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个股公告正文

古井贡B:2015年半年度报告(英文版)

日期:2015-08-22附件下载

ANHUI GUJING DISTILLERY COMPANY LIMITED

         2015 Semi-annual Report




               August 2015
                                                                 2015 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                                            Contents




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

Section II. Company Profile .............................................................................................................. 4

Section III. Highlights of Accounting Data & Financial Indicators .............................................. 6

Section IV. Report of the Board of Directors ................................................................................... 8

Section V. Significant Events ........................................................................................................... 18

Section VI. Changes in Shares & Particulars about Shareholders.............................................. 22

Section VII. Preference Shares........................................................................................................ 26

Section VIII. Directors, Supervisors & Senior Management Staff .............................................. 27

Section IX. Financial Report ........................................................................................................... 28

Section X. Documents Available for Reference ........................................................................... 143




                                                                     1
                                              2015 Semi-annual Report of Anhui Gujing Distillery Company Limited




          Section I. Important Reminders, Contents & Definitions

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 is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.




                                                 2
                                            2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                         Definitions


                                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

                                Refers
Anhui Longrui Glass Co., Ltd             Bozhou Gujing Glass Products Co., Ltd.
                                  to




                                                3
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                                        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, P.R.China                       Province, P.R.China

Tel.                                           (0558) 5712231                            (0558) 5710057

Fax                                            (0558) 5317706                            (0558) 5317706

E-mail                                         ycq@gujing.com.cn                         gjzqb@gujing.com.cn


III. 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 2014 Annual Report.




                                                                     4
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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 2014
Annual Report.


3. Changes in 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 2014 Annual Report.




                                                                  5
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     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)                          2,713,042,828.92                 2,390,158,949.76                     13.51%

Net profit attributable to shareholders of the
                                                         380,504,804.17                   357,806,197.58                     6.34%
Company (RMB Yuan)
Net profit attributable to shareholders of the
Company after extraordinary gains and                    368,258,604.21                   349,115,748.43                     5.48%
losses (RMB Yuan)
Net cash flows from operating activities
                                                         336,217,657.83                    -76,213,052.44                  541.15%
(RMB Yuan)

Basic EPS (RMB Yuan/share)                                              0.76                          0.71                   7.04%

Diluted EPS (RMB Yuan/share)                                            0.76                          0.71                   7.04%

Weighted average ROE (%)                                             8.75%                          9.33%                    -0.58%

                                                 As at the end of the
                                                                               As at the end of last year        +/- (%)
                                                  reporting period

Total assets (RMB Yuan)                                7,034,173,483.78                 6,413,518,166.03                     9.68%

Net assets attributable to shareholders of
                                                       4,516,257,599.46                 4,181,050,977.96                     8.02%
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.



                                                                 6
                                                                2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


III. Items and amounts of extraordinary gains and losses

√Applicable □ Inapplicable
                                                                                                                       Unit: RMB Yuan

                                Item                                           Amount                        Explanation

Gains/losses on the disposal of non-current assets (including the
                                                                                     -561,466.87
offset part of the asset impairment provisions)

Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
                                                                                    3,021,627.75
certain quotas or amounts according to the government’s unified
standards

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
                                                                                    7,622,904.98
financial liabilities and financial assets available for sales except
for effective hedging related with normal businesses of the
Company

Non-operating income and expense other than the above                               6,245,200.75

Less: Income tax effects                                                            4,082,066.65

Total                                                                              12,246,199.96                  --

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 in the reporting period.




                                                                    7
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                          Section IV. Report of the Board of Directors

I. Overview

The first half of 2015 saw the downward pressure building up on the domestic and foreign economies, the distilled
spirit industry still in a period of adjustment and no marked turnaround for the weak consumer demand. Therefore,
the distilled spirit has to deal with great pressure for some timer longer amid fierce competition on the market.
Under the common efforts of the board and all the other staff, for the six months from January to June 2015, the
Company achieved operating revenues of RMB 2.713 billion, up 13.51% year on year; and net profits of RMB
380 million, representing a year-on-year growth of 6.34%. As such, the operating goals that we had set for the
first half of 2015 at the beginning of the year were all accomplished. To achieve that, we took the following main
measures in the reporting period: ① beefing up the internationalization of our brand to improve our brand image
at home and abroad; ② optimizing our market competitive strategy through pushing forward the campaign to
bring our products to more channels, stores and consumers as well as through expanding our marketing channels
to low-tier cities; ③ further improving our brewing technique to increase our product quality steadily; and ④
vitalizing our operation mechanism, promoting marketization within the Company and enhancing cost control.

II. Main business analysis

YoY movements in major financial data:
                                                                                                                   Unit: RMB Yuan

                                                                                                            Main reasons for
                             Reporting period       Same period of last year      YoY +/-%
                                                                                                              movements

Operating revenues               2,713,042,828.92          2,390,158,949.76                 13.51%

Operating costs                   827,578,527.59             734,083,360.31                 12.74%

Selling expenses                  794,226,823.89             706,159,566.91                 12.47%

Administrative expenses           237,926,770.64             239,125,781.91                  -0.50%

                                                                                                      The discounting fees for
                                                                                                      activating              notes
                                                                                                      increased while the gains
Financial expenses                  -8,593,975.74            -32,364,892.13                 73.55%
                                                                                                      on wealth management
                                                                                                      banking              products
                                                                                                      decreased.

Income tax expenses               132,550,174.27             126,941,933.36                  4.42%

                                                                                                      Increased sales income
Net cash flows from
                                  336,217,657.83             -76,213,052.44                541.15% and         activated      notes
operating activities
                                                                                                      through discounting

Net cash flows from                                                                                   The      industrial      park
                                  -114,449,347.71           -204,715,450.66                 44.09%
investing activities                                                                                  construction     completed

                                                               8
                                                                2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                                                  and the relevant inputs
                                                                                                                  thus decreased.

Net increase in cash and                                                                                          The      sales         income
                                      221,768,310.12             -280,928,503.10                       178.94%
cash equivalents                                                                                                  increased.

Major changes in the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
No such cases in 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
No such cases.
Review the reporting period progress of any previously disclosed business plan:
In the reporting period, we carried out our work according to our development strategy and annual operating plan, with the progress
meeting the schedule.


III. Breakdown of main business

                                                                                                                               Unit: RMB Yuan

                                                                                 Increase/decrease
                                                                                                      Increase/decrease Increase/decrease
                          Operating                                                of operating
                                          Operating cost    Gross profit rate                         of operating cost     of gross profit
                           revenue                                               revenue over last
                                                                                                       over last year      rate over last year
                                                                                       year

Classified by industry:

Manufacture            2,697,122,601.21   812,852,316.96                69.86%               13.89%               13.89%                 0.00%

Classified by product:

Distilled     spirit
                       2,648,849,751.45   793,251,232.79                70.05%               13.88%               15.45%                 -0.41%
products

Hotel service             38,945,966.46    15,857,465.85                59.28%               11.24%            -23.23%                   18.28%

Other                      9,326,883.30      3,743,618.32               59.86%               32.63%            -36.84%                   44.15%

Classified by region:

Domestic               2,695,830,008.55   812,441,800.25                69.86%               13.84%               13.83%                 0.00%

Overseas                   1,292,592.66       410,516.71                68.24%          --                   --                     --


IV. Core competitiveness analysis

In the reporting period, no changes occurred to our core competitiveness in equipment, patents, non-proprietary technology, franchise
rights, land use rights, trademark use rights, etc., with no impact on the Company.




                                                                    9
                                                                        2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


V. Investment analysis

1. Investments in equities of external parties

(1) Investments in external parties

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


(2) Equity-holdings in financial enterprises

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


(3) Securities investments

√Applicable □ Inapplicable

                                                                                                                       Gain/lo
                                                               Shareholdi
                                                Number                      Number Shareholdi                           ss for
Variety               Name       Initial                          ng
           Code of                              of shares                   of shares       ng          Closing        reportin
   of                   of     investment                      percentage                                                          Accounting       Source
           securiti                              held at                     held at percentage book value                g
securiti              securiti cost (RMB                           at                                                                  title        of stock
             es                                 period-be                   period-e         at       (RMB Yuan) period
   es                   es       Yuan)                         period-beg
                                                  gin                          nd        period-end                    (RMB
                                                                   in
                                                                                                                       Yuan)

                                                                                                                                                    Purchas
                                                                                                                                  Available-for-s
                             28,026,138.4                                   10,115,1                  49,462,839.0                                  ed with
Stock      601988 ZGYH                          9,625,200          0.00%                     0.00%                                ale financial
                                           8                                        00                            0                                 our own
                                                                                                                                  assets
                                                                                                                                                    funds

                                                                                                                                                    Purchas
                                                                                                                                  Available-for-s
                             19,080,559.5                                   2,095,92                  30,474,676.8                                  ed with
Stock      000001 PAYH                          1,602,800          0.01%                     0.01%                                ale financial
                                           1                                        0                             0                                 our own
                                                                                                                                  assets
                                                                                                                                                    funds

                                                                                                                                                    Purchas
                                                                                                                                  Available-for-s
                             91,133,996.8                                   6,445,12                  154,425,074.                                  ed with
Stock      600373 ZWCM                                     0       0.00%                     0.47%                                ale financial
                                           0                                        0                             20                                our own
                                                                                                                                  assets
                                                                                                                                                    funds

                             138,240,694. 11,228,00                         18,656,1                  234,362,590.
Total                                                              --                        --                           0.00             --          --
                                           79              0                        40                            00

Disclosure date of the
board announcement on
approval of the securities
investment


                                                                             10
                                                                     2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


Disclosure date of the
general           meeting
announcement           on
approval of the securities
investment (if any)


(4) Shareholdings in other listed companies

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


2. Wealth management entrustment, derivative investments and entrustment loans

(1) Wealth management entrustment

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


(2) Derivative investments

√ Applicable □ Inapplicable
                                                                                                                         Unit: RMB Ten Thousand

                                                                                                                                 Proportion
                                                                                                                                   of the
                                                                                                                                  closing     Actual
                      Related-part Type of                                                               Impairme
                                                  Initial                                    Opening                  Closing investmen gain/los
Operato Relationshi          y      derivative                  Beginning           Ending                  nt
                                                 investme                                    investme                investme t amount          s in
   r          p        transaction investme                         date             date                provision
                                                 nt amount                                   nt amount               nt amount     in the     reportin
                           or not          nt                                                            (if any)
                                                                                                                                 Company’ g period
                                                                                                                                 s closing
                                                                                                                                 net assets

                                    Reverse
                                    repurchas
                                                                2015/01/0 2015/06/1
                      No            e of                    0                                18,071.22                      0        0.00%      189.9
                                                                2               9
                                    national
                                    debt

Total                                                       0        --               --     18,071.22                      0        0.00%      189.9

Source of the entrusted funds                    Self-owned funds of the Company

Cases involving lawsuit (if applicable)          Naught

Disclosure date of the board announcement
                                                 2013/08/30
approving the derivative investments (if any)

Disclosure date of the board of shareholders

                                                                           11
                                                                    2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


announcement       approving      the derivative
investments (if any)

Analysis on risks and control measures of
derivative products held in the reporting
                                                     The Company had controlled the relevant risks strictly according to the Derivatives
period (including but not limited to market
                                                     Investment Management System.
risk, liquidity 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
                                                     Naught
value of the 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
accounting principles of derivatives in the Naught
reporting period compared to the previous
reporting period

                                                     The sustainable development of the main business and the sufficient free idle money,
                                                     the Company increased the profits through investing in the reasonable financial
                                                     derivative instruments, which was in favor of improving the service efficiency of the
                                                     idle funds; in order to reduce the investment risks of the financial derivative
                                                     instruments, the Company had set up corresponding supervision mechanism for the
Specific opinion from independent directors
                                                     financial derivative instrument business and formulated reasonable accounting policy
on the Company’s derivatives investment
                                                     as well as specific principles of financial accounting; the derivative Investment
and risk control
                                                     business developed separately took national debts as mortgage object, which was met
                                                     with the cautious and steady risks management principle and the interest of the
                                                     Company and shareholders. Therefore, the Company has been agreed to conduct
                                                     derivative investment of reverse repurchase of national debt under the line of RMB 0.3
                                                     billion.


(3) Entrustment loans

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


3. Particulars about the use of raised funds

√ Applicable □ Inapplicable


(1) Overview of the use of raised funds

√ Applicable □ Inapplicable

                                                                        12
                                                                 2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                                                    Unit: RMB Ten Thousand

Total amount of raised funds                                                                                                           122,749.95

Total amount of raised funds input in the reporting
                                                                                                                                          2,066.71
period

Total amount of raised funds accumulatively input                                                                                      106,222.80

Total amount of the raised funds with modified
                                                                                                                                          8,755.35
purposes during the reporting period

Total amount of the accumulative raised funds with
                                                                                                                                          8,755.35
modified purposes

Proportion of the total amount of the accumulative
                                                                                                                                            7.13%
raised funds with modified purposes

                                                    Overview of the use of raised funds

To maximize the economic benefits to raise funds and reduce financial costs and increase the company's earnings, the company
intends to raise funds 87,553,500 yuan permanent savings add liquidity, the company disclosed the specific circumstances detailed
in the huge influx of information online on January 28, 2014 "About the savings to raise funds to add permanent liquidity of the
company announcement."


(2) Projects promised to be invested with raised funds

√ Applicable □ Inapplicable
                                                                                                                    Unit: RMB Ten Thousand

                                                                                                       Date
                          Project                                                       Investment when the                               Material
Projects invested with                                                   Accumulative                             Profit        Reach
                         changed     Raised Investment Input in                          progress     project                             change in
   raised capital as                                                      input up to                            generated       the
                           or not    capital    after          the                       up to the   reaches                                   the
    promised and                                                             the                                  in the       expected
                         (including input as adjustment reporting                       period-end      the                                project
   investments with                                                       period-end                             reporting profit or
                         partially promised         (1)       year                      (%)(3)= expected                                 feasibility
  over-raised capital                                                         (2)                                 period         not
                         changed)                                                         (2)/(1)     usable                                or not
                                                                                                     condition

Projects invested with raised capital as promised
Technological
Transform on the
Brewage         of No                  13,500 12,194.42        293.7        12,063.86      98.93%                              Yes        No
High-quality  Base
Wine
Construction of Base
Wine Blending &
                     No                68,600 64,060.83 1,642.38            59,045.90      92.17%                              Yes        No
Filling Centre and
Ancillary Facilities
Construction      of
                     No                27,500 20,739.35       130.63        18,087.98      87.22%                              Yes        No
Marketing Network
Brand Promotion          No            17,000       17,000           0      17,025.06    100.15%                               Yes        No

Subtotal of promised            --   126,600 113,994.60 2,066.71           106,222.80       --          --                 0      --           --


                                                                     13
                                                                 2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


investment projects

Investments of over-raised capital

Subtotal      of      the
investments           of        --                                                       --         --            0     --        --
over-raised capital

Total                           --       126,600 113,994.60 2,066.71      106,222.80     --         --            0     --        --

Reason for failing to
reach         scheduled
progress or projected Naught
income (explain one
project by one project)

Explanation           on
significant changes in Naught
feasibility of projects

Amount, usage and Inapplicable
usage      progress   of
over-raised capital

Change        of      the Inapplicable
implementation
location of any raised
funds         investment
project

Adjustment      of    the Inapplicable
implementation
method of any raised
funds         investment
project

                            Applicable

                            In accordance with the explanation of the Particulars on the Private Issuance of A-share of Anhui Gujing
                   Distillery Co., Ltd. and the Listing Announcement, ―Before the raised proceeds being in place, the Company
Advanced input and can use the self-raised proceeds to input preliminarily in accordance with the actual progress of raised
exchange  of   any proceeds investment projects; after the raised proceeds being in place, the Company can use the raised
raised           funds proceeds to replace the self-raised proceeds preliminarily input‖. And the Proposal on Using the Raised
investment project     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 Inapplicable
temporarily
supplementing
working capital

                                                                     14
                                                                       2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                             Applicable

                             1. The Company strictly carried out the purchase system and the project bidding way, which better controlled
                            the project construction and purchase cost and under the premise of guaranteeing the project quality with the
Outstanding          raised principles of practicing strict economy, the Company further strengthened the project expenses control,
funds        in     project supervisor and management in the process of the execution which reduced the total cost of the investment
implementation         and project of the raised funds. 2. The surplus reason of the marketing network construction project was due to
reasons                      the rather big changes of the liquor market environment and the third party logistics system gradually
                             becoming more and more mature and at the same time, the Company would no more execute the center
                             project of Hefei Logistics for reducing the fixed operating cost of the Company, which caused the capital
                             surplus of the project.

Usage                  and
whereabouts             of Deposited in the special account for raised proceeds.
unused raise capital

Problems found in the
usage and disclosure
                             Naught
affairs of raised capital
and other situations


(3) Changes in projects invested with raised funds

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


4. Analysis to main subsidiaries and shareholding companies

√ Applicable □ Inapplicable
Main subsidiaries and shareholding companies
                                                                                                                             Unit: RMB Yuan

                                                   Main
 Company            Company                                      Registered                             Operating Operating
                                    Industry   products/ser                   Total assets Net assets                          Net profit
      name           variety                                      capital                               revenues    profit
                                                   vices

                                               Wholesales
                                               of distilled
Bozhou                                         spirit,
Gujing                            Business     constructio 84,864,497. 1,970,961,5 396,331,79 2,648,388,9 333,933,0 251,644,634.
                  Subsidiary
Sales     Co.,                    trading      n materials, 89                      52.34        6.94       59.35     86.37             71
Ltd                                            feeds       and
                                               assistant
                                               materials




                                                                            15
                                                                  2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


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

√ Applicable □ Inapplicable
                                                                                                              Unit: RMB Ten Thousand

                                                         Accumulati
                                     Amount of
                    Total planed                    ve         amount
    Name of                         input during                          Progress of     Gains from   Disclosure date    Disclosure
                     amount of                      actually     input
     project                        the reporting                           project        project        (if any)       index (if any)
                    investment                      as     of      the
                                       period
                                                    period-end

Relocation and
Technological
Transform      on
the Brewage of
                           80,000           2,790               80,000             100%                2012/03/29
Base Wine and
the supporting
facilities
projects

      Total                80,000           2,790               80,000        --              --             --                --


VI. Predict the operating results of Jan.-Sep. 2015

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
Profit distribution plan carried out in the reporting period: As audited by Ruihua Certified Public Accountants, the net profits of RMB
577,062,374.98 achieved by the Company in 2014, plus the undistributed profits of 2013 of RMB 1,589,277,915.00, minus the
dividend payout for 2013 of RMB 176,260,000, equaled the 2014 annual profits distributable to shareholders of RMB

                                                                     16
                                                                2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


1,990,080,289.98. According to the operation and capital situation of the Company, a pre-plan for the profit distribution and
capitalization of capital reserves for 2014 was put forward as follows: The Company intended to distribute, based on the total shares
of 503,600,000 as at the end of 2014, a cash dividend of RMB 2.00 (tax included) to all shareholders for every 10 shares they held,
with the total dividends paid out totaling RMB 100,720,000.00. The retained profits of RMB 1,889,360,289.98 would carry over to
the next year. In this profit distribution, the Company would not grant bonus shares or turn capital reserves into share capital.
The said dividend payout pre-plan was reviewed and approved at the Fifth Meeting of the Seventh Board of Directors on 27 April
2015 and later at the 2014 Annual General Meeting on 26 May 2015 (see the relevant announcements disclosed on Ta Kung Pao
(HK), China Securities Journal, Shanghai Securities News and www.cninfo.com.cn dated 29 April 2015 and 27 May 2015).
For particulars about the implementation of this equity distribution, please pay timely attention to subsequent relevant
announcements to be disclosed on Ta Kung Pao (HK), China Securities Journal, Shanghai Securities News and www.cninfo.com.cn.

                                           Special statement about the cash dividend policy

In compliance with the Company’s Articles of Association and
                                                                    Yes
the resolution of the general meeting

Specific and clear dividend standard and ratio                      Yes

Complete decision-making procedure and mechanism                    Yes

Independent directors fulfilled their responsibilities and played
                                                                    Yes
their due role.

Minority shareholders have the chance to fully express their
opinion and desire and their legal rights and interests were fully Yes
protected.

In adjustment or alteration of the cash dividend policy, the
conditions and procedure were in compliance with regulations Inapplicable
and transparent.


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 or bonus shares or turn capital reserve into share capital for the reporting
period.


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

□ Applicable √ Inapplicable
No such in the reporting period.




                                                                   17
                                                              2015 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                               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.
During the reporting period, the actual situation of the corporate governance had no difference with the Company Law and the
requirements of the relevant regulations of the CSRC.


II. Litigations

Significant litigations and arbitrations
□ Applicable √ Inapplicable
No such cases in the reporting period.
Other litigations
□ Applicable √ Inapplicable


III. Media query

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


IV. Bankruptcy or Reorganization Events

□ Applicable √ Inapplicable
There Company was not involved in any bankruptcy or reorganization events in the reporting period.




                                                                  18
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V. Transaction in Assets

1. Purchase of assets

□ Applicable √ Inapplicable
There is no purchase of assets in the Company during the reporting period


2. Sale of assets

□ Applicable √ Inapplicable
There is no sale of assets in the Company during the reporting period.


3. Business combination

□ Applicable √ Inapplicable
There is no business combination in the Company during the reporting period.


VI. Implementation and Influence of Equity Incentive Plan of the Company

□ Applicable √ Inapplicable
There is no equity incentive plan and its implementation in the Company during the reporting period.


VII. Significant related-party transactions

1. Related-party transactions concerning routine operation

□ Applicable √ Inapplicable
There is no related-party transaction concerning routine operating in the Company during the reporting period.


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

□ Applicable √ Inapplicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the reporting period.


3. Related-party transitions with joint investments

□ Applicable √ Inapplicable
The Company was not involved in any related-party transaction with joint investments during the reporting period.


4. Credits and liabilities with related parties

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


                                                                 19
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


5. Other significant related-party transactions

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


VIII. Particulars about the non-operating occupation of funds by the controlling shareholder
and other related parties of the Company

□ Applicable √ Inapplicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties
during the reporting period.


IX. Particulars about significant contracts and their fulfillment

1. Particulars about trusteeship, contract and lease

(1) Trusteeship

□ Applicable √ Inapplicable
There was no any trusteeship of the Company in the reporting period.


(2) Contract

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


(3) Lease

□ Applicable √ Inapplicable
There was no any lease of the Company in the reporting period.


2. Guarantees provided by the company

□ Applicable √ Inapplicable
There was no any guarantee provided by the Company in the reporting period.


3. Other significant contracts

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


4. Other significant transactions

□ Applicable √ Inapplicable

                                                                 20
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There was no other significant transaction of the Company in the reporting period.


X. Commitments made by the Company or shareholders 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 situation of the Company during the reporting period.


XI. Particulars about engagement and disengagement of CPAs firm

Whether the semi-annual financial report had been audited?
□ Yes √ No
This semi-annual report is un-audited.


XII. Punishment and Rectification

□ Applicable √ Inapplicable
There was no any punishment and rectification of the Company in the reporting period.


XIII. Reveal of the delisting risks of illegal or violation

□ Applicable √ Inapplicable
There was no any delisting risk of illegal or violation of the Company in the reporting period.


XIV. Explanation about other significant matters

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




                                                                  21
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           Section VI. Changes in Share Capital and Particulars about

                                                                Shareholders

I. Changes in share capital

                                                                                                                                 Unit: Share

                                  Before this change                      Increase/decrease (+, -)                    After the change

                                                           Issuance            Capitalization
                                              Proportion               Bonus                                                     Proportion
                                 Amount                    of    new            of public       Other   Subtotal    Amount
                                                 (%)                   share                                                        (%))
                                                           shares              reserve fund

I.   Shares      subject   to
                                       900       0.00%                                                                    900        0.00%
trading moratorium

1. Other domestic shares               900       0.00%                                                                    900        0.00%

          Shares held by
                                       900       0.00%                                                                    900        0.00%
domestic individuals

II. Shares not subject to
                                503,599,100    100.00%                                                             503,599,100     100.00%
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 of shares            503,600,000    100.00%                                                             503,600,000     100.00%

Reasons for changes in share
□ Applicable √ Inapplicable
Approval of share changes
□ Applicable √ Inapplicable
Transfers in share changes
□ Applicable √ Inapplicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net
assets per share belonging to shareholder with ordinary share
□ Applicable √ Inapplicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable √ Inapplicable
Explanation of the changes in the sum of the shares and the structure of the shareholders and the structure of the assets as well as the
liabilities of the Company
□ Applicable √ Inapplicable


                                                                                                                                           22
                                                                                      2015 Semi-annual Report of Hubei Sanonda Co., Ltd.


II. Number of shareholders and shareholding

                                                                                                                                   Unit: Share

                                                                             Total     number      of     preferred
Total number of common shareholders at                                       shareholders that had restored
                                                                    27,386                                                                    0
the end of the reporting period                                              the voting right at the end of the
                                                                             reporting period (if any) (note 8)

             Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders

                                                                           Increase                                   Pledged or frozen shares
                                                             Number of        and      Number of Number of
                                                  Holding shareholding decrease shares held shares held
                                    Nature of
    Name of shareholder                          percentage at the end of of shares subject to          not subject   Status of   Number of
                                   shareholder
                                                    (%)      the reporting during        trading        to trading     shares       shares
                                                                period     reporting moratorium moratorium
                                                                             period

ANHUI GUJING GROUP State-owned
                                                    53.80% 270,954,022                              270,954,022 Pledged           114,000,000
COMPANY LIMITED                   corporation

                                  Foreign
UBS (LUXEMBOURG) S.A.                                2.29%    11,529,874                                11,529,874
                                  corporation

GREENWOODS            CHINA Foreign
                                                     2.01%    10,118,498                                10,118,498
ALPHA MASTER FUND                 corporation

                                  Foreign
NORGES BANK                                          1.68%     8,445,193                                 8,445,193
                                  corporation

                                  Foreign
KGI ASIA LIMITED                                     1.56%     7,879,404                                 7,879,404
                                  corporation

                                  Foreign
GAOLING FUND,L.P.                                    0.98%     4,943,544                                 4,943,544
                                  corporation

GOLDEN CHINA MASTER Foreign
                                                     0.75%     3,786,434                                 3,786,434
FUND                              corporation

                                  State-owned
CMS (HK) CO., LTD.                                   0.74%     3,742,042                                 3,742,042
                                  corporation

AGRICULTURE BANK OF
CHINA      -    FULLGOAL
ZHONGZHENG
STATE-OWNED                       Other              0.74%     3,723,030                                 3,723,030
ENTERPRISE            INDEX
GRADING         SECURITIES
INVESTMENT FUND

GUOTAI JUNAN                      Foreign
                                                     0.73%     3,666,775                                 3,666,775
SECURITIES(HONGKONG) corporation



                                                                                                                                             23
                                                                                  2015 Semi-annual Report of Hubei Sanonda Co., Ltd.


LIMITED

                                                Among the shareholders above, no affiliated relationship exists between the
                                                Company’s controlling shareholder—Anhui Gujing GROUP Company Limited—and
                                                other shareholders, nor they are parties acting in concert as defined in the
Explanation on associated relationship or
                                                Administrative Measures on Information Disclosure of Changes in Shareholding of
persons   acting   in   concert   among   the
                                                Listed Companies. As for other shareholders, the Company does not know whether
above-mentioned shareholders:
                                                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 top 10 common shareholders not subject to trading moratorium

                                                     Number of shares held not subject to trading                  Type of share
            Name of shareholder
                                                          moratorium at the end of the period              Type of share      Number

ANHUI     GUJING        GROUP     COMPANY                                                                 RMB ordinary
                                                                                            270,954,022                      270,954,022
LIMITED                                                                                                   share

                                                                                                          Domestically
UBS(LUXEMBOURG) S.A.                                                                         11,529,874 listed     foreign    11,529,874
                                                                                                          share

                                                                                                          Domestically
GREENWOODS CHINA ALPHA MASTER
                                                                                             10,118,498 listed     foreign    10,118,498
FUND
                                                                                                          share

                                                                                                          Domestically
NORGES BANK                                                                                   8,445,193 listed     foreign     8,445,193
                                                                                                          share

                                                                                                          Domestically
KGI ASIA LIMITED                                                                              7,879,404 listed     foreign     7,879,404
                                                                                                          share

                                                                                                          Domestically
GAOLING FUND,L.P.                                                                             4,943,544 listed     foreign     4,943,544
                                                                                                          share

                                                                                                          Domestically
GOLDEN CHINA MASTER FUND                                                                      3,786,434 listed     foreign     3,786,434
                                                                                                          share

                                                                                                          Domestically
CMS (HK) Co., Ltd.                                                                            3,742,042 listed     foreign     3,742,042
                                                                                                          share

Agriculture Bank of China - Fullgoal
                                                                                                          RMB ordinary
Zhongzheng State-owned Enterprise Index                                                       3,723,030                        3,723,030
                                                                                                          share
Grading Securities Investment Fund

GUOTAI JUNAN                                                                                              Domestically
                                                                                              3,666,775                        3,666,775
SECURITIES(HONGKONG) LIMITED                                                                              listed   foreign



                                                                                                                                       24
                                                                                       2015 Semi-annual Report of Hubei Sanonda Co., Ltd.


                                                                                                              share

                                                     Among the shareholders above, no affiliated relationship exists between the
Explanation    on     associated      relationship
                                                     Company’s controlling shareholder—Anhui Gujing GROUP Company Limited—and
among the top ten shareholders of tradable
                                                     other shareholders, nor they are parties acting in concert as defined in the
share not subject to trading moratorium, as
                                                     Administrative Measures on Information Disclosure of Changes in Shareholding of
well as among the top ten shareholders of
                                                     Listed Companies. As for other shareholders, the Company does not know whether
tradable   share    not   subject     to   trading
                                                     they are related parties or whether they belong to parties acting in concert as defined in
moratorium and top ten shareholders, or
                                                     the Administrative Measures on Information Disclosure of Changes in Shareholding of
explanation on acting-in-concert
                                                     Listed Companies.

Particular about shareholder participate in The company's largest shareholder Gujing Group since November 2014 launched a
the   securities    lending     and    borrowing "refinancing securities lending" business, currently the business ceased early April
business (if any) (note 4)                           2015, ended June 30, 2015 there are 45 million shares are being lent not yet in.

Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company carry
out an agreed buy-back in the reporting period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company had not
carried out any agreed buy-back in the reporting period.


III. Change of the controlling shareholder or the actual controller

Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
There was no any change of the controlling shareholder of the Company in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
There was no any change of the actual controller of the Company in the reporting period.


IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons

□ Applicable √ Inapplicable
Within the scope known to the Company, there was no any shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons.




                                                                                                                                            25
                                                                               2015 Semi-annual Report of Hubei Sanonda Co., Ltd.




                        Section VII. Situation of the Preferred Shares

□ Applicable √ Inapplicable
There was no any preferred share of the Company during the reporting period.




                                                                                                                              26
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited




       Section VIII. Directors, Supervisors, Senior Management Staffs

I. Changes in shareholding of directors, supervisors and senior management staffs

□ Applicable √ Inapplicable
There was no change in shareholding of directors, supervisors and senior management staffs, for the specific information please refer
to the 2014 Annual Report.


II. Changes in directors, supervisors and senior management staffs

□ Applicable √ Inapplicable
There was no change in directors, supervisors and senior management staffs, for the specific information please refer to the 2014
Annual Report.




                                                                 27
                                                              2015 Semi-annual Report of Anhui Gujing Distillery Company Limited




                                              IX. 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
                                                             30 Jun. 2015
                                                                                                                Unit: RMB Yuan

                  Item                                   Closing balance                          Opening balance

Current Assets:

   Monetary funds                                                     934,228,752.91                            718,460,442.79

   Settlement reserves

   Intra-Company lendings

   Financial assets measured by fair
value with the changes be included in                                        414,875.36                              303,919.60
the current gains and losses

   Derivative financial assets

   Notes receivable                                                   773,020,909.81                            505,893,430.66

   Accounts receivable                                                      5,771,113.56                            4,337,953.26

   Accounts paid in advance                                                59,137,284.25                         35,711,617.98

   Premiums receivable

   Reinsurance premiums receivable

   Receivable     reinsurance    contract
reserves

   Interest receivable                                                      2,369,097.21                            4,274,666.66

   Dividend receivable

   Other accounts receivable                                               10,369,201.23                            7,967,903.24

   Financial assets purchased under

                                                                 28
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agreements to resell

  Inventories                                      1,247,855,385.96                        1,227,182,774.09

  Assets divided available for sale

  Non-current assets due within 1 year

  Other current assets                             1,450,000,000.00                        1,501,552,476.11

Total current assets                               4,483,166,620.29                        4,005,685,184.39

Non-current assets:

  Loans by mandate and advances
granted

  Available-for-sale financial assets               257,362,590.00                            88,332,932.00

  Held-to-maturity investments

  Long-term accounts receivable

  Long-term equity investment

  Investing property                                 30,576,242.31                            32,074,356.24

  Fixed assets                                     1,723,053,180.88                        1,724,134,467.11

  Construction in progress                           39,159,122.86                            61,637,510.96

  Engineering materials

  Disposal of fixed assets

  Production biological assets

  Oil-gas assets

  Intangible assets                                 301,910,104.52                           306,488,782.60

  R&D expense

  Goodwill

  Long-term deferred expenses                       136,084,493.51                           131,921,179.23

  Deferred income tax assets                         62,861,129.41                            63,243,753.50

  Other non-current assets

Total of non-current assets                        2,551,006,863.49                        2,407,832,981.64

Total assets                                       7,034,173,483.78                        6,413,518,166.03

Current liabilities:

  Short-term borrowings

  Borrowings from Central Bank

  Customer bank deposits and due to
banks and other financial institutions

  Intra-Company borrowings

  Financial liabilities measured by fair

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 value with the changes be included in
 the current gains and losses

  Derivative financial liabilities

  Notes payable                                        294,084,023.18                           258,452,214.00

  Accounts payable                                     395,371,547.72                           404,634,196.58

  Accounts received in advance                         590,946,715.63                           377,503,471.86

  Financial assets sold for repurchase

  Handling charges and commissions
payable

  Employee’s compensation payable                     186,861,937.45                           220,198,521.28

  Tax payable                                          314,485,972.33                           468,679,523.63

  Interest payable

  Dividend payable                                     100,720,000.00

  Other accounts payable                               572,362,971.96                           456,572,505.42

  Reinsurance premiums payable

  Insurance contract reserves

  Payables     for   acting   trading    of
securities

  Payables for acting underwriting of
securities

  Liabilities divided available for sale

  Non-current liabilities due within 1
year

  Other current liabilities

Total current liabilities                             2,454,833,168.27                        2,186,040,432.77

Non-current liabilities:

  Long-term borrowings

  Bonds payable

  Of which: preferred shares

  Perpetual capital securities

  Long-term payables

  Long-term payroll payables

  Specific payables

  Estimated liabilities

  Deferred income                                       39,042,134.11                            40,839,961.86


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  Deferred income tax liabilities                                 24,040,581.94                               5,586,793.44

  Other non-current liabilities

Total non-current liabilities                                     63,082,716.05                              46,426,755.30

Total liabilities                                            2,517,915,884.32                          2,232,467,188.07

Owners’ equity

  Share capital                                               503,600,000.00                            503,600,000.00

  Other equity instruments

  Of which: preferred shares

  Perpetual capital securities

  Capital reserves                                           1,294,938,493.19                          1,294,938,493.19

  Less: Treasury stock

  Other comprehensive income                                      72,091,421.40                              16,669,604.07

  Specific reserves

  Surplus reserves                                            256,902,260.27                            256,902,260.27

  Provisions for general risks

  Retained profits                                           2,388,725,424.60                          2,108,940,620.43

Total equity attributable to owners of
                                                             4,516,257,599.46                          4,181,050,977.96
the Company

Minority interests

Total owners’ equity                                        4,516,257,599.46                          4,181,050,977.96

Total liabilities and owners’ equity                        7,034,173,483.78                          6,413,518,166.03


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


Chief of the accounting division: Zhu Jiafeng


2. Balance sheet of the Company

                                                                                                        Unit: RMB Yuan

                     Item                       Closing balance                           Opening balance

Current Assets:

  Monetary funds                                              839,382,496.44                            593,001,536.78

   Financial assets measured by fair
value with the changes be included in                               414,875.36                                 278,509.60
the current gains and losses

  Derivative financial assets

  Notes receivable                                            429,319,763.55                            286,449,264.42

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  Accounts receivable                                 1,286,945.79                             1,608,829.64

  Accounts paid in advance                           15,439,366.18                             5,506,676.65

  Interest receivable                                 2,369,097.21                             4,274,666.66

  Dividend receivable

  Other accounts receivable                         121,966,237.41                           124,826,309.55

  Inventories                                      1,222,956,081.65                        1,197,978,799.15

  Assets divided available for sale

  Non-current assets due within 1 year

  Other current assets                             1,450,000,000.00                        1,497,612,148.31

Total current assets                               4,083,134,863.59                        3,711,536,740.76

Non-current assets:

  Available-for-sale financial assets               257,362,590.00                            88,332,932.00

  Held-to-maturity investments

  Long-term accounts receivable                       4,931,559.16                             4,793,366.46

  Long-term equity investment                       338,089,408.32                           338,089,408.32

  Investing property                                 28,723,841.91                            30,151,635.36

  Fixed assets                                     1,533,783,287.82                        1,525,364,298.59

  Construction in progress                           32,638,002.48                            61,531,773.90

  Engineering materials

  Disposal of fixed assets

  Production biological assets

  Oil-gas assets

  Intangible assets                                 189,373,190.84                           192,318,384.28

  R&D expense

  Goodwill

  Long-term deferred expenses                       136,084,493.51                           131,864,366.43

  Deferred income tax assets                         35,322,336.06                            35,421,614.18

  Other non-current assets

Total of non-current assets                        2,556,308,710.10                        2,407,867,779.52

Total assets                                       6,639,443,573.69                        6,119,404,520.28

Current liabilities:

  Short-term borrowings

  Financial liabilities measured by fair
value with the changes be included in
the current gains and losses

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  Derivative financial liabilities

  Notes payable                                      40,660,023.18                            93,602,214.00

  Accounts payable                                  291,957,561.50                           402,837,653.24

  Accounts received in advance                     1,553,126,425.93                        1,064,055,921.66

  Employee’s compensation payable                   75,082,480.52                            79,329,070.21

  Tax payable                                       163,389,525.54                           168,778,299.92

  Interest payable

  Dividend payable                                  100,720,000.00

  Other accounts payable                            283,879,458.04                           255,065,310.80

  Liabilities divided available for sale

  Non-current liabilities due within 1
year

  Other current liabilities

Total current liabilities                          2,508,815,474.71                        2,063,668,469.83

Non-current liabilities:

  Long-term borrowings

  Bonds payable

  Of which: preferred shares

  Perpetual capital securities

  Long-term payables

  Long-term payroll payables

  Specific payables

  Estimated liabilities

  Deferred income                                    39,127,604.22                            40,839,961.86

  Deferred income tax liabilities                    24,031,995.12                             5,584,087.19

  Other non-current liabilities

Total non-current liabilities                        63,159,599.34                            46,424,049.05

Total liabilities                                  2,571,975,074.05                        2,110,092,518.88

Owners’ equity:

  Share capital                                     503,600,000.00                           503,600,000.00

  Other equity instruments

  Of which: preferred shares

  Perpetual capital securities

  Capital reserves                                 1,247,162,107.35                        1,247,162,107.35


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  Less: Treasury stock

  Other comprehensive income                             72,091,421.40                              16,669,604.07

  Specific reserves

  Surplus reserves                                      251,800,000.00                           251,800,000.00

  Retained profits                                     1,992,814,970.89                        1,990,080,289.98

Total owners’ equity                                  4,067,468,499.64                        4,009,312,001.40

Total liabilities and owners’ equity                  6,639,443,573.69                        6,119,404,520.28


3. Consolidated income statement

                                                                                                 Unit: RMB Yuan

                      Item                 Jan.-Jun. 2015                           Jan.-Jun 2014

I. Total operating revenues                            2,713,042,828.92                        2,390,158,949.76

Including: Sales income                                2,713,042,828.92                        2,390,158,949.76

         Interest income

         Premium income

         Handling charge and commission
income

II. Total operating cost                               2,247,031,817.63                        1,971,374,239.07

Including: Cost of sales                                827,578,527.59                           734,083,360.31

         Interest expenses

         Handling charge and commission
expenses

         Surrenders

         Net claims paid

         Net amount withdrawn for the
insurance contract reserve

         Expenditure on policy dividends

         Reinsurance premium

         Taxes and associate charges                    392,182,734.37                           324,862,025.08

       Selling and distribution expenses                794,226,823.89                           706,159,566.91

       Administrative expenses                          237,926,770.64                           239,125,781.91

       Financial expenses                                   -8,593,975.74                           -32,364,892.13

       Asset impairment loss                                3,710,936.88                              -491,603.01

Add: Gain/(loss) from change in fair
                                                               40,432.58                                 7,270.00
value (―-‖ means loss)

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     Gain/(loss) from investment (―-‖
                                                            38,298,172.94                             54,652,112.80
means loss)

Including: share of profits in associates
and joint ventures

Foreign exchange gains (―-‖ means loss)

III. Business profit (―-‖ means loss)                    504,349,616.81                            473,444,093.49

     Add: non-operating income                               9,984,586.51                             12,858,123.06

     Of which: gains from non-current
                                                                82,953.29                                286,406.47
asset disposal

     Less: non-operating expense                             1,279,224.88                              1,554,085.61

     Of which: losses from non-current
                                                               644,420.16                              1,389,957.09
asset disposal

IV. Total profit (―-‖ means loss)                        513,054,978.44                            484,748,130.94

     Less: Income tax expense                              132,550,174.27                            126,941,933.36

V. Net profit (―-‖ means loss)                           380,504,804.17                            357,806,197.58

     Attributable       to    owners    of   the
                                                           380,504,804.17                            357,806,197.58
Company

     Minority shareholders’ income

VI. After-tax net amount of other
                                                            55,421,817.33                              2,983,285.62
comprehensive incomes

     After-tax    net        amount    of other
comprehensive incomes attributable to                       55,421,817.33                              2,983,285.62
owners of the Company

         (I) Other comprehensive incomes
that will not be reclassified into gains and
losses

           1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement

           2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method

         (II) Other comprehensive incomes
that will be reclassified into gains and                    55,421,817.33                              2,983,285.62
losses

           1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
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under the equity method

           2. Gains and losses on fair
value    changes      of       available-for-sale                      55,421,817.33                             2,983,285.62
financial assets

           3.    Gains         and     losses   on
reclassifying                   held-to-maturity
investments        into        available-for-sale
financial assets

           4. Effective hedging gains and
losses on cash flows

           5. Foreign-currency financial
statement translation difference

           6. Other

     After-tax     net        amount    of other
comprehensive incomes attributable to
minority shareholders

VII. Total comprehensive incomes                                    435,926,621.50                           360,789,483.20

     Attributable        to    owners     of    the
                                                                    435,926,621.50                           360,789,483.20
Company

     Attributable              to        minority
shareholders

VIII. Earnings per share

     (I) Basic earnings per share                                              0.760                                     0.71

     (II) Diluted earnings per share                                           0.760                                     0.71


4. Income statement of the Company

                                                                                                             Unit: RMB Yuan

                    Item                              Jan.-Jun. 2015                            Jan.-Jun 2014

I. Total sales                                                     1,526,161,277.67                        1,320,382,051.92

     Less: cost of sales                                            849,408,915.00                           749,212,509.40

     Business taxes and surcharges                                  370,306,018.23                           307,286,754.62

     Distribution expenses                                             49,930,659.26                            50,515,240.37

     Administrative expenses                                        162,304,060.52                           159,555,096.01

     Financial costs                                                   -8,083,219.69                            -27,114,146.94

     Impairment loss                                                    2,948,211.17                              -423,137.26

     Add: gain/(loss) from change in
                                                                          40,432.58                                  3,635.00
fair value (―-‖ means loss)

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     Gain/(loss) from investment (―-‖
                                                          37,697,274.33                             54,206,211.10
means loss)

     Of which: income form investment
on associates and joint ventures

II. Business profit (―-‖ means loss)                   137,084,340.09                            135,559,581.82

     Add: non-business income                              7,222,891.82                              7,100,407.46

     Of which: gains from non-current
asset disposal

     Less: non-business expense                               74,531.37                                616,845.02

     Of which: losses from non-current
                                                              70,087.08                                945,068.04
asset disposal

III. Total profit     (―-‖ means loss)                 144,232,700.54                            142,043,144.26

     Less: income tax expense                             40,778,019.63                             40,273,822.54

IV. Net profit      (―-‖ means loss)                   103,454,680.91                            101,769,321.72

V. After-tax net amount of other
                                                          55,421,817.33                              2,983,285.62
comprehensive incomes

        (I)        Other      comprehensive
incomes that will not be reclassified
into gains and losses

              1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement

              2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method

        (II)        Other     comprehensive
incomes that will be reclassified into                    55,421,817.33                              2,983,285.62
gains and losses

              1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method

              2. Gains and losses on fair
value changes of available-for-sale                       55,421,817.33                              2,983,285.62
financial assets

              3.   Gains    and    losses   on
reclassifying                held-to-maturity
investments         into    available-for-sale

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financial assets

            4. Effective hedging gains
and losses on cash flows

            5. Foreign-currency financial
statement translation difference

            6. Other

VI. Total comprehensive incomes                               158,876,498.24                           104,752,607.34

VII. Earnings per share

     (I) Basic earnings per share                                      0.210                                     0.20

     (II) Diluted earnings per share                                   0.210                                     0.20


5. Consolidated cash flow statement

                                                                                                       Unit: RMB Yuan

                   Item                         Jan.-Jun. 2015                            Jan.-Jun 2014

I. Cash flows from operating activities:

     Cash      received    from    sale   of
                                                             2,825,242,242.74                        2,427,634,003.82
commodities and rendering of service

     Net increase of deposits from
customers and dues from banks

     Net increase of loans from the
central bank

     Net increase of funds borrowed
from other financial institutions

     Cash received from premium of
original insurance contracts

     Net cash received from reinsurance
business

     Net increase of deposits of policy
holders and investment fund

     Net increase of dispose of the
financial assets measured by fair value
with the changes be included in the
current gains and losses

     Cash      received    from     interest,
handling charges and commissions

     Net increase of intra-Company
borrowings


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     Net increase of funds in repurchase
business

     Tax refunds received                                                                           590,000.00

     Other cash received relating to
                                                       175,019,524.21                           213,011,013.81
operating activities

Subtotal of cash inflows from operating
                                                      3,000,261,766.95                        2,641,235,017.63
activities

     Cash paid for goods and services                  709,413,298.38                           730,037,605.84

     Net increase of customer lendings
and advances

     Net increase of funds deposited in
the central bank and amount due from
banks

     Cash for paying claims of the
original insurance contracts

     Cash for paying interest, handling
charges and commissions

     Cash for paying policy dividends

     Cash paid to and for employees                    517,459,277.00                           527,351,397.79

     Various taxes paid                               1,048,663,427.74                        1,014,623,162.62

     Other cash payment relating to
                                                       388,508,106.00                           445,435,903.82
operating activities

Subtotal     of    cash   outflows     from
                                                      2,664,044,109.12                        2,717,448,070.07
operating activities

Net cash flows from operating activities               336,217,657.83                           -76,213,052.44

II. Cash flows from investing activities:

     Cash received from withdrawal of
                                                      1,359,031,928.76                          980,093,922.21
investments

     Cash received from return on
                                                        38,298,172.94                            54,652,112.80
investments

     Net cash received from disposal of
fixed assets, intangible assets and other                  107,750.00                               286,406.47
long-term assets

     Net cash received from disposal of
subsidiaries or other business units

     Other cash received relating to
                                                           500,000.00                             1,100,000.00
investing activities

Subtotal of cash inflows from investing               1,397,937,851.70                        1,036,132,441.48

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activities

       Cash paid to acquire fixed assets,
intangible assets and other long-term                             109,798,840.51                           220,818,632.14
assets

       Cash paid for investment                                  1,402,588,358.90                        1,020,029,260.00

       Net increase of pledged loans

       Net      cash         paid      to     acquire
subsidiaries and other business units

       Other cash payments relating to
investing activities

Subtotal        of     cash     outflows        from
                                                                 1,512,387,199.41                        1,240,847,892.14
investing activities

Net cash flows from investing activities                          -114,449,347.71                         -204,715,450.66

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 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
financing activities

Net cash flows from financing activities

IV. Effect of foreign exchange rate

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changes on cash and cash equivalents

V. Net increase in cash and cash
                                                              221,768,310.12                          -280,928,503.10
equivalents

     Add: Opening balance of cash and
                                                              682,360,442.79                         1,306,930,710.96
cash equivalents

VI. Closing balance of cash and cash
                                                              904,128,752.91                         1,026,002,207.86
equivalents


6. Cash flow statement of the Company

                                                                                                    Unit: RMB Yuan
                    Item                        Jan.-Jun. 2015                            Jan.-Jun 2014

I. Cash flows from operating activities:

     Cash     received     from   sale     of
                                                             1,700,083,632.03                        1,327,478,616.09
commodities and rendering of service

     Tax refunds received

     Other cash received relating to
                                                                 88,556,807.56                         127,214,689.74
operating activities

Subtotal of cash inflows from operating
                                                             1,788,640,439.59                        1,454,693,305.83
activities

     Cash paid for goods and services                         551,870,710.00                           525,512,650.29

     Cash paid to and for employees                           240,816,560.34                           252,876,294.81

     Various taxes paid                                       558,464,417.24                           503,939,848.51

     Other cash payment relating to
                                                                 66,678,887.51                            75,252,706.56
operating activities

Subtotal     of    cash    outflows      from
                                                             1,417,830,575.09                        1,357,581,500.17
operating activities

Net cash flows from operating activities                      370,809,864.50                              97,111,805.66

II. Cash flows from investing activities:

     Cash received from retraction of
                                                             1,312,651,013.05                          980,093,922.21
investments

     Cash received from return on
                                                                 37,697,274.33                            54,206,211.10
investments

     Net cash received from disposal of
fixed assets, intangible assets and other                                                                   145,352.00
long-term assets

     Net cash received from disposal of
subsidiaries or other business units


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       Other cash received relating to
                                                                     500,000.00                             1,100,000.00
investing activities

Subtotal of cash inflows from investing
                                                                1,350,848,287.38                        1,035,545,485.31
activities

       Cash paid to acquire fixed assets,
intangible assets and other long-term                            106,844,334.84                           218,463,253.40
assets

       Cash paid for investment                                 1,360,032,857.38                        1,020,020,730.00

       Net      cash         paid     to     acquire
subsidiaries and other business units

       Other cash payments relating to
investing activities

Subtotal        of     cash     outflows       from
                                                                1,466,877,192.22                        1,238,483,983.40
investing activities

Net cash flows from investing activities                         -116,028,904.84                         -202,938,498.09

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 dividends or profit

         Other cash payments relating to
financing activities

Sub-total       of     cash     outflows       from
financing activities

Net cash flows from financing activities

IV. Effect of foreign exchange rate
changes on cash and cash equivalents

V. Net increase in cash and cash
                                                                 254,780,959.66                          -105,826,692.43
equivalents


                                                           42
                                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


       Add: Opening balance of cash and
                                                                                       584,601,536.78                                 1,040,360,357.51
cash equivalents

VI. Closing balance of cash and cash
                                                                                       839,382,496.44                                  934,533,665.08
equivalents


7. Consolidated Statement of Changes in Owners’ Equity

Jan.-Jun. 2015
                                                                                                                                       Unit: RMB Yuan

                                                                                      Jan.-Jun. 2015

                                                         Equity attributable to owners of the Company

                                           Other equity
                                           instruments
                                                                                      Other                                           Minorit    Total
         Item                                   Perpet
                                                                            Less:                                 General
                             Share               ual             Capital              compre Specific Surplus               Retaine      y      owners’
                                       Prefer                              treasury                                risk
                             capital            capita           reserve              hensive reserve reserve               d profit interests equity
                                        red              Other              stock                                 reserve
                                                  l                                   income
                                       shares
                                                securi
                                                 ties

I. Balance at the 503,60                                         1,294,9                                                    2,108,9             4,181,0
                                                                                      16,669,           256,902
end          of        the 0,000.                                38,493.                                                    40,620.             50,977.
                                                                                       604.07           ,260.27
previous year                    00                                   19                                                         43                  96

     Add: change of
accounting policy

     Correction        of
errors in previous
periods

     Business
combination under
the same control

     Other

                             503,60                              1,294,9                                                    2,108,9             4,181,0
II. Balance at the                                                                    16,669,           256,902
                             0,000.                              38,493.                                                    40,620.             50,977.
period-begin                                                                           604.07           ,260.27
                                 00                                   19                                                         43                  96

III.          Increase/
decrease          in   the                                                            55,421,                               279,784             335,206
period (―-‖ means                                                                    817.33                               ,804.17             ,621.50
decrease)

     (I) Total amount                                                                 55,421,                               380,504             435,926
of                     the                                                             817.33                               ,804.17             ,621.50

                                                                                43
                          2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


comprehensive
income

     (II) Capital paid
in and reduced by
owners

1. Common shares
invested     by     the
shareholders

2. Capital invested
by the owners of
other            equity
instruments

3.     Amounts      of
share-based
payments
recognized           in
owners’ equity

4. Others

                                                                  -100,72          -100,72
     (III)       Profit
                                                                  0,000.0          0,000.0
distribution
                                                                        0                0

1. Appropriations
to surplus reserves

2. Appropriations
to     general     risk
provisions

3. Appropriations                                                 -100,72          -100,72
to      owners      (or                                           0,000.0          0,000.0
shareholders)                                                           0                0

4. Other

     (IV)     Internal
carry-forward       of
owners’ equity

1. New increase of
capital (or share
capital)          from
capital          public
reserves

2. New increase of
capital (or share


                             44
                                                                           2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


capital)           from
surplus reserves

3. Surplus reserves
for      making      up
losses

4. Other

  (V)           Specific
reserve

1. Withdrawn for
the period

2. Used in the
period

  (VI) Other

                           503,60                              1,294,9                                                   2,388,7               4,516,2
IV.             Closing                                                             72,091,          256,902
                           0,000.                              38,493.                                                   25,424.               57,599.
balance                                                                              421.40          ,260.27
                               00                                   19                                                        60                    46

Jan.-Jun. 2014
                                                                                                                                     Unit: RMB Yuan

                                                                                    Jan.-Jun. 2014

                                                       Equity attributable to owners of the Company

                                         Other equity
                                         instruments
                                                                                                                                    Minorit
                                              Perpet                                Other                                                       Total
          Item                                                            Less:                                General                 y
                           Share                               Capital              compre Specific Surplus              Retaine               owners’
                                               ual                                                                                  interest
                                     Prefer                              treasury                               risk
                           capital                             reserve              hensive reserve reserve              d profit              equity
                                              capita                                                                                   s
                                      red              Other              stock                                reserve
                                                l                                   income
                                     shares
                                              securi
                                               ties

I. Balance at the 503,60                                       1,294,9                                                   1,688,1               3,742,7
                                                                                    -843,22          256,902
end        of       the 0,000.                                 38,493.                                                   58,733.               56,257.
                                                                                       9.50          ,260.27
previous year                  00                                   19                                                        09                    05

  Add: change of
accounting policy

  Correction         of
errors in previous
periods

  Business
combination under
the same control


                                                                              45
                                               2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


     Other

                            503,60   1,294,9                                            1,688,1         3,742,7
II. Balance at the                                     -843,22        256,902
                            0,000.   38,493.                                            58,733.         56,257.
period-begin                                              9.50        ,260.27
                               00        19                                                 09               05

III.         Increase/
decrease      in     the                               17,512,                         420,781          438,294
period (―-‖ means                                    833.57                           ,887.34         ,720.91
decrease)

     (I) Total amount
of                   the                               17,512,                         597,041          614,554
comprehensive                                          833.57                           ,887.34         ,720.91
income

     (II) Capital paid
in and reduced by
owners

1. Common shares
invested     by      the
shareholders

2. Capital invested
by the owners of
other            equity
instruments

3.     Amounts        of
share-based
payments
recognized            in
owners’ equity

4. Others

                                                                                       -176,26          -176,26
     (III)         Profit
                                                                                        0,000.0         0,000.0
distribution
                                                                                             0                0

1. Appropriations
to surplus reserves

2. Appropriations
to     general       risk
provisions

3. Appropriations                                                                      -176,26          -176,26
to      owners       (or                                                                0,000.0         0,000.0
shareholders)                                                                                0                0

4. Other


                                                  46
                                                                         2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


  (IV)       Internal
carry-forward       of
owners’ equity

1. New increase of
capital (or share
capital)          from
capital          public
reserves

2. New increase of
capital (or share
capital)          from
surplus reserves

3. Surplus reserves
for      making     up
losses

4. Other

  (V)        Specific
reserve

1. Withdrawn for
the period

2. Used in the
period

  (VI) Other

                          503,60                           1,294,9                                                      2,108,9             4,181,0
IV.          Closing                                                              16,669,           256,902
                          0,000.                           38,493.                                                      40,620.             50,977.
balance                                                                            604.07             ,260.27
                             00                                   19                                                           43                96


8. Statement of changes in owners’ equity of the Company

Jan.-Jun. 2015
                                                                                                                                    Unit: RMB Yuan

                                                                                  Jan.-Jun. 2015

                                    Other equity instruments

                                               Perpetu                                        Other
                                                                                    Less:                                                   Total
          Item             Share                  al                   Capital               comprehe Specific      Surplus     Retaine
                                    Preferre                                      treasury                                                 owners’
                          capital              capital    Other        reserve                nsive       reserve    reserve    d profit
                                    d shares                                       stock                                                   equity
                                               securiti                                       income
                                                 es

I. Balance at the 503,600,                                         1,247,162                 16,669,60              251,800,0 1,990,0 4,009,312
end of the previous        000.00                                       ,107.35                    4.07                 00.00 80,289.       ,001.40

                                                                             47
                                        2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


year                                                                                          98

     Add: change of
accounting policy

     Correction       of
errors in previous
periods

     Other

                                                                                         1,990,0
II. Balance at the 503,600,          1,247,162          16,669,60           251,800,0              4,009,312
                                                                                         80,289.
period-begin                000.00     ,107.35               4.07                00.00               ,001.40
                                                                                              98

III.         Increase/
decrease      in     the                                55,421,81                        2,734,6 58,156,49
period (―-‖ means                                          7.33                          80.91        8.24
decrease)

     (I) Total amount
of                   the                                55,421,81                        103,454 158,876,4
comprehensive                                                7.33                        ,680.91      98.24
income

     (II) Capital paid
in and reduced by
owners

1. Common shares
invested     by      the
shareholders

2. Capital invested
by the owners of
other          equity
instruments

3.     Amounts        of
share-based
payments
recognized            in
owners’ equity

4. Others

                                                                                         -100,72
     (III)         Profit                                                                          -100,720,
                                                                                         0,000.0
distribution                                                                                         000.00
                                                                                               0

1. Appropriations
to surplus reserves

2. Appropriations                                                                        -100,72 -100,720,

                                           48
                                                                        2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


to     general       risk                                                                                                      0,000.0      000.00
provisions                                                                                                                            0

3. Appropriations
to     owners         (or
shareholders)

4. Other

     (IV)      Internal
carry-forward         of
owners’ equity

1. New increase of
capital (or share
capital)            from
capital            public
reserves

2. New increase of
capital (or share
capital)            from
surplus reserves

3. Surplus reserves
for        making     up
losses

4. Other

     (V)       Specific
reserve

1. Withdrawn for
the period

2. Used in the
period

                                                                                                                               1,992,8
                            503,600,                                 1,247,162              72,091,42              251,800,0              4,067,468
     (VI) Other                                                                                                                14,970.
                             000.00                                    ,107.35                    1.40                 00.00                ,499.64
                                                                                                                                    89

Jan.-Jun. 2014
                                                                                                                                  Unit: RMB Yuan

                                                                                 Jan.-Jun. 2014

                                       Other equity instruments

                                                  Perpetu                                    Other
                                                                                   Less:                                                    Total
            Item             Share                   al               Capital               comprehe Specific      Surplus     Retaine
                                       Preferre                                  treasury                                                 owners’
                            capital               capital    Other    reserve                nsive       reserve    reserve    d profit
                                       d shares                                   stock                                                    equity
                                                  securiti                                   income
                                                    es

                                                                            49
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I. Balance at the                                                                          1,589,2
                            503,600,   1,247,162          -843,229.           251,800,0              3,590,996
end of the previous                                                                        77,915.
                             000.00      ,107.35                 50                00.00               ,792.85
year                                                                                            00

     Add: change of
accounting policy

     Correction       of
errors in previous
periods

     Other

                                                                                           1,589,2
II. Balance at the 503,600,            1,247,162          -843,229.           251,800,0              3,590,996
                                                                                           77,915.
period-begin                 000.00      ,107.35                 50                00.00               ,792.85
                                                                                                00

III.         Increase/
decrease      in     the                                  17,512,83                        400,802 418,315,2
period (―-‖ means                                            3.57                        ,374.98      08.55
decrease)

     (I) Total amount
of                   the                                  17,512,83                        577,062 594,575,2
comprehensive                                                  3.57                        ,374.98      08.55
income

     (II) Capital paid
in and reduced by
owners

1. Common shares
invested     by      the
shareholders

2. Capital invested
by the owners of
other          equity
instruments

3.     Amounts        of
share-based
payments
recognized            in
owners’ equity

4. Others

                                                                                           -176,26
     (III)         Profit                                                                            -176,260,
                                                                                           0,000.0
distribution                                                                                           000.00
                                                                                                 0

1. Appropriations

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to surplus reserves

2. Appropriations                                                                            -176,26
                                                                                                       -176,260,
to     general      risk                                                                     0,000.0
                                                                                                         000.00
provisions                                                                                        0

3. Appropriations
to     owners        (or
shareholders)

4. Other

     (IV)      Internal
carry-forward         of
owners’ equity

1. New increase of
capital (or share
capital)            from
capital          public
reserves

2. New increase of
capital (or share
capital)            from
surplus reserves

3. Surplus reserves
for        making    up
losses

4. Other

     (V)       Specific
reserve

1. Withdrawn for
the period

2. Used in the
period

                                                                                             1,990,0
                           503,600,      1,247,162          16,669,60           251,800,0              4,009,312
     (VI) Other                                                                              80,289.
                            000.00         ,107.35               4.07                00.00               ,001.40
                                                                                                 98


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 RMB 377,167,700 and state-owned shares of 155,000,000
shares and considered Anhui Gujing Company as the only promoter. The registration place was
Haozhou Anhui China. The Company was established on 5 March 1996 by document of WZM
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(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 Company) 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 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 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 equity, the share without
restrict condition are 111,500,000, representing 47.45% of total equity.
The Company issued 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.



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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. 2015, the Company issued 503,600,000 shares.
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 Company Co., Ltd in China.
Financial statement of the Company will be released on 20 Aug. 2015 by the board of directors.
According to the articles of the Company, the financial statement will be submitted to the Annual
General Meeting for review.
IV. Basis for the preparation of financial statements
1. Basis for the preparation
With the going-concern assumption as the basis and based on transactions and other events that
actually occurred, the Company prepared financial statements in accordance with the ASBE-Basic
Standard (No. 33 issued decreed by Ministry of Finance and No. 76 revised decreed by Ministry of
Finance), the 41 specific standards of Accounting Standards for Business Enterprises issued by
Ministry of Finance of the PRC on 15 Feb 2006 and revised thereafter, Application Guidance of
Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business
Enterprises and other regulations(hereinafter referred to as ―the Accounting Standards for Business
Enterprises‖, ―China Accounting Standards‖ or ―CAS‖), Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting
(revised in 2014) by China Securities Regulatory Commission.
In line with relevant rules of ASBE, financial accounting of the Company is based on accrual

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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.
V. 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 Company on 30
June 2015, operating results, cash flow from January to June in 2015 and other relevant information.
The financial statement of the Company 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 2014).
VI. 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. Operating cycle
Normal operating cycle refers to the period from the Company purchases the assets for processing
to realize the cash or cash equivalents. The Company regards 12 months as an operating cycle and
regards which as the partition criterion of the mobility of the assets and liabilities.
3. Bookkeeping base currency
Renminbi is the dominant currency used in the economic circumstances where the Company and its
domestic subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use
Renminbi as their bookkeeping base currency. And the Company adopted Renminbi as the
bookkeeping base currency when preparing the financial statements for the reporting period.
4. Accounting treatment methods for business combinations under the same control and those
not under the same control
The term ―business combinations‖ refers to a transaction or event bringing together two or more
separate enterprises into one reporting entity. Business combinations are classified into the business
combinations under the same control and the business combinations not under the same control.
(1) Accounting treatment of the business combination that is under the same control
A business combination involving enterprises under common control is a business combination in

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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 Company 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 statement of the Company, 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 Company acts as the combination party, the
cost of a business combination paid by the acquirer is the aggregate of the fair value at the
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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 Company 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 Company, 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 IV. 5 (2)), to judge the multiple exchange transactions
whether they are the ―package deal‖. If it belong to the ―package deal‖ in reference to the preceding
paragraphs of this section and the Notes described in IV. 13 ―long-term investment‖ accounting
treatment, if it does not belong to the ―package deal‖ to distinguish the individual financial
statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the sum of the book value and new investment cost of the
Company holds in the acquiree before the acquiring date shall be considered as initial cost of the
investment. Other related comprehensive gains in relation to the equity interests that the Company
holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree
directly disposes the related assets or liabilities when disposing the investment (that is, except for
the corresponding share in the changes in the net liabilities or assets with a defined benefit plan

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measured at the equity method arising from the acquiree’s re-measurement, the others shall be
transferred into current investment gains).
In the Company’s consolidated financial statements, as for the equity interests that the Company
holds in the acquiree before the acquiring date, they shall be re-measured according to their fair
values at the acquiring date; the positive difference between their fair values and carrying amounts
shall be recorded into the investment gains for the period including the acquiring date. Other related
comprehensive gains in relation to the equity interests that the Company holds in the acquiree
before the acquiring date shall be treated on the same basis as the acquiree directly disposes the
related assets or liabilities when disposing the investment (that is, except for the corresponding
share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity
method arising from the acquiree’s re-measurement, the others shall be transferred into current
investment gains on the acquiring date).
5. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term
―control‖ is the power of the Company upon an investee, with which it can take part in relevant
activities of the investee to obtain variable returns and is able to influence the amount of returns.
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries. A subsidiary is an enterprise or entity controlled by the Company.
(2) Methods for preparing the consolidated financial statements
The Company 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 cash flow, in addition, opening balance of the consolidated balance sheet
shall be adjusted.

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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-Company balances
and transactions, and any unrealized profit or loss arising from intra-Company transactions, are
eliminated in preparing the consolidated financial statements. Unrealized losses resulting from
intra-Company 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 Company 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, 13 ―Long-term Equity Investment‖ or Note IV, 9 ―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 conditions and the
economic impact of one or more of cases, usually indicates that several transactions should be
accounted for as a package deal: ① these transactions are considered simultaneously, or in the case
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of mutual influence made, ② these transactions as a whole in order to achieve a complete business
results; ③ the occurrence of a transaction depends on occurs at least one other transaction ; ④ a
transaction look alone is not economical, but when considered together with other transaction is
economical. If they do 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
long-term equity investments‖ (see Note IV. 13. (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.
6. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The
Company classifies joint arrangements into joint operations and joint ventures according to its
rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the
Company enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers
to a joint arrangement where the Company is only entitled to the net assets of the arrangement.
The Company’s investments in joint ventures are measured at the equity method according to the
accounting policies mentioned in Note IV. 13 (2) ② ―Long-term equity investments measured at
the equity method‖.
For a joint operation, the Company, as a joint operator, recognizes the assets and liabilities that it
holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne
liabilities according to the Company’s stake in the joint operation; recognizes the income from sale
of the Company’s share in the output of the joint operation; recognizes the income from sale of the
joint operation’s outputs according to the Company’s stake in it; and recognizes the expense solely
incurred to the Company and the expense incurred to the joint operation according to the
Company’s stake in it.
When the Company, as a joint operator, transfers or sells assets (the assets not constituting business,
the same below) to the joint operation, or purchases assets from the joint operation, before the assets
are sold to a third party, the Company only recognizes the share of the other joint operators in the
gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in                                                    59
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Accounting Standard No. 8 for Business Enterprises—Asset Impairment>, the Company shall fully
recognizes the loss for a transfer or sale of assets to a joint operation; and shall recognize the loss
according to its stake in the joint operation for a purchase of assets from the joint operation.
7. Recognition standard for cash and cash equivalents
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.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency 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) Accounting treatments for translation of foreign currency monetary items and
non-monetary items
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 ① those 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, ② hedging accounting, the exchange difference related to
hedging instruments for the purpose of net oversea operating investment is recorded in the
comprehensive income till the date of disposal and recognized in profit or loss of the period;
exchange difference from changes of other account balance of foreign currency monetary items, ③
available-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.
9. Financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant
financial instrument contract. Financial assets and liabilities are measured at fair value in initial

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recognition. As for the financial assets and liabilities measured at fair value of which changes are
recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains
and losses; and the dealing expenses on other kinds of financial assets and liabilities are included in
the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay
for transferring a liability in an orderly transaction on the measurement date. As for the financial
assets or financial liabilities for which there is an active market, the quoted prices in the active
market shall be used to determine the fair values thereof. The quoted prices in the active market
refers to the prices available from stock exchange, broker’s agencies, guilds, pricing organization
and etc., which represent the actual trading price under equal transaction. Where there is no active
market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques,
including the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring to other financial
instruments of the same essential nature, the cash flow capitalization method and the option pricing
model, etc., to determine its fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to
be recognized respectively at the price of transaction date. Financial assets shall be classified into
the following four categories when they are initially recognized: (a) the financial assets which are
measured at their fair values and the variation of which is recorded into the profits and losses of the
current period, (b) the investments which will be held to their maturity; (c) loans and the account
receivables; and (d) financial assets available for sale.
① The financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be measured
at their fair value when they are initially recognized and of which the variation is recorded into the
profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as transactional
financial assets:A. The purpose to acquire the said financial assets is mainly for selling them in the
near future; B. Forming a part of the identifiable combination of financial instruments which are
managed in a centralized way and for which there are objective evidences proving that the
enterprise may manage the combination by way of short-term profit making in the near future; C.
Being a derivative instrument, excluding the designated derivative instruments which are effective
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hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative
instruments which are connected with the equity instrument investments for which there is no
quoted price in the active market, whose fair value cannot be reliably measured, and which shall be
settled by delivering the said equity instruments.
The financial assets meeting any of the following requirements shall be designated as financial
assets which are measured at their fair values and the variation of which is recorded into the profits
and losses of the current period for initial recognition: A. the designation can eliminate or
significantly reduce the difference of relevant gains and losses between recognition and
measurement causing from different bases for measurement of financial assets; B. The official
written documents for risk management and investment strategies of the enterprise have clearly
stated that it shall, manage, evaluate and report to important management personnel based on the
fair value, about the financial assets Company or the Company of financial assets & liabilities
which the financial assets are belong to.
For the financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period shall continue to be measured by fair value,
gains and losses of change in fair value, dividends and interest related with these financial assets
should be recorded into gains and losses of current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date
of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a
definite purpose or the enterprise is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the
post-amortization costs, the profits and losses that arise when such financial assets or financial
liabilities are terminated from recognition, or are impaired or amortized, shall be recorded into the
profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the
interest incomes of different installments or interest expenses are calculated in light of the actual
interest rates of the financial assets or financial liabilities (including a set of financial assets or
financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash
flow of a financial asset or financial liability within the predicted term of existence or within a
shorter applicable term into the current carrying amount of the financial asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of
taking into account all the contractual provisions concerning the financial asset or financial liability
(the future credit losses shall not be taken into account).and also the various fee charges, trading
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expenses, premiums or reduced values, etc., which are paid or collected by the parties to a financial
asset or financial liability contract and which form a part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no
quotation in the active market, with fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Company including
notes receivables, accounts receivables, interest receivable, dividends receivable and other
receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of
post-amortization costs employing the effective interest method. Gains or loss arising from the
termination recognition, impairment occurs or amortization shall be recorded into the profits and
losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets
available for sales on the initial recognition and financial assets excluded those measured at fair
value and of which the variation into profits and losses of the current period, they are some financial
assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed
according to its amortized cost method, that is the initially recognized amount which deduct the
principal that had been repaid, to plus or minus the accumulative amortization amount formed by
the amortization between the difference of the initially recognized amount and the amount on the
due date that adopted the actual interest rate method, and at the same time deduct the amount after
the impairment loss happened. The cost at the period-end of the available-for-sale liabilities
instruments is its initial cost.
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 be carried
forward when the said financial assets stopped recognition, then it shall be recorded into the profits
and losses of the current period. But, the equity instrument investment which neither have quotation
in the active market nor its fair value could not be reliable measured, as well as the derivative
financial assets that concern with the equity instruments and should be settled through handing over
to its equity instruments, should take the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution
announcement by invested companies, it shall be recorded into the profits and losses of the current

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period.
(3) Impairment of financial assets
The Company 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.
The Company carries out a separate impairment test for every financial asset which is individually
significant. As for a financial asset which is individually insignificant, an impairment test is carried
out separately or in the financial asset Company with similar credit risk. Where the financial asset
(individually significant or insignificant) is found not impaired after the separate impairment test, it
is included in the financial asset Company with similar credit risk and tested again on the Company
basis. Where the impairment loss is recognized for an individual financial asset, it is not included in
the financial asset Company with similar credit risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there
is objective evidence to indicate the recovery of value of financial assets after impairment, and it is
related with subsequent event after recognition of loss, the impairment loss recorded originally can
be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed
the amortized cost of the financial assets without provisions of impairment loss on the reserving
date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment
is serious and not temporarily after comprehensive considering relevant factors, it reflected that the
available-for-sale equity instrument investment occurred impairment. Of which, the ―serious
decline‖ refers to the accumulative decline range of the fair value over 20%; while the
―non-temporary decline‖ refers to the consecutive decline time of the fair value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the
decrease of the fair value of the capital reserve which is directly included are transferred out and
recorded in the profits and losses for the current period. The accumulative losses transferred out are
the balance obtained from the initially obtained cost of the said financial asset after deducting the
principals as taken back, the amortized amount, the current fair value and the impairment loss
originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within

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the accounting periods thereafter, there is any objective evidence proving that the value of the said
financial asset has been restored and the restoration is objectively related to the events that occur
after the impairment loss was recognized, the originally recognized impairment loss is reversed.
The impairment losses on the available-for-sale equity instrument investments are reversed and
recognized as other comprehensive incomes, and the impairment losses on the available-for-sale
liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price
in the active market and whose fair value cannot be reliably measured, or incurred to a derivative
financial asset which is connected with the said equity instrument investment and which must be
settled by delivering the said equity investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is
terminated: ① The contractual rights for collecting the cash flow of the said financial asset are
terminated; ② The said financial asset has been transferred and nearly all of the risks and rewards
related to the ownership of the financial asset to the transferee; or ③ The said financial asset has
been transferred. And the Company has ceased its control on the said financial asset though it
neither transfers nor retains nearly all of the risks and rewards related to the ownership of the
financial asset.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the
ownership of a financial asset, and it does not cease its control on the said financial asset, it
recognizes the relevant financial asset and liability accordingly according to the extent of its
continuous involvement in the transferred financial asset. The term "continuous involvement in the
transferred financial asset" refers to the risk level that the enterprise faces resulting from the change
of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the
difference between the amounts of the following 2 items is recorded in the profits and losses of the
current period: (1) The book value of the transferred financial asset; and (2) The sum of
consideration received from the transfer, and the accumulative amount of the changes of the fair
value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book
value of the transferred financial asset is apportioned between the portion whose recognition has
been stopped and the portion whose recognition has not been stopped according to their respective
relative fair value, and the difference between the amounts of the following 2 items is included into
the profits and losses of the current period: (1) The summation of the consideration received from
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the transfer and the portion of the accumulative amount of changes in the fair value originally
recorded in other comprehensive incomes which corresponds to the portion whose recognition has
been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Company needs
to determine whether almost all of the risks and rewards of the financial asset ownership are
transferred. If almost all of the risks and rewards of the financial asset ownership had been
transferred to the transferee, derecognize the financial assets. For almost all of the risks and rewards
of the financial asset ownership retained, do not end to recognize the financial assets. For which
neither transfer or retain almost all of the risks and rewards of the financial asset ownership,
continuously judge whether the Company retain the control of the assets, and conduct accounting
treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair
values and whose changes are recorded in current gains and losses and other financial liabilities.
Financial liabilities are initially recognized at their fair values. As for a financial liability measured
at fair value and whose changes are recorded in current gains and losses, the relevant trading
expense is directly recorded in the profits and losses for the current period. As for other financial
liabilities, the relevant trading expenses are recorded in the initially recognized amounts.
① Financial liabilities measured at fair values and whose changes are recorded in current gains and
losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities
designated to be measured at fair values and whose changes are recorded in current gains and losses
in the initial recognition under the same conditions where such financial assets are divided into
transactional financial assets and financial assets designated to be measured at fair values and
whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and
losses are subsequently measured at their fair values. Gains or losses arising from the fair value
changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are
recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted
price in an active market and whose fair value cannot be reliably measured and which must be
settled by delivering the equity instrument, it is subsequently measured on the basis of costs. Other
financial liabilities are subsequently measured according to the amortized cost using the actual
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interest rate method. Gains or losses arising from de-recognition or amortization of the said
financial liabilities is recorded in the profits and losses for the current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability measured at its
fair value and the variation thereof is recorded into the profits and losses of the current period, or
the loan commitment which is not designated as a financial liability measured at its fair value and
the variation thereof is recorded into the gains and losses that will be loaned lower than the market
interest rate, which shall be initially recognized by fair value, and the subsequent measurement shall
be made after they are initially recognized according to the higher one of the following: a. the
amount as determined according to the Accounting Standards for Enterprises No. 13 –
Contingencies; b. the surplus after accumulative amortization as determined according to the
principles of the Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the
initially recognized amount.
(6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly. Where the Company (debtor)
enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of
any new financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it terminates the
recognition of the existing financial liability, and at the same time recognizes the new financial
liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise
concerned shall include into the profits and losses of the current period for the gap between the
book value which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has assumed)
(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
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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 Company
after deducting all of its liabilities. The Company issues (including refinancing), re-purchases, sells
or written-offs the equity instrument as the disposing of the changes of the equity. The Company not
recognized the changes of the fair value of the equity instrument. The transaction expenses related
to the equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Company to holders of equity
instruments are deducted from shareholders’ equity. The Company does not recognize any changes
in the fair value of equity instruments.
10. 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.
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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

 Related party portfolios                          Companies within the combination scope of the 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 lost the
 Related party portfolios
                                                                       repaying capability

a. Portfolio by age analysis

                  Category                    Proportion for accounts receivable (%)         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



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               Category                Proportion for accounts receivable (%)     Proportion for other receivable (%)

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 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.

11. 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.
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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
Low-value consumption goods: one-off amortization method
Packing articles: one-off amortization method

12. Divided as assets held for sale
If a non-current assets could be immediately sold only according to the usual terms of selling this
kind of assets under current situation, and the Group has made a decision on disposing a
non-current asset, entered into an irreversible transfer agreement with the transferee and the transfer
is likely to be completed within one year, the non-current asset is measured as a non-current asset
held for sale, which shall not be depreciated or amortized since the date held for sale but shall be
measured at the lower one of the net amounts of the book value and the fair value after deducting
the disposal expense. Non-current assets held for sale include single-item assets and disposal groups.
Where a disposal group is an asset group and the goodwill obtained in the business combination is
apportioned to the asset group according to the ―Accounting Standard No. 8 for Business
Enterprises—Asset Impairment‖, or a disposal group is an operation in such an asset group, the
disposal group shall include the goodwill in the business combination.
The non-current assets of single amount and the assets among the disposing group that both be
divided as assets held for sale, should be listed alone of the current assets on the balance sheet;
liabilities related to the assets transfer among the disposing group which be divided as assets held
for sale, should be listed alone of the current assets on the balance sheet.

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An asset or an disposal group was classified as held for sale before, but if it couldn’t meet the
recognition conditions for held-for-sale non-current asset later, the Company shall cease to classify
it as held for sale, and measure it by the lower amount of the followings: (1) its carrying amount
before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation,
amortization or impairment before the asset (or disposal group) being classified as held for sale; or
(2) its recoverable amount on the date of the subsequent decision not to sell.

13. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the
Company has control, joint control or significant influence over the investees. The long-term equity
investment that the Company does not have control, joint control or significant influence over the
investees, should be recognized as available-for-sale financial assets or be measured by fair value
with the changes should be included in the financial assets accounting of the current gains and
losses, and please refer the details of the accounting polices to Notes IV. 9 ―financial instrument‖.
Joint control, refers to the control jointly owned according to the relevant agreement on an
arrangement by the Company and the relevant activities of the arrangement should be decided only
after the participants which share the control right make consensus. Significant influence refers to
the power of the Company which could anticipate in the finance and the operation polices of the
investees, but could not control or jointly control the formulation of the policies with the other
parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same
control, the share of the book value of the owner’s equity of the merged enterprise, on the date of
merger, is regarded as the initial cost of the long-term equity investment. The difference between
the initial cost of the long-term equity investment and the payment in cash, non-cash assets
transferred as well as the book value of the debts borne by the merging party shall offset against the
capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of
merger, regard the share of the book value of the shareholder's equity of the merged enterprise on
the consolidated financial statement of the ultimate control party as the initial cost of the long-term
equity investment. The total face value of the stocks issued shall be regarded as the capital stock,
while the difference between the initial cost of the long-term equity investment and total face value
of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to
dilute, the retained earnings shall be adjusted. The equities of the combined party which
respectively acquired through multiple transaction under the same control that ultimately form into
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the combination of the enterprises under the same control, should be disposed according whether
belongs to package deal; if belongs to package deal, each transaction would be executed accounting
treatment by the Company as a transaction of acquiring the control right. If not belongs to package
deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's
equity of the merged enterprise on the consolidated financial statement of the ultimate control party
as the initial cost of the long-term equity investment, and as for the difference between the initial
investment cost of the long-term equity investment and sum of the book value of the long-term
equity investment before the combination and the book value of the consideration of the new
payment that further required on the combination date, should adjust the capital reserve; if the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity
investment held before the combination date which adopted the equity method for accounting, or
the other comprehensive income confirmed for the available-for-sale financial assets, should not
have any accounting disposal for the moment.
For the long-term investment required from the business combination under different control, the
initial investment cost regarded as long-term equity investment on the purchasing date according to
the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the
liabilities incurred or assumed and the equity securities issued by the Company. The equities of the
acquirees which respectively acquired through multiple transaction that ultimately form into the
combination of the enterprises under the different control, should be disposed according whether
belongs to package deal; if belongs to package deal, each transaction would be executed accounting
treatment by the Company as a transaction of acquiring the control right. If not belongs to package
deal, the sum of the book value of the original held equity investment of the acquirees and the
newly added investment cost should be regarded as the initial investment cost of the long-term
equity investment that changed to be accounted by cost method. If the original held equity is
calculated by cost method, the other relevant comprehensive income would not have any accounting
disposal for the moment. If the original held equity investment is the financial assets available for
sale, its difference between the fair value and the book value as well as the accumulative changes of
the fair value that include in the other comprehensive income, should transfer into the current gains
and losses.
The commission fees for audit, law services, assessment and consultancy services and other
relevant expenses occurred in the business combination by the combining party or the purchase
party, shall be recorded into current profits and losses upon their occurrence; the transaction
expense from the issuance of equity securities or bonds securities which are as consideration for
combination by the combining party, should be recorded as the initial amount of equity securities

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and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term
equity investments shall be initially measured by cost, the cost is fixed in accordance with the ways
of gaining, such as actual cash payment paid by the Company, the fair value of equity securities
issued by the Company, the agreed value of the investment contract or agreement, the fair value or
original carrying amount of exchanged assets from non-monetary assets exchange transaction, the
fair value of the long-term equity investments, etc. The expenses, taxes and other necessary
expenditures directly related with gaining the long-term equity investments shall also be recorded
into investment cost. The long-term equity investment cost for those could execute significant
influences on the investees because of appending the investment or could execute joint control but
not form as control, should be as the sum of the fair value of the original held equity investment and
the newly added investment cost recognized according to the No.22 of Accounting Standards for
Business Enterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which
forms into common operators) or significant influence over the investors should be measured by
equity method. Moreover, long-term equity investment adopting the cost method in the financial
statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included
at its initial investment cost and append as well as withdraw the cost of investing and adjusting the
long-term equity investment. The return on investment at current period shall be recognized in
accordance with the cash dividend or profit announced to distribute by the invested entity, except
the announced but not distributed cash dividend or profit included in the actual payment or
consideration upon gaining the investment.
②Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share of
the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the
long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment
is less than the Company's attributable share of the fair value of the invested entity's identifiable net
assets for the investment, the difference shall be included in the current profits and losses and the
cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other
comprehensive income according to the net gains and losses as well as the portion of other
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comprehensive income which should be enjoyed or be shared, and at the same time adjust the book
value of the long-term equity investment; corresponding reduce the book value of the long-term
equity investment according to profits which be declared to distribute by the investees or the portion
of the calculation of cash dividends which should be enjoyed; for the other changes except for the
net gains and losses, other comprehensive income and the owners’ equity except for the profits
distribution of the investees, should adjust the book value of the long-term equity investment as
well as include in the capital reserve. The investing enterprise shall, on the ground of the fair value
of all identifiable assets of the invested entity when it obtains the investment, recognize the
attributable share of the net profits and losses of the invested entity after it adjusts the net profits of
the invested entity. If the accounting polices adopted by the investees is not accord with that of the
Company, should be adjusted according to the accounting policies of the Company and the financial
statement of the investees during the accounting period and according which to recognize the
investment income as well as other comprehensive income. For the transaction happened between
the Company and associated enterprises as well as joint ventures, if the assets launched or sold not
form into business, the portion of the unrealized gains and losses of the internal transaction, which
belongs to the Company according to the calculation of the enjoyed proportion, should recognize
the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the
transferred assets, should not be neutralized. The assets launched by the Company to the associated
enterprises or the joint ventures if could form into business, the long-term equity investment
without control right which acquired by the investors, should regard the fair value of the launched
business as the initial investment cost the newly added long-term equity investment, and for the
difference between the initial investment cost and the book value of the launched business, should
be included into the current gains and losses with full amount. The assets sold by the Company to
the associated enterprises or the joint ventures if could form into business, the difference between
the acquired consideration and the book value of the business should be included in the current
gains and losses with full amount. The assets purchased by the Company to the associated
enterprises or the joint ventures if could form into business, should be accounting disposed
according to the regulations of No. 20 of ASBE—Business Combination, and should be recognized
gains or losses related to the transaction with full amount.
The Company shall recognize the net losses of the invested enterprise until the book value of the
long-term equity investment and other long-term rights and interests which substantially form the
net investment made to the invested entity are reduced to zero. However, if the Company has the
obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance

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with the estimated duties and then recorded into investment losses at current period. If the invested
entity realizes any net profits later, the Company shall, after the amount of its attributable share of
profits offsets against its attributable share of the un-recognized losses, resume recognizing its
attributable share of profits.
For the long-term equity investment held by the Company before the first execution of the new
accounting criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is debit
difference of the equity investment related to the investment, should be included in the current gains
and losses according to the amount of the straight-line amortization during the original remained
period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity
investment increased by acquiring shares of minority interest and the attributable net assets on the
subsidiary calculated by the increased shares held since the purchase date (or combination date), the
capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained
profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity
investment on subsidiaries without losing its controlling right on them, the balance between the
disposed price and attributable net assets of subsidiaries by disposing the long-term equity
investment shall be recorded into owners’ equity; where the Company losses the controlling right by
disposing part of long-term equity investment on such subsidiaries, it shall treated in accordance
with the relevant accounting policies in Note IV. 5 (2) Method on preparation of combined financial
statements.
For other ways on disposal of long-term equity investment, the balance between the book value of
the disposed equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity
after disposal still adopts the equity method for measurement, the other comprehensive income
originally recorded into owners’ equity should adopt the same basis of the accounting disposal of
the relevant assets or liabilities directly disposed by the investees according to the corresponding
proportion. The owners’ equity recognized owning to the changes of the other owners’ equity except
for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained
equity still adopt the cost method, the other comprehensive income recognized owning to adopting
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the equity method for measurement or the recognition and measurement standards of financial
instrument before acquiring the control of the investees, should adopt the same basis of the
accounting disposal of the relevant assets or liabilities directly disposed by the investees and should
be carried forward into the current gains and losses according to the proportion; the changes of the
other owners’ equity except for the net gains and losses, other comprehensive income and the
profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to
the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment
as well as the remained equity after disposal could execute joint control or significant influences on
the investees, should change to measure by equity method when compiling the individual financial
statement and should adjust the measurement of the remained equity to equity method as adopted
since the time acquired; if the remained equity after disposal could not execute joint control or
significant influences on the investees, should change the accounting disposal according to the
relevant regulations of the recognition and measurement standards of financial instrument, and its
difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized by
adopting equity method for measurement or the recognition and measurement standards of financial
instrument before the Company acquired the control of the investees, should execute the accounting
disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities
directly disposed by the investees when lose the control of them, while the changes of the other
owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution among the net assets of the investees which recognized by adopting the equity method
for measurement, should be carried forward into the current gains and losses according to the
proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried
forward according to the proportion; for the disposed remained equity which changed to execute the
accounting disposal according to the recognition and measurement standards of financial instrument,
the other comprehensive income and the other owners’ equity should be carried forward in full
amount.
For those the Company lost the control of the investees by disposing part of the equity investment,
the disposed remained equity should change to calculate according to the recognition and
measurement standards of financial instrument, and difference between the fair value and book
value on the date lose the control right should be included in the current gains and losses. For the

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other comprehensive income recognized from the original equity investment by adopting the equity
method, should execute the accounting disposal by adopting the same basis of the accounting
disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of
the other owner’s equity except for the net gains and losses, other comprehensive income and the
profits distribution of the investees, should be transferred into the current investment income with
full amount when terminate adopting the equity method.
The Company respectively disposes the equity investment of the subsidiaries through multiple
transactions until lose the control right, if the above transactions belongs to the package deal, should
execute the accounting disposal by regarding each transaction as a deal of disposing the equity
investment of the subsidiaries until lose the control right, while the difference between each
expenses of the disposal and the book value of the long-term equity investment in accord with the
disposed equity before losing the control right, should firstly be recognized as other comprehensive
income then be transferred into the current gains and losses of losing the control right along until
the time when lose it.
14. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment
property includes leased or ready to transfer after capital appreciation land use rights and leased
buildings. Besides, for the idle constructions held by the Company for operation and lease, if the
Board of Directors (or the similar institutions) made the written resolutions which affirmatively
disclosed to use which for operation and lease with the intention would not change in the short term,
should also be presented as the investment property.
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 should be recorded in the current gains and losses when occurred.
The Company 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 IV.
20 ―Long-term 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
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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.
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.
15. 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
                                                                                                       Annual deprecation
      Category of fixed assets        Method                 Useful life (Y)       salvage value
                                                                                                              (%)
                                                                                       (%)

                                 Average method of
 Housing and building                                                      8-35               3-5                   2.7-12.1
                                     useful life

                                 Average method of
 Machinery equipments                                                      8-10               3-5                   9.5-12.1
                                     useful life

                                 Average method of
                                                                               4                   3                  24.25
 Transportation vehicle
                                     useful life

                                 Average method of
                                                                               3                   3                  32.33
 Office equipment and others
                                     useful life

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
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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 IV. 20 ―Long-term assets
impairment‖.
(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 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.
16. 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 IV. 20 ―Long-term assets impairment‖.
17. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings,
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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 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.
18. 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.

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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 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

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Impairment and provisions of intangible assets are disclosed on Note IV. 20 ―Long-term assets
impairment‖.
19. 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 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.
20. Long-term assets impairment
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
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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 recognized, the recoverable part cannot be reserved in
the subsequent periods.
21. Payroll
The payroll of the Company mainly includes the short-term employee compensation, welfare after
demission, demission welfare and other long-term employee benefits. Of which:
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee
services and benefits, medical insurance premiums, birth insurance premium, industrial injury
insurance premium, housing fund, labour union expenditure and personnel education fund,
non-monetary benefits etc. The short-term compensation actually happened during the accounting
period when the active staff offering the service for the Group should be recognized as liabilities
and is included in the current gains and losses or relevant assets cost. Of which the non-monetary
benefits should be measured according to the fair value.
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan
mainly includes basic endowment insurance, unemployment insurance and annuity etc, and the
corresponding payable and deposit amount should be included into the relevant assets cost or the
current gains and losses when happen.
If an enterprise cancels the labour relationship with any employee prior to the expiration of the
relevant labour contract or brings forward any compensation proposal for the purpose of
encouraging the employee to accept a layoff, and should recognize the payroll liabilities occurred
from the demission welfare base on the earlier date between the time when the Group could not
one-sided withdraw the demission welfare which offered by the plan or layoff proposal owning to
relieve the labour relationship and the date the Group recognizes the cost related to the
reorganization of the payment of the demission welfare and at the same time includes which into the
current gains and losses. But if the demission welfare is estimated that could not totally pay after the
end of the annual report within 12 months, should be disposed according to other long-term payroll
payment.
The inside employee retirement plan is treated by adopting the same principle with the above
dismiss ion welfare. The group would recorded the salary and the social security insurance fees paid
and so on from the employee’s service terminative date to normal retirement date into current
profits and losses (dismiss ion welfare) under the condition that they meet the recognition
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conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan,
should be accounting disposed according to the setting drawing plan, while the rest should be
disposed according to the setting revenue plan.
22. Estimated 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.
23. 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 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

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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
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

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In accordance with the time that others use the Group’s monetary capital and the actual rate.
24. 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 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).
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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.
25. 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 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

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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
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
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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.
26. 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
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
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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.
27. Changes in main accounting policies and estimates
(1) Change of accounting policies
There was no any change of accounting policies
(2) Change of main accounting estimates
There was no any change of main accounting estimates.
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.
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.

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(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 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
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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 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
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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.
VII. Taxation
1. Main taxes and tax rate

           Category of taxes                                           Particulars about specific tax rate

                                         Income tax was in accordance with 17% of tax rate to calculate output tax, and
VAT                                      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 of consumption tax,
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 construction tax   1, 5, 7% of the actual taxable turnover amount.

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.



VIII. 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. 2015, the closing period was 30
Jun. 2015, this period referred to 1st Jan-30 Jun. 2015, and last period referred to 1st Jan-30 Jun.
2014.
1. Monetary funds

                        Item                           Closing balance                             Opening balance

    Cash in treasury                                                     367,649.75                                349,833.07

    Bank deposit                                                    924,353,716.95                             713,744,608.33

                                                               94
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                       Item                               Closing balance                         Opening balance

    Other monetary funds                                                  9,507,386.21                          4,366,001.39

                       Total                                          934,228,752.91                          718,460,442.79

    Of which: the total amount deposited in
                                                                                  0.00                                   0.00
    overseas

2. Financial assets measured by fair value and the changes be included in the current gains
and losses

                       Item                               Closing balance                         Opening balance

    Tradable financial assets                                               414,875.36                              303,919.60

    Of which: equity instruments
                                                                            414,875.36                              303,919.60
    investment

                       Total                                                414,875.36                              303,919.60

3. Notes receivable
(1) Category of notes receivable

                       Item                               Closing balance                         Opening balance

    Bank acceptance bill                                              773,020,909.81                          505,893,430.66

                       Total                                          773,020,909.81                          505,893,430.66

(2) Notes receivable pledged by the Company at the period-end

                  Item                                                               Amount

Bank acceptance bill                                                                                                220,924,000.00

                  Total                                                                                             220,924,000.00

(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the
balance sheet date at the period-end
                                              Amount of recognition termination at the    Amount of not terminated recognition at
                  Item
                                                            period-end                                the period-end

Bank acceptance bill                                                     395,557,755.25                                          0.00

                  Total                                                  395,557,755.25                                          0.00

4. Accounts receivable
(1) Accounts receivable disclosed by category

                                                                95
                                                                     2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                             Closing balance

                                                               Book balance                        Bad debt provision
                     Category                                                                                     Withdrawal
                                                                            Proportion                                            Book value
                                                           Amount                                Amount           proportion
                                                                                (%)
                                                                                                                     (%)

   Accounts receivable with significant

   single      amount       and      individually                   0.00              0.00                 0.00            0.00            0.00

   withdrawn bad debt provision

   Accounts receivable withdrawn bad debt
   provision    according       to   credit   risks        6,816,979.47          100.00           1,045,865.91          15.34      5,771,113.56
   characteristics

   Accounts receivable with insignificant
   single amount for which bad debt                                 0.00              0.00                 0.00            0.00            0.00
   provision separately accrued

                        Total                              6,816,979.47          100.00           1,045,865.91          15.34      5,771,113.56

(Continued)
                                                                                             Opening balance

                                                               Book balance                        Bad debt provision

                     Category                                                                                     Withdrawal
                                                                            Proportion                                            Book value
                                                           Amount                                Amount           proportion
                                                                                (%)
                                                                                                                     (%)

   Accounts receivable with significant

   single      amount       and      individually                   0.00              0.00                 0.00            0.00            0.00

   withdrawn bad debt provision

   Accounts receivable withdrawn bad debt
   provision    according       to   credit   risks        5,393,735.97          100.00           1,055,782.71          19.57      4,337,953.26
   characteristics

   Accounts receivable with insignificant
   single amount for which bad debt                                 0.00              0.00                 0.00            0.00            0.00
   provision separately accrued

                        Total                              5,393,735.97          100.00           1,055,782.71          19.57      4,337,953.26

In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision
                                                                                       Closing balance
                  Aging
                                                      Accounts receivable             Bad debt provision       Withdrawal proportion (%)

Within 1 year


                                                                           96
                                                  2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                   Closing balance
                     Aging
                                   Accounts receivable            Bad debt provision         Withdrawal proportion (%)

[Including: within 6 months]                4,936,939.15                        49,369.39                           1

           [7 months to 1 year]               381,351.43                        19,067.57                           5

Subtotal of within 1 year                   5,318,290.58                        68,436.96                        1.29

1 year to 2 years                             361,932.00                        36,193.20                          10

2 years to 3 years                            391,042.28                       195,521.14                          50

Over 3 years                                  745,714.61                       745,714.61                         100

                     Total                  6,816,979.47                      1,045,865.91                      15.34

(2) Accounts receivable withdraw, reversed or collected during the reporting period
The amount of the reversed or collected part during the reporting period was of RMB 9,916.80.
(3) The actual write-off accounts receivable
There was no any actual write-off account receivable.
(4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
The total amount of the top5 of the closing balance of the accounts receivable colleted according
to the arrears party during the reporting period of the Company was of RMB 2,321,280.45 which
covered 34.05% of the total amount of the closing balance of the accounts receivable and the
corresponding total amount of the closing balance of the withdrawn bad debt provision was of
RMB 450,247.66.
5. Prepayment
(1) List by aging analysis
                                              Closing balance                                 Opening balance
                       Aging
                                       Amount                Proportion (%)            Amount            Proportion (%)

    Within 1 year                       59,118,017.65                   99.96          35,406,358.00                99.14

    1 to 2 years                            14,092.60                    0.03            163,485.98                  0.46

    2 to 3 years                             5,174.00                    0.01            141,774.00                  0.40

                        Total          59,137,284.25                   100.00          35,711,617.98               100.00

(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
The total amount of the top 5 of the closing balance of the prepayment colleted according to the
prepayment target of the Company was of RMB 25,670,906.52 which covered 43.41% of the
total amount of the closing balance of the prepayments.
                                                        97
                                                            2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



6. Interest receivable
                       Item                              Closing balance                                Opening balance


   Structured deposits interest                                          2,369,097.21                                   4,274,666.66

                     Total                                               2,369,097.21                                   4,274,666.66

8. Other accounts receivable
(1) Other accounts receivable disclosed by category
                                                                                    Closing balance

                                                      Book balance                       Bad debt provision
                    Category
                                                                                                        Withdrawal
                                                                   Proportion                                           Book value
                                                  Amount                                Amount          proportion
                                                                       (%)
                                                                                                           (%)

  Other accounts receivable with significant

  single amount and individually withdrawn        50,727,440.55          82.60         50,727,440.55          100.00             0.00

  bad debt provision

  Other accounts receivable withdrawn bad
  debt provision according to credit risks        10,688,508.62          17.40            319,307.39             2.99   10,369,201.23
  characteristics

  Other     accounts          receivable   with
  insignificant single amount for which bad                0.00              0.00                0.00            0.00            0.00
  debt provision separately accrued

                       Total                      61,415,949.17         100.00         51,046,747.94           83.12    10,369,201.23

(Continued)

                                                                                    Opening balance

                                                      Book balance                       Bad debt provision
                    Category                                                                            Withdrawal
                                                                   Proportion                                           Book value
                                                  Amount                                Amount          proportion
                                                                       (%)
                                                                                                           (%)

  Other accounts receivable with significant

  single amount and individually withdrawn        50,727,440.55          85.92         50,727,440.55          100.00             0.00

  bad debt provision

  Other accounts receivable withdrawn bad
  debt provision according to credit risks         8,310,068.17          14.08            342,164.93             4.12    7,967,903.24
  characteristics

  Other     accounts          receivable   with            0.00              0.00                0.00            0.00            0.00

                                                                  98
                                                               2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                                   Opening balance

                                                       Book balance                     Bad debt provision
                     Category                                                                           Withdrawal
                                                                    Proportion                                        Book value
                                                    Amount                             Amount           proportion
                                                                        (%)
                                                                                                           (%)

   insignificant single amount for which bad
   debt provision separately accrued

                        Total                     59,037,508.72          100.00       51,069,605.48           86.50    7,967,903.24

① Accounts receivable with significant single amount for which bad debt provision separately accrued at the
period-end
    Accounts receivable (classified by units)                                         Closing balance

                                                                    Bad debt            Withdraw              Withdraw reason
                                                Other accounts
                                                                    provision         proportion (%)
                                                  receivable

                                                                                                         The enterprise entered into
   Jianqiao Securities                           11,840,500.00     11,840,500.00                100.00 bankruptcy and settlement
                                                                                                       procedure

                                                                                                         The enterprise entered into
   Hengxin Securities                            29,502,438.53     29,502,438.53                100.00 bankruptcy and settlement
                                                                                                       procedure

                                                                                                         The enterprise entered into
   Minfa Securities Co., Ltd.                     9,384,502.02      9,384,502.02                100.00 bankruptcy and settlement
                                                                                                       procedure

   Total                                         50,727,440.55     50,727,440.55

① Other accounts receivable that provision for bad debts by aging analysis
                                                                                 Closing balance
                Aging
                                                                              Bad debt provision             Withdraw proportion (%)
                                       Other accounts receivable

Within 1 year

[Including: within 6 months]                         9,288,574.41                             92,885.74                                1

           [7 months to 1 year]                        896,035.62                             44,801.78                                5

Subtotal of within 1 year                           10,184,610.03                            137,687.52                            1.35

1 year to 2 years                                      281,536.27                             28,153.63                                10

2 years to 3 years                                     137,792.16                             68,896.08                                50

Over 3 years                                            84,570.16                             84,570.16                            100


                                                                   99
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                           Closing balance
                 Aging
                                                                         Bad debt provision             Withdraw proportion (%)
                                        Other accounts receivable

                  Total                             10,688,508.62                        319,307.39                              2.99

(2) Other accounts receivable withdraw, reversed or collected during the reporting period
The amount of the reversed or collected part during the reporting period was of RMB 22,857.54.
(3) The actual write-off other accounts receivable
There was no any write-off other account receivable during the reporting period.
(4) List of other accounts receivable classified by nature

                             Nature                                     Closing book value                 Opening book value

Investment securities                                                                50,727,440.55                     50,727,440.55

Cash deposit and cash pledge                                                            4,997,666.77                    1,786,964.87

Travel cash advance                                                                     3,088,898.54                    3,772,242.50

Rent and water steam fees                                                                850,866.10                       903,964.37

Other                                                                                   1,751,077.21                    1,846,896.43

Total                                                                                61,415,949.17                     59,037,508.72

(5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears
party

                                                                                           Proportion of the total        Closing

        Name of units              Nature            Closing balance       Aging        closing balance of the other balance of bad

                                                                                          accounts receivable (%)      debt provision

No. 1                     Investment securities         29,502,438.53 Over 3 years                             48.04 29,502,438.53

No. 2                     Investment securities         11,840,500.00 Over 3 years                             19.28 11,840,500.00

No. 3                     Investment securities          9,384,502.02 Over 3 years                             15.28    9,384,502.02

                          Contract money and cash
No. 4                                                    2,304,249.00 Within 6 months                           3.75       23,042.49
                          pledge

                          Contract money and cash
No. 5                                                      689,658.09 With7-12months                            1.12       34,482.90
                          pledge

Total                                                   53,721,347.64                                          87.47 50,784,965.94

8. Inventory
(1) Category of inventory

                                                                100
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                                                                                   Closing balance
                          Item
                                                        Book balance           Falling price reserves            Book value

    Raw materials & wrappage                               80,400,225.48                8,870,480.03                71,529,745.45

    Homemade semi-finished products and
                                                        1,098,185,795.24                          0.00           1,098,185,795.24
    products in process

    Finished products                                      85,669,702.89                7,529,857.62                78,139,845.27

                          Total                         1,264,255,723.61              16,400,337.65              1,247,855,385.96

(Continued)

                                                                                  Opening balance
                          Item
                                                        Book balance           Falling price reserves            Book value

    Raw materials & wrappage                              112,077,576.03                8,700,056.12               103,377,519.90

    Homemade semi-finished products and
                                                        1,061,359,515.77                          0.00           1,061,359,515.77
    products in process

    Finished products                                      67,034,474.15                4,588,735.74                62,445,738.42

                          Total                         1,240,471,565.95              13,288,791.86              1,227,182,774.09

(2) Falling price reserves of inventory
                                                       Increased amount                 Decreased amount
                                                                                                                       Closing
              Item                Opening balance                                    Reverse or
                                                    Withdrawal         Other                             Other         balance
                                                                                      write-off

   Raw        materials      &
                                     8,700,056.12     170,423.91           0.00                   0.00       0.00     8,870,480.03
   wrappage

   Homemade semi-finished
   products and products in                  0.00           0.00           0.00                   0.00       0.00             0.00
   process

   Finished products                 4,588,735.74    3,573,035.31          0.00          631,913.43          0.00     7,529,857.62

              Total                 13,288,791.86    3,743,459.22          0.00          631,913.43          0.00 16,400,337.65

(3) Basis of provision for falling price of inventories and reasons of reversal and resell in reporting
period




                                                                 101
                                                                       2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                               Reason

                                                                 of

                                                              reversed

                                                                 the

                                                               provisio
                              Basic of provision for
                                                                n for           Reason of resell the provision for falling price of inventories of
           Item                   falling price of
                                                               falling                                 the reporting period
                                    inventories
                                                               price of

                                                              inventori

                                                              es of the

                                                              reporting

                                                               period

Raw     materials    &      Net    realizable        value                       Disposal of raw material withdrawn impairment provision in

wrappage                    below cost                                                                  reporting period

                            Net    realizable        value                         Disposal of finished withdrawn impairment provision in
Finished goods
                            below cost                                                                  reporting period

9. Other current assets

                    Item                                         Closing balance                                   Opening balance

Finance products                                                                  1,450,000,000.00                               1,320,000,000.00

Pledge-style repo reverse                                                                       0.00                              180,712,225.81

Tax deductible                                                                                  0.00                                   840,250.30

                    Total                                                         1,450,000,000.00                               1,501,552,476.11

10. Available-for-sale financial assets
(1) Lists of available-for-sale financial assets

                                                        Closing balance                                       Opening balance

                  Item                                       Impairment                                          Impairment
                                         Book balance                           Book value      Book balance                     Book value
                                                             provision                                             provision

   Available-for-sale        equity
                                         234,362,590.00                     234,362,590.00       65,332,932.00                  65,332,932.00
   instruments

   Of which: Measured by fair
                                         234,362,590.00                     234,362,590.00       65,332,932.00                  65,332,932.00
   value

                                                                          102
                                                                    2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



        Measured by cost                           0.00                                0.00                 0.00                             0.00

   Other                                23,000,000.00                        23,000,000.00      23,000,000.00                   23,000,000.00

                 Total                 257,362,590.00                      257,362,590.00       88,332,932.00                   88,332,932.00


(2) Available-for-sale financial assets measured by fair value at the period-end

        Category of the
                                        Available-for-sale equity              Available-for-sale liabilities
  available-for-sale financial                                                                                                   Total
                                              instruments                              instruments
              assets

Costs of equity instruments/

amortized cost of liabilities                         138,240,694.79                                         0.00                     138,240,694.79

instruments

Fair value                                           234,362,590.00                                          0.00                    234,362,590.00

Changes amount of fair value

accumulatively recorded into                              96,121,895.21                                      0.00                       96,121,895.21

other comprehensive income

Withdrawn               impairment
                                                                    0.00                                     0.00                               0.00
provision amount


(3) Available-for-sale financial assets measured by cost at the period-end

                                                      Book balance                                                Impairment provision

             Investee                Period-begi    Increas       Decreas                         Period-beg        Increas   Decreas      Period-en
                                                                                Period-end
                                         n                e           e                               in               e         e             d

Anjin No. 11 Collection Trust        23,000,000.                                23,000,000.
                                                          0.00        0.00                                 0.00        0.00      0.00           0.00
Plan                                          00                                          00

                                     23,000,000.                                23,000,000.
              Total                                       0.00        0.00                                 0.00        0.00      0.00           0.00
                                              00                                          00


11. Investment property

(1) Investment property adopted the cost measurement mode

                            Item                              Houses and buildings             Land use right                   Total

   I. Original book value



                                                                      103
                                                            2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                         Item                        Houses and buildings              Land use right                   Total

        1. Opening balance                                      74,748,266.02                2,644,592.00               77,392,858.02

        2. Increased amount of the period                                 0.00                          0.00                       0.00

        3. Decreased amount of the period                                 0.00                          0.00                       0.00

        4. Closing balance                                      74,748,266.02                2,644,592.00               77,392,858.02

   II. Accumulative depreciation and accumulative

   amortization

        1. Opening balance                                      44,927,757.41                    390,744.37             45,318,501.78

        2. Increased amount of the period                        1,467,106.65                     31,007.28               1,498,113.93

        (1) Withdrawal or amortization                           1,467,106.65                     31,007.28               1,498,113.93

                                                                          0.00                          0.00                       0.00

        4. Closing balance                                      46,394,864.06                    421,751.65             46,816,615.71

   III. Depreciation reserves

        1. Opening balance                                                0.00                          0.00                       0.00

        2. Increased amount of the period                                 0.00                          0.00                       0.00

        3. Decreased amount of the period                                 0.00                          0.00                       0.00

        4. Closing balance                                                0.00                          0.00                       0.00

   IV. Book value

        1. Closing book value                                   28,353,401.96                2,222,840.35               30,576,242.31

        2. Opening book value                                   29,820,508.61                2,253,847.63               32,074,356.24


12. Fixed assets

(1) List of fixed assets


                                                                                       Transportatio
                                                Houses and             Machinery                               Office
                     Item                                                                    n                                  Total
                                                    buildings
                                                                       equipment                          equipment
                                                                                        equipment

I. Original book value

                                                                      736,224,507.4 49,463,729.8                          2,418,823,285.3
  1. Opening balance                           1,576,781,874.52                                          56,353,173.45
                                                                                   9                7                                     3
                                                                104
                                                       2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                                   Transportatio
                                              Houses and           Machinery                          Office
                        Item                                                            n                                 Total
                                               buildings
                                                                   equipment                        equipment
                                                                                    equipment

  2. Increased amount of the period            58,895,702.01       9,872,251.82 3,788,341.18         6,348,198.77      78,904,493.78

     (1) Purchase                                          0.00    9,872,251.82 3,788,341.18         6,348,198.77      20,008,791.77


(2) Transfer of project under construction     58,895,702.01              0.00              0.00               0.00    58,895,702.01

  3. Decreased amount of the period                        0.00 13,712,681.15        510,805.44       182,999.81       14,406,486.40

     (1) Disposal or scrap                                 0.00 13,712,681.15        510,805.44       182,999.81       14,406,486.40

(2) Technology transfer into construction
                                                           0.00           0.00              0.00               0.00               0.00
projects

                                                                  732,384,078.1 52,741,265.6                          2,483,321,292.7
  4. Closing balance                         1,635,677,576.53                                       62,518,372.41
                                                                               6                1                                   1

II. Accumulative depreciation

                                                                  232,008,403.6 35,510,538.6
  1.Opening balance                           376,591,354.84                                        43,891,172.49 688,001,469.58
                                                                               2                3

  2. Increased amount of the period            32,921,844.10 37,050,548.01 3,656,080.53              4,119,694.03      77,748,166.67

     (1) Withdrawal                            32,921,844.10 37,050,548.01 3,656,080.53              4,119,694.03      77,748,166.67

3. Decreased amount of the period                          0.00 11,493,427.41        495,481.28       179,964.37       12,168,873.06

(1) Disposal or scrap                                      0.00 11,493,427.41        495,481.28       179,964.37       12,168,873.06

(2) Technology transfer into construction
                                                           0.00           0.00              0.00               0.00               0.00
projects

                                                                  257,565,524.2 38,671,137.8
  4. Closing balance                          409,513,198.94                                        47,830,902.15 753,580,763.19
                                                                               2                8

III. Depreciation reserves

  1.Opening balance                             4,133,377.10 2,553,971.54                   0.00               0.00     6,687,348.64

  2. Increased amount of the period                        0.00           0.00              0.00               0.00               0.00

     (1) Withdrawal                                        0.00           0.00              0.00               0.00               0.00

3. Decreased amount of the period                          0.00           0.00              0.00               0.00               0.00

  (1) Disposal or scrap                                    0.00           0.00              0.00               0.00               0.00

  4. Closing balance                            4,133,377.10 2,553,971.54                   0.00               0.00     6,687,348.64


                                                           105
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                                          Transportatio
                                                    Houses and            Machinery                             Office
                      Item                                                                     n                                 Total
                                                     buildings
                                                                          equipment                          equipment
                                                                                           equipment

IV. Book value

                                                                         472,264,582.4 14,070,127.7                          1,723,053,180.8
  1. Closing book value                            1,222,031,000.49                                          14,687,470.26
                                                                                      0                3                                    8

                                                                         501,662,132.3 13,953,191.2                          1,724,134,467.1
  2. Opening book value                            1,196,057,142.58                                          12,462,000.96
                                                                                      3                4                                    1


(2) List of temporarily idle fixed assets

                                  Original book    Accumulative             Impairment
              Item                                                                                 Book value                Notes
                                      value         depreciation             provision

     Houses and buildings          15,719,043.63     11,411,262.48           4,133,377.10            174,404.05

     Machinery
                                   11,408,610.31      8,824,987.29           2,553,971.54              29,651.48
     equipment

             Total                 27,127,653.94    20,236,249.77            6,687,348.64            204,055.53


(3) Fixed assets leased in from financing lease


                                  Item                                                          Closing book value

Machinery equipment                                                                                                            2,883,127.28

Transportation instruments                                                                                                           15,668.31

Office equipment and other                                                                                                           20,767.88

Total                                                                                                                          2,919,563.47


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

                     Item                           Book value                                             Reason

                                                                            Uniform handling after the completion of the industrial park

Industrial park office building                           73,604,583.93                                    project

                                                                            Uniform handling after the completion of the industrial park

The fire station                                           1,004,060.07                                    project


                                                                   106
                                                      2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                     Item                     Book value                                     Reason

                                                                   Uniform handling after the completion of the industrial park
No.1 Peiqu building
                                                   11,402,716.36                             project

                                                                   Uniform handling after the completion of the industrial park
No.2 Peiqu building
                                                   11,402,716.36                             project

                                                                   Uniform handling after the completion of the industrial park
No.3 Peiqu building
                                                   11,402,716.36                             project

                                                                   Uniform handling after the completion of the industrial park
No.4 Peiqu building
                                                   12,131,198.76                             project

                                                                   Uniform handling after the completion of the industrial park
No.5 Peiqu building
                                                   12,143,784.02                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial park No. 1 brewhouse
                                                   23,767,032.42                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial park No. 2 brewhouse
                                                   23,942,269.18                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial park No. 3 brewhouse
                                                   24,299,335.84                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial park No. 4 brewhouse
                                                   24,262,069.95                             project

                                                                   Uniform handling after the completion of the industrial park

Bran warehouse,     yeast warehouse                36,741,572.55                             project

                                                                   Uniform handling after the completion of the industrial park

Auxiliary workshop office building                  1,141,031.03                             project

                                                                   Uniform handling after the completion of the industrial park

Sewage treatment station of industrial park        12,000,709.02                             project

Blending workshop, wine collection station                         Uniform handling after the completion of the industrial park

and stainless steel tank district                  20,191,071.77                             project

                                                                   Uniform handling after the completion of the industrial park

No.2, No. 3 stainless steel tank district          23,512,212.12                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial Park No.1 filling house
                                                   37,953,866.04                             project

                                                           107
                                                      2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


                   Item                       Book value                                     Reason

                                                                   Uniform handling after the completion of the industrial park
Industrial Park No.2 filling house
                                                   40,613,173.81                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial Park No.6 filling house
                                                   21,717,100.56                             project

                                                                   Uniform handling after the completion of the industrial park
Industrial Park No.8 filling house
                                                   25,323,401.30                             project

                                                                   Uniform handling after the completion of the industrial park

Reception and multi-function hall                  25,204,127.80                             project

Scientific research and comprehensive                              Uniform handling after the completion of the industrial park

command center                                     28,212,112.96                             project

Logistics office building, canteen, salvage                        Uniform handling after the completion of the industrial park

station                                             4,430,535.36                             project

                                                                   Uniform handling after the completion of the industrial park

Qinggong apartment                                 10,189,005.39                             project

                                                                   Uniform handling after the completion of the industrial park

Industrial Park electropower station               34,923,526.86                             project

                                                                   Uniform handling after the completion of the industrial park

Industrial park No. 5 brewhouse                    25,982,050.51                             project

                                                                   Uniform handling after the completion of the industrial park

Industrial park No. 7 brewhouse                    25,821,630.87                             project

                                                                   Uniform handling after the completion of the industrial park

Industrial Park No.3 filling house                 44,382,898.57                             project

Hefei marketing command center                    141,054,942.80 Had not perform the final accounts of the completed project

                                                                   Uniform handling after the completion of the industrial park

Underground pottery jar wine warehouse             18,049,486.35                             project

                   Total                          806,806,938.92




                                                           108
                                                             2015 Semi-annual Report of Anhui Gujing Distillery Company Limited


13. Construction in progress

 (1)

                                                                    Closing balance                                    Opening balance

                      Item                              Book          Impairment           Book            Book          Impairment        Book
                                                       balance           provision         value          balance         provision        value

Renovation project    of major potential       safety 18,430,328                          18,430,32
                                                                                 0.00                         0.00                 0.00        0.00
concerns                                                     .81                               8.81

                                                      2,996,600.                          2,996,600.
Shenzhen experience museum                                                       0.00                         0.00                 0.00        0.00
                                                               00                                  00

                                                      1,145,025.                          1,145,025.
Thermal power generator                                                          0.00                         0.00                 0.00        0.00
                                                               64                                  64

Removal and R&D project of base liquid and support 6,973,661.                             6,973,661. 59,085,920                           59,085,92
                                                                                 0.00                                              0.00
facility project                                               51                                  51           .04                            0.04

                                                      1,577,655.                          1,577,655. 1,753,888.                           1,753,888.
Operation network of Gujing                                                      0.00                                              0.00
                                                               78                                  78             88                               88

Glass company II workshop technical renovation 5,513,757.                                 5,513,757.
                                                                                 0.00                      5,036.50                0.00    5,036.50
project                                                        23                                  23

                                                      2,522,093.                          2,522,093.                                      792,665.5
Other                                                                                                   792,665.54                 0.00
                                                               89                                  89                                              4

                                                      39,159,122                          39,159,12 61,637,510                            61,637,51
Total                                                                                                                              0.00
                                                             .86                      0        2.86             .96                            0.96


(2) Changes of significant construction in progress

                                                                                     Transferred to
 Name of project          Budget         Opening balance         Increase                                   Other decrease        Closing balance
                                                                                      fixed assets

Renovation project

of major potential     103,670,000.00                0.00        18,430,328.81                     0.00                    0.00       18,430,328.81

safety concerns

Shenzhen

experience                6,800,000.00               0.00         2,996,600.00                     0.00                    0.00        2,996,600.00

museum



                                                                   109
                                                                      2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                                                                                            Transferred to
 Name of project              Budget           Opening balance         Increase                                   Other decrease     Closing balance
                                                                                             fixed assets

Thermal          power
                               3,500,000.00                 0.00         1,145,025.64                      0.00               0.00       1,145,025.64
generator

Removal and R&D

project     of     base
                             800,000,000.00        59,085,920.04         279,0,000.00          58,439,814.27         21,572,444.26       6,973,661.51
liquid and support

facility project

Operation network
                               8,350,000.00         1,753,888.88                   0.00                    0.00          176,233.1       1,577,655.78
of Gujing

Glass company II

workshop technical            14,999,000.00             5,036.50         5,508,720.73                      0.00               0.00       5,513,757.23

renovation project

Other                          2,600,000.00          792,665.54          2,185,316.09             455,887.74                  0.00       2,522,093.89

Total                        939,919,000.00        61,637,510.96        58,165,991.27          58,895,702.01         21,748,677.36      39,159,122.86

(Continued)

                            Proportion of
                                                                    Accumulative
                               project                                                        Including:          Capitalization
                                                 Progress of          amount of
  Name of project           accumulative                                                   capitalization of      of interest rate Source of funding
                                                   works           capitalization of
                            investment in                                                 interest this period         (%)
                                                                       interest
                             budget (%)

Renovation        project

of major potential                     17.78            18.00%                    0.00                     0.00              0.00        Owned fund

safety concerns

Shenzhen experience
                                       44.07            90.00%                    0.00                     0.00              0.00        Owned fund
museum

Thermal            power
                                       32.72            80.00%                    0.00                     0.00              0.00        Owned fund
generator

Removal and R&D

project of base liquid
                                       92.35            99.00%                    0.00                     0.00              0.00        Owned fund
and support facility

project

Operation        network               50.59            60.00%                    0.00                     0.00              0.00        Owned fund


                                                                         110
                                                                      2015 Semi-annual Report of Anhui Gujing Distillery Company Limited



                            Proportion of
                                                                    Accumulative
                                 project                                                      Including:          Capitalization
                                                  Progress of         amount of
      Name of project       accumulative                                                  capitalization of       of interest rate Source of funding
                                                     works         capitalization of
                            investment in                                                interest this period          (%)
                                                                       interest
                             budget (%)

  of Gujing

  Glass company II

  workshop technical                   92.35              95.00%                  0.00                     0.00              0.00       Owned fund

  renovation project

  Other                                97.00              98.00%                  0.00                     0.00              0.00       Owned fund

  Total

  14. Intangible assets

             Item                    Land use right                    Patent                        Software                        Total

I. Total original book

value

1. Opening balance                          351,249,420.80                38,150,000.00                       4,465,480.74             393,864,901.54

 2.       Increase    in   the
                                                        0.00                           0.00                           0.00                       0.00
reporting period

(1) Purchase                                            0.00                           0.00                           0.00                       0.00

3.     Decrease      in    the
                                                        0.00                           0.00                           0.00                       0.00
reporting period

4. Closing balance                          351,249,420.80                38,150,000.00                       4,465,480.74             393,864,901.54

II.       Total      accrued

amortization

1. Opening balance                             47,205,017.04              38,090,000.00                       2,081,101.90              87,376,118.94

2.        Increase   in    the
                                                3,435,174.75                    30,000.00                     1,113,503.33               4,578,678.08
reporting period

 (1) Withdrawal                                 3,435,174.75                    30,000.00                     1,113,503.33               4,578,678.08

3.     Decrease      in    the
                                 &