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古井贡B:2014年半年度报告(英文版)

日期:2014-08-12附件下载

                      2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




    ANHUI GUJING DISTILLERY COMPANY LIMITED

             2014 Semi-annual Report




                   August 2014




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                                              2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




          Section I. Important Reminders, Contents & Definition

The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff 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,
misleading statement 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 plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Liang Jinhui, company principal, Ye Changqing, chief of the accounting work, and Zhu Jiafeng,
chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
enclosed in this report is factual, accurate and complete.
This report involves futures plans and some other forward-looking statements, which shall not be
considered as virtual promises to investors. Investors are kindly reminded to pay attention to
possible risks.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.




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                                                                 2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                                            Contents




2014 Semi-annual Report .................................................................................................................. 1

Section I. Important Reminders, Contents & Definition ............................................................... 2

Section II. Company Profile .............................................................................................................. 5

Section III. Highlights of Accounting Data & Financial Indicators .............................................. 7

Section IV. Report of the Board of Directors ....................................................错误!未定义书签。

Section V. Significant Events ........................................................................................................... 19

Section VI. Change in Shares & Shareholders .............................................................................. 27

Section VII. Preferred Shares ......................................................................................................... 27

Section VIII. Directors, Supervisors & Senior Management Staff .................错误!未定义书签。

Section IX. Financial Report ..............................................................................错误!未定义书签。

Section X. Documents Available for Reference ................................................错误!未定义书签。




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                                            2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                         Definition


                                Refers
                   Term                                                 Definition
                                  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




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                                                               2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                        Section II. Company Profile

I. Basic information of the Company

Stock abbreviation              GJGJ, GJGB                               Stock code                    000596, 200596
Stock exchange listed with      Shenzhen Stock Exchange
Chinese 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 Company (if any)
English name of the Company
                                ANHUI     GUJING          DISTILLERY COMPANY LIMITED
(if any)
Abbr. of the English name of
                                GU JING
the Company (if any)
Legal representative of the
                                Liang Jinhui
Company


II. Contact information

                                                           Company Secretary                  Securities Affairs Representative
Name                                           Ye Changqing                              Ma Junwei
                                               Gujing Town, Bozhou City, Anhui           Gujing Town, Bozhou City, Anhui
Contact address
                                               Province                                  Province
Tel.                                           (0558)5712231                           (0558)5710057
Fax                                            (0558)5317706                           (0558)5317706
E-mail                                         ycq@gujing.com.cn                         gjzqb@gujing.com.cn


III. Other information

1. Ways to contact the Company

Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the reporting period. The said information can be found in the 2013 Annual Report.


2. About information disclosure and where this report is placed

Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report
and the location where this report is placed did not change during the reporting period. The said information can be found in the 2013

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Annual Report.


3. Change of the registered information

Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license No., taxation registration No. and organizational code did not
change during the reporting period. The said information can be found in the 2013 Annual Report.




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                                                             2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




     Section III. Highlights of Accounting Data & Financial Indicators

I. Major accounting data and financial indicators

Does the Company adjust retrospectively or restate accounting data of previous years due to change of any accounting policy or
correction of any accounting error?
□ Yes √ No
                                                 Reporting period             Same period of last year        YoY +/- (%)
Operating revenues (RMB Yuan)                          2,390,158,949.76                2,306,954,677.39                     3.61%
Net profit attributable to shareholders of
                                                         357,806,197.58                  375,752,833.11                     -4.78%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after extraordinary gains and                349,115,748.43                  366,358,371.54                     -4.71%
losses (RMB Yuan)
Net cash flows from operating activities
                                                         -76,213,052.44                  142,716,150.70                   -153.40%
(RMB Yuan)
Basic EPS (RMB Yuan/share)                                             0.71                          0.75                   -5.33%
Diluted EPS (RMB Yuan/share)                                           0.71                          0.75                   -5.33%
Weighted average ROE (%)                                          9.33%                          10.94%                     -1.61%
                                                As at the end of the
                                                                              As at the end of last year        +/- (%)
                                                  reporting period
Total assets (RMB Yuan)                                5,908,898,994.97                5,816,934,562.27                     1.58%
Net assets attributable to shareholders of
                                                       3,927,285,740.25                3,742,756,257.05                     4.93%
the Company (RMB Yuan)


II. Differences between accounting data under domestic and overseas accounting standards

1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards

□ Applicable √ Inapplicable
No difference.


2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards

□ Applicable √ Inapplicable
No difference.


III. Items and amounts of extraordinary gains and losses

√Applicable □ Inapplicable
                                                                                                                Unit: RMB Yuan

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                                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                Item                                           Amount                        Explanation
Gains/losses on the disposal of non-current assets (including the
                                                                                   -1,103,550.62
offset part of asset impairment provisions)
Capital occupation charges on non-financial enterprises that were
                                                                                    1,625,047.54
recorded into current gains and losses
Gains and losses on change in fair value from tradable financial
assets and tradable financial liabilities, as well as investment
income from disposal of tradable financial assets and tradable
                                                                                      283,228.08
financial liabilities and financial assets available for sales except
for effective hedging related with normal businesses of the
Company
Non-operating income and expenses other than the above                             10,782,540.53
Less: Income tax effects                                                            2,896,816.38
Total                                                                               8,690,449.15                  --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases during the reporting period.




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                                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




                           Section IV. Report of the Board of Directors

I. Overview

In the first half of 2014, adjustment in the distilled spirit industry continued to deepen, with innovation and
transformation speeding up. The Board of Directors of the Company had a calm mind in studying and judging the
big picture and made adjustments to adapt. Centering on the values of “be honest, make good wine, make
ourselves better and make the world better”, we further freed our mind, transformed our ideology, enhanced
management and deepened our exploration of markets, which enlarged the market share, improved the operation
and management capability and helped realize the normal operation of the main business of distilled spirit. For the
reporting period, the Company achieved operating revenues of RMB 2,390,158,949.76, up 3.61% year on year; and
net profits of RMB 357,806,197.58, down 4.78% from the same period of last year.

II. Main business analysis

YoY change of major financial data:
                                                                                                                        Unit: RMB Yuan
                                Reporting period        Same period of last year         YoY +/-%            Main reasons for change
Operating revenues                  2,390,158,949.76           2,306,954,677.39                     3.61%
Operating costs                       734,083,360.31             726,521,456.89                     1.04%
Selling expenses                      706,159,566.91             617,749,743.85                  14.31%
Administrative expenses               239,125,781.91             178,529,442.62                  33.94%
Financial expenses                     -32,364,892.13             -34,200,295.79                    -5.37%
Income tax expenses                   126,941,933.36             133,976,868.93                     -5.25%
Net cash flows from
                                       -76,213,052.44            142,716,150.70                -153.40%
operating activities
Net cash flows from
                                      -204,715,450.66          -1,013,354,196.93                -79.80%
investing activities
                                                                                                             The equity distribution
Net cash flows from
                                                                 -251,800,000.00               -100.00% for 2013 was carried out
financing activities
                                                                                                             in this July.
Net increase in cash and
                                      -280,928,503.10          -1,122,438,046.23                -74.97%
cash equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
No major changes occurred to the profit structure or sources of the Company during the reporting period.
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Inapplicable
The Company did not mention any future planning for the reporting period in its disclosed documents such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.
Review the progress of any previously disclosed business plan in the reporting period:

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                                                        2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Naught




III. Breakdown of main business

                                                                                                        Unit: RMB Yuan
                                                                    Increase/decrea Increase/decrea Increase/decrea
                     Operating                         Gross profit se of operating se of operating se of gross
                                       Operating costs
                     revenues                             rate       revenues over costs over last profit rate over
                                                                        last year         year         last year
Classified by industry:
Manufacture      2,368,129,229.88 713,705,869.42           69.86%             3.22%            -0.15%            1.02%
Classified by product:
Distilled spirit
                 2,326,086,139.93 687,121,871.32           70.46%             3.27%             0.01%            0.96%
products
Hotel revenue        35,011,065.89      20,656,528.88      41.00%             5.32%             1.87%            2.00%
Other                   7,032,024.06     5,927,469.22      15.71%           -17.84%           -20.45%            2.77%
Classified by region:
Domestic         2,368,129,229.88 713,705,869.42           69.86%             3.22%            -0.15%            1.02%


IV. Core competitiveness analysis

No major change occurred to the core competitiveness of the Company during the reporting period.

V. Investment analysis

1. Investments in equities of external parties

 (1) Investments in external parties

□ Applicable √ Inapplicable
There was no investment in external parties of the reporting period.

 (2) Equity-holdings in financial enterprises

□ Applicable √ Inapplicable
There was no equity-holding in financial enterprise of the reporting period.

 (3) Securities investments

√Applicable □ Inapplicable
 Variety Code of Name of Initial Number Shareho Number Shareho Closing Gain/los
                                                                                       Account Source
   of     securitie securitie investmen   of    lding     of    lding   book    s for
                                                                                       ing title of stock
securitie    s         s        t cost  shares percenta shares percenta value reportin


10
                                                           2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


      s                              (RMB       held at ge at held at ge at        (RMB g period
                                     Yuan)     period-b period-b period-e period-e Yuan) (RMB
                                                 egin     egin      nd       nd          Yuan)
                                                                                                        Availabl
                                                                                                        e-for-sal
                                    25,199,9 1,938,46            3,489,22           28,053,4                      Subscri
Stock      002374 LPGF                                   1.82%              1.82%                  0.00 e
                                       93.00        1                   9              01.16                      ption
                                                                                                        financial
                                                                                                        assets
                                                                                                          Trading
                                                                                  17,060.0                          Subscri
Stock      002720 LDRS              9,790.00     1,000   0.00%     1,000    0.00%                         financial
                                                                                         0                          ption
                                                                                                          assets
                                                                                                          Trading
                                    12,200.0                                      12,200.0                          Subscri
Stock      002727 YXT                            1,000   0.00%     1,000    0.00%                         financial
                                           0                                             0                          ption
                                                                                                          assets
                                    25,221,9 1,940,46            3,491,22           28,082,6
Total                                                     --                 --                    0.00      --       --
                                       83.00        1                   9              61.16
Disclosure date of the board
announcement on approval of
the securities investment
Disclosure date of the general
meeting     announcement      on
approval    of   the   securities
investment (if any)
Explain equity-holdings in other listed companies
□ Applicable √ Inapplicable
The equities of other listed companies the Company held at the period-end.

2. Wealth management entrustment, derivative investments and entrustment loans

     (1) Wealth management entrustment

□ Applicable √ Inapplicable
There was no any wealth management entrustment of the Company of the reporting period.

     (2) Derivative investments

√ Applicable □ Inapplicable
                                                                                        Unit: RMB Ten Thousand Yuan
                                                                                   Proporti
                 Related- Type of                                 Impairm                    Actual
                                    Initial               Opening          Closing on of
                   party derivativ                                   ent                    gain/los
Operato                            investm Beginni Ending investm          investm   the
        Relation transacti   e                                    provisio                    s in
  r                                   ent   ng date date    ent              ent   closing
                   on or investm                                    n (if                   reportin
                                   amount                 amount           amount investm
                    not     ent                                     any)                    g period
                                                                                     ent


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                                                              2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                                             amount
                                                                                                              in the
                                                                                                             Compan
                                                                                                               y’s
                                                                                                             closing
                                                                                                               net
                                                                                                              assets
                                 Reverse
                                 repurcha
                      No         se of               0                          8,000                    0    0.00% 390.51
                                 national
                                 debt
Total                                                0   --           --        8,000                    0    0.00% 390.51
Source of the entrusted funds               Self-owned funds of the Company
Cases involving lawsuit (if applicable)     Naught
Disclosure date of the board
announcement approving the wealth 30 Aug. 2013
management entrustment (if any)
Disclosure date of the board of
shareholders         announcement
approving the wealth management
entrustment (if any)
Analysis on risks and control
measures of derivative products held
in the reporting period (including but The Company had controlled the relevant risks strictly according to the
not limited to market risk, liquidity Derivatives Investment Management System.
risk, credit risk, operation risk, law
risk, etc.)
Changes of market prices or fair
values in the reporting period of the
invested derivatives. And the
analysis on the fair value of the
                                      Naught
derivatives should include the
specific use methods and the
relevant       assumptions       and
parameters.
Whether       significant     changes
occurred     to    the    Company’s
accounting policy and specific
                                      Naught
accounting principles of derivatives
in the reporting period compared to
the previous reporting period
Specific opinion from independent The sustainable development of the main business and the sufficient free
directors   on   the   Company’s idle money, the Company increased the profits through investing in the

12
                                                           2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


derivatives   investment    and     risk reasonable financial derivative instruments, which was in favor of
control                                  improving the service efficiency of the idle funds; in order to reduce the
                                         investment risks of the financial derivative instruments, the Company had
                                         set up 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
                                         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.

 (3) Entrustment loans

□ Applicable √ Inapplicable
There was no entrustment loan of the Company of the reporting period.

3. Particulars about the use of raised funds

(1) Overview of the use of raised funds

√ Applicable □ Inapplicable
                                                                                          Unit: RMB Ten Thousand Yuan
Total amount of raised funds                                                                                    122,749.95
Total amount of raised funds input in the
                                                                                                                  2,258.64
reporting period
Total amount of raised funds accumulatively
                                                                                                                 96,815.36
input
                                  Explanation on overview of the use of raised funds
The Company’s raised funds were used stably as scheduled, without any changes.

 (2) Projects promised to be invested with raised funds

√ Applicable □ Inapplicable
                                                                                          Unit: RMB Ten Thousand Yuan
                                                                                      Date
                      Project                                            Investm      when
                     changed                                    Accumu ent             the                         Material
  Projects invested               Raised                                                        Profit     Reach
                      or not                Investm     Input in lative progress     project                        change
 with raised capital              capital                                                      generate     the
                     (includi               ent after     the input up up to        reaches                          in the
   as promised and               input as                                                      d in the   expecte
                        ng                  adjustm     reportin to the     the        the                          project
  investments with               promise                                                       reportin   d profit
                     partially               ent (1)     g year period-e period-e   expecte                        feasibili
 over-raised capital                d                                                          g period    or not
                     changed                                     nd (2) nd (3)=    d usable                       ty or not
                         )                                                (2)/(1)   conditio
                                                                                        n
Projects invested with raised capital as promised


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                                                     2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Technological
Transform on the                          12,194.           9,368.1        30 Apr.
Brewage of           No          13,500              65.9           76.82%
High-quality Base                             42                  4        2014
Wine
Construction of
Base Wine                                 65,921. 1,943.7 53,225.        30 Apr.
Blending & Filling No            68,600                           80.74%                                    No
Centre and                                    06        7     12         2014
Ancillary Facilities
Construction of                                             17,197.        30 Apr.
                  No             27,500 27,500 248.97               62.53%                                  No
Marketing Network                                               04         2014
Construction of                                             17,025. 100.15 31 Dec.
                      No         17,000 17,000          0                                                   No
Brand Promotion                                                 06      % 2012
Subtotal of
                                          122,615 2,258.6 96,815.
promised                   --   126,600                                 --        --                  --    No
                                              .48       4     36
investment projects
Investments of over-raised capital
                                          122,615 2,258.6 96,790.
Total                      --   126,600                                 --        --            0     --         --
                                              .48       4      3
Reason for failing
to reach scheduled
progress or
                     Naught
projected income
(explain one project
by one project)
Explanation      on
significant changes
                    There was no such situation of the reporting period.
in feasibility of
projects
Amount, usage and
usage progress of Inapplicable
over-raised capital
Change of the
implementation
location of any       Inapplicable
raised funds
investment project
Adjustment of the
implementation
method of any         Inapplicable
raised funds
investment project
Advanced input and Applicable
exchange of any    In accordance with the explanation of the Particulars on the Private Issuance of A-share of
raised funds       Anhui Gujing Distillery Co., Ltd. and the Listing Announcement, “Before the raised


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                                                     2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


investment project    proceeds being in place, the Company can use the self-raised proceeds to input
                      preliminarily in accordance with the actual progress of raised proceeds investment projects;
                      after the raised proceeds being in place, the Company can use the raised proceeds to replace
                      the self-raised proceeds preliminarily input”. And the Proposal on Using the Raised
                      Proceeds to Replace the Self-raised Proceeds Preliminarily Input to the Raised Proceeds
                      Investment Projects was reviewed and approved at the 7th Session of the 6th Board of
                      Directors, which agreed to use the raised proceeds to replace the self-raised proceeds of
                      RMB 27,058,143.42 preliminarily input to the raised proceeds investment projects. The
                      above funds replacement was completed on 6 Jan. 2012.
Idle raised capital
for temporarily
                      Inapplicable
supplementing
working capital
                      Applicable
                   1. The Company strictly executed the purchase system and project bidding way, which
                   better controlled the cost of project construction and purchase, and under the premise of
                   guaranteeing the project quality as well as based on the saving principle, the Company
Outstanding raised
                   further strengthen the expense control, supervision and administration of the project in the
funds in project
                   process of the execution that reduced the total cost of the raised-funds investment project.
implementation and
                   2. The surplus of the marketing network construction project was due to the great changes
reasons
                   of the liqueur market environment and the gradually mature of the third party logistics
                   system, at the same time in order to reduce the fixed operation cost, the Company would no
                   longer execute the Hefei logistics center project, which caused the capital surplus of the
                   project.
                      In order to exert the maximum economic benefits of the raised funds, reduce the financial
                      cost and increase the financial cost, the Company permanent supplemented the circulating
Usage and
                     fund with surplus raised funds and interest of 14,580.66million yuanand at the same time
whereabouts of
                     kept the outstanding contract amount and the retained quality guarantee deposit etc. which
unused raise capital
                     was of 17,204.30million yuan into the raised funds account that paid according to the
                     contract agreement.
Problems found in
the usage and
disclosure affairs of Naught.
raised capital and
other situations

 (3) Change of projects invested with raised funds

□ Applicable √ Inapplicable
There was no change of projects invested with raised funds of the Company of the reporting period.

 (4) Projects invested with raised funds

       Overview of the project                   Disclosure date              Index for the disclosed information


15
                                                            2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Technological Transform on the Brewage
                                             29 Nov. 2010                            http://www.cninfo.com.cn/
of High-quality Base Wine
Construction of Base Wine Blending &
                                             29 Nov. 2010                            http://www.cninfo.com.cn/
Filling Centre and Ancillary Facilities
Construction of Marketing Network            29 Nov. 2010                            http://www.cninfo.com.cn/
Construction of Brand Promotion              29 Nov. 2010                            http://www.cninfo.com.cn/

4. Analysis to main subsidiaries and stock-participating companies

√ Applicable □ Inapplicable
Main subsidiaries and stock-participating companies
                                                                                                            Unit: RMB Yuan
                                         Main
Company Company                                   Registere        Total                   Operating Operatin
                              Industry products/s                            Net assets                       Net profit
 name    variety                                  d capital        assets                  revenues g profit
                                        ervices
                                          Wholesale
                                          s         of
                                          distilled
Bozhou                                    spirit,
Gujing                Business            constructi 84,860,00 1,393,378 379,719,2 2,326,362 311,553, 236,849,55
           Subsidiary
Sales Co.,            trading             on           0.00      ,165.08     56.70 ,282.45 404.93           5.23
Ltd                                       materials,
                                          feeds and
                                          assistant
                                          materials

5. Particulars about significant projects invested by non-raised funds

√ Applicable □ Inapplicable
                                                                                             Unit: RMB Ten Thousand Yuan
                                                                  Accumulative
                          Total planed       Amount of input
                                                              amount actually             Progress of       Gains from
 Name of project            amount of           during the
                                                              input as of the               project          project
                           investment        reporting period
                                                              period-end
Relocation      and
Technological
Transform on the
Brewage of Base                     80,000              1,929               69,600                 87.00%
Wine and the
supporting
facilities projects
       Total                        80,000              1,929               69,600            --                  --




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VI. Predict the operating results of Jan.-Sep. 2014

Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin
to the end of the next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable √ Inapplicable

VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period

□ Applicable √ Inapplicable

VIII. Explanation by the Board of Directors about the “non-standard audit report” for last
year

□ Applicable √ Inapplicable

IX. Implementation of profit allocation during the reporting period

Formulation, execution or adjustment of the Company’s profit distribution policy, especially the cash dividend
policy, during the reporting period:
√ Applicable □ Inapplicable
According to the Proposal on the Profit Distribution of 2013 of the Company approved by the 2013 Annual
General Meeting on 20 Jun. 2014, the Company distributed the cash dividends to the whole shareholders of RMB
3.5 per share based on the current general capital which amounted to RMB 503,600,000 shares.
                                Special explanation of the cash dividend policy
Whether conformed with the regulations of the Articles
of association or the requirements of the resolutions of Yes
the shareholders’ meeting:
Whether the dividend standard and the proportion were
                                                      Yes
definite and clear:
Whether the relevant decision-making process and the
                                                           Yes
system were complete:
Whether the independent director acted dutifully and
                                                           Yes
exerted the proper function:
Whether the medium and small shareholders had the
chances to fully express their suggestions and appeals, Yes
of which their legal interest had gained fully protection:
Whether the conditions and the process met the
regulations and was transparent of the adjustment or       Inapplicable
altered of the cash dividend policy:




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X. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period

□ Applicable √ Inapplicable
The Company planed not to distribute cash dividends and share bonus, as well as not to turn capital reserve into
share capital of the half year.

XI. Particulars about researches, visits and interviews received in this reporting period

□ Applicable √ Inapplicable
There was no any research, visit and interview received by the Company in the reporting period.




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                                        V. Significant Events

I. Corporate governance

Since foundation, the Company constantly perfects corporate governance structure and standardize its
management strictly in accordance with the Company Law, Securities Law, Standard for Governance of Listed
Companies, Guide Opinion on Setting up Independent Directors Systems for Listed Companies as well as
principles and requirements of other relevant laws, regulations and normative documents. In the reporting period,
as per requirements of Basic Standard for Enterprise Internal Control and Shenzhen Stock Exchange Guideline on
Internal Control of Listed Companies, the Company developed internal control activity, perfected internal control
system step by step, promoted normative operation and healthy development. The Board of Directors, the
Supervisory Committee and the management of the Company make decisions, perform rights and assume
obligation strictly according to the standard operation rules and inner control system so as to make sure the
standard operation of the Company in the frame of rules and systems.
In the reporting period, according to requirements of China Securities Regulatory Commission and Rules for
Listing of Shares in Shenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriously
and timely performed information disclosure obligation and guaranteed that the information disclosed is true,
accurate and complete, free from fictitious presentation, misleading statements or important omissions, so that all
the shareholders will equally acquaint themselves with all the notices of the Company.
At the end of the reporting period, the Company will constantly optimize and perfect listed corporate governance
structure, and improves its standardizing management level.

II. Significant lawsuits or arbitrations

□ Applicable √ Inapplicable
The Company was not involved in any significant lawsuit or arbitration during the reporting period.

III. The media’s doubts

□ Applicable √ Inapplicable
There was no such a case in the reporting period where most of the media raised the same doubt about the
Company.

IV. Bankruptcy and reorganization

□ Applicable √ Inapplicable
The Company was not involved in any bankruptcy and reorganization during the reporting period.




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V. Asset transactions

1. Asset acquisition

□ Applicable √ Inapplicable
There was no any asset acquisition of the Company of the reporting period.

2. Sale of assets

□ Applicable √ Inapplicable
There was no any sale of assets of the Company of the reporting period.

3. Business combination

□ Applicable √ Inapplicable
There was no any business combination of the Company of the reporting period.

VI. Implementation and influence of equity incentive plan of the Company

□ Applicable √ Inapplicable
There was no any equity incentive plan and its execution of the Company of the reporting period.

VII. Significant related-party transactions

1. Related-party transactions concerning routine operation

□ Applicable √ Inapplicable
There was no any related-party transaction concerning routine operation of the Company of the reporting period.

2. Related-party transactions arising from asset acquisition or sale

□ Applicable √ Inapplicable
There was no any related-party transaction arising from asset acquisition or sale of the Company of the reporting
period.

3. Significant related-party transactions concerning joint investment in external parties

□ Applicable √ Inapplicable
There was no any significant related-party transaction concerning joint investment in external parties of the
Company of the reporting period.

4. Credits and liabilities with related parties

□ Applicable √ Inapplicable
There was no any credit and liability with related parties of the Company of the reporting period.

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5. Other significant related-party transactions

□ Applicable √ Inapplicable
There was no any other significant related-party transaction of the Company of the reporting period.

VIII. Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties

□ Applicable √ Inapplicable
The controlling shareholder or its related parties did not occupy the Company’s funds for non-operating purposes
during the reporting period.

IX. Significant contracts and fulfillment thereof

1. Trusteeship, contracting and leasing

(1) Trusteeship

□ Applicable √ Inapplicable
The Company did not make any entrustment in the reporting period.

(2) Contracting

□ Applicable √ Inapplicable
The Company was not involved in any contracting in the reporting period.

(3) Leasing

□ Applicable √ Inapplicable
The Company was not involved in any leasing in the reporting period.

2. Guarantees provided by the company

□ Applicable √ Inapplicable
The Company did not provide any guarantee in the reporting period.

(1) Illegal provision of guarantees for external parties

□ Applicable √ Inapplicable
The Company did not illegally provide any guarantee for any external party in the reporting period.

3. Other significant contracts

□ Applicable √ Inapplicable
There was no other significant contract of the Company in the reporting period.

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4. Other significant transactions

□ Applicable √ Inapplicable
The Company was not involved in any other significant transaction in the reporting period.

X. Commitments made by the Company or any shareholder holding over 5% of the
Company’s shares in the reporting period or such commitments carried down into the
reporting period

□ Applicable √ Inapplicable
No such commitments in the reporting period.

XI. Engagement and disengagement of the CPAs firm

Has the semi-annual financial report been audited?
□ Yes √ No

XII. Punishments and rectifications

□ Applicable √ Inapplicable
No punishment or rectification in the reporting period.

XIII. Delisting risk due to violation of laws or regulations

□ Applicable √ Inapplicable
No such risk in the reporting period.

XIV. Other significant events

□ Applicable √ Inapplicable
No other significant event in the reporting period that needs to be explained.




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                       Section VI. Change in Shares & Shareholders

I. Change in shares

                                                                                                         Unit: Share
                           Before the change            Increase/decrease (+, -)               After the change
                                                                Capitaliz
                                                New                                   Sub
                                       Percenta      Bonus      ation of                                    Percenta
                           Number               shar                         Other    tota    Number
                                          ge         shares      capital                                       ge
                                                 es                                     l
                                                                 reserve
I. Shares subject to
                                 900     0.00%                                                        900     0.00%
trading moratorium
3. Other domestic
                                 900     0.00%                                                        900     0.00%
shares
Shares of domestic
                                 900     0.00%                                                        900     0.00%
natural person
II. Shares not subject
                       503,599,100 100.00%                                                   503,599,100 100.00%
to trading moratorium
1. Ordinary shares
                   383,599,100 76.17%                                                        383,599,100 76.17%
denominated in RMB
2. Domestically listed
                       120,000,000 23.83%                                                    120,000,000 23.83%
foreign shares
III. Total shares         503,600,000 100.00%                                                503,600,000 100.00%
Reasons for changes in shares
□ Applicable √ Inapplicable
Approval of share changes
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common
shareholders of the Company and other financial indexes over the last year and the last reporting period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to
disclose
□ Applicable √ Inapplicable
Change of the total shares, shareholder structure, asset structure and liability structure
□ Applicable √ Inapplicable


II. Total number of shareholders and their shareholdings
                                                                                                         Unit: Share
Total number of common                           36,799 Total number of preferred                                  0


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shareholders at the end of                                 share holders who had
the reporting period                                       resumed their voting right
                                                           at the end of the reporting
                                                           period (if any) (see note 8)
                   Shareholdings of shareholders holding more than 5% shares or top 10 shareholders
                                                                Increas                         Pledged or frozen shares
                                                                e/decre   Numbe      Numbe
                                                                  ase       r of       r of
                                                   Total shares
      Name of           Nature of     Shareholdin               during    restrict   non-re
                                                    held at the                                   Status of    Number
     shareholder       shareholder    g percentage                the        ed      stricted
                                                   period-end                                      shares      of shares
                                                                reporti   shares      shares
                                                                   ng      held        held
                                                                 period
ANHUI
GUJING
                     State-owned                    271,404,02                       271,40                    114,000,0
GROUP                                      53.89%                                           Pledged
                     Corporation                             2                        4,022                          00
COMPANY
LIMITED
SPECIAL
ACCOUNT,
AGREED TO
                                                                                     15,000
BUY BACK Other                              2.98% 15,000,000
                                                                                       ,000
OF GF
SECURITIES
CO., LTD
KGI ASIA             Foreign                                                          8,182,
                                            1.62%    8,182,194
LIMITED              corporation                                                         194
GREENWOO
DS CHINA
         Foreign                                                                      6,704,
ALPHA                                       1.33%    6,704,739
         corporation                                                                     739
MASTER
FUND
UBS
          Foreign                                                                     6,240,
(LUXEMBOU                                   1.24%    6,240,062
          corporation                                                                    062
RG) S.A.
National    Social
                     State-owned                                                      5,742,
Security     Fund                           1.14%    5,742,783
                     corporation                                                         783
103 Group
CMS (HK)             State-owned                                                      5,520,
                                            1.10%    5,520,432
Co., Ltd.            corporation                                                         432
NORGES               Foreign                                                          5,467,
                                            1.09%    5,467,350
BANK                 corporation                                                         350
GUOTAI               Foreign                                                          4,422,
                                            0.88%    4,422,798
JUNAN                corporation                                                         798

24
                                                         2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


SECURITIES(
HONGKONG)
LIMITED
CCB—Bosera
Theme    Industry State-owned                                                         4,292,
                                            0.85%      4,292,006
Stock   Securities corporation                                                           006
Investment Funds
                                     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 relationship nor they are parties acting in concert as defined in the Administrative Measures on
or persons acting in concert among the Information Disclosure of Changes in Shareholding of Listed Companies. As for other
above-mentioned shareholders:        shareholders, the Company does not know whether they are related parties or whether they
                                     belong to parties acting in concert as defined in the Administrative Measures on
                                     Information Disclosure of Changes in Shareholding of Listed Companies.
     Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
                                         Number of tradable shares held at the                    Type of shares
        Name of shareholder
                                                      year-end                                 Type            Number
ANHUI GUJING GROUP                                                                       Renminbi
                                                                          271,404,022
COMPANY LIMITED                                                                          ordinary shares
SPECIAL ACCOUNT, AGREED
                                                                                         Renminbi
TO BUY BACK OF GF                                                          15,000,000
                                                                                         ordinary shares
SECURITIES CO., LTD
                                                                                       Domestically
KGI ASIA LIMITED                                                             8,182,194 listed foreign
                                                                                       shares
                                                                                       Domestically
GREENWOODS CHINA
                                                                             6,704,739 listed foreign
ALPHA MASTER FUND
                                                                                       shares
                                                                                       Domestically
UBS (LUXEMBOURG) S.A.                                                        6,240,062 listed foreign
                                                                                       shares
National Social Security Fund 103                                                        Renminbi
                                                                             5,742,783
Group                                                                                    ordinary shares
                                                                                       Domestically
CMS (HK) Co., Ltd.                                                           5,520,432 listed foreign
                                                                                       shares
                                                                                       Domestically
NORGES BANK                                                                  5,467,350 listed foreign
                                                                                       shares
GUOTAI JUNAN                                                                           Domestically
SECURITIES(HONGKONG)                                                         4,422,798 listed foreign
LIMITED                                                                                shares
CCB—Bosera Theme Industry Stock                                                         Renminbi
                                                                             4,292,006
Securities Investment Funds                                                              ordinary shares

25
                                                      2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                   Among the shareholders above, no affiliated relationship exists between the
Explanation      on     associated
                                   Company’s controlling shareholder—Anhui Gujing Group Company
relationship or/and persons acting
                                   Limited—and other shareholders, nor they are parties acting in concert as
in concert among the top ten
                                   defined in the Administrative Measures on Information Disclosure of
tradable     shareholders      and
                                   Changes in Shareholding of Listed Companies. As for other shareholders, the
between the top ten tradable
                                   Company does not know whether they are related parties or whether they
shareholders and the top ten
                                   belong to parties acting in concert as defined in the Administrative Measures
shareholders
                                   on Information Disclosure of Changes in Shareholding of Listed Companies.
Explanation on the top 10
shareholders participating in the
                                  Naught
margin trading business (if any)
(see Note 4)
Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
√ Yes □ No
The 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 with those at the end of the reporting period, i.e. 15,000,000 shares, a stake of
2.98%.

III. Change of the controlling shareholder or the actual controller

Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
The controlling shareholder of the Company did not change in the reporting period.

Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
The actual controller of the Company did not change in the reporting period.

IV. Any shareholding increase plan proposed or implemented by any shareholder or its
act-in-concert party during the reporting period

□ Applicable √ Inapplicable
To the best knowledge of the Company, no shareholder or its act-in-concert party proposed or implemented any
shareholding increase plan during the reporting period.




26
                                                     2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




            Section VII. Section VIII. Directors, Supervisors & Senior

                                              Management Staff

I. Change of shareholdings of directors, supervisors and senior management staff

□ Applicable √ Inapplicable
There was no change in the shareholdings of directors, supervisors and senior management staff in the reporting
period. For details, please refer to the 2013 Annual Report.

II. Change of directors, supervisors and senior management staff

√ Applicable □ Inapplicable
     Name           Position           Type         Date                              Reason
                                                                See details on the announcement that disclosed
Liang Jinhui    Chairman        Elected         23 Apr. 2014    on www.cninfo.com on 24 Apr. 2014 (No.
                                                                2014-013)
                                                                See details on the announcement that disclosed
            General
Zhou Qingwu                     Engaged         23 Apr. 2014    on www.cninfo.com on 24 Apr. 2014 (No.
            manager
                                                                2014-013)
                General                                         See details on the announcement that disclosed
Yan Lijun       manager         Engaged         20 Jun. 2014    on www.cninfo.com on 21 Jun. 2014 (No.
                assistant                                       2014-021)
                                                                See details on the announcement that disclosed
Yu Lin                          Left            23 Apr. 2014    on www.cninfo.com on 24 Apr. 2014 (No.
                                                                2014-013)
                                                                See details on the announcement that disclosed
                                Left as the
Zong Zhaoji                                     20 Jun. 2014    on www.cninfo.com on 24 Jun. 2014 (No.
                                term expired
                                                                2014-021)




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                                             2014 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                Section VIII.   Financial Report

I. Audit report

Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.

II. Financial statements

Currency unit for the statements in the notes to these financial statements: RMB Yuan

1. Consolidated balance sheet

Prepared by Anhui Gujing Distillery Company Limited
                                                                                          Unit: RMB Yuan
                 Item                         Closing balance                           Opening balance
Current Assets:
   Monetary funds                                        1,076,502,207.86                          1,381,930,710.96
   Settlement reserves
   Intra-group lendings
   Transactional financial assets                              29,260.00
   Notes receivable                                       339,936,339.04                             154,408,425.31
   Accounts receivable                                      5,856,940.09                               6,374,469.99
   Accounts paid in advance                                91,607,740.00                              90,217,698.50
   Premiums receivable
   Reinsurance           premiums
receivable
   Receivable reinsurance contract
reserves
   Interest receivable                                      12,162,291.01
    Dividend receivable
   Other accounts receivable                                 7,340,429.98                              6,296,326.20
   Financial assets purchased
                                                                                                      80,093,922.21
under agreements to resell
   Inventories                                           1,148,532,147.86                          1,075,033,137.30
   Non-current assets due within 1
year
   Other current assets                                  1,020,000,000.00                            900,000,000.00
Total current assets                                     3,701,967,355.84                          3,694,354,690.47
Non-current assets:
   Loans      by     mandate    and
advances granted
   Available-for-sale      financial
                                                            28,053,401.16                             24,075,687.00
assets
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                                       2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


   Held-to-maturity investments
   Long-term accounts receivable
   Long-term equity investment
   Investing property                                33,603,272.85                              35,188,079.66
   Fixed assets                                   1,584,436,002.80                           1,266,481,752.59
   Construction in progress                         116,049,642.83                             377,338,939.54
   Engineering materials                              3,611,632.44
   Disposal of fixed assets
   Production biological assets
   Oil-gas assets
   Intangible assets                                 311,050,005.57                            315,224,921.54
   R&D expense
   Goodwill
   Long-term deferred expenses                        88,172,105.91                             60,898,594.60
   Deferred income tax assets                         41,955,575.57                             43,371,896.87
   Other non-current assets
Total of non-current assets                       2,206,931,639.13                           2,122,579,871.80
Total assets                                      5,908,898,994.97                           5,816,934,562.27
Current liabilities:
   Short-term borrowings
   Borrowings from Central Bank
   Customer bank deposits and
due to banks and other financial
institutions
   Intra-group borrowings
   Transactional           financial
liabilities
   Notes payable                                    193,060,000.00                             235,770,000.00
   Accounts payable                                 295,426,072.34                             442,935,399.44
   Accounts received in advance                     293,315,829.20                             147,257,393.88
   Financial assets sold for
repurchase
   Handling        charges      and
commissions payable
   Employee’s         compensation
                                                      89,027,951.68                            231,343,202.17
payable
   Tax payable                                      370,490,985.40                             599,513,448.19
   Interest payable
   Dividend payable                                 176,260,000.00
   Other accounts payable                           520,392,839.12                             373,903,452.51
   Reinsurance premiums payable
   Insurance contract reserves
   Payables for acting trading of
securities
   Payables          for      acting
underwriting of securities

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                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


   Non-current liabilities due
within 1 year
   Other current liabilities                                   1,625,047.54                               3,112,595.04
Total current liabilities                                  1,939,598,725.28                           2,033,835,491.23
Non-current liabilities:
   Long-term borrowings
   Bonds payable
   Long-term payables
   Specific payables
   Estimated liabilities
   Deferred income tax liabilities                               709,215.45
   Other non-current liabilities                              41,305,313.99                              40,342,813.99
Total non-current liabilities                                 42,014,529.44                              40,342,813.99
Total liabilities                                          1,981,613,254.72                           2,074,178,305.22
Owners’ equity (or shareholders’
equity)
   Paid-up capital (or share
                                                             503,600,000.00                             503,600,000.00
capital)
   Capital reserves                                        1,297,078,549.31                           1,294,095,263.69
   Less: Treasury stock
   Specific reserves
   Surplus reserves                                          256,902,260.27                             256,902,260.27
   Provisions for general risks
   Retained profits                                        1,869,704,930.67                           1,688,158,733.09
   Foreign exchange difference
Total equity attributable to owners
                                                           3,927,285,740.25                           3,742,756,257.05
of the Company
Minority interests
Total owners’ (or shareholders’)
                                                           3,927,285,740.25                           3,742,756,257.05
equity
Total liabilities and owners’ (or
                                                           5,908,898,994.97                           5,816,934,562.27
shareholders’) equity

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

2. Balance sheet of the Company

Prepared by Anhui Gujing Distillery Company Limited
                                                                                              Unit: RMB Yuan
               Item                              Closing balance                           Opening balance
Current Assets:
  Monetary funds                                             934,533,665.08                           1,040,360,357.51
  Transactional financial assets                                  20,730.00
  Notes receivable                                           146,356,835.17                              81,472,414.44
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                                       2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


   Accounts receivable                                   825,907.69                              1,297,542.13
   Accounts paid in advance                           14,770,903.07                              1,288,277.31
   Interest receivable                                11,581,289.65
   Dividend receivable
   Other accounts receivable                        132,420,559.46                             139,654,563.53
   Redemptory monetary capital
                                                                                                80,093,922.21
for sale
   Inventories                                    1,133,074,618.37                           1,036,496,459.02
   Non-current assets due within 1
year
   Other current assets                           1,020,000,000.00                             900,000,000.00
Total current assets                              3,393,584,508.49                           3,280,663,536.15
Non-current assets:
   Available-for-sale      financial
                                                      28,053,401.16                             24,075,687.00
assets
   Held-to-maturity investments
   Long-term accounts receivable                      4,646,216.76                               4,494,950.37
   Long-term equity investment                      308,089,408.32                             308,089,408.32
   Investing property                                31,621,950.77                              33,124,717.82
   Fixed assets                                   1,385,475,887.14                           1,057,111,133.85
   Construction in progress                         114,134,649.19                             377,239,903.56
   Engineering materials
   Disposal of fixed assets
   Production biological assets
   Oil-gas assets
   Intangible assets                                194,595,581.09                             197,787,553.94
   R&D expense
   Goodwill
   Long-term deferred expenses                        87,944,854.71                             59,482,540.30
   Deferred income tax assets                         33,006,144.05                             34,095,084.20
   Other non-current assets
Total of non-current assets                       2,187,568,093.19                           2,095,500,979.36
Total assets                                      5,581,152,601.68                           5,376,164,515.51
Current liabilities:
   Short-term borrowings
   Transactional           financial
liabilities
   Notes payable                                     62,560,000.00                              26,150,000.00
   Accounts payable                                 287,594,758.87                             437,297,694.54
   Accounts received in advance                   1,081,735,670.56                             830,722,853.80
   Employee’s        compensation
                                                      50,737,503.56                             87,936,100.97
payable
   Tax payable                                      161,589,673.33                             205,717,464.45
   Interest payable
   Dividend payable                                 176,260,000.00
   Other accounts payable                           197,546,018.19                             153,888,199.87

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                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


  Non-current liabilities due
within 1 year
  Other current liabilities                                    1,625,047.54                               3,112,595.04
Total current liabilities                                  2,019,648,672.05                           1,744,824,908.67
Non-current liabilities:
  Long-term borrowings
  Bonds payable
  Long-term payables
  Specific payables
  Estimated liabilities
  Deferred income tax liabilities                                709,215.45
  Other non-current liabilities                               41,305,313.99                              40,342,813.99
Total non-current liabilities                                 42,014,529.44                              40,342,813.99
Total liabilities                                          2,061,663,201.49                           1,785,167,722.66
Owners’ equity (or shareholders’
equity)
  Paid-up capital (or share
                                                             503,600,000.00                             503,600,000.00
capital)
  Capital reserves                                         1,249,302,163.47                           1,246,318,877.85
  Less: Treasury stock
  Specific reserves
  Surplus reserves                                           251,800,000.00                             251,800,000.00
  Provisions for general risks
  Retained profits                                         1,514,787,236.72                           1,589,277,915.00
  Foreign exchange difference
Total owners’ (or shareholders’)
                                                           3,519,489,400.19                           3,590,996,792.85
equity
Total liabilities and owners’ (or
                                                           5,581,152,601.68                           5,376,164,515.51
shareholders’) equity

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

3. Consolidated income statement

Prepared by Anhui Gujing Distillery Company Limited
                                                                                               Unit: RMB Yuan
                 Item                             Jan.-Jun. 2014                            Jan.-Jun. 2013
I. Total operating revenues                                2,390,158,949.76                          2,306,954,677.39
Including: Sales income                                    2,390,158,949.76                          2,306,954,677.39
         Interest income
         Premium income
         Handling charge and
commission income
II. Total operating cost                                   1,971,374,239.07                           1,809,750,924.11
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                                          2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Including: Cost of sales                                734,083,360.31                            726,521,456.89
          Interest expenses
          Handling charge and
commission expenses
          Surrenders
          Net claims paid
          Net amount withdrawn for
the insurance contract reserve
          Expenditure on policy
dividends
          Reinsurance premium
          Taxes      and     associate
                                                        324,862,025.08                            320,387,063.09
charges
          Selling and distribution
                                                        706,159,566.91                            617,749,743.85
expenses
          Administrative expenses                       239,125,781.91                            178,529,442.62
          Financial expenses                            -32,364,892.13                            -34,200,295.79
          Asset impairment loss                            -491,603.01                                763,513.45
Add: Gain/(loss) from change in
                                                               7,270.00
fair value (“-” means loss)
       Gain/(loss) from investment
                                                         54,652,112.80                                581,538.48
(“-” means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (“-”
means loss)
III. Business profit (“-” means
                                                        473,444,093.49                            497,785,291.76
loss)
       Add: non-operating income                         12,858,123.06                             13,333,882.69
       Less: non-operating expense                        1,554,085.61                              1,389,472.41
Including: loss from non-current
                                                          1,389,957.09                              1,268,843.71
asset disposal
IV. Total profit (“-” means loss)                     484,748,130.94                            509,729,702.04
       Less: Income tax expense                         126,941,933.36                            133,976,868.93
V. Net profit (“-” means loss)                        357,806,197.58                            375,752,833.11
       Including:       Net     profit
achieved by combined parties
before the combinations
       Attributable to owners of the
                                                        357,806,197.58                            375,752,833.11
Company
       Minority          shareholders’
income
VI. Earnings per share                             --                                        --
       (I) Basic earnings per share                                 0.71                                       0.75
       (II) Diluted earnings per
                                                                    0.71                                       0.75
share
VII.        Other      comprehensive                      2,983,285.62                             -4,899,459.25
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                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


incomes
VIII.      Total     comprehensive
                                                              360,789,483.20                            370,853,373.86
incomes
      Attributable to owners of the
                                                              360,789,483.20                            370,853,373.86
Company
      Attributable to minority
shareholders

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

4. Income statement of the Company

Prepared by Anhui Gujing Distillery Company Limited
                                                                                               Unit: RMB Yuan
               Item                               Jan.-Jun. 2014                            Jan.-Jun. 2013
I. Total sales                                             1,320,382,051.92                          1,266,183,592.34
Less: cost of sales                                          749,212,509.40                            732,026,686.34
Business taxes and surcharges                                307,286,754.62                            295,760,161.37
Distribution expenses                                          50,515,240.37                            60,800,957.44
Administrative expenses                                      159,555,096.01                            134,997,985.02
Financial costs                                               -27,114,146.94                           -32,699,748.91
Impairment loss                                                  -423,137.26                               336,363.46
Add: gain/(loss) from change in
                                                                     3,635.00
fair value (“-” means loss)
Gain/(loss) from investment (“-”
                                                               54,206,211.10                                581,538.48
means loss)
Including:         income       form
investment on associates and joint
ventures
II. Business profit (“-” means
                                                              135,559,581.82                             75,542,726.10
loss)
Add: non-business income                                        7,100,407.46                              5,319,101.86
Less: non-business expense                                        616,845.02                              1,032,917.90
Including: loss from non-current
                                                                  945,068.04                                970,408.62
asset disposal
III. Total profit (“-” means loss)                          142,043,144.26                             79,828,910.06
Less: income tax expense                                       40,273,822.54                             20,500,967.95
IV. Net profit (“-” means loss)                             101,769,321.72                             59,327,942.11
V. Earnings per share                                    --                                        --
(I) Basic earnings per share                                            0.20                                      0.12
(II) Diluted earnings per share                                         0.20                                      0.12
VI. Other comprehensive income                                  2,983,285.62                             -4,899,459.25
VII. Total comprehensive income                               104,752,607.34                             54,428,482.86


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                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

5. Consolidated cash flow statement

Prepared by Anhui Gujing Distillery Company Limited
                                                                                               Unit: RMB Yuan
               Item                               Jan.-Jun. 2014                            Jan.-Jun. 2013
I. Cash flows from operating
activities:
   Cash received from sale of
commodities and rendering of                               2,427,634,003.82                           2,388,476,781.91
service
   Net increase of deposits from
customers and dues from banks
   Net increase of loans from the
central bank
   Net increase of funds borrowed
from other financial institutions
   Cash received from premium of
original insurance contracts
   Net cash received from
reinsurance business
   Net increase of deposits of
policy holders and investment
fund
   Net increase of disposal of
tradable financial assets
   Cash received from interest,
handling         charges        and
commissions
   Net increase of intra-group
borrowings
   Net increase of funds in
repurchase business
   Tax refunds received                                            590,000.00
   Other cash received relating to
                                                             213,011,013.81                             423,118,271.69
operating activities
Subtotal of cash inflows from
                                                           2,641,235,017.63                           2,811,595,053.60
operating activities
   Cash paid for goods and
                                                             730,037,605.84                             694,259,783.60
services
   Net increase of customer
lendings and advances
   Net increase of funds deposited

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                                      2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


in the central bank and amount
due from banks
   Cash for paying claims of the
original insurance contracts
   Cash for paying interest,
handling         charges       and
commissions
   Cash for paying policy
dividends
   Cash paid to and for employees                  527,351,397.79                             417,115,008.72
   Various taxes paid                            1,014,623,162.62                             955,081,121.16
   Other cash payment relating to
                                                   445,435,903.82                             602,422,989.42
operating activities
Subtotal of cash outflows from
                                                 2,717,448,070.07                           2,668,878,902.90
operating activities
Net cash flows from operating
                                                    -76,213,052.44                            142,716,150.70
activities
II. Cash flows from investing
activities:
   Cash received from withdrawal
                                                   980,093,922.21
of investments
   Cash received from return on
                                                     54,652,112.80                                581,538.48
investments
   Net cash received from disposal
of fixed assets, intangible assets                      286,406.47
and other long-term assets
   Net cash received from disposal
of subsidiaries or other business
units
      Other cash received relating
                                                      1,100,000.00
to investing activities
         Subtotal of cash inflows
                                                 1,036,132,441.48                                 581,538.48
from investing activities
   Cash paid to acquire fixed
assets, intangible assets and other                220,818,632.14                             213,935,735.41
long-term assets
   Cash paid for investment                      1,020,029,260.00                             800,000,000.00
   Net cash paid to acquire
subsidiaries and other business
units
   Other cash payments relating to
investing activities
Subtotal of cash outflows from
investing activities
Net cash flows from investing
                                                 1,240,847,892.14                           1,013,935,735.41
activities
   Net cash paid to acquire                        -204,715,450.66                         -1,013,354,196.93
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subsidiaries and other business
units
III. Cash Flows from Financing
Activities:
     Cash received from capital
contributions
     Including: Cash received from
minority shareholder investments
by subsidiaries
     Cash       received       from
borrowings
     Cash received from issuance
of bonds
    Other cash received relating to
financing activities
Subtotal of cash inflows from
financing activities
     Repayment of borrowings
     Cash paid for interest
expenses and distribution of                                                                            251,800,000.00
dividends or profit
      Including: dividends or profit
paid by subsidiaries to minority
shareholders
      Other cash payments relating
to financing activities
Sub-total of cash outflows from
                                                                                                        251,800,000.00
financing activities
Net cash flows from financing
                                                                                                       -251,800,000.00
activities
IV. Effect of foreign exchange
rate changes on cash and cash
equivalents
V. Net increase in cash and cash
                                                             -280,928,503.10                         -1,122,438,046.23
equivalents
      Add: Opening balance of
                                                           1,306,930,710.96                           2,409,650,352.09
cash and cash equivalents
VI. Closing balance of cash and
                                                           1,026,002,207.86                           1,287,212,305.86
cash equivalents

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng




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6. Cash flow statement of the Company

Prepared by Anhui Gujing Distillery Company Limited
                                                                                         Unit: RMB Yuan
                Item                        Jan.-Jun. 2014                            Jan.-Jun. 2013
I. Cash flows from operating
activities:
   Cash received from sale of
commodities and rendering of                          1,327,478,616.09                          1,455,720,537.05
service
   Tax refunds received
   Other cash received relating to
                                                       127,214,689.74                             206,306,800.65
operating activities
Subtotal of cash inflows from
                                                      1,454,693,305.83                          1,662,027,337.70
operating activities
   Cash paid for goods and
                                                       525,512,650.29                             534,007,644.68
services
   Cash paid to and for employees                      252,876,294.81                             215,108,866.37
   Various taxes paid                                  503,939,848.51                             602,748,898.68
   Other cash payment relating to
                                                         75,252,706.56                            174,542,357.54
operating activities
Subtotal of cash outflows from
                                                      1,357,581,500.17                          1,526,407,767.27
operating activities
Net cash flows from operating
                                                         97,111,805.66                            135,619,570.43
activities
II. Cash flows from investing
activities:
   Cash received from retraction
                                                       980,093,922.21
of investments
   Cash received from return on
                                                         54,206,211.10                                581,538.48
investments
   Net cash received from disposal
of fixed assets, intangible assets                           145,352.00
and other long-term assets
   Net cash received from disposal
of subsidiaries or other business
units
      Other cash received relating
                                                          1,100,000.00
to investing activities
         Subtotal of cash inflows
                                                      1,035,545,485.31                                581,538.48
from investing activities
   Cash paid to acquire fixed
assets, intangible assets and other                    218,463,253.40                             208,563,835.34
long-term assets
   Cash paid for investment                           1,020,020,730.00                            800,000,000.00
   Net cash paid to acquire
subsidiaries and other business
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units
   Other cash payments relating to
investing activities
Subtotal of cash outflows from
                                                           1,238,483,983.40                           1,008,563,835.34
investing activities
Net cash flows from investing
                                                             -202,938,498.09                         -1,007,982,296.86
activities
III. Cash Flows from Financing
Activities:
     Cash received from capital
contributions
     Cash       received      from
borrowings
     Cash received from issuance
of bonds
    Other cash received relating to
financing activities
Subtotal of cash inflows from
financing activities
     Repayment of borrowings
     Cash paid for interest
expenses and distribution of                                                                            251,800,000.00
dividends or profit
      Other cash payments relating
to financing activities
Sub-total of cash outflows from
                                                                                                        251,800,000.00
financing activities
Net cash flows from financing
                                                                                                       -251,800,000.00
activities
IV. Effect of foreign exchange
rate changes on cash and cash
equivalents
V. Net increase in cash and cash
                                                             -105,826,692.43                         -1,124,162,726.43
equivalents
      Add: Opening balance of
                                                           1,040,360,357.51                           2,290,346,607.43
cash and cash equivalents
VI. Closing balance of cash and
                                                             934,533,665.08                           1,166,183,881.00
cash equivalents

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

7. Consolidated Statement of Changes in Owners’ Equity

Prepared by Anhui Gujing Distillery Company Limited

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Jan.-Jun. 2014
                                                                                            Unit: RMB Yuan
                                                               Jan.-Jun. 2014
                                     Equity attributable to owners of the Company
                                Paid-u
                                   p
                                                                                                          Total
             Item               capital          Less: Specifi Surplu Genera Retain          Minority
                                        Capital                                                         owners’
                                  (or           treasur    c        s    l risk    ed Others interests
                                        reserve                                                          equity
                                 share          y stock reserve reserve reserve profit
                                capital
                                   )
                                503,60 1,294,0                   256,90         1,688,1
I. Balance at the end of the                                                                            3,742,75
                                 0,000. 95,263.                   2,260.        58,733.
previous year                                                                                           6,257.05
                                     00      69                       27             09
    Add:       change        of
accounting policy
    Correction of errors in
previous periods
    Other
                                503,60 1,294,0                   256,90         1,688,1
II.      Balance      at    the                                                                         3,742,75
                                 0,000. 95,263.                   2,260.        58,733.
beginning of the year                                                                                   6,257.05
                                     00      69                       27             09
III. Increase/ decrease in                                                       181,54
                                        2,983,2                                                         184,529,
the period (“-” means                                                         6,197.5
                                          85.62                                                           483.20
decrease)                                                                             8
                                                                                 357,80
                                                                                                        357,806,
    (I) Net profit                                                              6,197.5
                                                                                                          197.58
                                                                                      8
    (II)                 Other          2,983,2                                                         2,983,28
comprehensive incomes                     85.62                                                              5.62
                                                                                 357,80
                                        2,983,2                                                         360,789,
    Subtotal of (I) and (II)                                                    6,197.5
                                          85.62                                                           483.20
                                                                                      8
    (III) Capital paid in and
reduced by owners
       1. Capital paid in by
owners
       2.     Amounts        of
share-based          payments
recognized in owners’
equity
       3. Others
                                                                                 -176,2
                                                                                                       -176,260,
    (IV) Profit distribution                                                    60,000.
                                                                                                          000.00
                                                                                     00
       1. Appropriations to
surplus reserves

40
                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


    2. Appropriations to
general risk provisions
                                                                                   -176,2
    3. Appropriations to                                                                                      -176,260,
                                                                                  60,000.
owners (or shareholders)                                                                                         000.00
                                                                                       00
     4. Other
   (V)              Internal
carry-forward of owners’
equity
     1. New increase of
capital (or share capital)
from      capital     public
reserves
     2. New increase of
capital (or share capital)
from surplus reserves
     3. Surplus reserves for
making up losses
     4. Other
(VI) Specific reserve
     1. Withdrawn for the
period
     2. Used in the period
(VII) Other
                               503,60 1,297,0                    256,90           1,869,7
                                                                                                               3,927,28
IV. Closing balance            0,000. 78,549.                     2,260.          04,930.
                                                                                                               5,740.25
                                   00     31                         27               67
Jan.-Jun. 2013
                                                                                              Unit: RMB Yuan
                                                                 Jan.-Jun. 2013
                                       Equity attributable to owners of the Company
                             Paid-u
                                p
                                                                                                     Total
           Item              capital          Less: Specifi Surplu Genera Retain         Minority
                                     Capital                                                       owners’
                               (or           treasur    c        s    l risk   ed Others interests
                                     reserve                                                        equity
                              share          y stock reserve reserve reserve profit
                             capital
                                )
                             503,60 1,297,0                   218,73         1,356,1
I. Balance at the end of the                                                                       3,375,48
                              0,000. 32,031.                   6,964.        19,112.
previous year                                                                                      8,108.64
                                  00      07                       73            84
   Add:        retrospective
adjustment due to business
combination under the
same control
   Add:      change       of
accounting policy

41
                                                   2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


  Correction of errors in
previous periods
  Other
                                  503,60 1,297,0                    218,73           1,356,1
II.   Balance     at        the                                                                                   3,375,48
                                  0,000. 32,031.                     6,964.          19,112.
beginning of the year                                                                                             8,108.64
                                      00     07                         73                84
III. Increase/ decrease in                                          38,165            332,03
                                         -2,936,                                                                  367,268,
the period (“-” means                                              ,295.5          9,620.2
                                         767.38                                                                    148.41
decrease)                                                                 4                5
                                                                                      622,00
                                                                                                                  622,004,
     (I) Net profit                                                                  4,915.7
                                                                                                                   915.79
                                                                                           9
  (II)             Other                 -2,936,                                                                 -2,936,76
comprehensive incomes                    767.38                                                                       7.38
                                                                                      622,00
                                         -2,936,                                                                  619,068,
     Subtotal of (I) and (II)                                                        4,915.7
                                         767.38                                                                    148.41
                                                                                           9
   (III) Capital paid in and
reduced by owners
      1. Capital paid in by
owners
      2.    Amounts       of
share-based        payments
recognized in owners’
equity
      3. Others
                                                                    38,165            -289,9
                                                                                                                 -251,800,
     (IV) Profit distribution                                        ,295.5          65,295.
                                                                                                                    000.00
                                                                          4               54
                                                                    38,165            -38,16
     1. Appropriations to
                                                                     ,295.5          5,295.5
surplus reserves
                                                                          4                4
     2. New increase of
capital (or share capital)
from surplus reserves
                                                                                      -251,8
    3. Surplus reserves for                                                                                      -251,800,
                                                                                     00,000.
making up losses                                                                                                    000.00
                                                                                          00
     4. Other
   (V)            Internal
carry-forward of owners’
equity
     1. New increase of
capital (or share capital)
from      capital   public
reserves
     2. New increase of

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                                                 2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


capital (or share capital)
from surplus reserves
     3. Surplus reserves for
making up losses
     4. Other
(VI) Specific reserve
     1. Withdrawn for the
period
     2. Used in the period
(VII) Other
                                503,60 1,294,0                    256,90           1,688,1
                                                                                                                3,742,75
IV. Closing balance             0,000. 95,263.                     2,260.          58,733.
                                                                                                                6,257.05
                                    00     69                         27               09

Legal representative: Liang Jinhui                                Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

8. Statement of Changes in Owners’ Equity of the Company

Prepared by Anhui Gujing Distillery Company Limited
Jan.-Jun. 2014
                                                                                                Unit: RMB Yuan
                                                                     Jan.-Jun. 2014
                                Paid-up
                                                         Less:                           General           Total
               Item             capital    Capital              Specific      Surplus            Retained
                                                       treasury                            risk           owners’
                               (or share   reserve              reserve       reserve             profit
                                                         stock                           reserve           equity
                                capital)
I. Balance at the end of the 503,600,      1,246,31                           251,800,               1,589,27 3,590,99
previous year                     000.00   8,877.85                            000.00                7,915.00 6,792.85
   Add:        change       of
accounting policy
   Correction of errors in
previous periods
   Other
II. Balance at the beginning 503,600,      1,246,31                           251,800,               1,589,27  3,590,99
of the year                       000.00   8,877.85                            000.00                7,915.00  6,792.85
III. Increase/ decrease in the             2,983,28                                                 -74,490,6 -71,507,3
period (“-” means decrease)                  5.62                                                     78.28     92.66
                                                                                                     101,769,  101,769,
     (I) Net profit
                                                                                                       321.72    321.72
   (II) Other comprehensive                2,983,28                                                            2,983,28
incomes                                        5.62                                                                5.62
                                           2,983,28                                                  101,769, 104,752,
     Subtotal of (I) and (II)
                                               5.62                                                   321.72 607.34
     (III) Capital paid in and

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reduced by owners
     1. Capital paid in by
owners
     2.     Amounts      of
share-based       payments
recognized     in   owners’
equity
     3. Others
                                                                                                 -176,260, -176,260,
     (IV) Profit distribution
                                                                                                    000.00 000.00
     1. Appropriations to
surplus reserves
     2. Appropriations to
general risk provisions
     3. Appropriations to                                                                        -176,260, -176,260,
owners (or shareholders)                                                                            000.00 000.00
     4. Other
   (V)                Internal
carry-forward of owners’
equity
     1. New increase of
capital (or share capital)
from capital public reserves
     2. New increase of
capital (or share capital)
from surplus reserves
     3. Surplus reserves for
making up losses
     4. Other
(VI) Specific reserve
     1. Withdrawn for the
period
     2. Used in the period
(VII) Other
                                 503,600, 1,249,30                         251,800,               1,514,78 3,519,48
IV. Closing balance
                                  000.00 2,163.47                           000.00                7,236.72 9,400.19
Jan.-Jun. 2013
                                                                                            Unit: RMB Yuan
                                                                  Jan.-Jun. 2013
                              Paid-up
                                                       Less:                          General           Total
            Item              capital     Capital             Specific     Surplus            Retained
                                                     treasury                           risk           owners’
                             (or share    reserve             reserve      reserve             profit
                                                       stock                          reserve           equity
                              capital)
I. Balance at the end of the 503,600,     1,249,25                         213,634,               1,219,70 3,186,19
previous year                   000.00    5,645.23                          704.46                0,782.58 1,132.27
   Add:       change      of
accounting policy
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   Correction of errors in
previous periods
   Other
II. Balance at the beginning 503,600, 1,249,25                         213,634,               1,219,70  3,186,19
of the year                    000.00 5,645.23                          704.46                0,782.58  1,132.27
III. Increase/ decrease in the        -2,936,76                        38,165,2               369,577,  404,805,
period (“-” means decrease)              7.38                           95.54                 132.42    660.58
                                                                                              659,542,  659,542,
     (I) Net profit
                                                                                                427.96    427.96
   (II) Other comprehensive          -2,936,76                                                         -2,936,76
incomes                                   7.38                                                              7.38
                                     -2,936,76                                                659,542, 656,605,
     Subtotal of (I) and (II)
                                          7.38                                                 427.96 660.58
   (III) Capital paid in and
reduced by owners
      1. Capital paid in by
owners
      2.     Amounts      of
share-based         payments
recognized      in   owners’
equity
      3. Others
                                                                       38,165,2              -289,965, -251,800,
     (IV) Profit distribution
                                                                          95.54                 295.54 000.00
     1. Appropriations to                                              38,165,2              -38,165,2
surplus reserves                                                          95.54                  95.54
     2. Appropriations to
general risk provisions
     3. Appropriations to                                                                    -251,800, -251,800,
owners (or shareholders)                                                                        000.00 000.00
     4. Other
   (V) Internal carry-forward
of owners’ equity
     1. New increase of
capital (or share capital)
from capital public reserves
     2. New increase of
capital (or share capital)
from surplus reserves
     3. Surplus reserves for
making up losses
     4. Other
  (VI) Specific reserve
     1. Withdrawn for the
period
     2. Used in the period
  (VII)Other
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                              503,600, 1,246,31                              251,800,               1,589,27 3,590,99
IV. Closing balance
                               000.00 8,877.85                                000.00                7,915.00 6,792.85

Legal representative: Liang Jinhui                               Person-in-charge of the accounting work: Ye
Changqing

Chief of the accounting division: Zhu Jiafeng

III. Company history

Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of
State-owned Property, Anhui Gujing Distillery Company Limited (“the Company”) was
established as a limited liability company with net assets of 37,716.77 million yuanand
state-owned shares of 155,000,000 shares and considered Anhui Gujing Group as the only
promoter. The registration place was Haozhou Anhui China. The Company was established
on 5 March 1996 by document of WZM (1996) No.42 of Anhui People’s Government. The
Company set up plenary session on 28 May 1996 and registered in Anhui on 30 May 1996
with business license of 14897271-1.
The Company has been issued 60,000,000 domestic listed foreign shares (“B” shares) in June
1996 and 20,000,000 ordinary shares (“A shares) on September 1996, ordinary shares are
listed in national and par value is RMB 1.00 per share. Those A share and B share are listed
in Shenzhen Stock exchange.
Headquarter of the Company is located in Gujing Haozhou Anhui. The Company and its
subsidiaries (the Group) specialize in producing and selling white spirit.
Registered capitals of the Company were RMB 235,000,000 with stocks of 235,000,000, of
which 155,000,000 shares were issued in China, B shares of 60,000,000 shares and A shares
of 20,000,000 shares. The book value of the stocks of the Company was of RMB 1 Yuan per
share.
On May 29, 2006, a shareholder meeting was held to discuss and approval a program of
equity division of A share, the program was implement in June 2006. After implementation,
all shares are outstanding share, which include 147,000,000 shares with restrict condition on
disposal, represent 62.55% of total equity, and 88,000,000 shares without restrict condition
on disposal, represent 37.45% of total equity.
The Company issued Distillery Company Limited> on June 27, 2007, 11,750,000 outstanding shares with restrict
condition on disposal are listed in stock market on June 29, 2007. Up to that day, outstanding
shares with restrict condition on disposal are 135,250,000, representing 57.55% of total
equity, the share without restrict condition are 99,750,000, representing 42.45% of total
equity.
The Company issued Distillery Company Limited> on July 17, 2008, 11,750,000 outstanding shares with restrict
condition on disposal are listed in stock market on July 18, 2008. Up to that day, outstanding
shares with restrict condition on disposal are 123,500,000, representing 52.55% of total

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equity, the share without restrict condition are 111,500,000, representing 47.45% of total
equity.
The Company issued Distillery Company Limited> on July 24, 2009, 123,500,000 outstanding shares with restrict
condition on disposal are listed in stock market on 29 July, 2009. Up to that day, the
Company’s all shares are all tradable.
As approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943, the Company
privately offered 16,800,000 ordinary shares (A-shares) to special investors on 15 Jul. 2011,
with a par value of RMB 1 and the price of RMB 75.00 per share, raising RMB
1,260,000,000.00 in total, the net amount of raised funds stood at RMB 1,227,499,450.27
after deducting RMB 32,500,549.73 of various issuance expenses. Certified Public
Accountants verified the raised capital upon its arrival and issued the Capital Verification
Report Reanda-Yan-Zi [2011] No. 1065.
In accordance with the resolutions made at the 2011 Annual Shareholders’ General Meeting,
basing on the total share capital of 251,800,000 shares, the Company decided to transfer the
capital reserves to share capital by 10 shares upon each 10 shares to the A-share holders
registered in the Company on 27 Apr. 2012 and the B-share holders registered in the
Company on 4 May 2012, thus the total share capital increased to RMB 503,600,000 after the
capitalization. Reanda Certified Public Accountants verified the raised capital (Capital
Verification Report Reanda-Yan-Zi [2012] No. 1022). Up to 4 May 2012, the Company has
transferred RMB 251,800,000 of capital reserves to share capital.
Pursuant to the decision of annual shareholders meeting in 2012, the Company that
considered 251,800,000 shares as base number on 31 December 2013 transferred capital
reserve into share capital at a rate of “10 shares for per 10 shares” accounting for 251,800,000
shares and implemented in the year of 2012. Upon the transference, the registered capitals
increased to RMB 503,600,000.
By 30 Jun. 2014, the Company issued 503,600,000 shares. More details please refer to Note
VII, 28
The approved business of the Company including procurement of grain (operating with
business license), manufacture of distilled spirits, wine distilling facilities, packaging material,
bottles, alcohol, grease (limited to byproducts from wine manufacture), and research and
development of high-tech, biotechnology development, agricultural and sideline products
deep processing, as well as sale of self-manufacturing products.
The Company and the final parent company is Anhui Gujing Group Co., Ltd in China.
Financial statement of the Company will be released on 11 Aug. 2014 by the board of
directors.

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II. Basis for the preparation of financial statements
The financial statements of the Company have been prepared on the going concern basis with
reference to the actual occurrence of transactions and events and in accordance with the China
Enterprise Accounting Standards (CAS) issued by the Ministry of Finance on 15 Feb. 2006
and 38 accounting policies, application guides of ASBE, explanations and other relevant
stipulations of ASBE (ASBE), and disclosure stipulations “Compiling stipulations of public
information disclosure No.15---general rules of financial statement” (revised in 2010).
In line with relevant rules of ASBE, financial accounting of the Group is based on accrual
system. Except financial instruments and instrument real estate, the financial statement is
calculated on the basis of history costs. Available-for-sale non-current assets are calculated by
the lower one of fair value deducting estimated costs and original costs meeting the standard
of available-for-sale. If assets confront impairment, it shall be withdrawn provision for
impairment in line with relevant stipulations.

III. Declaration of Compliance with the Enterprise Accounting Standards
The financial statements of the Company have been prepared in accordance with the
Enterprise Accounting Standards to present truly and completely the financial position of the
Group on 30 June 2013, operating results, cash flow from January to June in 2013 and other
relevant information. The financial statement of the Group met the relevant disclosure
requirements of financial statement and notes of “Compiling stipulations of public
information disclosure No.15---general rules of financial statement” (revised in 2010).

IV. Main accounting policies and accounting estimates

 1. Accounting year
Accounting year is divided to annual term and medium term. Accounting medium refers to
reporting period shorter than a complete accounting period. The Company employs a period
of calendar days from 1 Jan. to 31 Dec. each year as accounting year.
 2. Bookkeeping base currency
The Company’s bookkeeping base currency is Renminbi (“RMB”). Currency used to compile
the financial statement is RMB.
 3. Accounting treatment of the business combination
Business combination refers to combination of two or more than two corporations to establish
a reporting entity. Business combination is divided to combination under the same control and
combination not under the same control.
 (1) Accounting treatment of the business combination that is under the same control

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A business combination involving enterprises under common control is a business
combination in which all of the combining enterprises are ultimately controlled by the same
party or parties both before and after the business combination, and that control is not
transitory. The assets and liabilities obtained are measured at the carrying amounts as
recorded by the enterprise being combined at the combination date. The difference between
the carrying amount of the net assets obtained and the carrying amount of consideration paid
for the combination (or the total face value of shares issued) is adjusted to share premium in
the capital reserve. If the balance of share premium is insufficient, any excess is adjusted to
retained earnings. Other direct expenses occur when the Group conducting business
combinations is recognized in current profit and loss. The combination date is the date on
which one combining enterprise effectively obtains control of the other combining
enterprises.
Those assets and liabilities obtained by the Company during the business combination should
be recognized in the carrying value of the equity of the merged party on the merger date. The
difference between the carrying amount of the net assets obtained and carrying amount of the
merger consideration (or total par value of issued shares) paid shall be adjusted to capital
reserve. If the capital reserve is not sufficient to absorb the difference, any excess shall be
adjusted against retained earnings.
Direct costs of a business combination shall be reckoned into current gains and losses.
 (2) Accounting treatment of the business combination that is not under the same control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same
party or parties both before and after the business combination. In business combination not
under the same control, acquirer refers to party obtaining control of other combining
corporations in the date of acquisition and acquiree refers to corporation participating in
combination. Date of acquire refers to the date the acquirer actually obtaining control of the
acquiree.
As for combination not under the same control, costs of combination includes assets that
acquirers occur in the date of combination in order to obtain control of acqirees, loans, fair
value of issued equity securities, intermediary costs such as audit, legal services and
evaluation consultation, and other administrative fees occurred in the reporting period. As for
trading costs that acquirers as combination consideration issue equity securities or debt
securities, it shall be reckoned into initial accounts of equity securities or debt securities. As
for business combination realized by several exchanges and trades, in the combined financial

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statement of the Group, the Company shall recalculate the stock right obtained by acquirees
before the date of acquisition in line with fair value of the stock right in the date of
acquisition. When the Group acts as the combination party, the cost of a business
combination paid by the acquirer is the aggregate of the fair value at the acquisition date of
assets given (including share equity of the acquiree held before the combination date),
liabilities incurred or assumed, and equity securities issued by the acquirer. Any excess of the
cost of a business combination over the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets is recognized as goodwill, while any excess of the acquirer’s interest in
the fair value of the acquiree’s identifiable net assets over the cost of a business combination
is recognized in profit or loss. The cost of equity securities or liability securities as on
combination consideration offering is recognized in initial recording capital on equity
securities or liability securities. Other direct expenses occur when the Group conducting
business combinations is recognized in current profit and loss. The difference between the
fair value and the carrying amount of the assets given is recognized in profit or loss. The
Group, at the acquisition date, recognized the acquiree’s identifiable asset, liabilities and
contingent liabilities at their fair value at that date. The acquisition date is the date on which
the acquirer effectively obtains control of the acquiree.
As for deductible temporary difference of acquirers obtained by acquirers which can’t be
confirmed due to failure of meeting the confirmation requirements of deferred income tax
assets, if there is newly information proving the existence of relevant situation in the date of
acquisition in a year after the acquisition date and financial benefits of deductible temporary
difference of acquirers in the date of acquisition are estimated to be realized, deferred income
tax assets shall be confirmed. At the same time, goodwill shall be decreased. If goodwill is
insufficient, the difference shall be reckoned into current gains and losses; except the above
circumstance, reliable deferred income tax assets relevant to the Company shall be reckoned
into current gains and losses.
For a business combination not involving enterprise under common control, which achieved
in stages that involves multiple exchange transactions, according to “The notice of the
Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai
[2012] No. 19) on the “package deal” criterion (see Note 4.4.2) , to judge the multiple
exchange transactions whether they are the "package deal". If it belong to the “package deal”
in reference to the preceding paragraphs of this section and the Notes described in 4.10
“long-term investment” accounting treatment, if it does not belong to the “package deal” to
distinguish the individual financial statements and the consolidated financial statements

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related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's
equity investment before the acquisition date and the cost of new investment at the
acquisition date, as the initial cost of the investment, the acquiree's equity investment before
the acquisition date involved in other comprehensive income, in the disposal of the
investment and other associated comprehensive income transferred to investment income.
In the combination financial statements, the equity interest in the acquiree previously held
before the acquisition date re-assessed at the fair value at the acquisition date, with any
difference between its fair value and its carrying amount is recorded as investment income.
The other comprehensive income of the acquiree before the acquisition date relating to the
previously held interest in the acquiree is transferred to investment income.
4. Methods for preparing consolidated financial statements
 (1) Principle for determining the consolidation scope
The consolidated financial statements prepared are in accordance with the No. 33 Enterprise
Accounting Standards – Consolidated Financial Statement issued in Feb. 2006. The
consolidated financial statements incorporate the financial statements of the Company and its
subsidiaries directly controlled or indirectly controlled by the Company as well as units with
special purpose. Control is achieved where the Company has the power to govern the
financial and operating policies of an invested enterprise so as to obtain benefits from its
operating activities. If there is evidence provide that the invested company is not controlled
by holding company, the invested company would not be included in the consolidation
scope.
 (2) Methods for preparing consolidated financial statements
The Group begins to include subsidiaries into consolidation scope from the date obtaining net
assets of subsidiaries and actual control of production and operation and terminates to
include subsidiaries into consolidation scope from the date losing actual control of
subsidiaries. As for the disposal of subsidiaries, operating results and cash flow are included
in consolidated income statement and consolidated statement of cash flow before the date of
the disposal; as for current disposal of subsidiaries, opening balance of the consolidated
balance sheet shall not be adjusted. As for subsidiaries increased in the combination not
under the same control, operating results and cash flow after the date of the acquisition are
included in consolidated income statement and consolidated statement of cash flow, in
addition, opening balance of the consolidated balance sheet shall not be adjusted. As for
subsidiaries increased in the combination under the same control and combined parties under
acquisition, operating results and cash flow form the beginning of combination to the date of
combination are included in consolidated income statement and consolidated statement of

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cash flow, in addition, opening balance of the consolidated balance sheet shall be adjusted.
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities under common control, the financial statements of the subsidiary are
included in the consolidated financial statements as if the combination had occurred at the
date that common control was established. Therefore the opening balances and the
comparative figures of the consolidated financial statements are restated. In the preparation
of the consolidated financial statements, the subsidiary’s assets, liabilities and results of
operations are included in the consolidated balance sheet based on their carrying amounts;
while results of operations are included in the consolidated income statement, from the date
that common control was established.
All the significant inter-company balances, trading and unrealized profits shall be offset
when preparing the consolidated financial statement.
If current loss shoulder by minority shareholders of a subsidy over the proportion enjoyed by
minority shareholders in a subsidy at owners’ equity at period-begin, its balance still offset
minority shareholders’ equity.
When the accounting period or accounting policies of a subsidiary are different from those of
the Company, the Company makes necessary adjustments to the financial statements of the
subsidiary based on the Company’s own accounting period or accounting policies.
Intra-group balances and transactions, and any unrealized profit or loss arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealized losses resulting from intra-group transactions are eliminated in the same way as
unrealized gains but only to the extent that there is no evidence of impairment.
When losing control right of subsidiaries because of the disposal of stock right investment or
other reasons, the Company shall recalculate residual stock right in accordance to the fair
value in the date of losing control right. As for remaining equity investment after disposal,
the Group will re-account it according to the fair value at the date the control was lost. Any
profit or loss occurred shall be recorded into the investment income during the period of
losing control right. Then follow-up measurement of remaining equity shall be arranged in
line with “No.2—Long-term Equity Investment” or “No.22—Affirmation and Calculation of
Financial Instrument”. More details please refer to Note IV, 10 “Long-term Equity
Investment” or Note IV, 7 “Financial Instrument”.
The company through multiple transactions step deals with disposal of the subsidiary's equity
investment until the loss of control; need to distinguish between equity until the disposal of a
subsidiary's loss of control over whether the transaction is package deal. Terms of the
transaction disposition of equity investment in a subsidiary, subject to the following

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conditions and the economic impact of one or more of cases, usually indicates that several
transactions should be accounted for as a package deal:①these transactions are considered
simultaneously, or in the case of mutual influence made, ②these transactions as a whole in
order to achieve a complete business results; ③the occurrence of a transaction depends on
occurs at least one other transaction ; ④a transaction look alone is not economical, but when
considered together with other transaction is economical. If they does not belong to the
package deal, each of them separately, as the case of a transaction in accordance with
“without losing control over the disposal of a subsidiary part of a long-term equity
investments” (see Note 4.10.2, 4)) and “due to the disposal of certain equity investments or
other reasons lost control of a subsidiary of the original” (see previous paragraph) principles
applicable accounting treatment. Until the disposal of the equity investment loss of control of
a subsidiary of the transactions belonging to the package deal, the transaction will be used as
a disposal of a subsidiary and the loss of control of the transaction. However, before losing
control of the price of each disposal entitled to share in the net assets of the subsidiary's
investment corresponding to the difference between the disposals, recognized in the
consolidated financial statements as other comprehensive income, loss of control over the
transferred together with the loss of control or loss in the period.
5. Cash equivalent
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and
investments having short holding term (normally will be due within three months from the
day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash
that can be measured reliably and have low risks of change.
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 exchange rate 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 sheet date. All the exchange differences thus resulted are taken
to profit or loss, except for ①those relating to foreign currency borrowings specifically for
construction and acquisition of qualifying assets, which are capitalized in accordance with
the principle of capitalization of borrowing costs, ②hedging accounting, the exchange

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difference related to hedging instruments for the purpose of net oversea operating investment
is recorded in the comprehensive income till the date of disposal and recognized in profit or
loss of the period; exchange difference from changes of other account balance of foreign
currency monetary items, ③available-for-trade is recorded into profit or loss except for
amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at
the spot exchange rate prevailing on the transaction date, and the amount denominated in the
functional currency is not changed. Non-monetary foreign currency items measured at fair
value are translated at the spot exchange rate prevailing at the date when the fair values are
determined. The exchange difference thus resulted are recognized in profit or loss for the
current period or as capital reserve.
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 in an arm’s length transaction. For a financial instrument
which has an active market, the Company uses quoted price in the active market to establish
its fair value. The quoted price in the active market refers to the price that can be regularly
obtained from exchange market, agencies, industry associations, pricing authorities; it
represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Company establishes
fair value by using a valuation technique. Valuation techniques include using recent arm’s
length market transactions between knowledgeable, willing parties, reference to the current
fair value of another instrument that is substantially the same, discounted cash flow analysis
and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at
the value of a competitor’s interest rate swap quoted by a recognized financial institution as
at the Company’s balance sheet date in accordance with the principle of consistency.
 (2) Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis. On initial recognition, the Company’s financial assets are classified into one
of the four categories; including financial assets at fair value though profit or loss, held-to
maturity investments, loans and receivables and available-for-trade financial assets. A
financial asset is recognized initially at fair value. In the case of financial assets at fair value
through profit or loss, relevant transaction costs are immediately charged to the profit and

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loss of the current period; transaction costs relating to financial assets of other categories are
included 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 is objective evidence indicating that the enterprise recently
manages this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective
hedging instrument, or a financial guarantee contract, or a derivative that is linked to and
must be settled by delivery of an unquoted equity instrument (without a quoted price from an
active market) whose fair value cannot be reliably measured. For such kind of financial
assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only
when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement
or recognition of relevant gains or losses that would otherwise arise from measuring the
financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair
value basis, and is reported to the enterprise’s key management 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 arising from changes in the fair value and any dividends or interest
income earned on the financial assets are recognized in the profit or loss.
2) Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity that an entity has the positive intention and ability to hold to
maturity. Such kind of financial assets are subsequently measured at amortized cost using the
effective interest method. Gains or losses arising from derecognizing, impairment or
amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through
the expected life of the financial asset or financial liability or, where appropriate, a shorter

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period to the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow
considering all contractual terms of the financial asset or financial liability without
considering future credit losses, and also consider all fees paid or received between the
parties to the contract giving rise to the financial asset and financial liability that are an
integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
3) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment
that are not quoted in an active market. Financial assets classified as loans and receivables by
the Company include note receivables, account receivables, interest receivable dividends
receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective
interest method. Gain or loss arising from derecognizing, 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 as available for trade, and financial assets that are not classified as
financial assets at fair value through profit or loss, loans and receivables or investment
held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or
losses arising from changes in the fair value are recognized as other comprehensive income
and included in the capital reserve, except that impairment losses and exchange differences
related to amortized cost of monetary financial assets denominated in foreign currencies are
recognized in profit or loss, until the financial assets are derecognized, at which time the
gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the
financial assets available-for-trade are held, are recognized in investment gains.
 (3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset
except for the financial assets that measured by the fair value. If there is objective evidence
indicating a financial asset may be impaired, a provision is provided for the impairment.
1) Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by
the estimated present value of future cash flow. The difference is recorded as impairment loss.

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If there is objective evidence to indicate the recovery of value of financial assets after
impairment, and it is related with subsequent event after recognition of loss, the impairment
loss recorded originally can be reversed. The carrying value of financial assets after
impairment loss reversed shall not exceed the amortized cost of the financial assets without
provisions of impairment loss on the reserving date.
2) Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not
contemporarily according to the integrated relevant factors, an available-for-trade financial
asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from
declining in fair value that had been recognized in capital reserve shall be removed and
recognized in profit or loss. The amount of the cumulative loss that is removed shall be
difference between the acquisition cost with deduction of recoverable amount less amortized
cost, current fair value and any impairment loss on that financial asset previously recognized
in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of
the financial asset is recovered, and it is objectively related to an event occurring after the
impairment loss was recognized, the initial impairment loss can be reversed and the reserved
impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the
reserved impairment loss on available-for-trade debt instrument is recorded in the current
profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair
value cannot be reliably measured, or impairment loss on a derivative asset that is linked to
and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
 (4) 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-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a)
has transferred substantially all the risks and rewards of the asset, or (b) has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor

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control over the asset, the asset is recognized according to the extent it exists as financial
asset, and correspondent liability is recognized. The extent of existence refers the level of
risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognizing criteria, (a) the
carrying amount of the financial asset transferred; and (b) the sum of the consideration
received from the transfer and any cumulative gain or loss that had been recognized in other
comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognizing, the carrying amount of
the transferred financial asset is allocated between the part that continues to be recognized
and the part that is derecognized, based on the relative fair value of those parts. The
difference between (a) the carrying amount allocated to the part derecognized; and (b) the
sum of the consideration received for the part derecognized and any cumulative gain or loss
allocated to the part derecognized which has been previously recognized in other
comprehensive income, is recognized in profit or loss.
 (5) Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities
at fair value through profit or loss and other financial liabilities. For financial liabilities at fair
value through profit or loss, relevant transaction costs are immediately recognized in profit or
loss for the current period, and transaction costs relating to other financial liabilities are
included in the initial recognition amounts.
1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities
designed at the initial recognition to be measured by the fair value follows the same criteria
as the classification by which financial assets held-for-trade and financial assets designed at
the initial recognition to be measured by the fair value and their changes are recorded in the
current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or
loss, fair values are adopted for subsequent measurement. All the gains or losses on the
change of fair value and the expenses on dividends or interests related to these financial
liabilities are recognized in profit or loss for the current period.
2) Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a
quoted price in an active market and their fair value cannot be measured reliably, is
subsequently measured by cost Other financial liabilities are subsequently measured at

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amortized cost using the effective interest method. Gains or losses arising from
derecognizing or amortization are recognized in profit or loss for the current period.
 (6) Derecognizing of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present
obligation (or part of it) is discharged or cancelled or has expired. An agreement between the
Company (an existing borrower) and existing lender to replace original financial liability
with a new financial liability with substantially different terms is accounted for as an
extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the
difference between the carrying amount of the financial liability (or part of the financial
liability) derecognized the consideration paid (including any non-cash assets transferred or
new financial liabilities assumed) in profit or loss.
 (7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the
date when the derivative contracts are entered into and are substantially re-measured at fair
value. The 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 financial asset or financial liability at fair value though
profit or loss, and the treated as a standalone derivative if (a) the economic characteristics
and risks of the embedded derivative are not closely related to the economic characteristics
and risks of the host contract; and (b) a separate instrument with the same terms as the
embedded derivative would meet the definition of a derivative. If the Company is unable to
measure the embedded derivative separately either at acquisition or at a subsequent balance
sheet date, it designates the entire hybrid instrument as a financial asset or financial liability
at fair value through profit or loss.
 (8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities, and intends either to settle on a net basis, or to realize
the financial asset and settle the financial liability simultaneously, a financial asset and a
financial liability shall be offset and the net amount is presented in the balance sheet. Except
for the above circumstances, financial assets and financial liabilities shall be presented
separately in the balance sheet and shall not be offset.
 (9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the

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Company after deducting all of its liabilities. The consideration received from issuing equity
instruments, net of transaction costs, are added to shareholders’ equity. All types of
distribution (excluding stock dividends) made by the Company to holders of equity
instruments are deducted from shareholders’ equity. The Group does not recognize any
changes in the fair value of equity instruments.
8. Receivables
The receivables by the Company include 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 the receivables 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 the principal, 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.
The Company recognized the accounts receivables which amounted to more than 2 million as
the account receivables that is individual significant.
For an account receivable that is individually significant, the asset is individually assessed for
impairment, the impairment loss is recognized at the difference between the present value of
future cash flow less the carrying amount, and provision is made accordingly.
② Provisions of bad debts in account receivables that individually insignificant item with
similar credit risk characteristics that 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 assets with similar credit risk characteristics and collectively
assessed for impairment. Such credit risk reflects the repayment of all due amount 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

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                                                         Companies within the combination scope of the
Related party portfolios
                                                                             Company

B. Provision by credit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by
the assessed result from the experience of historical loss and current economic status and the
existing loss in the estimated account receivables according to the set of account receivables
and credit risk characteristic.
Provision for different portfolios:
                          Item                                              Provision
Age portfolios                                                        Age analysis method
                                                        Don’t withdraw the bad debts provision unless the
 Related party portfolios
                                                            related-party lost the repaying capability

 a. Portfolio by age analysis

                                   Proportion for accounts receivable
               Category                                                  Proportion for other receivable (%)
                                                  (%)
Within 1 year (including 1 year,
similarly hereinafter)
Including: [within 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

③Accounts receivable with insignificant amount but being individually withdrawn bad debts
provision
When making individual impairment test on accounts receivable with insignificant amount
but high credit risk, the impairment loss shall be recognized based on the difference of the
book values higher than the present value of future cash flows, then withdraw the bad debts
provision. For example, accounts receivable of related parties; accounts receivable involving
dispute or litigation, arbitration; accounts receivable having clear signs to indicate that debtor
probably can not implement obligations of payment.

 (3) Reversal of provision for bad debt
If there is any provident demonstrating recovery of the value of the accounts receivable and
objectively correlating to the issues after the confirmation of the losses, the original

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confirmed losses would be reversed and recorded into current gains and losses. However, the
reserved book value shall not exceed the amortized costs of the accounts receivable under
non-withdrawing impairment circumstance.

9. Inventory

 (1) Category of inventory
Inventory mainly includes raw materials, packing materials, self-made semi-manufactured
products, goods in process and finished goods, etc.

 (2) Pricing method for outgoing inventories
Inventory is priced by actual costs when it is obtained. Inventory costs include procurement
costs, processing costs and other costs. Weighted average method is used to price inventory
when it is received and delivered.

 (3) Recognition basis of net realizable value and withdrawal method of falling price

provision for inventories
Net realizable value in daily activity, it is referred to the estimated selling price minus the
estimated selling expenses and related tax and fees in normal operating process. When
confirming the net realizable value of inventories, the Company shall take the intention of
inventories into consideration and influence of issues after balance sheet date.
On the balance sheet date, the evaluation criteria should base on the lower value between
costs and net realizable value. When net realizable value is lower than costs, falling price
provision of inventories shall be made. Under normal circumstances, the Company
withdraws the falling price provision in according to individual inventory items, but for large
quantity and low-unit-price inventories, falling price provision of inventories shall be made
based on the category of inventories; for those inventories that relating to the same product
line that have similar purposes or end uses, are produced and marketed in the same
geographical area, and cannot be practicably evaluated separately from other items in that
product line, their falling price provision of inventories shall be consolidated.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any
write-down of the inventories, have disappeared, the amount of write-down shall be
recovered and reversed from the original amount of depreciation reserve for inventories. The
reversed amount shall be included in the profits and losses of the current period.

 (4) Inventory system for inventories is perpetual inventory system

 (5) Amortization method of the low-value consumption goods and packing articles

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Low-value consumption goods: one-off amortization method
Packing articles: one-off amortization method

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 equity investment shall be carrying value of the absorbing
party’s share of the shareholder’s equity of the party being absorbed at the date of
combination.
For a business combination not involving enterprise under common control, the combination
cost including the sum of fair value, at the acquisition date, of the assets given, liabilities
incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses
incurred by the acquirer in respect of auditing, legal services, valuation and consultancy
services etc and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in
the business combination shall be recognized 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 shall be recognized to the difference in the way of acquisition of
long-term equity investment. Theses ways include the cash purchase price the Company
actually paid, the fair value of equity security issued by the Company, value specified in the
investment contract or agreement, the fair value or carrying value of the asset out in the
transaction of non-monetary asset exchanges, 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 are taken 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 control or significant influence over the investee, the investment is
not quoted in an active market and its fair value cannot be measured reliably.
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

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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 or profits declared but not yet paid that are included in the price or
consideration actually paid upon acquisition of the long-term equity investment, investment
income is recognized in the period in accordance with the attributable share of cash dividends
or profit distributions 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 values of 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 fair values of investee’s identifiable net assets at the time of
acquisition, the difference shall be charged to profit or loss for the current period, 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 investment income or loss for the period. The Group recognizes it
share of the investee’s net profit or loss based on the fair value of the investee’s individual
separately identifiable assets, etc at the acquisition date after making appropriate adjustments
to confirm with the Company’s accounting policies and accounting period. Unrealized profits
or losses resulting from the Company’s transactions with its associates and joint ventures are
recognized as investment income or loss to the extent that those attributable to the
Company’s equity interest are eliminated. However, unrealized losses resulting from the
Company’s transactions with its investees on the transferred assets, in accordance with
"Accounting Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated.
Changes in owners’ equity of the investee other than net profit or loss are correspondingly
adjusted to the carrying amount 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 of net investment (in substance) in investee to zero. In
addition, the Company has the obligations on additional losses, then the expected obligation
as estimated liabilities and included in the current investment losses. Where the net profit

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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 time adoption of Accounting Standards for Business Enterprises,
where the initial investment cost of a long-term equity investment exceeds the Company’s
interest in the investee’s net assets at the time of acquisition, the excess is amortized and is
recognized in profit 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 asset cumulatively calculated from the acquisition date is adjusted
as capital reserve. If the capital reserve is not sufficient to absorb the difference, 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 net asset between the amount of disposed long-term investment
and the amount of the consideration paid or received is adjusted to the owner’s equity. If the
disposal of long-term investment in a subsidiary involves loss of control over the subsidiary,
the related accounting policies in Note 4.4.2 applies.
On disposal of a long-term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period.
For along-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 the period.
For any retained interest, it shall be subsequently measured according to the related
accounting policies in regard of long-term equity investments or financial assets as described
above if its carrying amount is recognized as long-term equity investments or other related
financial assets. Retroactive adjustment is made on the basis of relevant policies if the
retained interests are settled from cost method to equity method.
 (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 operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and
exists only when the strategic financial and operating decisions relating to the activity require
the unanimous consent of the parties sharing control.

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Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant
influence over an investee, the effect of potential voting rights of the investee held the
investing enterprise or other parties that are currently exercisable or convertible 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 of impairment. 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 for impairment loss of the asset is
recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
11. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment
property includes leased or ready to transfer after capital appreciation land use rights and
leased buildings. Investment property is initially measured at cost. Subsequent expenditures
related to an investment real estate are likely to flow about the economic benefits of the asset
and its cost can be measured reliably, is included in the cost of investment real estate. Other
subsequent expenditures of gains or losses when occurred.
The Group uses the cost model for subsequent measurement of investment property, and in
accordance with the depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in
Note 4.17 “Non-current and non-financial assets impairment ".
Occupied real estate for investment property or investment property is transferred to
owner-occupied real estate or stock conversion as the recorded value after the conversion,
according to the book value before the conversion.
From the date of transference, investment properties shall be transferred into fixed assets or
intangible assets when investment properties transfer into self-owned properties. From the
date of transference, fixed assets or intangible assets shall be transferred into investment
properties when the intention of self-owned properties changes to be earning rents. Upon
transference, investment properties using cost modeling shall use its book value before
transference as the entry value after transference; investment properties using fair value shall
use its fair value in the date of transference as the entry value after transference.

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As for investment property disposed or perpetually out of use, and estimated without
economic benefits from the disposal, confirmation shall be terminated. Disposal
consideration of the investment property after sale, transference, discard or damage
deducting its book value and relating taxes shall be recorded into current gains and losses.
12. Fixed assets
 (1) Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features
as follows: they are held for the sake of producing commodities, rendering labor service,
renting or business management; and their useful life is in excess of one fiscal year.
 (2) Depreciation methods of fixed assets
The initial measurement of a fixed asset shall be made at its cost after considering the effect
of expected discard expenses. The Group shall withdraw the depreciation of fixed assets by
adopting the straight-line method since the second month of its useful life. Useful life,
expected net salvage value (refers to the expected amount that the Group may obtain from
the current disposal of a fixed asset after deducting the expected disposal expenses at the
expiration of its expected useful life) and annual depreciation rate of each fixed assets are as
below:
                                                        Expected net salvage
 Category of fixed assets      Useful life (Y)                                      Annual deprecation
                                                               value
 Housing and building                            8-35                      3-5                     2.7-12.1
 Machinery equipments                            8-10                      3-5                     9.5-12.1
 Transportation vehicle                            4                           3                      24.25
 Office equipment and                              3                           3                      32.33
 others

Expected net residual value of fixed assets is the balance of the Company currently obtained
from the disposal of the asset less the estimated costs of disposal amount, assuming the asset
is out of useful life and state the expected service life in the end.
 (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 or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same
policy as that for the fixed assets owned by the Company. If it can be reasonably determined

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that the ownership of the leased assets can be obtained at the end of the lease period, the
leased assets are depreciated over their useful lives; otherwise, the leased assets are
depreciated over the shorter of the lease terms and the useful lives of the leased assets.
 (5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will
probably flow to the Company and the cost of the asset can be measured reliably. Subsequent
expenditure incurred for a fixed asset that meet the recognition criteria shall be included in
the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is
replaced shall be derecognized. Otherwise, such expenditure shall be recognized in profit or
loss in the period in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and
loss after deduction of carrying value and related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation
methods of the fixed asset at least on an annual base. Any change is regarded as change in
accounting estimates.
13. Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before
it is ready for intended use and other relevant costs. Construction in progress 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 refer to Note 4.17.
14. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to
borrowings, ancillary costs incurred in connection 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 are capitalized. 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 of time 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 expense incurred on that borrowing for the period less any bank interest

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earned from depositing the borrowed funds before being used on the 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 determined by applying a weighted average interest rate to the weighted
average of the excess amounts of accumulated expenditure on the asset over and above the
amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose
borrowing denominating in foreign currency are all capitalized. Exchange differences in
connection with general-purpose borrowings are recognized in profit or loss in the period in
which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories
which need a long time of construction 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 a qualifying asset is interrupted by activities other than those
necessary to prepare the asset for its intended use or sale, when the interruption is for a
continuous period of more than 3 months. Borrowing costs incurred during these periods
recognized as an expense for the current period until the acquisition, construction or
production is resumed.
15. Intangible assets
 (1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical
shape, possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets,
if the economic benefits related to intangible assets are likely to flow into the enterprise and
the cost of intangible assets can be measured reliably, shall be recorded 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 are developed and constructed by the Company, and relevant
land use rights and buildings, are accounted for as intangible assets and fixed assets,
respectively. Payments for the land and buildings purchased are allocated between the land
use rights and the buildings; if they cannot be reasonably allocated all of the land use rights
and buildings should accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less

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net residual value and any accumulate impairment losses is amortized over its estimated
useful life using the straight-line method. An intangible asset with an indefinite 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 of the period, and makes adjustment when necessary. An
additional review is also carried out for useful life of the intangible assets with indefinite
useful life. If there is evidence showing the foreseeable limit period of economic benefits
generated to the enterprise by 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 in which 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 product produced by the intangible asset or the intangible asset
itself, it is objectively evidential that the intangible asset is economically usable 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 the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note 4.17.
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 period during which an expense is expected to bring economic benefits to
an entity) which is longer than one year and which includes at least part of the reporting
period during which the expense was incurred and subsequent reporting periods. An item of

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long-term deferred expenses is recognized at the actual amount of the expense incurred and
allocated in each month of the beneficial period using the straight line method.
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 definite useful 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, and impairment test is carried out and recoverable value is estimated if such an
indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as
intangible assets not ready for use, are tested for impairment annually regardless of indicators
of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable
value of the assets is lower than the book value. The recoverable value is the higher of
estimated present value of the future expected cash flows from the asset and net fair value of
the asset less disposed cost. The fair value of asset is determined by the sales agreement price
within an arm’s length transaction. In case there is no sales agreement, but there is active
market of assets, the fair value can be determined by the selling price. If there is neither sales
agreement nor active market, the fair value of the asset can be estimated based on the best
information obtained.
Disposal expenses include expenses related to the legislation, taxes, transportations and the
direct expense for the asset to be ready for sale. When calculating the present value of
expected future cash flows from an asset or asset Group, the management shall estimate the
expected future cash flows from the asset or asset Group and choose a suitable discount rate
in order to calculate 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 is hard to estimate, the recoverable amount can be determined
by the asset Group where subject asset belongs. Asset Group is the smallest 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 present value of the future expected cash flows from the asset
Groups or sets of asset Groups to which the goodwill is allocated. Estimating the present
value requires the Company to make an estimate of the expected future cash flows from the
asset Groups or sets of asset Groups and also choose a suitable discount rate in order to
calculate the present value of those cash flows. Once the loss from above asset impairment is

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recognized, the recoverable part cannot be reserved in the subsequent periods.
18. The buyback conditions attached to the transferred assets
Redemptory monetary capital for sale
The financial assets which will be resold on certain confirmed date in the future according to
the agreement promises would be recognized in the balance sheet. The cost of buying that
kind of assets (including interests), would be listed in the balance sheet as the redemptory
monetary capital for sale. The difference between the buying rate and resale rate should be
recognized according to the actual interest rate during the agreement period and included into
the interest income.
19. Accrued liabilities
Recognition of accrued liabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in
dispute, guarantee on quality of product, cut-down plan, loss of contract, recombine
obligation, obligation on abandon fixed asset, and meet the follow condition simultaneously
would determined as liabilities: (1) This obligation is current obligation of the Company;
and, (2) The performance of this obligation will probably cause economic benefits outflow of
the Company; and, (3) The amount of this obligation can be reliably measured.
On balance sheet date the Company performed relate obligation that consider risk,
incertitude, time value of currency of contingency factor. According to the best estimate of
the expenditure required to settle the present obligation for estimated liabilities measured.
If the expenditure required to settle the liability is expected to be fully or partly compensated
by a third party, to determine the amount of compensation will be received at the basic,
separately recognized as an asset, and is recognized in the amount of compensation does not
exceed the carrying value of estimated liabilities.
20. Revenues
 (1) Commodity sales revenues
No revenue from selling goods may be recognized unless the following conditions are met
simultaneously: the significant risks and rewards of ownership of the goods have been
transferred to the buyer by the enterprise; the enterprise retains neither continuous
management right that usually keeps relation with the ownership nor effective control over
the sold goods; the relevant amount of revenue can be measured in a reliable way; the
relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to
be incurred can be measured in a reliable way.
In the Company’s daily accounting practices, as for the domestic sales, when the products

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had shipped out of the library and had handed over to the buyers, and the major risk as well
as the reward on the ownership of the products had transferred to them, without keeping any
continued management right which commonly related to the ownership nor carrying out any
effective control of the products which had been sold, and at the same time the amounts
received could be calculated reliably, and the relevant economic interest may flow into the
enterprise, as well as the relevant costs which had occurred or is going to occur could be
calculated reliably, should recognize the implementation of the commodity sales revenues.
As for the overseas sales, should recognize the implementation of the revenues when the
goods had made shipment and gained the customs export declaration.
 (2) Revenues from providing labor services
If an enterprise can reliably estimate the outcome of a transaction concerning the labor
services it provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the balance sheet date. The percentage-of-completion is
determined by the proportion of the costs incurred against the estimated total costs.
The outcome of a transaction concerning the providing of labor services can be measured in a
reliable way, means that the following conditions shall be met simultaneously: ① The
amount of revenue can be measured in a reliable way; ② The relevant economic benefits
are likely to flow into the enterprise; ③ The schedule of completion under the transaction
can be confirmed in a reliable way; ④ The costs incurred or to be incurred in the
transaction can be measured in a reliable way.
If the Company can not measure the result of a transaction concerning the providing of labor
services in a reliable way, it shall be conducted in accordance with the following
circumstances, respectively: If the cost of labor services incurred is expected to be
compensated, the compensation amount for the cost of labor services shall be recognized as
the revenue from providing labor service, and the cost of labor service incurred shall be as
the current cost; if the cost of labor services incurred is not expected to compensate, no
revenue from the providing of labor services may be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling
goods and providing of labor services, if the part of sale of goods and the part of providing
labor services can be distinguished from each other and can be measured respectively, the
part of sale of goods and the part of providing labor services shall be treated respectively. If
the part of selling goods and the part of providing labor services can not be distinguished
from each other, or if the part of sale of goods and the part of providing labor services can be
distinguished from each other but can not be measured respectively, both parts shall be
conducted as selling goods.
 (3) Royalty revenue
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In accordance with relevant contract or agreement, the amount of royalty revenue should be
recognized as revenue on accrual basis. In the Company’s daily accounting practices, it
should be calculated and recognized according to the chargeable time and methods in
accordance with the relevant contract or agreement.
 (4) Interest revenue
In accordance with the time that others use the Group’s monetary capital and the actual rate.
21. Government subsidies
Government grants are transfer of monetary assets and non-monetary assets from the
government to the Company at no consideration, excluding the capital invested by the
government as equity owner. Government grant can be classified as grant related to the assets
and grants related to the income.
The government grants which were acquired by the Company will be used to purchase or
otherwise form become long-term assets will be defined as grant related to the assets; the
others will be defined as grants related to the income. If the files have not clearly defined
government grants objects, it will be divided in the following manner compartmentalize the
grants into rant related to the assets and grants related to the income: (1) government
documents defined specific projects targets, according to the relative proportion of the
budgets of specific items included the expenditure of to form assets and the expenditure will
be charged into expense to be divided, the division ratio required at each balance sheet date
for review and make changes if necessary; (2) government documents to make a general
presentation purposes only, does not specify a particular project, as 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 a government 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 loss for the period.
When received the government grants actually, recognized and measured them by the actual
amount received. However, there is strong evidence that the end of fiscal support policies
able to meet the conditions specified in the relevant funds are expected to be able to receive
financial support, measured at the amount receivable. Government grants are measured
according to the amount receivable shall also comply with the following conditions: (1)
grants receivable of government departments issued a document entitled have been
confirmed, or could reasonably estimated in accordance with the relevant provisions of its
own official release of financial resources management approach, and the expected amount
of a material uncertainty which does not exist; (2) it is based on the local financial sector to

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be officially released and financial support for the project and its financial fund management
approach voluntarily disclosed in accordance with the provisions of “Regulations on
Disclosure Government Information”, and the management approach should be (inclusive of
any compliance business conditions may apply), and not specifically formulated for specific
businesses;(3) related grants approval has been clearly committed the deadline, and is
financed by the proceeds of a corresponding budget as a guarantee, so that will be received
within the prescribed period with the a reasonable assurance; (4) according to the specific
circumstances of the Company and the subsidy matter, should satisfy the other conditions (if
any).
A government grant related to an asset is recognized as deferred income, and evenly
amortized to profit or loss over the useful life of the related asset. For a government grant
related to income, if the grant is a compensation for related expenses or losses to be incurred
in subsequent period, the grant is recognized as deferred income, and recognized in profit or
loss over the periods in which the related costs are recognized. If the grant is a compensation
for related expenses or losses already incurred, the grant 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 against the carrying amount of the deferred income, and any
excess is recognized in profit or loss for the period. If there is no related deferred income, the
repayment is recognized immediately in profit or loss for the period.
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 the period when the asset is realized or the liability is settled,
according to the requirements of tax laws. The measurement of deferred tax 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 recover the 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 amount expected to be paid (or recovered) according to the
requirements of tax laws. The calculation for income tax expenses in the current period is
based on the taxable income according to the related tax laws after adjustment to the
accounting profit of the reporting period.
 (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 nil carrying amount of those items that are not recognized as

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assets or liabilities and their tax base that can be determined according to tax 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 liability arising from a transaction (not a business combination) that
affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is 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 the temporary 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 (not a business combination) that affects neither the
accounting profit nor taxable profits (or deductible losses) at the time of transaction, no
deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and
associates, and interests in joint ventures, no deferred income tax asset related is recognized
if it is impossible to reversal the temporary difference in the foreseeable future, or it is not
probable to obtain taxable income which can be used for the deduction of the temporary
difference in the future.
Except mentioned above, the Company recognizes other deferred income tax assets that can
deduct temporary differences to the 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 differences are recognized to the extent that it is probable that taxable
profits will be available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates
according to tax laws, which are expected 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 that sufficient taxable profit will be available in future periods to
allow the benefits of the deferred tax assets to be used, the Company reduces the carrying
amount of deferred tax assets. The amount of such reduction is reversed when it becomes
probable that sufficient taxable profit will be available.
 (3) Income tax expenses

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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 current accounting period, except expense for income tax of the
current period and deferred income tax that booked into other income or equity 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 and liability fulfillment simultaneously, the Company shall
present the net value from the offset between current income tax asset and current 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 tax payer, or related to
different taxable subject, but the intension of net value settlement in regard of the current
income tax asset and current income tax liability, the Company shall present net value after
the offset of deferred income tax asset and deferred income tax liability.
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 or may 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 either included in the cost of the related asset or charged to profit or
loss for the current period. The contingent rents shall be recorded in the 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 lease term. 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
For an asset that is held under a finance lease, at the lease commencement, the leased asset is
recorded at the lower of its fair value at the lease commencement and the present value of the
minimum lease payments, and the minimum lease payment is recorded as the carrying
amount of the
long-term payables; the difference between the recorded amount of the leased asset and the

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recorded amount of the payable is accounted for as unrecognized finance charge, Initial
direct costs incurred by the lessee during the process of negotiating and securing 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 liabilities and 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 shall be booked into profit or loss when actually incurred.
 (4) In the case of the lessor 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 the lease and the initial direct costs is recorded as a finance lease
receivable, and unguaranteed residual value is recorded at the same time; the difference
between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed
residual value, and the aggregate of their present values, is recognized as unearned finance
income, which is amortized using the effective interest rate method over each period during
the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term
liabilities and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease
term. Contingent rent shall be credited into profit or loss in which actually incurred.
24. Assets held-for-sale
The Company has made decision on disposal of some non-current assets, and signed
irrecoverable transferring agreements with buyers. The transaction is probably to be
completed with one year. If so, the non-current asset shall be counted as an asset
ready-for-sale, not depreciated or amortized, and shall be measured by the lower of carrying
amount and faire value less net value of disposal expenses. Non-current assets ready-for-sale
includes individual asset and disposal Group. If disposal Group is an asset Group, and has
allocated goodwill acquired during the combination according to the Accounting Standard for
Business Enterprises No. 8 - Impairment, or. the disposal Group is an operation in the asset
Group, the disposal Group includes goodwill in the business combination.
Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the
condition of non-current asset ready-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 of depreciation, 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.

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25. Employee Benefits
During the accounting period of an employee’ providing services to the Company, the
Company recognizes the compensation payable 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 of related assets or the
profit or loss.
When an enterprise terminates the employment relationship with employees before the end of
the employment contracts or provides compensation as an offer to encourage employees to
accept voluntary redundancy, a provision shall be recognized for the compensation arising
from termination of employment relationship with employees, with a corresponding charge
to the profit or loss for 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 of ceasing services to the date of normal retirement) are paid
by the Company, subject to the conditions to be recognized in profit or loss (termination
benefits).
26. Changes in major accounting policies and accounting estimates
 (1) Changes of accounting policies
There was no significant change of accounting policies for the Company during the reporting
period.
 (2) Changes of accounting estimates
There was no any change of accounting estimates during the reporting period.
27. Correction of prior period errors
There is no significant change of previous accounting errors for the Company during the
reporting period.
28. Significant account judgment and estimates
The Company is required to make judgments, estimates and assumptions about the carrying
amounts of items in the financial statements that cannot be measured accurately, due to the
internal uncertainties of operation activities. These judgments, estimates and assumptions are
based on historical experiences of the Company’s management as well as other factors that
are considered to be 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 those uncertainties in
estimates may lead significant adjustments to the carrying amounts of the assets or liabilities
affected in the future.
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The Company has reviews the judgments, estimates and assumptions regularly on the basis
of going concern. Where the changes 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 the period of change and future period.
At balance sheet date, the followings are the significant areas where the Company needs to
make judgment, estimates and assumptions 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 Accounting Standard for Business Enterprises No. 21—Leasing. The
management shall make analysis and judgment on whether the risks and rewards related to
the title of leased assets has been transferred to the leaser, or whether the Company has
substantially held the risks and rewards related to the ownership of leased assets.
 (2) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance
method is used for bad debt’s calculation. The impairment of receivables is calculated based
on the assessment of recoverable of receivables. Assurance of receivable impairment needs
judgments and estimations from the management. The difference between actual results and
original estimates shall have impact on the carrying amount of receivables and receivable bad
debt provisions or the reverse during the change of estimation.
 (3) Impairment of inventories
The Company measures inventories by the lower of cost and realizable net value according to
the accounting policies in regard of inventories and provisions for decline in value of
inventories are 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 the ordinary course of business. Net realizable value is determined
on the basis of clear evidence obtained, and takes into consideration the purposes of holding
inventories and effect of post balance sheet events. The difference between the actual result
and the original estimates shall have impact on reverse of the carrying amount of the
inventories and their decline in value or provisions 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 and relationship during the
valuation and choose appropriate discount rate. Such assumptions have uncertainties and

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their changes shall 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 of management, to determine whether impairment loss is recognized in the
income statement. The process of making the judgments and assumptions, the Company is
required to assess the extent and duration of the fair value of the investment below cost, as
well as investment financial position and short-term business outlook, including industry
conditions, technological change, the credit rating, 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 the balance sheet date. For an intangible asset that has
indefinite useful life, impairment test is made in addition to the annual impairment test if
there is any indication of impairment. For non-current assets other than financial assets,
impairment test is made when 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 present value 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 a sale agreement in an arm’s length transaction or an
observable market price less the additional cost directly attributable to the disposal of the
asset.
When estimating the present value of future cash flow, significant judgments are made over
the asset’s production, selling price and relevant operating expenses, and discount rate used
to calculate present value. All available materials that are considered to be relevant shall be
used in the estimation of recoverable value. These materials include estimations of
production, selling price and 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 of future cash flow of the assets or assets group where
goodwill has been allocated. The Company shall makes estimation on the future cash flow
derived from assets or assets group and determine an appropriate discount rate for the present
value of future cash flow 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 over their useful lives after taking into account residual value. The

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useful lives are regularly reviewed to determine the depreciation and amortization costs
charged in each reporting period. The useful lives are determined based on historical
experience of similar assets and the estimated technical changes. If there is an indication that
there has been a change in the factor used to determine the 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 profit will be available against which the unused tax losses and
unused tax credits can be utilized. This requires the management of the Company make a lot
of judgments over the estimation of time period, value and tax planning strategies when
future taxable profit incurs 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 everyday operation. If it is possible for any item to make
expenditure before tax that needs to be approved from competent tax authorities. If there is
any difference between finalized determination value and their initial estimations value, the
difference shall have the impact on the income tax and deferred income tax of the current
period during the final determination.
 (15) Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience,
product quality assurance and expected contract losses, delay in delivery of liquidated
damages are estimated and recognized as accrued liabilities. In these matters has been the
formation of a current obligation, and fulfilling the duty is likely to lead to the outflow of
economic benefits of the 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 judgment the 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 is accrued liabilities. Accrued liabilities have
considered the recent experience in the maintenance data, but recent maintenance experience
may not reflect future maintenance. Any increase or decrease in the accrued liabilities may
affect the profit or loss in future.
     V. Taxation
     1. Main taxes and tax rate
        Category of taxes                           Particulars about specific tax rate

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        Category of taxes                         Particulars about specific tax rate
                               Income tax was in accordance with 17% of tax rate to calculate
VAT                            output tax, and according to the balance of the current the
                               deductibility deduct the input tax to calculate value added tax.
                               Sales of wine per 1000 ml or per kg 1 Yuan to calculate the amount
Consumption tax                of consumption tax, a flat rate, 20% of the annual turnover to
                               calculate the amount of consumption tax at valorem.
Business Tax                   5% of turnover tax payable.
Urban maintenance and
                               1, 5, 7% of the actual taxable turnover amount.
construction tax
Education expenses surcharge   3% of the actual taxable turnover amount.
Local education surcharge      2% of the actual taxable turnover amount.
Enterprise income tax          25% of the actual taxable turnover amount.




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   VI. Business combination and consolidated financial statements

    1. Subsidiaries

    (1) Subsidiaries obtained by establishment and investment


                                                                                                                                       Unit: RMB Ten thousand Yuan
                                                                   Register
                                            Registered Business
        Subsidiaries              Type                                ed                                Business scope                                types of companies
                                              place     nature
                                                                    capital
Bozhou Gujing Sales Co.,
                                                                              Wholesales of distilled spirit, construction materials, feeds and Limited liability
Ltd (hereinafter refer to as      Limited   Bozhou,    Business    8,486.00
                                                                              assistant materials                                                  company
Gujing Sales)                    company     Anhui      trading
Bozhou                 Gujing
Transportation Co., Ltd                     Bozhou, Transportati                                                                                        Limited liability
                                                                    695.00 Transportation, sales and repair service
(hereinafter refer to as          Limited    Anhui      on                                                                                                 company
“Gujing Transportation”)       company
Bozhou Gujing Glass Co.,
                                            Bozhou, Manufactur                                                                                          Limited liability
Ltd (hereinafter refer to as      Limited                      8,666.03 Manufacture and sale of glass products
                                             Anhui      e                                                                                                  company
“Gujing Glass”)                company
Bozhou      Gujing     Waste
Reclamation       Co.,     Ltd              Bozhou,     Waste                                                                                           Limited liability
                                                                    100.00 Collect and sale of recycled glass bottle, glass, wastebasket
(hereinafter refer to as          Limited    Anhui      cycled                                                                                             company
“Gujing Waste”)                company
Anhui Jinyunlai Culture &
                                             Hefei,     Ads                   Design, publish, design and proxy of ads in China; ceremony service Limited liability
Media Co.,Ltd. (hereinafter       Limited                           200.00
                                             Anhui    marketing               for conferences as well as sales of gifts in arts and crafts           company
refer to as “Jinyunlai”)       company
Bozhou Gujing Packing Co., Limited           Anhui    Production 3,000.00 Administrative license items: Naught; General operating items: Limited liability
   84
                                                                                                               2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                     Register
                                             Registered Business
         Subsidiaries               Type                                ed                                      Business scope                                         types of companies
                                               place     nature
                                                                      capital
Ltd. (hereinafter refer to as   company       Bozhou       and                  providing packing for Gujing Brand, serials wine,                          fruit and       company
“Bozhou Packing”)                                     manufactur              vegetable wine, health wine of Gujing Brand
                                                            e
Shanghai Hongbang Culture                                                       Design, publish, design and proxy of ads in China; ceremony service for
                                Subsidiary of
Communication Co., Ltd.                                                         conferences as well as sales of     gifts in arts and crafts(exception of special       Limited liability
                                wholly owned Shanghai Advertising     500.00
(hereinafter refer to as                                                        project) Public Relations Planning; Corporate image design and planning (if                company
                                 subsidiary
“Shanghai Hongbang”)                                                          there is need administrative licensing, operating based on the license.)
Anhui Swisse Will Science                                                 Research and promotion of engineering and technology; planning and
                            Subsidiary of                                 design of information system; computer software and hardware,
& Technology Co., Ltd.                        Bozhou, Technology                                                                               Limited liability
                           wholly owned                          5,000.00 design, development and sales of network communication system;
(hereinafter referred to as subsidiary         Anhui   research           consultancy and services of enterprise management. (if there is need    company
Swisse Will)                                                              administrative licensing, operating based on the license.)




   85
                                                           2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



               (Continued)
                                                                                                        The
                       Legal                Actual amount of                                                    The proportion
                                 Organizati                                 Other essential          proportion
  Subsidiaries      representati                                                                                   of voting
                                  on code investments at the                                         of holding
                         ve                                                   investment                          rights (%)
                                                year-end                                             shares (%)
                    Liang          15194481
Gujing Sales                                                8,486.00                          0.00       100.00          100.00
                    Jinhui                    8

Gujing                             15194006
                    Bai Yun                                   695.00                          0.00       100.00          100.00
Transportation                                7
                    Qian           15194604
Gujing Glass                                                8,666.03                          0.00       100.00          100.00
                    Zhenhai                   7
                    Qian           15194652
Gujing Wast                                                   100.00                          0.00       100.00          100.00
                    Zhenhai                   2
                                   56216532
Jinyunlai           Yan Lijun                                 200.00                          0.00       100.00          100.00
                                              5
                    Huai           58886276
Bozhou Packing                                              3,000.00                          0.00       100.00          100.00
                    Huiying                   X

Shanghai                           59313921
                    Yan Lijun                                 500.00                          0.00       100.00          100.00
Hongbang                                      8
                    Zhou          08757348-
Swisse Will                                                 5,000.00                          0.00       100.00          100.00
                    Qingwu                    4

              (Continued)
                              Included in
     Subsidiaries            consolidated         Minority interest       Deductible minority interests              Note
                           statement or not
Gujing Sales                           Yes                      0.00                                      0.00

Gujing Transportation                  Yes                      0.00                                      0.00

Gujing Glass                           Yes                      0.00                                      0.00

Gujing Wast                            Yes                      0.00                                      0.00

Jinyunlai                              Yes                      0.00                                      0.00

Bozhou Packing                         Yes                      0.00                                      0.00

Shanghai Hongbang                      Yes                      0.00                                      0.00

Swisse Will                            Yes                      0.00                                      0.00




      86
                                                      2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


      (2) Subsidiaries obtained by business combination under same control


                                                                                      Unit: RMB Ten thousand Yuan
                                                        Register                            types of   Legal
                                Register Business                                                                Organizati
    Subsidiaries         Type                              ed        Business scope         compani representati
                                ed place nature                                                                   on code
                                                         capital                               es        ve
                                                         Hotel management
                                                         (Except for catering
Shanghai        Gujing                                   management、Except
Jinhao            Hotel Limite                           for hotel operation);
                                       Hotel                                     Limited
Management         Co., d      Shangha                   Self-owned housing                                        13456599
                                       manageme 5,400.00                         liability Gong Lei
Ltd. (hereinafter refer compa i                          rental; establish                                                8
                                       nt                                       company
to as “Shanghai ny                                      branch. (If there is
Jinhao”)                                                need administrative
                                                         licensing, operating
                                                         based on the license.)
                                                         Accommodation and
Bozhou Gujing Hotel Limite                               parking services;
                                       Hotel                                     Limited
Co., Ltd.(hereinafter d        Bozhou,                   lunch processing,                   Zhao                  15194483
                                       manageme    62.80                         liability
refer to as “Gujing    compa Anhui                      sales of alcohol and               Yufeng                        4
                                       nt                                       company
Hotel”)                ny                               tobacco and sales of
                                                         daily commodity
            (Continued)
                                                                                                The         The
                                Actual amount of                                             proportion proportion of
          Subsidiaries                                      Other essential investment       of holding voting rights
                          investments at the year-end
                                                                                             shares (%)     (%)

    Shanghai Jinhao                              4,990.69                            0.00        100.00          100.00
    Gujing Hotel                                   64.86                             0.00        100.00          100.00
            (Continued)
                                       Included
                                            in
                                       consolidat                               Deductible minority
                Subsidiaries                           Minority interest                                       Note
                                                                                    interests
                                            ed
                                       statement
                                         or not
    Shanghai Jinhao                   Yes                             0.00                           0.00
    Gujing Hotel                      Yes                             0.00                           0.00

     2. Subsidiaries that newly combined into consolidation scope in the reporting period

     There was no subsidiary that newly combined into consolidation scope in the reporting period.
     87
                                                      2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


 VII. Notes on major items in consolidated financial statements of the Company

 The following notes (including notes on major items in consolidated financial statements of the Company),
 unless otherwise noted, the opening period was 1st Jan. 2014, the closing period was 30 Jun. 2014, last
 period referred to 1st Jan-30 Jun. 2013, this period referred to 1st Jan-30 Jun. 2014.
 1. Monetary funds
                                        Closing balance                                Opening balance
                            Amount in                                      Amount in
          Item                             Exchang        Amount in                        Exchange       Amount in
                              foreign                                        foreign
                                            e rate         RMB                               rate          RMB
                             currency                                       currency
Cash in treasury:                                          246,915.20                                        251,743.25
- RMB                          —             —           246,915.20          —              —            251,743.25
                                                      1,076,255,292.6                                    1,381,636,737.
Bank deposit:
                                                                      6                                               50
                                                      1,076,255,292.6                                    1,381,636,737.
- RMB                          —             —                               —              —
                                                                      6                                               50
- USD                               0.00                           0.00             0.00       6.0969               0.00
Other monetary
                                                                                                              42,230.21
funds:
- RMB                          —             —                   0.00        —              —             42,230.21
                                                      1,076,502,207.8                                    1,381,930,710.
         Total
                                                                      6                                               96
 Notes: the pledged deposit of the book value of RMB 75,000,000.00 Yuan in the last period using for bank
 acceptance draft had been fully reclaimed expiring the end of the reporting period. Expired on 30 Jun.
 2014, the pledged deposit of the book value of RMB 50,500,000.00 Yuan was used for bank acceptance
 draft.
 2. Notes receivable
 (1) Category of notes receivable

                 Category                            Closing balance                        Opening balance
 Bank acceptance bill                                          339,936,339.04                           154,408,425.31
                  Total                                        339,936,339.04                           154,408,425.31
 Notes: On 30 Jun. 2014, the pledged notes receivable of the book value of RMB 63,000,000.00Yuan was
 used for bank acceptance draft.
 (2) The top 5 of the largest amount of notes receivable pledged at period-end
                                                Date of
             Issuing entity                                      Expiring date         Amount              Remark
                                               issuance
 Huaibei Kunri Trading Co., Ltd.                    2014/6/6          2014/12/6       6,600,000.00
 Jiujiang Pxsteel Steel Co., Ltd.                  2014/5/29        2014/11/29        3,000,000.00

 88
                                                   2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                               Date of
              Issuing entity                                    Expiring date       Amount              Remark
                                              issuance
Lanzhou Syracuse Wine Co. Ltd.                 2014/3/24            2014/9/24      2,000,000.00
Anqing Qibajiu Materials Trading
                                               2014/5/19           2014/11/19      2,000,000.00
Co., Ltd.
Lanzhou Syracuse Wine Co. Ltd.                 2014/3/24            2014/9/24      1,900,000.00
                  Total                                                          15,500,000.00

(3) Notes transferred to accounts receivable because drawer of the notes fails to execute the contract or
agreement, and undue notes endorsed to other parties at the end of the period
(4) Undue notes endorsed to other parties by the Company (the top 5 of the largest amount)
                                                                                         Recognition
              Issuance unit               Issuance date Expired date       Amount        was stopped      Remark
                                                                                           or not
Henan Songhe Wine Industry Co.,
                                              2014/1/3          2014/7/3 2,000,000.00        Yes
Ltd.
Anqing Zhisheng Automobile Sales
                                             2014/1/20      2014/7/20 2,000,000.00           Yes
Co., Ltd.
Anqing Xinlian Trading Co., Ltd.             2014/3/12      2014/9/12 2,000,000.00           Yes

Gansu LBX Pharmacy Co., Ltd.                 2014/4/11     2014/10/11 1,764,948.00           Yes
Anqing Taifa Energy Technology
                                              2014/1/9          2014/7/9 1,260,000.00        Yes
Co., Ltd.
                  Total                                                  9,024,948.00

3. Accounts receivable
(1) Accounts receivable listed by categories

                                                                       Closing balance
                                                   Book balance                         Bad debt provision
                Category
                                                                 Proportion
                                               Amount                               Amount           Proportion (%)
                                                                    (%)
Accounts          receivable       with
significant     single    amount   and
                                                         0.00            0.00                 0.00               0.00
individually withdrawn bad debt
provision
Accounts receivable for which bad
debt provisions are made on the                          0.00            0.00                 0.00               0.00
group basis
Aging group                                    6,666,502.14           100.00          809,562.05                12.14
Subtotal of the groups                         6,666,502.14           100.00          809,562.05                12.14
Accounts receivable with                                 0.00            0.00                 0.00               0.00

89
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insignificant single amount and
individually withdrawn bad debt
provision
                 Total                         6,666,502.14         100.00             809,562.05               12.14
      (Continued)
                                                                        Opening balance
                                                   Book balance                         Bad debt provision
                Category
                                                               Proportion
                                               Amount                               Amount             Proportion (%)
                                                                  (%)
Accounts         receivable        with
significant    single    amount     and
                                                        0.00             0.00                   0.00             0.00
individually withdrawn bad debt
provision
Accounts receivable for which bad
debt provisions are made on the                         0.00             0.00                   0.00             0.00
group basis
Aging group                                    7,253,995.93         100.00             879,525.94               12.12
Subtotal of the groups                         7,253,995.93         100.00             879,525.94               12.12
Accounts receivable with
insignificant single amount and
individually withdrawn bad debt                         0.00             0.00                   0.00             0.00
provision
                 Total                         7,253,995.93         100.00             879,525.94               12.12
(2) Accounts receivable adopting aging analysis method to withdraw bad debt provision:
                                   Closing balance                                   Opening balance
       Item                   Amount          Proportion (%)                    Amount          Proportion (%)
Within 1 year                  5,727,165.27                     85.91            5,711,105.76                   78.73
Including: within 6
                                                                                 4,455,116.26                   61.42
months                         5,364,811.17                     80.47
7 months to 1 year                362,354.10                     5.44            1,255,989.50                   17.31
1 year to 2 years                  64,766.62                     0.97              749,254.58                   10.33
2 years to 3 years                286,501.36                     4.30              192,771.51                    2.66
Over 3 years                      588,068.89                     8.82              600,864.08                    8.28
       Total                   6,666,502.14                    100.00            7,253,995.93                  100.00
(3) Particulars about withdrawal of bad debt provision
Accounts receivable withdrawn bad debt provision by groups
A. Accounts receivable adopting Aging combination to withdraw bad debt provision:

90
                                              2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                 Closing balance                                 Opening balance

                           Book balance              Provision             Book balance
      Aging                                                                                         Provision for
                                      Proportion      for bad                          Proportion
                      Amount                                            Amount                       bad debts
                                         (%)           debts                              (%)

Within 1 year        5,727,165.27           85.91     71,765.82         5,711,105.76        78.73     107,350.64
Including: within
                     5,364,811.17           80.47     53,648.11         4,455,116.26        61.42      44,551.16
6 months
         7-12
                       362,354.10            5.44     18,117.71         1,255,989.50        17.31      62,799.48
months
1 year to 2 years        64,766.62           0.97      6,476.66          749,254.58         10.33      74,925.46
2 years to 3 years     286,501.36            4.30 143,250.68             192,771.51          2.66      96,385.76
More than 3 years      588,068.89            8.82 588,068.89             600,864.08          8.28     600,864.08
       Total         6,666,502.14          100.00 809,562.05            7,253,995.93       100.00     879,525.94
(4) There was not any account receivable which had withdrawn the bad debt provisions in full or large
amount that reversed or collected in the reporting period
(5) There was not any write-off account receivable
(6) There was not any account receivable due to shareholders holding 5% (including 5%) voting rights of
the Company
(7) The amounts due from related parties
                     The relationship
                                                                                          Proportion of the total
   Name of entity       with the            Amount                       Year
                       Company                                                                      (%)

                       Non-related
Dealer A                                    1,335,894.42 Within 6 months                                    20.04
                       relationship
                                                            Within 6 months , 7
                       Non-related
Dealer B                                    1,145,421.86 months to 1 year, 2 to 3                           17.18
                       relationship
                                                            years
                       Non-related                          Within 6 months, 7 months
Dealer C                                      546,205.01                                                     8.19
                       relationship                         to 1 year

                       Non-related
Dealer D                                      156,600.00 Within 6 months                                     2.35
                       relationship
                       Non-related
Dealer E                                      131,068.00 Within 6 months                                     1.97
                       relationship
         Total                              3,315,189.29                                                    49.73
(8) There was no any amount due from related parties


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                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



4. Prepayment
  (1) List by aging analysis:
                               Closing balance                                   Opening balance
      Aging                Amount           Proportion (%)                   Amount          Proportion (%)
Within 1 year                   91,269,886.76               99.63             90,017,564.50                  99.78
1 year to 2
years                             337,853.24                  0.37               200,134.00                    0.22
     Total                      91,607,740.00              100.00             90,217,698.50                100.00
(2) Information of the top 5 prepayment
                                       Relationship with                                          Reason for
             Name of entity                                       Amount               Aging
                                        the Company                                                unsettled
CCTV                                                                                            Advance      for
                                          Non-related
                                                                                                advertising
                                          relationship
                                                                  38,051,539.80      Jun. 2014 expense
Shenzhou Television Co., Ltd.                                                                   Advance      for
                                          Non-related
                                                                                                advertising
                                          relationship
                                                                     8,818,913.78     Jun. 2014 expense
Beijing Zhicheng Advertising co.,                                                               Advance      for
                                          Non-related
Ltd                                                                                             advertising
                                          relationship
                                                                     4,379,721.96    Jan. 2014 expense
Hangzhou Gaolu Advertising Co.,                                                                 Advance      for
                                          Non-related
Ltd.                                                                                            advertising
                                          relationship
                                                                     1,796,627.26    Apr. 2014 expense
Beijing Branch Company of                                                                       Advance      for
                                          Non-related
Hainan White Horse Adshel Co.,                                                                  advertising
                                          relationship
Ltd.                                                                 1,323,524.63    Mar. 2014 expense
                 Total                                            54,370,327.43
  (3) Information about amount due from shareholders with more than 5% (including 5%) of the voting
      shares of the Company in prepayment
5. Interest receivable
                 Item                           Closing balance                        Opening balance
Interest of certificate of deposit                         12,162,291.01                                     0.00
                 Total                                     12,162,291.01                                     0.00

6. Other accounts receivable
  (1) Other accounts receivable disclosed by type:

                                                                     Closing balance
                                                    Balance                     Provision for doubtful debts
                Category
                                                            Proportion
                                            Amount                              Amount           Proportion (%)
                                                               (%)
Other accounts receivable that is
individually      significant     and      50,727,440.55             87.18      50,727,440.55              100.oo
provisions for bad debts individually

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                                             2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Other accounts receivable that
provisions for bad debts by group
Aging group                              7,458,175.24              12.82         117,745.26                  1.58
Subtotal of group                        7,458,175.24              12.82         117,745.26                  1.58
Other accounts receivable that is
individually insignificant but
provisions for bad debts individually
                  Total                 58,185,615.79          100.00         50,845,185.81               87.38
         (Continued)
                                                                   Opening balance
                                                 Balance                      Provision for doubtful debts
                 Category
                                                         Proportion
                                         Amount                                Amount         Proportion (%)
                                                            (%)
Other accounts receivable that is
individually      significant     and   51,109,940.55              88.79      51,109,940.55             100.00
provisions for bad debts individually
Other accounts receivable that
provisions for bad debts by group
Aging group                              6,453,210.58              11.21         156,884.38                  2.43
Subtotal of group                        6,453,210.58              11.21         156,884.38                  2.43
Other accounts receivable that is
individually insignificant but
provisions for bad debts individually
                  Total                 57,563,151.13          100.00         51,266,824.93               89.06

(2) Other accounts receivable disclosed by aging
                                   Period-end                                     Period-begin
       Aging                Amount         Proportion (%)                  Amount          Proportion (%)
Within 1 year                7,285,039.42                  12.52            5,838,600.41                  10.14
Including:: within 6
                             6,749,577.01                  11.60            5,531,319.95                     9.61
months
         7-12 months           535,462.41                   0.92              307,280.46                     0.53
1 year to 2 years              160,228.86                   0.28              555,244.77                     0.96
2 years to 3 years               10,906.96                  0.02               57,365.40                     0.10
More than 3 years           50,729,440.55                  87.18           51,111,940.55                  88.80
         Total              58,185,615.79                100.00            57,563,151.13                100.00

(3) Withdrawal for bad debt provision
① Other closing accounts receivable that is individually significant and provisions for bad debts
individually

93
                                                  2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                             Provision for bad
         Name
                        Book balance                  debts           Proportion (%)                 Reason
                                                                                            The enterprise entered
Jianqiao Securities        11,840,500.00          11,840,500.00                100.00       into    bankruptcy   and
                                                                                            settlement procedure
                                                                                            The enterprise entered
Hengxin
                           29,502,438.53          29,502,438.53                100.00       into    bankruptcy   and
Securities
                                                                                            settlement procedure
                                                                                            The enterprise entered
Minfa Securities
                            9,384,502.02           9,384,502.02                100.00       into    bankruptcy   and
Co., Ltd.
                                                                                            settlement procedure
         Total             50,727,440.55          50,727,440.55                100.00

②Other accounts receivable that provision for bad debts by group

A. Other accounts receivable that provision for bad debts by aging analysis
                                        Period-end                                       Period-begin
                             Book balance                                          Book balance             Provision
       Aging                                             Provision for
                                         Proportion                                                          for bad
                        Amount                            bad debts       Proportion (%)       Amount
                                            (%)                                                               debts
Within 1 year          7,285,039.42            97.67          94,268.89     5,838,600.41            90.48 70,677.21
Including: within 6
                       6,749,577.01            90.50          67,495.77     5,531,319.95            85.72 55,313.19
months
         7-12 months    535,462.41                7.17        26,773.12        307,280.46            4.76 15,364.02
1 year to 2 years       160,228.86                2.15        16,022.89        555,244.77            8.60 55,524.47
2 years to 3 years         10,906.96              0.15         5,453.48         57,365.40            0.89 28,682.70
More than 3 years           2,000.00              0.03         2,000.00            2,000.00          0.03     2,000.00
         Total         7,458,175.24           100.00       117,745.26       6,453,210.58           100.00 156,884.38

(4) Other accounts receivable is due from shareholders with more than 5% (including 5%) of
the voting shares of the Company
(5) Information of the top 5 of other account receivable
                                       Relationship with the                                       Proportion of the
          Name of entity                                              Amount           Year
                                             Company                                                    total (%)
                                           Non-related                              Over       3
 Hengxin Securities
                                           relationship            11,840,500.00    years                       20.35

                                                                    29,502,438.     Over       3
 Jianqiao Securities                       Non-related                                                          50.70
                                                                              53    years
                                           relationship
                                                                    9,384,502.0     Over       3
 Minfa Securities                          Non-related                                                          16.13
                                                                               2    years
                                           relationship
94
                                              2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                    Relationship with the                                   Proportion of the
        Name of entity                                         Amount           Year
                                          Company                                                total (%)
Beijing Light Industry Group            Non-related                          Within 6
                                                              500,000.00                                     0.86
Co., Ltd.                               relationship                         months
Bozhou power supply company
                                                                             Within 6
of anhui electric power                 Non-related            216,300.00                                    0.37
                                                                             months
company                                 relationship
             Total                                          51,443,740.55                                88.41

(6) Accounts receivable of related-party
There was no accounts receivable of related-party of other accounts receivable.
7. Redemptory monetary capital for sale
              Item                            Closing amount                        Opening amount
Reverse purchase of national debt
by pledge                                                           0.00                        80,093,922.21
             Total                                                  0.00                        80,093,922.21

Notes: the term to maturity of the redemptory monetary capital for sale at the period-end was
within 30 days.
8. Inventory
 (1) Category
                                                                Closing balance
             Item                                               Impairment of
                                       Book balance                                          Book value
                                                                  inventories
Raw materials & wrappage                   72,487,724.45              4,164,570.24              68,323,154.21
Homemade semi-finished                    997,390,698.42                        0.00           997,390,698.42
products and products in
process
Finished products                           88,881,722.1              6,063,426.87              82,818,295.23
            Total                       1,158,760,144.97             10,227,997.11           1,148,532,147.86

     (Continued)
                                                               Opening balance
             Item                                               Impairment of
                                       Book balance                                          Book value
                                                                 inventories
Raw materials & wrappage                   97,581,058.67              4,164,570.23              93,416,488.44
Homemade semi-finished                    865,270,677.73                        0.00           865,270,677.73
products and products in
process
Finished products                         122,409,398.01              6,063,426.88             116,345,971.13
            Total                       1,085,261,134.41             10,227,997.11           1,075,033,137.30
95
                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



  (2) Change in provision for falling price of inventories
                                                                                      decrease
                                                                                             javascri
                                                          Opening                  Reversa pt:void(       Closing
                      Item                                             Increase
                                                          balance                     l      0);Writ      balance
                                                                                   amount     e-off
                                                                                             amount
Raw materials & wrappage                                4,164,570.23        0.00      0.00      0.00 4,164,570.23
Homemade semi-finished products and products                    0.00        0.00      0.00      0.00            0.00
in process
Finished products                                       6,063,426.88        0.00      0.00      0.00 6,063,426.88
                                                       10,227,997.11        0.00      0.00      0.00 10,227,997.1
                      Total
                                                                                                                    1

  (3) Reasons of provision for falling price of inventories and reversal
                                                                                                Proportion of the
                                                               Reason of reversed the
                                   Basic of provision for                                      reserved amount of
                                                                provision for falling
               Item                    falling price of                                       the closing balance of
                                                               price of inventories of
                                         inventories                                          the inventories of the
                                                                the reporting period
                                                                                                 reporting period
                                   Net realizable value
  Raw materials & wrappage
                                   below cost
                                   Net realizable value
  Finished goods
                                   below cost

9. Other current assets
              Item                  Nature (or content)          Closing amount                Opening amount
Available-for-sale    financial
                                  Bank financial products           1,020,000,000.00                  900,000,000.00
assets
              Total                                                 1,020,000,000.00                  900,000,000.00

10. Available-for-sale financial assets


              Item                         Closing fair value                          Opening fair value
Available-for-sale       equity
                                                           28,053,401.16                                24,075,687.00
instruments
Less:provision for impairment                                       0.00                                        0.00


96
                                                   2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



               Total                                         28,053,401.16                                24,075,687.00

        Notes: Available-for-sale equity instruments held by the company was the equity of Lipeng Co., Ltd.
11. Investment real estate
  (1) Particulars about details of Investment real estate

                                                             Increase in the        Decrease in the
                 Item                      Opening amount                                               Closing amount
                                                             reporting period reporting period
Investment real estate which ado
pted follow-up measurement thro              77,392,858.02                0.00                   0.00     77,392,858.02
ugh cost mode

Less: Accumulated depreciation or
                                             42,204,778.36       1,584,806.81                    0.00     43,789,585.17
amortization of investment property
Less:    Depreciation     reserves    of                                  0.00                   0.00
                                                      0.00                                                         0.00
 investment property
                 Total                       35,188,079.66       1,584,806.81                    0.00     33,603,272.85

  (2) Investment property measured by cost

                                                                Increase in the Decrease in the
                   Item                      Opening amount       reporting            reporting        Closing amount
                                                                    period              period
I. Total original book value                   77,392,858.02                 0.00                0.00     77,392,858.02
Houses & buildings                             74,748,266.02                 0.00                0.00     74,748,266.02
Land use right                                   2,644,592.00                0.00                0.00      2,644,592.00
II. Accumulated depreciation and
accumulated amortization                       42,204,778.36     1,584,806.81                    0.00     43,789,585.17

Houses & buildings                             41,838,712.45     1,553,799.53                    0.00     43,392,511.98
Land use right                                    366,065.91         31,007.28                   0.00        397,073.19

III. Total of depreciation reserves                      0.00                0.00                0.00              0.00
Houses & buildings                                       0.00                0.00                0.00              0.00
Land use right                                           0.00                0.00                0.00              0.00
IV. Total of book value                        35,188,079.66                                              33,603,272.85
Houses & buildings                             32,909,553.57                                              31,355,754.04
Land use right                                   2,278,526.09                                              2,247,518.81

  (3) The amount of depreciation and amortization of the investment property was of RMB

1,584,806.81in the reporting period.


97
                                                  2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


 12. Fixed assets

      (1) Information

                                                                                      Decrease in
                                                     Increase in the reporting
              Item              Opening amount                                       the reporting Closing amount
                                                              period
                                                                                        period
                                1,863,098,888.0
I. Total original book value                                         374,970,528.44 20,399,229.44 2,217,670,187.00
                                             0
Including:     Property   and 1,247,871,397.3
                                                                     212,784,978.25 7,628,418.75 1,453,027,956.82
building                                     2
Machineries                     517,454,256.43                       141,651,692.42 10,265,338.43     648,840,610.42
Vehicles                          47,016,731.79                       1,913,418.79 1,726,998.77       47,203,151.81
Official equipments       and
                                  50,756,502.46                      18,620,438.98     778,473.49     68,598,467.95
other equipment
                                                  Newly increase Withdrawal i
II.              Accumulated
                                                   in the reporti n the reporti
depreciation
                                                  ng period          ng period
Total of accumulated                                                  55,339,914.6
                                589,824,597.07                0.00                   18,722,865.88 626,441,645.86
depreciation                                                                     7
Including:     Property   and                                 0.00 20,562,971.8
                                331,582,943.53                                        6,679,077.71 345,466,837.66
building                                                                         4
                                                              0.00 24,626,130.5
Machineries                     189,488,293.37                                        9,670,071.17 204,444,352.70
                                                                                 0
Vehicles                          29,340,283.66               0.00 4,044,459.54 1,662,229.81          31,722,513.39
Official equipments       and                                 0.00
                                  39,413,076.51                    6,106,352.79   711,487.19          44,807,942.11
other equipment
III. The net book value of 1,273,274,290.9
                                                                                                    1,591,228,541.14
fixed assets                             3
Including: Property and
                            916,288,453.79                                                           1,107,561,119.16
building
Machineries                     327,965,963.06                                                        444,396,257.72
Vehicles                          17,676,448.13                                                       15,480,638.42
Official equipments and
                                  11,343,425.95                                                       23,790,525.84
other equipment
IV.     Total    impairment
                                   6,792,538.34                                                        6,792,538.34
provision
Including: Property and
                                   4,264,099.10                                                        4,264,099.10
building
Machineries                        1,860,758.88                                                        1,860,758.88
Vehicles                                   0.00                                                                  0.00
Official equipments and             667,680.36                                                           667,680.36
 98
                                                    2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                       Decrease in
                                                       Increase in the reporting
             Item                Opening amount                                       the reporting Closing amount
                                                                period
                                                                                         period
other equipment
                                 1,266,481,752.5
V. Total book value                                                                                     1,584,436,002.80
                                                9
Including:    Property     and
                                 912,024,354.69                                                         1,103,297,020.06
building
Machineries                      326,105,204.18                                                          442,535,498.84
Vehicles                           17,676,448.13                                                         15,480,638.42
Other equipment                    10,675,745.59                                                         23,122,845.48
 Notes: Depreciation amount of this reporting period was of RMB 55,339,914.6, RMB 118,011,827.59 was
 transferred into fixed assets from construction project in the reporting period.
  (2) Temporary idle fixed asset
                              Original          Accrued             Impairment           Net book
           Item                                                                                             Remark
                             book value       depreciation           provision            value
                            15,646,500.0
House and buildings
                                          9   11,190,960.05          4,264,099.10        191,440.94
                            11,115,403.0
Machinery equipments
                                          5    9,139,883.63          1,860,758.88        114,760.54
Official equipments
and other equipment         1,772,209.55       1,104,529.19            667,680.36                0.00
                            28,534,112.6       21,435,372.8
           Total
                                          9                  7       6,792,538.34        306,201.48

  (3) Fixed assets leased out from operation lease


              Category                         Closing book value                       Opening book value
Machinery equipments                                               850,456.78                              895,217.66
Electronic equipments and other                                     50,352.43                                60,422.91
                   Total                                           900,809.21                              955,640.57


  (4) Information of fixed assets failed to accomplish certification of property


              Item                        Reason                  Estimated accomplish date             Book value
                                                            Uniform handling after the
                                  Certification of property
No.1 Peiqu building                                         completion of the industrial park           13,313,920.08
                                     being conducting
                                                            project
                                  Certification of property Uniform handling after the
No.2 Peiqu building                                                                                     13,313,920.08
                                     being conducting       completion of the industrial park

 99
                                              2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


            Item                       Reason               Estimated accomplish date            Book value
                                                         project
                                                         Uniform handling after the
                               Certification of property
No.3 Peiqu building                                      completion of the industrial park       13,313,920.09
                                  being conducting
                                                         project
                                                         Uniform handling after the
                               Certification of property
No.4 Peiqu building                                      completion of the industrial park       12,785,693.04
                                  being conducting
                                                         project
                                                         Uniform handling after the
                               Certification of property
No.5 Peiqu building                                      completion of the industrial park       12,798,957.38
                                  being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 1          Certification of property
                                                         completion of the industrial park       22,341,686.05
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 2          Certification of property
                                                         completion of the industrial park       22,652,168.80
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 3          Certification of property
                                                         completion of the industrial park       22,950,057.66
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 4          Certification of property
                                                         completion of the industrial park       22,922,519.08
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 5          Certification of property
                                                         completion of the industrial park       25,026,696.90
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No.            Certification of property
                                                         completion of the industrial park       20,914,607.18
6brewhouse                        being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 7          Certification of property
                                                         completion of the industrial park       25,384,492.58
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial park No. 8          Certification of property
                                                         completion of the industrial park       24,714,136.53
brewhouse                         being conducting
                                                         project
                                                         Uniform handling after the
Industrial Park No.1 filling   Certification of property
                                                         completion of the industrial park       37,327,022.98
house                             being conducting
                                                         project
Industrial Park No.2 filling   Certification of property Uniform handling after the
                                                                                                 41,125,373.49
house                             being conducting       completion of the industrial park

100
                                                        2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                    Item                         Reason               Estimated accomplish date            Book value
                                                                   project
                                                                Uniform handling after the
     Industrial Park No.3 filling     Certification of property
                                                                completion of the industrial park          44,910,332.58
     house                               being conducting
                                                                project
                                                                Uniform handling after the
     Bran warehouse, Qu               Certification of property
                                                                completion of the industrial park          39,040,187.00
     warehouse                           being conducting
                                                                project
                                                                Uniform handling after the
     Logistics office building,       Certification of property
                                                                completion of the industrial park             4,651,200.79
     canteen, salvage station            being conducting
                                                                project
                                                                Uniform handling after the
                                      Certification of property
     Industrial park station                                    completion of the industrial park          33,138,247.68
                                         being conducting
                                                                project
                                                                Uniform handling after the
                                      Certification of property
     Qinggong apartment                                         completion of the industrial park          10,712,810.79
                                         being conducting
                                                                project
                    Total                                                                                 463,337,950.76


      13. Construction in progress

       (1)


                                          Closing balance                                     Opening balance
             Item                               Impairmen                                      Impairment
                            Book balance                      Book value       Book balance                     Book value
                                                t provision                                     provision
Marketing network
                                7,705,967.08          0.00     7,705,967.08 14,546,665.94              0.00     14,546,665.94
construction
Brewing technology
renovation project of           4,528,733.55          0.00     4,528,733.55     3,385,987.81           0.00       3,385,987.81
high quality base liquid
Hook store, filling and
packing center of base
liquid and construction         18,878,360.95         0.00     18,878,360.95 203,661,402.39            0.00    203,661,402.39
project of supplemental
facilities
Removal and R&D
project of base liquid          56,916,219.69         0.00     56,916,219.69 144,262,343.13            0.00    144,262,343.13
and support facility

      101
                                                     2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                         Closing balance                                        Opening balance
              Item                           Impairmen                                           Impairment
                           Book balance                      Book value          Book balance                     Book value
                                             t provision                                          provision
project
Operation network of
                               388,888.88          0.00           388,888.88              0.00         0.00               0.00
Gujing phase II
Gujing hotel
                             6,045,380.56          0.00       6,045,380.56        3,723,224.99         0.00        3,723,224.99
renovation
Beijing experience
center renovation           16,378,058.41          0.00      16,378,058.41        7,401,304.94         0.00        7,401,304.94
project
Stainless wine tank          2,136,629.81          0.00       2,136,629.81                0.00         0.00               0.00
Second workshop
technical renovation         1,797,872.25          0.00       1,797,872.25                0.00         0.00               0.00
project
Other                         1,273,531.65         0.00           1,273,531.65      358,010.34         0.00         358,010.34
Total                       116,049,642.83         0.00      116,049,642.83 377,338,939.54             0.00     377,338,939.54

        (2) Changes in construction in progress


                                                Opening                           Transferred to      Other          Closing
      Name of project           Budget                               Increase
                                                balance                            fixed assets      decrease
                                                                                                                     amount
Marketing network
                            275,000,000.00 14,546,665.94 1,669,029.67                       0.00 8,509,728.53 7,705,967.08
construction
Brewing technology
renovation project of high 102,000,000.00 3,385,987.81              1,902,944.7      760,198.96            0.00 4,528,733.55
quality base liquid
Hook store, filling and
packing center of base
                                              203,661,402.3
liquid and construction     586,000,000.00                         27,918,375.6 210,431,326.23 2,270,090.81 18,878,360.95
                                                             9
project of supplemental
facilities
Removal and R&D project
                                              144,262,343.1
of base liquid and support 800,000,000.00                         75,116,917.32 142,854,543.23 19,608,497.53 56,916,219.69
                                                             3
facility project
Operation network of
                              5,840,000.00                 0.00      388,888.88             0.00           0.00      388,888.88
Gujing phase II
        102
                                                       2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                   Opening                       Transferred to     Other          Closing
        Name of project           Budget                          Increase
                                                   balance                        fixed assets     decrease
                                                                                                                   amount
Gujing hotel renovation         7,987,386.68 3,723,224.99 2,322,155.57                     0.00           0.00 6,045,380.56
Beijing experience center
                               27,797,100.00 7,401,304.94 8,976,753.47                     0.00           0.00 16,378,058.41
renovation project
Stainless wine tank             9,989,955.00              0.00 2,136,629.81                0.00           0.00 2,136,629.81
Second workshop
technical renovation           12,760,000.00              0.00 1,797,872.25                0.00           0.00 1,797,872.25
project
Other                             7,500,000.00      358,010.34      915,521.31             0.00           0.00    1,273,531.65
                                                 377,338,939.5 123,145,088.5
                              1,834,874,441.68                                   354,046,068.42 30,388,316.87 116,049,642.83
Total                                                        4               8

              (Continued)
                                                                                               Including:
                                               Including:
                                                              Capitalizatio                   capitalizatio
                             Capitalization capitalization of               Capitalization of                      Source of
     Name of project                                          n of interest                       n of
                              of interest     interest this                     interest                            funding
                                                                rate (%)                      interest this
                                                 period
                                                                                                 period
Marketing network
                                      0.00                0.00           0.00              62.24     100.00%         Raise fund
construction
Brewing technology
renovation project of high            0.00                0.00           0.00              78.36     100.00%         Raise fund
quality base liquid
Hook store, filling and
packing center of base
liquid and construction               0.00                0.00           0.00              78.49     100.00%         Raise fund
project of supplemental
facilities
Removal and R&D
project of base liquid and            0.00                0.00           0.00              78.83       87.00%      Owned fund
support facility project
Operation network of
                                      0.00                0.00           0.00               7.15       12.75%      Owned fund
Gujing phase II
Gujing hotel renovation               0.00                0.00           0.00              75.68       95.00%      Owned fund
Beijing experience center
                                      0.00                0.00           0.00              58.89       80.00%      Owned fund
renovation project
Stainless wine tank                   0.00                0.00           0.00              21.39       25.00%      Owned fund
        103
                                                         2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                                 Including:
                                                 Including:
                                                                Capitalizatio                   capitalizatio
                               Capitalization capitalization of               Capitalization of                      Source of
     Name of project                                            n of interest                       n of
                                of interest     interest this                     interest                            funding
                                                                  rate (%)                      interest this
                                                   period
                                                                                                   period
Second workshop
technical renovation                    0.00                0.00           0.00              14.09       20.00%      Owned fund
project
Other                                   0.00                0.00           0.00               96.6       99.00%      Owned fund
Total                                   0.00                0.00           0.00

          Note: other decrease of Operation network construction was the completion of decoration of specialty
          store transferring into long-term unamortized expenses
        14. Engineering materials
                       Item                           Closing book value                     Opening book value
        Engineering materials                                          3,611,632.44                                    0.00
                       Total                                           3,611,632.44                                    0.00


        15. Intangible assets


          (1) Information
                                          Opening           Increase in the        Decrease in the
                Item                                                                                         Closing balance
                                          balance          reporting period        reporting period
I. Total original book value          393,604,217.77               260,683.77                     0.00           393,864,901.54
Land use right                        351,249,420.80                     0.00                     0.00           351,249,420.80
Patent                                  38,150,000.00                    0.00                     0.00            38,150,000.00
Software                                 4,204,796.97              260,683.77                     0.00             4,465,480.74
II. Total accrued amortization          78,379,296.23           4,435,599.74                      0.00             82,814,895.97
Land use right                          39,213,427.25           3,959,051.66                      0.00             43,172,478.91
Patent                                  38,030,000.00               30,000.00                     0.00            38,060,000.00
Software                                 1,135,868.98              446,548.08                     0.00             1,582,417.06
III. Total accrued depreciation
                                                  0.00                   0.00                     0.00                        0.00
reserve
Land use right                                    0.00                   0.00                     0.00                        0.00
Patent                                            0.00                   0.00                     0.00                        0.00
Software                                          0.00                   0.00                     0.00                        0.00
IV. Total book value                  315,224,921.54                     0.00                     0.00            311,050,005.57
Land use right                        312,035,993.55                     0.00                     0.00            308,076,941.89
Patent                                     120,000.00                    0.00                     0.00                 90,000.00
        104
                                                       2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                         Opening          Increase in the         Decrease in the
                Item                                                                                         Closing balance
                                         balance         reporting period         reporting period
 Software                               3,068,927.99                  0.00                       0.00              2,883,063.68
             Note: Amortization was of RMB4,435,599.74 in the reporting period.
              15. Long-term amortization expense
                                      Opening                      Amortization      Other         Closing         Reason for
               Item                                 Increase
                                      balance                        balance        decrease       balance       other decrease
Celebrity’s House                   1,239,278.63           0.00     625,864.68          0.00      613,413.95
Zhengzhou club house lease
                                      437,600.06            0.00     437,600.06          0.00             0.00
expenses
Building decoration
 engineering of 2011 Annual
                                      580,764.58            0.00     580,764.58          0.00             0.00
 Gujing Distillery Experience
 Center of Zhengzhou 2011
Hangzhou experience club
                                      397,689.66            0.00     170,438.46          0.00      227,251.20
project
specialty store decoration                                                                      26,904,432.6
                                    18,997,757.37 12,659,898.23 4,753,223.00             0.00
engineering                                                                                                  0

Reform on highly qualified                                                                      12,887,364.3
                                    14,748,065.24           0.00 1,860,700.86            0.00
base liquid                                                                                                  8
Qu frame and Qu bed                  5,965,086.59           0.00     761,679.42          0.00 5,203,407.17
The relocation compensation                                                                     14,650,100.0
                                    15,400,100.00 1,550,000.00 2,300,000.00              0.00
of Beijing experience center                                                                                 0
Wine culture museum                   132,252.47            0.00       74,704.20         0.00        57,548.27
Sewage treatment plant
                                     3,000,000.00 3,000,000.00       250,000.00          0.00 5,750,000.00
renovation project
Industrial park greening projects            0.00 21,878,588.34              0.00        0.00 21,878,588.34
               Total                60,898,594.60 39,088,486.57 11,814,975.26            0.00 88,172,105.91

       16. Deferred tax assets / deferred tax liabilities

          (1) Deferred tax assets and liabilities that already recognized

           ①Deferred tax assets that already recognized

                                                Closing amount                                  Opening amount
                                                             Deductible                                       Deductible
              Item                   Deferred tax                                   Deferred tax
                                       assets          temporary differences          assets            temporary differences
                                                       and deductible losses                            and deductible losses
 Provision for bad debts               12,913,686.99           51,654,747.86         13,036,587.74               52,146,350.87

       105
                                                               2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


Provision for obsolete sto
cks                                        2,556,999.28                     10,227,997.12           2,556,999.28                    10,227,997.11

Fixed assets depreciation
reserves                                   1,697,623.76                      6,790,495.04           1,697,623.76                     6,790,495.04

Internal         unrealized
purchase and sale profits                               0.00                            0.00          202,004.95                       808,019.79

Deferred income                           10,326,328.50                     41,305,313.99          10,863,852.26                    43,455,409.03
Accrued expenses                          14,460,937.04                     57,843,748.16          14,733,752.38                    58,935,009.49
Changes in the fair value of
Available-for-sale financial                            0.00                            0.00          281,076.50                     1,124,306.00
assets
               Total                      41,955,575.57                    167,822,302.17          43,371,896.87                   173,487,587.33


     ②Deferred tax liabilities that already recognized

                                                   Closing amount                                         Opening amount
                      Item               Deferred tax            Taxable   temporary           Deferred tax            Taxable   temporary
                                          liabilities               differences                 liabilities                 differences
    Changes in the fair value
    of              Available-for-sale      709,215.45                     2,836,861.80                       0.00                        0.00
    financial assets
                      Total                 709,215.45                     2,836,861.80                       0.00                        0.00

         (2)List of deferred tax assets that unrecognized

                              Item                             Closing amount                                 Opening amount
    Provision for   bad debts                                                           2,043.30                                      2,043.30
    Deductible losses                                                                 724,118.08                                   724,118.08
                             Total                                                    726,161.38                                   726,161.38


     17. List of provision for assets impairment
                                                                       Withdrawal                  Decrease
                                                    Opening                  in the
                              Item                                                                                          Closing amount
                                                        amount             reporting       Reversal       Written off

                                                                            period

    I. Provision for bad debt
                                                 52,146,350.87                   0.00      491,603.01                0.00     51,654,747.86
    II. Provision for inventory falling
    price                                        10,227,997.11                   0.00              0.00              0.00        10,227,997.11
     106
                                                2014 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                       Withdrawal            Decrease
                                         Opening         in the
                 Item                                                                             Closing amount
                                          amount        reporting     Reversal      Written off

                                                         period
III. Impairment provision of fixed
assets                                  6,792,538.34          0.00           0.00          0.00     6,792,538.34
IV. Impairment provision of
intangible assets                               0.00          0.00           0.00          0.00                      -

                 Total                 69,166,886.32          0.00    491,603.01           0.00    68,675,283.31

 18. Ownership or use right restricted assets
                 Item                   Closing amount                        Restricted assets
Subtotal of pledged assets
Bank deposits                               50,500,000.00            Pledge for issuing bank acceptance
Notes receivable                            63,000,000.00            Pledge for issuing bank acceptance
                Total                      113,500,000.00

 19. Notes payable
               Category                         Closing amount                        Opening amount
Bank acceptance                                            165,500,000.00                         235,620,000.00
Trade acceptance                                            27,560,000.00                             150,000.00
                 Total                                     193,060,000.00                         235,770,000.00

 20. Accounts payable

  (1) List of accounts payable

                 Item                           Closing amount                        Opening amount
Within 1 year                                              286,317,052.64                         433,467,588.20
Over 1 year                                                  9,109,019.70                            9,467,811.24
                 Total                                     295,426,072.34                         442,935,399.44


  (2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares
      of the Company

         □Applicable √Inapplicable

  (3) Notes of the accounts payable aging over 1 year
                                                          Reason for unsettlement Amount pay back after
       Name of creditor                Amount                                        Balance Sheet Date

 107
                                             2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                       Reason for unsettlement Amount pay back after
      Name of creditor            Amount                                          Balance Sheet Date
SHANGHAI TIMES                            474,696.76
                                                          Settlement of final                   No
PRINTING CO., LTD.                                             payment
Dingzheng machinery and                   288,400.00      Settlement of final
                                                                                               Yes
equipment Co.,Ltd.                                             payment
SHENZHEN TIMES                            243,732.61      Settlement of final
                                                                                                No
PRINTING CO., LTD.                                             payment
Shenzhen Gome Packing                     155,801.66      Settlement of final
                                                                                                No
Co., Ltd.                                                      payment
Chongqing Jimma Glass                     147,699.07      Settlement of final
                                                                                                No
Company                                                        payment
             Total                    1,310,330.10


21. Advance from customers

  (1)


                   Item                      Closing amount                         Opening amount
Within 1 year                                          289,743,247.69                         139,762,253.28
Over 1 year                                              3,572,581.51                           7,495,140.60
                   Total                               293,315,829.20                         147,257,393.88

  (2) There was no advanced from customers from shareholders with more than 5% (including 5%)
      of the voting shares of the Company


22. Payroll payable
                           Opening book                                                      Closing book
            Item                                  Increase               Decrease
                             balance                                                           balance
I. Salary, bonus,
allowance, subsidy          194,316,386.96          11,822,136.03         12,379,302.01               45,720.57

II. Employee welfare                  0.00         16,226,551.42          16,226,551.42                    0.00
III. Social insurance         2,728,790.54         56,083,384.85          58,328,928.55              483,246.84
Including: 1.Medical
insurance premiums              602,886.55          11,822,136.03         12,379,302.01               45,720.57
2.Basic pension
benefits                      1,880,164.98         38,448,306.24          39,924,930.89              403,540.33
3.Unemployment
insurance                       159,553.32           3,480,277.48           3,614,781.08              25,049.72


108
                                               2014 Semi-annual Report of Anhui Gujing Distillery Company Limited


                             Opening book                                                      Closing book
          Item                                      Increase                Decrease
                               balance                                                           balance
4.Work-related injury
insurance                          53,045.78           1,329,877.93           1,378,690.91               4,232.80

5.Maternity insurance              33,139.91           1,002,787.17           1,031,223.66               4,703.42
IV. Housing fund               11,882,473.50         53,680,621.24           54,876,433.28         10,686,661.46
V.      Labour      union
                               22,415,551.17         12,853,176.68           15,202,145.93         20,066,581.92
budget and other
          Total               231,343,202.17        301,725,188.99          444,040,439.48         89,027,951.68

23. Taxes payable
                  Item                         Closing balance                         Opening balance
VAT                                                        48,606,086.48                          86,131,273.54
Consumption tax                                            98,727,493.19                         155,018,644.03
Business tax                                                   427,315.98                            357,639.36
Corporate income tax                                     188,415,121.00                          330,262,070.25
Personal income tax                                        18,446,326.78                           5,307,318.66
Urban          maintenance       and
construction tax                                            5,301,369.53                           7,354,158.61
Stamp tax                                                   2,326,360.86          &ensp