ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2024
August 2024
I Independent Auditor’s ReportAre 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 StatementsCurrency 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 | 16,158,396,761.58 | 15,966,371,744.19 |
| Settlement reserve | ||
| Loans to other banks and financial institutions | ||
| Held-for-trading financial assets | 0.00 | 719,987,547.42 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 59,519,246.91 | 68,607,919.27 |
| Receivables financing | 1,581,346,121.50 | 957,560,115.73 |
| Prepayments | 115,234,646.94 | 91,607,342.18 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 37,020,138.26 | 49,178,194.70 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 7,758,323,363.84 | 7,519,682,536.51 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets |
| Other current assets | 134,701,510.60 | 135,071,255.36 |
| Total current assets | 25,844,541,789.63 | 25,508,066,655.36 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 10,437,313.99 | 10,367,078.26 |
| Investments in other equity instruments | 68,799,632.92 | 63,105,658.07 |
| Other non-current financial assets | ||
| Investment property | 44,627,931.01 | 46,622,910.19 |
| Fixed assets | 4,724,543,385.22 | 4,596,044,056.92 |
| Construction in progress | 3,228,411,813.84 | 2,910,735,155.39 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 104,188,743.84 | 81,038,100.24 |
| Intangible assets | 1,107,445,540.60 | 1,123,186,836.65 |
| Including: Data resource | ||
| Development costs | ||
| Including: Data resource | ||
| Goodwill | 561,364,385.01 | 561,364,385.01 |
| Long-term prepaid expense | 236,660,533.33 | 59,102,583.98 |
| Deferred income tax assets | 627,263,071.31 | 455,588,567.46 |
| Other non-current assets | 4,412,486.00 | 5,685,287.46 |
| Total non-current assets | 10,718,154,837.07 | 9,912,840,619.63 |
| Total assets | 36,562,696,626.70 | 35,420,907,274.99 |
| Current liabilities: | ||
| Short-term borrowings | 40,014,544.52 | 0.00 |
| Borrowings from the central bank | ||
| Loans from other banks and financial institutions | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 418,126,347.55 | 1,353,187,723.44 |
| Accounts payable | 2,090,075,757.87 | 2,814,192,071.24 |
| Advances from customers | ||
| Contract liabilities | 2,218,413,969.30 | 1,401,122,249.53 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and deposits from |
| other banks and financial institutions | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 1,152,665,323.59 | 1,180,605,773.29 |
| Taxes and levies payable | 1,304,481,154.79 | 1,179,368,855.69 |
| Other payables | 3,032,063,462.12 | 3,267,292,222.01 |
| Including: Interest payable | ||
| Dividends payable | ||
| Fees and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 65,734,379.46 | 80,825,022.51 |
| Other current liabilities | 1,964,535,477.83 | 1,132,018,451.10 |
| Total current liabilities | 12,286,110,417.03 | 12,408,612,368.81 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 83,400,000.00 | 107,106,256.94 |
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 84,363,974.83 | 68,380,767.78 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 101,700,136.20 | 100,811,404.82 |
| Deferred income tax liabilities | 276,292,048.38 | 321,723,514.56 |
| Other non-current liabilities | ||
| Total non-current liabilities | 545,756,159.41 | 598,021,944.10 |
| Total liabilities | 12,831,866,576.44 | 13,006,634,312.91 |
| Owners’ equity: | ||
| Share capital | 528,600,000.00 | 528,600,000.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 6,224,747,667.10 | 6,224,747,667.10 |
| Less: Treasury stock | ||
| Other comprehensive income | 2,373,236.52 | 1,596,322.73 |
| Specific reserve | ||
| Surplus reserves | 269,402,260.27 | 269,402,260.27 |
| General reserve | ||
| Retained earnings | 15,695,054,954.49 | 14,500,963,359.34 |
| Total equity attributable to owners of the Company as the parent | 22,720,178,118.38 | 21,525,309,609.44 |
| Non-controlling interests | 1,010,651,931.88 | 888,963,352.64 |
| Total owners’ equity | 23,730,830,050.26 | 22,414,272,962.08 |
| Total liabilities and owners’ equity | 36,562,696,626.70 | 35,420,907,274.99 |
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu JiafengHead 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 | 7,047,539,494.69 | 7,430,906,530.24 |
| Held-for-trading financial assets | 0.00 | 719,987,547.42 |
| Derivative financial assets | ||
| Notes receivable | 0.00 | 44,669,454.15 |
| Accounts receivable | ||
| Accounts receivable financing | 1,522,467,507.11 | 353,179,776.80 |
| Prepayments | 172,869,529.29 | 64,184,453.89 |
| Other receivables | 452,421,557.21 | 384,878,020.29 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 5,907,655,511.17 | 5,791,297,076.99 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 88,103,446.48 | 70,067,944.53 |
| Total current assets | 15,191,057,045.95 | 14,859,170,804.31 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 1,624,003,543.47 | 1,602,935,444.04 |
| Investments in other equity instruments | ||
| Other non-current financial assets |
| Investment property | 44,627,931.01 | 46,622,910.19 |
| Fixed assets | 3,323,853,340.67 | 3,457,239,038.00 |
| Construction in progress | 2,639,110,755.67 | 2,081,093,829.00 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 104,188,743.84 | 81,038,100.24 |
| Intangible assets | 484,777,828.88 | 494,450,059.46 |
| Including: Data resource | ||
| Development costs | ||
| Including: Data resource | ||
| Goodwill | ||
| Long-term prepaid expense | 202,384,409.63 | 22,664,614.49 |
| Deferred income tax assets | 26,518,520.65 | 31,803,704.33 |
| Other non-current assets | ||
| Total non-current assets | 8,449,465,073.82 | 7,817,847,699.75 |
| Total assets | 23,640,522,119.77 | 22,677,018,504.06 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 1,310,534,504.82 | 1,658,351,501.91 |
| Advances from customers | ||
| Contract liabilities | 2,387,816,632.04 | 858,057,014.88 |
| Employee benefits payable | 502,426,705.03 | 477,940,588.68 |
| Taxes payable | 755,081,514.38 | 730,264,020.00 |
| Other payables | 755,412,160.76 | 879,518,254.66 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 13,652,379.47 | 10,771,925.29 |
| Other current liabilities | 315,363,510.93 | 134,926,323.61 |
| Total current liabilities | 6,040,287,407.43 | 4,749,829,629.03 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 84,363,974.83 | 68,380,767.78 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 37,220,451.20 | 35,650,375.64 |
| Deferred income tax liabilities | 62,757,792.01 | 71,944,672.72 |
| Other non-current liabilities | ||
| Total non-current liabilities | 184,342,218.04 | 175,975,816.14 |
| Total liabilities | 6,224,629,625.47 | 4,925,805,445.17 |
| Owners’ equity: | ||
| Share capital | 528,600,000.00 | 528,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 6,176,504,182.20 | 6,176,504,182.20 |
| Less: Treasury stock | ||
| Other comprehensive income | -4,101,328.79 | -1,993,312.09 |
| Specific reserve | ||
| Surplus reserves | 264,300,000.00 | 264,300,000.00 |
| Retained earnings | 10,450,589,640.89 | 10,783,802,188.78 |
| Total owners’ equity | 17,415,892,494.30 | 17,751,213,058.89 |
| Total liabilities and owners’ equity | 23,640,522,119.77 | 22,677,018,504.06 |
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Revenue | 13,805,693,542.35 | 11,310,016,495.10 |
| Including: Operating revenue | 13,805,693,542.35 | 11,310,016,495.10 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 8,832,090,887.25 | 7,533,156,217.79 |
| Including: Cost of sales | 2,704,664,895.42 | 2,388,610,838.28 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net insurance claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends |
| Reinsurance premium expense | ||
| Taxes and surcharges | 2,093,680,344.08 | 1,605,442,141.06 |
| Selling expense | 3,611,684,984.17 | 3,048,015,143.61 |
| Administrative expense | 671,150,694.72 | 583,974,559.37 |
| R&D expense | 33,232,298.34 | 29,964,175.22 |
| Finance costs | -282,322,329.48 | -122,850,639.75 |
| Including: Interest expense | 3,445,346.57 | 771,499.92 |
| Interest income | 298,352,344.67 | 122,996,635.75 |
| Add: Other income | 26,746,914.82 | 27,104,577.88 |
| Return on investment (“-” for loss) | -25,111,476.37 | -27,346,113.37 |
| Including: Share of profit or loss of joint ventures and associates | 70,235.73 | 46,146.26 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 0.00 | 25,168,981.30 |
| Credit impairment loss (“-” for loss) | 57,444.88 | 84,454.20 |
| Asset impairment loss (“-” for loss) | 6,603,562.17 | -17,556,673.87 |
| Asset disposal income (“-” for loss) | 115,019.47 | 203,366.67 |
| 3. Operating profit (“-” for loss) | 4,982,014,120.07 | 3,784,518,870.12 |
| Add: Non-operating income | 32,302,009.99 | 44,676,493.06 |
| Less: Non-operating expense | 6,795,915.82 | 20,358,442.79 |
| 4. Profit before tax (“-” for loss) | 5,007,520,214.24 | 3,808,836,920.39 |
| Less: Income tax expense | 1,328,603,900.45 | 964,656,318.72 |
| 5. Net profit (“-” for net loss) | 3,678,916,313.79 | 2,844,180,601.67 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 3,678,916,313.79 | 2,844,180,601.67 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to shareholders of the Company as the | 3,572,791,595.15 | 2,779,474,367.51 |
| parent (“-” for net loss) | ||
| 5.2.1 Net profit attributable to non-controlling interests (“-” for net loss) | 106,124,718.64 | 64,706,234.16 |
| 6. Other comprehensive income, net of tax | 2,500,944.33 | 1,494,571.29 |
| Attributable to owners of the Company as the parent | 776,913.79 | 250,144.18 |
| 6.1 Items that will not be reclassified to profit or loss | 2,562,288.68 | 1,937,767.20 |
| 6.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | 2,562,288.68 | 1,937,767.20 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | -1,785,374.89 | -1,687,623.02 |
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | -1,785,374.89 | -1,687,623.02 |
| 6.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 6.2.5 Reserve for cash flow hedges | ||
| 6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 6.2.7 Other | ||
| Attributable to non-controlling interests | 1,724,030.54 | 1,244,427.11 |
| 7. Total comprehensive income | 3,681,417,258.12 | 2,845,675,172.96 |
| Attributable to owners of the Company as the parent | 3,573,568,508.94 | 2,779,724,511.69 |
| Attributable to non-controlling interests | 107,848,749.18 | 65,950,661.27 |
| 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 JiafengHead 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 | 7,384,017,491.41 | 5,688,977,006.98 |
| Less: Cost of sales | 2,445,598,078.60 | 2,033,053,131.03 |
| Taxes and surcharges | 1,772,751,072.05 | 1,375,276,190.77 |
| Selling expense | 21,459,835.72 | 18,124,000.75 |
| Administrative expense | 419,472,201.59 | 390,026,657.42 |
| R&D expense | 13,929,592.90 | 11,525,750.69 |
| Finance costs | -97,004,971.38 | -90,964,543.78 |
| Including: Interest expense | 3,595,408.74 | 637,086.51 |
| Interest income | 112,271,255.06 | 91,541,910.22 |
| Add: Other income | 6,966,116.88 | 1,828,952.83 |
| Return on investment (“-” for loss) | -26,308,146.40 | -18,401,784.46 |
| Including: Share of profit or loss of joint ventures and associates | 68,099.43 | 43,101.60 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 0.00 | 25,168,981.30 |
| Credit impairment loss (“-” for loss) | -10,278.59 | 148,348.99 |
| Asset impairment loss (“-” for loss) | 5,706,685.56 | -17,141,448.76 |
| Asset disposal income (“-” for loss) | 0.00 | 14,302.24 |
| 2. Operating profit (“-” for loss) | 2,794,166,059.38 | 1,943,553,172.24 |
| Add: Non-operating income | 15,441,836.27 | 15,599,716.85 |
| Less: Non-operating expense | 4,287,382.39 | 17,213,516.15 |
| 3. Profit before tax (“-” for loss) | 2,805,320,513.26 | 1,941,939,372.94 |
| Less: Income tax expense | 759,833,061.15 | 538,348,288.93 |
| 4. Net profit (“-” for net loss) | 2,045,487,452.11 | 1,403,591,084.01 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 2,045,487,452.11 | 1,403,591,084.01 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -2,108,016.70 | -1,133,280.01 |
| 5.1 Items that will not be reclassified to profit or loss | ||
| 5.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 5.1.3 Changes in the fair value of investments in other equity instruments | ||
| 5.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss | -2,108,016.70 | -1,133,280.01 |
| 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 5.2.2 Changes in the fair value of investments in other debt obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | -2,108,016.70 | -1,133,280.01 |
| 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 | 2,043,379,435.41 | 1,402,457,804.00 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | 3.87 | 2.66 |
| 7.2 Diluted earnings per share | 3.87 | 2.66 |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 14,245,568,250.46 | 12,967,342,850.81 |
| 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 | 23,333,556.85 | 1,875,811.35 |
| Cash generated from other operating activities | 1,818,735,111.85 | 1,056,647,876.21 |
| Subtotal of cash generated from operating activities | 16,087,636,919.16 | 14,025,866,538.37 |
| Payments for commodities and services | 3,170,264,475.64 | 2,160,026,046.33 |
| 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 | 2,060,510,062.01 | 1,885,616,624.31 |
| Taxes paid | 4,887,229,011.01 | 3,995,204,357.05 |
| Cash used in other operating activities | 1,959,926,915.01 | 1,257,182,813.95 |
| Subtotal of cash used in operating activities | 12,077,930,463.67 | 9,298,029,841.64 |
| Net cash generated from/used in operating activities | 4,009,706,455.49 | 4,727,836,696.73 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 725,199,000.00 | 760,098,239.02 |
| Return on investment | 22,301,834.45 | 1,221,108.96 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 49,020.00 | 276,793.00 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 747,549,854.45 | 761,596,140.98 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 1,190,884,765.96 | 1,027,930,984.35 |
| Payments for investments | 720,000,000.00 | |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | 13,439,262.05 | |
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 1,190,884,765.96 | 1,761,370,246.40 |
| Net cash generated from/used in investing activities | -443,334,911.51 | -999,774,105.42 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | 14,000,000.00 | 4,000,000.00 |
| Including: Capital contributions by non-controlling interests to subsidiaries | 14,000,000.00 | 4,000,000.00 |
| Borrowings raised | 90,000,100.00 | 134,000,000.00 |
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 104,000,100.00 | 138,000,000.00 |
| Repayment of borrowings | 91,590,000.00 | 113,000,000.00 |
| Interest and dividends paid | 2,381,442,940.92 | 7,626,554.97 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 5,304,511.69 |
| Cash used in other financing activities | 7,509,748.71 | 8,506,249.20 |
| Subtotal of cash used in financing activities | 2,480,542,689.63 | 129,132,804.17 |
| Net cash generated from/used in financing activities | -2,376,542,589.63 | 8,867,195.83 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | 1,189,828,954.35 | 3,736,929,787.14 |
| Add: Cash and cash equivalents, beginning of the period | 14,676,167,417.36 | 13,105,373,435.22 |
| 6. Cash and cash equivalents, end of the period | 15,865,996,371.71 | 16,842,303,222.36 |
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 rendering of services | 15,817,677,216.11 | 9,423,877,589.29 |
| Tax rebates | ||
| Cash generated from other operating activities | 732,824,253.24 | 684,649,476.89 |
| Subtotal of cash generated from operating activities | 16,550,501,469.35 | 10,108,527,066.18 |
| Payments for commodities and services | 1,871,024,800.58 | 1,600,410,168.91 |
| Cash paid to and for employees | 696,968,743.97 | 579,079,631.71 |
| Taxes paid | 3,138,757,389.98 | 2,341,187,694.15 |
| Cash used in other operating activities | 8,602,551,118.12 | 3,320,490,019.02 |
| Subtotal of cash used in operating activities | 14,309,302,052.65 | 7,841,167,513.79 |
| Net cash generated from/used in operating activities | 2,241,199,416.70 | 2,267,359,552.39 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 710,199,000.00 | 210,098,239.02 |
| Return on investment | 152,089,852.07 | 92,948,040.53 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 45,000.00 | 14,800.00 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing |
| activities | ||
| Subtotal of cash generated from investing activities | 862,333,852.07 | 303,061,079.55 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 1,078,518,200.30 | 854,427,751.14 |
| Payments for investments | 21,000,000.00 | 719,000,000.00 |
| Net payments for the acquisition of subsidiaries and other business units | 0.00 | 13,439,262.05 |
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 1,099,518,200.30 | 1,586,867,013.19 |
| Net cash generated from/used in investing activities | -237,184,348.23 | -1,283,805,933.64 |
| 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 | 2,379,872,355.31 | 0.00 |
| Cash used in other financing activities | 7,509,748.71 | 7,606,249.20 |
| Subtotal of cash used in financing activities | 2,387,382,104.02 | 7,606,249.20 |
| Net cash generated from/used in financing activities | -2,387,382,104.02 | -7,606,249.20 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | -383,367,035.55 | 975,947,369.55 |
| Add: Cash and cash equivalents, beginning of the period | 7,430,906,530.24 | 7,338,284,192.52 |
| 6. Cash and cash equivalents, end of the period | 7,047,539,494.69 | 8,314,231,562.07 |
7. Consolidated Statements of Changes in Owners’ Equity
H1 2024
Unit: RMB
| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 528,600,000.00 | 6,224,747,667.10 | 1,596,322.73 | 269,402,260.27 | 14,500,963,359.34 | 21,525,309,609.44 | 888,963,352.64 | 22,414,272,962.08 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 528,600,000.00 | 6,224,747,667.10 | 1,596,322.73 | 269,402,260.27 | 14,500,963,359.34 | 21,525,309,609.44 | 888,963,352.64 | 22,414,272,962.08 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 776,913.79 | 1,194,091,595.15 | 1,194,868,508.94 | 121,688,579.24 | 1,316,557,088.18 | ||||||||||
| 3.1 Total comprehensive income | 776,913.79 | 3,572,791,595.15 | 3,573,568,508.94 | 107,848,749.18 | 3,681,417,258.12 | ||||||||||
| 3.2 Capital increased and reduced by owners | 14,000,000.00 | 14,000,000.00 | |||||||||||||
| 3.2.1 Ordinary shares increased by owners | 14,000,000.00 | 14,000,000.00 | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments |
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -2,378,700,000.00 | -2,378,700,000.00 | -160,169.94 | -2,378,860,169.94 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -2,378,700,000.00 | -2,378,700,000.00 | -160,169.94 | -2,378,860,169.94 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers |
| within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 |
| Other 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 Reporting Period | 528,600,000.00 | 6,224,747,667.10 | 2,373,236.52 | 269,402,260.27 | 15,695,054,954.49 | 22,720,178,118.38 | 1,010,651,931.88 | 23,730,830,050.26 |
H1 2023
Unit: RMB
| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 528,600,000.00 | 6,224,747,667.10 | 408,739.61 | 269,402,260.27 | 11,497,599,306.54 | 18,520,757,973.52 | 812,095,782.69 | 19,332,853,756.21 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 528,600,000.00 | 6,224,747,667.10 | 408,739.61 | 269,402,260.27 | 11,497,599,306.54 | 18,520,757,973.52 | 812,095,782.69 | 19,332,853,756.21 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 250,144.18 | 1,193,674,367.51 | 1,193,924,511.69 | 63,320,021.66 | 1,257,244,533.35 | ||||||||||
| 3.1 Total comprehensive income | 250,144.18 | 2,779,474,367.51 | 2,779,724,511.69 | 65,950,661.27 | 2,845,675,172.96 | ||||||||||
| 3.2 Capital increased and reduced by owners | 4,000,000.00 | 4,000,000.00 | |||||||||||||
| 3.2.1 Ordinary shares increased by owners | 4,000,000.00 | 4,000,000.00 | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ |
| equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -1,585,800,000.00 | -1,585,800,000.00 | -6,630,639.61 | -1,592,430,639.61 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -1,585,800,000.00 | -1,585,800,000.00 | -6,630,639.61 | -1,592,430,639.61 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in |
| capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other 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 Reporting Period | 528,600,000.00 | 6,224,747,667.10 | 658,883.79 | 269,402,260.27 | 12,691,273,674.05 | 19,714,682,485.21 | 875,415,804.35 | 20,590,098,289.56 |
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2024
Unit: RMB
| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as | 528,600,000.0 | 6,176,504,182.2 | -1,993,312.09 | 264,300,000.00 | 10,783,802,188. | 17,751,213,058.8 | ||||||
| at the end of the period of prior year | 0 | 0 | 78 | 9 | ||||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 528,600,000.00 | 6,176,504,182.20 | -1,993,312.09 | 264,300,000.00 | 10,783,802,188.78 | 17,751,213,058.89 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -2,108,016.70 | -333,212,547.89 | -335,320,564.59 | |||||||||
| 3.1 Total comprehensive income | -2,108,016.70 | 2,045,487,452.11 | 2,043,379,435.41 | |||||||||
| 3.2 Capital increased and |
| reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -2,378,700,000.00 | -2,378,700,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation | -2,378,700,000.0 | -2,378,700,000.00 |
| to owners (or shareholders) | 0 | |||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes |
| transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 528,600,000.00 | 6,176,504,182.20 | -4,101,328.79 | 264,300,000.00 | 10,450,589,640.89 | 17,415,892,494.30 |
H1 2023
Unit: RMB
| Item | H1 2023 |
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the period of prior year | 528,600,000.00 | 6,176,504,182.20 | -529,354.77 | 264,300,000.00 | 9,691,022,921.78 | 16,659,897,749.21 | ||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 528,600,000.00 | 6,176,504,182.20 | -529,354.77 | 264,300,000.00 | 9,691,022,921.78 | 16,659,897,749.21 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -1,133,280.01 | -182,208,915.99 | -183,342,196.00 | |||||||||
| 3.1 Total | -1,133,280.01 | 1,403,591,084.01 | 1,402,457,804.00 | |||||||||
| comprehensive 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 distribution | -1,585,800,000.00 | -1,585,800,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus |
| reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -1,585,800,000.00 | -1,585,800,000.00 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to |
| retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 528,600,000.00 | 6,176,504,182.20 | -1,662,634.78 | 264,300,000.00 | 9,508,814,005.79 | 16,476,555,553.21 |
Anhui Gujing Distillery Company LimitedNotes 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 assetsof Anhui Bozhou Gujing Distillery Factory (GJ Distillery Factory), which is the core operating unitof GJ Group. The incorporation was further approved by the Anhui People's Government throughWanZhengMi (1996) 42. The incorporation General Meeting was held on 28 May 1996 and theincorporation was registered with the Anhui Admistration Bureau for Commerce and Industry on 30May 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 (knownas “A share(s)”) in September 1996. The par value of both the B share and A share is CNY 1.00 pershare. 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 CNY235 million. The Company’s at public listing comprised 155 million state-owned shares, 60 millionB shares and 20 million A shares. Each of the Company’s shares has a par value at CNY 1.00 pershare.In accordance with the resolution of the General Meeting held on 29 May 2006, the Companyexercised the share reorganisation plan in June 2006. Immediately after the implementation of theshare reorganisation plan, the Company had in total 235 million shares, comprising 147 million shareswith restriction of disposal (equal to 62.55% of total shares) and 88 million free-floating shares (equalto 37.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 27 June 2007, therestriction on disposal on 11.75 million shares was lifted on 29 June 2007. Immediately after thelifting, the Company had in total 235 million shares, comprising 135.25 million shares with restrictionof 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
restriction on disposal on 11.75 million shares was lifted on 18 July 2008. Immediately after thelifting, the Company had in total 235 million shares, comprising 123.5 million shares with restrictionof 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, therestriction on disposal on 123.5 million shares was lifted on 29 July 2009. Immediately after thelifting, 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 shareswith the par value at CNY 1.00 to designated investors. The shares were issued at CNY 75.00 pershare. Gross proceeds from this issuance was CNY 1,260 million and the respective net proceedsafter deduction of the cost of issuance (CNY 32.5 million) was CNY 1,227.5 million. The subscriptionfor 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 251.8million.In accordance with the resolution of the Company’s 2011 General Meeting, a bonus issue of 10 sharesfor every 10 shares held at 31 December 2011 through utilisation of capital reserves was exercised in2012. 251.8 million bonus shares were issued in total. Immediately after the exercise of the bonusissue, 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 July2021 through private offering of 25 million A shares with the par value at CNY 1.00 to designatedinvestors. The shares were issued at CNY 200.00 per share. Gross proceeds from this issuance wasCNY 5,000 million and the respective net proceeds after deduction of the cost of issuance (CNY
45.66 million) was CNY 4,954.34 million. The subscription for the issuance was verified by RSMChina 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 forfurther details.The Company's headquarters is located in Gujing town, Bozhou City, Anhui Province. Legalrepresentative of the company is Liang Jinhui.The Company is mainly engaged in the production and sales of baijiu, which belongs to the foodmanufacturing industry.These financial statements are approved on 30 August 2024 by the Company’s Board of Directorsfor publication.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis of Preparation
Based on going concern, according to actually occurred transactions and events, the Companyprepares its financial statements in accordance with the Accounting Standards for BusinessEnterprises – Basic standards and concrete accounting standards, Accounting Standards for BusinessEnterprises – 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 disclosesthe relevant financial information in accordance with "Rules No.15 for the Information Disclosureand Reporting of Companies Offering Securities to the Public - General Requirements for FinancialReporting (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 endof the reporting period, and no any matters that may result in doubt on its ability as a going concernwere noted. Therefore, it is reasonable for the Company to prepare financial statements on the goingconcern basis.
3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATESThe following significant accounting policies and accounting estimates of the Company areformulated in accordance with the Accounting Standards for Business Enterprises. Businesses notmentioned are complied with relevant accounting policies of the Accounting Standards for BusinessEnterprises.
3.1 Statement of Compliance with the Accounting Standards for Business EnterprisesThe Company prepares its financial statements in accordance with the requirements of the AccountingStandards for Business Enterprises, truly and completely reflecting the Company’s financial positionas at 30 June 2024, and its operating results, changes in shareholders' equity, cash flows and otherrelated 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.
3.4 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 inwhich 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 receivable | Amount greater than 5 million |
| 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 |
| Significant non-wholly owned subsidiaries | Total assets, operating income, and net profit account for more 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 controlshall be measured at their carrying amount of the acquired entity at the combination date. If theaccounting 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 thefinancial statements of the acquired party based on the principal of materiality. As for the differencebetween the carrying amount of the net assets obtained by the acquiring entity and the carryingamount of the consideration paid by it, the capital reserve (capital premium or share premium) shallbe adjusted. If the capital reserve (capital premium or share premium) is not sufficient to absorb thedifference, 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 commoncontrol shall be measured at their fair value at the acquisition date. If the accounting policy adoptedby 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 theacquired entity based on the principal of materiality. The acquiring entity shall recognise the positive
balance between the combination costs and the fair value of the identifiable net assets it obtains fromthe acquired entity as goodwill. The acquiring entity shall, pursuant to the following provisions, treatthe negative balance between the combination costs and the fair value of the identifiable net assets itobtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets, liabilities andcontingent 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 netassets it obtains from the acquired entity, the balance shall be recognised in profit or loss of thereporting 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 relatedmanagement costs that are directly attributable to the business combination shall be charged in profitor loss in the period in which they are incurred. The costs to issue equity or debt securities for theconsideration of business combination shall be recorded as a part of the value of the respect equity ordebt 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 returnsfrom its involvement with the investee and the ability to use its power over the investee to affect theamount 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 theability to use its power over the investee to affect the amount of the investor’s returns. The Companycontrols 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 onlyincludes subsidiaries determined based on voting rights (or similar) or together with otherarrangement, but also structured entities under one or more contractual arrangements.Subsidiaries are the entities that controlled by the Company (including enterprise, a divisible part ofthe investee, and structured entity controlled by the enterprise). A structured entity (sometimes calleda Special Purpose Entity) is an entity that has been designed so that voting or similar rights are notthe dominant factor in deciding who controls the entity.
(2) Special requirement as the parent company is an investment entityIf the parent company is an investment entity, it should measure its investments in particular
subsidiaries as financial assets at fair value through profit or loss instead of consolidating thosesubsidiaries in its consolidated and separate financial statements. However, as an exception to thisrequirement, 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 withinvestment management services;(ii) Commits to its investors that its business purpose is to invest funds solely for returns from capitalappreciation, investment income or both; and(iii) Measures and evaluates the performance of substantially all of its investments on a fair valuebasis.If the parent company becomes an investment entity, it shall cease to consolidate its subsidiaries atthe date of the change in status, except for any subsidiary which provides investment-related servicesor activities to the investment entity shall be continued to be consolidated. The deconsolidation ofsubsidiaries is accounted for as though the investment entity partially disposed subsidiaries withoutloss of control.When the parent company previously classified as an investment entity ceases to be an investmententity, subsidiary that was previously measured at fair value through profit or loss shall be includedin the scope of consolidated financial statements at the date of the change in status. The fair value ofthe subsidiary at the date of change represents the transferred deemed consideration in accordancewith 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 financialstatements of the Company and its subsidiaries, and using other related information.When preparing consolidated financial statements, the Company shall consider the entire group as anaccounting entity, adopt uniform accounting policies and apply the requirements of AccountingStandard for Business Enterprises related to recognition, measurement and presentation. Theconsolidated financial statements shall reflect the overall financial position, operating results and cashflows of the group.(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are combinedwith those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) againstthe parent’s portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or
between subsidiaries, and when intragroup transactions indicate an impairment of related assets, thelosses 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 areacquired or disposed in the reporting period(i) Acquisition of subsidiaries or businessSubsidiaries or business acquired through business combination under common controlWhen preparing consolidated statements of financial position, the opening balance of the consolidatedbalance sheet shall be adjusted. Related items of comparative financial statements shall be adjustedas well, deeming that the combined entity has always existed ever since the ultimate controlling partybegan to control.Incomes, expenses and profits of the subsidiary incurred from the beginning of the reporting periodto 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 thecombined 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 beincluded into the consolidated statement of cash flows. Related items of comparative financialstatements shall be adjusted as well, deeming that the combined entity has always existed ever sincethe ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common controlWhen preparing the consolidated statements of financial position, the opening balance of theconsolidated statements of financial position shall not be adjusted.Incomes, expenses and profits of the subsidiary incurred from the acquisition date to the end of thereporting 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 theconsolidated statement of cash flows.(ii) Disposal of subsidiaries or businessWhen preparing the consolidated statements of financial position, the opening balance of theconsolidated statements of financial position shall not be adjusted.Incomes, expenses and profits incurred from the beginning of the subsidiary to the disposal date shallbe 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 theconsolidated statement of cash flows.
(5) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised astreasury 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-termequity 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 differentfrom retained earnings and undistributed profit, “Specific reserves” and “General risk provision” shallbe recovered based on the proportion attributable to owners of the parent company after long-termequity 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 theconsolidated statement of financial position and their tax basis is generated as a result of eliminationof unrealized inter-company transaction profit or loss, deferred tax assets of deferred tax liabilitiesshall be recognised, and income tax expense in the consolidated statement of profit or loss shall beadjusted simultaneously, excluding deferred taxes related to transactions or events directly recognisedin owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assetsto 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 relatedsubsidiaries. 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 sellingsubsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than theproportion of non-controlling interest in this subsidiary at the beginning of the period, non-controllinginterest is still to be written down.
(6) Accounting for Special Transactions
(i) Purchasing of non-controlling interestsWhere, the Company purchases non-controlling interests of its subsidiary, in the separate financialstatements 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 consolidatedfinancial statements, difference between the cost of the long-term equity investment newly obtained
in purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisitiondate or combination date continuingly calculated pursuant to the newly acquired shareholdingproportion shall be adjusted into capital reserve (capital premium or share premium). If capital reserveis 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 transactionsBusiness combination under common control in stages through multiple transactionsOn the combination date, in the separate financial statement, initial cost of the long-term equityinvestment is determined according to the share of carrying amount of the acquiree’s net assets in theultimate controlling entity’s consolidated financial statements after combination. The differencebetween the initial cost of the long-term equity investment and the carrying amount of the long -terminvestment held prior of control plus book value of additional consideration paid at acquisition dateis adjusted into capital reserve (capital premium or share premium). If the capital reserve is notenough to absorb the difference, any excess shall be adjusted against surplus reserve and undistributedprofit in turn.In the consolidated financial statements, the assets and liabilities acquired during the combinationshould be recognized at their carrying amount in the ultimate controlling entity’s consolidatedfinancial statements on the combination date unless any adjustment is resulted from the difference inaccounting policies. The difference between the carrying amount of the investment held prior ofcontrol plus book value of additional consideration paid on the acquisition date and the net assetsacquired 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 againstretained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination dateand the equity investment is accounted for under the equity method, related profit or loss, othercomprehensive income and other changes in equity which have been recognised during the periodfrom the later of the date of the Company obtaining original equity interest and the date of both theacquirer and the acquiree under common control of the same ultimate controlling party to thecombination date should be offset against the opening balance of retained earnings at the comparativefinancial statements period respectively.Business combination not under common control in stages through multiple transactionsOn the consolidation date, in the separate financial statements, the initial cost of long-term equityinvestment is determined according to the carrying amount of the original long-term investment plusthe cost of new investment.In the consolidated financial statements, the equity interest of the acquired entity held prior to theacquisition date shall be re-measured at its fair value on the acquisition date. Difference between the
fair value of the equity interest and its book value is recognised as investment income. The othercomprehensive income related to the equity interest held prior to the acquisition date calculatedthrough 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 netliabilities under defined benefit plan. The Company shall disclose acquisition-date fair value of theequity interest held prior to the acquisition date, and the related gains or losses due to theremeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of controlFor 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 considerationreceived from the disposal and the corresponding share of subsidiary’s net assets cumulativelycalculated from the acquisition date or combination date shall be adjusted into capital reserve (capitalpremium or share premium). If the capital reserve is not enough to absorb the difference, any excessshall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of controlDisposal through one transactionIf the Company loses control in an investee through partial disposal of the equity investment, whenthe consolidated financial statements are prepared, the retained equity interest should be re-measuredat fair value at the date of loss of control. The difference between i) the fair value of considerationreceived from the disposal plus non-controlling interest retained; ii) share of the former subsidiary’snet assets cumulatively calculated from the acquisition date or combination date according to theoriginal proportion of equity interest, shall be recognised in current investment income when controlis lost.Moreover, other comprehensive income and other changes in equity related to the equity investmentin 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 netassets 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 financialstatements, for transactions prior of the date of loss of control, carrying amount of each disposal oflong-term equity investment need to be recognized, and the difference between consideration receivedand the carrying amount of long-term equity investment corresponding to the equity interest disposedshould be recognized in current investment income; in the consolidated financial statements, the
disposal transaction should be accounted for according to related policy in “Disposal of long-termequity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction”, these transactions should beaccounted for as a single transaction of disposal of subsidiary resulting in loss of control. In theseparate financial statements, for each transaction prior of the date of loss of control, differencebetween consideration received and the carrying amount of long-term equity investmentcorresponding to the equity interest disposed should be recognised as other comprehensive incomefirstly, and transferred to profit or loss as a whole when control is lost; in the consolidated financialstatements, for each transaction prior of the date of loss of control, difference between considerationreceived and proportion of the subsidiary’s net assets corresponding to the equity interest disposedshould 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, thepresence of one or more of the following indicators may lead to account for multiple transactions asa 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 consideredtogether 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 thesubsidiaries, 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 shallbe adjusted into capital reserve (capital premium or share premium). If the capital reserve is notenough to absorb the difference, any excess shall be adjusted against retained earnings.
3.8 Classification of Joint Arrangements and Accounting for Joint OperationA joint arrangement is an arrangement of which two or more parties have joint control. Jointarrangement 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 arrangementhave rights to the assets, and obligations for the liabilities, relating to the arrangement.
The Company shall recognise the following items in relation to shared interest in a joint operation,and account for them in accordance with relevant accounting standards of the Accounting Standardsfor 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 arrangementhave 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. Cashequivalents include short-term (generally within three months of maturity at acquisition), highlyliquid investments that are readily convertible into known amounts of cash and which are subject toan 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 afinancial 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 positionwhen, 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 ofthe Company (borrower) and lender of debt instruments that carry significantly different terms or asubstantial modification of the terms of an existing liability are both accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using tradedate accounting. A regular-way purchase or sale of financial assets is a transaction under a contractwhose terms require delivery of the asset within the time frame established generally by regulationsor convention in the market place concerned. Trade date is the date at which the entity commits itselfto 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 formanaging 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) andfinancial asset at fair value through other comprehensive income (FVTOCI). Reclassification offinancial assets is permitted if, and only if, the objective of the entity’s business model for managingthose financial assets changes. In this circumstance, all affected financial assets shall be reclassifiedon the first day of the first reporting period after the changes in business model; otherwise thefinancial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured atFVTPL, transaction costs are recognised in current profit or loss. For financial assets not measured atFVTPL, transaction costs should be included in the initial measurement. Notes receivable or accountsreceivable that arise from sales of goods or rendering of services are initially measured at thetransaction price defined in the accounting standard of revenue where the transaction does not includea significant financing component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised costThe financial asset at amortised cost category of classification applies when both the followingconditions are met: the financial asset is held within the business model whose objective is to holdfinancial assets in order to collect contractual cash flows, and the contractual term of the financialasset gives rise on specified dates to cash flows that are solely payment of principal and interest onthe principal amount outstanding. These financial assets are subsequently measured at amortised costby adopting the effective interest rate method. Any gain or loss arising from derecognition accordingto the amortisation under effective interest rate method or impairment are recognised in current profitor 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 conditionsare met: the financial asset is held within the business model whose objective is achieved by bothcollecting contractual cash flows and selling financial assets, and the contractual term of the financial
asset gives rise on specified dates to cash flows that are solely payment of principle and interest onthe principal amount outstanding. All changes in fair value are recognised in other comprehensiveincome except for gain or loss arising from impairment or exchange differences, which should berecognised in current profit or loss. At derecognition, cumulative gain or loss previously recognisedunder OCI is reclassified to current profit or loss. However, interest income calculated based on theeffective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrumentinvestments as measured through FVTOCI. All changes in fair value are recognised in othercomprehensive income except for dividend income recognised in current profit or loss. Atderecognition, 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 fairvalue through other comprehensive income (FVTOCI), should be classified as financial asset at fairvalue through profit or loss (FVTPL). These financial assets should be subsequently measured at fairvalue. 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 orloss (FVTPL), loan commitments at a below-market interest rate and financial guarantee contractsand 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 financialliabilities 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 thosehedge accounting is applied. For financial liability that is designated as at FVTPL, changes in the fairvalue of the financial liability that is attributable to changes in the own credit risk of the issuer shallbe presented in other comprehensive income. At derecognition, cumulative gain or loss previouslyrecognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contractsLoan commitment is a commitment by the Company to provide a loan to customer under specifiedcontract terms. The provision of impairment losses of loan commitments shall be recognised basedon expected credit losses model.Financial guarantee contract is a contract that requires the Company to make specified payments toreimburse the holder for a loss it incurs because a specified debtor fails to make payment when duein accordance with the original or modified terms of a debt instrument. Financial guarantee contracts
liability shall be subsequently measured at the higher of: The amount of the loss allowance recognisedaccording to the impairment principles of financial instruments; and the amount initially recognisedless the cumulative amount of income recognised in accordance with the revenue principles.(iii)Financial liabilities at amortised costAfter initial recognition, the Company measured other financial liabilities at amortised cost using theeffective interest method.Except for special situation, financial liabilities and equity instrument should be classified inaccordance with the following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financialinstrument to fulfill a contractual obligation, this contractual obligation meet the definition offinancial liabilities. Some financial instruments do not comprise terms and conditions related toobligations of delivering cash or another financial instrument explicitly, they may includecontractual obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments, itshould be considered that the Company’s own equity instruments are alternatives of cash or anotherfinancial instrument, or to entitle the holder of the equity instruments to sharing the remaining rightsover 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 thecontract 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 theequity instruments to be available or delivered by its fair value upon settlement. Such contracts shallbe classified as financial liabilities, regardless that the amount of contractual rights and liabilities isfixed, or fluctuate totally or partially with variables other than market price of the entity’s own equityinstruments (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 contractsare signed and subsequently measured at fair value. The derivative with a positive fair value shall berecognized 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 intocurrent profit or loss except for the effective portion of cash flow hedges which shall be recognisedin other comprehensive income and reclassified into current profit or loss when the hedged itemsaffect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host, theCompany shall apply the requirements of financial asset classification to the entire hybrid contract.If a host that is not a financial asset and the hybrid contract is not measured at fair value with changes
in fair value recognised in profit or loss, and the economic characteristics and risks of the embeddedderivative are not closely related to the economic characteristics and risks of the host, and a separateinstrument 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 separatederivative instrument. If the Company is unable to measure the fair value of the embedded derivativeat the acquisition date or subsequently at the balance sheet date, the entire hybrid contract isdesignated 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 assetthat is measured at amortised cost, a debt investment at fair value through other comprehensiveincome, a contract asset, a lease receivable, a loan commitment and a financial guarantee contract.(i) Measurement of expected credit lossesExpected credit losses are the weighted average of credit losses of the financial instruments with therespective risks of a default occurring as the weights. Credit loss is the difference between allcontractual cash flows that are due to the Company in accordance with the contract and all the cashflows that the Company expects to receive (ie all cash shortfalls), discounted at the original effectiveinterest rate or credit- adjusted effective interest rate for purchased or originated credit-impairedfinancial assets.Lifetime expected credit losses are the expected credit losses that result from all possible defaultevents over the expected life of a financial instrument.12-month expected credit losses are the portion of lifetime expected credit losses that represent theexpected credit losses that result from default events on a financial instrument that are possible withinthe 12 months after the reporting date (or the expected lifetime, if the expected life of a financialinstrument is less than 12 months).At each reporting date, the Company classifies financial instruments into three stages and makesprovisions for expected credit losses accordingly. A financial instrument of which the credit risk hasnot significantly increased since initial recognition is at stage 1. The Company shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses. Afinancial instrument with a significant increase in credit risk since initial recognition but is notconsidered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for thatfinancial instrument at an amount equal to the lifetime expected credit losses. A financial instrumentis considered to be credit-impaired as at the end of the reporting period is at stage 3. The Companyshall measure the loss allowance for that financial instrument at an amount equal to the lifetimeexpected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantlysince initial recognition if the financial instrument is determined to have low credit risk at the
reporting date and measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shallbe 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 becalculated by applying the effective interest rate to the amortised cost after deducting of impairmentloss.For notes receivable, accounts receivable and accounts receivable financing, no matter it contains asignificant financing component or not, the Company shall measure the loss allowance at an amountequal to the lifetime expected credit losses.Receivables/Contract assetsFor the notes receivable, accounts receivable, other receivables, accounts receivable financing andlong-term receivables which are demonstrated to be impaired by any objective evidence, or applicablefor individual assessment, the Company shall individually assess for impairment and recognise theloss allowance for expected credit losses. If the Company determines that no objective evidence ofimpairment exists for notes receivable, accounts receivable, other receivables, accounts receivablefinancing and long-term receivables, or the expected credit loss of a single financial asset cannot beassessed at reasonable cost, such notes receivable, accounts receivable, other receivables, accountsreceivable financing and long-term receivables shall be divided into several groups with similar creditrisk characteristics and collectively calculated the expected credit loss. The determination basis ofgroups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering 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 consolidationGroup 2: Receivables due from third partiesFor each group, the Company calculates expected credit losses through preparing an aging analysisschedule with the lifetime expected credit losses rate, taking reference to historical experience forcredit losses and considering current condition and expectation for the future economic situation.Determination basis of other receivables is as following:
Group 1: Related parties within the scope of consolidationGroup 2: Receivables due from third partiesFor 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 creditlosses and considering current condition and expectation for the future economic situation.Determination basis of accounts receivable financing is as following:
Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.Determination basis of contract assets is as following:
Group 1: Project constructionGroup 2: Undue warrantyFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.Determination basis of long-term receivables financing is as following:
Group 1: Project receivables, Lease receivablesGroup 2: OthersFor group 1, the Company calculates expected credit losses through default exposure and the lifetimeexpected credit losses rate, taking reference to historical experience for credit losses and consideringcurrent 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 creditlosses 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 isas 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% |
| 2-3 years | 50% | 50% |
| Over 3 years | 100% | 100% |
Debt investment and other debt investmentFor debt investment and other debt investment, the Company shall calculate the expected credit lossthrough the default exposure and the 12-month or lifetime expected credit loss rate based on the natureof the investment, counterparty and the type of risk exposure.(ii) Low credit riskIf the financial instrument has a low risk of default, the borrower has a strong capacity to meet itscontractual cash flow obligations in the near term and adverse changes in economic and businessconditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfillits contractual cash flow obligations.(iii) Significant increase in credit riskThe Company shall assess whether the credit risk on a financial instrument has increased significantlysince initial recognition, using the change in the risk of a default occurring over the expected life ofthe financial instrument, through the comparison of the risk of a default occurring on the financialinstrument as at the reporting date with the risk of a default occurring on the financial instrument asat the date of initial recognition.To make that assessment, the Company shall consider reasonable and supportable information, thatis available without undue cost or effort, and that is indicative of significant increases in credit risksince initial recognition, including forward-looking information. The information considered by theCompany 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 makescheduled 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 scheduledcontractual payments;
? Expected changes in the loan documentation including an expected breach of contract that may lead to covenantwaivers or amendments, interest payment holidays, interest rate step-ups, requiring additional collateral or
guarantees, or other changes to the contractual framework of the instrument；
? Significant changes in the expected performance and 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 creditrisk has increased significantly since initial recognition on an individual financial instrument or agroup of financial instruments. When assessed based on a group of financial instruments, theCompany can group financial instruments on the basis of shared credit risk characteristics, forexample, past due information and credit risk rating.Generally, the Company shall determine the credit risk on a financial asset has increased significantlysince initial recognition when contractual payments are more than 30 days past due. The Companycan only rebut this presumption if the Company has reasonable and supportable information that isavailable without undue cost or effort, that demonstrates that the credit risk has not increasedsignificantly since initial recognition even though the contractual payments are more than 30 dayspast due.(iv) Credit-impaired financial assetThe Company shall assess at each reporting date whether the credit impairment has occurred forfinancial asset at amortised cost and debt investment at fair value through other comprehensiveincome. A financial asset is credit-impaired when one or more events that have a detrimental impacton the estimated future cash flows of that financial asset have occurred. Evidences that a financialasset 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 defaultor past due event; the lender(s) of the borrower, for economic or contractual reasons relating to theborrower’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 orother financial reorganisation; the disappearance of an active market for that financial asset becauseof financial difficulties；the purchase or origination of a financial asset at a deep discount that reflectsthe incurred credit losses.(v) Presentation of impairment of expected credit lossIn order to reflect the changes of credit risk of financial instrument since initial recognition, theCompany shall at each reporting date remeasure the expected credit loss and recognise in profit orloss, as an impairment gain or loss, the amount of expected credit losses addition (or reversal). Forfinancial asset at amortised cost, the loss allowance shall reduce the carrying amount of the financialasset in the statement of financial position; for debt investment at fair value through othercomprehensive income, the loss allowance shall be recognised in other comprehensive income andshall not reduce the carrying amount of the financial asset in the statement of financial position.
(vi) Write-offThe Company shall directly reduce the gross carrying amount of a financial asset when the Companyhas no reasonable expectations of recovering the contractual cash flow of a financial asset in itsentirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset. Thiscircumstance usually occurs when the Company determines that the debtor has no assets or sourcesof 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 impairmentloss.
(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 assetsIf 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 financialasset 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 abilityto sell the asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelatedthird party and is able to exercise that ability unilaterally and without needing to impose additionalrestrictions on the transfer, the Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on thesubstance of the transfer.If the transfer of financial asset qualifies for derecognition in its entirety, the difference between thefollowing 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 asfinancial assets at fair value through other comprehensive income in accordance with Article 18 of theAccounting 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 forderecognition, the previous carrying amount of the larger financial asset shall be allocated betweenthe part that continues to be recognised (For this purpose, a retained servicing asset shall be treated
as a part that continues to be recognised) and the part that is derecognised, based on the relative fairvalues of those parts on the date of the transfer. The difference between following two amounts shallbe 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 inthe transfer are classified as financial assets at fair value through other comprehensive income in accordancewith Article 18 of the Accounting Standards for Business Enterprises - Recognition and Measurement ofFinancial Instruments).(ii) Continuing involvement in transferred assetsIf the Company neither transfers nor retains substantially all the risks and rewards of ownership of atransferred asset, and retains control of the transferred asset, the Company shall continue to recognisethe transferred asset to the extent of its continuing involvement and also recognise an associatedliability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which itis exposed to changes in the value of the transferred asset(iii) Continue to recognise the transferred assetsIf the Company retains substantially all the risks and rewards of ownership of the transferred financialasset, the Company shall continue to recognise the transferred asset in its entirety and theconsideration received shall be recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accountingperiod, the Company shall continuously recognise any income (gain) arising from the transferredasset 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 financialposition and shall not be offset. When meets the following conditions, financial assets and financialliabilities 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; TheCompany intends either to settle on a net basis, or to realise the asset and settle the liabilitysimultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the Companyshall 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.
3.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in theprincipal market, or in the absence of a principal market, in the most advantageous market price forthe related asset or liability. The fair value of an asset or a liability is measured using the assumptionsthat market participants would use when pricing the asset or liability, assuming that marketparticipants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with thegreatest volume and frequency. The most advantageous market is the market which maximizes thevalue that could be received from selling the asset and minimizes the value which is needed to bepaid 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 thefair value using the quoted price in the active market. If the active market of the financial instrumentis 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 togenerate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset in its highest and best use.(i) Valuation techniquesThe Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, including the market approach, the incomeapproach and the cost approach. The Company shall use valuation techniques consistent with one ormore of those approaches to measure fair value. If multiple valuation techniques are used to measurefair value, the results shall be evaluated considering the reasonableness of the range of valuesindicated by those results. A fair value measurement is the point within that range that is mostrepresentative 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 orpractically would not be obtained. Observable inputs refer to the information which is available frommarket and reflects the assumptions that market participants would use when pricing the asset orliability. Unobservable Inputs refer to the information which is not available from market and it hasto be developed using the best information available in the circumstances from the assumptions thatmarket participants would use when pricing the asset or liability.(ii) Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuationtechniques used to measure fair value. The fair value hierarchy gives the highest priority to Level 1inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs arequoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can accessat the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1that are observable for the asset or liability, either directly or indirectly. Level 3 inputs areunobservable 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 theprocess of production for such sale, or in the form of materials or supplies to be consumed in theproduction 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 inventoriescomprises the purchase cost, cost of processing and other costs. The cost of inventories used or soldis 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 inventoryInventories are stated at the lower of cost and net realizable value. The excess of cost over netrealizable value of the inventories is recognised as provision for impairment of inventory, andrecognised 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 beconsidered.(i) In normal operation process, finished goods, products and materials for direct sale, their netrealizable values are determined at estimated selling prices less estimated selling expenses andrelevant taxes and surcharges; for inventories held to execute sales contract or service contract, theirnet realizable values are calculated on the basis of contract price. If the quantities of inventoriesspecified in sales contracts are less than the quantities held by the Company, the net realizable valueof the excess portion of inventories shall be based on general selling prices. Net realizable value ofmaterials held for sale shall be measured based on market price.
(ii) For materials in stock need to be processed, in the ordinary course of production and business,net realisable value is determined at the estimated selling price less the estimated costs of completion,the estimated selling expenses and relevant taxes. If the net realisable value of the finished productsproduced by such materials is higher than the cost, the materials shall be measured at cost; if a declinein 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 provisionfor impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. Forinventories with large quantity and low unit price, the provisions for inventory impairment aredetermined 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, whichhas 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 thecustomer’s payment. A contract asset shall be presented if the Company has the right to considerationin exchange for goods or services that the Company has transferred to a customer when that right isconditioned on something other than the passage of time. A contract liability shall be presented if theCompany has the obligation to transfer goods or services to a customer for which the Company hasreceived consideration (or the amount is due) from the customer.Method of determination and accounting for expected credit loss for contract assets please refer toNote 3.10.Contract assets and contract liabilities shall be presented separately in the statement of financialposition. The contract asset and contract liability for the same contract shall be presented on a netbasis. 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 "Othernon-current liabilities" according to its liquidity. Contract assets and contract liabilities for differentcontracts cannot be offset.
3.14 Contract costs
Contract 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 costsmeet all of the following criteria:
(i) The costs relate directly to a contract or to an anticipated contract, including: direct labour, directmaterials, manufacturing costs (or similar costs), costs that are explicitly chargeable to the customerunder 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 performanceobligations 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 expectsto recover them.An asset related to contract costs shall be amortised on a systematic basis that is consistent with therevenue recognition of the goods or services to which the asset relates. The Company recognises thecontract acquisition costs as an expense when incurred if the amortisation period of the asset that theCompany otherwise would have recognised is one year or less.The Company shall accrue the provision for impairment, recognise an impairment loss in profit orloss to the extent that the carrying amount of an asset related to the contract cost exceeds the differenceof below two items, and further consider whether the estimated liability related to the onerous contractneeds to be accrued:
(i) The remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less(ii) The costs that relate directly to providing those goods or services and that have not beenrecognised as expenses.The Company shall recognise in profit or loss a reversal of some or all of an impairment losspreviously recognised when the impairment conditions no longer exist or have improved. Theincreased 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, theCompany shall present them in the account “Inventory” if the contract has an original expectedduration 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, theCompany shall present them in the account “Other current asset” 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 normaloperating cycle).
3.15 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of, orsignificant influence over, an investee, as well as equity investments in joint ventures. Associates ofthe Company are those entities over which the Company has significant influence.
(1) Determination basis of joint control or significant influence over the investeeJoint control is the relevant agreed sharing of control over an arrangement, and the arranged relevantactivity must be decided under unanimous consent of the parties sharing control. In assessing whetherthe Company has joint control of an arrangement, the Company shall assess first whether all theparties, or a group of the parties, control the arrangement. When all the parties, or a group of theparties, considered collectively, are able to direct the activities of the arrangement, the parties controlthe arrangement collectively. Then the Company shall assess whether decisions about the relevantactivities require the unanimous consent of the parties that collectively control the arrangement. Iftwo or more groups of the parties could control the arrangement collectively, it shall not be assessedas have joint control of the arrangement. When assessing the joint control, the protective rights arenot considered.Significant influence is the power to participate in the financial and operating policy decisions of theinvestee but is not control or joint control of those policies. In determination of significant influenceover an investee, the Company should consider not only the existing voting rights directly orindirectly held but also the effect of potential voting rights held by the Company and other entitiesthat could be currently exercised or converted, including the effect of share warrants, share optionsand 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 ofthe investee, it is presumed that the Company has significant influence of the investee, unless it canbe 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 combinationsFor a business combination involving enterprises under common control, if the Company makespayment in cash, transfers non-cash assets or bears liabilities as the consideration for the businesscombination, the share of carrying amount of the owners’ equity of the acquiree in the consolidatedfinancial statements of the ultimate controlling party is recognised as the initial cost of the long-termequity investment on the combination date. The difference between the initial investment cost and
the carrying amount of cash paid, non-cash assets transferred and liabilities assumed shall be adjustedagainst the capital reserve; if capital reserve is not enough to be offset, undistributed profit shall beoffset in turn.For a business combination involving enterprises under common control, if the Company issuesequity securities as the consideration for the business combination, the share of carrying amount ofthe owners’ equity of the acquiree in the consolidated financial statements of the ultimate controllingparty is recognised as the initial cost of the long-term equity investment on the combination date. Thetotal par value of the shares issued is recognised as the share capital. The difference between theinitial investment cost and the carrying amount of the total par value of the shares issued shall beadjusted against the capital reserve; if capital reserve is not enough to be offset, undistributed profitshall be offset in turn.For business combination not under common control, the assets paid, liabilities incurred or assumedand the fair value of equity securities issued to obtain the control of the acquiree at the acquisitiondate shall be determined as the cost of the business combination and recognised as the initial cost ofthe long-term equity investment. The audit, legal, valuation and advisory fees, other intermediaryfees, and other relevant general administrative costs incurred for the business combination, shall berecognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination, the investment costshall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash, the initial cost is the actually paidpurchase cost, including the expenses, taxes and other necessary expenditures directly related to theacquisition of long-term equity investments.For long-term equity investments acquired through issuance of equity securities, the initial cost is thefair value of the issued equity securities.For the long-term equity investments obtained through exchange of non-monetary assets, if theexchange has commercial substance, and the fair values of assets traded out and traded in can bemeasured reliably, the initial cost of long-term equity investment traded in with non-monetary assetsare 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 orloss. If the exchange of non-monetary assets does not meet the above criterion, the book value of theassets 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 determinedbased on the fair value of the equity obtained and the difference between initial investment cost andcarrying 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
accounted for at cost method. Long-term equity investment to a joint venture or an associate shall beaccounted for at equity method.(i) Cost methodFor Long-term equity investment at cost method, cost of the long-term equity investment shall beadjusted when additional amount is invested or a part of it is withdrawn. The Company recognises itsshare of cash dividends or profits which have been declared to distribute by the investee as currentinvestment income.(ii) Equity methodIf the initial cost of the investment is in excess of the share of the fair value of the net identifiableassets in the investee at the date of investment, the difference shall not be adjusted to the initial costof long-term equity investment; if the initial cost of the investment is in short of the share of the fairvalue of the net identifiable assets in the investee at the date investment, the difference shall beincluded in the current profit or loss and the initial cost of the long-term equity investment shall beadjusted accordingly.The Company recognises the share of the investee’s net profits or losses, as well as its share of theinvestee’s other comprehensive income, as investment income or losses and other comprehensiveincome respectively, and adjusts the carrying amount of the investment accordingly. The carryingamount of the investment shall be reduced by the share of any profit or cash dividends declared todistribute by the investee. The investor’s share of the investee’s owners’ equity changes, other thanthose 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 equityinvestment shall be adjusted accordingly. The Company recognises its share of the investee’s netprofits or losses after making appropriate adjustments of investee’s net profit based on the fair valuesof the investee’s identifiable net assets at the investment date. If the accounting policy and accountingperiod adopted by the investee is not in consistency with the Company, the financial statements ofthe 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 andits associate or joint venture are eliminated in proportion to the company’s equity interest in theinvestee, based on which investment income or losses shall be recognised. Any losses resulting frominter-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, overthe investee, due to additional investment or other reason, the relevant long-term equity investmentshall be accounted for by using the equity method, initial cost of which shall be the fair value of theoriginal investment plus the additional investment. Where the original investment is classified asother equity investment, difference between its fair value and the carrying value, in addition to the
cumulative changes in fair value previously recorded in other comprehensive income, shall berecogised 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 suchas disposal of equity investment, the retained interest shall be measured at fair value and the differencebetween the carrying amount and the fair value at the date of loss the joint control or significantinfluence shall be recognised in profit or loss. When the Company discontinues the use of the equitymethod, the Company shall account for all amounts previously recognised in other comprehensiveincome under equity method in relation to that investment on the same basis as would have beenrequired 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 forusing equity method.When an equity investment in an associate or a joint venture previously classified as held for sale nolonger meets the criteria to be so classified, it shall be accounted for using the equity methodretrospectively as from the date of its classification as held for sale. Financial statements for theperiods 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 pleaserefer 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. Forprovision for impairment please refer to Note 3.22.The Company calculates the depreciation or amortisation based on the net amount of investmentproperty 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 thecategories, estimated economic useful lives and estimated net residual rates are listed as followings:
| Category | Estimated useful life (year) | Residual rates (%) | Annual depreciation rates (%) |
| 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 producingcommodities, rendering services, renting or business management with useful lives exceeding oneyear.
(1) Recognition criteria of fixed assets
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteriaare 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 criteriaof fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit or loss whenincurred.
(2) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intendeduse using the straight-line-method. The estimated useful life and annual depreciation rates which aredetermined according to the categories, estimated economic useful lives and estimated net residualrates of fixed assets are listed as followings:
| Category | Depreciation method | Estimated useful life (year) | Residual rates (%) | Annual depreciation rates (%) |
| Buildings and constructions | straight-line-method | 8.00-35.00 | 3.00-5.00 | 2.71-12.13 |
| 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 devices | straight-line-method | 3.00 | 3.00 | 32.33 |
For the fixed assets with impairment provided, the impairment provision should be excluded fromthe cost when calculating depreciation.At the end of reporting period, the Company shall review the useful life, estimated net residual value
and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjustedif 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 assetsThe initial book values of the fixed assets are stated at total expenditures incurred before they areready 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 intendeduse and borrowing costs of the specific loan for the construction or the proportion of the general loanused for the constructions incurred before they are ready for their intended use. The construction inprogress shall be transferred to fixed asset when the installation or construction is ready for theintended use. For construction in progress that has been ready for their intended use but relevantbudgets for the completion of projects have not been completed, the estimated values of projectbudgets, prices, or actual costs should be included in the costs of relevant fixed assets, anddepreciation should be provided according to relevant policies of the Company when the fixed assetsare ready for intended use. After the completion of budgets needed for the completion of projects, theestimated values should be substituted by actual costs, but depreciation already provided is notadjusted.The specific criteria and timing of transfer to fixed assets for the Company’s different categories ofconstruction in progress items:
| category | The specific criteria and timing of transfer to fixed assets |
| Houses and buildings | (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 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. |
| Equipment to be installed and debugged | (i) Relevant equipment and other supporting facilities have been installed; (ii) After debugging, the equipment can maintain normal and stable operation for a period of time, and the production equipment can produce qualified products stably in a period of time; |
| category | 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-useasset 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 underlyingasset, restoring the site on which it is located or restoring the underlying asset to the condition requiredby 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 thelease item will transfer to the Group upon expiry of the lease, the leased item is depreciated over itsuseful life; if, however, transfer of ownership of the leased item upon expiry of the lease to the Groupcannot be reasonably expected, the leased item is depreciated over the shorter of its useful life andthe lease term. Where a leased item has recorded impairment, its residual value after deducting theimpairment allowance is depreciated in accordance the principle described in this paragraph.
3.20 Borrowing costs
(1) Recognition criteria and period for capitalization of borrowing costsThe 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 theirintended use or sale are in progress.Other borrowing cost, discounts or premiums on borrowings and exchange differences on foreigncurrency borrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition, constructionor production of a qualifying asset is interrupted abnormally and the interruption is for a continuousperiod of more than 3 months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired, constructedor produced become ready for their intended use or sale. The expenditure incurred subsequently shallbe recognised as expenses when incurred.
(2) Capitalization rate and measurement of capitalized amounts of borrowing costsWhen funds are borrowed specifically for purchase, construction or manufacturing of assets eligiblefor capitalization, the Company shall determine the amount of borrowing costs eligible forcapitalisation as the actual borrowing costs incurred on that borrowing during the period less anyinterest income on bank deposit or investment income on the temporary investment of thoseborrowings.Where funds allocated for purchase, construction or manufacturing of assets eligible for capitalizationare part of a general borrowing, the eligible amounts are determined by the weighted-average of thecumulative capital expenditures in excess of the specific borrowing multiplied by the generalborrowing capitalization rate. The capitalisation rate will be the weighted average of the borrowingcosts 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 |
| Patents | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
| Software | 3-5 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
| Trademarks | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
For intangible assets with finite useful life, the estimated useful life and amortisation method arereviewed annually at the end of each reporting period and adjusted when necessary. No change hasincurred 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 asintangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every yearend. If the useful lives of those assets are still indefinite, impairment test should be performed on those assets at thebalance sheet date.(iii) Amortisation of the intangible assetsFor intangible assets with finite useful lives, their useful lives should be determined upon their acquisition and
systematically amortised on a straight-line basis [units of production method] over the useful life. The amortisationamount shall be recognised into current profit or loss according to the beneficial items. The amount to be amortisedis cost deducting residual value. For intangible assets which has impaired, the cumulative impairment provisionshall be deducted as well. The residual value of an intangible asset with a finite useful life shall be assumed to bezero unless: there is a commitment by a third party to purchase the asset at the end of its useful life; or there is anactive market for the asset and residual value can be determined by reference to that market; and it is probable thatsuch 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 ofthose assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite, theuseful lives shall be estimated and the intangible assets shall be amortised systematically and reasonably within theestimated useful lives.
(3) Scope of Research and Development Expenditures
The Company classifies the expenses directly related to research and development activities as research anddevelopment expenditures, including remuneration of research and development staff, direct material, depreciationcost 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 intoresearch phase and development phasePreparation activities related to materials and other relevant aspects undertaken by the Company for the purpose offurther development shall be treated as research phase. Expenditures incurred during the research phase of internalresearch 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 phaseExpenditures arising from development phase on internal research and development projects shall be recognised asintangible 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 theexistence of a market for the output of the intangible assets or the intangible assets themselves or, if it is to be usedinternally, the usefulness of the intangible assets;(iv) The availability of adequate technical, financial and other resources to complete the development and to use orsell 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 determinedaccording to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an asset may beimpaired. If any such indication exists, the Company shall estimate the recoverable amount of the asset and test for
impairment. Irrespective of whether there is any indication of impairment, the Company shall test for impairmentof goodwill acquired in a business combination, intangible assets with an indefinite useful life or intangible assetsnot 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 thepresent values of the estimated future cash flows of the long-term assets. The Company estimate the recoverableamounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset, theCompany estimates the recoverable amount of the groups of assets that the individual asset belongs to. Identificationof a group of asset is based on whether the cash inflows from it are largely independent of the cash inflows fromother 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 carryingamount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall berecognised 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 ofassets, good will shall be allocated to relevant combination of asset groups. The relevant group of assets orcombination of asset groups is a group of assets or combination of asset groups that is benefit from the synergies ofthe 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 maybe impaired, impairment testing for group of assets or combination of asset groups excluding goodwill shall beconducted first, and the recoverable amount shall be then calculated and the impairment loss shall be recognisedaccordingly. Then the group of assets or combination of asset groups including goodwill shall be tested forimpairment, by comparing the carrying amount with its recoverable amount. If the recoverable amount is less thanthe 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 overcurrent 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 inexchange for service rendered by employees or for the termination of employment relationship.Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits 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 employeebenefits.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)
The Company recognises, in the accounting period in which an employee provides service, actuallyoccurred short-term employee benefits as a liability, with a corresponding charge to current profitexcept for those recognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfareThe Company shall recognise the employee welfare based on actual amount when incurred intocurrent profit or loss or related capital expenditure. Employee welfare shall be measured at fair valueas 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 fundPayments made by the Company of social insurance for employees, such as medical insurance, workinjury insurance and maternity insurance, payments of housing funds, and labor union fund andemployee education fund accrued in accordance with relevant requirements, in the accounting periodin which employees provide services, is calculated according to required accrual bases and accrualratio in determining the amount of employee benefits and the related liabilities, which shall berecognised in current profit or loss or the cost of relevant asset.(iv) Short-term paid absencesThe company shall recognise the related employee benefits arising from accumulating paid absenceswhen the employees render service that increases their entitlement to future paid absences. Theadditional payable amounts shall be measured at the expected additional payments as a result of theunused entitlement that has accumulated. The Company shall recognise relevant employee benefit ofnon-accumulating paid absences when the absences actually occurred.(v)Short-term profit-sharing planThe Company shall recognise the related employee benefits payable under a profit-sharing plan whenall 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 plansThe Company shall recognise, in the accounting period in which an employee provides service, thecontribution payable to a defined contribution plan as a liability, with a corresponding charge to thecurrent profit or loss or the cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve
months after the end of the annual reporting period in which the employees render the related service,they shall be discounted using relevant discount rate (market yields at the end of the reporting periodon high quality corporate bonds in active market or government bonds with the currency and termwhich shall be consistent with the currency and estimated term of the defined contribution obligations)to measure employee benefits payable.(ii) Defined benefit planThe present value of defined benefit obligation and current service costsBased on the expected accumulative welfare unit method, the Company shall make estimates aboutdemographic variables and financial variables in adopting the unbiased and consistent actuarialassumptions and measure defined benefit obligation, and determine the obligation period. TheCompany 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 orgovernment bonds with the currency and term which shall be consistent with the currency andestimated term of the defined benefit obligations) in order to determine the present value of thedefined benefit obligation and the current service cost.The net defined benefit liability or assetThe net defined benefit liability (asset) is the deficit or surplus recognised as the present value of thedefined 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 benefitasset 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 lossService cost comprises current service cost, past service cost and any gain or loss on settlement. Otherservice cost shall be recognised in profit or loss unless accounting standards require or allow theinclusion 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 beincluded in profit or loss.The amount recognised in other comprehensive incomeChanges in the net liability or asset of the defined benefit plan resulting from the remeasurementsincluding:
? Actuarial gains and losses, the changes in the present value of the defined benefit obligation resulting from
experience adjustments or the effects of changes in actuarial assumptions;
? Return on plan assets, excluding amounts included in net interest on the net defined benefit liability or asset;
? Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability (asset).
Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive incomeshall not be reclassified to profit or loss in a subsequent period. However, the Company may transferthose amounts recognised in other comprehensive income within equity.(c) Termination benefitsThe Company providing termination benefits to employees shall recognise an employee benefitsliability for termination benefits, with a corresponding charge to the profit or loss of the reportingperiod, 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 endof the annual reporting period, the Company shall discount the termination benefits using relevantdiscount rate (market yields at the end of the reporting period on high quality corporate bonds inactive market or government bonds with the currency and term which shall be consistent with thecurrency 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 planWhen other long-term employee benefits provided by the Company to the employees satisfies theconditions for classifying as a defined contribution plan, all those benefits payable shall be accountedfor as employee benefits payable at their discounted value.(ii) Meet the conditions of the defined benefit planAt the end of the reporting period, the Company recognised the cost of employee benefit from otherlong-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 benefitsIn order to simplify the accounting treatment, the net amount of above items shall be recognised inprofit or loss or relevant cost of assets.
3.25 Lease liabilities
At the commencement date, the Group measures the lease liability at the present value of the leasepayments 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 anoption 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 bereadily determined. If that rate cannot be readily determined, the lessee shall use the lessee’sincremental borrowing rate. The excess of the lease payments over its present value is amortised overthe lease term as interest expenses using the discount rate. A variable lease payment which is notincluded 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 followingconditions 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 fromthe 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 ofrelevant present obligations. The Company, when determining the best estimate, has had acomprehensive consideration of risks with respect to contingencies, uncertainties and the time valueof 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 ordinaryactivities of the Company when those inflows result in the increases in shareholders’ equity, other
than increases relating to contributions from shareholders.The Company shall recognise revenue when it satisfies a performance obligation in the contract asthe customer obtains control of a good or service. Control of a good or service refers to the ability todirect the use of, and obtain substantially all of the remaining economic benefits from, the good orservice.When the contract has two or more obligation performances, the Company shall allocate thetransaction price to each performance obligation in proportion to a relative stand-alone selling priceat contract inception of the promised good or service underlying each performance obligation in thecontract and recognize revenue based on the transaction price allocated to each performanceobligation.The transaction price is the amount of consideration to which the Company expects to be entitled inexchange for transferring promised goods or services to a customer, excluding amounts collected onbehalf of third parties. When determining the transaction price of the contract, if the contract includesa variable consideration, the Company shall determine the best estimate of the variable considerationbased on the expected value or the most likely amount and include in the transaction price only to theextent that it is highly probable that a significant reversal in the amount of cumulative revenuerecognised will not occur when the uncertainty associated with the variable consideration issubsequently resolved. If the contract contains a significant financing component, the Company shalldetermine the transaction price at an amount that reflects the price that a customer would have paidfor the promised goods or services if the customer had paid cash for those goods or services when (oras) they transfer to the customer. The difference between the transaction price and the promisedconsideration shall be amortised using the effective interest method within the contract period. TheCompany need not consider the effects of a significant financing component if the period betweenwhen the Company transfers control of a good or service to a customer and when the customer paysfor 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’sperformance as the Company performs;(ii) The Company’s performance creates or enhances an asset (for example, work in progress) thatthe 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 andthe 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 timeby measuring the progress towards complete satisfaction of that performance obligation, unless those
progress cannot be reasonably measured. The Company measures the progress of a performanceobligation 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 theCompany expects to recover the costs incurred in satisfying the performance obligation. In thosecircumstances, the Company shall recognise revenue only to the extent of the costs incurred untilsuch 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 promisedgood or service if a performance obligation is satisfied at a point in time. To determine the point intime at which a customer obtains control of a promised good or service, the Company shall considerindicators 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 presentlyobliged 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 tothe asset;(iii) The Company has transferred physical possession of an asset to a customer - the customer hasphysical possession of the asset;(iv) The Company has transferred the significant risks and rewards of ownership of the asset to acustomer - 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 goodsAccording to the contract of sales of goods between the Company and the customer, the Companysatisfies a performance obligation by transferring goods to the customer, which is a performanceobligation satisfied at a point in time.Revenue from domestic sales of goods can only be recognised when the following conditions aresatisfied: the Company has transferred the promised goods to the customer according to the contractand the customer has accepted the goods; the payment has been received or the receipt voucher hasbeen obtained and it is highly probable that the consideration will be received; the significant risksand rewards of ownership of the asset has been transferred; legal title of the asset has been transferred.(ii) Contract of rendering services
The customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs，Company satisfies a performance obligation by renderingof services to the customer, which is a performance obligation satisfied over time. For eachperformance obligation satisfied over time, the Company shall recognise revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation.The customer can’t simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs, the Company’s performance does not create an asset with analternative use and the Company has no enforceable right to payment for performance completed todate at all times throughout the duration of the contract, Revenue from rendering of services is aperformance obligation satisfied at a point in time. The company recognizes revenue when thecompany completes technical services in accordance with the contractual agreement(iii) Revenue from usage of assetsRevenue from usage of the Group’s assets is recognised if the revenue can be reliably measured andit 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 ofRMB 1.00 when reliable fair value is not available.
(3) Accounting for government grants
(i) Government grants related to assetsGovernment grants pertinent to assets mean the government grants that are obtained by the Company
used for purchase or construction, or forming the long-term assets by other ways. Government grantspertinent to assets shall be recognised as deferred income, and should be recognised in profit or losson a systematic basis over the useful lives of the relevant assets. Grants measured at their nominalvalue shall be directly recognised in profit or loss of the period when the grants are received. Whenthe relevant assets are sold, transferred, written off or damaged before the assets are terminated, theremaining deferred income shall be transferred into profit or loss of the period of disposing relevantassets.(ii) Government grants related to incomeGovernment 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 expensesor losses in future periods, such government grants shall be recognised as deferred income andincluded into profit or loss (or write down related expenses) in the same period as the relevantexpenses or losses are recognised;If the government grants related to income are used to compensate the enterprise’s relevant expensesor losses incurred, such government grants are directly recognised into current profit or loss (or writedown related expenses).For government grants comprised of part related to assets as well as part related to income, each partis accounted for separately; if it is difficult to identify different part, the government grants areaccounted for as government grants related to income as a whole.Government grants related to daily operation activities are recognised in other income (or write downrelated expenses) in accordance with the nature of the activities, and government grants irrelevant todaily operation activities are recognised in non-operating income.(iii) Loan interest subsidyWhen loan interest subsidy is allocated to the bank, and the bank provides a loan at lower-market rateof interest to the Company, the loan is recognised at the actual received amount, and the interestexpense 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 asoffsetting the relevant borrowing cost.(iv) Repayment of the government grantsRepayment of the government grants shall be recorded by increasing the carrying amount of the assetif the book value of the asset has been written down, or reducing the balance of relevant deferredincome if deferred income balance exists, any excess will be recognised into current profit or loss; ordirectly recognised into current profit or loss for other circumstances.
3.29 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base at the balance sheet date. The Company recognise and measure the effect oftaxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities ordeferred 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 ofunused tax losses and the carryforward of unused tax credits to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, the carryforwardof unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates that areexpected to apply to the period when the asset is realised, unless the deferred tax asset arises from theinitial 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 arisingfrom investments in subsidiaries, associates and joint ventures, only to the extent that, it is probablethat:
(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 profitwill be available against which the deductible temporary difference can be utilized, the Companyrecognises a previously unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. TheCompany shall reduce the carrying amount of a deferred tax asset to the extent that it is no longerprobable that sufficient taxable profit will be available to allow the benefit of part or all of thatdeferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomesprobable 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 thatare expected to apply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
? The initial recognition of goodwill; or
? The initial recognition of an asset or liability in a transaction which: is not a business combination;
and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associatedwith investments in subsidiaries, associates, and joint ventures, except to the extent that both of thefollowing 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 combinationFor the taxable temporary difference or deductible temporary difference arising from a businesscombination not under common control, a deferred tax liability or a deferred tax asset shall berecognised, and simultaneously, goodwill recognised in the business combination shall be adjustedbased on relevant deferred tax expense (income).(ii) Items directly recognised in equityCurrent tax and deferred tax related to items that are recognised directly in equity shall be recognisedin equity. Such items include: other comprehensive income generated from fair value fluctuation ofother debt investments; an adjustment to the opening balance of retained earnings resulting fromeither 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 compoundfinancial instrument that contains both liability and equity component.(iii) Unused tax losses and unused tax creditsUnused tax losses and unused tax credits generated from daily operation of the Company itselfDeductible loss refers to the loss calculated and permitted according to the requirement of tax lawthat can be offset against taxable income in future periods. The criteria for recognising deferred taxassets arising from the carryforward of unused tax losses and tax credits are the same as the criteriafor recognising deferred tax assets arising from deductible temporary differences. The Companyrecognises a deferred tax asset arising from unused tax losses or tax credits only to the extent thatthere is convincing other evidence that sufficient taxable profit will be available against which theunused tax losses or unused tax credits can be utilised by the Company. Income taxes in current profitor loss shall be deducted as well.Unused tax losses and unused tax credits arising from a business combinationUnder a business combination, the acquiree’s deductible temporary differences which do not satisfythe criteria at the acquisition date for recognition of deferred tax asset shall not be recognised. Within12 months after the acquisition date, if new information regarding the facts and circumstances exists
at the acquisition date and the economic benefit of the acquiree’s deductible temporary differences atthe acquisition is expected to be realised, the Company shall recognise acquired deferred tax benefitsand reduce the carrying amount of any goodwill related to this acquisition. If goodwill is reduced tozero, any remaining deferred tax benefits shall be recognised in profit or loss. All other acquireddeferred tax benefits realised shall be recognised in profit or loss.(iv) Temporary difference generated in consolidation eliminationWhen preparing consolidated financial statements, if temporary difference between carrying value ofthe assets and liabilities in the consolidated financial statements and their taxable bases is generatedfrom elimination of inter-company unrealized profit or loss, deferred tax assets or deferred taxliabilities shall be recognised in the consolidated financial statements, and income taxes expense incurrent profit or loss shall be adjusted as well except for deferred tax related to transactions or eventsrecognised directly in equity and business combination.(v) Share-based payment settled by equityIf tax authority permits tax deduction that relates to share-based payment, during the period in whichthe expenses are recognised according to the accounting standards, the Company estimates the taxbase in accordance with available information at the end of the accounting period and the temporarydifference 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 relatedto share-based payment recognised according to the accounting standards, the tax effect of the excessamount shall be recognised directly in equity.
(4) Basis for deferred income tax assets and deferred income tax liabilities presented on a netbasisThe 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 taxliabilities; and(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the sametaxation 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 torealise the assets and settle the liabilities simultaneously, in each future period in which significantamounts of deferred tax liabilities or assets are expected to be settled or recovered.
3.30 Leases
(1) Identifying a lease
At inception of a contract, the Company shall assess whether the contract is, or contains, a lease. Acontract is, or contains, a lease if the contract conveys the right to control the use of one or moreidentified assets for a period of time in exchange for consideration. To assess whether a contractconveys the right to control the use of an identified asset for a period of time, the Company shallassess whether, throughout the period of use, the customer has the right to obtain substantially all ofthe 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 separatecomponents of the contract and account for each lease component separately. The right to use anunderlying asset is a separate lease component if both conditions have been satisfied: (i) the lesseecan benefit from use of the underlying asset either on its own or together with other resources that arereadily available to the lessee; (ii) the underlying asset is neither highly dependent on, nor highlyinterrelated 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 orless 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 theCompany subleases an asset, or expects to sublease an asset, the head lease does not qualify as a leaseof a low-value asset.For all the short-term leases or leases for which the underlying asset is of low value, the Companyshall recognise the lease payments associated with those leases as cost of relevant asset or expensesin 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 asmentioned above, at the commencement date, the Company shall recognise a right-of-use asset and alease liability.(i) Right-of-use assetA right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the leaseterm.At the commencement date, the Company shall initially measure the right-of-use asset at cost. Thecost 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
? 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 andconditions of the lease. The Company recognises and measures the cost in accordance with the recognitioncriteria and measurement method for estimated liabilities, details please refer to Notes 3.26. Those costsincurred 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 lesseeby the end of the lease term, the depreciation rate shall be determined based on the classification ofthe right-of- use asset and estimated residual value rate from the commencement date to the end ofthe useful life of the underlying asset. Otherwise, the depreciation rate shall be determined based onthe classification of the right-of-use asset from the commencement date to the earlier of the end ofthe 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 aredetermined according to the categories of right-of-use asset are listed as followings:
| Category | Depreciation method | Estimated useful life (year) | Residual rates (%) | Annual depreciation rates (%) |
| Buildings and constructions | straight‐line method | 3.00-10.00 | 0.00 | 10.00-33.33 |
| Machinery equipment | straight‐line method | 3.00 | 0.00 | 33.33 |
(ii) Lease liabilityAt the commencement date, the lease liability shall be measured at the present value of the leasepayments that are not paid at that date. The lease payments included in the measurement of the leaseliability 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 toterminate 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 beused as the discount rate. If that rate cannot be readily determined, the Company shall use theincremental borrowing rate. The difference between the lease payments and its present value shall berecognised as unrecognised financing charges, calculated bases on the discount rate of the present
value of the lease payments in each period within the lease term and recorded as interest expense incurrent profit or loss. Variable lease payments not included in the measurement of lease liabilitiesshall be recognised in current profit or loss when incurred.After the commencement date, the Company shall remeasure the lease liability based on the revisedpresent value of the lease payments and adjust the carrying amount of the right-of-use asset if thereis a change in the in-substance fixed payments, or change in the amounts expected to be payableunder 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 optionto 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 transferssubstantially all the risks and rewards incidental to ownership of an underlying asset, otherwise itshall be classified as an operating lease.(i) Operating leasesThe Company shall recognise lease payments from operating leases as income on a straight-line basisover the term of the relevant lease and the initial direct costs incurred in obtaining an operating leaseshall be capitalised and recognised as an expense over the lease term on the same basis as the leaseincome. The Company shall recognise the variable lease payments relating to the operating lease butnot included in the measurement of the lease receivables into current profit or loss when incurred.(ii) Finance leasesAt the commencement date, the Company shall recognise the lease receivables at an account equal tothe net investment in the lease (the sum of the present value of the unguaranteed residual values andthe lease payment that are not received at the commencement date discounted at the interest rateimplicit in the lease) and derecognise the asset relating to the finance lease. The Company shallrecognise 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 notincluded 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 leaseThe 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.
(ii) A lease modification not accounted for as a separate leaseThe Company as a lesseeAt the effective date of the lease modification, the Company shall redetermine the lease term of themodified lease and remeasure the lease liability by discounting the revised lease payments using arevised discount rate. The revised discount rate is determined as the interest rate implicit in the leasefor the remainder of the lease term, if that rate can be readily determined, or the incrementalborrowing rate at the effective date of the modification, if the interest rate implicit in the lease cannotbe 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 recognisein 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 lessorThe Company shall account for a modification to an operating lease as a new lease from the effectivedate of the modification, considering any prepaid or accrued lease payments relating to the originallease 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 shallaccount 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 transactionis 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
and shall recognise a financial liability equal to the transfer proceeds. It shall account for the financialliability according to Note 3.10. If the transfer of the asset is a sale, the Company shall measure theright-of-use asset arising from the leaseback at the proportion of the previous carrying amount of theasset that relates to the right of use retained by the Company. Accordingly, the Company shallrecognise 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 shallrecognise a financial asset equal to the transfer proceeds. It shall account for the financial assetaccording to Note 3.10. If the transfer of the asset is a sale, the Company shall account for the purchaseof the asset applying applicable Accounting Standards of Business Enterprises, and for the leaseapplying 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 firstimplementation 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 tax (VAT) | Value added in the course of sales of goods and rendering of services | 13%, 9%, 6% |
| Consumption duty | Taxable revenue | Tax by quantity: CNY 1.00 per kilogram or litre of distrilled wine sold; Tax by revenue: 20% on taxable revenue from sale of distrilled wine |
| Urban maintenance and construction tax | Transaction tax payable | 7%, 5% |
| Education surcharge | Transaction tax payable | 3% |
| Local education surcharge | Transaction tax payable | 2% |
| Corporate income tax (CIT) | Taxable income | 25% |
The basic income tax rate of the company is 25%, and the actual income tax rate of some subsidiaries is shown in
the 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 for2022 (wankeqimi [2022] No.482) issued by Department of Science and Technology of Anhui province, thesubsidiary Ruisiweier was identified as a high-tech enterprise in 2022, therefore was given High-tech EnterpriseCertificate (Certificate Number: GR202234000476) which is valid for 3 years. According to Enterprise Income TaxLaw 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 theCertifing Body in Anhui Province for 2022 jointly issued by Department of Science and Technology of Anhuiprovince, Department of Finance of Anhui province, and Anhui Provincial Taxation Bureau of State Administrationof Taxation, the subsidiary Longrui Glass was identified as a high-tech enterprise in 2022, therefore was givenHigh-tech Enterprise Certificate (Certificate Number: GR202234004359) which is valid for 3 years. According toEnterprise Income Tax Law and other relevant regulations, the company is subject to a national high-tech enterpriseincome 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 inAnhui Province for 2021 (wankegaomi [2022] No.49) issued by Department of Science and Technology of Anhuiprovince, Department of Finance of Anhui province, and Anhui Provincial Taxation Bureau of State Administrationof Taxation, the subsidiary Anhui RunAnXinKe Testing Technology Co., Ltd. was identified as a high-techenterprise 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
subject to a national high-tech enterprise income tax rate at 15% for three years from 1 January 2021 to 31 December2023. It is currently in the process of recertification, and until it passes the recertification, the corporate income taxis 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 theAnhui Province in 2021 issued by the Office of the National Leading Group for the Identification and Managementof High-tech Enterprises, the subsidiary Anhui Gujing Health Technology Co., Ltd. (“Health Technology”) hasbeen recognized as the second batch of high-tech enterprises in Anhui Province in 2021, and obtained the High-techEnterprise Certificate (Certificate No.: GR202134004641) with a valid period from 2021 to 2023. According torelevant regulations such as the Enterprise Income Tax Law, the Health Technology shall enjoy an income tax rateof 15% for national high-tech enterprises from 1 January 2021 to 31 December 2023. It is currently in the processof recertification, and until it passes the recertification, the corporate income tax is temporarily prepaid at a rate of15%.
(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 annualtaxable income of small and micro profit enterprises that does not exceed RMB3 million shall be included in thetaxable income at a reduced rate of 25%. Pay corporate income tax at a rate of 20%. Anhui Gujinggong LiquorOriginal Vintage Theme Hotel Management Co., Ltd., Bozhou Gujing Hotel Co., Ltd., Anhui Jiuan MechanicalElectrical Equipment Co., Ltd., Anhui Guqi Distillery Co., Ltd., Hubei Junlou Cultural Tourism Co., Ltd., HubeiXinjia 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 taxpreferential policy.
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Monetary funds
| Item | Ending balance | Beginning balance |
| Cash on hand | 45,031.58 | 78,223.44 |
| Cash at bank | 16,113,769,698.47 | 15,674,993,088.76 |
| Other monetary funds | 44,582,031.53 | 291,300,431.99 |
| Total | 16,158,396,761.58 | 15,966,371,744.19 |
Notes: At the end of June 2024, there were 250.0498 million yuan used as collateral for opening bank drafts in thebank deposits, 27.8853 million yuan in other restricted funds, and 14.4653 million yuan in other monetary fundsused as collateral for opening bank drafts that could not be withdrawn in advance. In addition, there were no othermonetary funds with restrictions on use due to pledges, collateral, or freezing, etc., with potential risks of recoveryat the end of June 2024.Liquor manufacturing enterprises shall disclose whether there exists special interest arrangements such as
establishing 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 loss | 0.00 | 719,987,547.42 |
| Including: bank financial products | 0.00 | 719,987,547.42 |
| Total | 0.00 | 719,987,547.42 |
5.3 Accounts Receivable
(1) Disclosure by aging
| Aging | Ending balance | Beginning balance |
| Within one year | 59,584,421.30 | 68,276,125.36 |
| Of which: 1-6 months | 53,371,718.67 | 65,998,078.79 |
| 7-12 months | 6,212,702.63 | 2,278,046.57 |
| 1-2 years | 561,254.47 | 1,209,303.29 |
| 2-3 years | 8,340,881.56 | 7,827,391.86 |
| Over 3 years | 119,341.10 | 173,492.54 |
| Subtotal | 68,605,898.43 | 77,486,313.05 |
| Less: Bad debt provision | 9,086,651.52 | 8,878,393.78 |
| Total | 59,519,246.91 | 68,607,919.27 |
(2) Disclosure by withdrawal method of bad debt provision
①Ending balance
| Category | Ending balance | ||||
| Carrying amount | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Withdrawal proportion (%) | ||
| Bad debt provision withdrawn separately | 7,792,783.72 | 11.36 | 7,792,783.72 | 100.00 | 0.00 |
| Bad debt provision withdrawn by group | 60,813,114.71 | 88.64 | 1,293,867.80 | 2.13 | 59,519,246.91 |
| Category | Ending balance | ||||
| Carrying amount | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Withdrawal proportion (%) | ||
| Of which: Group 1 | |||||
| Group 2 | 60,813,114.71 | 88.64 | 1,293,867.80 | 2.13 | 59,519,246.91 |
| Total | 68,605,898.43 | 100.00 | 9,086,651.52 | 13.24 | 59,519,246.91 |
②Beginning balance
| Category | Beginning balance | ||||
| Carrying amount | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Withdrawal proportion (%) | ||
| Bad debt provision withdrawn separately | 7,792,783.72 | 10.06 | 7,792,783.72 | 100.00 | 0.00 |
| Bad debt provision withdrawn by group | 69,693,529.33 | 89.94 | 1,085,610.06 | 1.56 | 68,607,919.27 |
| Of which: Group 1 | |||||
| Group 2 | 69,693,529.33 | 89.94 | 1,085,610.06 | 1.56 | 68,607,919.27 |
| Total | 77,486,313.05 | 100.00 | 8,878,393.78 | 11.46 | 68,607,919.27 |
On 30 June 2024, Accounts receivable with bad debt provision withdrawn by group 2
| Aging | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 59,584,421.30 | 844,352.32 | 1.42 |
| Of which: 1-6 months | 53,371,718.67 | 533,717.19 | 1.00 |
| 7-12 months | 6,212,702.63 | 310,635.13 | 5.00 |
| 1-2 years | 561,254.47 | 56,125.45 | 10.00 |
| 2-3 years | 548,097.84 | 274,048.93 | 50.00 |
| Over 3 years | 119,341.10 | 119,341.10 | 100.00 |
| Total | 60,813,114.71 | 1,293,867.80 | 2.13 |
On 1 January 2024, Accounts receivable with bad debt provision withdrawn by group 2
| Aging | Beginning balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 68,276,125.36 | 773,883.12 | 1.13 |
| Of which: 1-6 months | 65,998,078.79 | 659,980.79 | 1.00 |
| 7-12 months | 2,278,046.57 | 113,902.33 | 5.00 |
| 1-2 years | 1,209,303.29 | 120,930.33 | 10.00 |
| 2-3 years | 34,608.14 | 17,304.07 | 50.00 |
| Over 3 years | 173,492.54 | 173,492.54 | 100.00 |
| Total | 69,693,529.33 | 1,085,610.06 | 1.56 |
(3) Changes of bad debt provision during the Reporting Period
| Category | Beginning amount | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Increase from business combination not under the same control | Recovery or reversal | Elimination or write-off | |||
| Accounts receivable with significant amount but bad debt provision withdrawn separately | 7,792,783.72 | 0.00 | 0.00 | 7,792,783.72 | ||
| Accounts receivable with insignificant amount but bad debt provision withdrawn separately | ||||||
| Group 2: Bad debt provision withdrawn by aging group | 1,085,610.06 | 338,160.77 | 129,903.03 | 1,293,867.80 | ||
| Total | 8,878,393.78 | 338,160.77 | 129,903.03 | 9,086,651.52 | ||
(4) Accounts receivable written off during the reporting period
Not applicable.
(5) Top five ending balances by entity
| Entity name | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion of the balance to the total accounts receivable and contract assets (%) | Provision for bad debt of accounts receivable and contract assets |
| No. 1 | 10,981,419.61 | 10,981,419.61 | 16.01 | 109,814.20 |
| Entity name | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion of the balance to the total accounts receivable and contract assets (%) | Provision for bad debt of accounts receivable and contract assets |
| No. 2 | 7,792,783.72 | 7,792,783.72 | 11.36 | 7,792,783.72 | |
| No. 3 | 4,048,496.72 | 4,048,496.72 | 5.90 | 40,484.97 | |
| No. 4 | 3,838,718.59 | 3,838,718.59 | 5.60 | 38,387.19 | |
| No. 5 | 2,998,387.09 | 2,998,387.09 | 4.37 | 29,983.87 | |
| Total | 29,659,805.73 | 29,659,805.73 | 43.24 | 8,011,453.95 |
5.4 Accounts Receivable Financing
(a) Accounts receivable financing by category
| Category | Ending balance | Beginning balance | ||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |
| Bank acceptance bills | 1,581,346,121.50 | 1,581,346,121.50 | 957,560,115.73 | 957,560,115.73 | ||
| Commercial acceptance bills | ||||||
| Total | 1,581,346,121.50 | 1,581,346,121.50 | 957,560,115.73 | 957,560,115.73 | ||
(b) Pledged notes receivable at 30 June 2024Not 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 | 4,722,000,240.75 | 0.00 |
| Commercial acceptance bills | ||
| Total | 4,722,000,240.75 | 0.00 |
(d) Accounts receivable financing by loss allowance provision method
| Category | Ending balance | ||||
| Carrying amount | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Withdrawal proportion (%) | ||
| Bad debt provision withdrawn separately | |||||
| Bad debt provision withdrawn by group | 1,581,346,121.50 | 100.00 | 1,581,346,121.50 | ||
| Of which: Group 1 | |||||
| Group 2 | 1,581,346,121.50 | 100.00 | 1,581,346,121.50 | ||
| Total | 1,581,346,121.50 | 100.00 | 1,581,346,121.50 | ||
(Continued)
| Category | Beginning balance | ||||
| Carrying amount | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Withdrawal proportion (%) | ||
| Bad debt provision withdrawn separately | |||||
| Bad debt provision withdrawn by group | 957,560,115.73 | 100.00 | 957,560,115.73 | ||
| Of which: Group 1 | |||||
| Group 2 | 957,560,115.73 | 100.00 | 957,560,115.73 | ||
| Total | 957,560,115.73 | 100.00 | 957,560,115.73 | ||
(e) Movement of impairment allowanceNot applicable.(f) Notes receivable written off during the reporting periodNot applicable.
5.5 Prepayment
(1) Disclosure by aging
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within one year | 112,708,157.88 | 97.81 | 90,144,117.89 | 98.40 |
| 1 to 2 years | 1,632,058.58 | 1.42 | 995,545.31 | 1.09 |
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| 2 to 3 years | 689,830.48 | 0.60 | 467,678.98 | 0.51 |
| Over 3 years | 204,600.00 | 0.17 | 0.00 | 0.00 |
| Total | 115,234,646.94 | 100.00 | 91,607,342.18 | 100.00 |
(2) Top five ending balances by entity
| Entity name | Ending balance | Proportion of the balance to the total prepayment (%) |
| No. 1 | 9,905,660.43 | 8.60 |
| No. 2 | 5,322,437.92 | 4.62 |
| No. 3 | 3,648,748.70 | 3.17 |
| No. 4 | 1,257,301.20 | 1.09 |
| No. 5 | 1,234,905.96 | 1.07 |
| Total | 21,369,054.21 | 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 | 37,020,138.26 | 49,178,194.70 |
| Total | 37,020,138.26 | 49,178,194.70 |
(2) Other Receivables
①Disclosure by aging
| Aging | Ending balance | Beginning balance |
| Within one year | 35,952,434.15 | 46,992,878.99 |
| Of which: 1-6 months | 32,751,072.18 | 40,097,431.00 |
| 7-12 months | 3,201,361.97 | 6,895,447.99 |
| 1-2 years | 842,987.19 | 2,308,597.13 |
| 2-3 years | 1,593,188.87 | 1,706,650.01 |
| Over 3 years | 34,847,825.17 | 34,652,068.31 |
| Subtotal | 73,236,435.38 | 85,660,194.44 |
| Less: Bad debt provision | 36,216,297.12 | 36,481,999.74 |
| Aging | Ending balance | Beginning balance |
| Total | 37,020,138.26 | 49,178,194.70 |
②Disclosure by nature
| Nature | Ending balance | Beginning balance |
| Investment in securities | 28,635,660.22 | 28,635,660.22 |
| Deposit and guarantee | 10,477,644.93 | 7,558,471.55 |
| Borrowing for business trip expenses | 369,421.60 | 594,453.48 |
| Rent, utilities and gasoline charges | 9,783,340.47 | 8,593,773.81 |
| Other | 23,970,368.16 | 40,277,835.38 |
| Subtotal | 73,236,435.38 | 85,660,194.44 |
| Less: Bad debt provision | 36,216,297.12 | 36,481,999.74 |
| Total | 37,020,138.26 | 49,178,194.70 |
③Disclosure 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 | 44,600,775.16 | 7,580,636.90 | 37,020,138.26 |
| Stage 2 | |||
| Stage 3 | 28,635,660.22 | 28,635,660.22 | - |
| Total | 73,236,435.38 | 36,216,297.12 | 37,020,138.26 |
A1. As of 30 June 2024, bad debt provision at stage 1:
| Category | Carrying amount | 12-month expected credit losses rate (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | ||||
| Bad debt provision withdrawn by group | 44,600,775.16 | 17.00 | 7,580,636.90 | 37,020,138.26 |
| Of which: Group 1 | ||||
| Group 2 | 44,600,775.16 | 17.00 | 7,580,636.90 | 37,020,138.26 |
| Total | 44,600,775.16 | 17.00 | 7,580,636.90 | 37,020,138.26 |
On 30 June 2024, other receivables with bad debt provision withdrawn by group 2
| Aging | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 35,952,434.15 | 487,578.79 | 1.36 |
| Of which: 1-6 months | 32,751,072.18 | 327,510.71 | 1.00 |
| 7-12 months | 3,201,361.97 | 160,068.08 | 5.00 |
| 1-2 years | 842,987.19 | 84,298.72 | 10.00 |
| 2-3 years | 1,593,188.87 | 796,594.44 | 50.00 |
| Over 3 years | 6,212,164.95 | 6,212,164.95 | 100.00 |
| Total | 44,600,775.16 | 7,580,636.90 | 17.00 |
A2. As of 30 June 2024, bad debt provision at stage 3:
| Category | Carrying amount | Expected credit loss rate for the entire duration (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
| Bad debt provision withdrawn by group | ||||
| Of which: Group 1 | ||||
| Group 2 | ||||
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
On 30 June 2024, bad debt provision withdrawn separately:
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | Withdrawal reason | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | The enterprise is bankrupt and liquidated |
| Total | 28,635,660.22 | 28,635,660.22 | 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 | 57,024,534.22 | 7,846,339.52 | 49,178,194.70 |
| Stage 2 | |||
| Stage 3 | 28,635,660.22 | 28,635,660.22 | 0.00 |
| Total | 85,660,194.44 | 36,481,999.74 | 49,178,194.70 |
B1. On 1 January 2024, bad debt provision at stage 1:
| Category | Carrying amount | 12-month expected credit losses rate (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | ||||
| Bad debt provision withdrawn by group | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
| Of which: Group 1 | ||||
| Group 2 | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
| Total | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
On 1 January 2024, other receivables with bad debt provision withdrawn by group 2
| Aging | Beginning balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 46,992,878.99 | 745,746.71 | 1.59 |
| Of which: 1-6 months | 40,097,431.00 | 400,974.31 | 1.00 |
| 7-12 months | 6,895,447.99 | 344,772.40 | 5.00 |
| 1-2 years | 2,308,597.13 | 230,859.71 | 10.00 |
| 2-3 years | 1,706,650.01 | 853,325.01 | 50.00 |
| Over 3 years | 6,016,408.09 | 6,016,408.09 | 100.00 |
| Total | 57,024,534.22 | 7,846,339.52 | 13.76 |
B2. As of 1 January 2024, bad debt provision at stage 3:
| Category | Carrying amount | Expected credit loss rate for the entire duration (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
| Bad debt provision withdrawn by group | ||||
| Of which: Group 1 | ||||
| Group 2 | ||||
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
On 1 January 2024, bad debt provision withdrawn separately:
| Name | Beginning balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | Withdrawal reason | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | The enterprise is bankrupt and liquidated |
| Total | 28,635,660.22 | 28,635,660.22 | 100.00 | -- |
④Changes of bad debt provision during the Reporting Period
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Increase from business combination not under the same control | Recovery or reversal | Elimination or write-off | |||
| Bad debt provision withdrawn separately | 28,635,660.22 | 0.00 | 0.00 | 28,635,660.22 | ||
| Bad debt provision withdrawn by group | 7,846,339.52 | 314,233.73 | 579,936.35 | 7,580,636.90 | ||
| Total | 36,481,999.74 | 314,233.73 | 579,936.35 | 36,216,297.12 | ||
⑤Top five ending balances by entity
| Entity name | Nature | Ending balance | Aging | Proportion of the balance to the total other receivables (%) | Bad debt provision |
| No. 1 | Securities investment | 28,635,660.22 | Over 3 years | 39.10 | 28,635,660.22 |
| No. 2 | Other | 6,277,406.23 | Within 6 months | 8.57 | 62,774.06 |
| No. 3 | Other | 5,448,432.21 | Within 6 months | 7.44 | 54,484.32 |
| No. 4 | Other | 3,200,000.00 | Over 3 years | 4.37 | 3,200,000.00 |
| No. 5 | Other | 3,108,795.61 | Within 6 months | 4.24 | 31,087.96 |
| Total | -- | 46,670,294.27 | 63.72 | 31,984,006.56 |
5.7 Inventories
(1) Category of inventories
| Item | Ending balance | ||
| Carrying amount | Falling price reserves | Carrying value | |
| Raw materials and package materials | 288,677,708.72 | 18,604,545.95 | 270,073,162.77 |
| Semi-finished goods and work in process | 6,684,465,834.09 | 0.00 | 6,684,465,834.09 |
| Finished goods | 818,390,458.20 | 14,606,091.22 | 803,784,366.98 |
| Total | 7,791,534,001.01 | 33,210,637.17 | 7,758,323,363.84 |
(Continued)
| Item | Beginning balance | ||
| Carrying amount | Falling price reserves | Carrying value | |
| Raw materials and package materials | 351,787,097.55 | 20,527,645.11 | 331,259,452.44 |
| Semi-finished goods and work in process | 5,811,584,229.52 | 0.00 | 5,811,584,229.52 |
| Finished goods | 1,396,536,633.32 | 19,697,778.77 | 1,376,838,854.55 |
| Total | 7,559,907,960.39 | 40,225,423.88 | 7,519,682,536.51 |
(2) Falling price reserves of inventories
| Items | Beginning balance | Increase | Decrease | Ending balance | ||
| Withdrawal | Increase from business combination | Reversal or elimination | Others | |||
| Raw materials and package materials | 20,527,645.11 | 213,447.25 | 0.00 | 2,136,546.41 | 0.00 | 18,604,545.95 |
| Finished goods | 19,697,778.77 | 373,112.96 | 0.00 | 5,464,800.51 | 0.00 | 14,606,091.22 |
| Total | 40,225,423.88 | 586,560.21 | 0.00 | 7,601,346.92 | 0.00 | 33,210,637.17 |
5.8 Other Current Assets
| Item | Ending balance | Beginning balance |
| Pledged treasury bond reverse repurchase | 0.00 | 25,199,000.00 |
| Item | Ending balance | Beginning balance |
| Deposit interest receivable | 93,124,224.62 | 26,696,206.46 |
| Deductible taxes and tax allowance | 41,577,285.98 | 83,176,048.90 |
| Total | 134,701,510.60 | 135,071,255.36 |
5.9 Long-term Equity Investments
| Investees | Beginning balance | Changes in the Reporting Period | ||||
| Additional investments | Reduced investments | Profit and loss on investments confirmed according to equity law | Adjustment of other comprehensive income | Changes in other equity | ||
| I. Associated enterprises | ||||||
| Beijing Guge Trading Co., Ltd. | 5,511,537.65 | 2,136.30 | ||||
| Anhui Xunfei Jiuzhi Technology Co., Ltd. | 4,855,540.61 | 68,099.43 | ||||
| Total | 10,367,078.26 | 70,235.73 | ||||
(Continued)
| Investees | Changes in the Reporting Period | Ending balance | Balance of impairment provision | ||
| Declaration of cash dividends or distribution of profit | Withdrawal of impairment provision | Other | |||
| I. Associated enterprises | |||||
| Beijing Guge Trading Co., Ltd. | 5,513,673.95 | ||||
| Anhui Xunfei Jiuzhi Technology Co., Ltd. | 4,923,640.04 | ||||
| Total | 10,437,313.99 | ||||
5.10Other Equity Instrument Investment
| Item | Beginning balance | Changes during the reporting period | Ending balance | ||||
| Additional investment | Decrease in investment | Gaines recognised in other comprehensive income | Losses recognised in other comprehensive income | Others | |||
| Anhui Mingguang Rural Commercial Bank Co., Ltd. | 63,105,658.07 | 5,693,974.85 | 68,799,632.92 | ||||
| Total | 63,105,658.07 | 5,693,974.85 | 68,799,632.92 | ||||
(Continued)
| Item | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to retained earnings | Reason for assigning to measure in fair value and the changes included in other comprehensive income |
| Anhui Mingguang Rural Commercial Bank Co., Ltd. | 769,616.25 | 14,950,935.12 | For management holding purposes, it is specified as measured at fair value and changes in it are included in other 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 | 84,177,952.61 | 2,644,592.00 | 86,822,544.61 |
| 2. Increase during the Reporting Period | |||
| (1) Transfer from fixed assets | |||
| 3. Decrease during the Reporting Period | |||
| 4. Ending balance | 84,177,952.61 | 2,644,592.00 | 86,822,544.61 |
| II. Accumulated depreciation and amortization: | |||
| 1. Beginning balance | 39,275,828.32 | 923,806.10 | 40,199,634.42 |
| 2. Increase during the Reporting Period | 1,963,609.58 | 31,369.60 | 1,994,979.18 |
| Items | Houses and buildings | Land use rights | Total |
| (1) Withdrawal or amortization | 1,963,609.58 | 31,369.60 | 1,994,979.18 |
| (2) Transfer from fixed assets | |||
| 3. Decrease during the Reporting Period | |||
| 4. Ending balance | 41,239,437.90 | 955,175.70 | 42,194,613.60 |
| 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 | 42,938,514.71 | 1,689,416.30 | 44,627,931.01 |
| 2. Beginning carrying value | 44,902,124.29 | 1,720,785.90 | 46,622,910.19 |
5.12 Fixed Assets
(1) Listed by category
| Item | Ending balance | Beginning balance |
| Fixed assets | 4,724,543,385.22 | 4,596,044,056.92 |
| Disposal of fixed assets | 0.00 | 0.00 |
| Total | 4,724,543,385.22 | 4,596,044,056.92 |
(2) Fixed assets
①General information of fixed assets
| Items | Houses and buildings | Machinery equipment | Transportation vehicles | Administrative and other devices | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 3,792,284,000.88 | 2,594,999,842.86 | 80,850,726.07 | 514,466,499.76 | 6,982,601,069.57 |
| 2. Increase during the Reporting Period | 224,231,460.52 | 83,928,159.66 | 661,133.17 | 36,106,549.37 | 344,927,302.72 |
| (1) Acquisition | 0.00 | 11,660,201.23 | 661,133.17 | 9,954,160.05 | 22,275,494.45 |
| (2) Transfer from construction in progress | 224,231,460.52 | 72,267,958.43 | 0.00 | 26,152,389.32 | 322,651,808.27 |
| (3)Enterprise merger increases | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3. Decrease during the Reporting Period | 1,300,061.36 | 11,167,755.84 | 416,812.98 | 2,289,474.30 | 15,174,104.48 |
| (1) Disposal or scrap | 1,300,061.36 | 11,167,755.84 | 416,812.98 | 2,289,474.30 | 15,174,104.48 |
| Items | Houses and buildings | Machinery equipment | Transportation vehicles | Administrative and other devices | Total |
| 4. Ending balance | 4,015,215,400.04 | 2,667,760,246.68 | 81,095,046.26 | 548,283,574.83 | 7,312,354,267.81 |
| II. Accumulated depreciation | |||||
| 1. Beginning balance | 1,079,567,698.80 | 952,856,539.12 | 67,485,170.84 | 282,097,904.02 | 2,382,007,312.78 |
| 2. Increase during the Reporting Period | 83,886,089.98 | 100,466,509.78 | 2,638,362.30 | 27,236,604.19 | 214,227,566.25 |
| (1) Withdrawal | 83,886,089.98 | 100,466,509.78 | 2,638,362.30 | 27,236,604.19 | 214,227,566.25 |
| 3. Decrease during the Reporting Period | 1,266,884.41 | 8,410,239.02 | 380,833.31 | 1,522,210.19 | 11,580,166.93 |
| (1) Disposal or scrap | 1,266,884.41 | 8,410,239.02 | 380,833.31 | 1,522,210.19 | 11,580,166.93 |
| 4. Ending balance | 1,162,186,904.37 | 1,044,912,809.88 | 69,742,699.83 | 307,812,298.02 | 2,584,654,712.10 |
| III. Impairment provision | |||||
| 1. Beginning balance | 2,596,209.90 | 1,375,189.67 | 0.00 | 578,300.30 | 4,549,699.87 |
| 2. Increase during the Reporting Period | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (1) Withdrawal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 3. Decrease during the Reporting Period | 17,030.55 | 798,198.53 | 0.00 | 578,300.30 | 1,393,529.38 |
| (1) Disposal or scrap | 17,030.55 | 798,198.53 | 0.00 | 578,300.30 | 1,393,529.38 |
| 4. Ending balance | 2,579,179.35 | 576,991.14 | 0.00 | 0.00 | 3,156,170.49 |
| IV. Carrying value | |||||
| 1. Ending carrying value | 2,850,449,316.32 | 1,622,270,445.66 | 11,352,346.43 | 240,471,276.81 | 4,724,543,385.22 |
| 2. Beginning carrying value | 2,710,120,092.18 | 1,640,768,114.07 | 13,365,555.23 | 231,790,295.44 | 4,596,044,056.92 |
②Fixed assets leasing out under operating leases
| Items | Carrying value |
| Buildings and constructions | 42,938,514.71 |
| Total | 42,938,514.71 |
③Fixed assets without certificate of title
| Items | Carrying value | Reason |
| Buildings and constructions | 1,650,802,967.04 | In process |
| Total | 1,650,802,967.04 | -- |
④At 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
| Item | Ending balance | Beginning balance |
| Construction in progress | 3,228,411,813.84 | 2,910,735,155.39 |
| Project materials | 0.00 | 0.00 |
| Total | 3,228,411,813.84 | 2,910,735,155.39 |
(2) Construction in progress
①General information of construction in progress
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Smart park project | 3,113,472,732.77 | 3,113,472,732.77 | 2,564,788,149.93 | 2,564,788,149.93 | ||
| Theme hotel project | 225,797,376.40 | 225,797,376.40 | ||||
| Gujing plant area 12# liquor warehouse | 0.00 | 0.00 | 25,626,044.87 | 25,626,044.87 | ||
| Suizhou new plant project | 0.00 | 0.00 | 29,094,832.88 | 29,094,832.88 | ||
| Other individual project | 114,939,081.07 | 114,939,081.07 | 65,428,751.31 | 65,428,751.31 | ||
| Total | 3,228,411,813.84 | 3,228,411,813.84 | 2,910,735,155.39 | 2,910,735,155.39 | ||
②Changes in significant projects of construction in progress
| Project | Budget (RMB’0,000) | Beginning balance | Increase during the Reporting Period | Amount transferred to fixed asset | Decrease during the Reporting Period | Ending balance |
| Smart park project | 828,965.74 | 2,564,788,149.93 | 699,818,163.90 | 122,610,842.58 | 28,522,738.48 | 3,113,472,732.77 |
| Theme hotel project | 62,500.00 | 225,797,376.40 | 15,501,111.51 | 84,843,930.60 | 156,454,557.31 | 0.00 |
| Gujing plant area 12# liquor warehouse | 19,000.00 | 25,626,044.87 | 2,705,828.85 | 28,331,873.72 | 0.00 | 0.00 |
| Suizhou new plant project | 60,000.00 | 29,094,832.88 | 25,671,599.77 | 54,363,962.81 | 402,469.84 | 0.00 |
| Other individual project | 71,410.23 | 65,428,751.31 | 83,914,308.93 | 32,501,198.56 | 1,902,780.61 | 114,939,081.07 |
| Total | 1,041,875.97 | 2,910,735,155.39 | 827,611,012.96 | 322,651,808.27 | 187,282,546.24 | 3,228,411,813.84 |
(Continued)
| Project | Proportion of project input to budgets (%) | Schedule (%) | Cumulative amount of interest capitalization | Of which: Interest capitalized during the reporting period | Interest capitalization during the Reporting Period (%) | Source of funds |
| Smart park project | 63.04 | 80.72 | Self-owned |
| Project | Proportion of project input to budgets (%) | Schedule (%) | Cumulative amount of interest capitalization | Of which: Interest capitalized during the reporting period | Interest capitalization during the Reporting Period (%) | Source of funds |
| fund and raised fund | ||||||
| Theme hotel project | 83.19 | 100.00 | Self-owned fund | |||
| Gujing plant area 12# liquor warehouse | 94.86 | 100.00 | Self-owned fund | |||
| Suizhou new plant project | 94.68 | 100.00 | 8,803,572.05 | 879,034.72 | 3.35 | Self-owned fund and borrowings |
| Other individual project | 26.32 | 26.32 | Self-owned fund | |||
| Total | 8,803,572.05 | 879,034.72 |
(3) Increase of10.91% in the book value of construction in progress at the end of June 2024 compared to thebeginning 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 | 108,271,565.09 | 0.00 | 108,271,565.09 |
| 2. Increase during the Reporting Period | 31,179,563.79 | 0.00 | 31,179,563.79 |
| 3. Decrease during the Reporting Period | - | ||
| 4. Ending balance | 139,451,128.88 | 0.00 | 139,451,128.88 |
| II. Accumulated depreciation | |||
| 1. Beginning balance | 27,233,464.85 | 0.00 | 27,233,464.85 |
| 2. Increase during the Reporting Period | 8,028,920.19 | 0.00 | 8,028,920.19 |
| 3. Decrease during the Reporting Period | |||
| 4. Ending balance | 35,262,385.04 | 0.00 | 35,262,385.04 |
| 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 | 104,188,743.84 | 0.00 | 104,188,743.84 |
| 2. Beginning carrying value | 81,038,100.24 | 0.00 | 81,038,100.24 |
5.15 Intangible Assets
(1) General information of intangible assets
| Item | Land use rights | Software | Patents and trademark | Total |
| I. Original carrying value | ||||
| 1. Beginning balance | 1,136,647,237.75 | 131,841,013.57 | 254,972,753.56 | 1,523,461,004.88 |
| 2. Increase during the Reporting Period | 5,225,439.06 | 1,869,156.29 | 0.00 | 7,094,595.35 |
| (1) Acquisition | 5,225,439.06 | 875,275.34 | 0.00 | 6,100,714.40 |
| (2) Transfer from construction in progress | 0.00 | 993,880.95 | 0.00 | 993,880.95 |
| 3. Decrease during the Reporting Period | 73,153.58 | 0.00 | 300,000.00 | 373,153.58 |
| (1) Disposal | 73,153.58 | 0.00 | 300,000.00 | 373,153.58 |
| 4. Ending balance | 1,141,799,523.23 | 133,710,169.86 | 254,672,753.56 | 1,530,182,446.65 |
| II. Accumulated amortization: | ||||
| 1. Beginning balance | 226,089,125.23 | 101,093,879.40 | 72,924,291.21 | 400,107,295.84 |
| 2. Increase during the Reporting Period | 12,098,915.64 | 10,449,949.33 | 91,327.02 | 22,640,191.99 |
| (1) Withdrawal | 12,098,915.64 | 10,449,949.33 | 91,327.02 | 22,640,191.99 |
| 3. Decrease during the Reporting Period | 24,954.17 | 0.00 | 152,500.00 | 177,454.17 |
| (1) Disposal | 24,954.17 | 0.00 | 152,500.00 | 177,454.17 |
| 4. Ending balance | 238,163,086.70 | 111,543,828.73 | 72,863,118.23 | 422,570,033.66 |
| III. Impairment provision |
| Item | Land use rights | Software | Patents and trademark | Total |
| 1. Beginning balance | 0.00 | 166,872.39 | 0.00 | 166,872.39 |
| 2. Increase during the Reporting Period | ||||
| (1) Withdrawal | ||||
| 3. Decrease during the Reporting Period | ||||
| (1) Withdrawal | ||||
| 4. Ending balance | 0.00 | 166,872.39 | 0.00 | 166,872.39 |
| IV. Carrying value | ||||
| 1. Ending carrying value | 903,636,436.53 | 21,999,468.74 | 181,809,635.33 | 1,107,445,540.60 |
| 2. Beginning carrying value | 910,558,112.52 | 30,580,261.78 | 182,048,462.35 | 1,123,186,836.65 |
(2) Intangible assets used for mortgage or pledge at 30 June 2024
| Item | Original carrying value | Accumulated amortization | Impairment provision | Carrying value | Note |
| Trademark right | 75,315,327.34 | 3,204,009.10 | - | 72,111,318.24 | Loan pledge |
| Total | 75,315,327.34 | 3,204,009.10 | - | 72,111,318.24 |
(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
| Investees or matters that goodwill arising from | Beginning balance | Increase | Decrease | Ending balance | ||
| Formed by business combination | Other | Disposal | Other | |||
| Yellow Crane Tower Distillery Co., Ltd. | 478,283,495.29 | 478,283,495.29 | ||||
| Anhui Mingguang Distillery Co., Ltd. | 60,686,182.07 | 60,686,182.07 | ||||
| Renhuai Maotai Town Zhencang Winery Industry Co., Ltd. | 22,394,707.65 | 22,394,707.65 | ||||
| Total | 561,364,385.01 | 561,364,385.01 | ||||
5.17 Long-term Deferred Expenses
| Item | Beginning balance | Increase | Decrease | Ending balance | |
| Amortization | Other decrease | ||||
| Experience center | 5,414,614.07 | 0.00 | 2,539,171.16 | 0.00 | 2,875,442.91 |
| Sewage treatment project | 76,885.25 | 0.00 | 76,885.25 | 0.00 | 0.00 |
| Outdoor auxiliary projects | 24,727,266.52 | 165,091.02 | 1,476,344.50 | 0.00 | 23,416,013.04 |
| Pottery jar | 16,479,992.73 | 30,171,784.07 | 1,677,279.25 | 0.00 | 44,974,497.55 |
| Theme hotel project | 0.00 | 157,152,774.51 | 1,731,874.65 | 0.00 | 155,420,899.86 |
| Other individual project with insignificant amounts | 12,403,825.41 | 525,367.54 | 2,955,512.98 | 0.00 | 9,973,679.97 |
| Total | 59,102,583.98 | 188,015,017.14 | 10,457,067.79 | 0.00 | 236,660,533.33 |
5.18 Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets before offsetting
| Item | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Asset impairment provision | 36,533,680.05 | 9,116,732.77 | 44,941,996.14 | 10,848,316.56 |
| Credit impairment provision | 45,302,948.64 | 11,325,737.16 | 45,360,393.52 | 11,292,126.66 |
| Unrealized intergroup profit | 48,961,580.60 | 11,867,838.61 | 74,347,126.84 | 18,586,781.71 |
| Deferred income | 101,700,136.20 | 25,425,034.05 | 100,811,404.82 | 24,492,497.96 |
| Deductible losses | 240,435,547.27 | 53,364,629.54 | 356,467,985.56 | 82,136,692.17 |
| Carry-over of payroll payables deductible during the next period | 0.00 | 0.00 | 8,433,254.65 | 1,264,988.20 |
| Accrued expenses and discount | 2,058,701,970.77 | 514,675,492.69 | 1,229,968,568.55 | 306,212,224.03 |
| Change in fair value of accounts receivable financing | 5,963,219.86 | 1,487,606.49 | 3,029,905.06 | 754,940.17 |
| Lease liabilities | 98,016,354.30 | 24,504,088.58 | 79,152,693.07 | 19,788,173.27 |
| Total | 2,635,615,437.69 | 651,767,159.89 | 1,942,513,328.21 | 475,376,740.73 |
(2) Deferred tax liabilities before offsetting
| Item | Ending balance | Beginning balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Difference in accelerated depreciation of fixed | 244,858,778.54 | 61,214,694.63 | 348,420,771.63 | 84,243,324.54 |
| Item | Ending balance | Beginning balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| assets | ||||
| Assets appreciation arising from business combination not under the same control | 669,009,499.08 | 161,979,691.50 | 677,082,342.46 | 163,643,316.42 |
| Changes in fair value of trading financial assets | 0.00 | 0.00 | 19,987,547.42 | 4,996,886.86 |
| Unrealized intergroup profit | 191,267,324.36 | 47,816,831.09 | 264,217,579.52 | 66,054,394.88 |
| Changes in fair value of investments in other equity instruments | 14,950,935.12 | 3,737,733.78 | 9,256,960.27 | 2,314,240.07 |
| Right-of-use assets | 104,188,743.84 | 26,047,185.96 | 81,038,100.24 | 20,259,525.06 |
| Total | 1,224,275,280.94 | 300,796,136.96 | 1,400,003,301.54 | 341,511,687.83 |
(3) Net balance of deferred tax liabilities and deferred tax assets after offsetting
| Items | Offset amount at the period-end | Net balance after offsetting at the period-end | Offset amount at the period-begin | Net balance after offsetting at the period- begin |
| Deferred tax assets | -24,504,088.58 | 627,263,071.31 | -19,788,173.27 | 455,588,567.46 |
| Deferred tax liabilities | -24,504,088.58 | 276,292,048.38 | -19,788,173.27 | 321,723,514.56 |
(4) As at 30 June 2024, the amount of deductible loss on the Company's unrecognised deferred tax assets wasRMB27,501,192.84.
(5) Deductible losses not recognised as deferred tax assets will expire in the following periods: due in three to fouryears at RMB9,659,508.57, and due after four years is RMB17,841,684.27.
5.19 Other Non-current Assets
| Item | Ending balance | Beginning balance |
| Prepayment for construction and machinery | 4,412,486.00 | 5,685,287.46 |
| Total | 4,412,486.00 | 5,685,287.46 |
5.20Short-term Borrowings
| Category | Ending balance | Beginning balance |
| Credit loan | 40,014,544.52 | 0.00 |
| Total | 40,014,544.52 | 0.00 |
5.21Notes Payable
(1) Listed by nature
| Category | Ending balance | Beginning balance |
| Bank acceptance bills | 418,126,347.55 | 1,332,031,679.44 |
| Commercial acceptance bills | 0.00 | 21,156,044.00 |
| Total | 418,126,347.55 | 1,353,187,723.44 |
(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 | 838,995,188.45 | 1,352,488,385.40 |
| Payments for constructions and equipment | 830,488,076.76 | 980,033,062.83 |
| Other | 420,592,492.66 | 481,670,623.01 |
| Total | 2,090,075,757.87 | 2,814,192,071.24 |
(2) Significant accounts payable with aging of over one year
Not applicable.
5.23Contract liabilities
| Item | Ending balance | Beginning balance |
| Payment for goods | 2,218,413,969.30 | 1,401,122,249.53 |
| Total | 2,218,413,969.30 | 1,401,122,249.53 |
5.24 Employee Benefits Payable
(1) List of employee benefits payable
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term employee benefits | 1,180,454,095.44 | 1,915,332,446.51 | 1,943,271,838.79 | 1,152,514,703.16 |
| II. Post-employment benefits-defined contribution plans | 151,677.85 | 115,262,072.90 | 115,263,130.32 | 150,620.43 |
| III. Termination benefits | 0.00 | 396,689.84 | 396,689.84 | 0.00 |
| IV. Other benefits due within one year | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 1,180,605,773.29 | 2,030,991,209.25 | 2,058,931,658.95 | 1,152,665,323.59 |
(2) List of short-term employee benefits
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Salaries, bonuses, allowances and subsidies | 1,102,959,306.93 | 1,644,530,357.29 | 1,671,939,981.12 | 1,075,549,683.10 |
| II. Employee benefits | 0.00 | 61,454,437.51 | 61,454,437.51 | 0.00 |
| III. Social insurance | 481,283.18 | 58,850,299.91 | 58,854,492.55 | 477,090.54 |
| Of which: Health insurance | 478,930.09 | 55,206,452.10 | 55,210,628.34 | 474,753.85 |
| Injury insurance | 2,353.09 | 3,643,847.81 | 3,643,864.21 | 2,336.69 |
| IV. Housing accumulation fund | 8,189,307.02 | 66,742,257.34 | 66,290,293.73 | 8,641,270.63 |
| V. Labor union funds and employee education funds | 64,598,761.77 | 22,411,735.42 | 23,542,207.87 | 63,468,289.32 |
| VI. Enterprise annuity | 4,225,436.54 | 61,343,359.04 | 61,190,426.01 | 4,378,369.57 |
| Total | 1,180,454,095.44 | 1,915,332,446.51 | 1,943,271,838.79 | 1,152,514,703.16 |
(3) Defined contribution plans
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic endowment insurance | 147,081.53 | 109,554,175.21 | 109,555,200.59 | 146,056.15 |
| 2. Unemployment insurance | 4,596.32 | 5,707,897.69 | 5,707,929.73 | 4,564.28 |
| Total | 151,677.85 | 115,262,072.90 | 115,263,130.32 | 150,620.43 |
5.25Taxes Payable
| Item | Ending balance | Beginning balance |
| VAT | 289,382,521.91 | 357,332,008.07 |
| Consumption tax | 393,911,618.60 | 434,932,478.09 |
| Enterprise income tax | 526,241,628.24 | 280,172,679.93 |
| Individual income tax | 3,159,701.39 | 4,436,736.14 |
| Urban maintenance and construction tax | 35,508,685.77 | 40,651,189.20 |
| Stamp duty | 4,456,456.36 | 4,531,195.41 |
| Educational surcharge | 34,101,008.82 | 39,534,935.75 |
| Other | 17,719,533.70 | 17,777,633.10 |
| Total | 1,304,481,154.79 | 1,179,368,855.69 |
5.26Other Payables
(1) Listed by category
| Item | Ending balance | Beginning balance |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 3,032,063,462.12 | 3,267,292,222.01 |
| Total | 3,032,063,462.12 | 3,267,292,222.01 |
(2) Other payables
①Listed by nature
| Item | Ending balance | Beginning balance |
| Security deposit and guarantee | 2,455,866,045.91 | 2,567,100,177.13 |
| Warranty | 97,462,081.41 | 77,264,459.45 |
| Personal housing fund paid by company | 8,738,351.62 | 6,231,182.41 |
| Other | 469,996,983.18 | 616,696,403.02 |
| Total | 3,032,063,462.12 | 3,267,292,222.01 |
②Other payables aged over one year as of the statement date are mainly security deposit and warranty not yetmatured.
5.27 Non-current Liabilities due within one year
| Item | Ending balance | Beginning balance |
| Lease liabilities due within one year | 13,652,379.47 | 10,771,925.29 |
| Long-term borrowings due within one year | 52,081,999.99 | 70,053,097.22 |
| Total | 65,734,379.46 | 80,825,022.51 |
5.28Other Current Liabilities
| Item | Ending balance | Beginning balance |
| Accrued expenses | 1,676,050,492.54 | 951,949,301.38 |
| Pre-mature output VAT | 288,484,985.29 | 180,069,149.72 |
| Total | 1,964,535,477.83 | 1,132,018,451.10 |
5.29 Long-term Borrowings
| Item | Ending balance | Beginning balance |
| Credit Loan | 0.00 | 0.00 |
| Item | Ending balance | Beginning balance |
| Guarantee loan | 83,400,000.00 | 107,000,000.00 |
| Accrued interest | 0.00 | 106,256.94 |
| Total | 83,400,000.00 | 107,106,256.94 |
5.30 Lease Liabilities
| Item | Ending balance | Beginning balance |
| Lease payments | 111,029,732.84 | 94,538,857.20 |
| Less: unrecognized financial charges | 13,013,378.54 | 15,386,164.13 |
| Subtotal | 98,016,354.30 | 79,152,693.07 |
| Less: lease liabilities due within one year | 13,652,379.47 | 10,771,925.29 |
| Total | 84,363,974.83 | 68,380,767.78 |
5.31 Deferred Income
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason |
| Government grants | 100,811,404.82 | 4,014,000.00 | 3,125,268.62 | 101,700,136.20 | Receiving asset-related grants from government |
| Total | 100,811,404.82 | 4,014,000.00 | 3,125,268.62 | 101,700,136.20 | -- |
5.32 Share Capital
| Item | Beginning balance | Changes during the Reporting Period (+,-) | Ending balance | ||||
| New issues | Bonus issues | Capitalization of reserves | Others | Subtotal | |||
| The sum of shares | 528,600,000.00 | 528,600,000.00 | |||||
5.33 Capital Reserves
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (share premium) | 6,191,894,530.90 | 6,191,894,530.90 | ||
| Other capital reserves | 32,853,136.20 | 32,853,136.20 | ||
| Total | 6,224,747,667.10 | 6,224,747,667.10 |
5.34 Other Comprehensive Income
| Item | Beginning balance | Reporting Period | Ending balance | |||||
| Income before taxation in the Current Period | Less: Recorded in other | Less: Recorded in other | Less: Income tax expense | Attributable to owners of the Company as | Attributable to non-controlling | |||
| comprehensive income in prior period and transferred to profit or loss in the Current Period | comprehensive income in prior period and transferred to retained earnings in the Current Period | the parent after tax | interests after tax | |||||
| I. Other comprehensive income that may not subsequently be reclassified to profit or loss | 4,165,632.12 | 5,693,974.85 | 1,423,493.72 | 2,562,288.68 | 1,708,192.45 | 6,727,920.80 | ||
| 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 investment | 4,165,632.12 | 5,693,974.85 | - | - | 1,423,493.72 | 2,562,288.68 | 1,708,192.45 | 6,727,920.80 |
| Changes in the fair value arising from changes in own credit risk | ||||||||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss | -2,569,309.39 | -5,963,219.86 | -3,608,102.09 | -585,580.97 | -1,785,374.89 | 15,838.09 | -4,354,684.28 | |
| 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 reclassification of financial assets | -2,569,309.39 | -5,963,219.86 | -3,608,102.09 | -585,580.97 | -1,785,374.89 | 15,838.09 | -4,354,684.28 | |
| Credit impairment allowance for investments in other debt obligations | ||||||||
| Reserve for cash flow |
| hedges | ||||||||
| Differences arising from translation of foreign currency-denominated financial statements | ||||||||
| Total of other comprehensive income | 1,596,322.73 | -269,245.01 | -3,608,102.09 | - | 837,912.75 | 776,913.79 | 1,724,030.54 | 2,373,236.52 |
5.35 Surplus Reserves
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserve | 269,402,260.27 | 269,402,260.27 | ||
| Total | 269,402,260.27 | 269,402,260.27 |
Note: In accordance with provisions of Company Law and Articles of Association, the statutory surplus reserve shallbe withdrawn at 10% of net profits by the Company. The accumulated amount of statutory surplus reserve can nolonger 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 | 14,500,963,359.34 | 11,497,599,306.54 |
| Total beginning balance of retained earnings before adjustment (increase+, decrease-) | 0.00 | 0.00 |
| Beginning balance of retained earnings after adjustments | 14,500,963,359.34 | 11,497,599,306.54 |
| Add: Net profit attributable to owners of the Company as the parent | 3,572,791,595.15 | 4,589,164,052.80 |
| Less: withdrawal of statutory surplus reserve | 0.00 | 0.00 |
| Dividend of ordinary shares payable | 2,378,700,000.00 | 1,585,800,000.00 |
| Ending retained earnings | 15,695,054,954.49 | 14,500,963,359.34 |
5.37 Operating Revenue and Cost of Sales
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Costs of sales | Operating revenue | Costs of sales | |
| Main operations | 13,749,070,890.99 | 2,684,505,728.28 | 11,255,806,929.70 | 2,371,427,439.55 |
| Other operations | 56,622,651.36 | 20,159,167.14 | 54,209,565.40 | 17,183,398.73 |
| Total | 13,805,693,542.35 | 2,704,664,895.42 | 11,310,016,495.10 | 2,388,610,838.28 |
Information on operating revenue and cost of sales:
| Item | Reporting Period | Same period of last year |
| Operating revenue | Costs of sales | Operating revenue | Costs of sales | |
| Commodity type | ||||
| Baijiu business | 13,428,363,064.31 | 2,409,942,515.02 | 10,980,685,839.60 | 2,134,573,872.18 |
| Others | 377,330,478.04 | 294,722,380.40 | 329,330,655.50 | 254,036,966.10 |
| Total | 13,805,693,542.35 | 2,704,664,895.42 | 11,310,016,495.10 | 2,388,610,838.28 |
| By operating segment | ||||
| North China | 1,109,250,619.81 | 232,885,728.87 | 821,080,901.86 | 177,942,282.98 |
| Central China | 11,869,976,454.15 | 2,325,411,733.69 | 9,782,622,497.21 | 2,080,292,659.11 |
| South China | 815,792,256.19 | 143,909,531.02 | 696,179,001.74 | 128,233,371.06 |
| International | 10,674,212.20 | 2,457,901.84 | 10,134,094.29 | 2,142,525.13 |
| Total | 13,805,693,542.35 | 2,704,664,895.42 | 11,310,016,495.10 | 2,388,610,838.28 |
| By distribution channel: | ||||
| Online | 408,477,087.11 | 115,516,082.79 | 343,597,657.39 | 83,341,732.21 |
| Offline | 13,397,216,455.24 | 2,589,148,812.63 | 10,966,418,837.71 | 2,305,269,106.07 |
| Total | 13,805,693,542.35 | 2,704,664,895.42 | 11,310,016,495.10 | 2,388,610,838.28 |
Information on performance obligations: None
5.38 Taxes and Surcharges
| Item | Reporting Period | Same period of last year |
| Consumption tax | 1,725,234,888.54 | 1,311,088,718.86 |
| Urban maintenance and construction tax and educational surcharge | 314,017,926.17 | 249,167,147.23 |
| Urban land use tax | 12,164,355.34 | 11,797,701.09 |
| Property tax | 17,079,657.91 | 12,402,844.79 |
| Stamp duty | 11,546,725.67 | 9,986,220.33 |
| Other | 13,636,790.45 | 10,999,508.76 |
| Total | 2,093,680,344.08 | 1,605,442,141.06 |
5.39 Selling Expense
| Item | Reporting Period | Same period of last year |
| Employment benefits | 675,938,548.40 | 623,631,139.58 |
| Travel fees | 120,981,637.15 | 96,783,184.70 |
| Advertisement fees | 688,129,021.87 | 564,290,043.38 |
| Comprehensive promotion costs | 1,685,467,666.43 | 1,333,513,264.01 |
| Service fees | 373,733,873.49 | 371,761,620.49 |
| Other | 67,434,236.83 | 58,035,891.45 |
| Total | 3,611,684,984.17 | 3,048,015,143.61 |
5.40 Administrative Expenses
| Item | Reporting Period | Same period of last year |
| Employee benefits | 443,783,424.86 | 404,447,209.51 |
| Office fees | 28,284,746.88 | 18,750,767.90 |
| Maintenance expenses | 16,737,356.47 | 24,933,916.68 |
| Depreciation | 48,529,409.50 | 34,435,401.77 |
| Amortization | 17,835,580.70 | 17,399,804.22 |
| Pollution discharge | 13,466,130.97 | 11,632,964.09 |
| Travel expenses | 6,681,000.73 | 7,252,762.78 |
| Water and electricity charges | 6,129,646.26 | 6,563,326.70 |
| Other | 89,703,398.35 | 58,558,405.72 |
| Total | 671,150,694.72 | 583,974,559.37 |
5.41 Development Costs
| Item | Reporting Period | Same period of last year |
| Labor cost | 23,995,060.27 | 20,823,084.10 |
| Direct input costs | 2,031,791.02 | 5,437,858.15 |
| Depreciation expense | 2,058,186.20 | 1,459,282.37 |
| Other | 5,147,260.85 | 2,243,950.60 |
| Total | 33,232,298.34 | 29,964,175.22 |
5.42 Finance Costs
| Item | Reporting Period | Same period of last year |
| Interest expenses | 3,445,346.57 | 771,499.92 |
| Including: Interest expenses for lease liabilities | 1,575,990.34 | 637,086.51 |
| Less: Interest income | 298,352,344.67 | 122,996,635.75 |
| Net interest expenses | -294,906,998.10 | -122,225,135.83 |
| Net foreign exchange losses | 11,640,952.86 | -75,794.06 |
| Bank charges and others | 943,715.76 | -549,709.86 |
| Item | Reporting Period | Same period of last year |
| Total | -282,322,329.48 | -122,850,639.75 |
5.43 Other Income
| Item | Reporting Period | Same period of last year | Related to assets /income |
| I. Government grants recorded to other income | 22,796,192.89 | 21,893,660.44 | |
| Of which: Government grant related to deferred income | 3,125,268.62 | 2,804,835.00 | Related to assets |
| Government grant recorded to current profit or loss | 19,670,924.27 | 19,088,825.44 | Related to income |
| II. Others related to daily operation activities and recognised in other income | 3,950,721.93 | 5,210,917.44 | Related to income |
| Total | 26,746,914.82 | 27,104,577.88 | -- |
5.44 Investment Income
| Item | Reporting Period | Same period of last year |
| Investment income from long-term equity investments under equity method | 70,235.73 | 46,146.26 |
| Gains on disposal of long-term equity investments | 0.00 | 0.00 |
| Gains on disposal of held-for-trading financial assets | 1,330,123.81 | -991,715.70 |
| Gains from other equity instrument investment income during holding period | 769,616.25 | 747,200.50 |
| Gains from disposal of financial assets at fair value through other comprehensive income | -27,352,763.75 | -27,223,678.44 |
| Others | 71,311.59 | 75,934.01 |
| Total | -25,111,476.37 | -27,346,113.37 |
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 | 25,168,981.30 |
| Of which: gains on changes in fair value of derivatives | 0.00 | 0.00 |
| Total | 0.00 | 25,168,981.30 |
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 | -208,257.74 | -98,593.99 |
| Item | Reporting Period | Same period of last year |
| Bad debt of other receivables | 265,702.62 | 183,048.19 |
| Total | 57,444.88 | 84,454.20 |
5.47 Asset Impairment Loss
| Item | Reporting Period | Same period of last year |
| I. Inventory falling price loss | 6,603,562.17 | -17,556,673.87 |
| II. Impairment loss of fixed assets | 0.00 | 0.00 |
| III. Impairment loss of intangible assets | 0.00 | 0.00 |
| Total | 6,603,562.17 | -17,556,673.87 |
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 classified as held for sale | 115,019.47 | 203,366.67 |
| Of which: Fixed assets | 115,019.47 | 203,366.67 |
| Total | 115,019.47 | 203,366.67 |
5.49 Non-operating Income
| Item | Reporting Period | Same period of last year | Recognized in current non-recurring profit or loss |
| Gains from damage or scrapping of non-current asset | 41,575.95 | 792.36 | 41,575.95 |
| Fine and compensation | 18,024,818.43 | 27,153,467.53 | 18,024,818.43 |
| Sale of scrap | 1,837,031.10 | 2,315,235.07 | 1,837,031.10 |
| Release of payables | 12,171,666.34 | 0.00 | 12,171,666.34 |
| Others | 226,918.17 | 15,206,998.10 | 226,918.17 |
| Total | 32,302,009.99 | 44,676,493.06 | 32,302,009.99 |
5.50 Non-operating Expenses
| Item | Reporting Period | Same period of last year | Recognized in current non-recurring profit or loss |
| Loss from damage or scrapping of non-current assets | 2,146,433.91 | 1,388,046.95 | 2,146,433.91 |
| Donations | 3,564,000.00 | 16,260,100.00 | 3,564,000.00 |
| Other | 1,085,481.91 | 2,710,295.84 | 1,085,481.91 |
| Item | Reporting Period | Same period of last year | Recognized in current non-recurring profit or loss |
| Total | 6,795,915.82 | 20,358,442.79 | 6,795,915.82 |
5.51 Income Tax Expenses
(1) Details of income tax expenses
| Item | Reporting Period | Same period of last year |
| Current tax expenses | 1,546,400,697.87 | 1,087,484,097.12 |
| Deferred tax expenses | -217,796,797.42 | -122,827,778.40 |
| Total | 1,328,603,900.45 | 964,656,318.72 |
(2) Reconciliation of accounting profit and income tax expenses
| Item | Reporting Period |
| Profit before taxation | 5,007,520,214.24 |
| Current income tax expense accounted at applicable tax rate of the Company as the parent | 1,251,880,053.56 |
| Influence of applying different tax rates by subsidiaries | -9,327,139.85 |
| Adjustment for prior period | 88,557,402.05 |
| Influence of non-taxable income | -209,963.00 |
| Influence of non-deductable costs, expenses and losses | 4,545,065.26 |
| Influence of deductable losses of unrecognized deferred income tax at the beginning of the Reporting Period | 0.00 |
| Influence of deductable temporary difference or deductable losses of unrecognized deferred income tax in the Reporting Period | 0.00 |
| Influence of development expense deduction | -6,841,517.57 |
| Tax rate adjustment to the beginning balance of deferred income tax assets/liabilities | 0.00 |
| Income tax credits | 0.00 |
| Total | 1,328,603,900.45 |
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 | 165,662,356.11 | 191,395,775.56 |
| Government grants | 27,166,798.37 | 23,086,588.11 |
| Interest income | 298,352,344.67 | 114,262,772.85 |
| Item | Reporting Period | Same period of last year |
| Release of restricted monetary assets | 1,290,204,326.83 | 667,182,706.08 |
| Other | 37,349,285.87 | 60,720,033.61 |
| Total | 1,818,735,111.85 | 1,056,647,876.21 |
(2) Other cash payments relating to operating activities
| Item | Reporting Period | Same period of last year |
| Cash paid in sales and distribution expenses and general and administrative expense | 1,281,715,414.95 | 1,028,393,443.01 |
| Security deposit, guarantee and warranty | 267,466,177.89 | 112,028,193.49 |
| Time deposits or deposits pledged for the issuance of notes payable | 292,400,389.87 | 10,001,995.00 |
| Others | 118,344,932.30 | 106,759,182.45 |
| Total | 1,959,926,915.01 | 1,257,182,813.95 |
(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 | 7,509,748.71 | 8,506,249.20 |
| Total | 7,509,748.71 | 8,506,249.20 |
Changes in liabilities arising from financing activities
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Changes in cash | Changes in non-cash | Changes in cash | Changes in non-cash | |||
| Short-term Borrowings | 0.00 | 40,000,100.00 | 14,444.52 | 0.00 | 0.00 | 40,014,544.52 |
| Long-term Borrowings | 107,106,256.94 | 50,000,000.00 | 215,289.58 | 21,812,513.88 | 52,109,032.64 | 83,400,000.00 |
| Lease liabilities | 68,380,767.78 | 0.00 | 32,755,553.39 | 0.00 | 16,772,346.34 | 84,363,974.83 |
| lease liabilities due within one year | 10,771,925.29 | 0.00 | 16,772,346.34 | 7,225,950.43 | 6,665,941.73 | 13,652,379.47 |
| Long-term Borrowings due within one year | 70,053,097.22 | 0.00 | 52,109,032.64 | 70,080,129.87 | 0.00 | 52,081,999.99 |
| Total | 256,312,047.23 | 90,000,100.00 | 101,866,666.47 | 99,118,594.18 | 75,547,320.71 | 273,512,898.81 |
5.53 Supplementary Information to the Statement of Cash Flows
(1) Supplementary information to the statement of cash flows
| Supplementary information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities: | -- | -- |
| Net profit | 3,678,916,313.79 | 2,844,180,601.67 |
| Add: Provisions for impairment of assets | -6,603,562.17 | 17,556,673.87 |
| Losses on credit impairment | -57,444.88 | -84,454.20 |
| Depreciation of fixed assets, oil and gas assets and productive biological assets | 214,227,566.25 | 141,764,699.64 |
| Depreciation of right-of-use assets | 8,028,920.19 | 7,271,247.88 |
| Amortization of intangible assets | 22,640,191.99 | 21,694,016.84 |
| Amortization of long-term deferred expenses | 10,457,067.79 | 14,328,044.89 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (gains: negative) | -115,019.47 | -203,366.67 |
| Losses on scrapping of fixed assets (gains: negative) | 2,104,857.96 | 1,387,254.59 |
| Losses on changes in fair value (gains: negative) | 0.00 | -25,168,981.30 |
| Finance costs (gains: negative) | 3,445,346.57 | 695,705.86 |
| Investment losses (gains: negative) | 25,111,476.37 | 27,346,113.37 |
| Decreases in deferred tax assets (increase: negative) | -171,674,503.85 | -134,248,634.08 |
| Increases in deferred tax liabilities (decrease: negative) | -45,431,466.18 | 11,925,466.41 |
| Decreases in inventories (increase: negative) | -231,626,040.62 | -133,877,031.57 |
| Decreases in operating receivables (increase: negative) | -626,166,581.73 | -555,140,216.28 |
| Increases in operating payables (decrease: negative) | -163,754,993.35 | 1,821,226,849.73 |
| Other*1 | 1,290,204,326.83 | 667,182,706.08 |
| Net cash flows from operating activities | 4,009,706,455.49 | 4,727,836,696.73 |
| 2. Significant investing and financing activities without involvement of cash receipts and payments |
| Conversion of debt into capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets acquired under finance leases | ||
| 3. Net increase/decrease of cash and cash equivalents: | ||
| Ending balance of cash | 15,865,996,371.71 | 16,842,303,222.36 |
| Less: Beginning balance of cash | 14,676,167,417.36 | 13,105,373,435.22 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 1,189,828,954.35 | 3,736,929,787.14 |
*1: Refer to impact of recovered restricted funds for operating activities paid at the same period of last year on netcash 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 |
| I. Cash | 15,865,996,371.71 | 16,842,303,222.36 |
| Including: Cash on hand | 45,031.58 | 100,681.01 |
| Bank deposit on demand | 15,835,834,577.80 | 16,842,069,031.88 |
| Other monetary assets on demand | 30,116,762.33 | 133,509.47 |
| II. Cash equivalents | ||
| Of which: Bond investments maturing within three months | ||
| III. Ending balance of cash and cash equivalents | 15,865,996,371.71 | 16,842,303,222.36 |
| 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 |
| Cash and cash equivalents | 292,400,389.87 | Amount in pledge for issuing bank acceptance bills and other security deposits, etc. |
| Intangible assets | 72,111,318.24 | Pledged for loans |
| Total | 364,511,708.11 | -- |
5.55 Leases
(1) The Company as a lessee
Current gains and losses and cash flows related to leases
| Item | Reporting Period |
| Expenses for short-term lease under simplified method | 3,472,146.35 |
| Expenses for lease of low value asset (except for short-term lease) under simplified method | - |
| Interest expense of lease liabilities | 1,575,990.34 |
| 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 | 38,121,656.46 |
| Profit or loss in sale and leaseback transaction |
(2) The Company as a lessor
①Operating lease
A. Lease income
| Item | Reporting Period |
| Lease income | 5,695,087.03 |
| 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 |
| Labor costs | 23,995,060.27 | 20,823,084.10 |
| Material costs | 2,031,791.02 | 5,437,858.15 |
| Depreciation costs | 2,058,186.20 | 1,459,282.37 |
| Others | 5,147,260.85 | 2,243,950.60 |
| Total | 33,232,298.34 | 29,964,175.22 |
| Including：Expensed R&D expenditures | 33,232,298.34 | 29,964,175.22 |
| 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 Consolidation
Compared 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
(1) Composition of corporate group
| Name of subsidiary | Registered capital (RMB’0,000) | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Bozhou Gujing Sales Co., Ltd. | 8,486.45 | Anhui Bozhou | Anhui Bozhou | Commercial trade | 100.00 | Investment establishment | |
| Anhui Longrui Glass Co., Ltd | 8,666.03 | Anhui Bozhou | Anhui Bozhou | Manufacture | 100.00 | Investment establishment | |
| Anhui Jiuan Mechanical Electrical Equipment Co., Ltd. | 1,000.00 | Anhui Bozhou | Anhui Bozhou | Equipment manufacturing | 100.00 | Investment establishment | |
| Anhui Jinyunlai Culture & Media Co., Ltd. | 1,500.00 | Anhui Hefei | Anhui Hefei | Advertisement marketing | 100.00 | Investment establishment | |
| Anhui Ruisiweier Technology Co., Ltd. | 5,000.00 | Anhui Bozhou | Anhui Bozhou | Technical research | 100.00 | Investment establishment | |
| Shanghai Gujing Jinhao Hotel Management Co., Ltd. | 5,400.00 | Shanghai | Shanghai | Hotel management | 100.00 | Business combination under common control | |
| Bozhou Gujing Hotel Co., Ltd | 62.80 | Anhui Bozhou | Anhui Bozhou | Hotel operating | 100.00 | Business combination under common control | |
| Anhui Yuanqing Environmental Protection Co., Ltd. | 1,600.00 | Anhui Bozhou | Anhui Bozhou | Sewage treatment | 100.00 | Investment establishment | |
| Anhui Gujing Yunshang E-commerce Co., Ltd | 500.00 | Anhui Hefei | Anhui Hefei | Electronic commerce | 100.00 | Investment establishment | |
| Anhui RunAnXinKe Testing Technology Co., Ltd. | 1,000.00 | Anhui Bozhou | Anhui Bozhou | Food testing | 100.00 | Investment establishment | |
| Anhui Jiudao Culture Media Co., Ltd. | 1,500.00 | Anhui Hefei | Anhui Hefei | Advertisement marketing | 100.00 | Investment establishment | |
| Anhui Gujinggong Liquor Original Vintage Theme Hotel Management Co., Ltd. | 1,000.00 | Anhui Bozhou | Anhui Bozhou | Hotel operation | 100.00 | Investment establishment | |
| Anhui Guqi Distillery Co., Ltd. | 12,000.00 | Anhui Bozhou | Anhui Bozhou | Manufacture | 60.00 | Investment establishment | |
| Yellow Crane Tower Distillery Co., Ltd. | 40,000.00 | Hubei Wuhan | Hubei Wuhan | Manufacture | 51.00 | Business combination not under common control | |
| Name of subsidiary | Registered capital (RMB’0,000) | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Yellow Crane Tower Distillery (Xianning) Co., Ltd. | 31,000.00 | Hubei Xianning | Hubei Xianning | Manufacture | 51.00 | Business combination not under common control | |
| Yellow Crane Tower Distillery (Suizhou) Co., Ltd. | 20,000.00 | Hubei Suizhou | Hubei Suizhou | Manufacture | 51.00 | Business combination not under common control | |
| Hubei Junlou Cultural Tourism Co., Ltd. | 300.00 | Hubei Wuhan | Hubei Wuhan | Advertising marketing | 51.00 | Business combination not under common control | |
| Hubei Xinjia Testing Technology Co., Ltd. | 418.00 | Hubei Xianning | Hubei Xianning | Food testing | 51.00 | Investment establishment | |
| Wuhan Tianlong Jindi Technology Development Co., Ltd | 3,000.00 | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Business combination not under common control | |
| Xianning Junhe Sales Co., Ltd | 1,000.00 | Hubei Xianning | Hubei Xianning | Commercial trade | 51.00 | Business combination not under common control | |
| Wuhan Junya Sales Co., Ltd | 100.00 | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Investment establishment | |
| Suizhou Junhe Commercial Co., Ltd. | 100.00 | Hubei Suizhou | Hubei Suizhou | Commercial trade | 51.00 | Investment establishment | |
| Huanggang Junya Trading Co., Ltd. | 2,000.00 | Huanggang Hubei | Huanggang Hubei | Commercial trade | 51.00 | Investment establishment | |
| Wuhan Gulou Junhe Trading Co., Ltd. | 2,000.00 | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Investment establishment | |
| Wuhan Gulou Juntai Trading Co., Ltd. | 2,000.00 | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Investment establishment | |
| Xiaogan Gulou Tiancheng Trading Co., Ltd. | 2,000.00 | Hubei Xiaogan | Hubei Xiaogan | Commercial trade | 51.00 | Investment establishment | |
| Ezhou Junya Trading Co., Ltd. | 2,000.00 | Hubei Ezhou | Hubei Ezhou | Commercial trade | 51.00 | Investment establishment | |
| Name of subsidiary | Registered capital (RMB’0,000) | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Anhui Mingguang Distillery Co., Ltd. | 6,883.00 | Anhui Chuzhou | Anhui Mingguang | Manufacture | 60.00 | Business combination not under common control | |
| Mingguang Tiancheng Ming Wine Sales Co., Ltd. | 80.00 | Anhui Chuzhou | Anhui Mingguang | Commercial trade | 60.00 | Business combination not under common control | |
| Anhui Jiuhao China Railway Construction Engineering Co., Ltd. | 1,100.00 | Anhui Bozhou | Anhui Bozhou | Construction | 52.00 | Investment establishment | |
| Anhui Zhenrui Construction Engineering Co., Ltd | 1,000.00 | Anhui Bozhou | Anhui Bozhou | Construction | 52.00 | Investment establishment | |
| Renhuai Maotai Town Zhencang Winery Industry Co., Ltd. | 125.00 | Renhuai Guizhou | Renhuai Guizhou | Manufacture | 60.00 | Business combination not under common control | |
| Guizhou Zhencang Winery Industry Sales Co., Ltd. | 100.00 | Renhuai Guizhou | Renhuai Guizhou | Commercial trade | 60.00 | Investment establishment | |
| Anhui Gujing Health Technology Co., Ltd. | 10,768.50 | Anhui Bozhou | Anhui Bozhou | Manufacture | 60.00 | Business combination not under common control | |
| Anhui Maiqi Biotechnology Co., Ltd. | 1,000.00 | Anhui Bozhou | Anhui Bozhou | Technology development | 60.00 | Business combination not under common control | |
| Anhui Yangshengtianxia Brand Operation Co., Ltd. | 500.00 | Anhui Hefei | Anhui Hefei | Advertising marketing | 60.00 | Business combination not under common control | |
| Hainan Yangshengtianxia Biotechnology Development Co., Ltd. | 500.00 | Hainan Lingshui | Hainan Lingshui | Commercial trade | 60.00 | Business combination not under common control | |
(2) Significant non-wholly owned subsidiaries
| Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to the non-controlling interests | Declaring dividends distributed to non-controlling interests | Balance of non-controlling interests at the period-end |
| Yellow Crane Tower Distillery Co., Ltd. | 49.00 | 61,418,274.64 | 0.00 | 663,701,504.77 |
(3) Main financial information of significant non-wholly owned subsidiaries
| Name | Ending balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Yellow Crane Tower Distillery Co., Ltd. | 1,293,513,412.79 | 1,163,082,223.55 | 2,456,595,636.34 | 859,761,989.10 | 242,340,780.37 | 1,102,102,769.47 |
(Continued)
| Name | Beginning balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Yellow Crane Tower Distillery Co., Ltd. | 1,269,187,978.69 | 1,167,449,470.70 | 2,436,637,449.39 | 939,863,270.35 | 267,657,052.44 | 1,207,520,322.79 |
(Continued)
| Name | Reporting Period | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Yellow Crane Tower Distillery Co., Ltd. | 1,070,259,791.38 | 125,343,417.64 | 125,375,740.27 | 168,005,118.50 |
(Continued)
| Name | Same period of last year | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Yellow Crane Tower Distillery Co., Ltd. | 865,646,272.06 | 100,981,091.52 | 100,884,320.74 | 19,674,621.86 |
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
| Item | Ending balance/Reporting Period | Beginning balance/Same period of 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 | 10,437,313.99 | 10,367,078.26 |
| The aggregate amount of below items calculated based on proportion of equity interests: | ||
| —Net profit/(loss) | 70,235.73 | 46,146.26 |
| —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
| Items presented in the statement of financial position | Beginning balance | Increase in government grants during the reporting period | Amount recognised in non-operating income during the reporting period | Amount recognised in other income during the reporting period | Other changes during the reporting period | Ending balance | Related to assets or income |
| Deferred income | 100,811,404.82 | 4,014,000.00 | 0.00 | 3,125,268.62 | 0.00 | 101,700,136.20 | Related to 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 |
| Other income | 22,796,192.89 | 21,893,660.44 |
| Finance costs | 0.00 | -1,392,125.00 |
10. RISKS RELATED TO FINANCIAL INSTRUMENTS
Risks related to the financial instruments of the Company arise from the recognition of variousfinancial assets and financial liabilities during its operation, including credit risk, liquidity risk andmarket risk.Management of the Company is responsible for determining risk management objectives and policiesrelated to financial instruments. Operational management is responsible for the daily riskmanagement through functional departments (e.g. credit management department of the Companyreviews each credit sale). Internal audit department is responsible for the daily supervision ofimplementation of the risk management policies and procedures, and report their findings to the auditcommittee in a timely manner.Overall risk management objective of the Company is to establish risk management policies tominimize 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 otherparty of the financial instrument fails to fulfill its obligation. The credit risk of the Company is relatedto cash and equivalent, notes receivable, accounts receivables, other receivables and long-termreceivables. 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 suchfinancial institutions as commercial bank, of which the Company thinks with higher reputation andfinancial position. For notes receivable, other receivables and long-term receivables, the Companyestablishes related policies to control their credit risk exposure. The Company assesses creditcapability 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 marketstatus, etc.). The Company monitors its customers’ credit record periodically, and for those customerswith poor credit record, the Company will take measures such as written call, shortening or cancellingtheir 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 instrumentshas increased significantly since initial recognition. When the Company determines whether the creditrisk has increased significantly since initial recognition, it considers based on reasonable andsupportable information that is available without undue cost or effort, including quantitative and
qualitative 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 thefinancial instrument through comparing the risk of a default occurring on the financial instrument asat the reporting date with the risk of a default occurring on the financial instrument as at the date ofinitial recognition based on individual financial instrument or a group of financial instruments withthe similar credit risk characteristics.When met one or more of the following quantitative or qualitative criteria, the Company determinesthat the credit risk on financial instruments has increased significantly: the quantitative criteriaapplied mainly because as at the reporting date, the increase in the probability of default occurringover the lifetime is more than a certain percentage since the initial recognition; the qualitative criteriaapplied if the debtor has adverse changes in business and economic conditions, early warning list ofcustomer, and etc.
(2) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent withinternal credit risk management objectives of relevant financial instruments in considering bothquantitative and qualitative indicators.When the Company assesses whether the debtor has incurred the credit impairment, the main factorsconsidered are as following: Significant financial difficulty of the issuer or the borrower; a breach ofcontract, e.g., default or past-due event; a lender having granted a concession to the borrower foreconomic or contractual reasons relating to the borrower’s financial difficulty that the lender wouldnot 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 financialdifficulties of the issuer or the borrower; the purchase or origination of a financial asset at a deepdiscount 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 creditimpairment has occurred. The key parameters for expected credit loss measurement include defaultprobability, default loss rate and default risk exposure. The Company sets up the model of defaultprobability, default loss rate and default risk exposure in considering the quantitative analysis ofhistorical statistics (such as counterparties’ ratings, guarantee method and collateral type, repaymentmethod, etc.) and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repaymentobligation over the next 12 months or the entire remaining lifetime;
Default loss rate refers to the Company's expectation of the loss degree of default risk exposure. Thedefault loss rate varies depending on the type of counterparty, recourse method and priority, and thecollateral. The default loss rate is the percentage of the risk exposure loss when default has occurredand 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 hasoccurred in the next 12 months or the entire lifetime. Both the assessment of significant increase incredit risk of forward-looking information and the calculation of expected credit losses involveforward-looking information. Through historical data analysis, the Company identifies key economicindicators 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 assetin the statement of financial position. The Company does not provide any other guarantees that mayexpose the Company to credit risk.For the accounts receivable of the Company, the amount of top 5 clients represents 43.24% of thetotal; 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 deliveringcash or other financial assets. The Company is responsible for the capital management of all of itssubsidiaries, including short-term investment of cash surplus and dealing with forecasted cashdemand 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 tomaintain 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 financialinstruments will fluctuate due to changes in market prices. Market risk mainly includes foreignexchange risk and interest rate risk.
(1) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilitiesdenominated in currency other than the Company’s functional currency. The main business of theCompany is located in Chinese Mainland, and the main business is settled in RMB. There is only asmall amount of export business, which has a small proportion of income scale and impact, and haslittle 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
by the change of market interest rate. Interest risk mainly arises from bank loans. As of the statementdate, 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 tothe risk brought by the change of security prices. The Company controls this risk to the acceptablelevel 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 thehierarchy 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 directlyor 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
| Item | Fair value on 30 June 2024 | |||
| 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 income | 1,650,145,754.42 | 1,650,145,754.42 | ||
| (1) Accounts receivable financing | 1,581,346,121.50 | 1,581,346,121.50 | ||
| (2) Investments in other equity instrument | 68,799,632.92 | 68,799,632.92 | ||
| Total assets measured at fair value on a recurring basis | 1,650,145,754.42 | 1,650,145,754.42 | ||
The fair value of financial instruments traded in an active market is based on quoted market prices atthe reporting date. The fair value of financial instruments not traded in an active market is determinedby using valuation techniques. Specific valuation techniques used to value the above financial
instruments include discounted cash flow and market approach to comparable company model. Inputsin 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 ValueThe financial assets and financial liabilities of the Company measured at amortised cost mainlyinclude: cash and cash equivalents, notes receivable, accounts receivable, other receivables, debtinvestments, short-term borrowings, notes payable, accounts payable, other payables, long-termborrowings maturing within one year, long-term payables, long-term borrowings and bonds payable.
12. RELATED PARTIES AND RELATED PARTY TRANSACTIONSRecognition of related parties: The Company has control or joint control of, or exercise significantinfluence over another party; or the Company and another party are controlled or jointly controlledby the same third party.
12.1 General Information of the Parent Company
| Name of the parent | Registered address | Nature of the business | Registered capital | Percentage of equity interests in the Company (%) | Voting rights in the Company (%) |
| Anhui Gujing Group Co., Ltd. | Anhui Bozhou | Commercial trade | 1,000,000,000.00 | 51.34 | 51.34 |
The Company’s ultimate controller is the State-owned Asset Management Commission of the People's Governmentof 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 Development) | Controlled by ZHANG Guiping, the non-executive director of the Company |
| Anhui Ruijing Shanglv (Group) Co., Ltd. (RJSL Group) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday Inn (RJSL Holiday Inn) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Gujing Huishenglou Catering Co., Ltd.(GJ Huishenglou Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Haochidian Catering Co., Ltd. (Haochidian Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruijing Catering Co., Ltd. (Ruijing Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
| Shanghai Beihai Hotel Co., Ltd. (Beihai Hotel) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing Hotel Development Co., Ltd.(GJ Hotel Development) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Huixin Financial Investment Group Co., Ltd.(Huixin Financial Investment) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Anxin Small Loan Co., Ltd. (Anxin Small Loan) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Hengxin Pawnshop Co., Ltd. (Hengxin Pawnshop) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruixin Pawnshop Co., Ltd. (Ruixin Pawnshop) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Zhongxin Financial Leasing Co., Ltd.(Zhongxin Financial Leasing) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Youxin Financing Guarantee Co, Ltd. (Youxin Guarantee) | Controlled by the Company's controlling shareholder or ultimate controller |
| Hefei Longxin Corporate Management Advisory Co., Ltd. (Longxin Advisory) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Equity Investment) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Lejiu Jiayuan Travel Management Co., Ltd. (Lejiu Jiayuan) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Shenglong Trading Co., Ltd. (Shenglong Trading) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing Health Industry Co., Ltd. (Health Industry) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Hotel Co., Ltd. (Bozhou Guest House) | Controlled by the Company's controlling shareholder or ultimate controller |
| Dongfang Ruijing Enterprise Investment Co., Ltd.(Dongfang Ruijing) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing International Development Co., Ltd.(GJ International) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Jiuan Construction Management Advisory Co., Ltd.(Jiuan Advisory) | Controlled by the Company's controlling shareholder or ultimate controller |
| Dazhongyuan Jiugu Cultural Tourism Development Co., Ltd. (Dazhongyuan Jiugu Cultural) | Controlled by the Company's controlling 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:
| Related parties | Nature of the transaction(s) | Reporting Period | Same period of last year |
| Bozhou Hotel Co., Ltd. | Receiving catering and accommodation | 3,528,662.25 | 4,325,048.30 |
| Bozhou Gujing Huishenglou Catering Co., Ltd. | Receiving catering and accommodation | 2,692,164.50 | 3,553,459.37 |
| Anhui Gujing Hotel Development Co., Ltd. | Receiving catering and accommodation | 515,749.97 | 728,018.80 |
| Anhui Gujing Hotel Development Co., Ltd. | Purchases of materials | 193,308.41 | 0.00 |
| Anhui Vista Business Travel (Group) Co., Ltd. | Purchases of materials | 0.00 | 45,663.72 |
| Anhui Vista Business Travel (Group) Co., Ltd. | Receiving catering and accommodation | 0.00 | 10,358.79 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Receiving catering and accommodation | 364,357.70 | 22,627.37 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Purchases of materials | 143,785.38 | 233,711.85 |
| Anhui Youxin Financing Guarantee Co., Ltd. | Receiving services | 57,289.43 | 0.00 |
| Anhui Jiuan Engineering Management Consulting Co., Ltd. | Advisory and assurance | 7,313,584.49 | 3,098,429.54 |
| Total | -- | 14,808,902.13 | 12,017,317.74 |
Sales of goods and rendering of services:
| Related parties | Nature of the transaction(s) | Reporting Period | Same period of last year |
| Anhui Shenglong Commercial Co., Ltd. | Sales of baijiu | 220,548.66 | 1,011,223.02 |
| Anhui Gujing Hotel Development Co., Ltd. | Provision of utilities | 76,598.19 | 53,250.00 |
| Anhui Gujing Group Co., Ltd. | Provision of catering and accommodation | 152,324.02 | 75,237.68 |
| Anhui Gujing Group Co., Ltd. | Sales of small materials | 70,556.36 | 45,141.22 |
| Anhui Gujing Hotel Development Co., Ltd. | Sales of baijiu | 492,217.67 | 18,141.59 |
| Anhui Vista Business Travel (Group) Co., Ltd. | Provision of catering and accommodation | 2,569.40 | 3,083.75 |
| Anhui Vista Business Travel (Group) Co., Ltd. | Sales of baijiu | 13,539.83 | 0.00 |
| Bozhou Hotel Co., Ltd. | Sales of small materials | 75,134.10 | 44,233.90 |
| Bozhou Hotel Co., Ltd. | Sales of baijiu | 179,690.27 | 0.00 |
| Bozhou Hotel Co., Ltd. | Provision of labor services | 707.55 | 0.00 |
| Anhui Huixin Finance Investment Group Co., Ltd | Sales of baijiu | 11,867.25 | 0.00 |
| Anhui Huixin Finance Investment Group Co., Ltd | Provision of catering and accommodation | 2,243.40 | 0.00 |
| Bozhou Gujing Huishenglou Catering Co., Ltd. | Sales of small materials | 10,991.16 | 13,238.94 |
| Bozhou Gujing Huishenglou Catering Co., Ltd. | Sales of baijiu | 38,150.44 | 0.00 |
| Bozhou Anxin Micro Finance Co., Ltd. | Sales of baijiu | 17,522.12 | 0.00 |
| Anhui Zhongxin Finance Leasing Co. Ltd. | Sales of baijiu | 3,185.84 | 0.00 |
| Anhui Hengxin Pawn Co. Ltd. | Sales of baijiu | 6,371.69 | 0.00 |
| Anhui Jiuan Engineering Management Consulting Co., Ltd. | Sales of baijiu | 28,672.56 | 60,318.59 |
| Shanghai Beihai Restaurant Co., Ltd. | Sales of baijiu | 26,442.48 | 0.00 |
| Anhui Haochidian Catering Co., Ltd. | Sales of baijiu | 8,522.12 | 0.00 |
| Anhui Haochidian Catering Co., Ltd. | Provision of catering and accommodation | 72,376.00 | 0.00 |
| Anhui Haochidian Catering Co., Ltd. | Sales of small materials | 21,235.36 | 0.00 |
| Related parties | Nature of the transaction(s) | Reporting Period | Same period of last year |
| Anhui Shenglong Commercial Co., Ltd. | Provision of catering and accommodation | 7,675.83 | 6,539.00 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Provision of utilities | 0.00 | 1,346.46 |
| Anhui Ruixin Pawn Co. Ltd. | Sales of baijiu | 3,185.84 | 0.00 |
| Anhui Youxin Financing Guarantee Co., Ltd. | Sales of baijiu | 3,185.84 | 0.00 |
| Anhui Jiuan Engineering Management Consulting Co., Ltd. | Provision of catering and accommodation | 800.00 | 3,220.00 |
| Bozhou Anxin Micro Finance Co., Ltd. | Sales of small materials | 0.00 | 9,911.50 |
| Anhui Shenglong Commercial Co., Ltd. | Sales of small materials | 203.54 | 1,796.46 |
| Hefei Longxin Business Management Consulting Co., Ltd | Sales of baijiu | 796.46 | 0.00 |
| Anhui Jiuan Engineering Management Consulting Co., Ltd. | Sales of small materials | 0.00 | 9,376.56 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Sales of small materials | 8,853.98 | 14,658.28 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Provision of catering and accommodation | 0.00 | 1,276.02 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Sales of baijiu | 128,123.90 | 0.00 |
| Anhui Vista Business Travel (Group) Co., Ltd. | Sales of small materials | 2,946.90 | 4,605.30 |
| Dongfang Vista Business Investment Development Co., Ltd. | Provision of catering and accommodation | 34,061.79 | 0.00 |
| Anhui Gujing Hotel Development Co., Ltd. | Provision of catering and accommodation | 94,339.62 | 0.00 |
| Anhui Gujing Hotel Development Co., Ltd. | Sales of small materials | 33,747.07 | 17,544.24 |
| Total | -- | 1,849,387.24 | 1,394,142.51 |
(2) Related-party leases
The Company as lessor:
| Name of lessee | Category of leased assets | The lease income confirmed in the Reporting Period | The lease income confirmed in the same period of last year |
| Anhui Gujing Hotel Development Co., Ltd. | Houses and buildings | 546,897.62 | 261,183.34 |
| Total | -- | 546,897.62 | 261,183.34 |
The Company as lessee:
| Name of lessor | Category of leased assets | Reporting Period | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| Anhui Gujing Group Co., Ltd. | Houses and buildings | 310,396.56 | 0.00 | 325,916.39 | 0.00 | 0.00 |
| Nanjing Suning Real Estate Development Co., Ltd. | Houses and buildings | 0.00 | 0.00 | 1,157,625.00 | 252,549.47 | 0.00 |
| Dazhongyuan Jiugu Cultural Tourism Development Co., Ltd. | Houses and buildings | 0.00 | 0.00 | 0.00 | 0.00 | 31,179,563.79 |
| Total | 310,396.56 | 0.00 | 1,483,541.39 | 252,549.47 | 31,179,563.79 | |
(Continued)
| Name of lessor | Category of leased assets | The same period of last year | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| Anhui Gujing Group Co., Ltd. | Houses and buildings | 534,782.12 | 470,848.16 | 0.00 | 0.00 | |
| Nanjing Suning Real Estate Development Co., Ltd. | Houses and buildings | 0.00 | 1,102,500.00 | 291,028.22 | 0.00 | |
| Total | -- | 534,782.12 | - | 1,573,348.16 | 291,028.22 | 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 | 15,988.44 |
| Item | Related party | Ending balance | Beginning balance |
| Contract liabilities | Bozhou Gujing Huishenglou Catering Co., Ltd. | 4,345.13 | 5,070.80 |
| Contract liabilities | Anhui Vista Business Travel (Group) Co., Ltd. | 3,380,660.06 | 221.12 |
| Contract liabilities | Anhui Shenglong Commercial Co., Ltd. | 1,115.04 | 0.00 |
| Contract liabilities | Anhui Gujing Hotel Development Co., Ltd. | 36,021.24 | 0.00 |
| Accounts payable | Anhui Jiuan Engineering Management Consulting Co., Ltd. | 254,732.49 | 4,711,062.24 |
| Accounts payable | Anhui Gujing Hotel Development Co., Ltd. | 0.00 | 6,500.00 |
| Accounts payable | Bozhou Hotel Co., Ltd. | 101,358.00 | 29,768.32 |
| Accounts payable | Anhui Vista Business Travel (Group) Co., Ltd. | 246,132.00 | 0.00 |
| Other payables | Anhui Vista Business Travel (Group) Co., Ltd. | 305,533.60 | 0.00 |
| Other payables | Anhui Gujing Hotel Development Co., Ltd. | 100,000.00 | 50,000.00 |
| Other payables | Dazhongyuan Jiugu Cultural Tourism Development Co., Ltd. | 6,999,238.82 | 0.00 |
| Other payables | Anhui Jiuan Engineering Management Consulting Co., Ltd. | 29,877.00 | 18,000.00 |
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 InformationThe 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 informationreport based on the operating segments.
16. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THE PARENTCOMPANY
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 | 452,421,557.21 | 384,878,020.29 |
| Total | 452,421,557.21 | 384,878,020.29 |
(2) Other receivables
①Disclosure by aging
| Aging | Ending balance | Beginning balance |
| Within one year | 451,850,947.68 | 384,298,400.37 |
| Of which:1-6 months | 450,070,156.43 | 384,283,297.37 |
| 7-12 months | 1,780,791.25 | 15,103.00 |
| 1-2 years | 25,649.00 | 24,380.80 |
| 2-3 years | 1,303,136.00 | 1,303,136.00 |
| Over 3 years | 29,741,318.31 | 29,741,318.31 |
| Subtotal | 482,921,050.99 | 415,367,235.48 |
| Less: Bad debt provision | 30,499,493.78 | 30,489,215.19 |
| Total | 452,421,557.21 | 384,878,020.29 |
②Disclosure by nature
| Nature | Ending balance | Beginning balance |
| Related parties within the scope of consolidation | 448,569,855.28 | 374,969,732.31 |
| Security investment | 28,635,660.22 | 28,635,660.22 |
| Security deposit and guarantee | 3,713,589.17 | 3,693,589.17 |
| Nature | Ending balance | Beginning balance |
| Rent, water, electricity and gas | 918,155.19 | 1,135,726.76 |
| Other | 1,083,791.13 | 6,932,527.02 |
| Subtotal | 482,921,050.99 | 415,367,235.48 |
| Less: Bad debt provision | 30,499,493.78 | 30,489,215.19 |
| Total | 452,421,557.21 | 384,878,020.29 |
③Disclosure 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 | 454,285,390.77 | 1,863,833.56 | 452,421,557.21 |
| Stage 2 | |||
| Stage 3 | 28,635,660.22 | 28,635,660.22 | 0.00 |
| Total | 482,921,050.99 | 30,499,493.78 | 452,421,557.21 |
A1. As of 30 June 2024, bad debt provision at stage 1:
| Category | Carrying amount | 12-month expected credit losses rate (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | ||||
| Bad debt provision withdrawn by group- | 454,285,390.77 | 0.41 | 1,863,833.56 | 452,421,557.21 |
| Of which: Group 1 | 448,569,855.28 | 0.00 | 0.00 | 448,569,855.28 |
| Group 2 | 5,715,535.49 | 32.61 | 1,863,833.56 | 3,851,701.93 |
| Total | 454,285,390.77 | 0.41 | 1,863,833.56 | 452,421,557.21 |
On 30 June 2024, other receivables with bad debt provision withdrawn by group 2
| Aging | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 3,281,092.40 | 104,042.57 | 3.17 |
| Of which:1-6 months | 1,500,301.15 | 15,003.01 | 1.00 |
| 7-12 months | 1,780,791.25 | 89,039.56 | 5.00 |
| 1-2 years | 25,649.00 | 2,564.90 | 10.00 |
| 2-3 years | 1,303,136.00 | 651,568.00 | 50.00 |
| Aging | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Over 3 years | 1,105,658.09 | 1,105,658.09 | 100.00 |
| Total | 5,715,535.49 | 1,863,833.56 | 32.61 |
A2. As of 30 June 2024, bad debt provision at stage 3:
| Category | Carrying amount | Expected credit loss rate for the entire duration (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
| Bad debt provision withdrawn by group | ||||
| Of which: Group 1 | ||||
| Group 2 | ||||
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
On 30 June 2024, other receivables with bad debt provision withdrawn separately:
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | Withdrawal reason | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | The enterprise has gone bankrupt and liquidated |
| Total | 28,635,660.22 | 28,635,660.22 | 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 | 386,731,575.26 | 1,853,554.97 | 384,878,020.29 |
| Stage 2 | |||
| Stage 3 | 28,635,660.22 | 28,635,660.22 | 0.00 |
| Total | 415,367,235.48 | 30,489,215.19 | 384,878,020.29 |
B1. On 1 January 2024, bad debt provision at stage 1:
| Category | Carrying amount | 12-month expected credit losses rate (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn |
| Category | Carrying amount | 12-month expected credit losses rate (%) | Bad debt provision | Carrying value |
| separately | ||||
| Bad debt provision withdrawn by group | 386,731,575.26 | 0.48 | 1,853,554.97 | 384,878,020.29 |
| Of which: Group 1 | 374,969,732.31 | 0.00 | 0.00 | 374,969,732.31 |
| Group 2 | 11,761,842.95 | 15.76 | 1,853,554.97 | 9,908,287.98 |
| Total | 386,731,575.26 | 0.48 | 1,853,554.97 | 384,878,020.29 |
On 1 January 2024, other receivables with bad debt provision withdrawn by group 2
| Aging | Beginning balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | |
| Within one year | 9,328,668.06 | 93,890.80 | 1.01 |
| Of which: 1-6 months | 9,313,565.06 | 93,135.65 | 1.00 |
| 7-12 months | 15,103.00 | 755.15 | 5.00 |
| 1-2 years | 24,380.80 | 2,438.08 | 10.00 |
| 2-3 years | 1,303,136.00 | 651,568.00 | 50.00 |
| Over 3 years | 1,105,658.09 | 1,105,658.09 | 100.00 |
| Total | 11,761,842.95 | 1,853,554.97 | 15.76 |
B2. As of 1 January 2024, bad debt provision at stage 3:
| Category | Carrying amount | Expected credit loss rate for the entire duration (%) | Bad debt provision | Carrying value |
| Bad debt provision withdrawn separately | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
| Bad debt provision withdrawn by group | ||||
| Of which: Group 1 | ||||
| Group 2 | ||||
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | 0.00 |
On 1 January 2024, other receivables with bad debt provision withdrawn separately:
| Name | Beginning balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion (%) | Withdrawal reason | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | The enterprise has gone bankrupt and liquidated |
| Total | 28,635,660.22 | 28,635,660.22 | 100.00 | -- |
④Changes of bad debt provision during the Reporting Period
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | ||
| Withdrawal | Reversal or recovery | Elimination or Write-off | |||
| Bad debt provision withdrawn separately | 28,635,660.22 | 0.00 | 28,635,660.22 | ||
| Bad debt provision withdrawn by group | 1,853,554.97 | 10,278.59 | 1,863,833.56 | ||
| Total | 30,489,215.19 | 10,278.59 | 30,499,493.78 | ||
⑤ On 30 June 2024, top five ending balance by entity
| No. | Nature | Ending balance | Aging | Proportion of the balance to the total other receivables (%) | Bad debt provision |
| No. 1 | Current accounts within the scope of consolidation | 230,000,000.00 | Within 6 months | 47.63 | |
| No. 2 | Current accounts within the scope of consolidation | 98,000,000.00 | Within 6 months | 20.29 | |
| No. 3 | Current accounts within the scope of consolidation | 78,207,352.12 | Within 6 months | 16.19 | |
| No. 4 | Current accounts within the scope of consolidation | 41,179,561.36 | Within 6 months | 8.53 | |
| No. 5 | Securities Investment | 28,635,660.22 | Over 3 years | 5.93 | 28,635,660.22 |
| Total | -- | 476,022,573.70 | 98.57 | 28,635,660.22 |
16.3 Long-term Equity Investments
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
| Investment in subsidiaries | 1,619,079,903.43 | 1,619,079,903.43 | 1,598,079,903.43 | 1,598,079,903.43 | ||
| Investment in associated enterprises | 4,923,640.04 | 4,923,640.04 | 4,855,540.61 | 4,855,540.61 | ||
| Total | 1,624,003,543.47 | 1,624,003,543.47 | 1,602,935,444.04 | 1,602,935,444.04 | ||
(1) Investments in subsidiaries
| Investees | Beginning balance | Increase during the Reporting Period | Decrease during the Reporting Period | Ending balance | Impairment provision during the Reporting Period | Provision for impairment at 30 June 2024 |
| Bozhou Gujing Sales Co., Ltd. | 68,949,286.89 | 68,949,286.89 | ||||
| Anhui Longrui Glass Co., Ltd. | 85,267,453.06 | 85,267,453.06 | ||||
| Shanghai Gujing Jinhao Hotel Management Co., Ltd. | 49,906,854.63 | 49,906,854.63 | ||||
| Bozhou Gujing Hotel Co., Ltd. | 648,646.80 | 648,646.80 | ||||
| Anhui Ruisiweier Technology Co., Ltd. | 40,000,000.00 | 40,000,000.00 | ||||
| Anhui Yuanqing Environmental Protection Co., Ltd. | 16,000,000.00 | 16,000,000.00 | ||||
| Anhui Gujing Yunshang E-commerce Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Yellow Crane Tower Distillery Co., Ltd. | 816,000,000.00 | 816,000,000.00 |
| Investees | Beginning balance | Increase during the Reporting Period | Decrease during the Reporting Period | Ending balance | Impairment provision during the Reporting Period | Provision for impairment at 30 June 2024 |
| Anhui Jinyunlai Cultural Media Co., Ltd. | 15,000,000.00 | 15,000,000.00 | ||||
| Anhui RunanXinke Testing Technology Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Anhui Jiuan Mechanical Electrical Equipment Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Anhui Mingguang Distillery Co., Ltd. | 200,200,000.00 | 200,200,000.00 | ||||
| Renhuai Maotai Town Zhencang Winery Industry Co., Ltd. | 224,723,400.00 | 224,723,400.00 | ||||
| Anhui Jiuhao China Railway Construction Engineering Co., Ltd. | 5,720,000.00 | 5,720,000.00 | ||||
| Anhui Gujing Health Technology Co., Ltd. | 34,664,262.05 | 34,664,262.05 | ||||
| Anhui Gujinggong Liquor Original Vintage Theme Hotel Management Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Anhui Guqi Distillery Co., Ltd. | 6,000,000.00 | 21,000,000.00 | 27,000,000.00 | |||
| Total | 1,598,079,903.43 | 21,000,000.00 | 1,619,079,903.43 |
(2) Investment in associated enterprises
| Investee | Beginning balance | Increase/decrease | ||||
| Additional investment | Reduced investment | Investment income recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | ||
| I. Joint ventures | ||||||
| Anhui Xunfei Jiuzhi | 4,855,540.61 | 68,099.43 | ||||
| Investee | Beginning balance | Increase/decrease | ||||
| Additional investment | Reduced investment | Investment income recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | ||
| Technology Co., Ltd. | ||||||
| Total | 4,855,540.61 | 68,099.43 | ||||
(Continued)
| Investee | Increase/decrease | Ending balance | Ending balance of depreciation reserve | ||
| Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | |||
| I. Joint ventures | |||||
| Anhui Xunfei Jiuzhi Technology Co., Ltd. | 4,923,640.04 | ||||
| Total | 4,923,640.04 | ||||
16.4 Operating Revenue and Cost of Sales
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 7,313,486,177.50 | 2,404,603,519.54 | 5,622,237,508.48 | 1,993,854,656.60 |
| Other operations | 70,531,313.91 | 40,994,559.06 | 66,739,498.50 | 39,198,474.43 |
| Total | 7,384,017,491.41 | 2,445,598,078.60 | 5,688,977,006.98 | 2,033,053,131.03 |
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 method | 0.00 | 9,945,959.41 |
| Investment income from long-term equity investments under equity method | 68,099.43 | 43,101.60 |
| Gains on disposal of financial assets at fair value through profit or loss | 1,330,123.81 | -1,293,063.11 |
| Gains on disposal of financial assets at fair value through other comprehensive income | -27,719,016.19 | -27,107,452.17 |
| Other investment income | 12,646.55 | 9,669.81 |
| Item | Reporting Period | Same period of last year |
| Total | -26,308,146.40 | -18,401,784.46 |
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 assets | -1,989,838.49 | |
| 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 defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 23,621,646.20 | |
| 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 liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | 1,401,435.40 | |
| Depreciation reserves returns of receivables with separate depreciation test | 0.00 | |
| Non-operating income and expense other than the above | 27,610,952.13 | |
| Less: Income tax effects | 12,342,219.62 | |
| Non-controlling interests effects (net of tax) | 6,051,287.14 | |
| Total | 32,250,688.48 | -- |
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 ExplanatoryAnnouncement 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
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the | 15.75 | 6.76 | 6.76 |
| Company | |||
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit and loss | 15.61 | 6.70 | 6.70 |
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 andChinese Accounting Standards
□ Applicable ? Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and ChineseAccounting Standards
□ Applicable ? Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas AccountingStandards; 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 StatedNone