company
        Attributable to minorityshareholders
    Legal representative: Yu Lin                     Person-in-charge of the accounting work: Ye Changqing
                                                 2013 Annual Report of Anhui Gujing Distillery Company LimitedChief of the accounting division: Zhu Jiafeng4. Income statement of the CompanyPrepared by Anhui Gujing Distillery Company Limited
                                                                                                Unit: RMB Yuan
                    Item                         Amount of this period                       Amount of last period
    I. Total sales                                                   2,529,549,854.01                             2,535,315,597.69
    Less: cost of sales                                              1,398,337,758.52                             1,207,277,936.81
    Business taxes and surcharges                                      592,720,228.35                              604,155,623.28
    Distribution expenses                                              182,732,468.72                              364,959,419.40
    Administrative expenses                                            309,058,351.45                              240,774,307.44
    Financial costs                                                    -44,325,968.34                               -71,949,250.84
    Impairment loss                                                      7,286,854.02                                 3,629,434.58Add: gain/(loss) from change in fairvalue (“-” means loss)Gain/(loss) from investment (“-” means
                                                                   600,946,599.56                              570,794,532.17loss)Including: income form investment onassociates and joint ventures
    II. Business profit (“-” means loss)                             684,686,760.85                              757,262,659.19
    Add: non-business income                                            16,000,980.87                               15,984,988.19
    Less: non-business expense                                           3,242,473.29                                 1,770,071.21Including: loss from non-current asset
                                                                     1,299,935.04disposal
    III. Total profit   (“-” means loss)                             697,445,268.43                              771,477,576.17
    Less: income tax expense                                            37,902,840.47                               54,810,904.83
    IV. Net profit (“-” means loss)                                  659,542,427.96                              716,666,671.34
    V. Earnings per share                                      --                                         --
    (I) Basic earnings per share                                                 1.31                                        1.42
    (II) Diluted earnings per share                                              1.31                                        1.42
    VI. Other comprehensive income                                      -2,936,767.38                                 2,093,537.88
    VII. Total comprehensive income                                    656,605,660.58                              718,760,209.22
    Legal representative: Yu Lin                          Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng
                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited5. Consolidated cash flow statementPrepared by Anhui Gujing Distillery Company Limited
                                                                                                Unit: RMB Yuan
                      Item                         Amount of this period                    Amount of last periodI. Cash flows from operating activities:
    Cash       received        from    sale     of
                                                                  5,381,770,280.57                         5,256,820,153.39commodities and rendering of service
    Net      increase     of    deposits      fromcustomers and dues from banks
    Net increase of loans from the centralbank
    Net increase of funds borrowed fromother financial institutions
    Cash received from premium oforiginal insurance contracts
    Net cash received from reinsurancebusiness
    Net increase of deposits of policyholders and investment fund
    Net increase of disposal of tradablefinancial assets
    Cash received from interest, handlingcharges and commissions
    Net        increase        of     intra-groupborrowings
    Net increase of funds in repurchasebusiness
    Tax refunds received                                                                                              642,100.00
    Other cash received relating to
                                                                    299,273,978.50                           152,260,005.14operating activitiesSubtotal of cash inflows from operating
                                                                  5,681,044,259.07                         5,409,722,258.53activities
    Cash paid for goods and services                                1,673,212,674.71                         1,117,167,748.88
    Net increase of customer lendingsand advances
    Net increase of funds deposited in thecentral bank and amount due from
                                                 2013 Annual Report of Anhui Gujing Distillery Company Limitedbanks
    Cash for paying claims of the originalinsurance contracts
    Cash for paying interest, handlingcharges and commissions
    Cash for paying policy dividends
    Cash paid to and for employees                                 924,834,475.73                            722,698,221.19
    Various taxes paid                                           1,483,773,600.56                          1,556,750,391.03
    Other cash payment relating to
                                                                 960,968,152.76                            926,238,532.97operating activities
    Subtotal    of     cash    outflows       from
                                                               5,042,788,903.76                          4,322,854,894.07operating activities
    Net cash flows from operating activities                         638,255,355.31                          1,086,867,364.46II. Cash flows from investing activities:
    Cash received from withdrawal ofinvestments
    Cash     received       from   return    on
                                                                  10,050,415.19investments
    Net cash received from disposal of
    fixed assets, intangible assets and other                          2,831,977.74                                   68,940.95long-term assets
    Net cash received from disposal ofsubsidiaries or other business units
    Other cash received relating to
                                                                  35,423,586.00                                  240,000.00investing activities
         Subtotal of cash inflows from
                                                                 948,305,978.93                                  308,940.95investing activities
    Cash paid to acquire fixed assets,
    intangible assets and other long-term                            557,480,975.37                            621,048,614.55assets
    Cash paid for investment                                     1,880,000,000.00                             25,199,993.00
    Net increase of pledged loans
    Net cash paid to acquire subsidiariesand other business units
    Other cash payments relating toinvesting activities
    Subtotal    of     cash    outflows       from
                                                               2,437,480,975.37                            646,248,607.55investing activities
                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
    Net cash flows from investing activities                        -1,489,174,996.44                             -645,939,666.60
    III.     Cash    Flows      from    FinancingActivities:
       Cash     received     from       capitalcontributions
       Including:    Cash    received    fromminority shareholder investments bysubsidiaries
       Cash received from borrowings
       Cash received from issuance ofbonds
       Other cash received relating tofinancing activitiesSubtotal of cash inflows from financingactivities
       Repayment of borrowings
       Cash paid for interest expenses and
                                                                   251,800,000.00                              113,310,000.00distribution of dividends or profit
        Including: dividends or profit paidby subsidiaries to minority shareholders
        Other cash payments relating tofinancing activities
    Sub-total       of   cash    outflows    from
                                                                   251,800,000.00                              113,310,000.00financing activities
    Net cash flows from financing activities                          -251,800,000.00                              -113,310,000.00IV. Effect of foreign exchange rate
                                                                                                                       162.90changes on cash and cash equivalentsV. Net increase in cash and cash
                                                                -1,102,719,641.13                              327,617,860.76equivalents
        Add: Opening balance of cash and
                                                                 2,409,650,352.09                             2,082,032,491.33cash equivalentsVI. Closing balance of cash and cash
                                                                 1,306,930,710.96                             2,409,650,352.09equivalents
    Legal representative: Yu Lin                          Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng6. Cash flow statement of the CompanyPrepared by Anhui Gujing Distillery Company Limited
                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                                                               Unit: RMB Yuan
                    Item                          Amount of this period                    Amount of last periodI. Cash flows from operating activities:
    Cash       received      from    sale      of
                                                                 3,136,291,164.98                         3,423,191,472.27commodities and rendering of service
    Tax refunds received
    Other cash received relating to
                                                                   116,309,895.62                           237,910,854.26operating activitiesSubtotal of cash inflows from operating
                                                                 3,252,601,060.60                         3,661,102,326.53activities
    Cash paid for goods and services                               1,826,604,908.68                         1,374,069,572.75
    Cash paid to and for employees                                   428,367,064.51                           336,171,582.81
    Various taxes paid                                               938,402,383.86                         1,111,980,958.34
    Other cash payment relating to
                                                                   124,356,345.13                           273,079,396.45operating activities
    Subtotal      of   cash    outflows        from
                                                                 3,317,730,702.18                         3,095,301,510.35operating activities
    Net cash flows from operating activities                           -65,129,641.58                           565,800,816.18II. Cash flows from investing activities:
    Cash received from retraction of
                                                                   900,000,000.00                             9,900,000.00investments
    Cash       received     from    return    on
                                                                   600,946,599.56                           570,794,532.17investments
    Net cash received from disposal of
    fixed assets, intangible assets and other                                 709,777.79                               68,940.95long-term assets
    Net cash received from disposal ofsubsidiaries or other business units
    Other cash received relating to
                                                                    35,423,586.00                             1,240,000.00investing activities
         Subtotal of cash inflows from
                                                                   637,079,963.35                           582,003,473.12investing activities
    Cash paid to acquire fixed assets,
    intangible assets and other long-term                              547,137,594.99                           584,887,244.40assets
    Cash paid for investment                                       1,922,998,976.70                            45,197,993.00
    Net cash paid to acquire subsidiaries
                                                    2013 Annual Report of Anhui Gujing Distillery Company Limitedand other business units
    Other cash payments relating toinvesting activities
    Subtotal        of     cash   outflows     from
                                                                  2,470,136,571.69                              630,085,237.40investing activities
    Net cash flows from investing activities                           -933,056,608.34                               -48,081,764.28
    III.     Cash        Flows    from    FinancingActivities:
       Cash      received      from       capitalcontributions
       Cash received from borrowings
       Cash received from issuance ofbonds
       Other cash received relating tofinancing activitiesSubtotal of cash inflows from financingactivities
       Repayment of borrowings
       Cash paid for interest expenses and
                                                                    251,800,000.00                              113,310,000.00distribution of dividends or profit
        Other cash payments relating tofinancing activities
    Sub-total       of     cash    outflows    from
                                                                    251,800,000.00                              113,310,000.00financing activities
    Net cash flows from financing activities                           -251,800,000.00                              -113,310,000.00IV. Effect of foreign exchange ratechanges on cash and cash equivalentsV. Net increase in cash and cash
                                                                 -1,249,986,249.92                              404,409,051.90equivalents
        Add: Opening balance of cash and
                                                                  2,290,346,607.43                             1,885,937,555.53cash equivalentsVI. Closing balance of cash and cash
                                                                  1,040,360,357.51                             2,290,346,607.43equivalents
    Legal representative: Yu Lin                           Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng
                                                                 2013 Annual Report of Anhui Gujing Distillery Company Limited7. Consolidated statement of changes in owners’ equityPrepared by Anhui Gujing Distillery Company LimitedAmount of this period
                                                                                                                     Unit: RMB Yuan
                                                                                    Amount of this period
                                                          Equity attributable to owners of the Company
                                           Paid-up
                                                                                                                                           Total
                 Item                                                                                                        Minority
                                           capital                Less:                        General
                                                      Capital               Specific Surplus             Retaine                          owners’
                                             (or                 treasury                       risk                Others   interests
                                                      reserve               reserve reserve              d profit                          equity
                                            share                 stock                        reserve
                                           capital)
    I. Balance at the end of the 503,600 1,297,03                                        218,736             1,356,11                        3,375,488,
    previous year                              ,000.00 2,031.07                          ,964.73             9,112.84                            108.64
    Add: change of accountingpolicy
    Correction         of     errors   inprevious periods
    Other
    II. Balance at the beginning of 503,600 1,297,03                                     218,736             1,356,11                        3,375,488,
    the year                                   ,000.00 2,031.07                          ,964.73             9,112.84                            108.64
    III.      Increase/        decrease   of
                                                      -2,936,7                       38,165,             332,039,                        367,268,14amount in the year (“-” means
                                                        67.38                         295.54              620.25                               8.41decrease)
                                                                                                         622,004,                        622,004,91
    (I) Net profit
                                                                                                          915.79                               5.79
    (II)     Other     comprehensive                   -2,936,7                                                                           -2,936,767.
    incomes                                                 67.38                                                                                       38
                                                      -2,936,7                                           622,004,                        619,068,14
    Subtotal of (I) and (II)
                                                        67.38                                             915.79                               8.41
    (III) Capital paid in andreduced by owners
       1. Capital paid in byowners
       2. Amounts of share-based
    payments            recognized        inowners’ equity
       3. Others
    (IV) Profit distribution                                                          38,165,             -289,96                         -251,800,0
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                                                 295.54             5,295.54                             00.00
    1.      Appropriations       to                                            38,165,             -38,165,
    surplus reserves                                                                 295.54              295.54
    2.      Appropriations       togeneral risk provisions
    3.      Appropriations       to                                                                -251,80                         -251,800,0
    owners (or shareholders)                                                                            0,000.00                             00.00
    4. Other
    (V) Internal carry-forward ofowners’ equity
    1. New increase of capital(or share capital) from capitalpublic reserves
    2. New increase of capital(or share capital) from surplusreserves
    3. Surplus reserves formaking up losses
    4. Other(Ⅵ) Specific reserve
    1.    Withdrawn       for   theperiod
    2. Used in the period(Ⅶ) Other
                                       503,600 1,294,09                         256,902             1,688,15                        3,742,756,IV. Closing balance
                                       ,000.00 5,263.69                         ,260.27             8,733.09                           257.05Amount of last period
                                                                                                                Unit: RMB Yuan
                                                                               Amount of last period
                                                      Equity attributable to owners of the Company
                                       Paid-up
                                                                                                                                      Total
                Item                                                                                                    Minority
                                       capital               Less:                        General
                                                  Capital              Specific Surplus             Retaine                          owners’
                                         (or                treasury                       risk                Others   interests
                                                  reserve              reserve reserve              d profit                         equity
                                        share                stock                        reserve
                                       capital)
    I. Balance at the end of the 251,800 1,546,73                                   147,070             815,506,                        2,761,115,
    previous year                          ,000.00 8,493.19                         ,297.60              493.66                            284.45
    Add:                 retrospective
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limitedadjustments due to businesscombinations under the samecontrol
    Add: change of accountingpolicy
    Correction         of     errors   inprevious periods
    Other
    II. Balance at the beginning of 251,800 1,546,73                               147,070          815,506,                      2,761,115,
    the year                                   ,000.00 8,493.19                    ,297.60           493.66                          284.45
    III.      Increase/        decrease   of
                                           251,800 -249,70                     71,666,          540,612,                      614,372,82amount in the year (“-” means
                                           ,000.00 6,462.12                     667.13           619.18                             4.19decrease)
                                                                                                725,589,                      725,589,28
    (I) Net profit
                                                                                                 286.31                             6.31
    (II)     Other     comprehensive               2,093,53                                                                    2,093,537.
    incomes                                               7.88                                                                           88
                                                  2,093,53                                      725,589,                      727,682,82
    Subtotal of (I) and (II)
                                                      7.88                                       286.31                             4.19
    (III) Capital paid in andreduced by owners
       1. Capital paid in byowners
       2. Amounts of share-based
    payments            recognized        inowners’ equity
       3. Others
                                                                               71,666,           -184,97                      -113,310,0
    (IV) Profit distribution
                                                                                667.13          6,667.13                           00.00
       1.     Appropriations          to                                       71,666,          -71,666,
    surplus reserves                                                                667.13           667.13
       2.     Appropriations          togeneral risk provisions
       3.     Appropriations          to                                                         -113,31                      -113,310,0
    owners (or shareholders)                                                                        0,000.00                           00.00
       4. Other
    (V) Internal carry-forward of 251,800 -251,80
    owners’ equity                            ,000.00 0,000.00
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
    1. New increase of capital
                                       251,800 -251,80(or share capital) from capital
                                        ,000.00 0,000.00public reserves
    2. New increase of capital(or share capital) from surplusreserves
    3. Surplus reserves formaking up losses
    4. Other(Ⅵ) Specific reserve
    1.    Withdrawn     for     theperiod
    2. Used in the period(Ⅶ) Other
                                       503,600 1,297,03                        218,736          1,356,11                          3,375,488,IV. Closing balance
                                        ,000.00 2,031.07                       ,964.73          9,112.84                             108.64
    Legal representative: Yu Lin                                     Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng8. Statement of changes in owners’ equity of the CompanyPrepared by Anhui Gujing Distillery Company LimitedAmount of this period
                                                                                                             Unit: RMB Yuan
                                                                               Amount of this period
                                          Paid-up
                                                                      Less:                             General                     Total
                Item                    capital (or    Capital                  Specific    Surplus                Retained
                                                                    treasury                               risk                   owners’
                                           share       reserve                  reserve     reserve                 profit
                                                                      stock                             reserve                    equity
                                          capital)
    I. Balance at the end of the 503,600,00 1,249,255,                                         213,634,70             1,219,700, 3,186,191,
    previous year                                  0.00        645.23                                4.46                 782.58         132.27
    Add: change of accountingpolicy
    Correction       of   errors     inprevious periods
    Other
    II. Balance at the beginning of 503,600,00 1,249,255,                                      213,634,70             1,219,700, 3,186,191,
    the year                                       0.00        645.23                                4.46                 782.58         132.27
    III. Increase/ decrease of amount                     -2,936,767.                          38,165,295             369,577,13 404,805,66
                                             2013 Annual Report of Anhui Gujing Distillery Company Limited
    in the year (“-” means decrease)             38                               .54                   2.42         0.58
                                                                                                659,542,42 659,542,42
    (I) Net profit
                                                                                                      7.96         7.96
    (II)     Other     comprehensive     -2,936,767.                                                           -2,936,767.
    incomes                                        38                                                                    38
                                       -2,936,767.                                              659,542,42 656,605,66
    Subtotal of (I) and (II)
                                               38                                                     7.96         0.58
    (III) Capital paid in andreduced by owners
    1. Capital paid in by owners
    2. Amounts of share-basedpayments recognized in owners’equity
    3. Others
                                                                         38,165,295             -289,965,2 -251,800,0
    (IV) Profit distribution
                                                                                .54                  95.54        00.00
    1. Appropriations to surplus                                        38,165,295             -38,165,29
    reserves                                                                        .54                   5.54
    2. Appropriations to generalrisk provisions
    3. Appropriations to owners                                                                -251,800,0 -251,800,0
    (or shareholders)                                                                                    00.00        00.00
    4. Other
    (V) Internal carry-forward ofowners’ equity
    1. New increase of capital(or share capital) from capitalpublic reserves
    2. New increase of capital(or share capital) from surplusreserves
    3.    Surplus    reserves   formaking up losses
    4. Other(Ⅵ) Specific reserve
    1. Withdrawn for the period
    2. Used in the period(Ⅶ) Other
                                                          2013 Annual Report of Anhui Gujing Distillery Company Limited
                                        503,600,00 1,246,318,                            251,800,00             1,589,277, 3,590,996,IV. Closing balance
                                              0.00       877.85                                0.00                915.00       792.85Amount of last period
                                                                                                         Unit: RMB Yuan
                                                                              Amount of last period
                                         Paid-up
                                                                    Less:                             General                  Total
                 Item                   capital (or    Capital                Specific    Surplus               Retained
                                                                   treasury                            risk                  owners’
                                          share        reserve                 reserve    reserve                 profit
                                                                    stock                             reserve                 equity
                                         capital)
    I. Balance at the end of the 251,800,00 1,498,962,                                       141,968,03             688,010,77 2,580,740,
    previous year                                 0.00       107.35                                7.33                   8.37      923.05
    Add: change of accountingpolicy
    Correction       of   errors     inprevious periods
    Other
    II. Balance at the beginning of 251,800,00 1,498,962,                                    141,968,03             688,010,77 2,580,740,
    the year                                      0.00       107.35                                7.33                   8.37      923.05
    III. Increase/ decrease of amount 251,800,00 -249,706,4                                  71,666,667             531,690,00 605,450,20
    in the year (“-” means decrease)            0.00        62.12                                 .13                   4.21        9.22
                                                                                                                716,666,67 716,666,67
    (I) Net profit
                                                                                                                      1.34        1.34
    (II)     Other    comprehensive                     2,093,537.                                                             2,093,537.
    incomes                                                      88                                                                        88
                                                      2,093,537.                                                716,666,67 718,760,20
    Subtotal of (I) and (II)
                                                             88                                                       1.34        9.22
    (III)    Capital paid      in   andreduced by owners
    1. Capital paid in by owners
    2. Amounts of share-basedpayments recognized in owners’equity
    3. Others
                                                                                         71,666,667             -184,976,6 -113,310,0
    (IV) Profit distribution
                                                                                                .13                  67.13       00.00
    1. Appropriations to surplus                                                        71,666,667             -71,666,66
    reserves                                                                                        .13                   7.13
    2. Appropriations to general
                                                         2013 Annual Report of Anhui Gujing Distillery Company Limitedrisk provisions
    3. Appropriations to owners                                                                                     -113,310,0 -113,310,0
    (or shareholders)                                                                                                         00.00     00.00
    4. Other
    (V) Internal carry-forward of 251,800,00 -251,800,0
    owners’ equity                              0.00       00.00
    1. New increase of capital
                                       251,800,00 -251,800,0(or share capital) from capital
                                             0.00       00.00public reserves
    2. New increase of capital(or share capital) from surplusreserves
    3.    Surplus    reserves   formaking up losses
    4. Other(Ⅵ) Specific reserve
    1. Withdrawn for the period
    2. Used in the period(Ⅶ) Other
                                       503,600,00 1,249,255,                              213,634,70                 1,219,700, 3,186,191,IV. Closing balance
                                             0.00      645.23                                    4.46                    782.58    132.27
    Legal representative: Yu Lin                                 Person-in-charge of the accounting work: Ye ChangqingChief of the accounting division: Zhu Jiafeng
                                       Anhui Gujing Distillery Co., Ltd.
                                   Notes to the Financial Statements
                                       For the Year Ended 31 December 2013
                        (All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
       Note 1: Company Profile
    Anhui Gujing Distillery Co., Ltd. (hereafter “the Company” or "Company") was the company limited by shares approved byAdministration Bureau of State-owned Property of Anhui province following the approval WanGuoZiGongZi (1996) NO. 053 (皖国资工字(1996)第053号文), Anhui Gujing Group Co., Ltd. as the sole sponsors, established net assets in the assessment of mainproduction operating assets of its core company Anhui Bozhou Gujing distillery 377.1677 million transferred into the 155,000,000state-owned shares, and the registered location was the Bozhou City of People's Republic of China. The company was registered in
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limitedthe The People's Republic of China on 5 March 1996 and was approved by People’s Government of Anhui province following theapproval WanZhengMin (1996) NO.42 (皖政秘(1996)42 号文). The company convoked the founding meeting on 28 May 1996,and registrated on 30 May 1996 by Administration for Industry and Commerce of Anhui province. The registration number ofBusiness License for Enterprise as a Legal Person is: 14897271-1.
    The Company has been issued 60,000,000 domestic listed foreign shares (hereafter “B” shares) in June 1996 and20,000,000 domestic listed CNY ordinary shares (hereafter “A” shares) in September 1996, the par value of ordinary shares isCNY1.00 per share. Both A share and B share are listed in Shenzhen Stock exchange.
    The headquarters of the company is located in Gujing town, Bozhou city, Anhui province. The company and the subsidiaries(collectively called “Group”) is mainly engaged in liquor production and sales, it belongs to the food manufacturing industry.
    The original registered capital was CNY 235 million, the total amount of shares were 235 million, including state-owned shares155 million ,B shares 60 million and A shares 20 million, the par value is CNY 1 per share.
    On 29 May 2006, the shareholder meeting for the Company’s shareholdings reform of A-share market have been discussedand approved the proposal of the shareholdings reform, and that has been implemented in June 2006. After the Company’sshareholdings reform implemented, all shares of the Company became floating shares, which including 147,000,000 shares withrestrict condition on disposal, represent 62.55% of total share capital, and 88,000,000 shares without restrict condition on disposal,represent 37.45% of total share capital.
    On 27 June 2007, the Company issued the , the 11,750,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, andthe conversion date is on 29 June 2007. Hence, outstanding shares with restrict condition on disposal are 135,250,000 shares,representing 57.55% of total share capital, the share without restrict condition on disposal are 99,750,000 shares, representing42.45% of total share capital.
    On 17 July 2008, the Company issued the ,the 11,750,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and theconversion date is on 18 July 2008. Hence, outstanding shares with restrict condition on disposal are 123,500,000 shares,representing 52.55% of total share capital, the share without restrict condition on disposal are 111,500,000 shares, representing47.45% of total share capital.
    On 24 July 2009, the Company issued the     Ltd.>,   the    123,500,000      restricted outstanding   shares    with    restrict   condition   on disposal became non-restrictedin stock market, and the conversion date is on 29 July 2009. Hence, all shares of the Company were became outstanding shareswithout restrict condition on disposal.
    According to the approval by China Securities Regulatory Commission (the authorization file No. zhengjianxuke[2011]943), on15th July 2011, the Company private issued 16,800,000 shares of ordinary share (A shares) to specific investors, the par value inCNY 1 per share, and the offering price is CNY 75 per share, the funds raised amounting to CNY 1,260 million, deduct those sundry
                                                           2013 Annual Report of Anhui Gujing Distillery Company Limitedissuing charges amounting to CNY 32,500,549.73, the actual funds raised net amounting to CNY 1,227,499,450.27. The abovefunds have been reviewed by Reanda Certified Public Accountants Co., Ltd., and issued the Capital Verification Report (REANDAYAN ZI[2011]No.1065). After private issued, the share capital was increased to CNY 251.8 million.
    According to the resolution of 2011 annual general meeting of stockholders, every 10 shares transferred to increase 10 sharesby capital reserves used the base of the 251.8 million shares on 31 December, 2011, the total amount of increase by transferringwere 251.8 million shares and has been implemented in 2012. After increase by transferring the registered capital was increased toCNY 503.6 million.
    Up to 31 December 2013, the accumulated total amount of issued capital was 503.6 million shares, see the note 7.27.
    The approved business scope: grain procurement (operation by license), manufacture of distilled spirits, beer, red wine,facilities for wine making, packaging materials, and glass bottles, alcohol, feeds, grease (limited to the by-products from alcoholmanufacture), development of high-tech, biotechnology development agricultural and sideline products deep processing, sales ofgoods from own production.
    The parent company of the group and ultimate parent company is the Anhui Gujing Group Co., Ltd.
    The financial statement is approved by the resolution of board of directors on 17th April, 2014. According to the articles ofassociation, the financial statements will be submitted to the shareholders meeting for consideration.
       Note 2: Basis for preparation of the financial statements
    The financial statements of company have been prepared on basis of going concern in conformity with Chinese AccountingStandards for Business Enterprises and the Accounting Systems for Business Enterprises issued by the Ministry of Finance ofPeople’s Republic of China in February 2006, and Accounting Standards (order No.38 of the Ministry of Finance) and CompilationRules for Information Disclosure by Companies Offering Securities to the Public No.15 – General Provisions on Financial Reports(2010 Revision) issued by the China Securities Regulatory Commission (CSRC).
    According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the company hasadopted the accrual basis of accounting. Except for certain financial instruments which are measured by at fair value, the Companyadopts the historical cost as the principle of measurement in the financial statements. Where assets are impaired, provisions forasset impairment are made in accordance with relevant requirements.
       Note 3: Statement of Compliance with Enterprise Accounting Standards
    The financial statements of the company are recognized and measured in accordance with the regulations in the ChineseAccounting Standards for Business Enterprises and they give a true and fair view of the financial position, business result and cashflow of the Company as of 31 December 2013 .In addition, the financial statements of the company comply, in all material respects,with the revised disclosing requirements for financial statements and the Compilation Rules for Information Disclosure byCompanies Offering Securities to the Public No.15—General Provisions on Financial Reports (2010 Revision) issued by China
                                                            2013 Annual Report of Anhui Gujing Distillery Company LimitedSecurities Regulatory Commission (CSRC) in 2010.
        Note 4: Important Accounting Principles and Accounting Estimates
      4.1 Accounting period
      The accounting period of the Company is classified as interim period and annual period. Interim period refers to the reportingperiod shorter than a complete annual period. The accounting period of the Company is the calendar year from 1st January to 31stDecember.
      4.2 Monetary Unit
      Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate.Therefore, the Company and its domestic subsidiaries choose CNY as their functional currency. The Company adopts CNY toprepare its functional statements.
      4.3 Business combination
      A business combination is a transaction or event that brings together two or more separate entities into one reporting entity.Business combinations are classified into business combinations involving enterprises under common control and businesscombinations not involving enterprises under common control.
      (1) Business combination involving entities under common control
      A business combination involving enterprises under common control is a business combination in which all of the combiningenterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is nottransitory.
      For a business combination involving enterprises under common control, the party that, on the combination date, obtainscontrol of another enterprise participating in the combination is the absorbing party, while that other enterprise participating in thecombination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of theparty being absorbed.
      The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at thecombination date. The difference between the carrying amount of the net assets obtained and the carrying amount of considerationpaid for the combination (or the total face value of shares issued) is adjusted to the capital premium (or share premium) in thecapital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained earnings.
      The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall berecognized as an expense through profit or loss for the current period when incurred.
      (2) Business combination involving entities not under common control
      A business combination involving enterprises not under common control is a business combination in which all of thecombining enterprises are not ultimately controlled by the same party or parties both before and after the business combination.
      For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains
                                                               2013 Annual Report of Anhui Gujing Distillery Company Limitedcontrol of another enterprise participating in the combination is the acquirer, while that other enterprise participating in thecombination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
      For a business combination not involving enterprise under common control, the combination cost including the sum of fairvalue, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. Theintermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc andother associated administrative expenses attributable to the business combination are recognized in profit or loss when they areincurred.
      The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securitiesor liability securities.
      The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisitiondate. If, within the 12 months after acquisition, additional information can prove the existence of related information at acquisitiondate and the contingent consideration need to be adjusted, goodwill can be offset.
      Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through the businesscombination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds the acquirer’sinterest in the fair value of the acquiree’s identifiable net assets, the difference shall be recognized as goodwill. Where the cost ofcombination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall beaccounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of theacquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination; (ii) if after thatreassessment, the cost of combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable netassets, the acquirer shall recognize the remaining difference immediately in profit or loss for the current period.
      Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions appliedfor recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence ofrelated information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporarydifference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is notsufficient, the difference shall be recognized as profit of the current period.
      Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of deferred income taxassets is related to the combination.
      For a business combination not involving enterprise under common control, which achieved in stages that involves multipleexchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards InterpretationNo. 5” (CaiKuai [2012] No. 19) on the “package deal” criterion (see Note 4.4.2) , to judge the multiple exchange transations whetherthey are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of this section and the Notesdescribed in 4.10 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish theindividual financial statements and the consolidated financial statements related to the accounting treatment:
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
    For the purpose of the separate financial statements, the cost of acquisition is measured as the sum of the carrying amount ofinvestment in the investee immediately prior to the acquisition and the consideration for the addition investment. Cumulative othercomprehensive income relevant to the investment recognised prior to the acquisition is reclassified to profit or loss as investmentincome at the time of acquisition.
    For the purpose of the consolidated financial statements, the investment in the investee prior to the acquisition is premeasuredby fair value, difference between the acquisition date fair value of the investment in the investee prior to the acquisition and itscarrying amount is recognised in profit or loss as investment income at the time of acquisition. Cumulative other comprehensiveincome relevant to the investment recognised prior to the acquisition is reclassified to profit or loss as investment income at the timeof acquisition.
    4.4 Preparation of the consolidated financial statements
    (1) The scope of consolidation
    The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the powerto govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope ofconsolidation includes the Company and all of the subsidiaries. Subsidiary is an enterprise or entity under the control of theCompany.
    (2) Preparation of the consolidated financial statements
    The subsidiary of the Company is included in the consolidated financial statements from the date when the control over the netassets and business decisions of the subsidiary is effectively obtained, and excluded from the date when the control ceases.
    For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the date whencontrol is lost) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For asubsidiary disposed during the period, no adjustment is made to the opening balance of the consolidated financial statements.
    For a subsidiary acquired through a business combination not under common control, the operating results and cash flowsfrom the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidatedstatement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in theconsolidated financial statements.
    Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises undercommon control, the financial statements of the subsidiary are included in the consolidated financial statements. The results ofoperations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively,based on their carrying amounts, from the date that common control was established, and the opening balances and thecomparative figures of the consolidated financial statements are restated.
    When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Companymakes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period oraccounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limitedcommon control, the financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date ofacquisition. Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group transactions, areeliminated in preparing the consolidated financial statements.
      Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in theconsolidated balance sheet within shareholders’/ owners’ equity and net profit. Net profit or loss attributable to minority shareholdersin the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item.
      When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’ portion of the opening balance of [shareholders’] [owners’] equity of the subsidiary, the excess is allocated against theminority interests.
      When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, theremaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the totalamount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equityinvestment and 2) the carrying amounts of the interest in the former subsidiary’s net assets immediately before the loss of thecontrol is recognized as investment income for the current period when control is lost. The amount recognized in othercomprehensive income in relation to the former subsidiary’s equity investment is reclassified as investment income for the currentperiod when control is lost. The retained interest is subsequently measured according to the rules stipulated in the “ChineseAccounting Standards for Business Enterprises No.2—Long-term equity investment” or “Chinese Accounting Standards forBusiness Enterprises No.22—Determination and measurement of financial instruments” . See Note 4.10 Long-term equityinvestments and Note 4.7 Financial instruments for details.
      Where loss of control over a subsidiary results from multiple transactions (agreements), assessment shall be made as towhether the multiple agreements shall be viewed as a whole as a single transaction. Multiple agreements giving rise to loss ofcontrol over a subsidiary is generally viewed as a whole as a single transaction if the terms, conditions and economic implications ofthe multiple agreements satisfy one or more of the following conditions: 1) the agreements are entered into simultaneously or takinginto account the implication of each other; 2) the business objective cannot be achieved without successful completion of all theagreements; the occurrence of one agreement is dependent on the result of at least another one agreement; and/or 4) any onesingle agreement is not recognised as economic and the agreements as a whole is economic. Where multiple agreements do notsatisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted for in accordancewith the provisions of disposal of long-term equity investments not resulting loss of control (see Note 4.10.2.2)) or loss of control dueto disposal of shares or other events (see the previous paragraph). Where multiple agreements satisfy the conditions of beingviewed as a single transaction, each agreement shall be treated and accounted for as a transaction which results in loss of control;differences between the consideration for disposals prior to loss of control and the net assets proportionate to the shares disposedprior to loss of control are recognised as other comprehensive income in the consolidated financial statements and transferred toprofit or loss at the time of loss of control.
      4.5 Cash equivalent
                                                               2013 Annual Report of Anhui Gujing Distillery Company Limited
    Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having shortholding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchangedinto certain amount of cash that can be measured reliably and have low risks of change.
    4.6 Foreign exchange
    (1) Translation in foreign exchange transactions
    The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying [the spot exchangerate on the date of the transaction / an exchange rate that approximates the actual spot exchange rate on the date of transaction].The exchange of foreign currency and transactions related to the foreign exchange are translated at the spot exchange rate.
    (2) Translation of monetary foreign currency and non-monetary foreign currency
    At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheetdate. All the exchange differences thus resulted are taken to profit or loss, except for ① those relating to foreign currencyborrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle ofcapitalization of borrowing costs; ② hedging accounting, the exchange difference related to hedging instruments for the purposeof net oversea operating investment is recorded in the comprehensive income till the date of disposal and recognized in profit or
    loss of the period; exchange difference from changes of other account balance of foreign currency monetary items,                   ③available-for-trade is recorded into profit or loss except for amortized cost.
    Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate prevailingon the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currencyitems measured at fair value are translated at the spot exchange rate prevailing at the date when the fair values are determined.The exchange difference thus resulted are recognized in profit or loss for the current period or as capital reserve.
    4.7 Financial instruments
    (1) Determination of financial assets and liabilities’ fair value
    Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties inan arm’s length transaction. For a financial instrument which has an active market, the Company uses quoted price in the activemarket to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained fromexchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actualtransaction.
    For a financial instrument which does not have an active market, the Company establishes fair value by using a valuationtechnique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties,reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and optionpricing models.
    The Company measures initially and subsequently the fair value of an interest rate swap at the value of a competitor’s interestrate swap quoted by a recognised financial institution as at the Company’s balance sheet date in accordance with the principle of
                                                                 2013 Annual Report of Anhui Gujing Distillery Company Limitedconsistency.
        (2) Classification, recognition and measurement of financial assets
        All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initialrecognition, the Company’s financial assets are classified into one of the four categories, including financial assets at fair valuethough profit or loss, held-to maturity investments, loans and receivables and available-for-trade financial assets. A financial asset isrecognized initially at fair value. In the case of financial assets at fair value through profit or loss, relevant transaction costs areimmediately charged to the profit and loss of the current period; transaction costs relating to financial assets of other categories areincluded in the amount initially recognized.
        ①     Financial assets at fair value through profit or loss:
        Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
        Financial asset held-for-trade is the financial asset that meets one of the following conditions:
        A. the financial asset is acquired for the purpose of selling it in a short term;
        B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there isobjective evidence indicating that the enterprise recently manages this portfolio for the purpose of short-term profits;
        C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financialguarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without aquoted price from an active market) whose fair value cannot be reliably measured. For such kind of financial assets, fair values areadopted for subsequent measurement.
        Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the followingconditions:
        A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of relevant gains orlosses that would otherwise arise from measuring the financial instruments on different bases.
        B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is reported to theenterprise’s key management personnel. Formal documentation regarding risk management or investment strategy has prepared.
        Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arisingfrom changes in the fair value and any dividends or interest income earned on the financial assets are recognized in the profit orloss.
        ②       Investment held-to maturity
        Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that anentity has the positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortizedcost using the effective interest method. Gains or losses arising from derecognition, impairment or amortization are recognized inprofit or loss for the current period.
        Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedasset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.
        When calculating the effective interest rate, the Company shall estimate future cash flow considering all contractual terms ofthe financial asset or financial liability without considering future credit losses, and also consider all fees paid or received betweenthe parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate,transaction costs, and premiums or discounts, etc.
        ③      Loans and receivables
        Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an activemarket. Financial assets classified as loans and receivables by the Company include note receivables, account receivables, interestreceivable dividends receivable and other receivables.
        Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arisingfrom derecognition, impairment or amortization is recognized in profit or loss.
        ④ Financial assets available-for-trade
        Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition asavailable for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans andreceivables or investment held-to-maturity.
        Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in thefair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses andexchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized inprofit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit orloss.
        Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-tradeare held, are recognized in investment gains.
        (3) Impairment of financial assets
        The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets thatmeasured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for theimpairment.
        ①      Impairment on held-to maturity investment, loans and receivables
        The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value offuture cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value offinancial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recordedoriginally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized costof the financial assets without provisions of impairment loss on the reserving date.
        ②      Impairment loss on available-for-trade financial assets
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limited
    Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integratedrelevant factors, an available-for-trade financial asset is impaired.
    When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had beenrecognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removedshall be difference between the acquisition cost with deduction of recoverable amount less amortized cost, current fair value andany impairment loss on that financial asset previously recognized in profit or loss.
    If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered,and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can bereversed and the reserved impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the reservedimpairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
    The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured,or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shallnot be reversed.
    (4) Recognition and measurement of financial assets transfer
    The Group derecognizes a financial asset when one of the following conditions is met:
    1) the rights to receive cash flows from the asset have expired;
    2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-througharrangement; or
    3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially allthe risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, buthas transferred control of the asset.
    If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset isrecognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existencerefers the level of risk by the financial asset changes the enterprise is facing.
    For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of the financialasset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had beenrecognized in other comprehensive income, is recognized in profit or loss.
    If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset isallocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value ofthose parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of theconsideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has beenpreviously recognized in other comprehensive income, is recognized in profit or loss.
    (5) Classification and measurement of financial liabilities
                                                                  2013 Annual Report of Anhui Gujing Distillery Company Limited
      The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or lossand other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediatelyrecognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in the initialrecognition amounts.
      1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
      The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to bemeasured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assetsdesigned at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss.
      For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted forsubsequent measurement. All the gains or losses on the change of fair value and the expenses on dividends or interests related tothese financial liabilities are recognized in profit or loss for the current period.
      2) Other financial liabilities
      Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and theirfair value cannot be measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured atamortized cost using the effective interest method. Gains or losses arising from derecognition or amortization are recognized inprofit or loss for the current period.
      (6) Derecognition
      The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged orcancelled or has expired. An agreement between the Company (an existing borrower) and existing lender to replace originalfinancial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the originalfinancial liability and the recognition of a new liability.
      When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount ofthe financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferredor new financial liabilities assumed) in profit or loss.
      (7) Derivatives and embedded derivatives
      Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contractsare entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
      An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financialasset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economiccharacteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the hostcontract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. Ifthe Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date,it designates the entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
      (8) Offsetting financial assets and financial liabilities
      When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedliabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, afinancial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the abovecircumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
      (9) Equity instruments
      An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of itsliabilities. The consideration received from issuing equity instruments, net of transaction costs, are added to shareholders’ equity. Alltypes of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
      4.8 Receivables
      The receivables by the Company includes account receivables, and other receivables.
      (1) Criteria for recognition of bad debts:
      The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that thereceivables have been impaired, an impairment provision shall be made:
      1) A serious financial difficulty occurs to the issuer or debtor;
      2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or theprincipal, etc.;
      3) The debtor will probably become bankrupt or carry out other financial reorganizations;
      4) Other objective evidences showing the impairment of the receivables.
      (2) Method for bad debts provision
      1) Provisions of bad debts in account receivables that is individually significant.
      Individual receivables equal to or higher than CNY 2,000,000.00 are classified as receivables of individual significance.
      For an account receivable that is individually significant, the asset is individually assessed for impairment, the impairment lossis recognized at the difference between the present value of future cash flow less the carrying amount, and provision is madeaccordingly.
      2) Provisions of bad debts in account receivables those individually insignificant items with similar credit risk characteristicsthat have significant risk:
      A. Evidence of credit risk characteristics
      Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assetswith similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all dueamount under the contract, and is related to the estimation of future cash flow expected to be derived from the assets.
      Evidence of portfolios:
                       Item                                                                     Basis
    Age portfolios                                                                                  Age
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limited
    Related party portfolios                           The companies which are in the scope of the consolidation.
    B. Provision by credit risk characteristics
    During the Company impairment test, the amount of bad debts provisions is determined by the assessed result from theexperience of historical loss and current economic status and the existing loss in the estimated account receivables according to theset of account receivables and credit risk characteristic.
    Provision for different portfolios:
                                Item                                                                  Provision
    Age portfolios                                                                                 Age analysis method
    Related party portfolios                                                                     No allowance for bad debt
      a.     Portfolio by age analysis
                                                       Percentage of carrying amount for              Percentage of carrying amount for
                    Category                          recognition of allowance for bad debt         recognition of allowance for bad debt
                                                        applicable to accounts receivable              applicable to other receivableLess than 1 year (inclusive, same applies tothe following)
    Including: 1 to 6 months                                                                1.00                                           1.00
    7 to 12 months                                                                          5.00                                           5.00
    1 to 2 years                                                                           10.00                                        10.00
    2 to 3 years                                                                           50.00                                        50.00
    Over 3 years                                                                         100.00                                       100.00
    3) Provisions of bad debts that is individually insignificant.
    For the account receivables not individually significant, the Company assesses the account receivables individually forimpairment when are of following characteristics: if there is objective evidence indicating the impairment, the impairment loss isrecognized at the difference between the present value of future cash flow less the carrying amount, and provision is madeaccordingly. For examples: receivables of individual insignificance bears differing credit risk characteristics to other receivables ofindividual insignificance account receivables with related parties; account receivables under litigations or arbitrations, or accountreceivables with obvious indication that debtor cannot fulfill the obligation of repayment.
    (3) The reversal of bad debts provision
    If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an eventoccurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized in profit orloss. However, the reversal shall not result in a carrying amount that exceeds what the amortized cost would have been had theimpairment loss not been recognized at the date the impairment is reversed.
                                                               2013 Annual Report of Anhui Gujing Distillery Company Limited
    4.9 Inventories
    (1) Classification of inventory
    The Company’s inventory mainly includes raw materials, semi-finished product, work-in-progress and finished products.
    (2) Valuation method of inventories
    Inventories are initially carried at the actual cost. Cost of inventories includes purchase cost, conversion cost and other cost.Cost of issue is measured using the weighted average method.
    (3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
    Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion,the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clearevidence obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
    At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizablevalue is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline invalue is determined normally by the difference of the cost of individual item less its realizable value. For large quantity and lowvalue items of inventories,
    provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line thatare produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot bepracticably evaluated separately from other items in that product line provision for decline in value is determined on an aggregatebasis.
    After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to bewritten down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provisionfor decline in value is reversed and the reversal is included in profit or loss for the period.
    (4) The perpetual inventory system is maintained for stock system.
    (5) Amortization method for low cost and short-lived consumable items and packaging materials.
    Low cost and short-lived consumable items are amortized using immediate write-off method; packaging materials areamortized using immediate write-off method.
    4.10 Long-term equity investments
    (1) Determination of Investment cost
    For a business combination involving enterprises under common control, the initial investment cost of the long-term equityinvestment shall be carrying value of the absorbing party’s share of the shareholder’s equity of the party being absorbed at the dateof combination.
    For a business combination not involving enterprise under common control, the combination cost including the sum of fairvalue, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. Theintermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc and
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedother associated administrative expenses attributable to the business combination are recognized in profit or loss when they areincurred.
      The transaction cost for the equity securities or liability securities issued by the acquirer in the business combination shall berecognized as initial amount of equity security or liability.
      The equity investments other than the long-term equity through combination shall be initially measured by cost. The cost shallbe recognized to the difference in the way of acquisition of long-term equity investment. Theses ways include the cash purchaseprice the Company the Company actually paid, the fair value of equity security issued by the Company, value specified in theinvestment contract or agreement, the fair value or carrying value of the asset out in the transaction of non-monetary assetexchanges, and the fair value of the long-term equity investment.
      Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term equity investment aretaken into investment cost.
      (2) Subsequent Measurement
      Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have common controlor significant influence over the investee, the investment is not quoted in an active market and its fair value cannot be measuredreliably.
      Where an investing enterprise can exercise common control or significant influence over the investee,
      a long-term investment shall be accounted for using the equity method.
      When an investing enterprise can no longer exercise joint control or common control nor significant influence over the investee,and its fair value cannot be measured reliably, a long-term investment shall be counted as financial asset ready-for trade.
      A long-term equity investment where cost method is adopted in the Company’s financial statements
      can exercise controls over the investee.
      1) Cost method of accounting for long-term equity investments
      Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends orprofits declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equityinvestment, investment income is recognized in the period in accordance with the attributable share of cash dividends or profitdistributions declared by the investee.
      2) Equity method of accounting for long-term equity investments
      Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in the fair valuesof the investee’s identifiable net assets at the time of acquisition, no adjustment shall be made to the initial investment cost.
      Where the initial investment cost of a long-term equity investment is less than the investing enterprise’s interest in the fairvalues of investee’s identifiable net assets at the time of acquisition, the difference shall be charged to profit or loss for the currentperiod, and the cost of the long-term equity investment shall adjusted accordingly.
      Under the equity method, the Company recognizes its share of the net profit or loss of the investee for the period as
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedinvestment income or loss for the period. The Group recognizes it share of the investee’s net profit or loss based on the fair value ofthe investee’s individual separately inventible assets, etc. at the acquisition date after making appropriate adjustments to confirmwith the Company’s accounting policies and accounting period. Unrealized profits or losses resulting from the Company’stransactions with its associates and joint ventures are recognized as investment income or loss to the extent that those attributableto the Company’s equity interest are eliminated. However, unrealized losses resulting from the Company’s transactions with itsinvestees on the transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", arenot eliminated. Changes in owners’ equity of the investee other than net profit or loss are correspondingly adjusted to the carryingamount of the long-term equity investment, and recognized as other compressive income which is included in the capital reserve.
      When the investee is recognized net losses, reduce the carrying value of long-term equity investments and long-term equity ofnet investment (in substance) in investee to zero. In addition, the Company has the obligations on additional losses, then theexpected obligation as estimated liabilities and included in the current investment losses. Where the net profit from investee units,restoration confirm the amount of revenue sharing after offset the amount of unrecognized loss sharing.
      For long-term equity investments in associates and joint ventures which had been held by the Company before its first timeadoption of Accounting Standards for Business Enterprises, where the initial investment cost of a long-term equity investmentexceeds the Company’s interest in the investee’s net assets at the time of acquisition, the excess is amortized and is recognized inprofit or loss on a straight line basis over the original remaining life.
      3) Acquisition of minority interest
      The difference between newly increased equity investment due to acquisition of minority interests and portion of net assetcumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb thedifference, the excess are adjusted against returned earnings.
      4) Disposal of long-term equity investment
      Where the parent company disposes long-term investment in a subsidiary without a change in control, the difference in the netasset between the amount of disposed long-term investment and the amount of the consideration paid or received is adjusted to theowner’s equity. If the disposal of long-term investment in a subsidiary involves loss of control over the subsidiary, the relatedaccounting policies in Note 4.2(2) applies.
      On disposal of a long-term equity investment, the difference between the proceeds actually received and receivable and thecarrying amount is recognized in profit or loss for the period. For long-term equity investment accounted for using the equity method,the amount included in the owners’ equity attributable to the percentage interest disposed is transferred to profit or loss for theperiod.
      For any retained interest, it shall be subsequently measured according to the related accounting policies in regard of long-termequity investments or financial assets as described above if its carrying amount is recognized as long-term equity investments orother related financial assets. Retroactive adjustment is made on the basis of relevant policies if the retained interests are settledfrom cost method to equity method.
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limited
      (3) Recognition of investee under common control or significant influence
      Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operatingactivities.
      Common control is the contractually agreed sharing of control over an economic activity, and exists only when the strategicfinancial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.
      Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not controlor joint control over those policies.
      When determining whether an investing enterprise is able to exercise control or significant influence over an investee, theeffect of potential voting rights of the investee held be the investing enterprise or other parties that are currently exercisable orconvertible shall be considered.
      (4) Impairment testing methods and recognition of impairment provision
      The company assesses the long-term equity investment at the balance sheet date whether there is any indication ofimpairment. If any indication exists that an asset may be impaired, the enterprise shall
      estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying amount, a provision forimpairment loss of the asset is recognized accordingly.
      Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
      4.11 Investment property
      Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes leased or readyto transfer after capital appreciation land use rights and leased buildings. Investment property is initially measured at cost.Subsequent expenditures related to an investment real estate are likely to flow about the economic benefits of the asset and its costcan be measured reliably, is included in the cost of investment real estate. Other subsequent expenditure in the profit or loss whenincurred.
      The Group uses the cost model for subsequent measurement of investment property, and in accordance with the depreciationor amortization of buildings or land use rights policy.
      Investment property impairment test method and impairment accrual method described in Note 17 “Non-current andnon-financial assets impairment ".
      Occupied real estate for investment property or investment property is transferred to owner-occupied real estate or stockconversion as the recorded value after the conversion, according to the book value before the conversion.
      Investment property change into the Owner-occupied real estate, since the change of date for the investment property istransferred to fixed assets or intangible assets. Change the owner-occupied property held to earn rentals or for capital appreciation,since the change of date, the fixed assets or intangible assets to investment property. Conversion occurs when converted toinvestment property using the cost model, as the book value before the conversion of the recorded value after the conversion;converted to investment property measured at fair value model, the fair value of the conversion date as the recorded value after
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limitedconversion.
    Derecognised when the investment property is disposed of or permanently withdrawn from use and the expected economicbenefits can not be obtained from the disposal of investment property. Proceeds on disposal of investment property is sold,transferred, retired or damaged through profit or loss after deducting the book value and related taxes.
    4.12 Fixed assets
    (1) The conditions of recognition
    Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor service, rentingor business management and their useful life is in excess of one fiscal year.
    (2) The method for depreciation
    Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement. From thefollowing month of state of intended use, depreciation method of the straight-line method is used for different categories of fixedassets to take depreciation. The recognition of the classification, useful life and estimated residual rate are as follows:
                                                                                     Estimated residual
                  Category                           Expected useful life                                          Depreciation(%)
                                                                                          value(%)
    Houses and building                                                         8-35                          3-5                 2.7-12.1
    Machineries                                                                 8-10                          3-5                 9.5-12.1
    Vehicles                                                                      4                             3                   24.25
    Administrative equipments and others                                          3                             3                   32.33
    Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of the assetless the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected service life in the end.
    (3) Measurement and recognition of fixed assets impairment
    Impairment and provisions of fixed assets are disclosed on Note 4.17 Impairment of non-current and non-financial assets.
    (4) Fixed Assets under finance leases
    A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may ormay not eventually be transferred.
    Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixed assetsowned by the Company. If it can be reasonably determined that the ownership of the leased assets can be obtained at the end ofthe lease period, the leased assets are depreciated over their useful lives; otherwise, the leased assets are depreciated over theshorter of the lease terms and the useful lives of the leased assets.
    (5) Others
    A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limitedthe cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteriashall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall bederecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which they are incurred.
    The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction of carryingvalue and related tax.
    The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset atleast on an annual base. Any change is regarded as change in accounting estimates.
    4.13 Construction in progress
    Construction in progress is measured at its actual cost. The actual costs include various construction expenditures during theconstruction period, borrowing costs capitalized before it is ready for intended use and other relevant costs. Construction inprogress is transferred to a fixed asset when it is ready for intended use.
    Testing method for provision impairment of construction in progress and accrued method for provision impairment please referto Note 4.17.
    4.14 Borrowing costs
    Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred inconnection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings.
    The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset arecapitalized. The amounts of other borrowing costs incurred are recognized as an expense in the period in which they are incurred.Qualifying assets are asset (fixed assets, investment property and inventories, etc.) that necessarily take a substantial period oftime for acquisition, construction or production to get ready for their intended use or sale.
    Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expenseincurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used onthe asset or any investment income on the temporary investment of those funds.
    Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determinedby applying a weighted average interest rate to the weighted average of the excess amounts of accumulated expenditure on theasset over and above the amounts of specific-purpose borrowings.
    During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in foreigncurrency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognized in profit or loss inthe period in which they are incurred.
    Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time ofconstruction or production activities before ready for intended used or sale.
    Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of aqualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedinterruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as anexpense for the current period until the acquisition, construction or production is resumed.
      4.15 Intangible assets
      (1) Intangible asset
      The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or controlled byenterprises.
      The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic benefits relatedto intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall berecorded as cost of intangible assets. The expenses other than this shall be booked in the profit or loss when they occur.
      Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such as plants that aredeveloped and constructed by the Company, and relevant land use rights and buildings, are accounted for as intangible assets andfixed assets, respectively. Payments for the land and buildings purchased are allocated between the land use rights and thebuildings; if they cannot be reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.
      When an intangible asset with a definite useful life is available for use, its original cost less net residual value and anyaccumulate impairment losses is amortized over its estimated useful life using the straight-line method. An intangible asset with anindefinite useful life is not amortized.
      For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method at the end ofthe period, and makes adjustment when necessary.. An additional review is also carried out for useful life of the intangible assetswith indefinite useful life. If there is evidence showing the foreseeable limit period of economic benefits generated to the enterpriseby the intangible assets, then estimate its useful life and amortize according to the policy of intangible assets with definite useful life.
      (2) Research and development cost
      Cost of research and development is distinguished into the research phase and the development phases.
      Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
      Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in the period inwhich it is incurred:
      1) it is technically feasible to complete the intangible asset so as to use it or sell it;
      2) it is clearly invented to complete the intangible asset in order to use it or sell it;
      3) it is probable that the intangible asset is capable of generating future economic benefit, such as the market for the productproduced by the intangible asset or the intangible asset itself, it is objectively evidential that the intangible asset is economicallyusable if it is going to be used internally;
      4) there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell it;
      5) the cost of the development of the intangible can be measured reliably.
      If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit or loss for
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limitedthe period in which it is incurred.
    (3) Impairment of intangible assets
    Impairment and provisions of intangible assets are disclosed on Note 4.17.
    4.16 Long-term deferred expenditure
    An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a periodduring which an expense is expected to bring economic benefits to an entity) which is longer than one year and which includes atleast part of the reporting period during which the expense was incurred and subsequent reporting periods. An item of long-termdeferred expenses is recognized at the actual amount of the expense incurred and allocated in each month of the beneficial periodusing the straight line method.
    4.17 Impairment of non-current and non-financial assets
    Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with definiteuseful lives, investment properties measured by cost methods and long-term equity investment on subsidiaries, jointly operations.The Company assesses whether there are any indicators of impairment for all non-financial assets at the balance sheet date, andimpairment test is carried out and recoverable value is estimated if such an indicator exits. Goodwill and intangible assets withindefinite useful lives, as well as intangible assets not ready for use, are tested for impairment annually regardless of indicators ofimpairment.
    Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is lower than thebook value. The recoverable value is the higher of estimated present value of the future expected cash flows from the asset and netfair value of the asset less disposed cost. The fair value of asset is determined by the sales agreement price within an arm’s lengthtransaction. In case there is no sales agreement, but there is active market of assets, the fair value can be determined by the sellingprice. If there is neither sales agreement nor active market, the fair value of the asset can be estimated based on the bestinformation obtained.
    Disposal expenses include expenses related to the legislation, taxes, transportations and the direct expense for the asset tobe ready for sale. When calculating the present value of expected future cash flows from an asset or asset Group, the managementshall estimate the expected future cash flows from the asset or asset Group and choose a suitable discount rate in order tocalculate the present value of those cash flows.
    Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of individual asset ishard to estimate, the recoverable amount can be determined by the asset Group where subject asset belongs. Asset Group is thesmallest set of assets that can have cash flow in independently.
    The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the presentvalue of the future expected cash flows from the asset Groups or sets of asset Groups to which the goodwill is allocated. Estimatingthe present value requires the Company to make an estimate of the expected future cash flows from the asset Groups or sets ofasset Groups and also choose a suitable discount rate in order to calculate the present value of those cash flows. Once the loss
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limitedfrom above asset impairment is recognized, the recoverable part cannot be reserved in the subsequent periods.
      4.18 Assets transfer with buy-back conditions
      For the sale of a financial asset with a repurchase agreement
      If the sale of a financial asset would be buy-back on a particular date in the future which confirmed in the repurchaseagreement should not recognized in the statement of financial position. Cost of repurchase of those financial assets (includeinterests) disclose as in the statement of financial position. The difference between sales price and repurchase price duringagreement period shall be measured as actual interest method and recognize as interest income.
      4.19 Accrued liabilities
      Contingent events recognised as provision if all or the following conditions are satisfied:①This obligation is current obligation of the Company; and,
      ②The performance of this obligation will probably cause economic benefits outflow of the                Company; and,
      ③The amount of this obligation can be reliably measured.
      A provision is measured on a balance-sheet date as the best estimate of the amount that is required for the fulfillment of the present obligation after taking into account of the risks and uncertainty associated with the respective contingent events and the timevalue of money.If the amount required for settlement of a provision is wholly or partly reimbursed by a third party, the reimbursement is recognised separately as an asset to the extent of the carrying amount of the provision if it is probable that the reimbursement becomes receivable.4.20 Revenue
      (1) Revenue from sales of goods
      Revenue from sales of goods is recognized when significant risks and rewards attached to the ownership of the goods soldare passed to the buyer, when neither continual involvement in the rights normally associated with the ownership of the goods soldnor effective control over the goods controls are retained, when revenue arising from the goods sold is reliably measurable, wheninflow of future economic benefits is probable, and when cost incurred or to be incurred associated with the goods sold is reliablymeasurable.
      Revenue arising from domestic sales of goods is recognized when goods are dispatched and delivered to the buyer, whensignificant risks and rewards attached to the ownership of the goods sold are passed to the buyer, when neither continualinvolvement in the rights normally associated with the ownership of the goods sold nor effective control over the goods controls areretained, when revenue arising from the goods sold is reliably measurable, when inflow of future economic benefits is probable, andwhen cost incurred or to be incurred associated with the goods sold is reliably measurable. Revenue arising from non-domesticsales of goods is recognised when goods are loaded on board and when the export clearance with the custom is completed.
      (2) Revenue from rendering of service
      Revenue arising from rendering of services is recognized on the balance date using the percentage of completion method
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limitedwhen the outcome of the services rendered can be reliably estimated. The percentage of completion of the services rendered iscalculated by dividing the cost to date by the budgeted total cost.
    The outcome of the services rendered can be reliably estimated when revenue from the services render can be reliablymeasured, when the inflow of associated future economic benefits is probable, when the percentage of completion can be reliablymeasure, and when the cost incurred or to be incurred associated with the services can be reliably measured.
    When the outcome of the services rendered cannot be reliably estimate, revenue is recognised as cost reimbursementreceived or to be received, if any, and cost incurred is recognised in profit or loss for the period in which the cost is incurred. Norevenue is recognised if cost reimbursement is not probable.
    When a contract between the group and another entity involves both sales of goods and rendering for services, the sales ofgoods and rendering of services are accounted for separately if they are distinguishable and separately measurable; the contract isaccounted for as if it is a contract involves only sales of goods if the sales of goods and rendering of services are eitherindistinguishable or distinguishable but not separately measurable.
    (3) Royalty Revenue
    According to the contract or agreement, the revenue is recognized on an accrual basis.
    (4) Interest Income
    The amount of interest revenue should be measured and confirmed in accordance with the length of time for which theenterprise's cash is used by others and the actual interest rate.
    4.21 Government Grants
    Government grants are transfer of monetary assets and non-monetary assets from the government to the Company at noconsideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grantrelated to the assets and grants related to the income.
    If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If agovernment grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined,it is measured at a nominal amount. A government grant measured at a nominal amount is recognized immediately in profit or lossfor the period.
    A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over theuseful life of the related asset. For a government grant related to income, if the grant is a compensation for related expenses orlosses to be incurred in subsequent period, the grant is recognized as deferred income, and recognized in profit or loss over theperiods in which the related costs are recognized. If the grant is a compensation for related expenses or losses already incurred, thegrant is recognized immediately in profit or loss for the period.
    For repayment of a government grant already recognized, if there is a related deferred income, the repayment is offset againstthe carrying amount of the deferred income, and any excess is recognized in profit or loss for the period. If there is no relateddeferred income, the repayment is recognized immediately in profit or loss for the period.
                                                              2013 Annual Report of Anhui Gujing Distillery Company Limited
      4.22 Deferred tax assets and deferred tax liabilities
      (1) Income tax for the current period
      At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to theperiod when the asset is realized or the liability is settled, according to the requirements of tax laws. The measurement of deferredtax assets and deferred tax liabilities reflects
      the tax consequences that would follow from the manner in which the Company expects at the balance sheet date, to recoverthe assets or settle the liabilities.
      At the balance sheet date, current income tax liabilities or assets for the current and prior periods, are measured at the amountexpected to be paid (or recovered) according to the requirements of tax laws. The calculation for income tax expenses in the currentperiod is based on the taxable income according to the related tax laws after adjustment to the accounting profit of the reportingperiod.
      (2) Deferred income tax assets and liabilities
      For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or between the nilcarrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined according totax laws, deferred tax assets and liabilities are recognized using the balance sheet liability method.
      For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liabilityarising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductiblelosses) at the time of transaction, no deferred tax asset or liability is recognized.
      For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures,no deferred income tax liability related is recognized except where the Company is able to control the timing of reversal of thetemporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
      All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above are recognized.
      For temporary deductible differences associated with the initial recognition of an asset or liability arising from a transaction (nota business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction,no deferred tax asset is recognized.
      For taxable temporary deductible differences associated with investments in subsidiaries and associates, and interests in jointventures, no deferred income tax asset related is recognized if it is impossible to reversal the temporary difference in theforeseeable future, or it is not probable to obtain taxable income which can be used for the deduction of the temporary difference inthe future.
      Except mentioned above, the Company recognizes other deferred income tax assets that can deduct temporary differences tothe extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.
      For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary differencesare recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary
                                                                 2013 Annual Report of Anhui Gujing Distillery Company Limiteddifferences can be utilized.
      At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws, that areexpected to apply in the period in which the asset is realized or the liability is settled.
      At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer probable thatsufficient taxable profit will be available in future periods to allow the benefits of the deferred tax assets to be used, the Companyreduces the carrying amount of deferred tax assets. The amount of such reduction is reversed when it becomes probable thatsufficient taxable profit will be available
      (3) Income tax expenses
      Income tax expenses consist of current income tax and deferred income tax.
      The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or loss in currentaccounting period, except expense for income tax of the current period and deferred income tax that booked into other income orequity and adjusted carrying value of deferred income tax goodwill arose from business combination.
      (4) Income tax offset
      When we have the legal right, and have intended to, to make settlement with net amount, or through the asset acquisition andliability fulfillment simultaneously, the Company shall present the net value from the offset between current income tax asset andcurrent income tax liability in the financial statement.
      When the Company has the legal right to make a settlement with the current income tax asset and current income tax liability,and the deferred income tax asset and deferred income tax liability are related to the same taxable subject under the same taxpayer, or related to different taxable subject, but the intension of net value settlement in regard of the current income tax asset andcurrent income tax liability, the Company shall present net value after the offset of deferred income tax asset and deferred incometax liability.
      4.23 Leases
      A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may ormay not eventually be transferred. An operating lease is a lease other than a finance lease.
      (1) The Company as Lessee under operating Lease
      Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, and eitherincluded in the cost of the related asset or charged to profit or loss for the current period. The contingent rents shall be recorded inthe profit or loss of the period in which they actually arise.
      (2) The Company as Leaser under operating Lease
      Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis over the leaseterm. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is more systematic and rational,that basis may be used. Contingent rents are credited to profit or loss in the period in which they actually arise.
      (3) The Company as Lessee under financing Lease
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
    For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the lower of itsfair value at the lease commencement and the present value of the minimum lease payments, and the minimum lease payment isrecorded as the carrying amount of the
    long-term payables; the difference between the recorded amount of the leased asset and the recorded amount of the payableis accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating andsecuring the lease agreement shall be added to the amount recognized for the leased asset.
    The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into long-term liabilitiesand long-term liability within one year for presentation.
    Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent rent shallbe booked into profit or loss when actually incurred.
    (4) In the case of the lesser of a financing lease
    For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception of thelease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is recorded at the sametime; the difference between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed residual value, andthe aggregate of their present values, is recognized as unearned finance income, which is amortized using the effective interest ratemethod over each period during the lease term.
    Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term liabilitywithin one year for presentation.
    Unearned finance income shall be computed by the effective interest method during the lease term. Contingent rent shall becredited into profit or loss in which actually incurred.
    4.24 Assets held-for-sale
    The Company has made decision on disposal of some non-current assets, and signed irrecoverable transferring agreementswith buyers. The transaction is probably to be completed with one year. If so, the non-current asset shall be counted as an assetready-for-sale, not depreciated or amortized, and shall be measured by the lower of carrying amount and faire value less net valueof disposal expenses. Non-current assets ready-for-sale includes individual asset and disposal Group. If disposal Group is an assetGroup, and has allocated goodwill acquired during the combination according to the Accounting Standard for Business EnterprisesNo. 8 - Impairment, or. the disposal Group is an operation in the asset Group, the disposal Group includes goodwill in the businesscombination.
    Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the condition of non-current assetready-for-trade, the Company shall derecognize it as held-for-trade, and measure it by the lower of the followings:
    (1) the carrying amount of the asset or disposal Group before it is classified as held-for-trade, the value after the adjustment ofdepreciation, amortization or impairment recognized under the assumption that it is not classified as held-for-trade;
    (2) the recoverable value on the date when decided not to trade any more.
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limited
      4.25 Employee Benefits
      During the accounting period of an employee’ providing services to the Company, the Company recognizes the compensationpayable as liabilities.
      The Company participates in the employees social security system set up by government agencies, including pensions,medical insurance, housing fund and other social security system, and the corresponding expenditures are included in the cost ofrelated assets or the profit or loss.
      When an enterprise terminates the employment relationship with employees before the end of the employment contracts orprovides compensation as an offer to encourage employees to accept voluntary redundancy, a provision shall be recognized for thecompensation arising from termination of employment relationship with employees, with a corresponding charge to the profit or lossfor the current period. The enterprise cannot unilaterally withdraw from the termination plan or the redundancy offer.
      The early retirement plan adopts the same principles of termination benefits. Salaries and social insurance (from the date ofceasing services to the date of normal retirement) are paid by the Company, subject to the conditions to be recognized in profit orloss (termination benefits).
      4.26 Changes in major accounting policies and accounting estimates
      (1) change of accounting policies
      There is no significant change of accounting policies for the Company during the reporting period.
      (2) change of accounting estimates
      There is no significant change of accounting estimates for the Company during the reporting period.
      4.27 Correction of prior period errors
      There is no significant change of previous accounting errors for the Company during the reporting period.
      4.28 Significant account judgment and estimates
      The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in the financialstatements that cannot be measured accurately, due to the internal uncertainties of operation activities. These judgments, estimatesand assumptions are based on historical experiences of the Company’s management as well as other factors that are considered tobe relevant. These judgments, estimates and assumptions may affect value of the financial statements in revenue, expenses,assets and liabilities and the disclosure of contingency at the balance sheet date. However, the result derived from thoseuncertainties in estimates may lead significant adjustments to the carrying amounts of the assets or liabilities affected in the future.
      The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern. Where thechanges in accounting estimates only affect the period when changes occurred, and they are recognized within the same period.Where the changes in accounting estimates affect both current period and future period, the changes are recognized within theperiod of change and future period.
      At balance sheet date, the followings are the significant areas where the Company needs to make judgment, estimates and
                                                                2013 Annual Report of Anhui Gujing Distillery Company Limitedassumptions over the value of items in the financial statements:
    (1) Classification of lease
    The Company classifies leases as operating lease and financing lease according to the rule stipulated in the AccountingStandard for Business Enterprises No. 21--Leasing. The management shall make analysis and judgment on whether the risks andrewards related to the title of leased assets has been transferred to the leaser, or whether the Company has substantially held therisks and rewards related to the ownership of leased assets.
    (2) Allowance for bad debt
    According to the relevant accounting policies of the Company in receivables, allowance method is used for bad debt’scalculation. The impairment of receivables is calculated based on the assessment of recoverable of receivables. Assurance ofreceivable impairment needs judgments and estimations from the management. The difference between actual results and originalestimates shall have impact on the carrying amount of receivables and receivable bad debt provisions or the reverse during thechange of estimation.
    (3) Impairment of inventories
    The Company measures inventories by the lower of cost and realizable net value according to the accounting policies inregard of inventories and provisions for decline in value of inventories is made if the cost is higher than their net realizable value,and obsolete and slow-movement inventories. Inventories decline in value to net realizable value is the estimated selling price in theordinary course of business. Net realizable value is determined on the basis of clear evidence obtained, and takes intoconsideration the purposes of holding inventories and effect of post balance sheet events. The difference between the actual resultand the original estimates shall have impact on reverse of the carrying amount of the inventories and their decline in value orprovisions during the period of change.
    (4) The fair value of financial instruments
    For a financial instrument which has no active market, the Company establishes fair value by using various valuation methods,including of discounted cash flow analysis model. The Company needs to estimate future cash flow, credit risk, volatility andrelationship during the valuation and choose appropriate discount rate. Such assumptions have uncertainties and their changesshall have impact on the fair value of financial instruments.
    (5) Impairment of financial assets available-for-sale
    The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions ofmanagement, to determine whether impairment loss is recognized in the income statement. The process of making the judgmentsand assumptions, the Company is required to assess the extent and duration of the fair value of the investment below cost, as wellas investment financial position and short-term business outlook, including industry conditions, technological change, the creditrating, default rates and counterparty risk.
    (6) Impairment of non-financial, non-current assets
    The Company assesses whether there are any indicators of impairment for all non-current assets other than financial assets at
                                                             2013 Annual Report of Anhui Gujing Distillery Company Limitedthe balance sheet date. For an intangible asset that has indefinite useful life, impairment test is made in addition to the annualimpairment test if there is any indication of impairment. For non-current assets other than financial assets, impairment test is madewhen there is any indication that its account balance cannot be recovered.
    Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and presentvalue of the future cash flows expected to be derived from the asset.
    Net value between the difference of fair value and disposal cost is determined by reference of the price of similar product in asale agreement in an arm’s length transaction or an observable market price less the additional cost directly attributable to thedisposal of the asset.
    When estimating the present value of future cash flow, significant judgments are made over the asset’s production, sellingprice and relevant operating expenses, and discount rate used to calculate present value. All available materials that are consideredto be relevant shall be used in the estimation of recoverable value. These materials include estimations of production, selling priceand operating expenses based on reasonable and supportable assumptions.
    The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of present value offuture cash flow of the assets or assets group where goodwill has been allocated. The Company shall makes estimation on thefuture cash flow derived from assets or assets group and determine an appropriate discount rate for the present value of future cashflow when the estimation of present value of future cash flow is made.
    (7) Depreciation and amortization
    Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line method overtheir useful lives after taking into account residual value. The useful lives are regularly reviewed to determine the depreciation andamortization costs charged in each reporting period. The useful lives are determined based on historical experience of similarassets and the estimated technical changes. If there is an indication that there has been a change in the factor used to determinethe depreciation or amortization, the rate of depreciation or amortization is revised.
    (8) Deferred tax assets
    The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that future taxable profitwill be available against which the unused tax losses and unused tax credits can be utilized. This requires the management of theCompany make a lot of judgments over the estimation of time period, value and tax planning strategies when future taxable profitincurs so that the value of deferred tax assets can be determined.
    (9) Income tax
    There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’s everydayoperation. Whether it is possible for some items to make expenditure before tax needs approval from competent tax authorities. Ifthere is any difference between finalized determination value and their initial estimations value, the difference shall have the impacton the
                                                            2013 Annual Report of Anhui Gujing Distillery Company Limited
    income tax and deferred income tax of the current period during the final determination.
    (10) Accrued liabilities
    According with the terms of the contract, the existing knowledge and historical experience, product quality assurance andexpected contract losses, delay in delivery of liquidated damages are estimated and recognized as a accrued liabilities. In thesematters has been the formation of a current obligation, and fulfilling the duty is likely to lead to the outflow of economic benefits ofthe Company, the Company or the best estimate of the current obligation expenditure required recognized as a accrued liabilities.Recognition and measurement of accrued liabilities is dependent on the judgment of management. In the processing of judgmentthe company needed to appraise the related risks, uncertainties and time value of money and other factors.
    The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service commitment isaccrued liabilities. Accrued liabilities have considered the recent experience in the maintenance data, but recent maintenanceexperience may not reflect future maintenance. Any increase or decrease in t accrued liabilities may affect the profit or loss in future
       Note 5: Taxation
    5.1 Major taxes and tax rate
                      Tax                                                                Tax rate (%)
    Value added tax                                 Revenues from sales of products and raw materials at the rate of 17%.
                                                 The consumption taxes have been provided at the rate of CNY 1.00 yuan per kg or 1,000
    Consumption tax                                 ml follow the quantity, and the consumption tax have been provided at the rate of 20% of
                                                 the taxable sales.
    Business tax                                    Business tax rate is the 5% of taxable income
    Urban maintenance                               Sum of VAT payable, consumption duty payable and business tax payable for the
    and construction surcharge                      reporting period, and exempt and deductible tax at the rate of 1, 5, 7%.
                                                 Sum of VAT payable, consumption duty payable and business tax payable for theEducation surcharge
                                                 reporting period, and exempt and deductible tax at the rate of 3%.
                                                 Sum of VAT payable, consumption duty payable and business tax payable for theLocal education surcharge
                                                 reporting period, and exempt and deductible tax at the rate of 2%.。
    Corporate income tax                            Income tax is calculated with the ratio of 25%.
                                                                                                                                                 2013 Annual Report of Anhui Gujing Distillery Company Limited
                    Note 6: Business combination and the consolidated financial statements
                  6.1      Circumstance of subsidiaries
                  6.1.1 Subsidiaries acquired through incorporation or investment
                  The monetary unit is ten thousand unless otherwise stated.
                                                                  Type                       Place                Nature            Registered
                   Subsidiaries                                                                                                                                                Business scope                         Type of business
                                                             of incorporation           of registration         of business           capital
                                                                                                                                                         Wholesales of distilled spirit, construction materials,
    Bozhou Gujing Sales Co., Ltd. (hereafter Gujing                                     Bozhou,
                                                        wholly-owned subsidiary                           Trade and business                8,486.00 feeds and                                                     limited liability company
    Sales)                                                                              Anhui
                                                                                                                                                         assistant materials
    Bozhou Gujing Transportation Co., Ltd                                               Bozhou,
                                                        wholly-owned subsidiary                           Transportation                        695.00 Transportation, Sales, maintenance service                  limited liability company
    (hereafter Gujing Transportation)                                                   Anhui
    Bozhou Gujing Glass Co., Ltd                                                        Bozhou,
                                                        wholly-owned subsidiary                           Manufacturing                     8,666.03 Manufacture and sales of glass products                       limited liability company
    (hereafter Gujing Glass)                                                            Anhui
    Bozhou Gujing Waste Reclamation Co., Ltd              Subsidinary of wholly-owned   Bozhou,                                                              Collect and sale of recycled glass bottle, glass, and
                                                                                                          Recycled                              100.00                                                             limited liability company
    (hereafter Gujing Waste)                                       subsidiary           Anhui                                                                other wastebaskets
                                                                                                                                                         Domestic advertising production, publish, design and
    Anhui Jinyunlai Culture & Media Co.,Ltd.              Subsidinary of wholly-owned   Hefei,
                                                                                                          Advertisement marketing               200.00 agency;                                                     limited liability company
    (hereafter Jinyunlai)                                          subsidiary           Anhui
                                                                                                                                                         conference etiquette service, craft gifts sales
    Bozhou Gujing Packaging Co., Ltd. (hereafter            wholly-owned subsidiary     Bozhou,               Manufacturing                     3,000.00 Approved operating business:None. General operating limited liability company
                                                                                                                                    2013 Annual Report of Anhui Gujing Distillery Company Limited
                                                     Type                       Place                Nature            Registered
                    Subsidiaries                                                                                                                                  Business scope                          Type of business
                                                of incorporation           of registration         of business           capital
    Gujing Packaging)                                                       Anhui                                                               business: Provide packaging services for Gujing
                                                                                                                                            distilled spirit, Gujing Gong series distilled spirit,
                                                                                                                                            vegetable and fruit wine, health wine and mixed wine
                                                                                                                                            Domestic advertising production, publish, design and
                                                                                                                                            agency;
    Shanghai Hong bang Culture Communication   Subsidiary of wholly-owned                                                                       Corporate image design and planning; conference
                                                                        Shanghai             Advertisement marketing               500.00                                                              limited liability company
    Co., Ltd (hereafter Shanghai Hongbang)             subsidiary                                                                               etiquette service, craft gifts sales(Except the special
                                                                                                                                            projects)(Business involving administrative licensing,
                                                                                                                                            need to get the operating permit)
                                                                                                                                            Engineering and technological research          and
                                                                                                                                            promotion; Information system planning and designing;
                                                                                                                                            PC software, hardware, planning, developing and salesAnhui Ruisiweier Technology Co., Ltd
                                            wholly-owned subsidiary     Bozhou Anhui         Technological research            5,000.00 of network communication system; corporation                   limited liability company(hereafter Ruisiweier)
                                                                                                                                            consulting and service (Business involving
                                                                                                                                            administrative licensing, need to get the operating
                                                                                                                                            permit)
                                                         2013 Annual Report of Anhui Gujing Distillery Company Limited
      (Continued)
                                         Organization Actual amount of The balance of other items that,
                        Corporate                                                                                    Holding     Voting rights
      Subsidiaries                       Registration investment as at        substantially constitute the net
                        representative                                                                             proportion % proportion %
                                         Code            31/12/2013              investment in subsidiary
    Gujing Sales                Liang Jinhui 151944818            8,486.00                                      0.00        100.00         100.00
    Gujing Transportation          Bai Yun 151940067                  695.00                                    0.00        100.00         100.00
    Gujing Glass             Qian Zhenhai 151946047               8,666.03                                      0.00        100.00         100.00
    Gujing Waste             Qian Zhenhai 151946522                   100.00                                    0.00        100.00         100.00
    Jinyunlai                     Yan Lijun 562165325                 200.00                                    0.00        100.00         100.00
    Gujing Packaging          Huai Huiying 58886276X              3,000.00                                      0.00        100.00         100.00
    Shanghai Hongbang             Yan Lijun 593139218                 500.00                                    0.00        100.00         100.00
    Ruisiweier                 Zhou Qingwu 08757348-4             5,000.00                                      0.00        100.00         100.00
    (Continued)
                            Whether consolidated        Minority          The amount of minority equity used for decrease
    Subsidiaries                                                                                                                       Notes
                                 statements              equity            the profits and losses of minority shareholders
    Gujing Sales                                    Yes                0.00                                                 0.00
    Gujing Transportation                           Yes                0.00                                                 0.00
    Gujing Glass                                    Yes                0.00                                                 0.00
    Gujing Waste                                    Yes                0.00                                                 0.00
    Jinyunlai                                       Yes                0.00                                                 0.00
    Gujing Packaging                                Yes                0.00                                                 0.00
    Shanghai Hongbang                               Yes                0.00                                                 0.00
    Ruisiweier                                      Yes                0.00                                                 0.00
                                                                   2013 Annual Report of Anhui Gujing Distillery Company Limited
         6.1.2 Subsidiaries acquired through business combination under common control
         The monetary unit is ten thousand unless otherwise stated.
                          Type            Place                                                                              Corporate Organization
                                                       Nature       Registered                                 Type of
    Subsidiaries           of              of                                         Business scope                       representat Registration
                                                     of business      capital                                  business
                      incorporation registration                                                                                ive          Code
                                                                                  Hotel management
                                                                                  (Except for catering
    Shanghai Gujing                                                                   management、Except for
    Jinhao        Hotel                                                               hotel operation)
                                                                                                                  limited
    Management            wholly-owned                 Hotel                          Self-owned housing rental;
                                        Shanghai                       5,400.00                                 liability      Gong lei     134565998
    Co.,Ltd.(hereaft subsidiary                        Management                     establish branch(If there
                &e