ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2024
August 2024I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor
□ Yes □ No
These interim financial statements have not been audited by an independent auditor.II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
30 June 2024
Unit: RMB
Item 30 June 2024 1 January 2024
Current assets:
Monetary assets 16158396761.58 15966371744.19
Settlement reserve
Loans to other banks and financial
institutions
Held-for-trading financial assets 0.00 719987547.42
Derivative financial assets
Notes receivable
Accounts receivable 59519246.91 68607919.27
Receivables financing 1581346121.50 957560115.73
Prepayments 115234646.94 91607342.18
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 37020138.26 49178194.70
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 7758323363.84 7519682536.51
Including: Data resource
Contract assets
Assets held for sale
Current portion of non-current assets
1Other current assets 134701510.60 135071255.36
Total current assets 25844541789.63 25508066655.36
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 10437313.99 10367078.26
Investments in other equity
68799632.9263105658.07
instruments
Other non-current financial assets
Investment property 44627931.01 46622910.19
Fixed assets 4724543385.22 4596044056.92
Construction in progress 3228411813.84 2910735155.39
Productive living assets
Oil and gas assets
Right-of-use assets 104188743.84 81038100.24
Intangible assets 1107445540.60 1123186836.65
Including: Data resource
Development costs
Including: Data resource
Goodwill 561364385.01 561364385.01
Long-term prepaid expense 236660533.33 59102583.98
Deferred income tax assets 627263071.31 455588567.46
Other non-current assets 4412486.00 5685287.46
Total non-current assets 10718154837.07 9912840619.63
Total assets 36562696626.70 35420907274.99
Current liabilities:
Short-term borrowings 40014544.52 0.00
Borrowings from the central bank
Loans from other banks and financial
institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 418126347.55 1353187723.44
Accounts payable 2090075757.87 2814192071.24
Advances from customers
Contract liabilities 2218413969.30 1401122249.53
Financial assets sold under repurchase
agreements
Customer deposits and deposits from
2other banks and financial institutions
Payables for acting trading of
securities
Payables for underwriting of securities
Employee benefits payable 1152665323.59 1180605773.29
Taxes and levies payable 1304481154.79 1179368855.69
Other payables 3032063462.12 3267292222.01
Including: Interest payable
Dividends payable
Fees and commissions payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
65734379.4680825022.51
liabilities
Other current liabilities 1964535477.83 1132018451.10
Total current liabilities 12286110417.03 12408612368.81
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 83400000.00 107106256.94
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 84363974.83 68380767.78
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 101700136.20 100811404.82
Deferred income tax liabilities 276292048.38 321723514.56
Other non-current liabilities
Total non-current liabilities 545756159.41 598021944.10
Total liabilities 12831866576.44 13006634312.91
Owners’ equity:
Share capital 528600000.00 528600000.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserves 6224747667.10 6224747667.10
Less: Treasury stock
Other comprehensive income 2373236.52 1596322.73
Specific reserve
Surplus reserves 269402260.27 269402260.27
3General reserve
Retained earnings 15695054954.49 14500963359.34
Total equity attributable to owners of the
22720178118.3821525309609.44
Company as the parent
Non-controlling interests 1010651931.88 888963352.64
Total owners’ equity 23730830050.26 22414272962.08
Total liabilities and owners’ equity 36562696626.70 35420907274.99
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2024 1 January 2024
Current assets:
Monetary assets 7047539494.69 7430906530.24
Held-for-trading financial assets 0.00 719987547.42
Derivative financial assets
Notes receivable 0.00 44669454.15
Accounts receivable
Accounts receivable financing 1522467507.11 353179776.80
Prepayments 172869529.29 64184453.89
Other receivables 452421557.21 384878020.29
Including: Interest receivable
Dividends receivable
Inventories 5907655511.17 5791297076.99
Including: Data resource
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 88103446.48 70067944.53
Total current assets 15191057045.95 14859170804.31
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1624003543.47 1602935444.04
Investments in other equity
instruments
Other non-current financial assets
4Investment property 44627931.01 46622910.19
Fixed assets 3323853340.67 3457239038.00
Construction in progress 2639110755.67 2081093829.00
Productive living assets
Oil and gas assets
Right-of-use assets 104188743.84 81038100.24
Intangible assets 484777828.88 494450059.46
Including: Data resource
Development costs
Including: Data resource
Goodwill
Long-term prepaid expense 202384409.63 22664614.49
Deferred income tax assets 26518520.65 31803704.33
Other non-current assets
Total non-current assets 8449465073.82 7817847699.75
Total assets 23640522119.77 22677018504.06
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1310534504.82 1658351501.91
Advances from customers
Contract liabilities 2387816632.04 858057014.88
Employee benefits payable 502426705.03 477940588.68
Taxes payable 755081514.38 730264020.00
Other payables 755412160.76 879518254.66
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets held for sale
Current portion of non-current
13652379.4710771925.29
liabilities
Other current liabilities 315363510.93 134926323.61
Total current liabilities 6040287407.43 4749829629.03
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 84363974.83 68380767.78
5Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 37220451.20 35650375.64
Deferred income tax liabilities 62757792.01 71944672.72
Other non-current liabilities
Total non-current liabilities 184342218.04 175975816.14
Total liabilities 6224629625.47 4925805445.17
Owners’ equity:
Share capital 528600000.00 528600000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6176504182.20 6176504182.20
Less: Treasury stock
Other comprehensive income -4101328.79 -1993312.09
Specific reserve
Surplus reserves 264300000.00 264300000.00
Retained earnings 10450589640.89 10783802188.78
Total owners’ equity 17415892494.30 17751213058.89
Total liabilities and owners’ equity 23640522119.77 22677018504.06
3. Consolidated Income Statement
Unit: RMB
Item H1 2024 H1 2023
1. Revenue 13805693542.35 11310016495.10
Including: Operating revenue 13805693542.35 11310016495.10
Interest income
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 8832090887.25 7533156217.79
Including: Cost of sales 2704664895.42 2388610838.28
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
6Reinsurance premium
expense
Taxes and surcharges 2093680344.08 1605442141.06
Selling expense 3611684984.17 3048015143.61
Administrative expense 671150694.72 583974559.37
R&D expense 33232298.34 29964175.22
Finance costs -282322329.48 -122850639.75
Including: Interest
3445346.57771499.92
expense
Interest
298352344.67122996635.75
income
Add: Other income 26746914.82 27104577.88
Return on investment (“-” for loss) -25111476.37 -27346113.37
Including: Share of profit or loss
70235.7346146.26
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
0.0025168981.30
for loss)
Credit impairment loss (“-” for
57444.8884454.20
loss)
Asset impairment loss (“-” for loss) 6603562.17 -17556673.87
Asset disposal income (“-” for loss) 115019.47 203366.67
3. Operating profit (“-” for loss) 4982014120.07 3784518870.12
Add: Non-operating income 32302009.99 44676493.06
Less: Non-operating expense 6795915.82 20358442.79
4. Profit before tax (“-” for loss) 5007520214.24 3808836920.39
Less: Income tax expense 1328603900.45 964656318.72
5. Net profit (“-” for net loss) 3678916313.79 2844180601.67
5.1 By operating continuity
5.1.1 Net profit from continuing
3678916313.792844180601.67
operations (“-” for net loss)
5.1.2 Net profit from discontinued
operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to
3572791595.152779474367.51
shareholders of the Company as the
7parent (“-” for net loss)
5.2.1 Net profit attributable to non-
106124718.6464706234.16
controlling interests (“-” for net loss)
6. Other comprehensive income net of
2500944.331494571.29
tax
Attributable to owners of the Company
776913.79250144.18
as the parent
6.1 Items that will not be reclassified
2562288.681937767.20
to profit or loss
6.1.1 Changes caused by
remeasurements on defined benefit
schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
2562288.681937767.20
investments in other equity instruments
6.1.4 Changes in the fair value
arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to
-1785374.89-1687623.02
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit
or loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Other comprehensive
income arising from the reclassification of -1785374.89 -1687623.02
financial assets
6.2.4 Credit impairment
allowance for investments in other debt
obligations
6.2.5 Reserve for cash flow
hedges
6.2.6 Differences arising from the
translation of foreign currency-
denominated financial statements
6.2.7 Other
Attributable to non-controlling
1724030.541244427.11
interests
7. Total comprehensive income 3681417258.12 2845675172.96
Attributable to owners of the Company
3573568508.942779724511.69
as the parent
8Attributable to non-controlling
107848749.1865950661.27
interests
8. Earnings per share
8.1 Basic earnings per share 6.76 5.26
8.2 Diluted earnings per share 6.76 5.26
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2024 H1 2023
1. Operating revenue 7384017491.41 5688977006.98
Less: Cost of sales 2445598078.60 2033053131.03
Taxes and surcharges 1772751072.05 1375276190.77
Selling expense 21459835.72 18124000.75
Administrative expense 419472201.59 390026657.42
R&D expense 13929592.90 11525750.69
Finance costs -97004971.38 -90964543.78
Including: Interest expense 3595408.74 637086.51
Interest income 112271255.06 91541910.22
Add: Other income 6966116.88 1828952.83
Return on investment (“-” for loss) -26308146.40 -18401784.46
Including: Share of profit or loss
68099.4343101.60
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
0.0025168981.30
for loss)
Credit impairment loss (“-” for
-10278.59148348.99
loss)
Asset impairment loss (“-” for loss) 5706685.56 -17141448.76
Asset disposal income (“-” for loss) 0.00 14302.24
2. Operating profit (“-” for loss) 2794166059.38 1943553172.24
Add: Non-operating income 15441836.27 15599716.85
Less: Non-operating expense 4287382.39 17213516.15
3. Profit before tax (“-” for loss) 2805320513.26 1941939372.94
Less: Income tax expense 759833061.15 538348288.93
94. Net profit (“-” for net loss) 2045487452.11 1403591084.01
4.1 Net profit from continuing
2045487452.111403591084.01
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income net of
-2108016.70-1133280.01
tax
5.1 Items that will not be reclassified to
profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
investments in other equity instruments
5.1.4 Changes in the fair value
arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to
-2108016.70-1133280.01
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Other comprehensive income
arising from the reclassification of -2108016.70 -1133280.01
financial assets
5.2.4 Credit impairment allowance
for investments in other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the
translation of foreign currency-
denominated financial statements
5.2.7 Other
6. Total comprehensive income 2043379435.41 1402457804.00
7. Earnings per share
7.1 Basic earnings per share 3.87 2.66
7.2 Diluted earnings per share 3.87 2.66
105. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2024 H1 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and
14245568250.4612967342850.81
rendering of services
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 23333556.85 1875811.35
Cash generated from other operating
1818735111.851056647876.21
activities
Subtotal of cash generated from operating
16087636919.1614025866538.37
activities
Payments for commodities and services 3170264475.64 2160026046.33
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans granted
Interest handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 2060510062.01 1885616624.31
11Taxes paid 4887229011.01 3995204357.05
Cash used in other operating activities 1959926915.01 1257182813.95
Subtotal of cash used in operating
12077930463.679298029841.64
activities
Net cash generated from/used in operating
4009706455.494727836696.73
activities
2. Cash flows from investing activities:
Proceeds from disinvestment 725199000.00 760098239.02
Return on investment 22301834.45 1221108.96
Net proceeds from the disposal of fixed
assets intangible assets and other long- 49020.00 276793.00
lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from investing
747549854.45761596140.98
activities
Payments for the acquisition of fixed
assets intangible assets and other long- 1190884765.96 1027930984.35
lived assets
Payments for investments 720000000.00
Net increase in pledged loans granted
Net payments for the acquisition of
13439262.05
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
1190884765.961761370246.40
activities
Net cash generated from/used in investing
-443334911.51-999774105.42
activities
3. Cash flows from financing activities:
Capital contributions received 14000000.00 4000000.00
Including: Capital contributions by
14000000.004000000.00
non-controlling interests to subsidiaries
Borrowings raised 90000100.00 134000000.00
Cash generated from other financing
activities
Subtotal of cash generated from financing
104000100.00138000000.00
activities
Repayment of borrowings 91590000.00 113000000.00
Interest and dividends paid 2381442940.92 7626554.97
Including: Dividends paid by
5304511.69
subsidiaries to non-controlling interests
12Cash used in other financing activities 7509748.71 8506249.20
Subtotal of cash used in financing
2480542689.63129132804.17
activities
Net cash generated from/used in financing
-2376542589.638867195.83
activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
1189828954.353736929787.14
equivalents
Add: Cash and cash equivalents
14676167417.3613105373435.22
beginning of the period
6. Cash and cash equivalents end of the
15865996371.7116842303222.36
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2024 H1 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and
15817677216.119423877589.29
rendering of services
Tax rebates
Cash generated from other operating
732824253.24684649476.89
activities
Subtotal of cash generated from operating
16550501469.3510108527066.18
activities
Payments for commodities and services 1871024800.58 1600410168.91
Cash paid to and for employees 696968743.97 579079631.71
Taxes paid 3138757389.98 2341187694.15
Cash used in other operating activities 8602551118.12 3320490019.02
Subtotal of cash used in operating
14309302052.657841167513.79
activities
Net cash generated from/used in operating
2241199416.702267359552.39
activities
2. Cash flows from investing activities:
Proceeds from disinvestment 710199000.00 210098239.02
Return on investment 152089852.07 92948040.53
Net proceeds from the disposal of fixed
assets intangible assets and other long- 45000.00 14800.00
lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
13activities
Subtotal of cash generated from investing
862333852.07303061079.55
activities
Payments for the acquisition of fixed
assets intangible assets and other long- 1078518200.30 854427751.14
lived assets
Payments for investments 21000000.00 719000000.00
Net payments for the acquisition of
0.0013439262.05
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
1099518200.301586867013.19
activities
Net cash generated from/used in investing
-237184348.23-1283805933.64
activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from financing
activities
Repayment of borrowings
Interest and dividends paid 2379872355.31 0.00
Cash used in other financing activities 7509748.71 7606249.20
Subtotal of cash used in financing
2387382104.027606249.20
activities
Net cash generated from/used in financing
-2387382104.02-7606249.20
activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
-383367035.55975947369.55
equivalents
Add: Cash and cash equivalents
7430906530.247338284192.52
beginning of the period
6. Cash and cash equivalents end of the
7047539494.698314231562.07
period
147. Consolidated Statements of Changes in Owners’ Equity
H1 2024
Unit: RMB
H1 2024
Equity attributable to owners of the Company as the parent
Item Other equity
Non-
Less: Other Specifi Genera Total owners’
instruments Capital Surplus Retained Othe controlling
Share capital Treasur comprehensi c l Subtotal equity
interests
Preferre Perpetu Othe reserves reserves earnings r
y stock ve income reserve reserve
d shares al bonds r
1. Balance as
at the end of 528600000. 6224747667. 269402260. 14500963359. 21525309609. 22414272962.
1596322.73888963352.64
the period of 00 10 27 34 44 08
prior year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
152. Balance as
at the
528600000.6224747667.269402260.14500963359.21525309609.22414272962.
beginning of 1596322.73 888963352.64
001027344408
the Reporting
Period
3. Increase/
decrease in
1194091595.11194868508.91316557088.1
the period 776913.79 121688579.24
548
(“-” for
decrease)
3.1 Total
3572791595.13573568508.93681417258.1
comprehensi 776913.79 107848749.18
542
ve income
3.2 Capital
increased and
14000000.0014000000.00
reduced by
owners
3.2.1
Ordinary
shares 14000000.00 14000000.00
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
163.2.3
Share-based
payments
included in
owners’
equity
3.2.4
Other
---
3.3 Profit
2378700000.02378700000.0-160169.942378860169.9
distribution
004
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio - - -
n to owners 2378700000.0 2378700000.0 -160169.94 2378860169.9
(or 0 0 4
shareholders)
3.3.4
Other
3.4
Transfers
17within
owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset by
surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
18Other
comprehensi
ve income
transferred to
retained
earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of 528600000. 6224747667. 269402260. 15695054954. 22720178118. 1010651931. 23730830050.
2373236.52
the Reporting 00 10 27 49 38 88 26
Period
H1 2023
Unit: RMB
19H1 2023
Equity attributable to owners of the Company as the parent
Other equity Non-Item
Less: Other Specifi Genera Total owners’
instruments Surplus Retained Othe controlling
Share capital Capital reserves Treasur comprehensi c l Subtotal equity
Preferre Perpetu Othe reserves earnings r
interests
y stock ve income reserve reserve
d shares a l bonds r
1. Balance as
at the end of 528600000.0 6224747667. 269402260.2 11497599306. 18520757973. 812095782.6 19332853756.
408739.61
the period of 0 10 7 54 52 9 21
prior year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
2. Balance as
at the
528600000.06224747667.269402260.211497599306.18520757973.812095782.619332853756.
beginning of 408739.61
01075452921
the Reporting
Period
203. Increase/
decrease in
1193674367.51193924511.61257244533.3
the period 250144.18 63320021.66
195
(“-” for
decrease)
3.1 Total
2779474367.52779724511.62845675172.9
comprehensi 250144.18 65950661.27
196
ve income
3.2 Capital
increased and
4000000.004000000.00
reduced by
owners
3.2.1
Ordinary
shares 4000000.00 4000000.00
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
21equity
3.2.4
Other
---
3.3 Profit
1585800000.01585800000.0-6630639.611592430639.6
distribution
001
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio - - -
n to owners 1585800000.0 1585800000.0 -6630639.61 1592430639.6
(or 0 0 1
shareholders)
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
22capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset by
surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensi
ve income
transferred to
retained
23earnings
3.4.6
Other
3.5
Specific
reserve
3.5.1
Increase in
the period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of 528600000.0 6224747667. 269402260.2 12691273674. 19714682485. 875415804.3 20590098289.
658883.79
the Reporting 0 10 7 05 21 5 56
Period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2024
Unit: RMB
H1 2024
Other equity instruments Less: Other Specifi
Item Retained Oth Total owners’
Share capital Preferre Perpetua Capital reserves Treasur comprehensiv c Surplus reserves
Other earnings er equity
d shares l bonds y stock e income reserve
1. Balance as 528600000.0 6176504182.2 -1993312.09 264300000.00 10783802188. 17751213058.8
24at the end of 0 0 78 9
the period of
prior year
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
2. Balance as
at the
528600000.06176504182.210783802188.17751213058.8
beginning of -1993312.09 264300000.00
00789
the Reporting
Period
3. Increase/
decrease in the
-2108016.70-333212547.89-335320564.59
period (“-” for
decrease)
3.1 Total
2045487452.1
comprehensiv -2108016.70 2043379435.41
e income
3.2 Capital
increased and
25reduced by
owners
3.2.1
Ordinary
shares
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4
Other
-
3.3 Profit
2378700000.0-2378700000.00
distribution
0
3.3.1
Appropriation
to surplus
reserves
3.3.2-
-2378700000.00
Appropriation 2378700000.0
26to owners (or 0
shareholders)
3.3.3
Other
3.4
Transfers
within owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3
Loss offset by
surplus
reserves
3.4.4
Changes in
defined benefit
schemes
27transferred to
retained
earnings
3.4.5
Other
comprehensiv
e income
transferred to
retained
earnings
3.4.6
Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2
Used in the
period
3.6 Other
4. Balance as
at the end of 528600000.0 6176504182.2 10450589640. 17415892494.3
-4101328.79264300000.00
the Reporting 0 0 89 0
Period
H1 2023
Unit: RMB
Item H1 2023
28Other equity instruments Less: Other
Specific Surplus Oth Total owners’
Share capital Preferre Perpetual Capital reserves Treasury comprehensiv Retained earnings
Other reserve reserves er equity
d shares bonds stock e income
1. Balance as at
the end of the 528600000.0 264300000.0 16659897749.2
6176504182.20-529354.779691022921.78
period of prior 0 0 1
year
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
2. Balance as at
the beginning
528600000.0264300000.016659897749.2
of the 6176504182.20 -529354.77 9691022921.78
001
Reporting
Period
3. Increase/
decrease in the
-1133280.01-182208915.99-183342196.00
period (“-” for
decrease)
3.1 Total -1133280.01 1403591084.01 1402457804.00
29comprehensive
income
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4
Other
3.3 Profit
-1585800000.00-1585800000.00
distribution
3.3.1
Appropriation
to surplus
30reserves
3.3.2
Appropriation
-1585800000.00-1585800000.00
to owners (or
shareholders)
3.3.3
Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
31retained
earnings
3.4.5
Other
comprehensive
income
transferred to
retained
earnings
3.4.6
Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at
the end of the 528600000.0 264300000.0 16476555553.2
6176504182.20-1662634.789508814005.79
Reporting 0 0 1
Period
32Anhui Gujing Distillery Company Limited
Notes to Financial Statements for H1 2024
(Currency Unit Is RMB Unless Otherwise Stated)
1. BASIC INFORMATION ABOUT THE COMPANY
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi (1996) No.
053 the incorporation of Anhui Gujing Distillery Company Limited (the Company and GJ Distillery)
by Anhui Gujing Group Company Limited (GJ Group) as the sole founder by the operating assets
of Anhui Bozhou Gujing Distillery Factory (GJ Distillery Factory) which is the core operating unit
of GJ Group. The incorporation was further approved by the Anhui People's Government through
WanZhengMi (1996) 42. The incorporation General Meeting was held on 28 May 1996 and the
incorporation was registered with the Anhui Admistration Bureau for Commerce and Industry on 30
May 1996 with the registered address at Bozhou Anhui the People’s Republic of China (the PRC).At incorporation the Company’s total number of shares stood at 155 million with a valuation of CNY
377.17million which was the fair value of the operating assets of GJ Distillery Factory upon appraisal.
The Company initiated public offering of 60 million domestic listed shares held by foreign investors
(known as “B share(s)”) in June 1996 and 20 million domestic listed CNY ordinary shares (known
as “A share(s)”) in September 1996. The par value of both the B share and A share is CNY 1.00 per
share. The B shares and A shares issued were listed on the Shenzhen Stock Exchange.As of the public listing the Company has 235 million shares in total with the share capital at CNY
235 million. The Company’s at public listing comprised 155 million state-owned shares 60 million
B shares and 20 million A shares. Each of the Company’s shares has a par value at CNY 1.00 per
share.In accordance with the resolution of the General Meeting held on 29 May 2006 the Company
exercised the share reorganisation plan in June 2006. Immediately after the implementation of the
share reorganisation plan the Company had in total 235 million shares comprising 147 million shares
with restriction of disposal (equal to 62.55% of total shares) and 88 million free-floating shares (equal
to 37.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 27 June 2007 the
restriction on disposal on 11.75 million shares was lifted on 29 June 2007. Immediately after the
lifting the Company had in total 235 million shares comprising 135.25 million shares with restriction
of disposal (equal to 57.55% of total shares) and 99.75 million free-floating shares (equal to 42.45%
of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 17 July 2008 the
33restriction on disposal on 11.75 million shares was lifted on 18 July 2008. Immediately after the
lifting the Company had in total 235 million shares comprising 123.5 million shares with restriction
of disposal (equal to 52.55% of total shares) and 111.5 million free-floating shares (equal to 47.45%
of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 24 July 2009 the
restriction on disposal on 123.5 million shares was lifted on 29 July 2009. Immediately after the
lifting the Company had in total 235 million shares comprising 235 million free-floating shares
(equal to 100% of total shares).Upon approval by the China Securities Regulatory Commission (CSRC) through ZhengJianXuKe
[2011] 943 the Company issued on 15 July 2011 through private offering of 16.8 million A shares
with the par value at CNY 1.00 to designated investors. The shares were issued at CNY 75.00 per
share. Gross proceeds from this issuance was CNY 1260 million and the respective net proceeds
after deduction of the cost of issuance (CNY 32.5 million) was CNY 1227.5 million. The subscription
for the issuance was verified by Reanda CPAs Co. Ltd. through Reanda YanZi [2011] No. 1065.Immediately after this private offering the share capital of the Company increased to CNY 251.8
million.In accordance with the resolution of the Company’s 2011 General Meeting a bonus issue of 10 shares
for every 10 shares held at 31 December 2011 through utilisation of capital reserves was exercised in
2012. 251.8 million bonus shares were issued in total. Immediately after the exercise of the bonus
issue the Company’s share capital increased to CNY 503.6 million.Upon approval by the CSRC through ZhengJianXuKe [2021] 1422 the Company issued on 22 July
2021 through private offering of 25 million A shares with the par value at CNY 1.00 to designated
investors. The shares were issued at CNY 200.00 per share. Gross proceeds from this issuance was
CNY 5000 million and the respective net proceeds after deduction of the cost of issuance (CNY
45.66 million) was CNY 4954.34 million. The subscription for the issuance was verified by RSM
China CPAs LLP through RSM Yan [2021] No. 518Z0050. Immediately after this private offering
the share capital of the Company increased to CNY 528.6 million.As of 30 June 2024 total number of the Company’s shares stood at 528.6 million. See Note 5.32 for
further details.The Company's headquarters is located in Gujing town Bozhou City Anhui Province. Legal
representative of the company is Liang Jinhui.The Company is mainly engaged in the production and sales of baijiu which belongs to the food
manufacturing industry.These financial statements are approved on 30 August 2024 by the Company’s Board of Directors
for publication.
342. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis of Preparation
Based on going concern according to actually occurred transactions and events the Company
prepares its financial statements in accordance with the Accounting Standards for Business
Enterprises – Basic standards and concrete accounting standards Accounting Standards for Business
Enterprises – Application Guidelines Accounting Standards for Business Enterprises –Interpretations and other relevant provisions (collectively known as “Accounting Standards forBusiness Enterprises issued by Ministry of Finance of PRC”). In addition the Company discloses
the relevant financial information in accordance with "Rules No.15 for the Information Disclosure
and Reporting of Companies Offering Securities to the Public - General Requirements for Financial
Reporting (2023 Revision)" issued by CSRC.
2.2 Going Concern
The Company has assessed its ability to continually operate for the next twelve months from the end
of the reporting period and no any matters that may result in doubt on its ability as a going concern
were noted. Therefore it is reasonable for the Company to prepare financial statements on the going
concern basis.
3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
The following significant accounting policies and accounting estimates of the Company are
formulated in accordance with the Accounting Standards for Business Enterprises. Businesses not
mentioned are complied with relevant accounting policies of the Accounting Standards for Business
Enterprises.
3.1 Statement of Compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the Accounting
Standards for Business Enterprises truly and completely reflecting the Company’s financial position
as at 30 June 2024 and its operating results changes in shareholders' equity cash flows and other
related information for the year then ended.
3.2 Accounting Period
The accounting year of the Company is from 1 January to 31 December in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is twelve months.
353.4 Functional Currency
The Company takes Renminbi Yuan (“RMB”) as the functional currency.The Company’s overseas subsidiaries choose the currency of the primary economic environment in
which the subsidiaries operate as the functional currency.
3.5 Determining Factor and Basis of Selection of Materiality
Item Factor and basis of materiality
Significant write-off of other receivables Amount greater than 5 million
Significant individual provision for bad debt of accounts
Amount greater than 5 million
receivable
Significant other payables with aging of over one year More than 0.03% of the total assets
Significant accounts payable with aging of over one year More than 0.03% of the total assets
Total assets operating income and net profit account for more
Significant non-wholly owned subsidiaries than 5% of the corresponding items in the consolidated
financial statements
Significant construction in progress Individual amount more than 20 million
3.6 Accounting Treatment of Business Combinations under and not under Common Control
(1) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common control
shall be measured at their carrying amount of the acquired entity at the combination date. If the
accounting policy adopted by the acquired entity is different from that adopted by the acquiring entity
the acquiring entity shall according to accounting policy it adopts adjust the relevant items in the
financial statements of the acquired party based on the principal of materiality. As for the difference
between the carrying amount of the net assets obtained by the acquiring entity and the carrying
amount of the consideration paid by it the capital reserve (capital premium or share premium) shall
be adjusted. If the capital reserve (capital premium or share premium) is not sufficient to absorb the
difference any excess shall be adjusted against retained earnings.For the accounting treatment of business combination under common control by step acquisitions
please refer to Note 3.7 (6).
(2) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common
control shall be measured at their fair value at the acquisition date. If the accounting policy adopted
by the acquired entity is different from that adopted by the acquiring entity the acquiring entity shall
according to accounting policy it adopts adjust the relevant items in the financial statements of the
acquired entity based on the principal of materiality. The acquiring entity shall recognise the positive
36balance between the combination costs and the fair value of the identifiable net assets it obtains from
the acquired entity as goodwill. The acquiring entity shall pursuant to the following provisions treat
the negative balance between the combination costs and the fair value of the identifiable net assets it
obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets liabilities and
contingent liabilities it obtains from the acquired entity as well as the combination costs;
(ii) If after the review the combination costs are still less than the fair value of the identifiable net
assets it obtains from the acquired entity the balance shall be recognised in profit or loss of the
reporting period.For the accounting treatment of business combination under the same control by step acquisitions
please refer to Note 3.7 (6).
(3) Treatment of business combination related costs
The intermediary costs such as audit legal services and valuation consulting and other related
management costs that are directly attributable to the business combination shall be charged in profit
or loss in the period in which they are incurred. The costs to issue equity or debt securities for the
consideration of business combination shall be recorded as a part of the value of the respect equity or
debt securities upon initial recognition.
3.7 Judgment of Control and Method of Preparing the Consolidated Financial Statements
(1) Judgment of control and consolidation decision
Control exists when the Company has power over the investee exposure or rights to variable returns
from its involvement with the investee and the ability to use its power over the investee to affect the
amount of the returns. The definition of control contains there elements: - power over the investee;
exposure or rights to variable returns from the Company’s involvement with the investee; and the
ability to use its power over the investee to affect the amount of the investor’s returns. The Company
controls an investee if and only if the Company has all the above three elements.The scope of consolidated financial statements shall be determined on the basis of control. It not only
includes subsidiaries determined based on voting rights (or similar) or together with other
arrangement but also structured entities under one or more contractual arrangements.Subsidiaries are the entities that controlled by the Company (including enterprise a divisible part of
the investee and structured entity controlled by the enterprise). A structured entity (sometimes called
a Special Purpose Entity) is an entity that has been designed so that voting or similar rights are not
the dominant factor in deciding who controls the entity.
(2) Special requirement as the parent company is an investment entity
If the parent company is an investment entity it should measure its investments in particular
37subsidiaries as financial assets at fair value through profit or loss instead of consolidating those
subsidiaries in its consolidated and separate financial statements. However as an exception to this
requirement if a subsidiary provides investment-related services or activities to the investment entity
it should be consolidated.The parent company is defined as investment entity when meets following conditions:
(i) Obtains funds from one or more investors for the purpose of providing those investors with
investment management services;
(ii) Commits to its investors that its business purpose is to invest funds solely for returns from capital
appreciation investment income or both; and
(iii) Measures and evaluates the performance of substantially all of its investments on a fair value
basis.If the parent company becomes an investment entity it shall cease to consolidate its subsidiaries at
the date of the change in status except for any subsidiary which provides investment-related services
or activities to the investment entity shall be continued to be consolidated. The deconsolidation of
subsidiaries is accounted for as though the investment entity partially disposed subsidiaries without
loss of control.When the parent company previously classified as an investment entity ceases to be an investment
entity subsidiary that was previously measured at fair value through profit or loss shall be included
in the scope of consolidated financial statements at the date of the change in status. The fair value of
the subsidiary at the date of change represents the transferred deemed consideration in accordance
with the accounting for business combination not under common control.
(3) Method of preparing the consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial
statements of the Company and its subsidiaries and using other related information.When preparing consolidated financial statements the Company shall consider the entire group as an
accounting entity adopt uniform accounting policies and apply the requirements of Accounting
Standard for Business Enterprises related to recognition measurement and presentation. The
consolidated financial statements shall reflect the overall financial position operating results and cash
flows of the group.(i) Like items of assets liabilities equity income expenses and cash flows of the parent are combined
with those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against
the parent’s portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or
38between subsidiaries and when intragroup transactions indicate an impairment of related assets the
losses shall be recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.
(4) Method of preparation of the consolidated financial statements when subsidiaries are
acquired or disposed in the reporting period
(i) Acquisition of subsidiaries or business
Subsidiaries or business acquired through business combination under common control
When preparing consolidated statements of financial position the opening balance of the consolidated
balance sheet shall be adjusted. Related items of comparative financial statements shall be adjusted
as well deeming that the combined entity has always existed ever since the ultimate controlling party
began to control.Incomes expenses and profits of the subsidiary incurred from the beginning of the reporting period
to the end of the reporting period shall be included into the consolidated statement of profit or loss.Related items of comparative financial statements shall be adjusted as well deeming that the
combined entity has always existed ever since the ultimate controlling party began to control.Cash flows from the beginning of the reporting period to the end of the reporting period shall be
included into the consolidated statement of cash flows. Related items of comparative financial
statements shall be adjusted as well deeming that the combined entity has always existed ever since
the ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common control
When preparing the consolidated statements of financial position the opening balance of the
consolidated statements of financial position shall not be adjusted.Incomes expenses and profits of the subsidiary incurred from the acquisition date to the end of the
reporting period shall be included into the consolidated statement of profit or loss.Cash flows from the acquisition date to the end of the reporting period shall be included into the
consolidated statement of cash flows.(ii) Disposal of subsidiaries or business
When preparing the consolidated statements of financial position the opening balance of the
consolidated statements of financial position shall not be adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal date shall
be included into the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into the
consolidated statement of cash flows.
39(5) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised as
treasury stock of the Company which is offset with the owner’s equity represented as “treasury stock”
under “owner’s equity” in the consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking long-
term equity investment held by the Company to its subsidiaries as reference. That is the long-term
equity investment is eliminated (off-set) against the portion of the corresponding subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve and being different
from retained earnings and undistributed profit “Specific reserves” and “General risk provision” shall
be recovered based on the proportion attributable to owners of the parent company after long-term
equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the
consolidated statement of financial position and their tax basis is generated as a result of elimination
of unrealized inter-company transaction profit or loss deferred tax assets of deferred tax liabilities
shall be recognised and income tax expense in the consolidated statement of profit or loss shall be
adjusted simultaneously excluding deferred taxes related to transactions or events directly recognised
in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assets
to its subsidiaries shall be eliminated against “net profit attributed to the owners of the parent company”
in full. Unrealized inter-company transactions profit or loss generated from the subsidiaries sellingassets to the Company shall be eliminated between “net profit attributed to the owners of the parentcompany” and “non-controlling interests” pursuant to the proportion of the Company in the related
subsidiaries. Unrealized inter-company transactions profit or loss generated from the assets salesbetween the subsidiaries shall be eliminated between “net profit attributed to the owners of the parentcompany” and “non-controlling interests” pursuant to the proportion of the Company in the selling
subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the
proportion of non-controlling interest in this subsidiary at the beginning of the period non-controlling
interest is still to be written down.
(6) Accounting for Special Transactions
(i) Purchasing of non-controlling interests
Where the Company purchases non-controlling interests of its subsidiary in the separate financial
statements of the Company the cost of the long-term equity investment obtained in purchasing non-
controlling interests is measured at the fair value of the consideration paid. In the consolidated
financial statements difference between the cost of the long-term equity investment newly obtained
40in purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisition
date or combination date continuingly calculated pursuant to the newly acquired shareholding
proportion shall be adjusted into capital reserve (capital premium or share premium). If capital reserve
is not enough to be offset surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactions
Business combination under common control in stages through multiple transactions
On the combination date in the separate financial statement initial cost of the long-term equity
investment is determined according to the share of carrying amount of the acquiree’s net assets in the
ultimate controlling entity’s consolidated financial statements after combination. The difference
between the initial cost of the long-term equity investment and the carrying amount of the long -term
investment held prior of control plus book value of additional consideration paid at acquisition date
is adjusted into capital reserve (capital premium or share premium). If the capital reserve is not
enough to absorb the difference any excess shall be adjusted against surplus reserve and undistributed
profit in turn.In the consolidated financial statements the assets and liabilities acquired during the combination
should be recognized at their carrying amount in the ultimate controlling entity’s consolidated
financial statements on the combination date unless any adjustment is resulted from the difference in
accounting policies. The difference between the carrying amount of the investment held prior of
control plus book value of additional consideration paid on the acquisition date and the net assets
acquired through the combination is adjusted into capital reserve (capital premium or share premium).If the capital reserve is not enough to absorb the difference any excess shall be adjusted against
retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date
and the equity investment is accounted for under the equity method related profit or loss other
comprehensive income and other changes in equity which have been recognised during the period
from the later of the date of the Company obtaining original equity interest and the date of both the
acquirer and the acquiree under common control of the same ultimate controlling party to the
combination date should be offset against the opening balance of retained earnings at the comparative
financial statements period respectively.Business combination not under common control in stages through multiple transactions
On the consolidation date in the separate financial statements the initial cost of long-term equity
investment is determined according to the carrying amount of the original long-term investment plus
the cost of new investment.In the consolidated financial statements the equity interest of the acquired entity held prior to the
acquisition date shall be re-measured at its fair value on the acquisition date. Difference between the
41fair value of the equity interest and its book value is recognised as investment income. The other
comprehensive income related to the equity interest held prior to the acquisition date calculated
through equity method should be transferred to current investment income of the acquisition period
excluding other comprehensive income resulted from the remeasurement of the net assets or net
liabilities under defined benefit plan. The Company shall disclose acquisition-date fair value of the
equity interest held prior to the acquisition date and the related gains or losses due to the
remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control
when the Company prepares consolidated financial statements difference between consideration
received from the disposal and the corresponding share of subsidiary’s net assets cumulatively
calculated from the acquisition date or combination date shall be adjusted into capital reserve (capital
premium or share premium). If the capital reserve is not enough to absorb the difference any excess
shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of control
Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment when
the consolidated financial statements are prepared the retained equity interest should be re-measured
at fair value at the date of loss of control. The difference between i) the fair value of consideration
received from the disposal plus non-controlling interest retained; ii) share of the former subsidiary’s
net assets cumulatively calculated from the acquisition date or combination date according to the
original proportion of equity interest shall be recognised in current investment income when control
is lost.Moreover other comprehensive income and other changes in equity related to the equity investment
in the former subsidiary shall be transferred into current investment income when control is lost
excluding other comprehensive income resulted from the remeasurement of the movement of net
assets or net liabilities under defined benefit plan.Disposal in stagesIn the consolidated financial statements whether the transactions should be accounted for as “a singletransaction” needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction” in the separate financial
statements for transactions prior of the date of loss of control carrying amount of each disposal of
long-term equity investment need to be recognized and the difference between consideration received
and the carrying amount of long-term equity investment corresponding to the equity interest disposed
should be recognized in current investment income; in the consolidated financial statements the
42disposal transaction should be accounted for according to related policy in “Disposal of long-termequity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction” these transactions should be
accounted for as a single transaction of disposal of subsidiary resulting in loss of control. In the
separate financial statements for each transaction prior of the date of loss of control difference
between consideration received and the carrying amount of long-term equity investment
corresponding to the equity interest disposed should be recognised as other comprehensive income
firstly and transferred to profit or loss as a whole when control is lost; in the consolidated financial
statements for each transaction prior of the date of loss of control difference between consideration
received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed
should be recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact the
presence of one or more of the following indicators may lead to account for multiple transactions as
a single transaction:
* The transactions are entered into simultaneously or in contemplation of one another.* The transactions form a single transaction designed to achieve an overall commercial effect.* The occurrence of one transaction depends on the occurrence of at least one other transaction.* One transaction when considered on its own merits does not make economic sense but when considered
together with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by the
subsidiaries’ minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the
subsidiaries which resulted in the dilution of equity interest of parent company in these subsidiaries.In the consolidated financial statements difference between share of the corresponding subsidiaries’
net assets calculated based on the parent’s equity interest before and after the capital injection shall
be adjusted into capital reserve (capital premium or share premium). If the capital reserve is not
enough to absorb the difference any excess shall be adjusted against retained earnings.
3.8 Classification of Joint Arrangements and Accounting for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. Joint
arrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets and obligations for the liabilities relating to the arrangement.
43The Company shall recognise the following items in relation to shared interest in a joint operation
and account for them in accordance with relevant accounting standards of the Accounting Standards
for Business Enterprises:
(i) its assets including its share of any assets held jointly;
(ii) its liabilities including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses including its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of long-
term equity investment.
3.9 Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents include short-term (generally within three months of maturity at acquisition) highly
liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value.
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity.
(1) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial position
when and only when an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e.when the obligation specified in the contract is discharged or cancelled or expires. An exchange of
the Company (borrower) and lender of debt instruments that carry significantly different terms or a
substantial modification of the terms of an existing liability are both accounted for as an
44extinguishment of the original financial liability and the recognition of a new financial liability.
Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade
date accounting. A regular-way purchase or sale of financial assets is a transaction under a contract
whose terms require delivery of the asset within the time frame established generally by regulations
or convention in the market place concerned. Trade date is the date at which the entity commits itself
to purchase or sell an asset.
(2) Classification and measurement of financial assets
At initial recognition the Company classified its financial asset based on both the business model for
managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost financial asset at fair value through profit or loss (FVTPL) and
financial asset at fair value through other comprehensive income (FVTOCI). Reclassification of
financial assets is permitted if and only if the objective of the entity’s business mode l for managing
those financial assets changes. In this circumstance all affected financial assets shall be reclassified
on the first day of the first reporting period after the changes in business model; otherwise the
financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured at
FVTPL transaction costs are recognised in current profit or loss. For financial assets not measured at
FVTPL transaction costs should be included in the initial measurement. Notes receivable or accounts
receivable that arise from sales of goods or rendering of services are initially measured at the
transaction price defined in the accounting standard of revenue where the transaction does not include
a significant financing component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised cost
The financial asset at amortised cost category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is to hold
financial assets in order to collect contractual cash flows and the contractual term of the financial
asset gives rise on specified dates to cash flows that are solely payment of principal and interest on
the principal amount outstanding. These financial assets are subsequently measured at amortised cost
by adopting the effective interest rate method. Any gain or loss arising from derecognition according
to the amortisation under effective interest rate method or impairment are recognised in current profit
or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following conditions
are met: the financial asset is held within the business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual term of the financial
45asset gives rise on specified dates to cash flows that are solely payment of principle and interest on
the principal amount outstanding. All changes in fair value are recognised in other comprehensive
income except for gain or loss arising from impairment or exchange differences which should be
recognised in current profit or loss. At derecognition cumulative gain or loss previously recognised
under OCI is reclassified to current profit or loss. However interest income calculated based on the
effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument
investments as measured through FVTOCI. All changes in fair value are recognised in other
comprehensive income except for dividend income recognised in current profit or loss. At
derecognition cumulative gain or loss are reclassified to retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair
value through other comprehensive income (FVTOCI) should be classified as financial asset at fair
value through profit or loss (FVTPL). These financial assets should be subsequently measured at fair
value. All the changes in fair value are included in current profit or loss.
(3) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or
loss (FVTPL) loan commitments at a below-market interest rate and financial guarantee contracts
and financial asset at amortised cost.Subsequent measurement of financial assets will be based on the classification:
(i)Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial
liabilities designated at FVTPL are classified as financial liabilities at FVTP. After initial recognition
any gain or loss (including interest expense) are recognised in current profit or loss except for those
hedge accounting is applied. For financial liability that is designated as at FVTPL changes in the fair
value of the financial liability that is attributable to changes in the own credit risk of the issuer shall
be presented in other comprehensive income. At derecognition cumulative gain or loss previously
recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified
contract terms. The provision of impairment losses of loan commitments shall be recognised based
on expected credit losses model.Financial guarantee contract is a contract that requires the Company to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts
46liability shall be subsequently measured at the higher of: The amount of the loss allowance recognised
according to the impairment principles of financial instruments; and the amount initially recognised
less the cumulative amount of income recognised in accordance with the revenue principles.(iii)Financial liabilities at amortised cost
After initial recognition the Company measured other financial liabilities at amortised cost using the
effective interest method.Except for special situation financial liabilities and equity instrument should be classified in
accordance with the following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial
instrument to fulfill a contractual obligation this contractual obligation meet the definition of
financial liabilities. Some financial instruments do not comprise terms and conditions related to
obligations of delivering cash or another financial instrument explicitly they may include
contractual obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments it
should be considered that the Company’s own equity instruments are alternatives of cash or another
financial instrument or to entitle the holder of the equity instruments to sharing the remaining rights
over the net assets of the issuer. If the former is the case the instrument is a liability of the issuer;
otherwise it is an equity instrument of the issuer. Under some circumstances it is regulated in the
contract that the financial instrument must or may be settled in the Company's own equity instruments
where amount of contractual rights and obligations are calculated by multiplying the number of the
equity instruments to be available or delivered by its fair value upon settlement. Such contracts shall
be classified as financial liabilities regardless that the amount of contractual rights and liabilities is
fixed or fluctuate totally or partially with variables other than market price of the entity’s own equity
instruments (such as interest rate price of some kind of goods or some kind of financial instrument).
(4) Derivatives and embedded derivatives
At initial recognition derivatives shall be measured at fair value at the date of derivative contracts
are signed and subsequently measured at fair value. The derivative with a positive fair value shall be
recognized as an asset and with a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into
current profit or loss except for the effective portion of cash flow hedges which shall be recognised
in other comprehensive income and reclassified into current profit or loss when the hedged items
affect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host the
Company shall apply the requirements of financial asset classification to the entire hybrid contract.If a host that is not a financial asset and the hybrid contract is not measured at fair value with changes
47in fair value recognised in profit or loss and the economic characteristics and risks of the embedded
derivative are not closely related to the economic characteristics and risks of the host and a separate
instrument with the same terms as the embedded derivative would meet the definition of a derivative
the embedded derivative shall be separated from the hybrid instrument and accounted for as a separate
derivative instrument. If the Company is unable to measure the fair value of the embedded derivative
at the acquisition date or subsequently at the balance sheet date the entire hybrid contract is
designated as financial assets or financial liabilities at fair value through profit or loss.
(5) Impairment of financial instrument
The Company shall recognise a loss allowance based on expected credit losses on a financial asset
that is measured at amortised cost a debt investment at fair value through other comprehensive
income a contract asset a lease receivable a loan commitment and a financial guarantee contract.(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the
respective risks of a default occurring as the weights. Credit loss is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and all the cash
flows that the Company expects to receive (ie all cash shortfalls) discounted at the original effective
interest rate or credit- adjusted effective interest rate for purchased or originated credit-impaired
financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
12-month expected credit losses are the portion of lifetime expected credit losses that represent the
expected credit losses that result from default events on a financial instrument that are possible within
the 12 months after the reporting date (or the expected lifetime if the expected life of a financial
instrument is less than 12 months).At each reporting date the Company classifies financial instruments into three stages and makes
provisions for expected credit losses accordingly. A financial instrument of which the credit risk has
not significantly increased since initial recognition is at stage 1. The Company shall measure the loss
allowance for that financial instrument at an amount equal to 12-month expected credit losses. A
financial instrument with a significant increase in credit risk since initial recognition but is not
considered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for that
financial instrument at an amount equal to the lifetime expected credit losses. A financial instrument
is considered to be credit-impaired as at the end of the reporting period is at stage 3. The Company
shall measure the loss allowance for that financial instrument at an amount equal to the lifetime
expected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is determined to have low credit risk at the
48reporting date and measure the loss allowance for that financial instrument at an amount equal to 12-
month expected credit losses.For financial instrument at stage 1 stage 2 and those have low credit risk the interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset
(ie impairment loss not been deducted). For financial instrument at stage 3 interest revenue shall be
calculated by applying the effective interest rate to the amortised cost after deducting of impairment
loss.For notes receivable accounts receivable and accounts receivable financing no matter it contains a
significant financing component or not the Company shall measure the loss allowance at an amount
equal to the lifetime expected credit losses.Receivables/Contract assets
For the notes receivable accounts receivable other receivables accounts receivable financing and
long-term receivables which are demonstrated to be impaired by any objective evidence or applicable
for individual assessment the Company shall individually assess for impairment and recognise the
loss allowance for expected credit losses. If the Company determines that no objective evidence of
impairment exists for notes receivable accounts receivable other receivables accounts receivable
financing and long-term receivables or the expected credit loss of a single financial asset cannot be
assessed at reasonable cost such notes receivable accounts receivable other receivables accounts
receivable financing and long-term receivables shall be divided into several groups with similar credit
risk characteristics and collectively calculated the expected credit loss. The determination basis of
groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.Determination basis of accounts receivable is as following:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group the Company calculates expected credit losses through preparing an aging analysis
schedule with the lifetime expected credit losses rate taking reference to historical experience for
credit losses and considering current condition and expectation for the future economic situation.Determination basis of other receivables is as following:
49Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group the Company calculates expected credit losses through default exposure and the 12-
months or lifetime expected credit losses rate taking reference to historical experience for credit
losses and considering current condition and expectation for the future economic situation.Determination basis of accounts receivable financing is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.Determination basis of contract assets is as following:
Group 1: Project construction
Group 2: Undue warranty
For each group the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.Determination basis of long-term receivables financing is as following:
Group 1: Project receivables Lease receivables
Group 2: Others
For group 1 the Company calculates expected credit losses through default exposure and the lifetime
expected credit losses rate taking reference to historical experience for credit losses and considering
current condition and expectation for the future economic situation.For group 2 the Company calculates expected credit losses through default exposure and the 12-
months or lifetime expected credit losses rate taking reference to historical experience for credit
losses and considering current condition and expectation for the future economic situation.The Company's aging calculation method of credit risk characteristic combination based on aging is
as follows:
Aging Accounts receivable Provision ratio Other receivables provision ratio
Within 6 months 1% 1%
7 months to 1 years 5% 5%
1-2 years 10% 10%
502-3 years 50% 50%
Over 3 years 100% 100%
Debt investment and other debt investment
For debt investment and other debt investment the Company shall calculate the expected credit loss
through the default exposure and the 12-month or lifetime expected credit loss rate based on the nature
of the investment counterparty and the type of risk exposure.(ii) Low credit risk
If the financial instrument has a low risk of default the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term and adverse changes in economic and business
conditions in the longer term may but will not necessarily reduce the ability of the borrower to fulfill
its contractual cash flow obligations.(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly
since initial recognition using the change in the risk of a default occurring over the expected life of
the financial instrument through the comparison of the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the financial instrument as
at the date of initial recognition.To make that assessment the Company shall consider reasonable and supportable information that
is available without undue cost or effort and that is indicative of significant increases in credit risk
since initial recognition including forward-looking information. The information considered by the
Company are as following:
* Significant changes in internal price indicators of credit risk as a result of a change in credit risk since inception
* Existing or forecast adverse change in the business financial or economic conditions of the borrower that
results in a significant change in the borrower’s ability to meet its debt obligations；
* An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory economic or technological environment of the borrower；
* Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements which are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments or to otherwise influence the probability of a default occurring;
* Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
* Expected changes in the loan documentation including an expected breach of contract that may lead to covenant
waivers or amendments interest payment holidays interest rate step-ups requiring additional collateral or
51guarantees or other changes to the contractual framework of the instrument；
* Significant changes in the expected performance and behavior of the borrower；
* Contractual payments are more than 30 days past due.Depending on the nature of the financial instruments the Company shall assess whether the credit
risk has increased significantly since initial recognition on an individual financial instrument or a
group of financial instruments. When assessed based on a group of financial instruments the
Company can group financial instruments on the basis of shared credit risk characteristics for
example past due information and credit risk rating.Generally the Company shall determine the credit risk on a financial asset has increased significantly
since initial recognition when contractual payments are more than 30 days past due. The Company
can only rebut this presumption if the Company has reasonable and supportable information that is
available without undue cost or effort that demonstrates that the credit risk has not increased
significantly since initial recognition even though the contractual payments are more than 30 days
past due.(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for
financial asset at amortised cost and debt investment at fair value through other comprehensive
income. A financial asset is credit-impaired when one or more events that have a detrimental impact
on the estimated future cash flows of that financial asset have occurred. Evidences that a financial
asset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract such as a default
or past due event; the lender(s) of the borrower for economic or contractual reasons relating to the
borrower’s financial difficulty having granted to the borrower a concession(s) that the lender(s)
would not otherwise consider；it is becoming probable that the borrower will enter bankruptcy or
other financial reorganisation; the disappearance of an active market for that financial asset because
of financial difficulties；the purchase or origination of a financial asset at a deep discount that reflects
the incurred credit losses.(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition the
Company shall at each reporting date remeasure the expected credit loss and recognise in profit or
loss as an impairment gain or loss the amount of expected credit losses addition (or reversal). For
financial asset at amortised cost the loss allowance shall reduce the carrying amount of the financial
asset in the statement of financial position; for debt investment at fair value through other
comprehensive income the loss allowance shall be recognised in other comprehensive income and
shall not reduce the carrying amount of the financial asset in the statement of financial position.
52(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the Company
has no reasonable expectations of recovering the contractual cash flow of a financial asset in its
entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset. This
circumstance usually occurs when the Company determines that the debtor has no assets or sources
of income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment
loss.
(6) Transfer of financial assets
Transfer of financial assets refers to following two situations:
* Transfers the contractual rights to receive the cash flows of the financial asset;
* Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of
the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset
or neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’s ability
to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated
third party and is able to exercise that ability unilaterally and without needing to impose additional
restrictions on the transfer the Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on the
substance of the transfer.If the transfer of financial asset qualifies for derecognition in its entirety the difference between the
following shall be recognised in profit or loss:
* The carrying amount of transferred financial asset;
* The sum of consideration received and the part derecognised of the cumulative changes in fair value previously
recognised in other comprehensive income (The financial assets involved in the transfer are classified as
financial assets at fair value through other comprehensive income in accordance with Article 18 of the
Accounting Standards for Business Enterprises - Recognition and Measurement of Financial Instruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for
derecognition the previous carrying amount of the larger financial asset shall be allocated between
the part that continues to be recognised (For this purpose a retained servicing asset shall be treated
53as a part that continues to be recognised) and the part that is derecognised based on the relative fair
values of those parts on the date of the transfer. The difference between following two amounts shall
be recognised in profit or loss:
* The carrying amount (measured at the date of derecognition) allocated to the part derecognised；
* The sum of the consideration received for the part derecognised and part derecognised of the cumulative
changes in fair value previously recognised in other comprehensive income (The financial assets involved in
the transfer are classified as financial assets at fair value through other comprehensive income in accordance
with Article 18 of the Accounting Standards for Business Enterprises - Recognition and Measurement of
Financial Instruments).(ii) Continuing involvement in transferred assets
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a
transferred asset and retains control of the transferred asset the Company shall continue to recognise
the transferred asset to the extent of its continuing involvement and also recognise an associated
liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which it
is exposed to changes in the value of the transferred asset
(iii) Continue to recognise the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred financial
asset the Company shall continue to recognise the transferred asset in its entirety and the
consideration received shall be recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accounting
period the Company shall continuously recognise any income (gain) arising from the transferred
asset and any expense (loss) incurred on the associated liability.
(7) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial
position and shall not be offset. When meets the following conditions financial assets and financial
liabilities shall be offset and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; The
Company intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition the Company
shall not offset the transferred asset and the associated liability.
(8) Determination of fair value of financial instruments
Determination of fair value of financial assets and financial liabilities please refer to Note 3.11.
543.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in the
principal market or in the absence of a principal market in the most advantageous market price for
the related asset or liability. The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability assuming that market
participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the
greatest volume and frequency. The most advantageous market is the market which maximizes the
value that could be received from selling the asset and minimizes the value which is needed to be
paid in order to transfer a liability considering the effect of transport costs and transaction costs both.If the active market of the financial asset or financial liability exists the Company shall measure the
fair value using the quoted price in the active market. If the active market of the financial instrument
is not available the Company shall measure the fair value using valuation techniques.A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.(i) Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value including the market approach the income
approach and the cost approach. The Company shall use valuation techniques consistent with one or
more of those approaches to measure fair value. If multiple valuation techniques are used to measure
fair value the results shall be evaluated considering the reasonableness of the range of values
indicated by those results. A fair value measurement is the point within that range that is most
representative of fair value in the circumstances.When using the valuation technique the Company shall give the priority to relevant observable inputs.The unobservable inputs can only be used when relevant observable inputs is not available or
practically would not be obtained. Observable inputs refer to the information which is available from
market and reflects the assumptions that market participants would use when pricing the asset or
liability. Unobservable Inputs refer to the information which is not available from market and it has
to be developed using the best information available in the circumstances from the assumptions that
market participants would use when pricing the asset or liability.(ii) Fair value hierarchy
55To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation
techniques used to measure fair value. The fair value hierarchy gives the highest priority to Level 1
inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are
quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability either directly or indirectly. Level 3 inputs are
unobservable inputs for the asset or liability.
3.12 Inventories
(1) Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business in the
process of production for such sale or in the form of materials or supplies to be consumed in the
production process or in the rendering of services including raw materials work in progress semi-
finished goods finished goods goods in stock turnover material etc.
(2) Measurement method of cost of inventories sold or used
Inventories are measured at actual cost at recognition. The actual cost of an item of inventories
comprises the purchase cost cost of processing and other costs. The cost of inventories used or sold
is determined on the weighted average basis.
(3) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year
and surplus or losses of inventory stocktaking shall be included in current profit and loss.
(4) Recognition Criteria and Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net
realizable value of the inventories is recognised as provision for impairment of inventory and
recognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained
and factors such as purpose of holding the inventory and impact of post balance sheet event shall be
considered.(i) In normal operation process finished goods products and materials for direct sale their net
realizable values are determined at estimated selling prices less estimated selling expenses and
relevant taxes and surcharges; for inventories held to execute sales contract or service contract their
net realizable values are calculated on the basis of contract price. If the quantities of inventories
specified in sales contracts are less than the quantities held by the Company the net realizable value
of the excess portion of inventories shall be based on general selling prices. Net realizable value of
materials held for sale shall be measured based on market price.
56(ii) For materials in stock need to be processed in the ordinary course of production and business
net realisable value is determined at the estimated selling price less the estimated costs of completion
the estimated selling expenses and relevant taxes. If the net realisable value of the finished products
produced by such materials is higher than the cost the materials shall be measured at cost; if a decline
in the price of materials indicates that the cost of the finished products exceeds its net realisable value
the materials are measured at net realisable value and differences shall be recognised at the provision
for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For
inventories with large quantity and low unit price the provisions for inventory impairment are
determined on group basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date
the amounts written down are recovered and reversed to the extent of the inventory impairment which
has been provided for. The reversal shall be included in profit or loss.
(5) Amortisation method of low-value consumables
Low-value consumables: One-off writing off method is adopted.Package material: One-off writing off method is adopted.
3.13 Contract Assets and Contract Liabilities
The Company shall present contract assets or contract liabilities in the statement of financial position
depending on the relationship between the Company’s satisfying a performance obligation and the
customer’s payment. A contract asset shall be presented if the Company has the right to consideration
in exchange for goods or services that the Company has transferred to a customer when that right is
conditioned on something other than the passage of time. A contract liability shall be presented if the
Company has the obligation to transfer goods or services to a customer for which the Company has
received consideration (or the amount is due) from the customer.Method of determination and accounting for expected credit loss for contract assets please refer to
Note 3.10.Contract assets and contract liabilities shall be presented separately in the statement of financial
position. The contract asset and contract liability for the same contract shall be presented on a net
basis. A net balance shall be listed in the item of "Contract assets" or "Other non-current assets"
according to its liquidity; a credit balance shall be listed in the item of "Contract liabilities" or "Other
non-current liabilities" according to its liquidity. Contract assets and contract liabilities for different
contracts cannot be offset.
3.14 Contract costs
57Contract costs include costs to fulfill a contract and the costs to obtain a contract.
The Company shall recognise an asset from the costs incurred to fulfill a contract only if those costs
meet all of the following criteria:
(i) The costs relate directly to a contract or to an anticipated contract including: direct labour direct
materials manufacturing costs (or similar costs) costs that are explicitly chargeable to the customer
under the contract and other costs that are incurred only because an entity entered into the contract;
(ii) The costs enhance resources of the Company that will be used in satisfying performance
obligations in the future; and
(iii) The costs are expected to be recovered.The incremental costs of obtaining a contract shall be recognised as an asset if the Company expects
to recover them.An asset related to contract costs shall be amortised on a systematic basis that is consistent with the
revenue recognition of the goods or services to which the asset relates. The Company recognises the
contract acquisition costs as an expense when incurred if the amortisation period of the asset that the
Company otherwise would have recognised is one year or less.The Company shall accrue the provision for impairment recognise an impairment loss in profit or
loss to the extent that the carrying amount of an asset related to the contract cost exceeds the difference
of below two items and further consider whether the estimated liability related to the onerous contract
needs to be accrued:
(i) The remaining amount of consideration that the Company expects to receive in exchange for the
goods or services to which the asset relates; less
(ii) The costs that relate directly to providing those goods or services and that have not been
recognised as expenses.The Company shall recognise in profit or loss a reversal of some or all of an impairment loss
previously recognised when the impairment conditions no longer exist or have improved. The
increased carrying amount of the asset shall not exceed the amount that would have been determined
(net of amortisation) if no impairment loss had been recognised previously.Providing that the costs to fulfil a contract satisfy the requirement to be recognised as an asset the
Company shall present them in the account “Inventory” if the contract has an original expected
duration of one year (or a normal operating cycle) or less or in the account “Other non-current assets”
if the contract has an original expected duration of more than one year (or a normal operating cycle).Providing that the costs to obtain a contract satisfy the requirement to be recgonised as an asset the
Company shall present them in the account “Other current asset” if the contract has an original
58expected duration of one year (or a normal operating cycle) or less or in the account “Other non-current assets” if the contract has an original expected duration of more than one year (or a normal
operating cycle).
3.15 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of or
significant influence over an investee as well as equity investments in joint ventures. Associates of
the Company are those entities over which the Company has significant influence.
(1) Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement and the arranged relevant
activity must be decided under unanimous consent of the parties sharing control. In assessing whether
the Company has joint control of an arrangement the Company shall assess first whether all the
parties or a group of the parties control the arrangement. When all the parties or a group of the
parties considered collectively are able to direct the activities of the arrangement the parties control
the arrangement collectively. Then the Company shall assess whether decisions about the relevant
activities require the unanimous consent of the parties that collectively control the arrangement. If
two or more groups of the parties could control the arrangement collectively it shall not be assessed
as have joint control of the arrangement. When assessing the joint control the protective rights are
not considered.Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control of those policies. In determination of significant influence
over an investee the Company should consider not only the existing voting rights directly or
indirectly held but also the effect of potential voting rights held by the Company and other entities
that could be currently exercised or converted including the effect of share warrants share options
and convertible corporate bonds that issued by the investee and could be converted in current period.If the Company holds directly or indirectly 20% or more but less than 50% of the voting power of
the investee it is presumed that the Company has significant influence of the investee unless it can
be clearly demonstrated that in such circumstance the Company cannot participate in the decision-
making in the production and operating of the investee.
(2) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
For a business combination involving enterprises under common control if the Company makes
payment in cash transfers non-cash assets or bears liabilities as the consideration for the business
combination the share of carrying amount of the owners’ equity of the acquiree in the consolidated
financial statements of the ultimate controlling party is recognised as the initial cost of the long-term
equity investment on the combination date. The difference between the initial investment cost and
59the carrying amount of cash paid non-cash assets transferred and liabilities assumed shall be adjusted
against the capital reserve; if capital reserve is not enough to be offset undistributed profit shall be
offset in turn.For a business combination involving enterprises under common control if the Company issues
equity securities as the consideration for the business combination the share of carrying amount of
the owners’ equity of the acquiree in the consolidated financial statements of the ultimate controlling
party is recognised as the initial cost of the long-term equity investment on the combination date. The
total par value of the shares issued is recognised as the share capital. The difference between the
initial investment cost and the carrying amount of the total par value of the shares issued shall be
adjusted against the capital reserve; if capital reserve is not enough to be offset undistributed profit
shall be offset in turn.For business combination not under common control the assets paid liabilities incurred or assumed
and the fair value of equity securities issued to obtain the control of the acquiree at the acquisition
date shall be determined as the cost of the business combination and recognised as the initial cost of
the long-term equity investment. The audit legal valuation and advisory fees other intermediary
fees and other relevant general administrative costs incurred for the business combination shall be
recognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination the investment cost
shall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash the initial cost is the actually paid
purchase cost including the expenses taxes and other necessary expenditures directly related to the
acquisition of long-term equity investments.For long-term equity investments acquired through issuance of equity securities the initial cost is the
fair value of the issued equity securities.For the long-term equity investments obtained through exchange of non-monetary assets if the
exchange has commercial substance and the fair values of assets traded out and traded in can be
measured reliably the initial cost of long-term equity investment traded in with non-monetary assets
are determined based on the fair values of the assets traded out together with relevant taxes.Difference between fair value and book value of the assets traded out is recorded in current profit or
loss. If the exchange of non-monetary assets does not meet the above criterion the book value of the
assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring the initial cost is determined
based on the fair value of the equity obtained and the difference between initial investment cost and
carrying amount of debts shall be recorded in current profit or loss.
(3) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be
60accounted for at cost method. Long-term equity investment to a joint venture or an associate shall be
accounted for at equity method.(i) Cost method
For Long-term equity investment at cost method cost of the long-term equity investment shall be
adjusted when additional amount is invested or a part of it is withdrawn. The Company recognises its
share of cash dividends or profits which have been declared to distribute by the investee as current
investment income.(ii) Equity method
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable
assets in the investee at the date of investment the difference shall not be adjusted to the initial cost
of long-term equity investment; if the initial cost of the investment is in short of the share of the fair
value of the net identifiable assets in the investee at the date investment the difference shall be
included in the current profit or loss and the initial cost of the long-term equity investment shall be
adjusted accordingly.The Company recognises the share of the investee’s net profits or losses as well as its share of the
investee’s other comprehensive income as investment income or losses and other comprehensive
income respectively and adjusts the carrying amount of the investment accordingly. The carrying
amount of the investment shall be reduced by the share of any profit or cash dividends declared to
distribute by the investee. The investor’s share of the investee’s owners’ equity changes other than
those arising from the investee’s net profit or loss other comprehensive income or profit distribution
shall be recognised in the investor’s equity and the carrying amount of the long-term equity
investment shall be adjusted accordingly. The Company recognises its share of the investee’s net
profits or losses after making appropriate adjustments of investee’s net profit based on the fair values
of the investee’s identifiable net assets at the investment date. If the accounting policy and accounting
period adopted by the investee is not in consistency with the Company the financial statements of
the investee shall be adjusted according to the Company’s accounting policies and accounting period
based on which investment income or loss and other comprehensive income etc. shall be adjusted.The unrealized profits or losses resulting from inter-company transactions between the company and
its associate or joint venture are eliminated in proportion to the company’s equi ty interest in the
investee based on which investment income or losses shall be recognised. Any losses resulting from
inter-company transactions between the investor and the investee which belong to asset impairment
shall be recognised in full.Where the Company obtains the power of joint control or significant influence but not control over
the investee due to additional investment or other reason the relevant long-term equity investment
shall be accounted for by using the equity method initial cost of which shall be the fair value of the
original investment plus the additional investment. Where the original investment is classified as
other equity investment difference between its fair value and the carrying value in addition to the
61cumulative changes in fair value previously recorded in other comprehensive income shall be
recogised into retained earnings of the period of using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such
as disposal of equity investment the retained interest shall be measured at fair value and the difference
between the carrying amount and the fair value at the date of loss the joint control or significant
influence shall be recognised in profit or loss. When the Company discontinues the use of the equity
method the Company shall account for all amounts previously recognised in other comprehensive
income under equity method in relation to that investment on the same basis as would have been
required if the investee had directly disposed of the related assets or liabilities.
(4) Equity investment classified as held for sale
Any retained interest in the equity investment not classified as held for sale shall be accounted for
using equity method.When an equity investment in an associate or a joint venture previously classified as held for sale no
longer meets the criteria to be so classified it shall be accounted for using the equity method
retrospectively as from the date of its classification as held for sale. Financial statements for the
periods since classification as held for sale shall be amended accordingly.
(5) Impairment testing and provision for impairment loss
For investment in subsidiaries associates or a joint ventures provision for impairment loss please
refer to Note 3.22.
3.16 Investment Properties
(1) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both including:
(i) Land use right leased out
(ii) Land held for transfer upon appreciation
(iii) Buildings leased out
(2) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For
provision for impairment please refer to Note 3.22.The Company calculates the depreciation or amortisation based on the net amount of investment
property cost less the accumulated impairment and the net residual value using straight-line method.The estimated useful life and annual depreciation rates which are determined according to the
categories estimated economic useful lives and estimated net residual rates are listed as followings:
62Estimated useful life
Category Residual rates (%) Annual depreciation rates (%)
(year)
Buildings and constructions 10.00-30.00 3.00-5.00 3.17-9.70
Land use right 40.00-50.00 0.00 2.00-2.50
3.17 Fixed Assets
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing
commodities rendering services renting or business management with useful lives exceeding one
year.
(1) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria
are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets if recognition criteria
of fixed assets are satisfied otherwise the expenditure shall be recorded in current profit or loss when
incurred.
(2) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intended
use using the straight-line-method. The estimated useful life and annual depreciation rates which are
determined according to the categories estimated economic useful lives and estimated net residual
rates of fixed assets are listed as followings:
Estimated useful life Annual depreciation
Category Depreciation method Residual rates (%)
(year) rates (%)
Buildings and
straight-line-method 8.00-35.00 3.00-5.00 2.71-12.13
constructions
Machinery equipment straight-line-method 8.00-10.00 3.00-5.00 9.50-12.13
Transportation vehicles straight-line-method 4.00 3.00 24.25
Administrative and other
straight-line-method 3.00 3.00 32.33
devices
For the fixed assets with impairment provided the impairment provision should be excluded from
the cost when calculating depreciation.At the end of reporting period the Company shall review the useful life estimated net residual value
63and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjusted
if it is changed compared to the original estimation.
3.18 Construction in Progress
(1) Classification of construction in progress
Construction in progress is measured on an individual project basis.
(2) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are
ready for their intended use including construction costs original price of machinery equipment
other necessary expenses incurred to bring the construction in progress to get ready for its intended
use and borrowing costs of the specific loan for the construction or the proportion of the general loan
used for the constructions incurred before they are ready for their intended use. The construction in
progress shall be transferred to fixed asset when the installation or construction is ready for the
intended use. For construction in progress that has been ready for their intended use but relevant
budgets for the completion of projects have not been completed the estimated values of project
budgets prices or actual costs should be included in the costs of relevant fixed assets and
depreciation should be provided according to relevant policies of the Company when the fixed assets
are ready for intended use. After the completion of budgets needed for the completion of projects the
estimated values should be substituted by actual costs but depreciation already provided is not
adjusted.The specific criteria and timing of transfer to fixed assets for the Company’s different categories of
construction in progress items:
category The specific criteria and timing of transfer to fixed assets
(i) The main construction project and supporting projects have been substantially
completed;
(ii) After the construction project meets the predetermined design requirements it shall be inspected
and accepted by the survey design construction supervision and other units and inspected and
Houses and buildings
accepted by the local construction authorities and other relevant units;
(iii) If the construction project has reached the predetermined serviceability state but has not yet
completed the final accounts it shall be transferred to the fixed assets at the estimated value according
to the actual cost of the project from the date of reaching the predetermined serviceability state.(i) Relevant equipment and other supporting facilities have been installed;
Equipment to be installed
(ii) After debugging the equipment can maintain normal and stable operation for a period of time and
and debugged
the production equipment can produce qualified products stably in a period of time;
64category The specific criteria and timing of transfer to fixed assets
(iii) The equipment management department shall conduct joint inspection with the asset use
department safety management Department emergency Department environmental Protection
Department and other departments.
3.19 Right-of-use assets
At the lease commencement date a right-of-use asset is measured at cost. The cost of a right-of-use
asset comprise:
(i) The amount of the initial measurement of the lease liability;
(ii) Any lease payments made at or before the commencement date less any lease incentives received;
(iii) Any initial direct costs incurred by the Group; and
(iv) An estimate of costs to be incurred by the Group in dismantling and removing the underlying
asset restoring the site on which it is located or restoring the underlying asset to the condition required
by the terms and conditions of the lease unless those costs are incurred to produce inventories.A right-of-use asset is subsequently measured at cost. If it is reasonably certain that ownership of the
lease item will transfer to the Group upon expiry of the lease the leased item is depreciated over its
useful life; if however transfer of ownership of the leased item upon expiry of the lease to the Group
cannot be reasonably expected the leased item is depreciated over the shorter of its useful life and
the lease term. Where a leased item has recorded impairment its residual value after deducting the
impairment allowance is depreciated in accordance the principle described in this paragraph.
3.20 Borrowing costs
(1) Recognition criteria and period for capitalization of borrowing costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition
construction or production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred and;
(iii) Acquisition construction or production activities that are necessary to prepare the assets for their
intended use or sale are in progress.Other borrowing cost discounts or premiums on borrowings and exchange differences on foreign
currency borrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition construction
or production of a qualifying asset is interrupted abnormally and the interruption is for a continuous
period of more than 3 months.
65Capitalization of such borrowing costs ceases when the qualifying assets being acquired constructed
or produced become ready for their intended use or sale. The expenditure incurred subsequently shall
be recognised as expenses when incurred.
(2) Capitalization rate and measurement of capitalized amounts of borrowing costs
When funds are borrowed specifically for purchase construction or manufacturing of assets eligible
for capitalization the Company shall determine the amount of borrowing costs eligible for
capitalisation as the actual borrowing costs incurred on that borrowing during the period less any
interest income on bank deposit or investment income on the temporary investment of those
borrowings.Where funds allocated for purchase construction or manufacturing of assets eligible for capitalization
are part of a general borrowing the eligible amounts are determined by the weighted-average of the
cumulative capital expenditures in excess of the specific borrowing multiplied by the general
borrowing capitalization rate. The capitalisation rate will be the weighted average of the borrowing
costs applicable to the general borrowing.
3.21 Intangible Assets
(1) Measurement method of intangible assets
Intangible assets are recognised at actual cost at acquisition.
(2) The useful life and amortisation of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 40-50 years Legal life
The service life is determined by reference to the period that can
Patents 10 years
bring economic benefits to the Company
The service life is determined by reference to the period that can
Software 3-5 years
bring economic benefits to the Company
The service life is determined by reference to the period that can
Trademarks 10 years
bring economic benefits to the Company
For intangible assets with finite useful life the estimated useful life and amortisation method are
reviewed annually at the end of each reporting period and adjusted when necessary. No change has
incurred in current year in the estimated useful life and amortisation method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are regarded as
intangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every year
end. If the useful lives of those assets are still indefinite impairment test should be performed on those assets at the
balance sheet date.(iii) Amortisation of the intangible assets
For intangible assets with finite useful lives their useful lives should be determined upon their acquisition and
66systematically amortised on a straight-line basis [units of production method] over the useful life. The amortisation
amount shall be recognised into current profit or loss according to the beneficial items. The amount to be amortised
is cost deducting residual value. For intangible assets which has impaired the cumulative impairment provision
shall be deducted as well. The residual value of an intangible asset with a finite useful life shall be assumed to be
zero unless: there is a commitment by a third party to purchase the asset at the end of its useful life; or there is an
active market for the asset and residual value can be determined by reference to that market; and it is probable that
such a market will exist at the end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses the useful lives of
those assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite the
useful lives shall be estimated and the intangible assets shall be amortised systematically and reasonably within the
estimated useful lives.
(3) Scope of Research and Development Expenditures
The Company classifies the expenses directly related to research and development activities as research and
development expenditures including remuneration of research and development staff direct material depreciation
cost and long-term amortised expense design fee equipment commissioning fee intangible assets amortisation cost
outsourcing research and development cost and other expenses etc.
(4) Criteria of classifying expenditures on internal research and development projects into
research phase and development phase
Preparation activities related to materials and other relevant aspects undertaken by the Company for the purpose of
further development shall be treated as research phase. Expenditures incurred during the research phase of internal
research and development projects shall be recognised in profit or loss when incurred.Development activities after the research phase of the Company shall be treated as development phase.
(5) Criteria for capitalization of qualifying expenditures during the development phase
Expenditures arising from development phase on internal research and development projects shall be recognised as
intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be available for use or sale;
(ii) Its intention to complete the intangible asset and use or sell it;
(iii) The method that the intangible assets generate economic benefits including the Company can demonstrate the
existence of a market for the output of the intangible assets or the intangible assets themselves or if it is to be used
internally the usefulness of the intangible assets;
(iv) The availability of adequate technical financial and other resources to complete the development and to use or
sell the intangible asset; and
(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
3.22 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries associates and joint ventures investment properties
fixed assets constructions in progress and intangible assets subsequently measured at cost shall be determined
according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an asset may be
impaired. If any such indication exists the Company shall estimate the recoverable amount of the asset and test for
67impairment. Irrespective of whether there is any indication of impairment the Company shall test for impairment
of goodwill acquired in a business combination intangible assets with an indefinite useful life or intangible assets
not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and the
present values of the estimated future cash flows of the long-term assets. The Company estimate the recoverable
amounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset the
Company estimates the recoverable amount of the groups of assets that the individual asset belongs to. Identification
of a group of asset is based on whether the cash inflows from it are largely independent of the cash inflows from
other assets or groups of assets.If and only if the recoverable amount of an asset or a group of assets is less than its carrying amount the carrying
amount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall be
recognised accordingly.For the purpose of impairment testing goodwill acquired in a business combination shall from the acquisition date
be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevant group of
assets good will shall be allocated to relevant combination of asset groups. The relevant group of assets or
combination of asset groups is a group of assets or combination of asset groups that is benefit from the synergies of
the business combination and is not larger than the reporting segment determined by the Company.When test for impairment if there is an indication that relevant group of assets or combination of asset groups may
be impaired impairment testing for group of assets or combination of asset groups excluding goodwill shall be
conducted first and the recoverable amount shall be then calculated and the impairment loss shall be recognised
accordingly. Then the group of assets or combination of asset groups including goodwill shall be tested for
impairment by comparing the carrying amount with its recoverable amount. If the recoverable amount is less than
the carrying amount the Company shall recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognised.
3.23 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred which shall be amortised over
current and subsequent periods with the amortisation period exceeding one year.
3.24 Employee Benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in
exchange for service rendered by employees or for the termination of employment relationship.Employee benefits include short-term employee benefits post-employment benefits termination
benefits and other long-term employee benefits. Benefits provided to an employee's spouse children
dependents family members of decreased employees or other beneficiaries are also employee
benefits.According to liquidity employee benefits are presented in the statement of financial position as
“Employee benefits payable” and “Long-term employee benefits payable”.(a) Short-term employee benefits
(i) Employee basic salary (salary bonus allowance subsidy)
68The Company recognises in the accounting period in which an employee provides service actually
occurred short-term employee benefits as a liability with a corresponding charge to current profit
except for those recognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfare
The Company shall recognise the employee welfare based on actual amount when incurred into
current profit or loss or related capital expenditure. Employee welfare shall be measured at fair value
as it is a non-monetary benefits.(iii) Social insurance such as medical insurance work injury insurance and maternity insurance
housing funds labor union fund and employee education fund
Payments made by the Company of social insurance for employees such as medical insurance work
injury insurance and maternity insurance payments of housing funds and labor union fund and
employee education fund accrued in accordance with relevant requirements in the accounting period
in which employees provide services is calculated according to required accrual bases and accrual
ratio in determining the amount of employee benefits and the related liabilities which shall be
recognised in current profit or loss or the cost of relevant asset.(iv) Short-term paid absences
The company shall recognise the related employee benefits arising from accumulating paid absences
when the employees render service that increases their entitlement to future paid absences. The
additional payable amounts shall be measured at the expected additional payments as a result of the
unused entitlement that has accumulated. The Company shall recognise relevant employee benefit of
non-accumulating paid absences when the absences actually occurred.(v)Short-term profit-sharing plan
The Company shall recognise the related employee benefits payable under a profit-sharing plan when
all of the following conditions are satisfied:
* The Company has a present legal or constructive obligation to make such payments as a result of past
events; and
* A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can
be made.(b) Post-employment benefits
(i) Defined contribution plans
The Company shall recognise in the accounting period in which an employee provides service the
contribution payable to a defined contribution plan as a liability with a corresponding charge to the
current profit or loss or the cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve
69months after the end of the annual reporting period in which the employees render the related service
they shall be discounted using relevant discount rate (market yields at the end of the reporting period
on high quality corporate bonds in active market or government bonds with the currency and term
which shall be consistent with the currency and estimated term of the defined contribution obligations)
to measure employee benefits payable.(ii) Defined benefit plan
The present value of defined benefit obligation and current service costs
Based on the expected accumulative welfare unit method the Company shall make estimates about
demographic variables and financial variables in adopting the unbiased and consistent actuarial
assumptions and measure defined benefit obligation and determine the obligation period. The
Company shall discount the obligation arising from defined benefit plan using relevant discount rate
(market yields at the end of the reporting period on high quality corporate bonds in active market or
government bonds with the currency and term which shall be consistent with the currency and
estimated term of the defined benefit obligations) in order to determine the present value of the
defined benefit obligation and the current service cost.The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognised as the present value of the
defined benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan it shall measure the net defined benefit
asset at the lower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or loss
Service cost comprises current service cost past service cost and any gain or loss on settlement. Other
service cost shall be recognised in profit or loss unless accounting standards require or allow the
inclusion of current service cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets
interest cost on the defined benefit obligation and interest on the effect of the asset ceiling shall be
included in profit or loss.The amount recognised in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements
including:
* Actuarial gains and losses the changes in the present value of the defined benefit obligation resulting from
experience adjustments or the effects of changes in actuarial assumptions;
* Return on plan assets excluding amounts included in net interest on the net defined benefit liability or asset;
70* Any change in the effect of the asset ceiling excluding amounts included in net interest on the net defined
benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive income
shall not be reclassified to profit or loss in a subsequent period. However the Company may transfer
those amounts recognised in other comprehensive income within equity.(c) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefits
liability for termination benefits with a corresponding charge to the profit or loss of the reporting
period at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an
employment termination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves the
payment of termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end
of the annual reporting period the Company shall discount the termination benefits using relevant
discount rate (market yields at the end of the reporting period on high quality corporate bonds in
active market or government bonds with the currency and term which shall be consistent with the
currency and estimated term of the defined benefit obligations) to measure the employee benefits.(d) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the
conditions for classifying as a defined contribution plan all those benefits payable shall be accounted
for as employee benefits payable at their discounted value.(ii) Meet the conditions of the defined benefit plan
At the end of the reporting period the Company recognised the cost of employee benefit from other
long-term employee benefits as the following components:
* Service costs;
* Net interest cost for net liability or asset of other long-term employee benefits
* Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits
In order to simplify the accounting treatment the net amount of above items shall be recognised in
profit or loss or relevant cost of assets.
3.25 Lease liabilities
71At the commencement date the Group measures the lease liability at the present value of the lease
payments that are not paid at that date. The lease payments comprise:
(i) Fixed payments or in-substance fixed payments less any lease incentives receivable;
(ii) Variable lease payments that depend on an index or a rate;
(iii) The exercise price of a purchase option if the Group is reasonably certain to exercise that option;
(iv) Payments of penalties for terminating the lease if the lease term reflects the Group exercising an
option to terminate the lease; and
(v) Amounts expected to be payable by the Group under residual value guarantees.The lease payments shall be discounted using the interest rate implicit in the lease if that rate can be
readily determined. If that rate cannot be readily determined the lessee shall use the lessee’s
incremental borrowing rate. The excess of the lease payments over its present value is amortised over
the lease term as interest expenses using the discount rate. A variable lease payment which is not
included in the initial measurement of the lease liability is recognised in profit or loss when incurred.
3.26 Provisions
(1) Recognition
A provision is recognised for an obligation associated with a contingent event when the following
conditions are satisfied:
(i) The obligation is a present obligation assumed by the entity;
(ii) It is probable that fulfillment of the obligation will result in outflows of economic benefits from
the entity;
(iii) The amount of the obligation can be reliably measured.
(2) Measurement
A provision is initially measured at the best estimate of expenses required for the performance of
relevant present obligations. The Company when determining the best estimate has had a
comprehensive consideration of risks with respect to contingencies uncertainties and the time value
of money. The carrying amount of the provision shall be reviewed at the end of every reporting period.If conclusive evidences indicate that the carrying amount fails to be the best estimate of the provision
the carrying amount shall be adjusted based on the updated best estimate.
3.27 Revenue
(1) General Principle
Revenue is defined as the gross inflow of economic benefits arising in the course of the ordinary
activities of the Company when those inflows result in the increases in shareholders’ equity other
72than increases relating to contributions from shareholders.
The Company shall recognise revenue when it satisfies a performance obligation in the contract as
the customer obtains control of a good or service. Control of a good or service refers to the ability to
direct the use of and obtain substantially all of the remaining economic benefits from the good or
service.When the contract has two or more obligation performances the Company shall allocate the
transaction price to each performance obligation in proportion to a relative stand-alone selling price
at contract inception of the promised good or service underlying each performance obligation in the
contract and recognize revenue based on the transaction price allocated to each performance
obligation.The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer excluding amounts collected on
behalf of third parties. When determining the transaction price of the contract if the contract includes
a variable consideration the Company shall determine the best estimate of the variable consideration
based on the expected value or the most likely amount and include in the transaction price only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the variable consideration is
subsequently resolved. If the contract contains a significant financing component the Company shall
determine the transaction price at an amount that reflects the price that a customer would have paid
for the promised goods or services if the customer had paid cash for those goods or services when (or
as) they transfer to the customer. The difference between the transaction price and the promised
consideration shall be amortised using the effective interest method within the contract period. The
Company need not consider the effects of a significant financing component if the period between
when the Company transfers control of a good or service to a customer and when the customer pays
for that good or service will be one year or less.The Company satisfies a performance obligation over time if one of the following criteria is met;
otherwise a performance obligation is satisfied at a point in time:
(i) The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs;
(ii) The Company’s performance creates or enhances an asset (for example work in progress) that
the customer controls as the asset is created or enhanced;
(iii) The Company’s performance does not create an asset with an alternative use to the Company and
the Company has an enforceable right to payment for performance completed to date.For each performance obligation satisfied over time the Company shall recognise revenue over time
by measuring the progress towards complete satisfaction of that performance obligation unless those
73progress cannot be reasonably measured. The Company measures the progress of a performance
obligation for the service rendered using input methods (or output methods). In some circumstances
the Company cannot be able to reasonably measure the progress of a performance obligation but the
Company expects to recover the costs incurred in satisfying the performance obligation. In those
circumstances the Company shall recognise revenue only to the extent of the costs incurred until
such time that it can reasonably measure the progress of the performance obligation.The Company shall recognise revenue at the point in which a customer obtains control of a promised
good or service if a performance obligation is satisfied at a point in time. To determine the point in
time at which a customer obtains control of a promised good or service the Company shall consider
indicators of the transfer of control which include but are not limited to the followings:
(i) The Company has a present right to payment for the good or service – a customer is presently
obliged to pay for the good or service;
(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title to
the asset;
(iii) The Company has transferred physical possession of an asset to a customer - the customer has
physical possession of the asset;
(iv) The Company has transferred the significant risks and rewards of ownership of the asset to a
customer - the customer has the significant risks and rewards of ownership of the asset;
(v) The customer has accepted the asset.(VI) Other indication that the customer has obtained control over the asset.
(2) Specific Method
Revenue recognition methods of the Company are as follows:
(i) Contract of sales of goods
According to the contract of sales of goods between the Company and the customer the Company
satisfies a performance obligation by transferring goods to the customer which is a performance
obligation satisfied at a point in time.Revenue from domestic sales of goods can only be recognised when the following conditions are
satisfied: the Company has transferred the promised goods to the customer according to the contract
and the customer has accepted the goods; the payment has been received or the receipt voucher has
been obtained and it is highly probable that the consideration will be received; the significant risks
and rewards of ownership of the asset has been transferred; legal title of the asset has been transferred.(ii) Contract of rendering services
74The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs，Company satisfies a performance obligation by renderingof services to the customer which is a performance obligation satisfied over time. For each
performance obligation satisfied over time the Company shall recognise revenue over time by
measuring the progress towards complete satisfaction of that performance obligation.The customer can’t simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs the Company’s performance does not create an asset with an
alternative use and the Company has no enforceable right to payment for performance completed to
date at all times throughout the duration of the contract Revenue from rendering of services is a
performance obligation satisfied at a point in time. The company recognizes revenue when the
company completes technical services in accordance with the contractual agreement
(iii) Revenue from usage of assets
Revenue from usage of the Group’s assets is recognised if the revenue can be reliably measured and
it is probable that the associated economic benefits will flow to the Group.Revenue from usage of assets mainly includes the income from the leasing of premises and houses.Revenue measured in accordance with the method determined by the respective contracts.
3.28 Government Grants
(1) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.
(2) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable and non-
monetary grants from the government shall be measured at their fair value or at a nominal value of
RMB 1.00 when reliable fair value is not available.
(3) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the Company
75used for purchase or construction or forming the long-term assets by other ways. Government grants
pertinent to assets shall be recognised as deferred income and should be recognised in profit or loss
on a systematic basis over the useful lives of the relevant assets. Grants measured at their nominal
value shall be directly recognised in profit or loss of the period when the grants are received. When
the relevant assets are sold transferred written off or damaged before the assets are terminated the
remaining deferred income shall be transferred into profit or loss of the period of disposing relevant
assets.(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income.Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant expenses
or losses in future periods such government grants shall be recognised as deferred income and
included into profit or loss (or write down related expenses) in the same period as the relevant
expenses or losses are recognised;
If the government grants related to income are used to compensate the enterprise’s relevant expenses
or losses incurred such government grants are directly recognised into current profit or loss (or write
down related expenses).For government grants comprised of part related to assets as well as part related to income each part
is accounted for separately; if it is difficult to identify different part the government grants are
accounted for as government grants related to income as a whole.Government grants related to daily operation activities are recognised in other income (or write down
related expenses) in accordance with the nature of the activities and government grants irrelevant to
daily operation activities are recognised in non-operating income.(iii) Loan interest subsidy
When loan interest subsidy is allocated to the bank and the bank provides a loan at lower-market rate
of interest to the Company the loan is recognised at the actual received amount and the interest
expense is calculated based on the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company the subsidy shall be recognised as
offsetting the relevant borrowing cost.(iv) Repayment of the government grants
Repayment of the government grants shall be recorded by increasing the carrying amount of the asset
if the book value of the asset has been written down or reducing the balance of relevant deferred
income if deferred income balance exists any excess will be recognised into current profit or loss; or
directly recognised into current profit or loss for other circumstances.
763.29 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the statement of
financial position and its tax base at the balance sheet date. The Company recognise and measure the effect of
taxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities or
deferred tax assets using liability method. Deferred tax assets and deferred tax liabilities shall not be discounted.
(1) Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences the carryforward of
unused tax losses and the carryforward of unused tax credits to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences the carryforward
of unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates that are
expected to apply to the period when the asset is realised unless the deferred tax asset arises from the
initial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and
(ii) At the time of the transaction affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognise a deferred tax asset for all deductible temporary differences arising
from investments in subsidiaries associates and joint ventures only to the extent that it is probable
that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.At the end of each reporting period if there is sufficient evidence that it is probable that taxable profit
will be available against which the deductible temporary difference can be utilized the Company
recognises a previously unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The
Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer
probable that sufficient taxable profit will be available to allow the benefit of part or all of that
deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomes
probable that sufficient taxable profit will be available.
(2) Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that
are expected to apply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
* The initial recognition of goodwill; or
* The initial recognition of an asset or liability in a transaction which: is not a business combination;
77and at the time of the transaction affects neither accounting profit nor taxable profit (tax loss)
(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated
with investments in subsidiaries associates and joint ventures except to the extent that both of the
following conditions are satisfied:
* The Company is able to control the timing of the reversal of the temporary difference; and
* It is probable that the temporary difference will not reverse in the foreseeable future.
(3) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business
combination not under common control a deferred tax liability or a deferred tax asset shall be
recognised and simultaneously goodwill recognised in the business combination shall be adjusted
based on relevant deferred tax expense (income).(ii) Items directly recognised in equity
Current tax and deferred tax related to items that are recognised directly in equity shall be recognised
in equity. Such items include: other comprehensive income generated from fair value fluctuation of
other debt investments; an adjustment to the opening balance of retained earnings resulting from
either a change in accounting policy that is applied retrospectively or the correction of a prior period
(significant) error; amounts arising on initial recognition of the equity component of a compound
financial instrument that contains both liability and equity component.(iii) Unused tax losses and unused tax credits
Unused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law
that can be offset against taxable income in future periods. The criteria for recognising deferred tax
assets arising from the carryforward of unused tax losses and tax credits are the same as the criteria
for recognising deferred tax assets arising from deductible temporary differences. The Company
recognises a deferred tax asset arising from unused tax losses or tax credits only to the extent that
there is convincing other evidence that sufficient taxable profit will be available against which the
unused tax losses or unused tax credits can be utilised by the Company. Income taxes in current profit
or loss shall be deducted as well.Unused tax losses and unused tax credits arising from a business combination
Under a business combination the acquiree’s deductible temporary differences which do not satisfy
the criteria at the acquisition date for recognition of deferred tax asset shall not be recognised. Within
12 months after the acquisition date if new information regarding the facts and circumstances exists
78at the acquisition date and the economic benefit of the acquiree’s deductible temporary differences at
the acquisition is expected to be realised the Company shall recognise acquired deferred tax benefits
and reduce the carrying amount of any goodwill related to this acquisition. If goodwill is reduced to
zero any remaining deferred tax benefits shall be recognised in profit or loss. All other acquired
deferred tax benefits realised shall be recognised in profit or loss.(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements if temporary difference between carrying value of
the assets and liabilities in the consolidated financial statements and their taxable bases is generated
from elimination of inter-company unrealized profit or loss deferred tax assets or deferred tax
liabilities shall be recognised in the consolidated financial statements and income taxes expense in
current profit or loss shall be adjusted as well except for deferred tax related to transactions or events
recognised directly in equity and business combination.(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment during the period in which
the expenses are recognised according to the accounting standards the Company estimates the tax
base in accordance with available information at the end of the accounting period and the temporary
difference arising from it. Deferred tax shall be recognised when criteria of recognition are satisfied.If the amount of estimated future tax deduction exceeds the amount of the cumulative expenses related
to share-based payment recognised according to the accounting standards the tax effect of the excess
amount shall be recognised directly in equity.
(4) Basis for deferred income tax assets and deferred income tax liabilities presented on a net
basis
The Company shall offset deferred tax assets and deferred tax liabilities if and only if:
(i) the Company has a legally enforceable right to set off current tax assets against current tax
liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same
taxation authority on either:
* the same taxable entity; or
* different taxable entities which intend either to settle current tax liabilities and assets on a net basis or to
realise the assets and settle the liabilities simultaneously in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
3.30 Leases
(1) Identifying a lease
79At inception of a contract the Company shall assess whether the contract is or contains a lease. A
contract is or contains a lease if the contract conveys the right to control the use of one or more
identified assets for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset for a period of time the Company shall
assess whether throughout the period of use the customer has the right to obtain substantially all of
the economic benefits from use of the identified asset and to direct the use of the identified asset.
(2) Identifying a separate lease component
When a contract includes more than one separate lease components the Company shall separate
components of the contract and account for each lease component separately. The right to use an
underlying asset is a separate lease component if both conditions have been satisfied: (i) the lessee
can benefit from use of the underlying asset either on its own or together with other resources that are
readily available to the lessee; (ii) the underlying asset is neither highly dependent on nor highly
interrelated with the other underlying assets in the contract.
(3) The Company as a lessee
At the commencement date the Company identifies the lease that has a lease term of 12 months or
less and does not contain a purchase option as a short-term lease. A lease qualifies as a lease of a low-
value asset if the nature of the asset is such that when new the asset is typically of low value. If the
Company subleases an asset or expects to sublease an asset the head lease does not qualify as a lease
of a low-value asset.For all the short-term leases or leases for which the underlying asset is of low value the Company
shall recognise the lease payments associated with those leases as cost of relevant asset or expenses
in current profit or loss on a straight-line basis over the lease term.Except for the election of simple treatment as short-term lease or lease of a low-value asset as
mentioned above at the commencement date the Company shall recognise a right-of-use asset and a
lease liability.(i) Right-of-use asset
A right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the lease
term.At the commencement date the Company shall initially measure the right-of-use asset at cost. The
cost of the right-of-use asset shall comprise:
* the amount of the initial measurement of the lease liability；
* any lease payments made at or before the commencement date less any lease incentives received;
* any initial direct costs incurred by the lessee; and
80* an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset restoring
the site on which it is located or restoring the underlying asset to the condition required by the terms and
conditions of the lease. The Company recognises and measures the cost in accordance with the recognition
criteria and measurement method for estimated liabilities details please refer to Notes 3.26. Those costs
incurred to produce inventories shall be included in the cost of inventories.The right-of-use asset shall be depreciated according to the categories using straight‐line method.If it is reasonably certain that the ownership of the underlying asset shall be transferred to the lessee
by the end of the lease term the depreciation rate shall be determined based on the classification of
the right-of- use asset and estimated residual value rate from the commencement date to the end of
the useful life of the underlying asset. Otherwise the depreciation rate shall be determined based on
the classification of the right-of-use asset from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term.The depreciation method estimated useful life residual rates and annual depreciation rates which are
determined according to the categories of right-of-use asset are listed as followings:
Depreciation Estimated useful life Annual depreciation rates
Category Residual rates (%)
method (year) (%)
straight‐line
Buildings and constructions 3.00-10.00 0.00 10.00-33.33
method
straight‐line
Machinery equipment 3.00 0.00 33.33
method
(ii) Lease liability
At the commencement date the lease liability shall be measured at the present value of the lease
payments that are not paid at that date. The lease payments included in the measurement of the lease
liability comprise the following 5 items:
* fixed payments and in-substance fixed payments less any lease incentives receivable;
* variable lease payments that depend on an index or a rate；
* the exercise price of a purchase option if the lessee is reasonably certain to exercise that option；
* payments of penalties for terminating the lease if the lease term reflects the lessee exercising an option to
terminate the lease；
* amounts expected to be payable by the lessee under residual value guarantees.In order to calculate the present value of the lease payments interest rate implicit in the lease shall be
used as the discount rate. If that rate cannot be readily determined the Company shall use the
incremental borrowing rate. The difference between the lease payments and its present value shall be
recognised as unrecognised financing charges calculated bases on the discount rate of the present
81value of the lease payments in each period within the lease term and recorded as interest expense in
current profit or loss. Variable lease payments not included in the measurement of lease liabilities
shall be recognised in current profit or loss when incurred.After the commencement date the Company shall remeasure the lease liability based on the revised
present value of the lease payments and adjust the carrying amount of the right-of-use asset if there
is a change in the in-substance fixed payments or change in the amounts expected to be payable
under a residual value guarantee or change in an index or a rate used to determine lease payments
or change in the assessment or exercising of an option to purchase the underlying asset or an option
to extend or terminate the lease.
(4) The Company as a lessor
At the commencement date the Company shall classify a lease as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset otherwise it
shall be classified as an operating lease.(i) Operating leases
The Company shall recognise lease payments from operating leases as income on a straight-line basis
over the term of the relevant lease and the initial direct costs incurred in obtaining an operating lease
shall be capitalised and recognised as an expense over the lease term on the same basis as the lease
income. The Company shall recognise the variable lease payments relating to the operating lease but
not included in the measurement of the lease receivables into current profit or loss when incurred.(ii) Finance leases
At the commencement date the Company shall recognise the lease receivables at an account equal to
the net investment in the lease (the sum of the present value of the unguaranteed residual values and
the lease payment that are not received at the commencement date discounted at the interest rate
implicit in the lease) and derecognise the asset relating to the finance lease. The Company shall
recognise interest income using the interest rate implicit in the lease over the lease term.The Company shall recognise the variable lease payments relating to the finance lease but not
included in the measurement of the net investment in the lease into current profit or loss when incurred.
(5) Lease modifications
(i) A lease modification accounted for as a separate lease
The Company shall account for a modification to a lease as a separate lease if both:
* the modification increases the scope of the lease by adding the right to use one or more underlying assets; and
* the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase
in scope.
82(ii) A lease modification not accounted for as a separate lease
The Company as a lessee
At the effective date of the lease modification the Company shall redetermine the lease term of the
modified lease and remeasure the lease liability by discounting the revised lease payments using a
revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease
for the remainder of the lease term if that rate can be readily determined or the incremental
borrowing rate at the effective date of the modification if the interest rate implicit in the lease cannot
be readily determined.The Company shall account for the remeasurement of the lease liability by:
* decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for
lease modifications that decrease the scope of the lease or shorten the lease term. The Company shall recognise
in profit or loss any gain or loss relating to the partial or full termination of the lease.* Making a corresponding adjustment to the carrying amount of the right-of-use asset for all other lease
modifications.The Company as a lessor
The Company shall account for a modification to an operating lease as a new lease from the effective
date of the modification considering any prepaid or accrued lease payments relating to the original
lease as part of the lease payments for the new lease.For a modification to a finance lease that is not accounted for as a separate lease the Company shall
account for the modification as follows:
* if the lease would have been classified as an operating lease had the modification been in effect at the inception
date the Company shall account for the lease modification as a new lease from the effective date of the
modification and measure the carrying amount of the underlying asset as the net investment in the lease
immediately before the effective date of the lease modification;
* if the lease would have been classified as a finance lease had the modification been in effect at the inception
date the Company shall account for the lease modification according to the requirements in the modification
or renegotiation of the contract.
(6) Sale and leaseback
The Company shall determine whether the transfer of an asset under the sale and leaseback transaction
is a sale of that asset according to the policies in Note 3.27.(i) The Company as a seller (lessee)
If the transfer of the asset is not a sale the Company shall continue to recognise the transferred asset
83and shall recognise a financial liability equal to the transfer proceeds. It shall account for the financial
liability according to Note 3.10. If the transfer of the asset is a sale the Company shall measure the
right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the
asset that relates to the right of use retained by the Company. Accordingly the Company shall
recognise only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor.(ii) The Company as a buyer (lessor)
If the transfer of the asset is not a sale the Company shall not recognise the transferred asset and shall
recognise a financial asset equal to the transfer proceeds. It shall account for the financial asset
according to Note 3.10. If the transfer of the asset is a sale the Company shall account for the purchase
of the asset applying applicable Accounting Standards of Business Enterprises and for the lease
applying the lessor accounting requirements.
3.31 Changes in Significant Accounting Policies and Accounting Estimates
(1) Changes in accounting polices
□ Applicable □ Not applicable
(2) Significant changes in accounting estimates
□ Applicable □ Not applicable
(3) Adjustments to financial statement items at the beginning of the year of the first
implementation of the new accounting standards implemented since 2024
□ Applicable □ Not applicable
4. TAXATION
4.1Major Categories of Tax and Tax Rates Applicable to the Company
Categories of tax Basis of tax assessment Tax rate
Value added in the course of
Value added tax (VAT) sales of goods and rendering of 13% 9% 6%
services
Tax by quantity: CNY 1.00 per kilogram or litre of distrilled wine sold;
Consumption duty Taxable revenue
Tax by revenue: 20% on taxable revenue from sale of distrilled wine
Urban maintenance and
Transaction tax payable 7% 5%
construction tax
Education surcharge Transaction tax payable 3%
Local education Transaction tax payable 2%
surcharge
Corporate income tax Taxable income 25%
(CIT)
The basic income tax rate of the company is 25% and the actual income tax rate of some subsidiaries is shown in
84the following table:
Name of Taxpayer Rate of Income Tax
Anhui Longrui Glass Co. Ltd 15.00%
Anhui Ruisiweier Technology Co. Ltd 15.00%
Anhui RunAnXinKe Testing Technology Co. Ltd. 15.00%
Anhui Gujinggong Liquor Original Vintage Theme Hotel Management Co. Ltd. 5.00%
Anhui Guqi Distillery Co. Ltd. 5.00%
Bozhou Gujing Hotel Co. Ltd 5.00%
Anhui Jiuan Mechanical Electrical Equipment Co. Ltd. 5.00%
Hubei Junlou Cultural Tourism Co. Ltd. 5.00%
Hubei Xinjia Testing Technology Co. Ltd. 5.00%
Wuhan Gulou Junhe Trading Co. Ltd. 5.00%
Wuhan Gulou Juntai Trading Co. Ltd. 5.00%
Ezhou Junya Trading Co. Ltd. 5.00%
Anhui Gujing Health Technology Co. Ltd. 15.00%
4.2Tax Preference
(1) According to the Notice on Announcing the List of First Batch of High-tech Enterprises in Anhui Province for
2022 (wankeqimi [2022] No.482) issued by Department of Science and Technology of Anhui province the
subsidiary Ruisiweier was identified as a high-tech enterprise in 2022 therefore was given High-tech Enterprise
Certificate (Certificate Number: GR202234000476) which is valid for 3 years. According to Enterprise Income Tax
Law and other relevant regulations the company is subject to a national high-tech enterprise income tax rate at 15%
for three years from 1 January 2022 to 31 December 2024.
(2) According to the Notice on Filing and Publicity for the First Batch of High-tech Enterprises Recognized by the
Certifing Body in Anhui Province for 2022 jointly issued by Department of Science and Technology of Anhui
province Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State Administration
of Taxation the subsidiary Longrui Glass was identified as a high-tech enterprise in 2022 therefore was given
High-tech Enterprise Certificate (Certificate Number: GR202234004359) which is valid for 3 years. According to
Enterprise Income Tax Law and other relevant regulations the company is subject to a national high-tech enterprise
income tax rate at 15% for three years from 1 January 2022 to 31 December 2024.
(3) According to Notice on Announcing the List of Two Batches of Supplementary Filing High-tech Enterprises in
Anhui Province for 2021 (wankegaomi [2022] No.49) issued by Department of Science and Technology of Anhui
province Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State Administration
of Taxation the subsidiary Anhui RunAnXinKe Testing Technology Co. Ltd. was identified as a high-tech
enterprise in 2021 therefore was given High-tech Enterprise Certificate (Certificate Number: GR202134004920)
which is valid for 3 years. According to Enterprise Income Tax Law and other relevant regulations the company is
85subject to a national high-tech enterprise income tax rate at 15% for three years from 1 January 2021 to 31 December
2023. It is currently in the process of recertification and until it passes the recertification the corporate income tax
is temporarily prepaid at a rate of 15%.
(4) According to the Announcement on the Filing of the Second Batch of High-tech Enterprises Identified by the
Anhui Province in 2021 issued by the Office of the National Leading Group for the Identification and Management
of High-tech Enterprises the subsidiary Anhui Gujing Health Technology Co. Ltd. (“Health Technology”) has
been recognized as the second batch of high-tech enterprises in Anhui Province in 2021 and obtained the High-tech
Enterprise Certificate (Certificate No.: GR202134004641) with a valid period from 2021 to 2023. According to
relevant regulations such as the Enterprise Income Tax Law the Health Technology shall enjoy an income tax rate
of 15% for national high-tech enterprises from 1 January 2021 to 31 December 2023. It is currently in the process
of recertification and until it passes the recertification the corporate income tax is temporarily prepaid at a rate of
15%.
(5) According to the relevant provisions of the document “Announcement of the Ministry of Finance and the GeneralAdministration of Taxation No. 12 of 2023 from 1 January 2023 to 31 December 2027 the part of the annual
taxable income of small and micro profit enterprises that does not exceed RMB3 million shall be included in the
taxable income at a reduced rate of 25%. Pay corporate income tax at a rate of 20%. Anhui Gujinggong Liquor
Original Vintage Theme Hotel Management Co. Ltd. Bozhou Gujing Hotel Co. Ltd. Anhui Jiuan Mechanical
Electrical Equipment Co. Ltd. Anhui Guqi Distillery Co. Ltd. Hubei Junlou Cultural Tourism Co. Ltd. Hubei
Xinjia Testing Technology Co. Ltd. Wuhan Gulou Junhe Trading Co. Ltd. Wuhan Gulou Juntai Trading Co. Ltd.Ezhou Junya Trading Co. Ltd. comply with the relevant provisions of small low-profit enterprise income tax
preferential policy.
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Monetary funds
Item Ending balance Beginning balance
Cash on hand 45031.58 78223.44
Cash at bank 16113769698.47 15674993088.76
Other monetary funds 44582031.53 291300431.99
Total 16158396761.58 15966371744.19
Notes: At the end of June 2024 there were 250.0498 million yuan used as collateral for opening bank drafts in the
bank deposits 27.8853 million yuan in other restricted funds and 14.4653 million yuan in other monetary funds
used as collateral for opening bank drafts that could not be withdrawn in advance. In addition there were no other
monetary funds with restrictions on use due to pledges collateral or freezing etc. with potential risks of recovery
at the end of June 2024.Liquor manufacturing enterprises shall disclose whether there exists special interest arrangements such as
86establishing a joint fund account with related parties
□ Applicable □ Not applicable
5.2 Financial Assets Held-for-trading
Item Ending balance Beginning balance
Financial assets at fair value through profit or
0.00719987547.42
loss
Including: bank financial products 0.00 719987547.42
Total 0.00 719987547.42
5.3 Accounts Receivable
(1) Disclosure by aging
Aging Ending balance Beginning balance
Within one year 59584421.30 68276125.36
Of which: 1-6 months 53371718.67 65998078.79
7-12 months 6212702.63 2278046.57
1-2 years 561254.47 1209303.29
2-3 years 8340881.56 7827391.86
Over 3 years 119341.10 173492.54
Subtotal 68605898.43 77486313.05
Less: Bad debt provision 8878393.78
9086651.52
Total 59519246.91 68607919.27
(2) Disclosure by withdrawal method of bad debt provision
* Ending balance
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
7792783.7211.367792783.72100.000.00
separately
Bad debt provision withdrawn by
60813114.7188.641293867.802.1359519246.91
group
87Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Of which: Group 1
Group 2 60813114.71 88.64 1293867.80 2.13 59519246.91
Total 68605898.43 100.00 9086651.52 13.24 59519246.91
* Beginning balance
Beginning balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
7792783.7210.067792783.72100.000.00
separately
Bad debt provision withdrawn by
69693529.3389.941085610.061.5668607919.27
group
Of which: Group 1
Group 2 69693529.33 89.94 1085610.06 1.56 68607919.27
Total 77486313.05 100.00 8878393.78 11.46 68607919.27
On 30 June 2024 Accounts receivable with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 59584421.30 844352.32 1.42
Of which: 1-6 months 53371718.67 533717.19 1.00
7-12 months 6212702.63 310635.13 5.00
1-2 years 561254.47 56125.45 10.00
2-3 years 548097.84 274048.93 50.00
Over 3 years 119341.10 119341.10 100.00
Total 60813114.71 1293867.80 2.13
On 1 January 2024 Accounts receivable with bad debt provision withdrawn by group 2
88Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 68276125.36 773883.12 1.13
Of which: 1-6 months 65998078.79 659980.79 1.00
7-12 months 2278046.57 113902.33 5.00
1-2 years 1209303.29 120930.33 10.00
2-3 years 34608.14 17304.07 50.00
Over 3 years 173492.54 173492.54 100.00
Total 69693529.33 1085610.06 1.56
(3) Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Increase from
Beginning business
Category Recovery or Elimination or Ending balance
amount Withdrawal combination not
reversal write-off
under the same
control
Accounts receivable with
significant amount but bad
7792783.720.000.007792783.72
debt provision withdrawn
separately
Accounts receivable with
insignificant amount but bad
debt provision withdrawn
separately
Group 2: Bad debt provision
1085610.06338160.77129903.031293867.80
withdrawn by aging group
Total 8878393.78 338160.77 129903.03 9086651.52
(4) Accounts receivable written off during the reporting period
Not applicable.
(5) Top five ending balances by entity
Proportion of the
Provision for bad
Ending balance of balance to the total
Ending balance of Ending balance of debt of accounts
Entity name accounts receivable accounts receivable
accounts receivable contract assets receivable and
and contract assets and contract assets
contract assets
(%)
No. 1 10981419.61 10981419.61 16.01 109814.20
89Proportion of the
Provision for bad
Ending balance of balance to the total
Ending balance of Ending balance of debt of accounts
Entity name accounts receivable accounts receivable
accounts receivable contract assets receivable and
and contract assets and contract assets
contract assets
(%)
No. 2 7792783.72 7792783.72 11.36 7792783.72
No. 3 4048496.72 4048496.72 5.90 40484.97
No. 4 3838718.59 3838718.59 5.60 38387.19
No. 5 2998387.09 2998387.09 4.37 29983.87
Total 29659805.73 29659805.73 43.24 8011453.95
5.4 Accounts Receivable Financing
(a) Accounts receivable financing by category
Ending balance Beginning balance
Category Bad debt Bad debt
Carrying amount Carrying value Carrying amount Carrying value
provision provision
Bank acceptance
1581346121.501581346121.50957560115.73957560115.73
bills
Commercial
acceptance bills
Total 1581346121.50 1581346121.50 957560115.73 957560115.73
(b) Pledged notes receivable at 30 June 2024
Not applicable.(c) Notes receivable which were discounted or endorsed but not due at 30 June 2024
Items Amount of derecognition Amount of unrecognition
Bank acceptance bills 4722000240.75 0.00
Commercial acceptance bills
Total 4722000240.75 0.00
(d) Accounts receivable financing by loss allowance provision method
90Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
1581346121.50100.001581346121.50
group
Of which: Group 1
Group 2 1581346121.50 100.00 1581346121.50
Total 1581346121.50 100.00 1581346121.50
(Continued)
Beginning balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
957560115.73100.00957560115.73
group
Of which: Group 1
Group 2 957560115.73 100.00 957560115.73
Total 957560115.73 100.00 957560115.73
(e) Movement of impairment allowance
Not applicable.(f) Notes receivable written off during the reporting period
Not applicable.
5.5 Prepayment
(1) Disclosure by aging
Ending balance Beginning balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within one year 112708157.88 97.81 90144117.89 98.40
1 to 2 years 1632058.58 1.42 995545.31 1.09
91Ending balance Beginning balance
Aging
Amount Proportion (%) Amount Proportion (%)
2 to 3 years 689830.48 0.60 467678.98 0.51
Over 3 years 204600.00 0.17 0.00 0.00
Total 115234646.94 100.00 91607342.18 100.00
(2) Top five ending balances by entity
Proportion of the balance to the
Entity name Ending balance
total prepayment (%)
No. 1 9905660.43 8.60
No. 2 5322437.92 4.62
No. 3 3648748.70 3.17
No. 4 1257301.20 1.09
No. 5 1234905.96 1.07
Total 21369054.21 18.55
5.6 Other Receivables
(1) Listed by category
Item Ending balance Beginning balance
Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Other receivables 37020138.26 49178194.70
Total 37020138.26 49178194.70
(2) Other Receivables
* Disclosure by aging
Aging Ending balance Beginning balance
Within one year 35952434.15 46992878.99
Of which: 1-6 months 32751072.18 40097431.00
7-12 months 3201361.97 6895447.99
1-2 years 842987.19 2308597.13
2-3 years 1593188.87 1706650.01
Over 3 years 34847825.17 34652068.31
Subtotal 73236435.38 85660194.44
Less: Bad debt provision 36216297.12 36481999.74
92Aging Ending balance Beginning balance
Total 37020138.26 49178194.70
* Disclosure by nature
Nature Ending balance Beginning balance
Investment in securities 28635660.22 28635660.22
Deposit and guarantee 10477644.93 7558471.55
Borrowing for business trip expenses 369421.60 594453.48
Rent utilities and gasoline charges 9783340.47 8593773.81
Other 23970368.16 40277835.38
Subtotal 73236435.38 85660194.44
Less: Bad debt provision 36216297.12 36481999.74
Total 37020138.26 49178194.70
* Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2024 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 44600775.16 7580636.90 37020138.26
Stage 2
Stage 3 28635660.22 28635660.22 -
Total 73236435.38 36216297.12 37020138.26
A1. As of 30 June 2024 bad debt provision at stage 1:
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 44600775.16 17.00 7580636.90 37020138.26
Of which: Group 1
Group 2 44600775.16 17.00 7580636.90 37020138.26
Total 44600775.16 17.00 7580636.90 37020138.26
On 30 June 2024 other receivables with bad debt provision withdrawn by group 2
93Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 35952434.15 487578.79 1.36
Of which: 1-6 months 32751072.18 327510.71 1.00
7-12 months 3201361.97 160068.08 5.00
1-2 years 842987.19 84298.72 10.00
2-3 years 1593188.87 796594.44 50.00
Over 3 years 6212164.95 6212164.95 100.00
Total 44600775.16 7580636.90 17.00
A2. As of 30 June 2024 bad debt provision at stage 3:
Expected credit
Category Carrying amount loss rate for the Bad debt provision Carrying value
entire duration (%)
Bad debt provision withdrawn separately 28635660.22 100.00 28635660.22 0.00
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 28635660.22 100.00 28635660.22 0.00
On 30 June 2024 bad debt provision withdrawn separately:
Ending balance
Name Withdrawal
Carrying amount Bad debt provision Withdrawal reason
proportion (%)
The enterprise is bankrupt and
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00
liquidated
Total 28635660.22 28635660.22 100.00 --
B. As of 1 January 2024 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 57024534.22 7846339.52 49178194.70
Stage 2
Stage 3 28635660.22 28635660.22 0.00
Total 85660194.44 36481999.74 49178194.70
94B1. On 1 January 2024 bad debt provision at stage 1:
12-month expected
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 57024534.22 13.76 7846339.52 49178194.70
Of which: Group 1
Group 2 57024534.22 13.76 7846339.52 49178194.70
Total 57024534.22 13.76 7846339.52 49178194.70
On 1 January 2024 other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 46992878.99 745746.71 1.59
Of which: 1-6 months 40097431.00 400974.31 1.00
7-12 months 6895447.99 344772.40 5.00
1-2 years 2308597.13 230859.71 10.00
2-3 years 1706650.01 853325.01 50.00
Over 3 years 6016408.09 6016408.09 100.00
Total 57024534.22 7846339.52 13.76
B2. As of 1 January 2024 bad debt provision at stage 3:
Expected credit
Category Carrying amount loss rate for the Bad debt provision Carrying value
entire duration (%)
Bad debt provision withdrawn separately 28635660.22 100.00 28635660.22 0.00
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total 28635660.22 100.00 28635660.22 0.00
On 1 January 2024 bad debt provision withdrawn separately:
95Beginning balance
Name Withdrawal
Carrying amount Bad debt provision Withdrawal reason
proportion (%)
The enterprise is bankrupt and
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00
liquidated
Total 28635660.22 28635660.22 100.00 --
* Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Increase from
Beginning business
Category Recovery or Elimination or Ending balance
balance
Withdrawal combination not
reversal write-off
under the same
control
Bad debt provision
28635660.220.000.0028635660.22
withdrawn separately
Bad debt provision
7846339.52314233.73579936.357580636.90
withdrawn by group
Total 36481999.74 314233.73 579936.35 36216297.12
* Top five ending balances by entity
Proportion of the
balance to the total
Entity name Nature Ending balance Aging Bad debt provision
other receivables
(%)
Securities
No. 1
28635660.22 Over 3 years 39.10 28635660.22
investment
No. 2 Within 6
Other 6277406.23 8.57 62774.06
months
No. 3 Within 6
Other 5448432.21 7.44 54484.32
months
No. 4 Other 3200000.00 Over 3 years 4.37 3200000.00
Within 6
No. 5 Other 3108795.61 4.24 31087.96
months
Total -- 46670294.27 63.72 31984006.56
965.7 Inventories
(1) Category of inventories
Ending balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials and package
288677708.7218604545.95270073162.77
materials
Semi-finished goods and work
6684465834.090.006684465834.09
in process
Finished goods 818390458.20 14606091.22 803784366.98
Total 7791534001.01 33210637.17 7758323363.84
(Continued)
Beginning balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials and package
351787097.5520527645.11331259452.44
materials
Semi-finished goods and
5811584229.520.005811584229.52
work in process
Finished goods 1396536633.32 19697778.77 1376838854.55
Total 7559907960.39 40225423.88 7519682536.51
(2) Falling price reserves of inventories
Increase Decrease
Beginning
Items Increase from Ending balance
balance Reversal or
Withdrawal business Others
elimination
combination
Raw materials and
20527645.11213447.250.002136546.410.0018604545.95
package materials
Finished goods 19697778.77 373112.96 0.00 5464800.51 0.00 14606091.22
Total 40225423.88 586560.21 0.00 7601346.92 0.00 33210637.17
5.8 Other Current Assets
Item Ending balance Beginning balance
Pledged treasury bond reverse repurchase 0.00 25199000.00
97Item Ending balance Beginning balance
Deposit interest receivable 93124224.62 26696206.46
Deductible taxes and tax allowance 41577285.98 83176048.90
Total 134701510.60 135071255.36
5.9 Long-term Equity Investments
Changes in the Reporting Period
Profit and loss on Adjustment of
Investees Beginning balance Additional Reduced investments other Changes in
investments investments confirmed according comprehensive other equity
to equity law income
I. Associated
enterprises
Beijing Guge Trading
5511537.652136.30
Co. Ltd.Anhui Xunfei Jiuzhi
4855540.6168099.43
Technology Co. Ltd.Total 10367078.26 70235.73
(Continued)
Changes in the Reporting Period
Balance of
Investees Declaration of cash Withdrawal of Ending balance impairment
dividends or impairment Other provision
distribution of profit provision
I. Associated enterprises
Beijing Guge Trading
5513673.95
Co. Ltd.Anhui Xunfei Jiuzhi
4923640.04
Technology Co. Ltd.Total 10437313.99
5.10Other Equity Instrument Investment
98Changes during the reporting period
Gaines Losses
Beginning recognised in recognised in
Item Additional Decrease in Ending balance
balance other other Others
investment investment
comprehensive comprehensive
income income
Anhui
Mingguang
Rural 63105658.07 5693974.85 68799632.92
Commercial
Bank Co. Ltd.Total 63105658.07 5693974.85 68799632.92
(Continued)
Amount of other
comprehensive
Dividend Reason for assigning to measure in fair
Accumulative Accumulative income
Item income value and the changes included in other
gains losses transferred to
recognized comprehensive income
retained
earnings
For management holding purposes it is
Anhui Mingguang
specified as measured at fair value and
Rural Commercial 769616.25 14950935.12
changes in it are included in other
Bank Co. Ltd.comprehensive income
5.11 Investment Properties
(1) Investment property adopting cost measurement mode
Items Houses and buildings Land use rights Total
I. Original carrying value
1. Beginning balance 84177952.61 2644592.00 86822544.61
2. Increase during the Reporting Period
(1) Transfer from fixed assets
3. Decrease during the Reporting Period
4. Ending balance 84177952.61 2644592.00 86822544.61
II. Accumulated depreciation and amortization:
1. Beginning balance 39275828.32 923806.10 40199634.42
2. Increase during the Reporting Period 1963609.58 31369.60 1994979.18
99Items Houses and buildings Land use rights Total
(1) Withdrawal or amortization 1963609.58 31369.60 1994979.18
(2) Transfer from fixed assets
3. Decrease during the Reporting Period
4. Ending balance 41239437.90 955175.70 42194613.60
III. Impairment provision
1. Beginning balance
2. Increase during the Reporting Period
3. Decrease during the Reporting Period
4. Ending balance
IV. Carrying value
1. Ending carrying value 42938514.71 1689416.30 44627931.01
2. Beginning carrying value 44902124.29 1720785.90 46622910.19
5.12 Fixed Assets
(1) Listed by category
Item Ending balance Beginning balance
Fixed assets 4724543385.22 4596044056.92
Disposal of fixed assets 0.00 0.00
Total 4724543385.22 4596044056.92
(2) Fixed assets
* General information of fixed assets
Houses and Machinery Transportation Administrative and
Items Total
buildings equipment vehicles other devices
I. Original carrying value
1. Beginning balance 3792284000.88 2594999842.86 80850726.07 514466499.76 6982601069.57
2. Increase during the
224231460.5283928159.66661133.1736106549.37344927302.72
Reporting Period
(1) Acquisition 0.00 11660201.23 661133.17 9954160.05 22275494.45
(2) Transfer from
224231460.5272267958.430.0026152389.32322651808.27
construction in progress
(3)Enterprise merger
0.000.000.000.000.00
increases
3. Decrease during the
1300061.3611167755.84416812.982289474.3015174104.48
Reporting Period
(1) Disposal or scrap 1300061.36 11167755.84 416812.98 2289474.30 15174104.48
100Houses and Machinery Transportation Administrative and
Items Total
buildings equipment vehicles other devices
4. Ending balance 4015215400.04 2667760246.68 81095046.26 548283574.83 7312354267.81
II. Accumulated depreciation
1. Beginning balance 1079567698.80 952856539.12 67485170.84 282097904.02 2382007312.78
2. Increase during the 83886089.98 100466509.78 2638362.30 27236604.19 214227566.25
Reporting Period
(1) Withdrawal 83886089.98 100466509.78 2638362.30 27236604.19 214227566.25
3. Decrease during the 1266884.41 8410239.02 380833.31 1522210.19 11580166.93
Reporting Period
(1) Disposal or scrap 1266884.41 8410239.02 380833.31 1522210.19 11580166.93
4. Ending balance 1162186904.37 1044912809.88 69742699.83 307812298.02 2584654712.10
III. Impairment provision
1. Beginning balance 2596209.90 1375189.67 0.00 578300.30 4549699.87
2. Increase during the
0.000.000.000.000.00
Reporting Period
(1) Withdrawal 0.00 0.00 0.00 0.00 0.00
3. Decrease during the
17030.55798198.530.00578300.301393529.38
Reporting Period
(1) Disposal or scrap 17030.55 798198.53 0.00 578300.30 1393529.38
4. Ending balance 2579179.35 576991.14 0.00 0.00 3156170.49
IV. Carrying value
1. Ending carrying value 2850449316.32 1622270445.66 11352346.43 240471276.81 4724543385.22
2. Beginning carrying value 2710120092.18 1640768114.07 13365555.23 231790295.44 4596044056.92
* Fixed assets leasing out under operating leases
Items Carrying value
Buildings and constructions 42938514.71
Total 42938514.71
* Fixed assets without certificate of title
Items Carrying value Reason
Buildings and constructions 1650802967.04 In process
Total 1650802967.04 --
* At the end of the period there were no fixed assets with limited use due to mortgage.
5.13 Construction in Progress
(1) Listed by category
101Item Ending balance Beginning balance
Construction in progress 3228411813.84 2910735155.39
Project materials 0.00 0.00
Total 3228411813.84 2910735155.39
(2) Construction in progress
* General information of construction in progress
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Smart park project 3113472732.77 3113472732.77 2564788149.93 2564788149.93
Theme hotel project 225797376.40 225797376.40
Gujing plant area 12# liquor warehouse 0.00 0.00 25626044.87 25626044.87
Suizhou new plant project 0.00 0.00 29094832.88 29094832.88
Other individual project 114939081.07 114939081.07 65428751.31 65428751.31
Total 3228411813.84 3228411813.84 2910735155.39 2910735155.39
* Changes in significant projects of construction in progress
Decrease during
Budget Increase during the Amount transferred to
Project Beginning balance the Reporting Ending balance
(RMB’0000) Reporting Period fixed asset
Period
Smart park project 828965.74 2564788149.93 699818163.90 122610842.58 28522738.48 3113472732.77
Theme hotel project 62500.00 225797376.40 15501111.51 84843930.60 156454557.31 0.00
Gujing plant area 12#
19000.0025626044.872705828.8528331873.720.000.00
liquor warehouse
Suizhou new plant
60000.0029094832.8825671599.7754363962.81402469.840.00
project
Other individual project 71410.23 65428751.31 83914308.93 32501198.56 1902780.61 114939081.07
Total 1041875.97 2910735155.39 827611012.96 322651808.27 187282546.24 3228411813.84
(Continued)
Interest
Cumulative Of which: Interest
Proportion of capitalization
amount of capitalized during
Project project input to Schedule (%) during the Source of funds
interest the reporting
budgets (%) Reporting
capitalization period
Period (%)
Smart park project 63.04 80.72 Self-owned
102Interest
Cumulative Of which: Interest
Proportion of capitalization
amount of capitalized during
Project project input to Schedule (%) during the Source of funds
interest the reporting
budgets (%) Reporting
capitalization period
Period (%)
fund and
raised fund
Self-owned
Theme hotel project 83.19 100.00
fund
Gujing plant area 12# Self-owned
94.86100.00
liquor warehouse fund
Self-owned
Suizhou new plant project 94.68 100.00 8803572.05 879034.72 3.35 fund and
borrowings
Self-owned
Other individual project 26.32 26.32
fund
Total 8803572.05 879034.72
(3) Increase of10.91% in the book value of construction in progress at the end of June 2024 compared to the
beginning of 2024 was mainly resulted from the increase of investment in Smart Zone in the period.
5.14 Right-of-use Assets
Items Buildings and constructions Machinery equipments Total
I. Original carrying value
1. Beginning balance 108271565.09 0.00 108271565.09
2. Increase during the Reporting
31179563.790.0031179563.79
Period
3. Decrease during the
-
Reporting Period
4. Ending balance 139451128.88 0.00 139451128.88
II. Accumulated depreciation
1. Beginning balance 27233464.85 0.00 27233464.85
2. Increase during the Reporting
8028920.190.008028920.19
Period
3. Decrease during the
Reporting Period
4. Ending balance 35262385.04 0.00 35262385.04
103III. Impairment provision
1. Beginning balance
2. Increase during the Reporting
Period
3. Decrease during the
Reporting Period
4. Ending balance
IV. Carrying value
1. Ending carrying value 104188743.84 0.00 104188743.84
2. Beginning carrying value 81038100.24 0.00 81038100.24
5.15 Intangible Assets
(1) General information of intangible assets
Patents and
Item Land use rights Software Total
trademark
I. Original carrying value
1. Beginning balance 1136647237.75 131841013.57 254972753.56 1523461004.88
2. Increase during the Reporting
5225439.061869156.290.007094595.35
Period
(1) Acquisition 5225439.06 875275.34 0.00 6100714.40
(2) Transfer from construction in
0.00993880.950.00993880.95
progress
3. Decrease during the Reporting
73153.580.00300000.00373153.58
Period
(1) Disposal 73153.58 0.00 300000.00 373153.58
4. Ending balance 1141799523.23 133710169.86 254672753.56 1530182446.65
II. Accumulated amortization:
1. Beginning balance 226089125.23 101093879.40 72924291.21 400107295.84
2. Increase during the Reporting
12098915.6410449949.3391327.0222640191.99
Period
(1) Withdrawal 12098915.64 10449949.33 91327.02 22640191.99
3. Decrease during the Reporting
24954.170.00152500.00177454.17
Period
(1) Disposal 24954.17 0.00 152500.00 177454.17
4. Ending balance 238163086.70 111543828.73 72863118.23 422570033.66
III. Impairment provision
104Patents and
Item Land use rights Software Total
trademark
1. Beginning balance 0.00 166872.39 0.00 166872.39
2. Increase during the Reporting
Period
(1) Withdrawal
3. Decrease during the Reporting
Period
(1) Withdrawal
4. Ending balance 0.00 166872.39 0.00 166872.39
IV. Carrying value
1. Ending carrying value 903636436.53 21999468.74 181809635.33 1107445540.60
2. Beginning carrying value 910558112.52 30580261.78 182048462.35 1123186836.65
(2) Intangible assets used for mortgage or pledge at 30 June 2024
Original carrying Accumulated Impairment
Item Carrying value Note
value amortization provision
Trademark right 75315327.34 3204009.10 - 72111318.24 Loan pledge
Total 75315327.34 3204009.10 - 72111318.24
(3) Land use rights without certificate of title at 30 June 2024
There were no land use rights without certificate of title at the end of the period.
5.16 Goodwill
(1) Original carrying value of goodwill
Increase Decrease
Investees or matters that
Formed by
goodwill arising from Beginning balance Ending balance
business Other Disposal Other
combination
Yellow Crane Tower Distillery
478283495.29478283495.29
Co. Ltd.Anhui Mingguang Distillery Co.
60686182.0760686182.07
Ltd.Renhuai Maotai Town Zhencang
22394707.6522394707.65
Winery Industry Co. Ltd.Total 561364385.01 561364385.01
5.17 Long-term Deferred Expenses
105Beginning Decrease
Item Increase Ending balance
balance
Amortization Other decrease
Experience center 5414614.07 0.00 2539171.16 0.00 2875442.91
Sewage treatment project 76885.25 0.00 76885.25 0.00 0.00
Outdoor auxiliary projects 24727266.52 165091.02 1476344.50 0.00 23416013.04
Pottery jar 16479992.73 30171784.07 1677279.25 0.00 44974497.55
Theme hotel project 0.00 157152774.51 1731874.65 0.00 155420899.86
Other individual project with
12403825.41525367.542955512.980.009973679.97
insignificant amounts
Total 59102583.98 188015017.14 10457067.79 0.00 236660533.33
5.18 Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
Ending balance Beginning balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Asset impairment provision 36533680.05 9116732.77 44941996.14 10848316.56
Credit impairment provision 45302948.64 11325737.16 45360393.52 11292126.66
Unrealized intergroup profit 48961580.60 11867838.61 74347126.84 18586781.71
Deferred income 101700136.20 25425034.05 100811404.82 24492497.96
Deductible losses 240435547.27 53364629.54 356467985.56 82136692.17
Carry-over of payroll payables
deductible during the next 0.00 0.00 8433254.65 1264988.20
period
Accrued expenses and discount 2058701970.77 514675492.69 1229968568.55 306212224.03
Change in fair value of
5963219.861487606.493029905.06754940.17
accounts receivable financing
Lease liabilities 98016354.30 24504088.58 79152693.07 19788173.27
Total 2635615437.69 651767159.89 1942513328.21 475376740.73
(2) Deferred tax liabilities before offsetting
Ending balance Beginning balance
Item Taxable temporary Taxable temporary Deferred tax
Deferred tax liabilities
differences differences liabilities
Difference in accelerated
244858778.5461214694.63348420771.6384243324.54
depreciation of fixed
106Ending balance Beginning balance
Item Taxable temporary Taxable temporary Deferred tax
Deferred tax liabilities
differences differences liabilities
assets
Assets appreciation
arising from business
669009499.08161979691.50677082342.46163643316.42
combination not under
the same control
Changes in fair value of
0.000.0019987547.424996886.86
trading financial assets
Unrealized intergroup
191267324.3647816831.09264217579.5266054394.88
profit
Changes in fair value of
investments in other 14950935.12 3737733.78 9256960.27 2314240.07
equity instruments
Right-of-use assets 104188743.84 26047185.96 81038100.24 20259525.06
Total 1224275280.94 300796136.96 1400003301.54 341511687.83
(3) Net balance of deferred tax liabilities and deferred tax assets after offsetting
Net balance after Net balance after
Offset amount at the Offset amount at the
Items offsetting at the period- offsetting at the period-
period-end period-begin
end begin
Deferred tax assets -24504088.58 627263071.31 -19788173.27 455588567.46
Deferred tax liabilities -24504088.58 276292048.38 -19788173.27 321723514.56
(4) As at 30 June 2024 the amount of deductible loss on the Company's unrecognised deferred tax assets was
RMB27501192.84.
(5) Deductible losses not recognised as deferred tax assets will expire in the following periods: due in three to four
years at RMB9659508.57 and due after four years is RMB17841684.27.
5.19 Other Non-current Assets
Item Ending balance Beginning balance
Prepayment for construction and machinery 4412486.00 5685287.46
Total 4412486.00 5685287.46
5.20Short-term Borrowings
Category Ending balance Beginning balance
Credit loan 40014544.52 0.00
Total 40014544.52 0.00
1075.21Notes Payable
(1) Listed by nature
Category Ending balance Beginning balance
Bank acceptance bills 418126347.55 1332031679.44
Commercial acceptance bills 0.00 21156044.00
Total 418126347.55 1353187723.44
(2) At the end of the reporting period there is no notes payable matured but not yet paid.
5.22 Accounts Payable
(1) Listed by nature
Item Ending balance Beginning balance
Payables for materials 838995188.45 1352488385.40
Payments for constructions and equipment 830488076.76 980033062.83
Other 420592492.66 481670623.01
Total 2090075757.87 2814192071.24
(2) Significant accounts payable with aging of over one year
Not applicable.
5.23Contract liabilities
Item Ending balance Beginning balance
Payment for goods 2218413969.30 1401122249.53
Total 2218413969.30 1401122249.53
5.24 Employee Benefits Payable
(1) List of employee benefits payable
Item Beginning balance Increase Decrease Ending balance
1180454095.44
I. Short-term employee benefits 1915332446.51 1943271838.79 1152514703.16
II. Post-employment benefits-
151677.85115262072.90115263130.32150620.43
defined contribution plans
0.00
III. Termination benefits 396689.84 396689.84 0.00
IV. Other benefits due within one 0.00
0.000.000.00
year
Total 1180605773.29 2030991209.25 2058931658.95 1152665323.59
(2) List of short-term employee benefits
108Item Beginning balance Increase Decrease Ending balance
I. Salaries bonuses allowances and
1102959306.931644530357.291671939981.121075549683.10
subsidies
0.0061454437.51
II. Employee benefits 61454437.51 0.00
III. Social insurance 481283.18 58850299.91 58854492.55 477090.54
Of which: Health insurance 478930.09 55206452.10 55210628.34 474753.85
Injury insurance 2353.09 3643847.81 3643864.21 2336.69
IV. Housing accumulation fund 8189307.02 66742257.34 66290293.73 8641270.63
V. Labor union funds and employee
64598761.7722411735.4223542207.8763468289.32
education funds
VI. Enterprise annuity 4225436.54 61343359.04 61190426.01 4378369.57
1180454095.44
Total 1915332446.51 1943271838.79 1152514703.16
(3) Defined contribution plans
Item Beginning balance Increase Decrease Ending balance
1. Basic endowment
147081.53109554175.21109555200.59146056.15
insurance
2. Unemployment
4596.325707897.695707929.734564.28
insurance
Total 151677.85 115262072.90 115263130.32 150620.43
5.25Taxes Payable
Item Ending balance Beginning balance
VAT 289382521.91 357332008.07
Consumption tax 393911618.60 434932478.09
Enterprise income tax 526241628.24 280172679.93
Individual income tax 3159701.39 4436736.14
Urban maintenance and construction tax 35508685.77 40651189.20
Stamp duty 4456456.36 4531195.41
Educational surcharge 34101008.82 39534935.75
Other 17719533.70 17777633.10
Total 1304481154.79 1179368855.69
1095.26Other Payables
(1) Listed by category
Item Ending balance Beginning balance
Interest payable
Dividends payable
Other payables 3032063462.12 3267292222.01
Total 3032063462.12 3267292222.01
(2) Other payables
* Listed by nature
Item Ending balance Beginning balance
Security deposit and guarantee 2455866045.91 2567100177.13
Warranty 97462081.41 77264459.45
Personal housing fund paid by company 8738351.62 6231182.41
Other 469996983.18 616696403.02
Total 3032063462.12 3267292222.01
* Other payables aged over one year as of the statement date are mainly security deposit and warranty not yet
matured.
5.27 Non-current Liabilities due within one year
Item Ending balance Beginning balance
Lease liabilities due within one year 13652379.47 10771925.29
Long-term borrowings due within one
52081999.9970053097.22
year
Total 65734379.46 80825022.51
5.28Other Current Liabilities
Item Ending balance Beginning balance
Accrued expenses 1676050492.54 951949301.38
Pre-mature output VAT 288484985.29 180069149.72
Total 1964535477.83 1132018451.10
5.29 Long-term Borrowings
Item Ending balance Beginning balance
Credit Loan 0.00 0.00
110Item Ending balance Beginning balance
Guarantee loan 83400000.00 107000000.00
Accrued interest 0.00 106256.94
Total 83400000.00 107106256.94
5.30 Lease Liabilities
Item Ending balance Beginning balance
Lease payments 111029732.84 94538857.20
Less: unrecognized financial charges 13013378.54 15386164.13
Subtotal 98016354.30 79152693.07
Less: lease liabilities due within one year 13652379.47 10771925.29
Total 84363974.83 68380767.78
5.31 Deferred Income
Item Beginning balance Increase Decrease Ending balance Reason
Government Receiving asset-related
100811404.824014000.003125268.62101700136.20
grants grants from government
Total 100811404.82 4014000.00 3125268.62 101700136.20 --
5.32 Share Capital
Changes during the Reporting Period (+-)
Item Beginning balance Bonus Capitalization Ending balance
New issues Others Subtotal
issues of reserves
The sum of
528600000.00528600000.00
shares
5.33 Capital Reserves
Item Beginning balance Increase Decrease Ending balance
Capital premium (share 6191894530.90 6191894530.90
premium)
32853136.2032853136.20
Other capital reserves
6224747667.10
Total
6224747667.10
5.34 Other Comprehensive Income
Reporting Period
Beginning Income before Less: Less: Attributable to Attributable to Ending
Item Less: Income
balance taxation in the Recorded in Recorded in owners of the non- balance
tax expense
Current Period other other Company as controlling
111comprehensiv comprehensi the parent interests after
e income in ve income in after tax tax
prior period prior period
and and
transferred to transferred
profit or loss to retained
in the Current earnings in
Period the Current
Period
I. Other comprehensive income
that may not subsequently be 4165632.12 5693974.85 1423493.72 2562288.68 1708192.45 6727920.80
reclassified to profit or loss
Of which: Changes caused by
remeasurements on defined
benefit schemes
Other comprehensive
income that will not be
reclassified to profit or loss under
the equity method
Changes in fair value of
other equity instrument 4165632.12 5693974.85 - - 1423493.72 2562288.68 1708192.45 6727920.80
investment
Changes in the fair
value arising from changes in own
credit risk
II. Other comprehensive income
that may subsequently be -2569309.39 -5963219.86 -3608102.09 -585580.97 -1785374.89 15838.09 -4354684.28
reclassified to profit or loss
Of which: Other comprehensive
income that will be reclassified to
profit or loss under the equity
method
Changes in the fair value
of investments in other debt
obligations
Other comprehensive
income arising from the -2569309.39 -5963219.86 -3608102.09 -585580.97 -1785374.89 15838.09 -4354684.28
reclassification of financial assets
Credit impairment
allowance for investments in other
debt obligations
Reserve for cash flow
112hedges
Differences arising from
translation of foreign currency-
denominated financial statements
Total of other comprehensive
1596322.73-269245.01-3608102.09-837912.75776913.791724030.542373236.52
income
5.35 Surplus Reserves
Item Beginning balance Increase Decrease Ending balance
Statutory surplus reserve 269402260.27 269402260.27
Total 269402260.27 269402260.27
Note: In accordance with provisions of Company Law and Articles of Association the statutory surplus reserve shall
be withdrawn at 10% of net profits by the Company. The accumulated amount of statutory surplus reserve can no
longer be withdrawn when it is more than 50% of the Company’s registered capital.
5.36 Retained Earnings
Item Reporting Period Same period of last year
Beginning balance of retained earnings before adjustments 14500963359.34 11497599306.54
Total beginning balance of retained earnings before 0.00
0.00
adjustment (increase+ decrease-)
Beginning balance of retained earnings after adjustments 14500963359.34 11497599306.54
Add: Net profit attributable to owners of the Company as 4589164052.80
3572791595.15
the parent
Less: withdrawal of statutory surplus reserve 0.00 0.00
Dividend of ordinary shares payable 2378700000.00 1585800000.00
Ending retained earnings 15695054954.49 14500963359.34
5.37 Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Costs of sales Operating revenue Costs of sales
Main operations 13749070890.99 2684505728.28 11255806929.70 2371427439.55
Other operations 56622651.36 20159167.14 54209565.40 17183398.73
Total 13805693542.35 2704664895.42 11310016495.10 2388610838.28
Information on operating revenue and cost of sales:
Item Reporting Period Same period of last year
113Operating revenue Costs of sales Operating revenue Costs of sales
Commodity type
Baijiu business 13428363064.31 2409942515.02 10980685839.60 2134573872.18
Others 377330478.04 294722380.40 329330655.50 254036966.10
Total 13805693542.35 2704664895.42 11310016495.10 2388610838.28
By operating segment
North China 1109250619.81 232885728.87 821080901.86 177942282.98
Central China 11869976454.15 2325411733.69 9782622497.21 2080292659.11
South China 815792256.19 143909531.02 696179001.74 128233371.06
International 10674212.20 2457901.84 10134094.29 2142525.13
Total 13805693542.35 2704664895.42 11310016495.10 2388610838.28
By distribution
channel:
Online 408477087.11 115516082.79 343597657.39 83341732.21
Offline 13397216455.24 2589148812.63 10966418837.71 2305269106.07
Total 13805693542.35 2704664895.42 11310016495.10 2388610838.28
Information on performance obligations: None
5.38 Taxes and Surcharges
Item Reporting Period Same period of last year
1311088718.86
Consumption tax 1725234888.54
Urban maintenance and construction tax and 249167147.23
314017926.17
educational surcharge
11797701.09
Urban land use tax 12164355.34
12402844.79
Property tax 17079657.91
11546725.67 9986220.33 Stamp duty
13636790.45 10999508.76 Other
Total 2093680344.08
1605442141.06
5.39 Selling Expense
Item Reporting Period Same period of last year
Employment benefits 675938548.40 623631139.58
Travel fees 120981637.15 96783184.70
Advertisement fees 688129021.87 564290043.38
114Comprehensive promotion costs 1685467666.43 1333513264.01
Service fees 373733873.49 371761620.49
Other 67434236.83 58035891.45
Total 3611684984.17
3048015143.61
5.40 Administrative Expenses
Item Reporting Period Same period of last year
404447209.51
Employee benefits 443783424.86
28284746.88 18750767.90 Office fees
24933916.68
Maintenance expenses 16737356.47
Depreciation 48529409.50
34435401.77
Amortization 17835580.70
17399804.22
11632964.09
Pollution discharge 13466130.97
Travel expenses 6681000.73
7252762.78
6563326.70
Water and electricity charges 6129646.26
58558405.72
Other 89703398.35
Total 671150694.72 583974559.37
5.41 Development Costs
Item Reporting Period Same period of last year
Labor cost 23995060.27 20823084.10
Direct input costs 2031791.02 5437858.15
Depreciation expense 2058186.20 1459282.37
Other 5147260.85 2243950.60
Total 33232298.34 29964175.22
5.42 Finance Costs
Item Reporting Period Same period of last year
Interest expenses 3445346.57 771499.92
Including: Interest expenses for lease
1575990.34637086.51
liabilities
Less: Interest income 298352344.67 122996635.75
Net interest expenses -294906998.10 -122225135.83
Net foreign exchange losses 11640952.86 -75794.06
Bank charges and others 943715.76 -549709.86
115Item Reporting Period Same period of last year
Total -282322329.48 -122850639.75
5.43 Other Income
Same period of
Item Reporting Period Related to assets /income
last year
I. Government grants recorded to other income 22796192.89 21893660.44
Of which: Government grant related to deferred
3125268.62 2804835.00 Related to assets
income
Government grant recorded to current
19670924.27 19088825.44 Related to income
profit or loss
II. Others related to daily operation activities and
3950721.93 5210917.44 Related to income
recognised in other income
Total 26746914.82 27104577.88 --
5.44 Investment Income
Item Reporting Period Same period of last year
Investment income from long-term equity
70235.7346146.26
investments under equity method
Gains on disposal of long-term equity
0.000.00
investments
Gains on disposal of held-for-trading financial
1330123.81-991715.70
assets
Gains from other equity instrument investment
769616.25747200.50
income during holding period
Gains from disposal of financial assets at fair
-27352763.75-27223678.44
value through other comprehensive income
Others 71311.59 75934.01
Total -25111476.37 -27346113.37
5.45 Gains on Changes in Fair Values
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss 0.00 25168981.30
Of which: gains on changes in fair value of derivatives 0.00 0.00
Total 0.00 25168981.30
5.46 Credit Impairment Loss
Item Reporting Period Same period of last year
Bad debt of notes receivable 0.00 0.00
Bad debt of accounts receivable -208257.74 -98593.99
116Item Reporting Period Same period of last year
Bad debt of other receivables 265702.62 183048.19
Total 57444.88 84454.20
5.47 Asset Impairment Loss
Item Reporting Period Same period of last year
I. Inventory falling price loss 6603562.17 -17556673.87
II. Impairment loss of fixed assets 0.00 0.00
III. Impairment loss of intangible assets 0.00 0.00
Total 6603562.17 -17556673.87
5.48 Gains on Disposal of Assets
Item Reporting Period Same period of last year
Gains/losses from disposal of fixed assets construction in
progress productive biological assets and intangible assets not 115019.47 203366.67
classified as held for sale
Of which: Fixed assets 115019.47 203366.67
Total 115019.47 203366.67
5.49 Non-operating Income
Recognized in current
Item Reporting Period Same period of last year non-recurring profit or
loss
Gains from damage or scrapping of non-
41575.95792.3641575.95
current asset
Fine and compensation 18024818.43 27153467.53 18024818.43
Sale of scrap 1837031.10 2315235.07 1837031.10
Release of payables 12171666.34 0.00 12171666.34
Others 226918.17 15206998.10 226918.17
Total 32302009.99 44676493.06 32302009.99
5.50 Non-operating Expenses
Recognized in current non-
Item Reporting Period Same period of last year
recurring profit or loss
Loss from damage or scrapping of non- 1388046.95
2146433.912146433.91
current assets
Donations 3564000.00 16260100.00 3564000.00
1085481.91 2710295.84 Other 1085481.91
117Recognized in current non-
Item Reporting Period Same period of last year
recurring profit or loss
Total 6795915.82
20358442.796795915.82
5.51 Income Tax Expenses
(1) Details of income tax expenses
Item Reporting Period Same period of last year
1087484097.12
Current tax expenses 1546400697.87
Deferred tax expenses -217796797.42
-122827778.40
1328603900.45 964656318.72 Total
(2) Reconciliation of accounting profit and income tax expenses
Item Reporting Period
Profit before taxation 5007520214.24
Current income tax expense accounted at applicable tax rate of the
1251880053.56
Company as the parent
Influence of applying different tax rates by subsidiaries -9327139.85
Adjustment for prior period 88557402.05
Influence of non-taxable income -209963.00
Influence of non-deductable costs expenses and losses 4545065.26
Influence of deductable losses of unrecognized deferred income 0.00
tax at the beginning of the Reporting Period
Influence of deductable temporary difference or deductable
losses of unrecognized deferred income tax in the Reporting 0.00
Period
Influence of development expense deduction -6841517.57
Tax rate adjustment to the beginning balance of deferred income
0.00
tax assets/liabilities
Income tax credits 0.00
Total 1328603900.45
5.52 Notes to the Statement of Cash Flows
(1) Other cash received relating to operating activities
Item Reporting Period Same period of last year
Security deposit guarantee and warranty 165662356.11 191395775.56
Government grants 27166798.37 23086588.11
Interest income 298352344.67 114262772.85
118Item Reporting Period Same period of last year
Release of restricted monetary assets 1290204326.83 667182706.08
37349285.87 60720033.61 Other
Total 1818735111.85
1056647876.21
(2) Other cash payments relating to operating activities
Item Reporting Period Same period of last year
Cash paid in sales and distribution expenses and
1281715414.951028393443.01
general and administrative expense
Security deposit guarantee and warranty 267466177.89 112028193.49
Time deposits or deposits pledged for the
292400389.8710001995.00
issuance of notes payable
Others 118344932.30 106759182.45
Total 1959926915.01 1257182813.95
(3) Other cash payments relating to financing activities
Item Reporting Period Same period of last year
Payment of minority shareholder equity 0.00 0.00
Rental fee 7509748.71 8506249.20
Total 7509748.71 8506249.20
Changes in liabilities arising from financing activities
Increase in the current period Decrease in the current period
Beginning
Item Changes in non- Changes in non- Ending balance
balance Changes in cash Changes in cash
cash cash
Short-term
0.0040000100.0014444.520.000.0040014544.52
Borrowings
Long-term
107106256.9450000000.00215289.5821812513.8852109032.6483400000.00
Borrowings
Lease liabilities 68380767.78 0.00 32755553.39 0.00 16772346.34 84363974.83
lease liabilities
due within one 10771925.29 0.00 16772346.34 7225950.43 6665941.73 13652379.47
year
Long-term
Borrowings due 70053097.22 0.00 52109032.64 70080129.87 0.00 52081999.99
within one year
Total 256312047.23 90000100.00 101866666.47 99118594.18 75547320.71 273512898.81
5.53 Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
119Supplementary information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
----
flows generated from operating activities:
Net profit 3678916313.79 2844180601.67
Add: Provisions for impairment of assets -6603562.17 17556673.87
Losses on credit impairment -57444.88 -84454.20
Depreciation of fixed assets oil and gas
214227566.25141764699.64
assets and productive biological assets
Depreciation of right-of-use assets 8028920.19 7271247.88
Amortization of intangible assets 22640191.99 21694016.84
Amortization of long-term deferred expenses 10457067.79 14328044.89
Losses from disposal of fixed assets
intangible assets and other long-term assets -115019.47 -203366.67
(gains: negative)
Losses on scrapping of fixed assets (gains:
2104857.961387254.59
negative)
Losses on changes in fair value (gains:
0.00-25168981.30
negative)
Finance costs (gains: negative) 3445346.57 695705.86
Investment losses (gains: negative) 25111476.37 27346113.37
Decreases in deferred tax assets (increase:
-171674503.85-134248634.08
negative)
Increases in deferred tax liabilities (decrease:
-45431466.1811925466.41
negative)
Decreases in inventories (increase: negative) -231626040.62 -133877031.57
Decreases in operating receivables (increase:
-626166581.73-555140216.28
negative)
Increases in operating payables (decrease:
-163754993.351821226849.73
negative)
Other*1 1290204326.83 667182706.08
Net cash flows from operating activities 4009706455.49 4727836696.73
2. Significant investing and financing
activities without involvement of cash
receipts and payments
120Conversion of debt into capital
Current portion of convertible corporate
bonds
Fixed assets acquired under finance leases
3. Net increase/decrease of cash and cash
equivalents:
Ending balance of cash 15865996371.71 16842303222.36
Less: Beginning balance of cash 14676167417.36 13105373435.22
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 1189828954.35 3736929787.14
*1: Refer to impact of recovered restricted funds for operating activities paid at the same period of last year on net
cash flow generated from operating activities of the reporting period.
(2) The components of cash and cash equivalents
Item Reporting Period Same period of last year
15865996371.71 16842303222.36 I. Cash
Including: Cash on hand 45031.58
100681.01
Bank deposit on demand 15835834577.80 16842069031.88
133509.47 Other monetary assets on demand 30116762.33
II. Cash equivalents
Of which: Bond investments maturing within three months
III. Ending balance of cash and cash equivalents 15865996371.71 16842303222.36
Of which: cash and cash equivalents with restriction to use in the
subsidies of the Company as the parent or Group
5.54 Assets with Restricted Ownership or Right of Use
Item Ending carrying value Reason
Amount in pledge for issuing bank
Cash and cash equivalents 292400389.87 acceptance bills and other security
deposits etc.Intangible assets 72111318.24 Pledged for loans
Total 364511708.11 --
5.55 Leases
(1) The Company as a lessee
121Current gains and losses and cash flows related to leases
Item Reporting Period
Expenses for short-term lease under simplified method 3472146.35
Expenses for lease of low value asset (except for short-term lease) under simplified method -
Interest expense of lease liabilities 1575990.34
Variable lease payments not included in lease liabilities recognised in current profit or loss -
Income from subleasing the right-of-use assets -
Cash outflows related to leases 38121656.46
Profit or loss in sale and leaseback transaction
(2) The Company as a lessor
* Operating lease
A. Lease income
Item Reporting Period
Lease income 5695087.03
Including: income related to variable lease payments not included in lease receivables
6. RESEARCH AND DEVELOPMENT EXPENDITURES
Item Reporting Period Same period of last year
20823084.10
Labor costs 23995060.27
5437858.15
Material costs 2031791.02
1459282.37
Depreciation costs 2058186.20
5147260.85 2243950.60 Others
33232298.34 29964175.22 Total
Including：Expensed R&D expenditures 33232298.34 29964175.22
Capitalized R&D expenditures 0.00 0.00
7. CHANGES IN THE SCOPE OF CONSOLIDATION
7.1 Other Reasons of Changes in the Scope of ConsolidationCompared with the previous period the Company set up a new subsidiary “Ezhou Junya Trading Co. Ltd. andliquidated three subsidiaries “Fengyang Xiaogang Village Ming Wine Distillery Co. Ltd.” “Hubei Yellow CraneTower Beverage Co. Ltd.” and “Wuhan Yashibo Technology Co. Ltd.”.
8. INTERESTS IN OTHER ENTITIES
8.1 Interests in Subsidiaries
122(1) Composition of corporate group
Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
Address business Company (%) acquisition
(RMB’0000) business
Direct Indirect
Anhui Commercial Investment
Bozhou Gujing Sales Co. Ltd. 8486.45 Anhui Bozhou 100.00
Bozhou trade establishment
Anhui Investment
Anhui Longrui Glass Co. Ltd 8666.03 Anhui Bozhou Manufacture 100.00
Bozhou establishment
Anhui Jiuan Mechanical Electrical Anhui Equipment Investment
1000.00 Anhui Bozhou 100.00
Equipment Co. Ltd. Bozhou manufacturing establishment
Anhui Jinyunlai Culture & Media Advertisement Investment
1500.00 Anhui Hefei Anhui Hefei 100.00
Co. Ltd. marketing establishment
Anhui Ruisiweier Technology Co. Anhui Technical Investment
5000.00 Anhui Bozhou 100.00
Ltd. Bozhou research establishment
Shanghai Gujing Jinhao Hotel Business
Management Co. Ltd. Hotel combination
5400.00 Shanghai Shanghai 100.00
management under common
control
Bozhou Gujing Hotel Co. Ltd Business
Anhui combination
62.80 Anhui Bozhou Hotel operating 100.00
Bozhou under common
control
Anhui Yuanqing Environmental Anhui Sewage Investment
1600.00 Anhui Bozhou 100.00
Protection Co. Ltd. Bozhou treatment establishment
Anhui Gujing Yunshang E- Electronic Investment
500.00 Anhui Hefei Anhui Hefei 100.00
commerce Co. Ltd commerce establishment
Anhui RunAnXinKe Testing Anhui Investment
1000.00 Anhui Bozhou Food testing 100.00
Technology Co. Ltd. Bozhou establishment
Anhui Jiudao Culture Media Co. Advertisement Investment
1500.00 Anhui Hefei Anhui Hefei 100.00
Ltd. marketing establishment
Anhui Gujinggong Liquor Original
Anhui Investment
Vintage Theme Hotel Management 1000.00 Anhui Bozhou Hotel operation 100.00
Bozhou establishment
Co. Ltd.Anhui Investment
Anhui Guqi Distillery Co. Ltd. 12000.00 Anhui Bozhou Manufacture 60.00
Bozhou establishment
Business
Yellow Crane Tower Distillery combination not
40000.00 Hubei Wuhan Hubei Wuhan Manufacture 51.00
under common
Co. Ltd.control
123Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
Address business Company (%) acquisition
(RMB’0000) business
Direct Indirect
Business
Yellow Crane Tower Distillery Hubei Hubei combination not
31000.00 Manufacture 51.00
(Xianning) Co. Ltd. Xianning Xianning under common
control
Business
Yellow Crane Tower Distillery Hubei combination not
20000.00 Hubei Suizhou Manufacture 51.00
(Suizhou) Co. Ltd. Suizhou under common
control
Business
Hubei Junlou Cultural Tourism Hubei Hubei Advertising combination not
300.0051.00
Co. Ltd. Wuhan Wuhan marketing under common
control
Hubei Xinjia Testing Technology Hubei Hubei Investment
418.00 Food testing 51.00
Co. Ltd. Xianning Xianning establishment
Business
Wuhan Tianlong Jindi Technology Commercial combination not
3000.00 Hubei Wuhan Hubei Wuhan 51.00
Development Co. Ltd trade under common
control
Business
Hubei Hubei Commercial combination not
Xianning Junhe Sales Co. Ltd 1000.00 51.00
Xianning Xianning trade under common
control
Commercial Investment
Wuhan Junya Sales Co. Ltd 100.00 Hubei Wuhan Hubei Wuhan 51.00
trade establishment
Suizhou Junhe Commercial Co. Hubei Commercial Investment
100.00 Hubei Suizhou 51.00
Ltd. Suizhou trade establishment
Huanggang Huanggang Commercial Investment
Huanggang Junya Trading Co. Ltd. 2000.00 51.00
Hubei Hubei trade establishment
Wuhan Gulou Junhe Trading Co. Commercial Investment
2000.00 Hubei Wuhan Hubei Wuhan 51.00
Ltd. trade establishment
Wuhan Gulou Juntai Trading Co. Commercial Investment
2000.00 Hubei Wuhan Hubei Wuhan 51.00
Ltd. trade establishment
Xiaogan Gulou Tiancheng Trading Hubei Hubei Commercial Investment
2000.0051.00
Co. Ltd. Xiaogan Xiaogan trade establishment
Commercial Investment
Ezhou Junya Trading Co. Ltd. 2000.00 Hubei Ezhou Hubei Ezhou 51.00
trade establishment
124Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
Address business Company (%) acquisition
(RMB’0000) business
Direct Indirect
Business
Anhui Mingguang Distillery Co. Anhui Anhui combination not
6883.00 Manufacture 60.00
Ltd. Chuzhou Mingguang under common
control
Business
Mingguang Tiancheng Ming Wine Anhui Anhui Commercial combination not
80.0060.00
Sales Co. Ltd. Chuzhou Mingguang trade under common
control
Anhui Jiuhao China Railway Anhui Investment
1100.00 Anhui Bozhou Construction 52.00
Construction Engineering Co. Ltd. Bozhou establishment
Anhui Zhenrui Construction Anhui Investment
1000.00 Anhui Bozhou Construction 52.00
Engineering Co. Ltd Bozhou establishment
Business
Renhuai Maotai Town Zhencang Renhuai Renhuai combination not
125.00 Manufacture 60.00
Winery Industry Co. Ltd. Guizhou Guizhou under common
control
Guizhou Zhencang Winery Industry Renhuai Renhuai Commercial Investment
100.0060.00
Sales Co. Ltd. Guizhou Guizhou trade establishment
Anhui Gujing Health Technology Business
Co. Ltd. Anhui combination not
10768.50 Anhui Bozhou Manufacture 60.00
Bozhou under common
control
Anhui Maiqi Biotechnology Co. Business
Ltd. Anhui Technology combination not
1000.00 Anhui Bozhou 60.00
Bozhou development under common
control
Anhui Yangshengtianxia Brand Business
Operation Co. Ltd. Anhui Anhui Advertising combination not
500.0060.00
Hefei Hefei marketing under common
control
Hainan Yangshengtianxia Business
Biotechnology Development Co. Hainan Hainan Commercial combination not
500.0060.00
Ltd. Lingshui Lingshui trade under common
control
(2) Significant non-wholly owned subsidiaries
125Shareholding The profit or loss Declaring dividends Balance of non-
Name proportion of non- attributable to the non- distributed to non- controlling interests at the
controlling interests controlling interests controlling interests period-end
Yellow Crane Tower
49.0061418274.640.00663701504.77
Distillery Co. Ltd.
(3) Main financial information of significant non-wholly owned subsidiaries
Ending balance
Name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liability
Yellow Crane
Tower Distillery 1293513412.79 1163082223.55 2456595636.34 859761989.10 242340780.37 1102102769.47
Co. Ltd.
(Continued)
Beginning balance
Name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liability
Yellow Crane Tower
1269187978.691167449470.702436637449.39939863270.35267657052.441207520322.79
Distillery Co. Ltd.
(Continued)
Reporting Period
Name Total comprehensive Cash flows from
Operating revenue Net profit
income operating activities
Yellow Crane Tower Distillery
1070259791.38125343417.64125375740.27168005118.50
Co. Ltd.
(Continued)
Same period of last year
Name Total comprehensive Cash flows from
Operating revenue Net profit
income operating activities
Yellow Crane Tower Distillery
865646272.06100981091.52100884320.7419674621.86
Co. Ltd.
8.2 Interests in Joint Arrangements or Associates
(1) Significant joint ventures or associates
The Company had no significant joint venture or associate.
(2) Summarized financial information about insignificant joint ventures and associates
126Beginning balance/Same period of
Item Ending balance/Reporting Period
last year
Joint venture：
Total carrying amount of investments
The aggregate amount of below items calculated
based on proportion of equity interests:
—Net profit/(loss)
—Other comprehensive income
—Total comprehensive income
Associate：
Total carrying amount of investments 10437313.99 10367078.26
The aggregate amount of below items calculated
based on proportion of equity interests:
—Net profit/(loss) 70235.73 46146.26
—Other comprehensive income
—Total comprehensive income
9. GOVERNMENT GTRANTS
9.1 Government grants recognised as receivables
The ending balance of accounts receivable was RMB0.00.Reason for not receiving the projected amount of government grants at the projected point in time
□ Applicable □ Not applicable
9.2 Liability items that involve government grants
□ Applicable □ Not applicable
Amount
Items
recognised in Amount
presented Increase in
non- recognised in
in the government Other changes Related to
Beginning operating other income
statement grants during during the Ending balance assets or
balance income during the
of the reporting reporting period income
during the reporting
financial period
reporting period
position
period
Deferred Related to
100811404.824014000.000.003125268.620.00101700136.20
income assets
9.3 Government grants recognised in current profit or loss
□ Applicable □ Not applicable
Items presented in income statement Reporting Period Same period of last year
127Other income 22796192.89 21893660.44
Finance costs 0.00 -1392125.00
10. RISKS RELATED TO FINANCIAL INSTRUMENTS
Risks related to the financial instruments of the Company arise from the recognition of various
financial assets and financial liabilities during its operation including credit risk liquidity risk and
market risk.Management of the Company is responsible for determining risk management objectives and policies
related to financial instruments. Operational management is responsible for the daily risk
management through functional departments (e.g. credit management department of the Company
reviews each credit sale). Internal audit department is responsible for the daily supervision of
implementation of the risk management policies and procedures and report their findings to the audit
committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies to
minimize the risks without unduly affecting the competitiveness and resilience of the Company.
10.1 Credit Risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the other
party of the financial instrument fails to fulfill its obligation. The credit risk of the Company is related
to cash and equivalent notes receivable accounts receivables other receivables and long-term
receivables. Credit risk of these financial assets is derived from the counterparty’s breach of contract.The maximum risk exposure is equal to the carrying amount of these financial instruments.Cash and cash equivalent of the Company has lower credit risk as they are mainly deposited in such
financial institutions as commercial bank of which the Company thinks with higher reputation and
financial position. For notes receivable other receivables and long-term receivables the Company
establishes related policies to control their credit risk exposure. The Company assesses credit
capability of its customers and determines their credit terms based on their financial position
possibility of the guarantee from third party credit record and other factors (such as current market
status etc.). The Company monitors its customers’ credit record periodically and for those customers
with poor credit record the Company will take measures such as written call shortening or cancelling
their credit terms so as to ensure the overall credit risk of the Company is controllable.
(1) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instruments
has increased significantly since initial recognition. When the Company determines whether the credit
risk has increased significantly since initial recognition it considers based on reasonable and
supportable information that is available without undue cost or effort including quantitative and
128qualitative analysis of historical information external credit ratings and forward-looking information.
The Company determines the changes in the risk of a default occurring over the expected life of the
financial instrument through comparing the risk of a default occurring on the financial instrument as
at the reporting date with the risk of a default occurring on the financial instrument as at the date of
initial recognition based on individual financial instrument or a group of financial instruments with
the similar credit risk characteristics.When met one or more of the following quantitative or qualitative criteria the Company determines
that the credit risk on financial instruments has increased significantly: the quantitative criteria
applied mainly because as at the reporting date the increase in the probability of default occurring
over the lifetime is more than a certain percentage since the initial recognition; the qualitative cri teria
applied if the debtor has adverse changes in business and economic conditions early warning list of
customer and etc.
(2) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent with
internal credit risk management objectives of relevant financial instruments in considering both
quantitative and qualitative indicators.When the Company assesses whether the debtor has incurred the credit impairment the main factors
considered are as following: Significant financial difficulty of the issuer or the borrower; a breach of
contract e.g. default or past-due event; a lender having granted a concession to the borrower for
economic or contractual reasons relating to the borrower’s financial difficulty that the lender would
not otherwise consider; the probability that the borrower will enter bankruptcy or other financial re-
organisation; the disappearance of an active market for the financial asset because of financial
difficulties of the issuer or the borrower; the purchase or origination of a financial asset at a deep
discount that reflects the incurred credit losses.
(3) The parameter of expected credit loss measurement
The company measures impairment provision for different assets with the expected credit loss of 12-
month or the lifetime based on whether there has been a significant increase in credit risk or credit
impairment has occurred. The key parameters for expected credit loss measurement include default
probability default loss rate and default risk exposure. The Company sets up the model of default
probability default loss rate and default risk exposure in considering the quantitative analysis of
historical statistics (such as counterparties’ ratings guarantee method and collateral type repayment
method etc.) and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repayment
obligation over the next 12 months or the entire remaining lifetime;
129Default loss rate refers to the Company's expectation of the loss degree of default risk exposure. The
default loss rate varies depending on the type of counterparty recourse method and priority and the
collateral. The default loss rate is the percentage of the risk exposure loss when default has occurred
and it is calculated over the next 12 months or the entire lifetime;
The default risk exposure refers to the amount that the company should be repaid when default has
occurred in the next 12 months or the entire lifetime. Both the assessment of significant increase in
credit risk of forward-looking information and the calculation of expected credit losses involve
forward-looking information. Through historical data analysis the Company identifies key economic
indicators that have impact on the credit risk and expected credit losses for each business.The maximum exposure to credit risk of the Company is the carrying amount of each financial asset
in the statement of financial position. The Company does not provide any other guarantees that may
expose the Company to credit risk.For the accounts receivable of the Company the amount of top 5 clients represents 43.24% of the
total; for the other receivables the amount of the top five entities represents 63.72% of the total.
10.2 Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering
cash or other financial assets. The Company is responsible for the capital management of all of its
subsidiaries including short-term investment of cash surplus and dealing with forecasted cash
demand by raising loans. The Company’s policy is to monitor the demand for short-term and long-
term floating capital and whether the requirement of loan contracts is satisfied so as to ensure to
maintain adequate cash and cash equivalents.
10.3 Market Risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial
instruments will fluctuate due to changes in market prices. Market risk mainly includes foreign
exchange risk and interest rate risk.
(1) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
denominated in currency other than the Company’s functional currency. The main business of the
Company is located in Chinese Mainland and the main business is settled in RMB. There is only a
small amount of export business which has a small proportion of income scale and impact and has
little exchange rate risk.
(2) Interest rate risk
Interest risk refers to the risk on the fair value or future cash flows of a financial instrument brought
130by the change of market interest rate. Interest risk mainly arises from bank loans. As of the statement
date the Company had no bank loan with a floating interest rate.
(3) Other price risk
Investments held for trading were measured at fair value. As such these investments are subject to
the risk brought by the change of security prices. The Company controls this risk to the acceptable
level by utilising multiple investment mix.
11. FAIR VALUE DISCLOSURES
The inputs used in the fair value measurement in its entirety are to be classified in the level of the
hierarchy in which the lowest level input that is significant to the measurement is classified.Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities.Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either directly
or indirectly observable.Level 3: Inputs are unobservable inputs for the assets or liabilities.
11.1 Assets and Liabilities Measured at Fair Value on 30 June 2024
Fair value on 30 June 2024
Item
Level 1 Level 2 Level 3 Total
I. Recurring fair value measurements
(I) Held-for-trading financial assets
1. Financial assets at fair value through
profit or loss
(1) Debt instruments
(2) Bank financial products
(II) Financial assets measured at fair
value through other comprehensive 1650145754.42 1650145754.42
income
(1) Accounts receivable financing 1581346121.50 1581346121.50
(2) Investments in other equity
68799632.9268799632.92
instrument
Total assets measured at fair value on a
1650145754.421650145754.42
recurring basis
The fair value of financial instruments traded in an active market is based on quoted market prices at
the reporting date. The fair value of financial instruments not traded in an active market is determined
by using valuation techniques. Specific valuation techniques used to value the above financial
131instruments include discounted cash flow and market approach to comparable company model. Inputs
in the valuation technique include risk-free interest rates benchmark interest rates exchange rates
credit spreads liquidity premiums discount for lack of liquidity.
11.2 Fair Value of Financial Assets or Financial Liabilities which are not Measured at Fair Value
The financial assets and financial liabilities of the Company measured at amortised cost mainly
include: cash and cash equivalents notes receivable accounts receivable other receivables debt
investments short-term borrowings notes payable accounts payable other payables long-term
borrowings maturing within one year long-term payables long-term borrowings and bonds payable.
12. RELATED PARTIES AND RELATED PARTY TRANSACTIONS
Recognition of related parties: The Company has control or joint control of or exercise significant
influence over another party; or the Company and another party are controlled or jointly controlled
by the same third party.
12.1 General Information of the Parent Company
Percentage of
Registered Voting rights in the
Name of the parent Nature of the business Registered capital equity interests in
address Company (%)
the Company (%)
Anhui Gujing Group Anhui
Commercial trade 1000000000.00 51.34 51.34
Co. Ltd.Bozhou
The Company’s ultimate controller is the State-owned Asset Management Commission of the People's Government
of Bozhou Anhui.
12.2 General Information of Subsidiaries
Details of the subsidiaries please refer to Notes 8.1 INTERESTS IN OTHER ENTITIES.
12.3 Joint Ventures and Associates of the Company
(1) General information of significant joint ventures and associates
Details of significant joint ventures and associates please refer to Notes 8.2 INTERESTS IN OTHER ENTITIES.
12.4 Other Related Parties of the Company
Name Relationship with the Company
Nanjing Suning Property Development Co. Ltd.(Suning Property Controlled by ZHANG Guiping the non-executive
Development) director of the Company
Controlled by the Company's controlling
Anhui Ruijing Shanglv (Group) Co. Ltd. (RJSL Group)
shareholder or ultimate controller
Anhui Ruijing Shanglv (Group) Co. Ltd. Hefei Gujing Holiday Inn (RJSL Controlled by the Company's controlling
Holiday Inn) shareholder or ultimate controller
132Controlled by the Company's controlling
Bozhou Gujing Huishenglou Catering Co. Ltd.(GJ Huishenglou Catering)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Haochidian Catering Co. Ltd. (Haochidian Catering)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Ruijing Catering Co. Ltd. (Ruijing Catering)
shareholder or ultimate controller
Controlled by the Company's controlling
Shanghai Beihai Hotel Co. Ltd. (Beihai Hotel)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Gujing Hotel Development Co. Ltd.(GJ Hotel Development)
shareholder or ultimate controller
Anhui Huixin Financial Investment Group Co. Ltd.(Huixin Financial Controlled by the Company's controlling
Investment) shareholder or ultimate controller
Controlled by the Company's controlling
Bozhou Anxin Small Loan Co. Ltd. (Anxin Small Loan)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Hengxin Pawnshop Co. Ltd. (Hengxin Pawnshop)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Ruixin Pawnshop Co. Ltd. (Ruixin Pawnshop)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Zhongxin Financial Leasing Co. Ltd.(Zhongxin Financial Leasing)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Youxin Financing Guarantee Co Ltd. (Youxin Guarantee)
shareholder or ultimate controller
Hefei Longxin Corporate Management Advisory Co. Ltd. (Longxin Controlled by the Company's controlling
Advisory) shareholder or ultimate controller
Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Equity Controlled by the Company's controlling
Investment) shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Lejiu Jiayuan Travel Management Co. Ltd. (Lejiu Jiayuan)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Shenglong Trading Co. Ltd. (Shenglong Trading)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Gujing Health Industry Co. Ltd. (Health Industry)
shareholder or ultimate controller
133Controlled by the Company's controlling
Bozhou Hotel Co. Ltd. (Bozhou Guest House)
shareholder or ultimate controller
Controlled by the Company's controlling
Dongfang Ruijing Enterprise Investment Co. Ltd.(Dongfang Ruijing)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Gujing International Development Co. Ltd.(GJ International)
shareholder or ultimate controller
Anhui Jiuan Construction Management Advisory Co. Ltd.(Jiuan Controlled by the Company's controlling
Advisory) shareholder or ultimate controller
Dazhongyuan Jiugu Cultural Tourism Development Co. Ltd. Controlled by the Company's controlling
(Dazhongyuan Jiugu Cultural) shareholder or ultimate controller
12.5 Related Party Transactions
(1) Purchases or sales of goods rendering or receiving of services
Purchases of goods receiving of services:
Reporting Same period of last
Related parties Nature of the transaction(s)
Period year
Receiving catering and
Bozhou Hotel Co. Ltd. 3528662.25 4325048.30
accommodation
Receiving catering and
Bozhou Gujing Huishenglou Catering Co. Ltd. 2692164.50 3553459.37
accommodation
Receiving catering and
Anhui Gujing Hotel Development Co. Ltd. 515749.97 728018.80
accommodation
Anhui Gujing Hotel Development Co. Ltd. Purchases of materials 193308.41 0.00
Anhui Vista Business Travel (Group) Co. Ltd. Purchases of materials 0.00 45663.72
Receiving catering and
Anhui Vista Business Travel (Group) Co. Ltd. 0.00 10358.79
accommodation
Receiving catering and
Hefei Gujing Holiday Hotel Co. Ltd. 364357.70 22627.37
accommodation
Hefei Gujing Holiday Hotel Co. Ltd. Purchases of materials 143785.38 233711.85
Anhui Youxin Financing Guarantee Co. Ltd. Receiving services 57289.43 0.00
Anhui Jiuan Engineering Management Consulting
Advisory and assurance 7313584.49 3098429.54
Co. Ltd.Total -- 14808902.13 12017317.74
Sales of goods and rendering of services:
134Nature of the
Related parties Reporting Period Same period of last year
transaction(s)
Anhui Shenglong Commercial Co. Ltd. Sales of baijiu 220548.66 1011223.02
Provision of
Anhui Gujing Hotel Development Co. Ltd. 76598.19 53250.00
utilities
Provision of
Anhui Gujing Group Co. Ltd. catering and 152324.02 75237.68
accommodation
Sales of small
Anhui Gujing Group Co. Ltd. 70556.36 45141.22
materials
Anhui Gujing Hotel Development Co. Ltd. Sales of baijiu 492217.67 18141.59
Provision of
Anhui Vista Business Travel (Group) Co. Ltd. catering and 2569.40 3083.75
accommodation
Anhui Vista Business Travel (Group) Co. Ltd. Sales of baijiu 13539.83 0.00
Sales of small
Bozhou Hotel Co. Ltd. 75134.10 44233.90
materials
Bozhou Hotel Co. Ltd. Sales of baijiu 179690.27 0.00
Provision of
Bozhou Hotel Co. Ltd. 707.55 0.00
labor services
Anhui Huixin Finance Investment Group Co. Ltd Sales of baijiu 11867.25 0.00
Provision of
Anhui Huixin Finance Investment Group Co. Ltd catering and 2243.40 0.00
accommodation
Sales of small
Bozhou Gujing Huishenglou Catering Co. Ltd. 10991.16 13238.94
materials
Bozhou Gujing Huishenglou Catering Co. Ltd. Sales of baijiu 38150.44 0.00
Bozhou Anxin Micro Finance Co. Ltd. Sales of baijiu 17522.12 0.00
Anhui Zhongxin Finance Leasing Co. Ltd. Sales of baijiu 3185.84 0.00
Anhui Hengxin Pawn Co. Ltd. Sales of baijiu 6371.69 0.00
Anhui Jiuan Engineering Management Consulting Co. Ltd. Sales of baijiu 28672.56 60318.59
Shanghai Beihai Restaurant Co. Ltd. Sales of baijiu 26442.48 0.00
Anhui Haochidian Catering Co. Ltd. Sales of baijiu 8522.12 0.00
Provision of
Anhui Haochidian Catering Co. Ltd. catering and 72376.00 0.00
accommodation
Sales of small
Anhui Haochidian Catering Co. Ltd. 21235.36 0.00
materials
135Nature of the
Related parties Reporting Period Same period of last year
transaction(s)
Provision of
Anhui Shenglong Commercial Co. Ltd. catering and 7675.83 6539.00
accommodation
Provision of
Anhui Lejiu Home Tourism Management Co. Ltd. 0.00 1346.46
utilities
Anhui Ruixin Pawn Co. Ltd. Sales of baijiu 3185.84 0.00
Anhui Youxin Financing Guarantee Co. Ltd. Sales of baijiu 3185.84 0.00
Provision of
Anhui Jiuan Engineering Management Consulting Co. Ltd. catering and 800.00 3220.00
accommodation
Sales of small
Bozhou Anxin Micro Finance Co. Ltd. 0.00 9911.50
materials
Sales of small
Anhui Shenglong Commercial Co. Ltd. 203.54 1796.46
materials
Hefei Longxin Business Management Consulting Co. Ltd Sales of baijiu 796.46 0.00
Sales of small
Anhui Jiuan Engineering Management Consulting Co. Ltd. 0.00 9376.56
materials
Sales of small
Hefei Gujing Holiday Hotel Co. Ltd. 8853.98 14658.28
materials
Provision of
Hefei Gujing Holiday Hotel Co. Ltd. catering and 0.00 1276.02
accommodation
Hefei Gujing Holiday Hotel Co. Ltd. Sales of baijiu 128123.90 0.00
Sales of small
Anhui Vista Business Travel (Group) Co. Ltd. 2946.90 4605.30
materials
Provision of
Dongfang Vista Business Investment Development Co. Ltd. catering and 34061.79 0.00
accommodation
Provision of
Anhui Gujing Hotel Development Co. Ltd. catering and 94339.62 0.00
accommodation
Sales of small
Anhui Gujing Hotel Development Co. Ltd. 33747.07 17544.24
materials
Total -- 1849387.24 1394142.51
(2) Related-party leases
The Company as lessor:
136Category of leased The lease income confirmed in The lease income confirmed in
Name of lessee
assets the Reporting Period the same period of last year
Anhui Gujing Hotel Development Co. Ltd. Houses and buildings 546897.62 261183.34
Total -- 546897.62 261183.34
The Company as lessee:
Reporting Period
Expenses for
short-term lease Variable lease
Category of Interest
Name of lessor and lease of low payments not Lease payment for Increase in right-
leased assets expense of
value asset included in lease current period of-use assets
lease liabilities
under simplified liabilities
method
Anhui Gujing Group Houses and
310396.560.00325916.390.000.00
Co. Ltd. buildings
Nanjing Suning Real
Houses and
Estate Development 0.00 0.00 1157625.00 252549.47 0.00
buildings
Co. Ltd.Dazhongyuan Jiugu
Houses and
Cultural Tourism 0.00 0.00 0.00 0.00 31179563.79
buildings
Development Co. Ltd.Total 310396.56 0.00 1483541.39 252549.47 31179563.79
(Continued)
The same period of last year
Expenses for
short-term lease Variable lease
Category of Interest Increase in
Name of lessor and lease of low payments not Lease payment for
leased assets expense of right-of-use
value asset included in lease current period
lease liabilities assets
under simplified liabilities
method
Anhui Gujing Group Houses and
534782.12470848.160.000.00
Co. Ltd. buildings
Nanjing Suning Real
Houses and
Estate Development 0.00 1102500.00 291028.22 0.00
buildings
Co. Ltd.Total -- 534782.12 - 1573348.16 291028.22 0.00
12.6 Receivables and Payables with Related Parties
Item Related party Ending balance Beginning balance
Contract liabilities Bozhou Hotel Co. Ltd. 143.36 15988.44
137Item Related party Ending balance Beginning balance
Contract liabilities Bozhou Gujing Huishenglou Catering Co. Ltd. 4345.13 5070.80
Contract liabilities Anhui Vista Business Travel (Group) Co. Ltd. 3380660.06 221.12
Contract liabilities Anhui Shenglong Commercial Co. Ltd. 1115.04 0.00
Contract liabilities Anhui Gujing Hotel Development Co. Ltd. 36021.24 0.00
Anhui Jiuan Engineering Management Consulting
Accounts payable 254732.49 4711062.24
Co. Ltd.Accounts payable Anhui Gujing Hotel Development Co. Ltd. 0.00 6500.00
Accounts payable Bozhou Hotel Co. Ltd. 101358.00 29768.32
Accounts payable Anhui Vista Business Travel (Group) Co. Ltd. 246132.00 0.00
Other payables Anhui Vista Business Travel (Group) Co. Ltd. 305533.60 0.00
Other payables Anhui Gujing Hotel Development Co. Ltd. 100000.00 50000.00
Dazhongyuan Jiugu Cultural Tourism Development
Other payables 6999238.82 0.00
Co. Ltd.Anhui Jiuan Engineering Management Consulting 29877.00
Other payables 18000.00
Co. Ltd.
13. COMMITMENTS AND CONTINGENCIES
13.1 Significant Commitments
As at 30 June 2024 the Company has no significant commitments need to be disclosed.
13.2 Contingencies
As at 30 June 2024 the Company has no significant contingencies need to be disclosed.
14. EVENTS AFTER BALANCE SHEET DATE
As at 30 August 2024 the Company had no post-balance sheet events that required disclosure.
15. OTHER SIGNIFICANT MATTERS
Segment Information
The Company did not determine the operating segment in accordance with the internal organizational structure
management requirements and internal reporting system so there was no need to disclose segment information
report based on the operating segments.
13816. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THE PARENT
COMPANY
16.1 Accounts Receivable
(1) On 30 June 2024 the Company as the parent has no balance of accounts receivable.
(2) On 1 January 2024 the Company as the parent has no balance of accounts receivable.
(3) There is no change in bad debt provision for the Company as the parent during the Reporting Period.
16.2 Other Receivables
(1) Listed by category
Item Ending balance Beginning balance
Interest receivable 0.00 0.00
Dividends receivable 0.00 0.00
Other receivables 452421557.21 384878020.29
Total 452421557.21 384878020.29
(2) Other receivables
* Disclosure by aging
Aging Ending balance Beginning balance
Within one year 451850947.68 384298400.37
Of which:1-6 months 450070156.43 384283297.37
7-12 months 1780791.25 15103.00
1-2 years 25649.00 24380.80
2-3 years 1303136.00 1303136.00
Over 3 years 29741318.31 29741318.31
Subtotal 482921050.99 415367235.48
Less: Bad debt provision 30499493.78 30489215.19
Total 452421557.21 384878020.29
* Disclosure by nature
Nature Ending balance Beginning balance
Related parties within the scope of
448569855.28374969732.31
consolidation
Security investment 28635660.22 28635660.22
Security deposit and guarantee 3713589.17 3693589.17
139Nature Ending balance Beginning balance
Rent water electricity and gas 918155.19 1135726.76
Other 1083791.13 6932527.02
Subtotal 482921050.99 415367235.48
Less: Bad debt provision 30499493.78 30489215.19
Total 452421557.21 384878020.29
* Disclosure by withdrawal method of bad debt provision
A. As of 30 June 2024 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 454285390.77 1863833.56 452421557.21
Stage 2
Stage 3 28635660.22 28635660.22 0.00
Total 482921050.99 30499493.78 452421557.21
A1. As of 30 June 2024 bad debt provision at stage 1:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
454285390.770.411863833.56452421557.21
by group-
Of which: Group 1 448569855.28 0.00 0.00 448569855.28
Group 2 5715535.49 32.61 1863833.56 3851701.93
Total 454285390.77 0.41 1863833.56 452421557.21
On 30 June 2024 other receivables with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 3281092.40 104042.57 3.17
Of which:1-6 months 1500301.15 15003.01 1.00
7-12 months 1780791.25 89039.56 5.00
1-2 years 25649.00 2564.90 10.00
2-3 years 1303136.00 651568.00 50.00
140Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Over 3 years 1105658.09 1105658.09 100.00
Total 5715535.49 1863833.56 32.61
A2. As of 30 June 2024 bad debt provision at stage 3:
Expected credit loss rate
Category Carrying amount Bad debt provision Carrying value
for the entire duration (%)
Bad debt provision withdrawn
28635660.22100.0028635660.220.00
separately
Bad debt provision withdrawn
by group
Of which: Group 1
Group 2
Total 28635660.22 100.00 28635660.22 0.00
On 30 June 2024 other receivables with bad debt provision withdrawn separately:
Ending balance
Withdrawal
Name
Carrying amount Bad debt provision proportion Withdrawal reason
(%)
The enterprise has gone bankrupt
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00
and liquidated
Total 28635660.22 28635660.22 100.00 --
B. As of 1 January 2024 bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 386731575.26 1853554.97 384878020.29
Stage 2
Stage 3 28635660.22 28635660.22 0.00
Total 415367235.48 30489215.19 384878020.29
B1. On 1 January 2024 bad debt provision at stage 1:
12-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
14112-month expected credit
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
separately
Bad debt provision withdrawn
386731575.260.481853554.97384878020.29
by group
Of which: Group 1 374969732.31 0.00 0.00 374969732.31
Group 2 11761842.95 15.76 1853554.97 9908287.98
Total 386731575.26 0.48 1853554.97 384878020.29
On 1 January 2024 other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within one year 9328668.06 93890.80 1.01
Of which: 1-6 months 9313565.06 93135.65 1.00
7-12 months 15103.00 755.15 5.00
1-2 years 24380.80 2438.08 10.00
2-3 years 1303136.00 651568.00 50.00
Over 3 years 1105658.09 1105658.09 100.00
Total 11761842.95 1853554.97 15.76
B2. As of 1 January 2024 bad debt provision at stage 3:
Expected credit loss rate
Category Carrying amount Bad debt provision Carrying value
for the entire duration (%)
Bad debt provision withdrawn
28635660.22100.0028635660.220.00
separately
Bad debt provision withdrawn
by group
Of which: Group 1
Group 2
Total 28635660.22 100.00 28635660.22 0.00
On 1 January 2024 other receivables with bad debt provision withdrawn separately:
142Beginning balance
Withdrawal
Name
Carrying amount Bad debt provision proportion Withdrawal reason
(%)
The enterprise has gone bankrupt
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00
and liquidated
Total 28635660.22 28635660.22 100.00 --
* Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Category Beginning balance Reversal or Elimination or Ending balance
Withdrawal
recovery Write-off
Bad debt provision withdrawn 0.00
28635660.2228635660.22
separately
Bad debt provision withdrawn by 10278.59
1853554.971863833.56
group
Total 30489215.19 10278.59 30499493.78
* On 30 June 2024 top five ending balance by entity
Proportion of
the balance to
Bad debt
No. Nature Ending balance Aging the total other
provision
receivables
(%)
Current accounts within the
No. 1 230000000.00 Within 6 months 47.63
scope of consolidation
Current accounts within the
No. 2 98000000.00 Within 6 months 20.29
scope of consolidation
Current accounts within the
No. 3 78207352.12 Within 6 months 16.19
scope of consolidation
Current accounts within the
No. 4 41179561.36 Within 6 months 8.53
scope of consolidation
No. 5 Securities Investment 28635660.22 Over 3 years 5.93 28635660.22
Total -- 476022573.70 98.57 28635660.22
16.3 Long-term Equity Investments
143Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment in
1619079903.431619079903.431598079903.431598079903.43
subsidiaries
Investment in
associated 4923640.04 4923640.04 4855540.61 4855540.61
enterprises
Total 1624003543.47 1624003543.47 1602935444.04 1602935444.04
(1) Investments in subsidiaries
Impairment
Decrease
Increase during provision Provision for
Beginning during the
Investees the Reporting Ending balance during the impairment at
balance Reporting
Period Reporting 30 June 2024
Period
Period
Bozhou Gujing Sales Co.
68949286.8968949286.89
Ltd.Anhui Longrui Glass Co.
85267453.0685267453.06
Ltd.Shanghai Gujing Jinhao
Hotel Management Co. 49906854.63 49906854.63
Ltd.Bozhou Gujing Hotel Co.
648646.80648646.80
Ltd.Anhui Ruisiweier
40000000.0040000000.00
Technology Co. Ltd.Anhui Yuanqing
Environmental Protection 16000000.00 16000000.00
Co. Ltd.Anhui Gujing Yunshang E-
5000000.005000000.00
commerce Co. Ltd.Yellow Crane Tower
816000000.00816000000.00
Distillery Co. Ltd.
144Impairment
Decrease
Increase during provision Provision for
Beginning during the
Investees the Reporting Ending balance during the impairment at
balance Reporting
Period Reporting 30 June 2024
Period
Period
Anhui Jinyunlai Cultural
15000000.0015000000.00
Media Co. Ltd.Anhui RunanXinke Testing
10000000.0010000000.00
Technology Co. Ltd.Anhui Jiuan Mechanical
Electrical Equipment Co. 10000000.00 10000000.00
Ltd.Anhui Mingguang
200200000.00200200000.00
Distillery Co. Ltd.Renhuai Maotai Town
Zhencang Winery Industry 224723400.00 224723400.00
Co. Ltd.Anhui Jiuhao China
Railway Construction 5720000.00 5720000.00
Engineering Co. Ltd.Anhui Gujing Health
34664262.0534664262.05
Technology Co. Ltd.Anhui Gujinggong Liquor
Original Vintage Theme
10000000.0010000000.00
Hotel Management Co.Ltd.Anhui Guqi Distillery Co.
6000000.0021000000.0027000000.00
Ltd.Total 1598079903.43 21000000.00 1619079903.43
(2) Investment in associated enterprises
Increase/decrease
Adjustment of
Beginning Investment income
Investee Additional Reduced other Changes of
balance
recognized under
investment investment
comprehensive other equity
the equity method
income
I. Joint ventures
Anhui Xunfei Jiuzhi 4855540.61 68099.43
145Increase/decrease
Adjustment of
Beginning Investment income
Investee Additional Reduced other Changes of
balance
recognized under
investment investment
comprehensive other equity
the equity method
income
Technology Co. Ltd.Total 4855540.61 68099.43
(Continued)
Increase/decrease
Ending balance of
Withdrawal of
Investee Cash bonus or profits Ending balance depreciation
impairment Other
announced to issue reserve
provision
I. Joint ventures
Anhui Xunfei Jiuzhi
4923640.04
Technology Co. Ltd.Total 4923640.04
16.4 Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
7313486177.50 2404603519.54 5622237508.48 1993854656.60 Main operations
Other operations 70531313.91 40994559.06
66739498.5039198474.43
7384017491.41 2445598078.60 5688977006.98 2033053131.03 Total
Information on performance obligations: None.
16.5 Investment Income
Item Reporting Period Same period of last year
Investment income from long-term equity investments under cost
0.009945959.41
method
Investment income from long-term equity investments under equity
68099.4343101.60
method
Gains on disposal of financial assets at fair value through profit or
1330123.81-1293063.11
loss
Gains on disposal of financial assets at fair value through other
-27719016.19-27107452.17
comprehensive income
Other investment income 12646.55 9669.81
146Item Reporting Period Same period of last year
Total -26308146.40 -18401784.46
17. SUPPLEMENTARY MATERIALS
17.1 Items and Amounts of Non-recurring Profit or Loss
Item Amount Note
Gain or loss on disposal of non-current
-1989838.49
assets
Government grants recognised in profit or
loss (exclusive of those that are closely
related to the Company's normal business
operations and given in accordance with
23621646.20
defined criteria and in compliance with
government policies and have a
continuing impact on the Company's
profit or loss)
Gain or loss on fair-value changes in
financial assets and liabilities held by a
non-financial enterprise as well as on
disposal of financial assets and liabilit ies 1401435.40
(exclusive of the effective portion of
hedges that is related to the Company's
normal business operations)
Depreciation reserves returns of
0.00
receivables with separate depreciation test
Non-operating income and expense other
27610952.13
than the above
Less: Income tax effects 12342219.62
Non-controlling interests effects (net
6051287.14
of tax)
Total 32250688.48 --
Others that meets the definition of non-recurring gain/loss:
□Applicable □ Not applicable
No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-
recurring Gains and Losses as a recurrent gain/loss item
□Applicable □ Not applicable
17.2 Return on Net Assets and Earnings Per Share
Weighted average ROE EPS (Yuan/share)
Profit as of Reporting Period
(%)
EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the 15.75 6.76 6.76
147Company
Net profit attributable to ordinary shareholders of the
15.616.706.70
Company after deduction of non-recurring profit and loss
17.3 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 □ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and Chinese
Accounting Standards
□ Applicable □ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting
Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing Agent
Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
None
148
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