Anhui Gujing Distillery Company Limited
Annual Report 2019
April 2020
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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The Board of Directors (or the “Board”), the Supervisory Committee as well as thedirectors, supervisors and senior management of Anhui Gujing Distillery CompanyLimited (hereinafter referred to as the “Company”) hereby guarantee the factuality,accuracy and completeness of the contents of this Report and its summary, and shallbe jointly and severally liable for any misrepresentations, misleading statements ormaterial omissions therein.Liang Jinhui, the legal representative, Ye Changqing, the Chief Accountant, and ZhuJiafeng, the head of the financial department (equivalent to financial manager)hereby guarantee that the financial statements carried in this Report are factual,accurate and complete.All the Company’s directors have attended the Board meeting for the review of thisReport and its summary.Any plans for the future and other forward-looking statements mentioned in thisReport shall NOT be considered as absolute promises of the Company to investors.Investors, among others, shall be sufficiently aware of the risk and shall differentiatebetween plans/forecasts and promises. Again, investors are kindly reminded to payattention to possible investment risks.The Board has approved a final dividend plan as follows: based on the Company’stotal shares on 31 December 2019, a cash dividend of RMB15.00 (tax inclusive) per 10shares is to be distributed to the shareholders, with no bonus issue from either profitor capital reserves.This Report and its summary have been prepared in both Chinese and English.Should there be any discrepancies or misunderstandings between the two versions,the Chinese versions shall prevail.
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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Part I Important Notes, Table of Contents and Definitions 2Part II Corporate Information and Key Financial Information 5Part III Business Summary 10Part IV Management Discussion and Analysis 11Part V Significant Events 28Part VI Share Changes and Shareholder Information 42Part VII Preferred Shares 48Part VIII Convertible bonds 49Part IX Directors, Supervisors, Senior Management and Staff 50Part X Corporate Governance 58Part XI Corporate Bonds 65Part XII Financial Statements 66Part XIII Documents Available for Reference 253
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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| Term | Definition |
| The “Company”, “ Gu Jing” or “we” | Anhui Gujing Distillery Company Limited inclusive of its consolidated subsidiaries, except where the context otherwise requires |
| The Company as the parent | Anhui Gujing Distillery Company Limited exclusive of subsidiaries, except where the context otherwise requires |
| Gujing Group | Anhui Gujing Group Co., Ltd. |
| Yellow Crane Tower | Yellow Crane Tower Distillery Co., Ltd. |
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | Gujing Distillery, Gujing Distillery-B |
| Stock code | 000596, 200596 |
| Stock exchange for stock listing | Shenzhen Stock Exchange |
| Company name in Chinese | 安徽古井贡酒股份有限公司 |
| Abbr. | 古井 |
| Company name in English (if any) | ANHUI GUJING DISTILLERY COMPANY LIMITED |
| Abbr. (if any) | GU JING |
| Legal representative | Liang Jinhui |
| Registered address | Gujing Town, Bozhou City, Anhui Province, P.R.China |
| Zip code | 236820 |
| Office address | Gujing Town, Bozhou City, Anhui Province, P.R.China |
| Zip code | 236820 |
| Company website | http://www.gujing.com |
| Email address | gjzqb@gujing.com.cn |
| Board Secretary | Securities Representative | |
| Name | Ye Changqing | Mei Jia |
| Address | Gujing Town, Bozhou City, Anhui Province, P.R.China | Gujing Town, Bozhou City, Anhui Province, P.R.China |
| Tel. | （0558）5712231 | （0558）5710057 |
| Fax | （0558）5710099 | （0558）5710099 |
| Email address | gjzqb@gujing.com.cn | gjzqb@gujing.com.cn |
| Newspapers designated by the Company for information disclosure | China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK) |
| Website designated by CSRC for publication of this Report | http://www.cninfo.com.cn |
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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| Place where this Report is lodged | The Board Secretary’s Office |
| Unified social credit code | 913400001519400083 |
| Change to principal activity of the Company since going public (if any) | No change |
| Every change of controlling shareholder since incorporation (if any) | No change |
| Name | RSM China |
| Office address | Suite 901-22 to 901-26, Wai Jing Mao Building (Tower 1), No. 22 Fuchengmen Wai Street, Xicheng District, Beijing, China |
| Accountants writing signatures | Fu jinyong, Bao guangrong, Jiang jieyu |
| 2019 | 2018 | 2019-over-2018 change (%) | 2017 | |
| Operating revenue (RMB) | 10,416,961,584.23 | 8,686,140,336.89 | 19.93% | 6,968,325,048.55 |
| Net profit attributable to the listed company’s shareholders (RMB) | 2,097,527,739.86 | 1,695,231,643.05 | 23.73% | 1,148,740,644.93 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 1,891,097,157.37 | 1,638,204,454.34 | 15.44% | 1,069,457,368.70 |
| Net cash generated from/used in operating activities (RMB) | 192,447,063.45 | 1,440,881,285.95 | -86.64% | 930,914,712.78 |
| Basic earnings per share | 4.17 | 3.37 | 23.74% | 2.28 |
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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| (RMB/share) | ||||
| Diluted earnings per share (RMB/share) | 4.17 | 3.37 | 23.74% | 2.28 |
| Weighted average return on equity (%) | 25.55% | 24.03% | 1.52% | 19.09% |
| 31 December 2019 | 31 December 2018 | Change of 31 December 2019 over 31 December 2018 (%) | 31 December 2017 | |
| Total assets (RMB) | 13,871,297,363.16 | 12,509,928,449.72 | 10.88% | 10,152,862,119.05 |
| Equity attributable to the listed company’s shareholders (RMB) | 8,944,111,764.44 | 7,601,984,024.58 | 17.65% | 6,459,078,378.38 |
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 3,668,502,474.92 | 2,319,610,524.17 | 2,214,767,350.88 | 2,214,081,234.26 |
| Net profit attributable to the listed company’s shareholders | 783,389,904.73 | 464,926,409.28 | 493,294,846.62 | 355,916,579.23 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 749,094,364.21 | 416,776,614.89 | 444,504,344.99 | 280,721,833.28 |
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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| Net cash generated from/used in operating activities | 1,010,701,440.91 | 31,032,307.92 | 1,199,637,755.93 | -2,048,924,441.31 |
| Item | 2019 | 2018 | 2017 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -7,615,741.56 | -10,060,019.55 | -10,659,063.45 | |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 98,293,177.32 | 36,041,674.45 | 34,257,968.39 | |
| Gain or loss on fair-value changes in trading financial assets and liabilities & investment income from disposal of trading financial assets and liabilities and available-for-sale financial assets (exclusive of effective portion of hedges that arise in the Company’s ordinary course of business) | 144,234,319.52 | 18,653,228.80 | 54,544,637.44 | |
| Reversed portion of impairment allowance for accounts receivable which are tested individually for impairment | 0.00 | 0.00 | 491,989.18 | |
| Non-operating income and expense other than the above | 57,215,092.96 | 32,375,890.89 | 27,140,455.30 | |
| Less: Income tax effects | 71,418,613.38 | 18,150,068.72 | 25,366,619.70 | |
| Non-controlling interests effects (net of tax) | 14,277,652.37 | 1,833,517.16 | 1,126,090.93 | |
| Total | 206,430,582.49 | 57,027,188.71 | 79,283,276.23 | -- |
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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No such cases for the Reporting Period.
Gujinggong Liquor Aged Original Liquor Annual Report 2019
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Part III Business SummaryI Principal Activity of the Company in the Reporting PeriodIs the Company subject to any industry-specific disclosure requirements?No.The Company primarily produces and markets liquor and spirits.As one of China’s traditional top eight liquor brands, the Company is the first listed liquor and spirits company with both A and Bstocks. It is located in Bozhou City, Anhui Province in China, the hometown of historic figures Cao Cao and Hua Tuo, as well as oneof the world’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period.As the main product of the Company, the Gujing spirit originated as a “JiuYunChun Spirit”, together with its making secrets, beingpresented as a hometown specialty by Cao Cao, a famous warlord in China’s history, to Emperor Han Xiandi (name: Liu Xie) in A.D.196, and was continually presented to the royal house since then. With crystalline liquid, rich aroma, a fine flavor and a lingeringaftertaste, the Gujing spirit has helped the Company win four national distilled spirit golden awards, a golden award at the 13
thSIALParis, the title of China’s “Geographical Indication Product”, the recognition as a “Key Cultural Relics Site under the StateProtection”, the recognition with a “National Intangible Cultural Heritage Protection Project”, a Quality Award from the Anhuiprovincial government, a title of “National Quality Benchmark”, among other honors.In recent years, China’s top liquor companies have basically finished adjusting their teams, strategies, products, etc., and areexperiencing a continuous, strong recovery relying on their superior brand influence and product quality. The big picture for theliquor industry has taken shape. Regional small and medium liquor producers are in face of a reshuffle, while regionally famousliquor brands are busy dealing with competition from both larger and smaller fellow companies. As such, the liquor industry hasentered a new normal.II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Not applicable.
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
No material changes occurred to the Company’s core competitiveness in the Reporting Period.
Part IV Management Discussion and AnalysisI Overview
In 2019, under the guidance of the spirit of the 19
thNational Congress of the Communist Party of China and President Xi Jinping’sthought on socialism with Chinese characteristics for a new era, the Company further implemented various guidelines and policies.Upholding the values of “Be Honest, Offer Quality Spirits, Be Stronger and Be Helpful to the Society”, the Company beefed up theimplementation of the new strategy of “Digitalization, Internationalization, and Stricter Compliance with Law and Regulations”, aswell as promoted the “Nie Guangrong Spirit”. It further improved corporate management, motivated employees, acceleratedtransformation and upgrading, further implemented the “Distilled Spirits 5.0” strategy, and successfully achieved all the operatingobjectives.For 2019, the Company recorded operating revenue of RMB 10.417 billion, up 19.93% compared to 2018; a net profit attributable tothe Company as the parent of RMB 2.098 billion, rising 23.73% from the year earlier; earnings per share of RMB4.17, 23.74%higher than 2018; and net cash generated from operating activities of RMB192 million, going down 86.64% on a year-on-year basis（primarily driven by considerable increases in structured and term deposits that are not drawable in advance, as well as termdeposits put in pledge for the issuance of notes payable. Exclusive of the effects of the aforesaid factors, net cash generated fromoperating activities stood at RMB1.997 billion）. Meanwhile, the brand value reached a new high of RMB146.98 billion.The Company’s Overall Operation During the Reporting Period
1. Strengthen market construction to continuously rise the brand influence
By strengthening the market construction, the Company further enhanced the organization-driven. Focused on systemic competition,the Company established a new marketing mechanism of upstream-downstream linkage, information exchange, quick response, andoverall coordination. The brand construction has been strengthened to gradually increase brand influence.
2. Accelerate the transformation of the Company and continuously improve the managementThe Company stands firmly on Strategy 5.0 and promotes the depth of digital transformation. During the Reporting Period, thedigital marketing, Gujing SAP ERP and CRM projects were completed, and at the same time, these projects were successfullyswitched online. The digital operation structure system with digital marketing (CRM) in the front line and SAP ERP as the mainchannel in the backstage has been completed to lay a foundation for a new digital Gujing.
3. Stably optimize quality control and boost the application of scientific research transformationThe Company strengthened the management of production process, established a sound quality control system and standard,optimized the inspection project of raw and auxiliary materials into the factory, standardized inspection standards and inspectionoperations, improved supply efficiency, and avoided behavioral risks. The Company’s two technological innovation achievementshave reached the international leading level, one scientific achievement has reached the domestic leading level, one scientificachievement has won a prize awarded by China Light Industry Council, one has won the third prize of Provincial Science andTechnology Award, and two scientific research achievements have been transformed within the company. Gujing Distillery ProductDesign Center was recognized by the “National Industrial Design Center” and “China Light Industry Engineering TechnologyResearch Center”.
4. In-depth collaboration between production and sales ensures a prominent effect of balanced productionThe Company implemented a coordinate mechanism between production and sales to continuously improve production efficiencyand supply satisfaction. A logistics system and a planting model with high-quality raw grain base have been built to ensure thequality of raw materials and reduce supply risks.
5. Strictly abide by the bottom line of environmental protection and constantly improve the environmental protectioninfrastructureThe Company continued to increase investment in environmental protection, and achieved the “Four Goals” for safe production
throughout 2019. The Company’s main pollutant indicators for environmental protection was stable and reached the standard, whicheffectively controlled the energy loss rate and equipment failure rate. In the whole year, all the main environmental pollutiondischarge pollutants met the standard, and no environmental pollution accidents occurred. The company was successfully selectedinto the “National Green Factory” list.
6. Adhere to the guidance of the Party building and promote the “Nie Guangrong Spirit”The Company implemented an in-depth educational activity on the theme of “Remain true to our originalaspiration and keep our mission firmly in mind”. According to the arrangement of the Central Committee, the Provincial PartyCommittee and the Municipal Party Committee, the Company resolutely follows the main line of learning and implementing XiJinping’s Thought on Socialism with Chinese Characteristics for a New Era. Focused on the general requirements of “remain true,fulfill the Mission, find the reasons of falling behind, and emphasize the implementation”, the Company spared no effort to study andeducation, investigation and research, inspection of problems, rectification and implementation throughout the entire process andyielded prominent fruits. During this period, the Company held a grand activity “Report on Comrade Nie Guangrong’s AdvancedDeeds” in the Great Hall of the People in Beijing, making “Nie Guangrong Spirit” well spread and promoted.
7. During the Reporting Period, the Company still had the following pressures and inadequacies
(1) The complex macroeconomic environment has brought many uncertainties to the development of the liquor industry.
(2) The level of lean management of the Company falls behind the pace of the Company’s development.
(3) The system, mechanism and the vitality of the Company need to be further activated.
(4) Bold innovation is required in cultivating talents, inspiring talents, and retaining talents by system.
II Core Business Analysis
1. Overview
See relevant contents of “I Overview” in “Management Discussion and Analysis”, herein
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2019 | 2018 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 10,416,961,584.23 | 100.00% | 8,686,140,336.89 | 100.00% | 19.93% |
| By operating division | |||||
| Manufacturing | 10,416,961,584.23 | 100.00% | 8,686,140,336.89 | 100.00% | 19.93% |
| By product category | |||||
| Distilled spirits | 10,164,144,471.76 | 97.57% | 8,519,862,666.82 | 98.09% | 19.30% |
| Hotel services | 88,659,455.17 | 0.85% | 86,807,124.18 | 1.00% | 2.13% |
| Other | 164,157,657.30 | 1.58% | 79,470,545.89 | 0.91% | 106.56% |
| By operating segment | |||||
| North China | 557,017,590.00 | 5.35% | 436,508,213.35 | 5.03% | 27.61% |
| Central China | 9,326,923,639.55 | 89.53% | 7,867,207,092.57 | 90.57% | 18.55% |
| South China | 520,685,208.39 | 5.00% | 367,741,836.37 | 4.23% | 41.59% |
| Overseas | 12,335,146.29 | 0.12% | 14,683,194.60 | 0.17% | -15.99% |
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Manufacturing | 10,416,961,584.23 | 2,426,046,924.89 | 76.71% | 19.93% | 25.57% | -1.05% |
| By product category | ||||||
| Distilled spirits | 10,164,144,471.76 | 2,257,907,919.10 | 77.79% | 19.30% | 20.63% | -0.24% |
| Hotel services | 88,659,455.17 | 39,765,568.71 | 55.15% | 2.13% | 3.52% | -0.60% |
| Other | 164,157,657.30 | 128,373,437.08 | 21.80% | 106.56% | 485.97% | -50.63% |
| By operating segment | ||||||
| North China | 557,017,590.00 | 184,315,816.75 | 66.91% | 27.61% | 13.39% | 4.15% |
| Central China | 9,326,923,639.55 | 2,065,495,633.99 | 77.85% | 18.55% | 25.34% | -1.20% |
| South China | 520,685,208.39 | 170,592,892.09 | 67.24% | 41.59% | 46.96% | -1.19% |
| Overseas | 12,335,146.29 | 5,642,582.06 | 54.26% | -15.99% | 1.88% | -8.02% |
| Operating division | Item | Unit | 2019 | 2018 | Change (%) |
| Distilled spirits brewage | Sales volume | Ton | 90,318.85 | 82,818.70 | 9.06% |
| Output | Ton | 93,798.87 | 83,254.25 | 12.67% | |
| Inventory | Ton | 13,987.83 | 10,507.81 | 33.12% |
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
| Operating division | Item | 2019 | 2018 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Food manufacturing | Direct materials | 1,807,661,503.73 | 74.51% | 1,465,613,415.05 | 75.86% | 23.34% |
| Food manufacturing | Direct labor cost | 214,328,787.10 | 8.83% | 183,657,819.79 | 9.51% | 16.70% |
| Food manufacturing | Manufacturing expenses | 147,018,800.80 | 6.06% | 134,698,484.31 | 6.97% | 9.15% |
| Food manufacturing | Fuels | 88,898,827.47 | 3.66% | 87,773,829.59 | 4.54% | 1.28% |
| Total sales to top five customers (RMB) | 1,883,372,178.17 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 18.08% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
| No. | Customer | Sales revenue contributed for the Reporting Period (RMB) | As % of total sales revenue (%) |
| 1 | Customer A | 749,884,238.55 | 7.20% |
| 2 | Customer B | 577,850,797.92 | 5.54% |
| 3 | Customer C | 204,809,138.19 | 1.97% |
| 4 | Customer D | 177,370,278.21 | 1.70% |
| 5 | Customer E | 173,457,725.30 | 1.67% |
| Total | -- | 1,883,372,178.17 | 18.08% |
| Total purchases from top five suppliers (RMB) | 691,819,821.13 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 27.73% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Supplier A | 273,330,053.07 | 10.96% |
| 2 | Supplier B | 175,259,289.50 | 7.02% |
| 3 | Supplier C | 104,833,589.08 | 4.20% |
| 4 | Supplier D | 72,811,249.30 | 2.92% |
| 5 | Supplier E | 65,585,640.18 | 2.63% |
| Total | -- | 691,819,821.13 | 27.73% |
| 2019 | 2018 | Change (%) | Reason for any significant change | |
| Selling expense | 3,184,894,221.10 | 2,682,535,305.26 | 18.73% | |
| Administrative expense | 685,280,546.45 | 644,997,046.65 | 6.25% | |
| Finance costs | -97,625,803.51 | -51,572,629.73 | -89.30% | The main reason is the increase of interest income. |
| R&D expense | 42,373,017.33 | 23,966,766.04 | 76.80% | The main reason is the increase of R & D investment in this year. |
4. R&D Expense
√ Applicable □ Not applicable
We carried out R&D projects in the current year to study and develop new products, improve the quality of our products, study theintelligent brewage technique and new brewage technique.R&D Achievements of the Company: The Company’s two technological innovation achievements have reached the internationalleading level, one scientific achievement has reached the domestic leading level, one scientific achievement has won a prize awardedby China Light Industry Council, one has won the third prize of Provincial Science and Technology Award, and two scientificresearch achievements have been transformed within the company. The Key Technology for Ecological Cave Brewing and BaseLiquor Quality Improvement of Yellow Crane Tower won the first prize of Science and Technology Award of China National FoodIndustry Association. Yellow Crane Tower Xianning Testing Center obtained the National Laboratory Accreditation Certificatewhich is issued by China National Accreditation Service for Conformity Assessment (CNAS). Since 2019, the Company has licensed115 patents.Details about R&D expense:
| 2019 | 2018 | Change (%) | |
| Number of R&D personnel | 938 | 968 | -3.10% |
| R&D personnel as % of total employees | 9.69% | 11.63% | -1.94% |
| R&D expense (RMB) | 269,107,374.89 | 224,585,370.62 | 19.82% |
| R&D expense as % of operating revenue | 2.58% | 2.59% | -0.01% |
| Capitalized R&D expense (RMB) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D expense as % of total R&D expense | 0.00% | 0.00% | 0.00% |
| Item | 2019 | 2018 | Change (%) |
| Subtotal of cash generated from operating activities | 12,080,069,939.92 | 9,950,615,569.29 | 21.40% |
| Subtotal of cash used in operating activities | 11,887,622,876.47 | 8,509,734,283.34 | 39.69% |
| Net cash generated from/used in operating activities | 192,447,063.45 | 1,440,881,285.95 | -86.64% |
| Subtotal of cash generated from investing activities | 4,138,301,120.12 | 3,530,649,713.30 | 17.21% |
| Subtotal of cash used in investing activities | 1,466,159,130.60 | 4,656,442,207.19 | -68.51% |
| Net cash generated from/used in investing activities | 2,672,141,989.52 | -1,125,792,493.89 | 337.36% |
| Subtotal of cash generated from financing activities | 755,400,000.00 | 503,616,553.34 | 50.00% |
| Subtotal of cash used in financing activities | -755,400,000.00 | -503,616,553.34 | -50.00% |
| Net cash generated from/used in financing activities | 2,109,189,052.97 | -188,527,761.28 | 1,218.77% |
| 31 December 2019 | 31 December 2018 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 5,619,749,918.09 | 40.51% | 1,705,760,865.12 | 13.64% | 26.87% | |
| Accounts receivable | 40,776,567.96 | 0.29% | 29,748,068.74 | 0.24% | 0.05% | |
| Inventories | 3,015,051,961.78 | 21.74% | 2,407,306,664.86 | 19.24% | 2.50% | |
| Investment property | 4,710,086.02 | 0.03% | 5,027,228.53 | 0.04% | -0.01% | |
| Long-term equity investments | 4,678,282.24 | 0.03% | 4,900,000.00 | 0.04% | -0.01% | |
| Fixed assets | 1,722,572,998.79 | 12.42% | 1,763,988,530.56 | 14.10% | -1.68% | |
| Construction in progress | 183,984,816.07 | 1.33% | 93,320,557.56 | 0.75% | 0.58% |
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 1. Financial assets at fair value through profit or loss (excluding derivative financial assets) | 2,965,016,000.42 | 17,585,151.48 | 0.00 | 0.00 | 1,053,830,000.00 | 3,527,400,054.88 | 0.00 | 509,031,097.02 |
| Subtotal of financial assets | 2,965,016,000.42 | 17,585,151.48 | 0.00 | 0.00 | 1,053,830,000.00 | 3,527,400,054.88 | 0.00 | 509,031,097.02 |
| Total of the above | 2,965,016,000.42 | 17,585,151.48 | 0.00 | 0.00 | 1,053,830,000.00 | 3,527,400,054.88 | 0.00 | 509,031,097.02 |
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Item | Ending carrying value (RMB) | Reason for restriction |
| Bank deposits | 2,675,000,000.00 | Structured deposits and time deposits that |
| Item | Ending carrying value (RMB) | Reason for restriction |
| cannot be withdrawn in advance and time deposits that are pledged for issuing bank acceptance drafts | ||
| Notes receivable | 349,377,134.82 | A pledge is used to issue a banker's acceptance draft |
| Total | 3,024,377,134.82 |
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| Variety of securities | Code of securities | Name of securities | Initial investment cost | Accounting measurement model | Beginning carrying value | Gain/loss on fair value changes in the Reporting Period | Cumulative fair value changes charged to equity | Purchased in the Reporting Period | Sold in the Reporting Period | Gain/loss in the Reporting Period | Ending carrying value | Accounting title | Source of funds |
| Fund | ZXYSDP 1st Assets Management Plan | 200,000,000.00 | Fair value method | 206,393,107.46 | 5,491,397.78 | 0.00 | 0.00 | 0.00 | 15,000,000.00 | 211,884,505.24 | Available-for-sale financial asset | Self-owned funds |
| Other ending holding securities investments | -- | -- | -- | ||||||||
| Total | 200,000,000.00 | -- | 206,393,107.46 | 5,491,397.78 | 0.00 | 0.00 | 0.00 | 15,000,000.00 | 211,884,505.24 | -- | -- |
| Disclosure date of the announcement about the board’s consent for the securities investment | The Company held the 9th Meeting of the 8th Board of Directors on 26 April 2019, reviewed and approved the proposal on carrying out securities investment business | ||||||||||
| Disclosure date of the announcement about the general meeting’s consent for the securities investment (if any) | N/A | ||||||||||
| Operator | Relationship with the Company | Connected transaction | Type of derivative | Initial investment amount | Starting date | Ending date | Beginning investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Impairment provision (if any) | Ending investment amount | Proportion of closing investment amount in the Company’s ending net assets | Actual gain/loss in the Reporting Period |
| Reverse repurchase of national | Naught | No | Reverse repurchase of national debt | 0.00 | 28 December 2018 | 30 June 2019 | 17,990 | 1,090 | 19,080 | 0.00 | 0.00 | 0.00% | 0.35 |
| debt | |||||||||||
| Total | 0.00 | -- | -- | 17,990 | 1,090 | 19,080 | 0.00 | 0.00 | 0.00% | 0.35 | |
| Capital source for derivative investment | Company’s own funds | ||||||||||
| Lawsuits involved (if applicable) | N/A | ||||||||||
| Disclosure date of board announcement approving derivative investment (if any) | 30 August 2013 | ||||||||||
| Disclosure date of shareholders’ meeting announcement approving derivative investment (if any) | |||||||||||
| Analysis of risks and control measures associated with derivative investments held in the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | The Company had controlled the relevant risks strictly according to the Derivatives Investment Management System. | ||||||||||
| Changes in market prices or fair value of derivative investments during the Reporting Period (fair value analysis should include measurement method and related assumptions and parameters) | Naught | ||||||||||
| Significant changes in accounting policies and specific accounting principles adopted for derivative investments in the Reporting Period compared to previous reporting period | Naught | ||||||||||
| Opinion of independent directors on derivative investments and risk control | Based on the sustainable development of the main business and the sufficient free idle money, the Company increased the profits through investing in the reasonable financial derivative instruments, which was in favor of improving the service efficiency of the idle funds; in order to reduce the investment risks of the financial derivative instruments, the Company had set up corresponding supervision mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific principles of financial accounting; the derivative Investment business developed separately took national debts as mortgage object, which was met with the cautious and steady risks management principle and the interest of the Company and shareholders. Therefore, agreed the | ||||||||||
Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit of RMB0.3billion.
5. Use of Funds Raised
□ Applicable √ Not applicable
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit:
Unit: RMB
| Company name | Relationship with the Company | Main business scope | Registered capital | Total assets | Net assets | Operating revenues | Operating profit | Net profit |
| Bozhou Gujing Sales | Subsidiary | Wholesales of distilled | 84,864,497.89 | 2,987,262,154.57 | 114,267,236.43 | 9,408,967,287.45 | 918,498,076.90 | 684,310,878.29 |
| Co., Ltd | spirit, construction materials, feeds and assistant materials | |||||||
| Anhui Longrui Glass Co., Ltd | Subsidiary | Manufacture and sale of glass products | 86,660,268.98 | 334,367,483.96 | 283,457,347.19 | 263,211,742.36 | 47,521,309.38 | 40,366,861.19 |
| Yellow Crane Tower Wine Industry Co., Ltd | Subsidiary | Production and sales of distilled spirit | 400,000,000.00 | 1,113,378,476.47 | 707,788,358.44 | 1,153,666,330.72 | 166,767,019.61 | 128,603,665.60 |
| Shanghai Gujing Jinhao Hotel Management Co., Ltd. | Subsidiary | Hotel management and house lease | 54,000,000.00 | 197,339,647.17 | 77,032,345.33 | 78,097,168.09 | 18,396,718.11 | 10,829,628.99 |
| The name of the company | Acquisition and disposal of subsidiaries during the reporting period | The impact on the overall production operation and performance |
| Hubei yellow crane tower beverage co. LTD | Set up | Optimize the internal management structure and enhance the internal driving force. |
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Prospects
(I) Development Prospect of the Industry the Company is in
1. The epidemic of COVID-19 has accelerated industry reshuffle to make it more concentratedAs a strong pressure test for the liquor industry, theCOVID-19has disturbed the liquor industry in the short term, but the overallstable trend of the industry remains unchanged. Liquor companies have periodical operating pressure. In the first half of the year,they mainly focused on digesting market inventory, while in the second half of the year, with further differentiation and declinedfrequency of alcohol consumption, famous liquor brands will speed up their recovery. The industry’s concentration will be furtherimproved to rapidly eliminate inferior capacity.
2. Continuous innovation in marketing model with integrated development of online and offline channelsThe non-contact impact of the epidemic of COVID-19 has caused an outbreak of online Cloud Economy. Liquor manufacturers haveexposed their shortcomings of traditional offline channels. The importance and convenience of online channel sales stand out. Afterthe epidemic, a situation where offline and online promotions converge will appear, and the trend of online and offline integrationdevelopment will become more and more apparent. Online social e-commerce and the emerging “Cloud after-work drinks” willbecome a new growth point; and new methods will be adopted for traditional offline sales channels to empower and endow newmeanings of the era. The wave of “community block sales” in the liquor industry is coming soon.
3. Quality strategy is prominent with the upcoming of the era of healthy consumption
Health and health-nurturing practices are green consumption and the trend of the liquor industry. Healthy drinking has become aconsumption concept. The trend of “drink less and drink better” is more prominent. Consumers demand for health is increasing. Theypay more attention to brand and quality. In pursuit of the concept of quality consumption, the strategy of dumb-type large singleproduct will become the standard of famous liquor. The volume of high-end and sub-high-end products will be further increased, andhigh-quality light bottle liquor and small liquor are also popular because of their high quality-price ratio and rich self-drinking andgroup-drinking scenes.(II) Development Strategy of the Company
1. Firmly boost "Strategy 5.0, Five-Star Operation” Strategy
Comprehensively fulfill Strategy 5.0 and have the "User-Centered" thought fully and deeply implemented in the Company. Solidlycreate the "Five-Star Operation", enhance competitive force, improve quality and efficiency, optimize services and promote healthyand efficient operation of the enterprise.
2. Firmly boost reform and innovation strategy
Deeply boost marketing innovation, technological innovation and mechanism innovation and generate endogenous power of theenterprise.
3. Firmly create “Talent Highland” strategy
Intensify talent recruitment and attraction and establish flexible talent attraction and wisdom experience borrowing mechanism.Innovate talent training mode and promote independent cultivation & development and absorption & attraction simultaneously.
4. Firmly boost the strategy of integration of Party governance
Comprehensively strengthen Party discipline, continuously strengthen “four-consciousness”, and strengthen political leadership.Need to take firm political stand, strengthen political orientation, practically strengthen “four-consciousness”. Thoroughly study and
implement the spirit of the 19
th
National Congress of the Communist Party of China and Xi Jinping Thought on Socialism withChinese Characteristics for a New Era, and guide all the Party members to enhance their thought and action consciousness tomaintain the core.(III) Operating Revenue Plan of the Company in 2020In 2020, the Company plans to achieve an operating revenue of RMB11.6 billion, rising 11.36% compared with that of last year; andachieve a total profit of RMB2.99 billion, rising4.08% compared with that of last year.(IV) Operating Risk of the Company
1. The adverse effect of the systematic risk in macro-economic environment on the development of the industry and the Company.
2. Impact of industrial policy adjustment and change on the sustainable development of the Company.
3. Impact of epidemic of COVID-19 on the comsumption behaviors and habits.
(V) Operating Measures
1. Marketing
In order to enhance the balance of the market, the Company has cemented the base of its headquarter; continued to better itsinvestment attraction in peripheral markets; further optimized product structure and the proportion of medium and high-end products,and accelerated the nationalization of Gujinggong Liquor. As for brand construction, the Company continued to actively participatein empowering the country by brand projects, adhered to the IP of brand communication, and increased domestic and foreignpromotion efforts. Through further optimizing dealer development policies, the Company strengthened dealer access, enlarged itsbusiness networks and made it stronger by developing channels.
2. Product Management
The Company strictly implemented the production process, concentrated on the source control; paid great attention to the processmanagement and key linkage of production, strictly performed the standardization of work, strengthened technical quality work. Itcontinued to strengthen strict management of specific quality inspections, further improved the quality management system, focusedon process control to ensure that every bottle of Gujing that goes on the consumer’s table is of good quality.
3. Engineering Construction
The Company accelerated the planning design and phased construction of the smart technology transformation project (smart park)for liquor production, prepared its fund planning and financing work, and adhered to high standards and high quality to promote theconstruction of smart park projects.
4. Informatization Construction
The Company which took informatization into its whole management system and centered on SAP ERP system and digital marketingproject, actively pushed the second phase construction of the digital marketing project. By enhancing its data management,strengthening data application empowerment, establishing smart management corporate and setting up an integrated corporatemanagement platform, the Company has achieved a concentrated control and operation to promote process standardization, datavisualization, and management standardization, and support its business innovation and development.
5. Human Resource
Based on the demands of the Company’s strategic development, the Company continuously optimized the channels for talentsintroduction, further improved talent structure and salary structure; strengthened the orientation of performance appraisal,continuously innovated performance management model; incessantly cemented talent echelon construction, conducted talent trainingand cultivation in a comprehensive, multidimensional and targeted way.
6. Internal Management
The Company deeply carried out the “four revolutions” (ideological revolution, organizational revolution, behavioral revolution,management revolution), and solidly implemented the “five goals and six projects”; adhered to the “four betters” orientation (betterpositioning, better process, better state, better management), established the consciousness for the better, work hard on the word
“better”. Through transforming strict management into normalcy, the Company strengthened the ideological education of employees,focused on management innovation, employed innovative thinking, made full use of new methods and tools to break the inertial workmode, prevent aging mentality and old-fashioned manage, comprehensively improve work efficiency, and stimulate creativeorganizations.
7. Corporate Culture Construction
The Company should continue to strengthen the leadership team’s construction, temper the core team of “loyalty and cleanness”;continue to carry out warning education on integrity, and further build an ideological line of defense against corruption; continue torectify formalism, bureaucracy, and “laziness, randomness, fatigue, glibness and complacency” and dogmatism, cultivate pragmaticand rigorous work style of cadres and employees; continue to strengthen ideological and political work, maintain the main position ofcultural propaganda and ideological work; continue to strengthen the leadership of Party building, and gather the strong power of therevolution. At the same time, the Company needs to focus on the construction of civilization practice center for a new era and culturalcommunication base of Gujing contribution, promote the “Nie Guangrong Spirit” to the entire industry, and further deepen theGujing corporate culture.In 2020, the Company will continue to thoroughly implement the spirit of the 19th National Congress of the Party and the Second,Third, and Fourth Plenary Sessions of the 19th CPC Central Committee. Guided by Xi Jinping’s Thought on Socialism with ChineseCharacteristics for a New Era, the Company remains true to the original aspiration and remembers its mission. Under the strongleadership of Bozhou municipal government and Bozhou Municipal Committee, the Company has fully implemented the core valuesof socialism and upholding the values of “Be Honest, Offer Quality Liquor, Be Stronger and Be Helpful to the Society”, and the spiritof Nie Guangrong and the consciousness of better products. With a long-term vision and a strong focus, the Company will promotethe implementation of Strategy 5.0 in depth, earnestly implement the “four betters” working method, and strive to move towards “anew Gujing of digitalization, internationalization, and rule of law.”
X Communications with the Investment Community such as Researches, Inquiries andInterviews
1. During the Reporting Period
□ Applicable √ Not applicable
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated, executed or revisedin the Reporting Period:
√ Applicable □ Not applicable
The 2018 Annual General Meeting held on 20 May 2019 reviewed and approved the Company’s Interest Distribution Scheme in2018 that based on the total shares of 503,600,000 of the Company on 31 December 2018, cash dividends was distributed atRMB15.00 per 10 shares (tax inclusive), and the total cash dividends distributed was RMB755,400,000.00 (tax inclusive).
| Special statement about the cash dividend policy | |
| In compliance with the Company’s Articles of Association and resolution of general meeting | Yes |
| Specific and clear dividend standard and ratio | Yes |
| Complete decision-making procedure and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protected | Yes |
| In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparent | No adjustments or changes |
| Year | Cash dividends (tax inclusive) (A) | Net profit attributable to ordinary shareholders of the listed company in consolidated | A as % of B (%) | Cash dividends in other forms (such as share repurchase) (C) | C as % of B (%) | Total cash dividends (including those in other forms) (D) | D as % of B (%) |
| statements for the year (B) | |||||||
| 2019 | 755,400,000.00 | 2,097,527,739.86 | 36.01% | 0.00 | 0.00% | 755,400,000.00 | 36.01% |
| 2018 | 755,400,000.00 | 1,695,231,643.05 | 44.56% | 0.00 | 0.00% | 755,400,000.00 | 44.56% |
| 2017 | 503,600,000.00 | 1,148,740,644.93 | 43.84% | 0.00 | 0.00% | 503,600,000.00 | 43.84% |
| Bonus issue from capital reserves for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 15.00 |
| Bonus issue from profit for every 10 shares (share) | 0 |
| Total shares as the basis for the final dividend plan (share) | 503,600,000 |
| Total cash dividends (RMB) (tax inclusive) | 755,400,000.00 |
| Cash dividends in other ways (such as share repurchase) (RMB) | 0.00 |
| Total cash bonus (including other methods) (RMB) | 755,400,000.00 |
| Distributable profits (RMB) | 6,397,131,020.62 |
| Percentage of cash dividends to the total distributed profits | 100% |
| Particulars about the cash dividends | |
| other | |
| Details of final dividend plan for the Reporting Period | |
| The company intends to distribute rmb15 (tax included) per 10 shares based on the total number of shares at the end of the year, totaling rmb755,400,000.00. This year does not send bonus, does not transfer to increase capital stock with accumulation fund. | |
| Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment |
| Commitments made in acquisition documents or shareholding alteration documents | Anhui Gujing Distillery Company Limited | Performance commitment | The Company promised that Yellow Crane Tower Distillery Co., Ltd. would realize the operating revenue of RMB1, 308.125 million (tax inclusive) and the net profit margin would be not lower than 11.00% in 2019. | 29 April 2016 | Y2017-Y2021 | Fulfilled in 2019 |
| Fulfilled on time | Yes | |||||
| Specific reasons for failing to fulfill commitments on time and plans for next step (if any) | N/A | |||||
| Period | Y2017 | Y2018 | Y2019 | Y2020 | Y2021 |
| Committed operating revenue (tax inclusive) | 80,500.00 | 100,625.00 | 130,812.50 | 170,056.25 | 204,067.50 |
| Item | Actual amount | Promised amount | Difference | Completion rate |
| Operating revenue (tax inclusive) | 131,006.46 | 130,812.50 | 193.96 | 100.15% |
| Net profit | 12,860.37 | 12,298.61 | 561.76 | 104.57% |
| Net profit ratio | 11.15% | 11.00% | 0.15% | 101.36% |
| Contents and reasons | Approval procedures | Notes |
| The Ministry of Finance issued Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments (CK [2017] No. 7), Accounting Standards for Business Enterprises No.23-Transfer of Financial Assets (CK [2017] No. 8), Accounting Standards for Business Enterprises No.24-Hedge Accounting (CK [2017] No. 9) and Accounting Standards for Business Enterprises No.37-Presentation of Financial Instrument (CK [2017] No. 14). The Company started to implement the abovementioned new standards from 1 | Reviewed and approved on the 9th Meeting of the 8th Board of Directors and the 8th Meeting of the 8th Supervisory Committee | Refer to Announcement on Changes in Accounting Policy on http://www.cninfo.com.cn disclosed on the same date for details. |
| January 2019. According to the above requirements, the Company implemented the above new standards governing financial instrument from 1 January 2019, and changed relevant accounting polices in line with the stipulations of the above new standards governing financial instrument. In accordance with the relevant requirements of new standard governing financial instrument, the retroactive adjustment was not conducted to the same period of last year, and no impact the changes of accounting policies will occur to the financial situation and operating results in the prior period. | ||
| On 30 April 2019, Notes of Revising and Printing the Format of 2019 General Enterprises Financial Statement (CK [2019] No. 6) (hereinafter referred to as “Notes of Revising”) was issued by the Ministry of Finance, making partial amendments to the format of general enterprises financial statements, stipulated that the format is applicable to the interim and annual financial statements in and after 2019 of non-financial business executing ASBE and the regulations of Notes of Revising. The Company belongs to the enterprise executed the new standards governing financial instrument but not new standards governing revenue and leases, and shall adjust correspondingly to the format of financial statements and part of course presentation combined with the requirements of Notes of Revising. | Reviewed and approved on the 10th Meeting of the 8th Board of Directors and the 9th Meeting of the 8th Supervisory Committee | Refer to Announcement on Changes in Accounting Policy on http://www.cninfo.com.cn disclosed on the same date for details. |
VIII YoY Changes to the Scope of the Consolidated Financial Statements
√Applicable □ Not applicable
| Name of subsidiary | Principal place of business | registered | Nature of the business | stake（%） | Make way | |
| directly | indirect | |||||
| Hubei Yellow Crane Tower beverage co. LTD | Hubei xianning | Hubei xianning | Production and manufacturing | 51.00 | Hubei Yellow Crane Tower beverage co. LTD | |
| Name of the domestic independent auditor | RSM Certified Public Accountants (LLP) |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 155 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 1 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Fu jinyong, Bao guangrong, Jiang jieyu |
| How many consecutive years the certified public accountants have provided audit service for the Company | 1 |
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.XII Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIV Credit Quality of the Company as well as Its Controlling Shareholder and ActualController
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of cash entrusted for wealth management during the Reporting Period
Unit: RMB’0,000
| Specific type | Capital resources | Amount incurred | Undue Balance | Overdue unrecovered amount |
| Trust financial products | Self-owned funds | 30,000.00 | 0.00 | 0.00 |
| Bank financial products | Self-owned funds | 295,600.00 | 28,517.00 | 0.00 |
| Broker financial products | Self-owned funds | 0.00 | 0.00 | 0.00 |
| Others | Self-owned funds | 20,000.00 | 20,000.00 | 0.00 |
| Total | 345,600.00 | 48,517.00 | 0.00 | |
| Name of the trustee | Type of the trustee | Type of the product | Amount | Capital resource | Start date | End date | Use of fund | Determination method of remuneration | Annual yield for reference | Estimate profit (if any) | Amount of actual profit or loss in Reporting Period | Actual recovery of profit or loss in Reporting Period | Allowance for impairment (if any) | Legal procedures or not | Plan for entrusted asset management in the future or not | Overviews of events and query index (if any |
| CITIC Wings Asset Management Company Limited | Limited Liability Company | Fund | 20,000 | Self-owned funds | Purchasing new shares offline, products with fixed earnings, reverse repurchase of national debt, and etc. | 1.2% of products’ net value and 20% of excess earnings | 7.00% | 1,500.00 | N/A | Yes | Yes | |||||
| Total | 20,000 | -- | -- | -- | -- | -- | -- | 1,500.00 | -- | -- | -- | -- | ||||
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
The Company disclosed Social Responsibilities Report of Enterprises for 2019 on 27 April 2020. (for details, seehttp://www.cninfo.com.cn)
2. Measures Taken for Targeted Poverty Alleviation
(1) PlansIn accordance with the "organizations are responsible for villages and individuals are responsible for families” poverty alleviationwork arrangement of Bozhou Municipal Party Committee, the Company has established targeted support towards 178 poor familieswith 306 people in Bali Village, Yanglou Village and Wuma Village, Wuma Town, Qiaocheng District, Bozhou, which have beenlifted out of poverty by the joint efforts of people in charge of poverty alleviation and three assistance and support villages as of theend of December 2019.
(2) Summary of the Related Work Done in the Reporting Period
① The Company visited and helped 178 poor households. By uniformly purchasing 178 Chinese New Year gifts, the Companyarranged 90 persons in charge of assistance to send the gifts to the 178 poor households. The gifts were not only confined to rice,spring couplets, festive liquor, lotus root and lotus root juice, but also including a sincere New Year blessing;
② The Company carried out the “Warm the Young with Love, Help the Young Realize Their Dreams” activity to care for youngpeople with difficulties. The Gujing Group Labor Union and the Youth League Committee respectively went to the threeadministrative villages (Yanglou, Bali, and Wuma) in Wuma Town, and collected the “small wishes” of the poor young teenagers.And on 25 January 2019, they sent coats, school bags and “love gift packages” to help teenagers to “realize their dream”, and sentblessing and encouraged them to grow up healthily;
③ The Company organized activities to listen to the story of “initial intention” and ignited the dreams of the “the Young”. In orderto further implement the spirit of General Secretary Xi’s important speech at the educational work conference on the theme of“remain true and remember mission”, and to firmly grasp the general ideas of the Communists to remain true, fulfill the mission, findthe reasons of falling behind, and emphasize the implementation, at the beginning of September, the Company’s logistics controlcenter organized all party members of the branch to Yangzhuang Village, Lumiao Town, where the poverty alleviation cadre wasselected by the corporate, to carry out branch team building activities.
(3) Subsequent Plans
① Learn the important discourse on poverty alleviation, and ensure political stand. General Party Secretary Xi Jinping's importantdiscourse on poverty alleviation work is both an ideological weapon and an action guide. The party organizations of all levels of theCompany shall work out a study plan carefully, strengthen the recognition of party members and management personnel on povertyalleviation work, and put the poverty alleviation work as a major political task, a top livelihood project and a matter of primaryimportance.
② Know about targeted poverty alleviation movement and report and pass it on well. Carry out the requirements of theOrganizational Department of the Municipal Committee and the Municipal Poverty Alleviation Bureau, unite under the leadership ofheads and fulfill the poverty alleviation work all-roundly.
③ Absorb aspiring youths in poverty and enlarge employment poverty alleviation and relief. Connect to three positioned assistanceand support villages and two stationed villages actively, absorb aspiring youths in poverty or children of households in poverty towork in the Company, and widen the income increase channels of households in poverty.
④ According to the notification and requirement of the Bozhou Municipal Party Committee Organization Department, the Companystrictly implements the spirit of “Work Tips on the Role of Selecting and Helping Cadres in the Fight against the EpidemicPrevention and Control”. By combining the actual needs of corporate to select and help the poor cadres and help villages, theCompany provided supplies and sent encouraging words to win the battle for epidemic prevention and control.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protectionauthorities.Yes
| Name of polluter | Name of major pollutants | Way of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Discharge standards implemented | Total discharge | Approved total discharge | Excessive discharge |
| Anbui Gujing Distillery Co., Ltd. | COD | Directly discharge | 3 | Gujing plant, Zhangji plant, Headquarter plant | 20.79mg/L 25.42mg/L 46.09mg/L | ≦100mg/L | 94.16t | 155.05t | Naught |
| Anbui Gujing Distillery Co., Ltd. | NH3-N | Directly discharge | 3 | Gujing plant, Zhangji plant, Headquarter plant | 0.35mg/L 0.48mg/L 1.17mg/L | ≦10mg/L | 2.18t | 15.53t | Naught |
| Anbui Gujing Distillery Co., Ltd. | Smoke | Organized discharge through chimney | 3 | Gujing plant, Zhangji plant, | 3.34mg/m? 9.76mg/m? 3.03mg/m? | Gujing plant, Headquarter plant ≦10mg/m? | 2.41t | / | Naught |
| Headquarter plant | Zhangji plant ≦20mg/m? | ||||||||
| Anbui Gujing Distillery Co., Ltd. | Sulfur Dioxide | Organized discharge through chimney | 3 | Gujing plant, Zhangji plant, Headquarter plant | 2.14mg/m? 9.02mg/m? 5.99mg/m? | Gujing plant, Headquarter plant≦35mg/m? Zhangji plant ≦50mg/m? | 3.92t | / | Naught |
| Anbui Gujing Distillery Co., Ltd. | Nitrogen oxide | Organized discharge through chimney | 3 | Gujing plant, Zhangji plant, Headquarter plant | 16.92mg/m? 80.94mg/m? 17.09mg/m? | Gujing plant, Headquarter plant≦50mg/m? Zhangji plant ≦150mg/m? | 15.33t | / | Naught |
| Anhui Longrui Glass Co., Ltd | Smoke | Organized discharge through chimney | 3 | No. 1 furnace, No. 2 furnace, No. 3 furnace | 24.58mg/m? / 23.31mg/m? | ≦200mg/m? | 10.56t | / | Naught |
| Anhui Longrui Glass Co., Ltd | Sulfur Dioxide | Organized discharge through chimney | 3 | No. 1 furnace, No. 2 furnace, No. 3 furnace | 2.95mg/m? / Not detected | ≦850mg/m? | 0.5t | / | Naught |
| Anhui Longrui Glass Co., Ltd | Nitrogen oxide | Organized discharge through chimney | 3 | No. 1 furnace, No. 2 furnace, No. 3 furnace | 178mg/m? / 139.33mg/m? | ≦700mg/m? | 78.64t | / | Naught |
Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(3) The sewage treatment capacity of the sewage treatment station of Gujing Subsidiary under Anhui Gujing Distillery Co., Ltd isabout 2800 tons per day. IC anaerobic jar, A?/O and in-depth treatment process is adopted. The sewage is discharged after treatmentand up to the standard, and discharge of sewage is in compliance with the direct discharge requirements in Table 3 of GB27631-2011Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(4) The production and living sewage of Anhui Longrui Glass Co., Ltd is discharged into the sewage treatment station of ZhangjiPlant under Anhui Gujing Distillery Company Limited, and it is discharged after treatment and up to the standard.
2. Construction and operation situation of waste gas control facilities of the listed Company and its subsidiaries
(1) The flue gas control facilities of thermal power stations of the Headquarters and Gujing Subsidiary of Anhui Gujing DistilleryCompany Limited run well, and waste gas is discharged through the 65-meter-tall exhaust funnel after the waste gas treatment is upto the standard, adopting the process of cloth-bag dust removal (original)+Limestone-Wet flue gas Desulfurization (renovated)+SNCR Denitrification by non-catalytic reduction (original) + SCR Denitrification by catalytic reduction (newly added) + Wetelectrostatic precipitator (newly added), and discharge of flue gas meets the super-low discharge requirements (smoke ≤10mg/m
,SO2≤35mg/m
, NOx≤50mg/m
).
(2) The coal-to-gas work has been completed and runs stably at Zhangji Plant under Anhui Gujing Distillery Company Limited, andwaste gas is discharged through the 20-meter-tall exhaust funnel, of which and discharge of flue gas meets the requirements forcoal-fired boiler in Table 2 of GB13271-2014 Emission Standard of Air Pollutants for Industrial Kiln and Furnace.
(3) No. 2 furnace of Anhui Longrui Glass Co., Ltd has been stopped, and No. 2 and No. 3 furnaces have completed coal-to-gas workand are running stably. SCR Denitrification by catalytic reduction has been adopted, waste gas from No. 1 furnace is dischargedthrough the 45-meter-tall exhaust funnel and waste gas from No. 3 furnace through the 45-meter-tall exhaust funnel after the wastegas treatment is up to the standard. The discharge of flue gas meets the requirements in GB9078-1996 Emission Standard of AirPollutants for Boiler.
(4) The Headquarter of Anhui Gujing Distillery Company Limited and Gujing Branch finished product coding machine exhaust gastreatment facilities are operating well. By adopting photocatalytic oxidation technology, the Company’s flue gas emissions complywith the Table 1 standard requirements of DB12/524-2014 Emission Standard for Industrial Enterprises Volatile Organic Compounds.
(5) The Headquarters of Anhui Gujing Distillery Company Limited and the odor treatment facilities of Zhangji Sewage Station areoperating well. By adopting technologies like photocatalytic oxidation and activated carbon adsorption, and the Company’s emissionof exhaust gas meets the requirements of Table 2 of the Standard for Emission of Pollutants.In 2019, the environment protection facilities of Anhui Gujing Distillery Company Limited and its subsidiaries ran normally ingeneral, main pollutants can achieve up-to-standard discharge, environment information is opened to the public normally, and theyhave performed their social responsibilities properly.Environmental impact assessment of construction project and other administrative license situation in respect ofenvironmental protection
| No. | Item | Category of EIA | EIA approval (filing) time | EIA approval (filing) number |
| 1 | In-depth renovation project of sewage treatment station in industrial park of Anhui Gujing Distillery Company Limited | Environment affection form | 16 November 2019 | BHB [2019] No. 36 |
Environmental self-monitoring schemeThe Company has formulated the Self-Monitoring Scheme of Key Pollution Source Enterprises under the National Monitoring andpublished it on the website of Bozhou Environmental Protection Bureau.Other environment information that should be disclosedNaughtOther related environment protection informationNaughtXIX Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
Part VI Share Changes and Shareholder InformationI. Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I. Restricted shares | 0 | 0.00% | 0 | 0.00% | |||||
| II. Non-restricted shares | 503,600,000 | 100.00% | 503,600,000 | 100.00% | |||||
| 1 RMB ordinary shares | 383,600,000 | 76.17% | 383,600,000 | 76.17% | |||||
| 2 Domestically listed foreign shares | 120,000,000 | 23.83% | 120,000,000 | 23.83% | |||||
| III. Total shares | 503,600,000 | 100.00% | 503,600,000 | 100.00% | |||||
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 21,204 | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 29,696 | Number of preferred shareholders with resumed voting rights (if any) (see note 8) | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) (see note 8) | 0 | |||||||
| 5% or greater shareholders or top 10 shareholders | ||||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease in the Reporting Period | Restricted shares held | Non-restricted shares held | Shares in pledge or frozen | |||||||
| Status | Shares | |||||||||||||
| ANHUI GUJING GROUP COMPANY LIMITED | State-owned legal person | 53.89% | 271,404,022 | 271,404,022 | In pledge | 114,000,000 | ||||||||
| GAOLING FUND,L.P. | Foreign legal person | 2.47% | 12,446,408 | 12,446,408 | ||||||||||
| AGRICULTURAL BANK OF CHINA- E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND | Other | 2.45% | 12,324,779 | 12,324,779 | ||||||||||
| CHINA INT'L | Foreign | 1.96% | 9,871,986 | 9,871,986 | ||||||||||
| CAPITAL CORP HONG KONG SECURITIES LTD | legal person | |||||||
| HONG KONG SECURITIES CLEARING COMPANY LTD. | Foreign legal person | 1.72% | 8,672,976 | 8,672,976 | ||||
| INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED- INVESCO GREAT WALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND | Other | 1.49% | 7,500,000 | 7,500,000 | ||||
| UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) | Foreign legal person | 1.40% | 7,068,861 | 7,068,861 | ||||
| CENTRAL HUIJIN ASSET MANAGEMENT CO., LTD. | State-owned legal person | 1.30% | 6,543,600 | 6,543,600 | ||||
| GREENWOODS CHINA ALPHA MASTER FUND | Foreign legal person | 1.12% | 5,657,150 | 5,657,150 | ||||
| NORGES BANK | Foreign legal person | 1.03% | 5,211,411 | 5,211,411 | ||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (see note 3) | N/A | |||||||
| Related or acting-in-concert parties among the shareholders above | Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed | |||||||
| Companies. | |||
| Top 10 non-restricted shareholders | |||
| Name of shareholder | Non-restricted shares held at the period-end | Shares by type | |
| Type | Shares | ||
| ANHUI GUJING GROUP COMPANY LIMITED | 271,404,022 | RMB ordinary share | 271,404,022 |
| GAOLING FUND,L.P. | 12,446,408 | Domestically listed foreign stock | 12,446,408 |
| AGRICULTURAL BANK OF CHINA- E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND | 12,324,779 | RMB ordinary share | 12,324,779 |
| CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD | 9,871,986 | Domestically listed foreign stock | 9,871,986 |
| HONG KONG SECURITIES CLEARING COMPANY LTD. | 8,672,976 | RMB ordinary share | 8,672,976 |
| INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED-JINGSHUN GREATWALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND | 7,500,000 | RMB ordinary share | 7,500,000 |
| UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) | 7,068,861 | Domestically listed foreign stock | 7,068,861 |
| CENTRAL HUIJIN ASSET MANAGEMENT CO., LTD. | 6,543,600 | RMB ordinary share | 6,543,600 |
| GREENWOODS CHINA ALPHA MASTER FUND | 5,657,150 | Domestically listed foreign stock | 5,657,150 |
| NORGES BANK | 5,211,411 | Domestically listed foreign stock | 5,211,411 |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. |
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4) | N/A |
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| ANHUI GUJING GROUP COMPANY LIMITED | Liang Jinhui | 16 January 1995 | 91341600151947437P | Making beverage, construction materials and plastic products, etc. |
| Controlling shareholder’s holdings in other listed companies at home or abroad in the Reporting Period | The controlling shareholder ANHUI GUJING GROUP COMPANY LIMITED directly holds100,000,000 shares of Huaan Securities Co., Ltd. owning the proportion of shares of 2.76%. | |||
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| State-owned Assets Supervision | N/A | N/A | N/A |
| and Administration Commission of the People’s Government of Bozhou | |
| Other listed companies at home or abroad controlled by the actual controller in the Reporting Period | N/A |
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Part VIII Convertible bonds
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Part IX Directors, Supervisors, Senior Management and StaffI Change in Shareholdings of Directors, Supervisors and Senior Management
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) |
| Liang Jinhui | Chairman of the Board | Incumbent | Male | 54 | 20 June 2017 | 19 June 2020 | |||||
| Li Peihui | Director | Incumbent | Male | 47 | 20 June 2017 | 19 June 2020 | |||||
| Zhou Qingwu | Director, GM | Incumbent | Male | 46 | 20 June 2017 | 19 June 2020 | |||||
| Yan Lijun | Director, Executive Deputy GM | Incumbent | Male | 47 | 20 June 2017 | 19 June 2020 | |||||
| Xu Peng | Director, Deputy GM | Incumbent | Male | 50 | 20 June 2017 | 19 June 2020 | |||||
| Ye Changqing | Director, Deputy GM, Chief Accountant, Secretary of the Board | Incumbent | Male | 46 | 20 June 2017 | 19 June 2020 | |||||
| Wang Gao | Independent director | Incumbent | Male | 55 | 20 June 2017 | 19 June 2020 | |||||
| Song Shuyu | Independent director | Incumbent | Male | 58 | 20 June 2017 | 19 June 2020 | |||||
| Wang Ruihua | Independent director | Incumbent | Male | 58 | 27 September 2019 | 19 June 2020 | |||||
| Sun | Chairman | Incumbent | Male | 55 | 20 May | 19 June |
| Wanhua | of Supervisory Committee | 2019 | 2020 | ||||||||
| Yang Xiaofan | Supervisor | Incumbent | Male | 53 | 20 June 2017 | 19 June 2020 | |||||
| Wang Zibin | Employee supervisor | Incumbent | Male | 50 | 20 June 2017 | 19 June 2020 | |||||
| Lu Duicang | Supervisor | Incumbent | Male | 40 | 20 May 2019 | 19 June 2020 | |||||
| Zhang Bo | Employee supervisor | Incumbent | Male | 55 | 20 June 2017 | 19 June 2020 | |||||
| Zhang Lihong | Deputy GM | Incumbent | Male | 52 | 20 June 2017 | 19 June 2020 | |||||
| Zhu Xianghong | GM assistant | Incumbent | Male | 46 | 20 June 2017 | 19 June 2020 | |||||
| Gao Jiakun | GM assistant | Incumbent | Male | 50 | 20 June 2017 | 19 June 2020 | |||||
| Du Jie | Independent director | Former | Male | 50 | 20 June 2017 | 27 September 2019 | |||||
| Wang Feng | Chairman of Supervisory Committee | Former | Male | 55 | 20 June 2017 | 20 May 2019 | |||||
| Fu Qiangxin | Supervisor | Former | Male | 51 | 20 June 2017 | 20 May 2019 | |||||
| Total | -- | -- | -- | -- | -- | -- |
| Name | Office title | Type | Date | Reason |
| Du Jie | independent director | The independent director | September 27, 2019 | Personal reasons. |
| Wang Feng | Chairman of the Supervisory Committee | Left | 20 May 2019 | Job adjustment. |
| Fu Qiangxin | Supervisor | Left | 20 May 2019 | Job adjustment. |
Liquor Branch Association, Secretary General of Market Professional Committee, Secretary General of White Wine Club TechnicalCommittee, specialist who enjoy the special allowance of the state council. He also is member of Chinese liquor standardizationtechnical committee, Deputy Secretary General of strong-flavor, Feng-flavour, soybean-flavor and rice flavour Liquor TechnicalCommittee of Chinese Liquor Standardization Technical Committee, Chairman of Committee of Te-flavour Chinese spirits andLaobaigan-flavour Chinese spirits standardization technical committee.
9. Wang Ruihua, male, born in January 1962, is a non-practicing CPA with a doctor’s degree in management. Now he acts as aprofessor and doctoral advisor in the Business School of Central University of Finance and Economics, the independent director inBeijing Zhong Ke San Huan Hi-Tech Co., Ltd., Harbin Gloria Pharmaceuticals Co., Ltd. and Bank Of Beijing Co., Ltd.
10. Sun Wanhua, male, was born in October 1965 with a bachelor degree. Now he acts as the Chairman of the SupervisoryCommittee of the Company, member of the Party Committee and vice president in Gujing Group. He once held the posts of themember of Standing Committee of CPC County Committee, the Party Secretary of People’s Armed Forces Department and politicalcommissar in Minquan County, Henan Province, member of Standing Committee of Discipline Inspection Committee in Bozhou,Deputy Director of Bozhou Supervision Bureau and Deputy Secretary of Bozhou Discipline Inspection Committee.
11. Mr. Yang Xiaofan, male, born in April 1967, is a holder of master degree. At present, he is Supervisor of the Company and VicePresident and member of CPC Committee of Gujing Group. He once acted as Vice President and General Manager of Anhui GujingReal Estates Group Co., Ltd., Assistant to President of Gujing Group; Director of the 5
th, 6
th and 7thBoard of Directors of theCompany and Supervisor of the 7
thSupervisory Committee.
12. Wang Zibin, male, born in August 1970, a senior auditor, certified internal auditor and CPA with a college degree. Now he acts asthe Employee Supervisor of the Company, member of the Party Committee and Secretary of the Discipline Inspection Committee inGujing Group. He once held the posts of the GM of Audit Department in Gujing Group, Assistant GM in Bozhou ConstructionInvestment Real Estate Development Co., Ltd., CFO and Deputy GM in Hefei Marketing Center of Bozhou Gujing Sales Company,the Supervisor of the 7
thSupervisory Committee of the Company and Director in Audit Supervision Center of Gujing Group.
13. Lu Duicang, male, born in March 1980, a senior accountant with a bachelor degree. Now he serves as the Assistant FinancialController in Gujing Group. He once acted as the accountant, deputy director, and director of No.1 Center of Finance Department,factory director of the Liquor and Spirits Bottling Branch and Manager of Finished Product Department in the Company, Controllerof the Financial Management Center in Gujing Group, GM of Anhui Huixin Finance Investment Group Co., Ltd. and the Supervisorof the 5th, 6th and 7th
Supervisory Committee of the Company.
14. Mr. Zhang Bo, male, born in July 1965, is an economist with bachelor degree. Now, he serves as Employee Supervisor of theCompany and Chairman of the Labor Union of Gujing Group. He once worked as Chairman of the board and GM of Bozhou GujingPrinting Co., Ltd. and Bozhou Gujing Glassware Manufacturing Co., Ltd. as well as Chairman of the Board of Bozhou Ruineng Heatand Power Co., Ltd. and Supervisor of the 7
thSupervisory Committee of the Company.
15. Mr. Zhang Lihong, male, born in October 1968, is an economist with bachelor degree. He is incumbent Deputy GM of theCompany and member of CPC Committee and deputy secretary of Commission for Discipline and Inspection of Gujing Group. Heonce acted as clerk, Secretary of Operation Department and Market Development Department, Deputy GM, Director of GeneralOffice, Director of Service Centre of Bozhou Gujing Sales Co., Ltd., Director of HR Department and Administrative Service Centerof the Company.
16. Mr. Zhu Xianghong, male, born in September 1974, is a senior Wine Taster with bachelor degree. He is incumbent assistant toGM of the Company, and GM of Yellow Crane Tower Liquor Industry Co., Ltd. He once acted as GM of Product Department ofBozhou Gujing Sales Co., Ltd., GM of Hefei Office, regional GM of Northern Anhui Province, GM of Anhui Operating Centre andstanding Deputy GM of Sales Company.
17. Mr. Gao Jiakun, male, born in November 1970, is a holder of bachelor degree. He is incumbent assistant to GM of the Company.He once served as GM of Production Management Department, Vice Director of Production Management Centre, Chairman of theBoard and GM of Bozhou Pairuite Packing Products Co., Ltd., Director of Finished Products Filling Centre and Production
Management Centre of the Company.Offices held concurrently in shareholding entities:
√Applicable □Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure | Remuneration or allowance from the shareholding entity |
| Liang Jinhui | Anhui Gujing Group Co., Ltd. | Chairman of the Board of Directors, Chairman of Party Committee | 1 May 2014 | Yes | |
| Li Peihui | Anhui Gujing Group Co., Ltd. | Deputy Chairman of Party Committee,， President | 31 October 2017 | Yes | |
| Sun Wanhua | Anhui Gujing Group Co., Ltd. | Vice President, member of the Party Committee | 31 October 2017 | Yes | |
| Yang Xiaofan | Anhui Gujing Group Co., Ltd. | Vice President, member of the Party Committee | 1 November 2009 | Yes | |
| Wang Zibin | Anhui Gujing Group Co., Ltd. | Member of the Party Committee, Chairman of Discipline Inspection Committee | 23 May 2019 | Yes | |
| Lu Duicang | Anhui Gujing Group Co., Ltd. | Assistant Financial Controller | 27 November 2017 | Yes | |
| Zhang Bo | Anhui Gujing Group Co., Ltd. | Chairman of the Labor Union | 16 October 2015 | Yes | |
| Notes | The above-mentioned personnel, though they take posts in shareholders’ entities, comply with the relevant employment requirements of Company Law, Securities Law and never disciplined by CSRC, other relevant | ||||
departments and the Stock Exchange.
Offices held concurrently in other entities:
□ Applicable √ Not applicable
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and seniormanagement as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement:
(I) Decision-making procedure of remuneration for Directors, Supervisors and Executive OfficersThe Remuneration & Appraisal Committee under the Board of Directors is in charge of drafting appraisal index of seniormanagement and checking accomplishment of annual index.(II) Determination basis of remuneration for Directors, Supervisors and Executive OfficersThe remuneration is determined based on the annual performance of the Company and the appraisal result in accordance with thespirits in the Implementation Opinion on Deepening the System Reform of Remuneration of Chargers in Provincial Enterprises(WF[2015] No. 28), and the Interim Procedures of Remuneration Management of Chargers in Municipal Enterprises (GZG[2017] No.
21) issued by the CPC Anhui Provincial Committee and the People’s Government of Anhui.(III) Actual Payment of remuneration for Directors, Supervisors and Executive OfficersPayment of the remuneration of Directors, Supervisors and Executive Officers is distributed annually according to check.Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Liang Jinhui | Chairman of the Board | Male | 54 | Incumbent | Yes | |
| Li Peihui | Director | Male | 47 | Incumbent | Yes | |
| Zhou Qingwu | Director, GM | Male | 46 | Incumbent | 146.58 | No |
| Yan Lijun | Director, Executive Deputy GM | Male | 47 | Incumbent | 325.07 | No |
| Xu Peng | Director, Deputy GM | Male | 50 | Incumbent | 94.39 | No |
| Ye Changqing | Director, Deputy GM, Chief Accountant, Secretary of the | Male | 46 | Incumbent | 141.44 | No |
| Board | ||||||
| Wang Gao | Independent director | Male | 55 | Incumbent | 7.50 | No |
| Song Shuyu | Independent director | Male | 58 | Incumbent | 7.50 | No |
| Wang Ruihua | Independent director | Male | 58 | Incumbent | 0.00 | No |
| Sun Wanhua | Chairman of Supervisory Committee | Male | 55 | Incumbent | Yes | |
| Yang Xiaofan | Supervisor | Male | 53 | Incumbent | Yes | |
| Wang Zibin | Employee supervisor | Male | 50 | Incumbent | Yes | |
| Lu Duicang | Supervisor | Male | 40 | Incumbent | Yes | |
| Zhang Bo | Employee supervisor | Male | 55 | Incumbent | Yes | |
| Zhang Lihong | Deputy GM | Male | 52 | Incumbent | 144.65 | No |
| Zhu Xianghong | GM assistant | Male | 46 | Incumbent | 306.48 | No |
| Gao Jiakun | GM assistant | Male | 50 | Incumbent | 127.02 | No |
| Du Jie | Independent director | Male | 50 | Former | 7.50 | No |
| Wang Feng | Chairman of Supervisory Committee | Male | 55 | Former | Yes | |
| Fu Qiangxin | Supervisor | Male | 51 | Former | Yes | |
| Total | -- | -- | -- | -- | 1,308.13 | -- |
| Number of in-service employees of the Company as the parent | 5,642 |
| Number of in-service employees of major subsidiaries | 4,039 |
| Total number of in-service employees | 9,681 |
| Total number of paid employees in the Reporting Period | 9,681 |
| Number of retirees to whom the Company as the parent or its | 1,142 |
| major subsidiaries need to pay retirement pensions | |
| Functions | |
| Function | Employees |
| Production | 5,452 |
| Sales | 2,378 |
| Technical | 471 |
| Financial | 187 |
| Administrative | 1,193 |
| Total | 9,681 |
| Educational backgrounds | |
| Educational background | Employees |
| Master or above | 84 |
| Bachelor | 2,286 |
| Junior college | 1,965 |
| High school or below | 5,346 |
| Total | 9,681 |
Part X Corporate GovernanceI General Information of Corporate GovernanceSince foundation, the Company constantly perfects corporate governance structure and standardize its management strictly inaccordance with the Company Law, Securities Law, Standard for Governance of Listed Companies, Guide Opinion on Setting upIndependent Directors Systems for Listed Companies as well as principles and requirements of other relevant laws, regulations andnormative documents.In the reporting period, the Company developed internal control activity, implemented Rules on Management of Assets Provision forImpairment, The Policy on the Liability of Disclosing Materially Inaccurate Information in Annual Report, Rules for Management ofExternal Information User and Rules for Management of Insider of Inner Information, perfected internal control system step by step,promoted normative operation and healthy development. The Board of Directors, the Supervisory Committee and the management ofthe Company make decisions, perform rights and assume obligation strictly according to the standard operation rules and innercontrol system so as to make sure the standard operation of the Company in the frame of rules and systems.In the reporting period, according to requirements of China Securities Regulatory Commission and Rules for Listing of Shares inShenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriously and timely performed informationdisclosure obligation and guaranteed that the information disclosed is true, accurate and complete, free from fictitious presentation,misleading statements or important omissions, so that all the shareholders will equally acquaint themselves with all the notices of theCompany.After the reporting period, the Company will continuously optimize and perfect the corporate governance of listed companies, furtherimprove the standard operation of the Company.Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing thegovernance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,Asset, Organization and Financial AffairsThe Company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five independences in terms of business,personnel, assets, organizations and financial affairs, with separate independent calculation, independent and complete business,independent operation ability, and independent responsibilities and risks. Majority shareholders cannot surpass the shareholders’general meeting to directly or indirectly interfere with the Company’s decisions and legal production as well as operation activities,and there is no same trade competition state of the same products between the company and majority shareholders.III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Index to disclosed information |
| The 2018 Annual General Meeting | Annual General Meeting | 61.15% | 20 May 2019 | 21 May 2019 | Announcement on Resolutions of the 2018 Annual General Meeting disclosed on www.cninfo.com.cn |
| The 1st Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 64.61% | 27 September 2019 | 28 September 2019 | Announcement on Resolutions of the 1st Extraordinary General Meeting of 2019 disclosed on www.cninfo.com.cn |
| The 2nd Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 59.80% | 26 November 2019 | 27 November 2019 | Announcement on Resolutions of the 2nd Extraordinary General Meeting of 2019 disclosed on www.cninfo.com.cn |
| Attendance of independent directors at board meetings and general meetings | |||||||
| Independent director | Total number of board meetings the independent director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the independent director failed to attend | The independent director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Wang Gao | 4 | 0 | 4 | 0 | 0 | No | 0 |
| Song Shuyu | 4 | 0 | 4 | 0 | 0 | No | 0 |
| Wang Ruihua | 1 | 0 | 1 | 0 | 0 | No | 0 |
| Du Jie | 3 | 1 | 2 | 0 | 0 | No | 2 |
In the reporting period, in strict compliance with the Specific Implementation Rules of the Nomination Committee, the NominationCommittee vigorously worked on various tasks, which ensured that the senior management staffs of the Company were hired incompliance with laws and regulations.
(1) In the Reporting Period, the senior management staff hired by the Company satisfied the requirements of the Company Law andother relevant laws and regulations. They were qualified as senior management staff. They were not in such a case where theCompany Law should forbid them from being senior management staff. Nor they were forbidden by CSRC from entering thesecurities market.
(2) In the Reporting Period, the senior management staff of the Company were nominated and hired in line with the Company Lawand the Company’s Articles of Association. The hired personnel have never been punished by CSRC, other relevant authorities orstock exchanges.
4. Duty performance of Remuneration and Appraisal Committee
(1) The Remuneration and Appraisal Committee affiliated to the Board of Directors, according to relevant regulations ofImplementation Rules of Remuneration and Appraisal Committee successfully completed the annual performance appraisal todirectors, supervisors and senior executives in line with standards and procedures of performance appraisal during the reportingperiod.
(2) Through the deliberation and assessment of the committee, the consistent opinion was that the general remuneration levelcomplied with development of the Company; the remuneration level of directors, supervisors and senior executives accuratelyreflected the overall performance situation of the Company and individual work performance, which complied with the remunerationmanagement system; the remuneration plan and procedure of issuing remuneration were in accordance with the laws and did notviolate relevant national laws and regulations.
VII Performance of Duty by the Supervisory CommitteeIndicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the ReportingPeriod.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.VIII Appraisal of and Incentive for Senior ManagementThe Company has set up a Performance Appraisal and Incentive Mechanism for Senior Executives, which links remuneration ofsenior executives with the Company’ performance, the decision-making management adopts the assessment and incentive measuresby linking the annual remuneration with the Company’ economic indexes & management achievement. To promote the standard,healthy and orderly development of the Company and keep the stability of the Executive Officers, the Company annually sets up theassessment index for them and signs a written responsibility of business target at the year-begin, then decides their remuneration andthe rewards & punishment at the year-end according to their personal work performance and completion of the Company’s operatingtarget.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 27 April 2020 | |
| Index to the disclosed internal control self-evaluation report | See www.cninfo.com.cn for the Anhui Gujing Distillery Company Limited Self-assessment Report of Internal Control | |
| Evaluated entities’ combined assets as % of consolidated total assets | 99.26% | |
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 99.89% | |
| Identification standards for internal control weaknesses | ||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting |
| Nature standard | Critical defect: Separate defect or other defects that result in failure in preventing, finding out and correcting major wrong reporting in financial report in time. The following circumstances are deemed as critical defects: (1) Ineffective in controlling the environment; (2) Malpractice of directors, supervisors and senior management officers; (3) According to external auditing, there’s major wrong reporting in current financial report, which fails to be found by the company in its operating process; (4) Major defects found and reported to the top management fail to be corrected within a reasonable period of time; (5) The supervision of audit committee of the company and its internal audit department for internal control is ineffective; (6) Other defects that may affect correct judgment of users of statements. Major defect: Separate defect or other defects that result in failure in preventing, finding out and correcting wrong reporting in financial report in time, which shall be noted by the top management despite of not attaining or exceeding critical level. Minor defect: Other internal control defects not constituting critical or major defects. | Any of the following circumstances shall be deemed as a critical defect, and other circumstances shall be deemed as major or minor defects according to their degree of impact. (1) Violate national laws, regulations or standardized documents; (2) Major decision making procedure is not scientific; (3) Lack of systems results in systematic failure; (4) Critical or major defects fail to be rectified; (5) Other circumstances that have major impact on the company. |
| Quantitative standard | Critical defect: (1) Wrong reporting ≥0.5% of total operating revenue; (2) Wrong reporting ≥5% of total profit; (3) Wrong reporting ≥0.5% of total assets; (4) Wrong reporting ≥0.5% of total owner’s equity. Major defect: (1) Wrong reporting ≥0.2% but ＜0.5% of total operating revenue; (2) Wrong reporting ≥2% but ＜5% of total profit; (3) Wrong reporting ≥0.2% but ＜0.5% of total assets; (4) Wrong reporting ≥0.2% but ＜0.5% of total owner’s equity. Minor defect: (1) Wrong reporting＜0.2% of total operating revenue; (2) Wrong reporting＜2% of total profit; (3) Wrong reporting＜0.2% of total assets; (4) Wrong reporting＜0.2% of total owner’s equity. | Critical defect: The defect with direct property loss amounting to over RMB10 million, has great negative impact on the company and is disclosed in public in the form of announcement. Major defect: The defect with direct property loss amounting to RMB1 million to RMB10 million (included), or is penalized by governmental authority of the country but has not resulted in negative impact on the company. Minor defect: The defect with direct property loss no more than RMB1 million (included), or is penalized by governmental authority of the provincial-level or below but has not resulted in negative impact on the company. |
| Number of material weaknesses in internal control over financial reporting | 0 | |
| Number of material weaknesses in internal control not related to financial reporting | 0 | |
| Number of serious weaknesses in internal control over financial reporting | 0 | |
| Number of serious weaknesses in internal control not related to financial reporting | 0 | |
| Opinion paragraph in the independent auditor’s report on internal control | |
| We believe that the Company has maintained effective internal control on financial report in all significant respects according to the Basic Rules for Enterprise Internal Control and relevant regulations on 31 December 2019 | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 27 April 2020 |
| Index to such report disclosed | See www.cninfo.com.cn for Audit Report of Internal Control |
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | None |
Part XI Corporate BondsDoes the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?No
Part XII Financial StatementsI Independent Auditor’s Report
| Type of auditor’s opinion | Unmodified unqualified opinion |
| Date of signing the auditor’s report | 24 April 2020 |
| Name of the auditor | RSM China |
| No. of the auditor’s report | Rongcheng audit character [2020] 230Z1808 |
| Name of CPA | Fu jinyong, Bao guangrong, Jiang jieyu |
In 2019, the company achieved revenue of 10.417 billion yuan, an increase of 19.93% compared with the same period in 2018.As revenue is one of the key performance indicators of the company, there may be the risk of material misstatement in whether therevenue is recognized in an appropriate accounting period. Therefore, we regard revenue recognition as a key audit matter.ii. Audit responseOur procedures for revenue recognition include:
i) Understand the internal control process design related to the sales business, and execute the walk-through test, performthe control test on the identified key control points;
ii) Interview with the management, check the samples of sales contract, analyze the significant risk and reward transferringpoint related to revenue recognition of liquor sales, and then evaluate whether the company's sales revenue recognition policy isreasonable;
iii) Sampling inspection of supporting documents related to liquor sales revenue recognition, including sales orders, salesinvoices, outbound orders, etc.;
iv) Compared with the liquor sales data of other enterprises in the same industry, compared the liquor sales data of the lastperiod with the current period, analyzed the overall rationality of revenue and gross margin;
v) For the liquor sales revenue recognized before and after the balance sheet date, select samples to check the sales orders,sales invoices, outbound orders, etc., in order to evaluate whether the sales revenue is recorded in an appropriate accounting period;
vi) Confirm the amount of liquor sold and the closing balance of the advance payment to the main distributor by sendingconfirmation letter.
II. Accuracy of inventory balancesi. Description
Refer to notes to the consolidated financial statements "3 13. Inventory" and "5. 8. Inventory".
Anhui Gujing has a large inventory balance and needs to maintain an appropriate level of inventory to meet future market orproduction demand. The inventory balance accounts for 21.74% of the company's total assets, and most of the inventory issemi-finished products and work in progress products. As the most important asset of liquor production enterprises, inventory has ahigh balance at the end of the year and a large proportion of the total assets. Therefore, we regard the accuracy of the company'sinventory balance as a key audit matter.ii. Audit response
Our procedures for the accuracy of inventory balances include:
i) Understand the internal control process design related to inventory business, and carry out walk-through test, carry outcontrol tests for identified key control points;
ii) Obtain the stocktaking plan and stocktaking results of the company, understand the stocktaking methods and reviewprocedures of the company, and supervise the stocktaking;
iii) Understand the company's inventory cost accounting method, select several months of cost calculation sheet to review,and select the main categories of inventory to carry out valuation test;
iv) To understand the provision method of the company's inventory impairment, evaluate the appropriateness of the provisionmethod, and review whether the provision amount is correct;v) Perform analytical procedures and compare with companies in the same industry.Other informationManagement of Anhui Gujing is responsible for the other information. The other information comprises the informationincluded in the Annual Report of Anhui Gujing for the year of 2019, but does not include the financial statements and our auditor’sreport thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assuranceconclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the auditor otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.Responsibilities of Management and Those Charged with Governance for the Financial StatementsManagement of Anhui Gujing is responsible for the preparation and fair presentation of the financial statements in accordancewith Accounting Standards of Business Enterprises, and for the design, implementation and maintenance of such internal control asmanagement determines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Anhui Gujing’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate Anhui Gujing or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Anhui Gujing’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our Objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:
i) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, designand perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.ii) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate inthe circumstances.
iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by management.iv) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on AnhuiGujing’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention inour auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause Anhui Gujing to cease to continue as a going concern.
v) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fair presentation.
vi) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activitieswithin Anhui Gujing to express an opinion on the financial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the auditand significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear onour independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
RSM China CPA LLP [Name of CPA]：Fujinyong
China·Beijing [Name of CPA]：Baoguangrong
[Name of CPA]：Jangjieyue
[Date] 24 April 2020
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
31 December 2019
Unit: RMB
| Item | 31 December 2019 | 31 December 2018 |
| Current assets: | ||
| Monetary assets | 5,619,749,918.09 | 1,705,760,865.12 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 509,031,097.02 | 0.00 |
| Financial assets at fair value through profit or loss | 0.00 | 622,892.96 |
| Derivative financial assets | ||
| Notes receivable | 1,004,217,431.56 | 1,347,427,811.34 |
| Accounts receivable | 40,776,567.96 | 29,748,068.74 |
| Accounts receivable financing | ||
| Prepayments | 197,453,313.96 | 182,558,000.75 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 25,746,957.22 | 43,342,878.22 |
| Including: Interest receivable | 1,908,788.81 | 24,923,178.08 |
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 3,015,051,961.78 | 2,407,306,664.86 |
| Contractual assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | 0.00 | 300,000,000.00 |
| Other current assets | 114,439,167.07 | 3,012,478,687.20 |
| Total current assets | 10,526,466,414.66 | 9,029,245,869.19 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Available-for-sale financial assets | 0.00 | 206,393,107.46 |
| Investments in other debt obligations | ||
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 4,678,282.24 | 4,900,000.00 |
| Investments in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 4,710,086.02 | 5,027,228.53 |
| Fixed assets | 1,722,572,998.79 | 1,763,988,530.56 |
| Construction in progress | 183,984,816.07 | 93,320,557.56 |
| Productive living assets | ||
| Oil and gas assets | ||
| Use rights assets | ||
| Intangible assets | 785,717,932.76 | 742,083,609.10 |
| R&D expense | ||
| Goodwill | 478,283,495.29 | 478,283,495.29 |
| Long-term prepaid expense | 70,240,106.82 | 83,561,473.46 |
| Deferred income tax assets | 90,494,544.51 | 86,580,171.06 |
| Other non-current assets | 4,148,686.00 | 16,544,407.51 |
| Total non-current assets | 3,344,830,948.50 | 3,480,682,580.53 |
| Total assets | 13,871,297,363.16 | 12,509,928,449.72 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 703,679,646.86 | 349,203,413.72 |
| Accounts payable | 563,494,195.40 | 484,952,598.59 |
| Advances from customers | 529,863,011.73 | 1,149,143,310.48 |
| Contractual liabilities | ||
| Financial assets sold under repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Payroll payable | 454,189,532.89 | 457,299,476.43 |
| Taxes payable | 482,903,109.59 | 372,993,624.18 |
| Other payables | 1,315,878,229.01 | 1,192,020,147.82 |
| Including: Interest payable | ||
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 197,484,121.41 | 295,164,745.44 |
| Total current liabilities | 4,247,491,846.89 | 4,300,777,316.66 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term payroll payable | ||
| Provisions | ||
| Deferred income | 72,778,437.92 | 76,636,500.55 |
| Deferred income tax liabilities | 118,872,366.61 | 102,764,515.11 |
| Other non-current liabilities | ||
| Total non-current liabilities | 191,650,804.53 | 179,401,015.66 |
| Total liabilities | 4,439,142,651.42 | 4,480,178,332.32 |
| Owners’ equity: | ||
| Share capital | 503,600,000.00 | 503,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,295,405,592.25 | 1,295,405,592.25 |
| Less: Treasury stock | ||
| Other comprehensive income | 0.00 | 4,794,830.59 |
| Specific reserve | ||
| Surplus reserves | 256,902,260.27 | 256,902,260.27 |
| General reserve | ||
| Retained earnings | 6,888,203,911.92 | 5,541,281,341.47 |
| Total equity attributable to owners of the Company as the parent | 8,944,111,764.44 | 7,601,984,024.58 |
| Non-controlling interests | 488,042,947.30 | 427,766,092.82 |
| Total owners’ equity | 9,432,154,711.74 | 8,029,750,117.40 |
| Total liabilities and owners’ equity | 13,871,297,363.16 | 12,509,928,449.72 |
| Item | 31 December 2019 | 31 December 2018 |
| Current assets: | ||
| Monetary assets | 2,919,818,830.20 | 1,078,172,917.59 |
| Held-for-trading financial assets | 489,861,097.02 | 0.00 |
| Financial assets at fair value through profit or loss | 0.00 | 622,892.96 |
| Derivative financial assets | ||
| Notes receivable | 378,740,100.82 | 1,256,336,386.34 |
| Accounts receivable | 218,558,555.07 | 9,385,950.54 |
| Accounts receivable financing | ||
| Prepayments | 17,906,999.63 | 10,869,911.54 |
| Other receivables | 125,219,213.84 | 110,800,665.19 |
| Including: Interest receivable | 301,888.89 | 0.00 |
| Dividends receivable | ||
| Inventories | 2,688,839,871.27 | 2,125,826,967.11 |
| Contractual assets | ||
| Assets classified as held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 1,280,998.32 | 1,764,267,968.83 |
| Total current assets | 6,840,225,666.17 | 6,356,283,660.10 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Available-for-sale financial assets | 0.00 | 206,393,107.46 |
| Investments in other debt obligations | ||
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 1,148,213,665.32 | 1,148,213,665.32 |
| Investments in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 4,710,086.02 | 24,715,657.40 |
| Fixed assets | 1,310,704,771.36 | 1,290,714,455.79 |
| Construction in progress | 84,477,784.02 | 86,634,753.93 |
| Productive living assets | ||
| Oil and gas assets | ||
| Use rights assets | ||
| Intangible assets | 243,928,047.95 | 189,968,142.25 |
| R&D expense | ||
| Goodwill | ||
| Long-term prepaid expense | 48,354,967.15 | 56,643,945.05 |
| Deferred income tax assets | 31,360,809.87 | 37,415,458.17 |
| Other non-current assets | 574,026.00 | 12,474,026.00 |
| Total non-current assets | 2,872,324,157.69 | 3,053,173,211.37 |
| Total assets | 9,712,549,823.86 | 9,409,456,871.47 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 49,114,582.04 | 28,648,913.72 |
| Accounts payable | 450,303,984.53 | 362,290,556.21 |
| Advances from customers | 31,724.77 | 1,123,125,892.84 |
| Contractual liabilities | ||
| Payroll payable | 100,357,808.20 | 117,748,485.96 |
| Taxes payable | 371,012,223.50 | 161,176,957.25 |
| Other payables | 274,053,511.54 | 372,902,293.22 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities directly associated with assets classified as held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 11,953,800.20 | 32,605,794.55 |
| Total current liabilities | 1,256,827,634.78 | 2,198,498,893.75 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term payroll payable | ||
| Provisions | ||
| Deferred income | 33,229,246.47 | 36,417,554.85 |
| Deferred income tax liabilities | 22,799,814.64 | 4,828,737.52 |
| Other non-current liabilities | ||
| Total non-current liabilities | 56,029,061.11 | 41,246,292.37 |
| Total liabilities | 1,312,856,695.89 | 2,239,745,186.12 |
| Owners’ equity: | ||
| Share capital | 503,600,000.00 | 503,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,247,162,107.35 | 1,247,162,107.35 |
| Less: Treasury stock | ||
| Other comprehensive income | 0.00 | 4,794,830.59 |
| Specific reserve | ||
| Surplus reserves | 251,800,000.00 | 251,800,000.00 |
| Retained earnings | 6,397,131,020.62 | 5,162,354,747.41 |
| Total owners’ equity | 8,399,693,127.97 | 7,169,711,685.35 |
| Total liabilities and owners’ equity | 9,712,549,823.86 | 9,409,456,871.47 |
| Item | 2019 | 2018 |
| 1. Revenue | 10,416,961,584.23 | 8,686,140,336.89 |
| Including: Operating revenue | 10,416,961,584.23 | 8,686,140,336.89 |
| Interest income | ||
| Premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 7,833,874,460.30 | 6,510,898,845.96 |
| Including: Cost of sales | 2,426,046,924.89 | 1,932,064,837.65 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends |
| Reinsurance premium expense | ||
| Taxes and surcharges | 1,592,905,554.04 | 1,278,907,520.09 |
| Selling expense | 3,184,894,221.10 | 2,682,535,305.26 |
| Administrative expense | 685,280,546.45 | 644,997,046.65 |
| R&D expense | 42,373,017.33 | 23,966,766.04 |
| Finance costs | -97,625,803.51 | -51,572,629.73 |
| Including: Interest expense | 33,652,843.25 | 15,408,022.76 |
| Interest income | 133,813,626.35 | 68,964,800.42 |
| Add: Other income | 98,244,470.32 | 35,701,674.45 |
| Return on investment (“-” for loss) | 126,427,450.28 | 148,215,468.62 |
| Including: Share of profit or loss of joint ventures and associates | -221,717.76 | 0.00 |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Foreign exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 17,585,151.48 | -161,541.19 |
| Credit impairment loss (“-” for loss) | -932,729.84 | 0.00 |
| Asset impairment loss (“-” for loss) | -1,217,745.51 | -12,726,868.74 |
| Asset disposal income (“-” for loss) | 252,518.68 | 526,066.38 |
| 3. Operating profit (“-” for loss) | 2,823,446,239.34 | 2,346,796,290.45 |
| Add: Non-operating income | 57,805,996.37 | 35,289,980.44 |
| Less: Non-operating expense | 8,410,456.65 | 13,160,175.48 |
| 4. Profit before tax (“-” for loss) | 2,872,841,779.06 | 2,368,926,095.41 |
| Less: Income tax expense | 715,037,184.72 | 628,012,434.53 |
| 5. Net profit (“-” for net loss) | 2,157,804,594.34 | 1,740,913,660.88 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 2,157,804,594.34 | 1,740,913,660.88 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to owners of the Company as the parent | 2,097,527,739.86 | 1,695,231,643.05 |
| 5.2.1 Net profit attributable to non-controlling interests | 60,276,854.48 | 45,682,017.83 |
| 6. Other comprehensive income, net of tax | 0.00 | -48,725,996.85 |
| Attributable to owners of the Company as the parent | 0.00 | -48,725,996.85 |
| 6.1 Items that will not be reclassified to profit or loss | ||
| 6.1.1 Changes caused by remeasurements on defined benefit pension 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 | ||
| 6.1.4 Changes in the fair value of the company’s credit risks | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | 0.00 | -48,725,996.85 |
| 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 Gain/Loss on changes in the fair value of available-for-sale financial assets | 0.00 | -48,725,996.85 |
| 6.2.4 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.5 Gain/Loss arising from the reclassification of held-to-maturity investments to available-for-sale financial assets |
| 6.2.6 Allowance for credit impairments in investments in other debt obligations | ||
| 6.2.7 Reserve for cash flow hedges | ||
| 6.2.8 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 6.2.9 Other | ||
| Attributable to non-controlling interests | ||
| 7. Total comprehensive income | 2,157,804,594.34 | 1,692,187,664.03 |
| Attributable to owners of the Company as the parent | 2,097,527,739.86 | 1,646,505,646.20 |
| Attributable to non-controlling interests | 60,276,854.48 | 45,682,017.83 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 4.17 | 3.37 |
| 8.2 Diluted earnings per share | 4.17 | 3.37 |
| Item | 2019 | 2018 |
| 1. Operating revenue | 5,564,895,569.73 | 4,255,302,263.38 |
| Less: Cost of sales | 2,269,256,097.78 | 1,772,452,588.66 |
| Taxes and surcharges | 1,366,947,316.98 | 1,074,150,390.45 |
| Selling expense | 66,666,543.63 | 177,002,048.12 |
| Administrative expense | 449,947,174.03 | 443,945,470.10 |
| R&D expense | 21,923,357.07 | 17,321,657.06 |
| Finance costs | -34,323,060.49 | -42,463,654.44 |
| Including: Interest expense | 33,506,232.15 | 15,408,022.76 |
| Interest income | 69,580,038.23 | 58,659,575.81 |
| Add: Other income | 54,224,566.00 | 15,340,983.23 |
| Return on investment (“-” for loss) | 846,168,044.08 | 953,463,522.77 |
| Including: Share of profit or loss of joint ventures and associates |
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 17,585,151.48 | -161,541.19 |
| Credit impairment loss (“-” for loss) | -274,201.63 | 0.00 |
| Asset impairment loss (“-” for loss) | -948,348.71 | -11,600,870.40 |
| Asset disposal income (“-” for loss) | 36,552.41 | 0.00 |
| 2. Operating profit (“-” for loss) | 2,341,269,904.36 | 1,769,935,857.84 |
| Add: Non-operating income | 45,105,856.60 | 29,427,413.82 |
| Less: Non-operating expense | 4,137,379.38 | 9,158,255.98 |
| 3. Profit before tax (“-” for loss) | 2,382,238,381.58 | 1,790,205,015.68 |
| Less: Income tax expense | 396,856,938.96 | 227,402,111.65 |
| 4. Net profit (“-” for net loss) | 1,985,381,442.62 | 1,562,802,904.03 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 1,985,381,442.62 | 1,562,802,904.03 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | 0.00 | -48,659,905.79 |
| 5.1 Items that will not be reclassified to profit or loss | ||
| 5.1.1 Changes caused by remeasurements on defined benefit pension 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 of the company’s credit risks | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss | 0.00 | -48,659,905.79 |
| 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 Gain/Loss on changes in the fair value of available-for-sale financial assets | 0.00 | -48,659,905.79 |
| 5.2.4 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.5 Gain/Loss arising from the reclassification of held-to-maturity investments to available-for-sale financial assets | ||
| 5.2.6 Allowance for credit impairments in investments in other debt obligations | ||
| 5.2.7 Reserve for cash flow hedges | ||
| 5.2.8 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 5.2.9 Other | ||
| 6. Total comprehensive income | 1,985,381,442.62 | 1,514,142,998.24 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | 3.94 | 3.10 |
| 7.2 Diluted earnings per share | 3.94 | 3.10 |
| Item | 2019 | 2018 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 10,746,837,904.99 | 9,158,327,553.33 |
| 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 | 9,498,718.50 | 18,279,633.65 |
| Cash generated from other operating activities | 1,323,733,316.43 | 774,008,382.31 |
| Subtotal of cash generated from operating activities | 12,080,069,939.92 | 9,950,615,569.29 |
| Payments for commodities and services | 1,593,805,653.82 | 1,141,576,748.20 |
| 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 | 2,042,656,319.91 | 1,557,106,771.09 |
| Taxes paid | 3,292,028,435.78 | 3,095,830,374.91 |
| Cash used in other operating activities | 4,959,132,466.96 | 2,715,220,389.14 |
| Subtotal of cash used in operating activities | 11,887,622,876.47 | 8,509,734,283.34 |
| Net cash generated from/used in operating activities | 192,447,063.45 | 1,440,881,285.95 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 4,007,300,054.88 | 3,392,057,566.06 |
| Return on investment | 126,649,168.04 | 137,503,636.38 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 4,351,897.20 | 1,088,510.86 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 4,138,301,120.12 | 3,530,649,713.30 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 412,329,130.60 | 307,319,114.99 |
| Payments for investments | 1,053,830,000.00 | 4,349,123,092.20 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 1,466,159,130.60 | 4,656,442,207.19 |
| Net cash generated from/used in investing activities | 2,672,141,989.52 | -1,125,792,493.89 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings obtained | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayments of borrowings | ||
| Payments for interest and dividends | 755,400,000.00 | 503,600,000.00 |
| Including: Dividends paid by subsidiaries to non-controlling interests | ||
| Cash used in other financing activities | 0.00 | 16,553.34 |
| Subtotal of cash used in financing activities | 755,400,000.00 | 503,616,553.34 |
| Net cash generated from/used in financing activities | -755,400,000.00 | -503,616,553.34 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | 2,109,189,052.97 | -188,527,761.28 |
| Add: Cash and cash equivalents, beginning of the period | 835,560,865.12 | 1,024,088,626.40 |
| 6. Cash and cash equivalents, end of the period | 2,944,749,918.09 | 835,560,865.12 |
| Item | 2019 | 2018 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 4,469,643,061.53 | 3,047,700,512.72 |
| Tax rebates | 4,448,500.00 | 4,523,679.80 |
| Cash generated from other operating activities | 530,824,780.80 | 744,922,683.25 |
| Subtotal of cash generated from operating activities | 5,004,916,342.33 | 3,797,146,875.77 |
| Payments for commodities and services | 1,103,336,566.52 | 1,151,280,535.30 |
| Cash paid to and for employees | 674,939,745.53 | 556,958,789.26 |
| Taxes paid | 1,967,147,571.63 | 1,875,058,501.76 |
| Cash used in other operating activities | 1,195,092,963.86 | 606,222,797.89 |
| Subtotal of cash used in operating activities | 4,940,516,847.54 | 4,189,520,624.21 |
| Net cash generated from/used in operating activities | 64,399,494.79 | -392,373,748.44 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 2,200,740,054.88 | 2,592,057,566.06 |
| Return on investment | 846,168,044.08 | 956,590,486.35 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 2,760,011.69 | 153,914.79 |
| Net proceeds from the disposal of subsidiaries and other business units | 0.00 | 3,587,238.24 |
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 3,049,668,110.65 | 3,552,389,205.44 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 271,021,692.83 | 228,181,556.23 |
| Payments for investments | 716,000,000.00 | 2,546,323,092.20 |
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 987,021,692.83 | 2,774,504,648.43 |
| Net cash generated from/used in investing activities | 2,062,646,417.82 | 777,884,557.01 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings obtained | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayments of borrowings | ||
| Payments for interest and dividends | 755,400,000.00 | 503,600,000.00 |
| Cash used in other financing activities | ||
| Subtotal of cash used in financing activities | 755,400,000.00 | 503,600,000.00 |
| Net cash generated from/used in financing activities | -755,400,000.00 | -503,600,000.00 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | 1,371,645,912.61 | -118,089,191.43 |
| Add: Cash and cash equivalents, beginning of the period | 708,172,917.59 | 826,262,109.02 |
| 6. Cash and cash equivalents, end of the period | 2,079,818,830.20 | 708,172,917.59 |
7. Consolidated Statements of Changes in Owners’ Equity
2019
Unit: RMB
| Item | 2019 | ||||||||||||||
| 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. Balances as at the end of the prior year | 503,600,000.00 | 1,295,405,592.25 | 4,794,830.59 | 256,902,260.27 | 5,541,281,341.47 | 7,601,984,024.58 | 427,766,092.82 | 8,029,750,117.40 | |||||||
| Add: Adjustments for changed accounting policies | -4,794,830.59 | 4,794,830.59 | |||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||||
| Adjustments for business combinations under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balances as at the beginning of the year | 503,600,000.00 | 1,295,405,592.25 | 256,902,260.27 | 5,546,076,172.06 | 7,601,984,024.58 | 427,766,092.82 | 8,029,750,117.40 | ||||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 1,342,127,739.86 | 1,342,127,739.86 | 60,276,854.48 | 1,402,404,594.34 | |||||||||||
| 3.1 Total comprehensive income | 2,097,527,739.86 | 2,097,527,739.86 | 60,276,854.48 | 2,157,804,594.34 | |||||||||||
| 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 | -755,400,000.00 | -755,400,000.00 | -755,400,000.00 | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve |
| 3.3.3 Appropriation to owners (or shareholders) | -755,400,000.00 | -755,400,000.00 | -755,400,000.00 | ||||||||||||
| 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 pension 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. Balances as at the end of the period | 503,600,000.00 | 1,295,405,592.25 | 256,902,260.27 | 6,888,203,911.92 | 8,944,111,764.44 | 488,042,947.30 | 9,432,154,711.74 |
| Item | 2018 | ||||||||||||||
| 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. Balances as at the end of the prior year | 503,600,000.00 | 1,295,405,592.25 | 53,520,827.44 | 256,902,260.27 | 4,349,649,698.42 | 6,459,078,378.38 | 382,100,628.33 | 6,841,179,006.71 | |||||||
| Add: Adjustments for changed accounting policies | |||||||||||||||
| Adjustments for corrections of previous errors | |||||||||||||||
| Adjustments for business combinations under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balances as at the beginning of the year | 503,600,000.00 | 1,295,405,592.25 | 53,520,827.44 | 256,902,260.27 | 4,349,649,698.42 | 6,459,078,378.38 | 382,100,628.33 | 6,841,179,006.71 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -48,725,996.85 | 1,191,631,643.05 | 1,142,905,646.20 | 45,665,464.49 | 1,188,571,110.69 | ||||||||||
| 3.1 Total comprehensive income | -48,725,996.85 | 1,695,231,643.05 | 1,646,505,646.20 | 45,682,017.83 | 1,692,187,664.03 | ||||||||||
| 3.2 Capital increased and reduced by owners | -16,553.34 | -16,553.34 |
| 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 | -16,553.34 | -16,553.34 | |||||||||||||
| 3.3 Profit distribution | -503,600,000.00 | -503,600,000.00 | -503,600,000.00 | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve |
| 3.3.3 Appropriation to owners (or shareholders) | -503,600,000.00 | -503,600,000.00 | -503,600,000.00 | ||||||||||||
| 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 pension 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. Balances as at the end of the period | 503,600,000.00 | 1,295,405,592.25 | 4,794,830.59 | 256,902,260.27 | 5,541,281,341.47 | 7,601,984,024.58 | 427,766,092.82 | 8,029,750,117.40 |
| Item | 2019 | |||||||||||
| 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. Balances as at the end of the prior year | 503,600,000.00 | 1,247,162,107.35 | 4,794,830.59 | 251,800,000.00 | 5,162,354,747.41 | 7,169,711,685.35 | ||||||
| Add: Adjustments for changed accounting policies | -4,794,830.59 | 4,794,830.59 | ||||||||||
| Adjustments for corrections of previous errors | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balances as at the beginning of the year | 503,600,000.00 | 1,247,162,107.35 | 251,800,000.00 | 5,167,149,578.00 | 7,169,711,685.35 | |||||||
| 3. Increase/ decrease in the period (“-” for decrease) | 1,229,981,442.62 | 1,229,981,442.62 | ||||||||||
| 3.1 Total comprehensive income | 1,985,381,442.62 | 1,985,381,442.62 | ||||||||||
| 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 | -755,400,000.00 | -755,400,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -755,400,000.00 | -755,400,000.00 | ||||||||||
| 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 pension 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. Balances as at the end of the period | 503,600,000.00 | 1,247,162,107.35 | 251,800,000.00 | 6,397,131,020.62 | 8,399,693,127.97 |
2018
Unit: RMB
| Item | 2018 | |||||||||||
| 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. Balances as at the end of the prior year | 503,600,000.00 | 1,247,162,107.35 | 53,454,736.38 | 251,800,000.00 | 4,103,151,843.38 | 6,159,168,687.11 | ||||||
| Add: Adjustments for changed accounting policies | ||||||||||||
| Adjustments for corrections of previous errors | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balances as at the beginning of the year | 503,600,000.00 | 1,247,162,107.35 | 53,454,736.38 | 251,800,000.00 | 4,103,151,843.38 | 6,159,168,687.11 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -48,659,905.79 | 1,059,202,904.03 | 1,010,542,998.24 | |||||||||
| 3.1 Total comprehensive income | -48,659,905.79 | 1,562,802,904.03 | 1,514,142,998.24 | |||||||||
| 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 | -503,600,000.00 | -503,600,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -503,600,000.00 | -503,600,000.00 | ||||||||||
| 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 pension 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. Balances as at the end of the period | 503,600,000.00 | 1,247,162,107.35 | 4,794,830.59 | 251,800,000.00 | 5,162,354,747.41 | 7,169,711,685.35 |
Anhui Gujing Distillery Co., Ltd.Notes to the Financial StatementsFor the year ended 31 December 2019（All amounts are expressed in Renminbi Yuan(“RMB”)unless otherwise stated）
1. BASIC INFORMATION ABOUT THE COMPANY
1.1 Corporate Information
Anhui Gujing Distillery Co., Ltd. (hereinafter “the Company” or "Company") was approved byAnhui State-owned Assets Administration by WanGuoZiGongZi (1996) NO. 053. Anhui GujingGroup Co., Ltd. was the sole sponsor of the Company. The Company was established by convertingthe net assets of the main production and operating assets of its core enterprise Anhui BozhouGujing Distillery into 155 million shares of state-owned shares with a net value of 377.1677 millionyuan. The registered place of the Company is Bozhou City, Anhui Province, People's Republic ofChina. The Company was established on March 5, 1996 with the approval of Anhui Secretary ofGovernment (1996) No. 42 by the Anhui Provincial People's Government. The Company started itsfounding meeting on May 28, 1996, and registered with the Anhui Provincial Administration forIndustry and Commerce on May 30, 1996.The Company issued 60 million foreign-oriented shares for domestic listing (hereinafter “B”shares) in June 1996 and 20 million domestic listed RMB ordinary shares (hereinafter “A” shares)in September 1996, the par value of ordinary shares is RMB1per share. Both A share and B shareare listed on Shenzhen Stock exchange.The headquarters of the Company is located in Gujing town, Bozhou city, Anhui province. TheCompany and the subsidiaries (collectively called “Group”) is mainly engaged in liquor productionand sales; it belongs to the food manufacturing industry.The original registered capital wasRMB 235 million, the total amount of shares was 235 million,including state-owned shares 155 million, “B” shares 60 million, “A” shares 20 million with thepar value of RMB 1 per share.On May 29, 2006, the shareholder meeting for the Company’s split share structure reform ofA-share market has discussed and approved the proposal of the split share structure reform, andthe reform was implemented in June 2006. After the implementation of the Company’s split sharestructure reform, all shares of the Company became tradable shares, which included147,000,000shares with restrictions on disposal, representing 62.55% of total share capital, and88,000,000 shares without restrictions on disposal, representing 37.45% of total share capital.
On June 27, 2007, the Company issued the Announcement of release restriction shares by AnhuiGujing Distillery Co., Ltd., the 11,750,000 restricted outstanding shares with the restrictedcondition on disposal became non-restricted in the stock market, and the conversion date is June29, 2007. Hence, outstanding shares with the restrict condition on disposal are 135,250,000 shares,representing 57.55% of total share capital, the share without restricting condition on disposal are99,750,000 shares, representing 42.45% of total share capital.On July 17, 2008, the Company issued the Announcement of release restriction shares by AnhuiGujing Distillery Co., Ltd., the 11,750,000 restricted outstanding shares with the restrictedcondition on disposal became non-restricted in the stock market, and the conversion date is onJuly 18, 2008. Hence, outstanding shares with the restricted condition on disposal were123,500,000 shares, representing 52.55% of total share capital, the share without restrictingcondition on disposal are 111,500,000 shares, representing 47.45% of total share capital.On July 24, 2009, the Company issued the Announcement of release restriction shares by AnhuiGujing Distillery Co., Ltd., the 123,500,000 restricted outstanding shares with the restrictedcondition on disposal became non-restricted in the stock market, and the conversion date was onJuly 29, 2009. Hence, all shares of the Company became outstanding shares without restrictedcondition on disposal.According to the approval by China Securities Regulatory Commission (the authorization file No.zhengjianxuke[2011]943), on July 15, 2011, the Company privately issued 16,800,000 shares ofordinary share (A shares) to specific investors, the par value was RMB 1 per share, and theoffering price was RMB 75 per share, the funds raised amounted to RMB 1,260 million. Afterdeducting the sundry issuing charges amounting to RMB 32,500,549.73, the actual funds raisedamounted to RMB 1,227,499,450.27. The position of the above raised funds has been verified byReanda Certified Public Accountants Co., Ltd. with a Capital Verification Report (REANDA YANZI[2011]No.1065). After the non-public issuance, the share capital of the Company increased toRMB 251.80 million.According to the resolution of 2011 annual general meeting of stockholders, the Companyconverted 10 shares for each10 shares from capital reserves based on the 251.80 million shares on31 December 2011, the total number of converted shares was 251.80 million, and the transfer wasimplemented in 2012. After the conversion, the registered capital increased to RMB 503.60million.As of 31 December 2019, the accumulated number of issued share capital was 503.60 millionshares.The Company registered in Gujing town, Bozhou city, Anhui province.
The approved business scope of the Company: grain procurement (operation by license),production of distilled spirits, brewing equipment, packaging materials, glass bottles, alcohol,grease (limited to the by-products from alcohol production), high-tech development,biotechnology development, deep processing of agricultural and sideline products, sales ofself-produced products.The parent company of the Company and ultimate parent company is Anhui Gujing Group Co.,Ltd. incorporated in China.The financial statements were approved and authorized for issue, upon the resolution of theCompany’s Board of Directors meeting on April 24 2020.
1.2 Scope of Consolidation
(a) Incorporated subsidiaries of the CompanyAt 31 December 2019, subsidiaries of the Company are as follows:
| Sequence Number | Name of Subsidiaries | Abbreviation of Subsidiaries | Proportion of Shareholding (or similar equity interest) (%) | |
| Direct | Indirect | |||
| 1 | Bozhou Gujing Sales Co., Ltd. | Gujing Sales | 100.00 | - |
| 2 | Anhui Jinyunlai Culture & Media Co., Ltd. | Jinyunlai | 100.00 | - |
| 3 | Anhui Ruisiweier Technology Co., Ltd. | Ruisiweier | 100.00 | - |
| 4 | Anhui Colorful Taste Wine Co., Ltd. | Colorful Taste Wine | 100.00 | - |
| 5 | Anhui Longrui Glass Co., Ltd. | Longrui Glass | 100.00 | - |
| 6 | Bozhou Gujing Waste Recycling Co., Ltd. | Gujing Waste | 100.00 | - |
| 7 | Shanghai Gujing Jinhao hotel management company | Jinhao Hotel | 100.00 | - |
| 8 | Bozhou Gujing hotel Co., Ltd | Gujing Hotel | 100.00 | - |
| 9 | Anhui Yuanqing environmental protection Co., Ltd. | Yuanqing Environmental Protection | 100.00 | - |
| 10 | Anhui Gujing Yunshang Electronic Commerce Co., Ltd | Gujing Electronic Commerce | 100.00 | - |
| 11 | Anhui Zhenrui Construction Engineering Co., Ltd | Zhenrui Construction Engineering | 100.00 | - |
| 12 | Anhui RunanxinkeTesting Tech. Co., Ltd. | Runanxinke Testing | 100.00 | - |
| 13 | Yellow Crane Tower Wine Co., Ltd | Yellow Crane Tower Wine | 51.00 | - |
| 14 | Yellow Crane Tower Wine (Suizhou) Co., Ltd | Suizhou Yellow Crane Tower | - | 51.00 |
| 15 | Hubei Junhe Advertising Co., Ltd. | Junhe Advertising | - | 51.00 |
| 16 | Hubei Yellow Crane Tower Beverage Co., Ltd. | Yellow Crane Tower Beverage | - | 51.00 |
| 17 | Yellow Crane Tower Wine (Xianning) Co., Ltd. | Xianning Yellow Crane Tower | - | 51.00 |
| 18 | Wuhan Yashibo tech. Co., Ltd. | Yashibo | - | 51.00 |
| 19 | Wuhan Tianlong Jindi Technology Development Co., Ltd. | Tianlong Jindi | - | 51.00 |
| 20 | Wuhan Junya Sales Co., Ltd. | Junya Sales | - | 51.00 |
| 21 | Xianning Junhe Sales Co., Ltd. | Xianning Junhe | - | 51.00 |
| 22 | Suizhou Junhe Commercial Co., Ltd. | Suizhou Junhe | - | 51.00 |
| Sequence Number | Name of Subsidiaries | Abbreviation of Subsidiaries | Reporting Period |
| 1 | Hubei Yellow Crane Tower Beverage Co., Ltd. | Yellow Crane Tower Beverage | January 1 to December 31, 2019 |
SCOPE OF CONSOLIDATION.
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 forBusiness Enterprises – Application Guidelines, Accounting Standards for Business Enterprises –Interpretations and other relevant provisions (collectively known as “Accounting Standards forBusiness Enterprises, issued by Ministry of Finance of PRC”). In addition, the company alsodisclosed relevant financial information in accordance with the CSRC “Preparation Rules forInformation Disclosure by Companies Offering Securities to the Public No. 15—General Provisionson Financial Reports (2014 Revision)”.
2.2 Going Concern
The Company has assessed its ability to continually operate for the next twelve months from theend of the reporting period, and no any matters that may result in doubt on its ability as a goingconcern were noted. Therefore, it is reasonable for the Company to prepare financial statements onthe going concern 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 theAccounting Standards for Business Enterprises, truly and completely reflecting the Company’sfinancial position as at 31 December 2019, and its operating results, changes in shareholders' equity,cash flows and other related information for the year then ended.
3.2 Accounting Period
The accounting year of the Company is from January 1 to December 31 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 Accounting Treatment of Business Combinations under and not under Common Control(a) Business combinations under common controlThe assets and liabilities that the Company obtains in a business combination under commoncontrol shall be measured at their carrying amount of the acquired entity at the combination date. Ifthe accounting policy adopted by the acquired entity is different from that adopted by the acquiringentity, the acquiring entity shall, according to accounting policy it adopts, adjust the relevant itemsin the financial statements of the acquired party based on the principal of materiality. As for thedifference between the carrying amount of the net assets obtained by the acquiring entity and thecarrying amount of the consideration paid by it, the capital reserve (capital premium or sharepremium) shall be adjusted. If the capital reserve (capital premium or share premium) is notsufficient to absorb the difference, any excess shall be adjusted against retained earnings.For the accounting treatment of business combination under common control by step acquisitions,please refer to Note 3.6 (6).(b) Business combinations not under common controlThe 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 entityshall, according to accounting policy it adopts, adjust the relevant items in the financial statementsof the acquired entity based on the principal of materiality. The acquiring entity shall recognise thepositive balance between the combination costs and the fair value of the identifiable net assets itobtains from the acquired entity as goodwill. The acquiring entity shall, pursuant to the followingprovisions, treat the negative balance between the combination costs and the fair value of theidentifiable net assets it obtains 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 3.6 (f).
(c) Treatment of business combination related costsThe 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 inprofit or loss in the period in which they are incurred. The costs to issue equity or debt securities forthe consideration of business combination shall be recorded as a part of the value of the respectequity or debt securities upon initial recognition.
3.6 Method of Preparing the Consolidated Financial Statements(a) Scope of consolidationThe scope of consolidated financial statements shall be determined on the basis of control. It notonly includes subsidiaries determined based on voting power (or similar) or other arrangement, butalso structured entities under one or several contract arrangements.Control exists when the Company has all the following: power over the investee; exposure, or rightsto variable returns from the Company’s involvement with the investee; and the ability to use itspower over the investee to affect the amount of the investor’s returns. Subsidiaries are the entitiesthat controlled by the Company (including enterprise, a divisible part of the investee, and structuredentity controlled by the enterprise). A structured entity (sometimes called a Special Purpose Entity)is an entity that has been designed so that voting or similar rights are not the dominant factor indeciding who controls the entity.(b) Special requirement as the parent company is an investment entityIf the parent company is an investment entity, it should measure its investments in particularsubsidiaries 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 investmententity, it should be consolidated.The parent company is defined as investment entity when meets following conditions:
a. Obtains funds from one or more investors for the purpose of providing those investors withinvestment management services;b. Commits to its investors that its business purpose is to invest funds solely for returns from capitalappreciation, investment income or both; andc. 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-relatedservices or activities to the investment entity shall be continued to be consolidated. The
deconsolidation of subsidiaries is accounted for as though the investment entity partially disposedsubsidiaries without loss 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.(c) Method of preparing the consolidated financial statementsThe 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 asan accounting 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 andcash flows of the group.(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent arecombined with 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 orbetween 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.(d) 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 theconsolidated balance sheet shall be adjusted. Related items of comparative financial statementsshall be adjusted as well, deeming that the combined entity has always existed ever since theultimate controlling party began 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 dateshall be included into the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into theconsolidated statement of cash flows.(e) 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 “treasurystock” under “owner’s equity” in the consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for takinglong-term equity investment held by the Company to its subsidiaries as reference. That is, thelong-term equity investment is eliminated (off- set) against the portion of the correspondingsubsidiary’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”shall be recovered based on the proportion attributable to owners of the parent company afterlong-term equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.
(iii) If temporary timing difference between the book value of the assets and liabilities in 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 directlyrecognised in 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 parentcompany” in full. Unrealized inter-company transactions profit or loss generated from thesubsidiaries selling assets to the Company shall be eliminated between “net profit attributed to theowners of the parent company” and “non-controlling interests” pursuant to the proportion of theCompany in the related subsidiaries. Unrealized inter-company transactions profit or loss generatedfrom the assets sales between the subsidiaries shall be eliminated between “net profit attributed tothe owners of the parent company” and “non-controlling interests” pursuant to the proportion of theCompany in the selling subsidiaries.(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-controlling interest is still to be written down.(f) 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 purchasingnon-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 obtainedin 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 capitalreserve is not enough to be offset, surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple 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 inthe ultimate 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-term investment held prior of control plus book value of additional consideration paid at
acquisition date is adjusted into capital reserve (capital premium or share premium). If the capitalreserve is not enough to absorb the difference, any excess shall be adjusted against surplus reserveand undistributed profit 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 differencein accounting 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 sharepremium). If the capital reserve is not enough to absorb the difference, any excess shall be adjustedagainst retained 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 thecomparative financial 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 investmentplus the 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 thefair 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 acquisitionperiod, excluding other comprehensive income resulted from the remeasurement of the net assets ornet liabilities under defined benefit plan. The Company shall disclose acquisition-date fair value ofthe equity 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 cumulatively
calculated from the acquisition date or combination date shall be adjusted into capital reserve(capital premium or share premium). If the capital reserve is not enough to absorb the difference,any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of 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 bere-measured at fair value at the date of loss of control. The difference between i) the fair value ofconsideration received from the disposal plus non-controlling interest retained; ii) share of theformer subsidiary’s net assets cumulatively calculated from the acquisition date or combination dateaccording to the original proportion of equity interest, shall be recognised in current investmentincome when control is 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 “asingle transaction” 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 considerationreceived and the carrying amount of long-term equity investment corresponding to the equityinterest disposed should be recognized in current investment income; in the consolidated financialstatements, the disposal transaction should be accounted for according to related policy in “Disposalof long-term equity 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:
(a) The transactions are entered into simultaneously or in contemplation of one another.(b) The transactions form a single transaction designed to achieve an overall commercial effect.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) One transaction, when considered on its own merits, does not make economic sense, but whenconsidered together with the other transaction or transactions would be considered economicallyjustifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection bythe 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.
3.7 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.(a) Joint operationA joint operation is a joint arrangement whereby the parties that have joint control of thearrangement have 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.
(b) Joint ventureA 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 oflong-term equity investment.
3.8 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.
3.9 Foreign Currency Transactions and Translation of Foreign Currency FinancialStatements(a) Determination of the exchange rate for foreign currency transactionsAt the time of initial recognition of a foreign currency transaction, the amount in the foreigncurrency shall be translated into the amount in the functional currency at the spot exchange rate ofthe transaction date, or at an exchange rate which is determined through a systematic and reasonablemethod and is approximate to the spot exchange rate of the transaction date (hereinafter referred toas the approximate exchange rate).(b) Translation of monetary items denominated in foreign currency on the balance sheet dateThe foreign currency monetary items shall be translated at the spot exchange rate on the balancesheet date. The balance of exchange arising from the difference between the spot exchange rate onthe balance sheet date and the spot exchange rate at the time of initial recognition or prior to thebalance sheet date shall be recorded into the profits and losses at the current period. The foreigncurrency non-monetary items measured at the historical cost shall still be translated at the spotexchange rate on the transaction date; for the foreign currency non-monetary items restated to a fairvalue measurement, shall be translated into the at the spot exchange rate at the date when the fairvalue was determined, the difference between the restated functional currency amount and theoriginal functional currency amount shall be recorded into the profits and losses at the currentperiod.(c) Translation of foreign currency financial statementsBefore translating the financial statements of foreign operations, the accounting period andaccounting policy shall be adjusted so as to conform to the Company. The adjusted foreignoperation financial statements denominated in foreign currency (other than functional currency)shall be translated in accordance with the following method:
(i) The asset and liability items in the statement of financial position shall be translated at the spotexchange rates at the date of that statement of financial position.. The owners’ equity items exceptundistributed profit shall be translated at the spot exchange rates when they are incurred.(ii) The income and expense items in the statement of profit and other comprehensive income shallbe translated at the spot exchange rates or approximate exchange rate at the date of transaction.(iii) Foreign currency cash flows and cash flows of foreign subsidiaries shall be translated at thespot exchange rate or approximate exchange rate when the cash flows are incurred. The effect ofexchange rate changes on cash is presented separately in the statement of cash flows as anadjustment item.(iv) The differences arising from the translation of foreign currency financial statements shall bepresented separately as “other comprehensive income” under the owners’ equity items of theconsolidated statement of financial position.When disposing a foreign operation involving loss of control, the cumulative amount of theexchange differences relating to that foreign operation recognised under other comprehensiveincome in the statement of financial position, shall be reclassified into current profit or lossaccording to the proportion disposed.
3.10 Financial Instruments
Effective at 1st January 2019Financial instrument is any contract which gives rise to both a financial asset of one entity and afinancial liability or equity instrument of another entity.(a) Recognition and derecognition of financial instrumentA 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 derecognitionconditions:
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 anextinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using
trade date accounting. A regular-way purchase or sale of financial assets is a transaction under acontract whose terms require delivery of the asset within the time frame established generally byregulations or convention in the market place concerned. Trade date is the date at which the entitycommits itself to purchase or sell an asset.(b) Classification and measurement of financial assetsAt initial recognition, the Company classified its financial asset based on both the business modelfor managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost, financial asset at fair value through profit or loss (FVTPL) 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 formanaging those financial assets changes. In this circumstance, all affected financial assets shall bereclassified on the first day of the first reporting period after the changes in business model;otherwise the financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measuredat FVTPL, transaction costs are recognised in current profit or loss. For financial assets notmeasured at FVTPL, transaction costs should be included in the initial measurement. Notesreceivable or accounts receivable that arise from sales of goods or rendering of services are initiallymeasured at the transaction price defined in the accounting standard of revenue where thetransaction does not include a 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 amortisedcost by adopting the effective interest rate method. Any gain or loss arising from derecognitionaccording to the amortization under effective interest rate method or impairment are recognised incurrent profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)The financial asset at FVTOCI category of classification applies when both the followingconditions are met: the financial asset is held within the business model whose objective is achievedby both collecting contractual cash flows and selling financial assets, and the contractual term of thefinancial asset gives rise on specified dates to cash flows that are solely payment of principle andinterest on the principal amount outstanding. All changes in fair value are recognised in other
comprehensive income except for gain or loss arising from impairment or exchange differences,which should be recognised in current profit or loss. At derecognition, cumulative gain or losspreviously recognised under OCI is reclassified to current profit or loss. However, interest incomecalculated based on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity 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 atfair value. All the changes in fair value are included in current profit or loss.(c) Classification and measurement of financial liabilitiesThe 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 initialrecognition, any gain or loss (including interest expense) are recognised in current profit or lossexcept for those hedge accounting is applied. For financial liability that is designated as at FVTPL,changes in the fair value of the financial liability that is attributable to changes in the own credit riskof the issuer shall be presented in other comprehensive income. At derecognition, cumulative gainor loss previously recognised 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 guaranteecontracts liability shall be subsequently measured at the higher of: The amount of the loss
allowance recognised according to the impairment principles of financial instruments; and theamount initially recognised less the cumulative amount of income recognised in accordance withthe revenue principles.(iii)Financial liabilities at amortised costAfter initial recognition, the Company measured other financial liabilities at amortised cost usingthe effective 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 equityinstruments, where, amount of contractual rights and obligations are calculated by multiplying thenumber of the equity instruments to be available or delivered by its fair value upon settlement. Suchcontracts shall be classified as financial liabilities, regardless that the amount of contractual rightsand liabilities is fixed, or fluctuate totally or partially with variables other than market price of theentity’s own equity instruments(d) Derivatives and embedded derivativesAt 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 theembedded derivative are not closely related to the economic characteristics and risks of the host,and a separate instrument with the same terms as the embedded derivative would meet thedefinition of a derivative, the embedded derivative shall be separated from the hybrid instrumentand accounted for as a separate derivative instrument. If the Company is unable to measure the fairvalue of the embedded derivative at the acquisition date or subsequently at the balance sheet date,the entire hybrid contract is designated as financial assets or financial liabilities at fair value throughprofit or loss.(e) Impairment of financial instrumentThe 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, discounted at the original effective interest rate orcredit- adjusted effective interest rate for purchased or originated credit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible 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 possiblewithin the 12 months after the reporting date (or the expected lifetime, if the expected life of afinancial instrument 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 theloss allowance for that financial instrument at an amount equal to 12-month expected credit losses.A financial instrument with a significant increase in credit risk since initial recognition but is notconsidered to be credit-impaired is at stage 2. The Company shall measure the loss allowance forthat financial instrument at an amount equal to the lifetime expected credit losses. A financialinstrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. TheCompany shall measure the loss allowance for that financial instrument at an amount equal to thelifetime expected credit losses.The Company may assume that the credit risk on a financial instrument has not increasedsignificantly since 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 equalto 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.For financial instrument at stage 3, interest revenue shall be calculated by applying the effectiveinterest rate to the amortised cost after deducting of impairment loss.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.ReceivablesFor the notes receivable, accounts receivable, other receivables, accounts receivable financing andlong-term receivables which are demonstrated to be impaired by any objective evidence, orapplicable for individual assessment, the Company shall individually assess for impairment andrecognise the loss allowance for expected credit losses. If the Company determines that no objectiveevidence of impairment exists for notes receivable, accounts receivable, other receivables, accountsreceivable financing and long-term receivables, or the expected credit loss of a single financial assetcannot be assessed at reasonable cost, such notes receivable, accounts receivable, other receivables,accounts receivable financing and long-term receivables shall be divided into several groups withsimilar credit risk characteristics and collectively calculated the expected credit loss. Thedetermination basis of groups 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: Accounts receivables due from the company within the scope of consolidationGroup 2: Accounts receivables due from other customersFor 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: Other receivables due from the company within the scope of consolidation
Group 2: Other receivables due from othersFor each group, the Company calculates expected credit losses through default exposure and the12-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.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 thenature of 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 tofulfill its contractual cash flow obligations.(iii) Significant increase in credit riskThe Company shall assess whether the credit risk on a financial instrument has increasedsignificantly since initial recognition, using the change in the risk of a default occurring over theexpected life of the financial instrument, through the comparison of the risk of a default occurringon the financial instrument as at the reporting date with the risk of a default occurring on thefinancial instrument as at 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 creditrisk since inception
? Existing or forecast adverse change in the business, financial or economic conditions of theborrower 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 actualor expected significant adverse change in the regulatory, economic, or technological environment ofthe borrower；
? Significant changes in the value of the collateral supporting the obligation or in the qualityof third-party guarantees or credit enhancements, which are expected to reduce the borrower’seconomic incentive to make scheduled contractual payments or to otherwise have an effect on the
probability of a default occurring;? Significant change that are expected to reduce the borrower’s economic incentive to makescheduled contractual payments;? Expected changes in the loan documentation including an expected breach of contract thatmay lead to covenant waivers or amendments, interest payment holidays, interest rate step-ups,requiring additional collateral or guarantees, or other changes to the contractual framework of theinstrument；? Significant changes in the expected performance and behaviour 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 increasedsignificantly since initial recognition when contractual payments are more than 30 days past due.The Company can only rebut this presumption if the Company has reasonable and supportableinformation that is available without undue cost or effort, that demonstrates that the credit risk hasnot increased significantly since initial recognition even though the contractual payments are morethan 30 days past 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 thatreflects the incurred credit losses.(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition, 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 theCompany has no reasonable expectations of recovering the contractual cash flow of a financial assetin its entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset.This circumstance usually occurs when the Company determines that the debtor has no assets orsources of income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairmentloss.(f) Transfer of financial assetsTransfer 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 thecash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to oneor 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’sability to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to anunrelated third party and is able to exercise that ability unilaterally and without needing to imposeadditional restrictions 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 fairvalue previously recognised in other comprehensive income (The financial assets involved in thetransfer are classified as financial assets at fair value through other comprehensive income inaccordance with Article 18 of the Accounting Standards for Business Enterprises No.22 -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 treatedas 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 thecumulative changes in fair value previously recognised in other comprehensive income (Thefinancial assets involved in the transfer are classified as financial assets at fair value through othercomprehensive income in accordance with Article 18 of the Accounting Standards for BusinessEnterprises No.22 - Recognition and Measurement of Financial 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 torecognise the transferred asset to the extent of its continuing involvement and also recognise anassociated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to whichit is 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 transferredfinancial asset, 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 subsequentaccounting period, the Company shall continuously recognise any income (gain) arising from thetransferred asset and any expense (loss) incurred on the associated liability.(g) Offsetting financial assets and financial liabilitiesFinancial 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 financial
liabilities shall be offset and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; 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.(h) Determination of fair value of financial instrumentsDetermination of financial assets and financial liabilities please refer to Note 3.11Following financial instruments accounting standard is applicable for year 2018 and before(a) Classification of financial assets(i) Financial assets at fair value through profit or lossThis category comprises financial assets defined as held for trading, or those designated as at fairvalue through profit or loss. The former mainly includes shares, bonds, funds, and derivativefinancial instruments investment that are not designated effective hedging instruments that areacquired principally for the purpose of sale in the near future. Such financial assets are initiallyrecognised at fair values when acquired. Relevant transaction expenses are included in the currentprofit or loss. Cash dividends that have been declared but not distributed and bond interests thathave matured but not been drawn included in the consideration paid are recognised as receivablesseparately. The interests or cash dividends to be received during the holding period are recognisedas investment income. On the balance sheet date, this category of financial assets is measured at fairvalue, and change in fair values is included in the current profit or loss. Difference between the fairvalue and initial measurement amount is recognised as investment income upon disposal;meanwhile, gains or losses from changes in fair values are written-off.(ii) Held-to-maturity investmentsHeld-to-maturity investments refer to government bonds, corporate bonds with fixed ordeterminable payments and fixed maturity, for which the Company has a positive intention andability to hold to maturity. Held-to-maturity investments are initially measured at fair values plusthe related transaction costs when acquired. Bond interests that have matured but not been drawnincluded in the consideration paid is recognised as a receivable separately. The interest incomecalculated at amortisation cost and effective interest rate during the holding period is recognised asinvestment income. The difference between the amount received and the book value of theinvestment is included in the investment income upon disposal.(iii) ReceivablesReceivables mainly include accounts receivable and other receivables. Receivables arise from
external sales of goods or rendering of service by the Company. They are recognised initially at thecontract price or agreement price receivable from the purchasing party.(iv) Available-for-sale financial assetsThis category of financial assets comprises those financial assets that cannot be classified asfinancial assets at fair value through profit or loss, held-to-maturity financial assets, loans andreceivables. Available-for-sale financial assets are initially recognised at fair values plus the relatedtransaction costs when acquired. Cash dividends that have been declared but not distributed andbond interests that have matured but not been drawn included in the consideration paid arerecognised as receivables separately. The interests or cash dividends to be received during theholding period are recognised as investment income.For available-for-sale financial assets that are foreign currency monetary financial assets, theexchange gain or loss shall be recognised in current profit or loss. Interest of available-for-sale debtinstrument investment calculated using effective interest rate method shall be recognised in currentprofit or loss; cash dividend of available-for-sale equity instrument investment shall be recognisedinto current profit or loss when the investee declares the dividend. At the balance sheet date,available-for-sale financial assets are measured at fair value and change in fair value shall beincluded in other comprehensive income. The difference between the amount received and the bookvalue of the financial asset is included in the investment income upon disposal. Meanwhile, thecorresponding accumulated change in fair value recognised in other comprehensive income istransferred into investment income.(b) Classification of financial liabilities(i) Financial liabilities at fair value through profit or lossThis category of financial liabilities comprises financial liabilities that are defined as held fortrading, or those that are designated as at fair value through profit or loss. This category of financialliabilities is initially measured at fair value. Relevant transaction costs are included in the currentprofit or loss. On the balance sheet date, change in fair values is included in the current profit orloss.(ii) Other financial liabilitiesOther financial liabilities are those financial liabilities excluding financial liabilities at fair valuethrough profit or loss.(c) Reclassification of financial assetsAn investment will be reclassified as available-for-sale if, as a result of a change in intention orability, it fails to meet the requirements for classification as held-to-maturity. After thereclassification, it will be subsequently measured at fair value. If the held-to maturity investment is
partially disposed, or a large part of it has been reclassified, and not included in the exceptionsillustrated in provision 16 of “Accounting Standards for Enterprises No. 22 – Recognition andMeasurement of Financial Instruments”, as a result of which, the remaining of the investment failsto meet the requirements for classification as held-to-maturity, any remaining held-to-maturityinvestments should also be reclassified as available-for-sale, and subsequently measured at fairvalue. However, it is prohibited that the above available-for-sale is reclassified back toheld-to-maturity within current fiscal year and the following two fiscal years.On the date of reclassification, difference between carrying value of the investment and its fairvalue is recorded in other comprehensive income, which shall be transferred out and recogniseddirectly in current profit or loss upon incurrence of impairment or de-recognition of the investment.If, as a result of a change in intention or ability or a reliable measure of fair value is no longeravailable or because the two preceding financial years have passed since the reclassification ofheld-to-maturity to available-for-sale investment, it becomes appropriate to measure a financialasset at cost or amortised cost rather than at fair value, the fair value or carrying amount of thefinancial asset on the date of reclassification becomes its new cost or amortised cost, as applicable.In the case of a financial asset with a fixed maturity, the gain or loss related to the financial assetpreviously recoginsed in other comprehensive income shall be amortised to current profit or lossover the remaining life of the financial asset using the effective interest method. Any differencebetween the new amortised cost and maturity amount shall also be amortised over the remaining lifeof the financial asset using the effective interest method and recognised in current profit or loss. Inthe case that a financial asset does not have a fixed maturity, the gain or loss related to the financialasset previously recoginsed in other comprehensive income shall remain in the equity andrecognised in profit or loss when the financial asset is sold or otherwise disposed of.(d) Classification of financial liabilities and equity instrumentsExcept 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 entity's own equity instruments, it shouldbe considered that the entity’s own equity instruments are alternatives of cash or another financialinstrument, or to entitle the holder of the equity instruments to sharing the remaining rights over thenet assets of the issuer. If the former is the case, the instrument is a liability of the issuer. Otherwise,
it is an equity instrument of the issuer. Under some circumstances, it is regulated in the contract thatthe financial instrument must or may be settled in the entity's own equity instruments, where,amount of contractual rights and obligations are calculated by multiplying the number of the equityinstruments to be available or delivered by its fair value upon settlement. Such contacts shall beclassified 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 ownequity instruments.(e) Transfer of Financial AssetsTransfer of financial assets include below situations:
? The contractual rights to receive cash flows from the asset are transferred to another entity; or? The financial assets are totally or partially transferred to another entity, while the rights toreceive cash flows from the asset or obligations to pay the received cash flows to one or severalpayees are retained.(i) Derecognition of transferred financial assetsThe financial assets should be derecognised if the Company has transferred substantially all therisks and rewards of the asset, or the Company has neither transferred nor retained substantially allthe risks and rewards of the asset, but has transferred control of the asset.When judging whether control of the asset has been transferred or not, the Company shall layemphasis on the transferee’s substantial capability to sell the financial asset. If the transferee itselfcan sell the financial asset as a whole to a third party that has no any relationship with it, withoutany restrictions on this sale through supplemental terms, it is shown that the control of the asset hasbeen given up.The principle of substance over form is adopted to determine whether the transfer of a financialasset satisfies the criteria described above for derecognition of a financial asset.If the entire transfer of financial asset satisfies the criteria for derecognition, the difference betweenthe amounts of the following two items shall be included in the current profit or loss:
? The carrying amount of the transferred financial asset;? The sum of the consideration received from the transfer and the cumulative amount of thechanges in fair value originally and directly included in owners’ equity (where the financial assettransferred is an available-for-sale financial asset).If the transferred asset is part of a larger financial asset and the part transferred qualifies forderecognition, the previous carrying amount of the financial asset shall be allocated between thepart that continues to be recognised and the part that is derecognised, based on the relative fairvalues (In such circumstances，servicing asset shall be treated as a part that continues to be
recognised）and the difference between the amounts of the following two items shall be recognisedin current profit or loss:
? The carrying amount allocated to the part derecognised and;? The sum of the consideration received for the part derecognised and any cumulative fair valuechange originally and directly recognised in other comprehensive income (where the financial assettransferred is an available-for-sale financial asset).(ii) Continuing involvement in transferred financial assetsIf the Company neither transfers nor retains substantially all the risks and rewards of ownership ofthe financial asset, and retains control of the transferred financial asset, the Company shall continueto recognise the transferred asset to the extent of its continuing involvement and also recognize anassociated liability.The extent of the entity’s continuing involvement in the transferred financial asset is the extent towhich it is exposed to changes in the value of the transferred asset.(iii) Continuing recognise transferred financial assetsIf the Company retains substantially all the risks and rewards of ownership of a 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 liability shall not be offset. During the subsequent accountingperiod, the Company shall continue to recognise any income arising on the transferred financialasset and any expense incurred on the associated liability. If the transferred financial asset ismeasured at amortised cost, to designate a financial liability as at fair value through profit or loss isnot applicable to the associated liability.(f) Derecognition of financial liabilityA financial liability shall be totally or partly derecognised if its present obligations are totally orpartly dissolved.If the assets to be used to settle a financial liability is transferred to another institute or establish atrust, where the present obligations still exist, either the financial liability or the assets transferredshall not be derecognised.Where the Company enters into an agreement with a creditor so as to substitute the existingfinancial liabilities with any new financial liability, and the new financial liability is substantiallydifferent from the contractual stipulations regarding the existing financial liability, it shallderecognise the existing financial liability, and shall at the same time recognise a new financialliability.
Where substantial revisions are made to some or all of the contractual stipulations of the existingfinancial liability, the Company shall derecognise the existing financial liability totally or partly,and at the same time recognise the financial liability with revised contractual stipulations as a newfinancial liability.Upon total or partial derecognition of financial liabilities, the difference between the carryingamount of the financial liabilities derecognised and the consideration paid (including non-cashassets surrendered or new financial liabilities assumed) shall be included in the current profit orloss.(g) Offsetting financial assets and liabilitiesFinancial assets and liabilities shall be presented separately in the statement of financial positionand shall not be offset. However, they shall be presented on a net basis after offsetting if thefollowing criteria are both satisfied.(i) The Company has a legal right to offset the recognised amounts, and the right is executable atpresent; and(ii) The Company has an intention to settle on a net basis or liquidate the asset and settle theliability simultaneously.Asset transfer that does not satisfy the criteria for derecognition of this asset, the transferor shall notoffset the transferred asset and the related liability.(h) Impairment testing and impairment provision of financial assets(i) Objective evidence for the impairment of the financial assets? The issuer or debtor encounters serious financial difficulties;? The debtor violates the terms of contract, for example, it cannot repay the interest or theprincipal of the loan on schedule;? The creditor makes concessions to the debtor in financial difficulties from the respect ofeconomy or law;? The creditor is possible to bankrupt or execute other financial restructuration;? The financial asset is no longer traded in the active market since the issuer encounterssignificant financial difficulties;? It is unrecognisable whether cash flows from an asset in one group of financial assets hasdecreased, however, it is identifiable that the estimated future cash flows of the group of financialassets has decreased and measurable since they are initially recognised through overall assessmenton them on the basis of public data;
? The debtor’s technological, market, economic or legal environment encounters significantunfavorable change, as a result of which investment cost may not be recovered;? A serious or prolonged decline in the fair value of equity instrument.? Other objective evidence that indicate impairment of financial assets.(ii) Impairment provision of the financial assets (excluding receivables)Financial assets at amortised costWhen the financial asset is impaired, the carrying amount of the financial asset shall be writtendown to the present value of its expected future cash flows (excluding future credit losses that havenot occurred); the amount written down shall be recognised as impairment loss in current profit orloss.The present value of the estimated future cash flows is determined by discounting at the originaleffective rate of the held-to maturity investment, considering the value of related guaranty(deducting expense incurred for obtaining or selling this guaranty). The original effective rate is theeffective rate calculated when the held-to maturity investment is initially recognised. For held-tomaturity investment with floating interest rate, when calculate the present value of expected futurecash flow, the current effective interest rate determined in the contract can be used as the discountrate.When assesses the impairment of financial asset at amortised cost, the Company recognize thefinancial asset with the balance accounts for more than 5%（including 5%）of the total amount asfinancial asset with individually significant balance and the balance below 5% of the total amountas financial asset with individually insignificant balance.When assesses the impairment of financial asset with individually significant balance, if there areobjective evidences indicate the assets have impaired, the Company shall recognize the impairmentloss and included in profit or loss; for financial asset with individually insignificant balance, theCompany could assess the impairment individually or included in the financial asset group with thesimilar credit risk characteristics.If the financial asset (including with individually significant and insignificant balance) is notimpaired through the individual assessment, it shall be assessed again in the assessment of thefinancial asset group with the similar credit risk characteristics; if it has recognised the impairmentthrough the individual assessment, then shall not be included in the assessment of the financial assetgroup with the similar credit risk characteristics.If, in a subsequent period, the carrying amount of the financial asset at amortised cost increases andthe increase can be related objectively to an event occurring after the impairment was recognised,the previously recognised impairment losses are reversed, included in current profit or loss. But the
carrying amount after the reversal shall not exceed the amortised cost in assuming that noimpairment loss been recognised at the date of reversal.Impairment provision of available-for sale financial assetsFor available-for sale financial assets that is impaired, when recognize the impairment loss, thecumulative loss arising from the decline in fair value that has been recognised previously in othercomprehensive income shall be transferred out into the impairment loss of asset. After theavailable-for sale debt instrument is impaired, the interest revenue shall be calculated by using thediscount rate that used to discount the future cash flows when determining the impairment loss.If, in a subsequent period, the carrying amount of available-for-sale debt instruments investmentsincreases and the increase is related objectively to an event occurring after the impairment wasrecognised, the previously recognised impairment losses are reversed, and included in current profitor loss. Impairment loss of available-for sale equity instrument cannot be reversed through profit orloss.(i) Method of determining the fair value of financial assets and financial liabilitiesMethod of determining the 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 inan orderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in 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 theassumptions that market participants would use when pricing the asset or liability, assuming thatmarket participants 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 costsboth.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 financialinstrument is not available, the Company shall measure the fair value using valuation techniques.A fair value measurement of a non-financial asset takes into account a market participant’s abilityto generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.? 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 tomeasure fair value, the results shall be evaluated considering the reasonableness of the range ofvalues indicated by those results. A fair value measurement is the point within that range that ismost representative of fair value in the circumstances.When using the valuation technique, the Company shall give the priority to relevant observableinputs. The unobservable inputs can only be used when relevant observable inputs is not availableor practically would not be obtained. Observable inputs refer to the information which is availablefrom market and reflects the assumptions that market participants would use when pricing the assetor liability. Unobservable Inputs refer to the information which is not available from market and ithas to be developed using the best information available in the circumstances from the assumptionsthat market participants would use when pricing the asset or liability.? Fair value hierarchyTo Company establishes a fair value hierarchy that categorises into three levels the inputs tovaluation techniques used to measure fair value. The fair value hierarchy gives the highest priorityto Level 1 inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that theentity can access at the measurement date. Level 2 inputs are inputs other than quoted pricesincluded within Level 1 that are observable for the asset or liability, either directly or indirectly.Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Receivables
Following accounts receivable accounting standard is applicable for year 2018 and before.(a) Receivable with individually significant balance and recognised provision for bad debtsindividually(i) Assessment basis or standard of amount individually significantThe amount of accounts receivable over RMB 2 million and other receivables over RMB 2 millionis assessed individually significant.(ii) Method of provision for bad debts of receivables which are individually significantFor accounts receivable with individually significant amount, the Company shall test impairmentseparately. After separate impairment test, if there is objective evidence of impairment, the
impairment loss of receivables shall be recognised at the difference between the individualreceivable’s carrying amount and the present value of estimated future cash flows and the provisionfor bad debts shall be recognised accordingly.If the difference between expected future cash flows and the present value of short-term accountsreceivable is very small, when determine the relevant impairment loss, the expected future cashflows may not be discounted.(b) Receivables with provision for bad debts recognised on the basis of similar credit riskcharacteristicsGroup 1: Except for the existence of objective evidence that the Company will not be able torecover the amount in accordance with the original terms of receivables, no provision for bad debtsshall be made for the transactions between companies within the scope of the consolidatedstatement of receivables.Group 2 For accounts receivables with individually significant amount but with no impairmentindicated after a separate test, combined with the accounts receivables with individuallyinsignificant amount, the Company use aging as the credit risk characteristic.Provision method for bad debt provision by group 2: aging analysis methodProvision ratio for bad debts on the basis of aging analysis:
| Aging | Provision ratio for accounts receivable% | Provision ratio for other receivables% |
| Within1year(including1year) | ||
| Including:1-6months | 1.00 | 1.00 |
| 7-12months | 5.00 | 5.00 |
| 1-2years | 10.00 | 10.00 |
| 2-3years | 50.00 | 50.00 |
| Over 3 years | 100.00 | 100.00 |
3.13 Inventories
(a) Classification of inventoriesInventories 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.(b) Measurement method of cost of inventories sold or usedInventories are initially measured at the actual cost. Cost of inventories includes purchase cost,processing cost, and other costs. Cost of the issue is measured using the weighted average method.(c) Inventory systemThe 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.(d) 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 evidenceobtained, and factors such as purpose of holding the inventory and impact of post balance sheetevent shall be considered.(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 ofcompletion, the estimated selling expenses and relevant taxes. If the net realisable value of thefinished products produced by such materials is higher than the cost, the materials shall bemeasured at cost; if a decline in the price of materials indicates that the cost of the finished productsexceeds its net realisable value, the materials are measured at net realisable value and differencesshall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For
inventories with large quantity and low unit price, the provisions for inventory impairment aredetermined on a category basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date,the amounts written down are recovered and reversed to the extent of the inventory impairment,which has been provided for. The reversal shall be included in profit or loss.(e) Amortisation method of low-value consumablesLow-value consumables: One-off writing off method is adoptedPackage material: One-off writing off method is adopted
3.14 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.(a) Determination basis of joint control or significant influence over the investeeJoint control is the relevant agreed sharing of control over an arrangement, and the arrangedrelevant activity must be decided under unanimous consent of the parties sharing control. Inassessing whether the Company has joint control of an arrangement, the Company shall assess firstwhether all the parties, or a group of the parties, control the arrangement. When all the parties, or agroup of the parties, considered collectively, are able to direct the activities of the arrangement, theparties control the arrangement collectively. Then the Company shall assess whether decisionsabout the relevant activities require the unanimous consent of the parties that collectively controlthe arrangement. If two or more groups of the parties could control the arrangement collectively, itshall not be assessed as have joint control of the arrangement. When assessing the joint control, theprotective rights are not considered.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control of those policies. In determination of significantinfluence over an investee, the Company should consider not only the existing voting rights directlyor indirectly held but also the effect of potential voting rights held by the Company and otherentities that could be currently exercised or converted, including the effect of share warrants, shareoptions and convertible corporate bonds that issued by the investee and could be converted incurrent 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 thedecision-making in the production and operating of the investee.
(b) 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 thelong-term equity investment on the combination date. The difference between the initial investmentcost and the carrying amount of cash paid, non-cash assets transferred and liabilities assumed shallbe adjusted against the capital reserve; if capital reserve is not enough to be offset, undistributedprofit shall be offset 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 ultimatecontrolling party is recognised as the initial cost of the long-term equity investment on thecombination date. The total par value of the shares issued is recognised as the share capital. Thedifference between the initial investment cost and the carrying amount of the total par value of theshares issued shall be adjusted against the capital reserve; if capital reserve is not enough to beoffset, undistributed profit shall 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 investmentcost shall 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 isthe fair 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-monetaryassets are determined based on the fair values of the assets traded out together with relevant taxes.
Difference between fair value and book value of the assets traded out is recorded in current profit orloss. If the exchange of non-monetary assets does not meet the above criterion, the book value ofthe assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring, the initial cost is 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.(c) Subsequent measurement and recognition of profit or lossLong-term equity investment to an entity over which the Company has ability of control shall beaccounted for at cost method. Long-term equity investment to a joint venture or an associate shallbe accounted 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 recognisesits share of cash dividends or profits which have been declared to distribute by the investee ascurrent investment 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 profitdistribution, shall be recognised in the investor’s equity, and the carrying amount of the long-termequity investment shall be adjusted accordingly. The Company recognises its share of the investee’snet profits or losses after making appropriate adjustments of investee’s net profit based on the fairvalues of the investee’s identifiable net assets at the investment date. If the accounting policy andaccounting period adopted by the investee is not in consistency with the Company, the financialstatements of the investee shall be adjusted according to the Company’s accounting policies andaccounting 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 transactionsbetween the company and its associate or joint venture are eliminated in proportion to thecompany’s equity interest in the investee, based on which investment income or losses shall berecognised. Any losses resulting from inter-company transactions between the investor and theinvestee, 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 asavailable-for sale investment, difference between its fair value and the carrying value, in addition tothe cumulative changes in fair value previously recorded in other comprehensive income, shall berecogised into current profit or loss 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 thedifference between the carrying amount and the fair value at the date of loss the joint control orsignificant influence shall be recognised in profit or loss. When the Company discontinues the useof the equity method, the Company shall account for all amounts previously recognised in othercomprehensive income under equity method in relation to that investment on the same basis aswould have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for saleAny 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 saleno longer 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.(f) Impairment testing and provision for impairment lossFor investment in subsidiaries, associates or a joint venture, provision for impairment loss pleaserefer to Note 3.20.
3.15 Investment Properties
(a) Classification of investment propertiesInvestment 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(b) The measurement model of investment propertyThe Company adopts the cost model for subsequent measurement of investment properties. Forprovision for impairment please refer to Note 3.20.The Company calculates the depreciation or amortization based on the net amount of investmentproperty cost less the accumulated impairment and the net residual value using straight-line method.
3.16 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.(a) Recognition criteria of fixed assetsFixed assets will only be recognised at the actual cost paid when obtaining as all the followingcriteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognitioncriteria of fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit orloss when incurred.(b) Depreciation methods of fixed assetsThe Company begins to depreciate the fixed asset from the next month after it is available forintended use using the straight-line-method. The estimated useful life and annual depreciation rateswhich are determined according to the categories, estimated economic useful lives and estimatednet residual rates 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 | 2.70-12.10 |
| Machinery equipment | straight-line-method | 5.00-10.00 | 3.00-5.00 | 9.50-19.40 |
| Vehicles | straight-line-method | 4.00 | 3.00 | 24.25 |
| Office equipment and others | straight-line-method | 3.00 | 3.00 | 32.33 |
the cost when calculating depreciation.At the end of reporting period, the Company shall review the useful life, estimated net residualvalue and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall beadjusted if it is changed compared to the original estimation.(c) Recognition criteria, valuation and depreciation methods of fixed assets obtained througha finance leaseIf the entire risk and rewards related to the leased assets have been substantially transferred, theCompany shall recognise the lease as a finance lease. The cost of the fixed assets obtained through afinance lease is determined at the lower of the fair value of the leased assets and the present value ofthe minimum lease payment on the date of the lease. The fixed assets obtained by a finance leaseare depreciated in the method which is consistent with the self-owned fixed assets of the Company.For fixed assets obtained through a finance lease, if it is reasonably certain that the ownership of theleased assets will be transferred to the lessee by the end of the lease term, they shall be depreciatedover their remaining useful lives; otherwise, the leased assets shall be depreciated over the shorterof the lease terms or their remaining useful lives.
3.17 Construction in Progress
(a) Classification of construction in progressConstruction in progress is measured on an individual project basis.(b) 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 generalloan used for the constructions incurred before they are ready for their intended use. Theconstruction in progress shall be transferred to fixed asset when the installation or construction isready for the intended use. For construction in progress that has been ready for their intended usebut relevant budgets for the completion of projects have not been completed, the estimated values ofproject budgets, 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 fixedassets are ready for intended use. After the completion of budgets needed for the completion ofprojects, the estimated values should be substituted by actual costs, but depreciation alreadyprovided is not adjusted.
3.18 Borrowing Costs
(a) 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 fortheir intended 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,constructed or produced become ready for their intended use or sale. The expenditure incurredsubsequently shall be recognised as expenses when incurred.(b) 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 forcapitalization are part of a general borrowing, the eligible amounts are determined by theweighted-average of the cumulative capital expenditures in excess of the specific borrowingmultiplied by the general borrowing capitalization rate. The capitalization rate will be the weightedaverage of the borrowing costs applicable to the general borrowing.
3.19 Intangible Assets
(a) Measurement method of intangible assetsIntangible assets are recognised at actual cost at acquisition.(b) 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 | 50 years | Legal life |
| Patent right | 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 |
| Trademark | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
(d) Criteria for capitalization of qualifying expenditures during the development phaseExpenditures arising from development phase on internal research and development projects shallbe recognised as intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be available for use orsale;(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 candemonstrate the existence of a market for the output of the intangible assets or the intangible assetsthemselves or, if it is to be used internally, the usefulness of the intangible assets;(iv) The availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset; and(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
3.20 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries, associates and joint ventures,investment properties, fixed assets and constructions in progress subsequently measured at cost,intangible assets, shall be determined according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that anasset may be impaired. If any such indication exists, the Company shall estimate the recoverableamount of the asset and test for impairment. Irrespective of whether there is any indication ofimpairment, the Company shall test for impairment of goodwill acquired in a business combination,intangible assets with an indefinite useful life or intangible assets not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs todispose and the present values of the estimated future cash flows of the long-term assets. TheCompany estimate the recoverable amounts on an individual basis. If it is difficult to estimate therecoverable amount of the individual asset, the Company estimates the recoverable amount of thegroups of assets that the individual asset belongs to. Identification of an group of asset is based onwhether the cash inflows from it are largely independent of the cash inflows from other assets orgroups of assets.If, and only if, the recoverable amount of an asset or a group of assets is less than its carryingamount, the carrying amount of the asset shall be reduced to its recoverable amount and theprovision for impairment loss shall be recognised accordingly.For the purpose of impairment testing, goodwill acquired in a business combination shall, from theacquisition date, be allocated to relevant group of assets based on reasonable method; if it isdifficult to allocate to relevant group of assets, good will shall be allocated to relevant combinationof asset groups. The relevant group of assets or combination of asset groups is a group of assets orcombination of asset groups that is benefit from the synergies of the business combination and isnot 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 ofasset groups may be impaired, impairment testing for group of assets or combination of asset groupsexcluding goodwill shall be conducted first, and calculate the recoverable amount and recognize theimpairment loss. Then the group of assets or combination of asset groups including goodwill shallbe tested for impairment, by comparing the carrying amount with its recoverable amount. If therecoverable amount is less than the carrying amount, the Company shall recognise the impairmentloss.The mentioned impairment loss will not be reversed in subsequent accounting period once it hadbeen recognised.
3.21 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. Long-termdeferred expenses are evenly amortised over the beneficial period
3.22 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 alsoemployee benefits.According to liquidity, employee benefits are presented in the statement of financial position as“Employee benefits payable” and “Long-term employee benefits payable”.(a) Short-term employee benefits(i) Employee basic salary (salary, bonus, allowance, subsidy)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 accountingstandards.(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 fairvalue as it is a non-monetary benefit.(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,work injury insurance and maternity insurance, payments of housing funds, and labor union fund
and employee education fund accrued in accordance with relevant requirements, in the accountingperiod in which employees provide services, is calculated according to required accrual bases andaccrual ratio in determining the amount of employee benefits and the related liabilities, which shallbe recognised 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 paidabsences when the employees render service that increases their entitlement to future paid absences.The additional payable amounts shall be measured at the expected additional payments as a result ofthe unused entitlement that has accumulated. The Company shall recognise relevant employeebenefit of non-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 planwhen all of the following conditions are satisfied:
(i) The Company has a present legal or constructive obligation to make such payments as a result ofpast events; and(ii) 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 beforetwelve months after the end of the annual reporting period in which the employees render therelated service, they shall be discounted using relevant discount rate (market yields at the end of thereporting period on high quality corporate bonds in active market or government bonds with thecurrency and term which shall be consistent with the currency and estimated term of the definedcontribution 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 or
government 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 ofthe defined benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan, it shall measure the net defined 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.Other service cost shall be recognised in profit or loss unless accounting standards require or allowthe inclusion of current service cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets,interest cost on the defined benefit obligation and interest on the effect of the asset ceiling, shall 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 obligationresulting 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 benefitliability or asset;? Any change in the effect of the asset ceiling, excluding amounts included in net interest on thenet defined benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensiveincome shall not be reclassified to profit or loss in a subsequent period. However, the Companymay transfer those 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 ofan employment termination plan or a curtailment proposal.
(ii) When the Company recognises costs or expenses related to a restructuring that involves thepayment 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 beaccounted for 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-termemployee benefitsIn order to simplify the accounting treatment, the net amount of above items shall be recognised inprofit or loss or relevant cost of assets.
3.23 Estimated Liabilities
(a) Recognition criteria of estimated liabilitiesThe Company recognises the estimated liabilities when obligations related to contingencies satisfyall the following conditions:
(i) That obligation is a current obligation of the Company;(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performanceof the obligation; and(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilitiesThe estimated liabilities of the Company are initially measured at the best estimate of expensesrequired for the performance of relevant present obligations. The Company, when determining the
best estimate, has had a comprehensive consideration of risks with respect to contingencies,uncertainties and the time value of money. The carrying amount of the estimated liabilities shall bereviewed at the end of every reporting period. If conclusive evidences indicate that the carryingamount fails to be the best estimate of the estimated liabilities, the carrying amount shall beadjusted based on the updated best estimate.
3.24 Revenue
(a) Revenue from sale of goodsRevenue from sale of goods shall be recognised when the following criteria are satisfied:
(i) Significant risks and rewards related to ownership of the goods have been transferred to thebuyer;(ii) The Company retains neither continuous management rights associated with ownership of thegoods sold nor effective control over the goods sold;(iii) Relevant amount of revenue can be measured reliably;(iv) It is probable that the economic benefits associated with the transaction will flow into theCompany; and(v) Relevant amount of cost incurred or to be incurred can be measured reliably.Revenue arising from domestic sales of goods is recognized when goods are dispatched anddelivered to the buyer, when significant risks and rewards attached to the ownership of the goodssold are passed to the buyer, when neither continual involvement in the rights normally associatedwith the ownership of the goods sold nor effective control over the goods controls are retained,when revenue arising from the goods sold is reliably measurable, when inflow of future economicbenefits is probable, and when cost incurred or to be incurred associated with the goods sold isreliably measurable. Revenue arising from non-domestic sales of goods is recognized when goodsare loaded on board and when the export clearance with the custom is completed.(b) Revenue from rendering of servicesWhen the outcome of rendering of services can be estimated reliably at the balance sheet date,revenue associated with the transaction is recognised using the percentage of completion method.Percentage of completion is determined based on the measurement of the work completedThe outcome of rendering of services can be estimated reliably when all of the following conditionsare satisfied: i) the amount of revenue can be measured reliably; ii) it is probable that the associatedeconomic benefits will flow to the Company; iii) the percentage of completion of the transactioncan be measured reliably; iv) the costs incurred and to be incurred for the transaction can bemeasured reliably.The Company shall determine the total revenue from rendering of services based on the received orreceivable price stipulated in the contract or agreement, unless the received or receivable amount as
stipulated in the contract or agreement is unfair. At the end of the reporting period, the Companyshall recognise the revenue from rendering of the services in current period, based on the amount ofmultiplying the total amount of revenues from rendering of the services by the percentage ofcompletion then deducting the accumulative revenues from rendering of the services that have beenrecognised in the previous accounting periods. At the same time, the Company shall recognise thecurrent cost incurred for rendering of the services based on the amount of multiplying the totalestimated cost for rendering of the services by the percentage of completion and then deducting theaccumulative costs from rendering of the services that have been recognised in the previousaccounting periods.If the outcome of rendering of services cannot be estimated reliably at the balance sheet date, theaccounting treatment shall be based on the following circumstances, respectively:
(i) When the costs incurred are expected to be recovered, revenue shall be recognised to the extentof costs incurred and charge an equivalent amount of cost to the profit and loss;(ii) When the costs incurred are not expected to be recovered, revenue shall not be recognised andthe costs incurred are recognised into current profit or loss(c) Revenue from alienating the right to use assetsWhen it is probable that the economic benefits associated with the transaction will flow into theCompany and amount of revenue can be measured reliably, the Company shall recognise theamount of revenue from the alienating of right to use assets based on the following circumstances,respectively:
(i) Interest revenue should be calculated in accordance with the period for which the enterprise'scash is used by others and the effective interest rate; or(ii) The amount of royalty revenue should be calculated in accordance with the period and methodof charging as stipulated in the relevant contract or agreement.
3.25 Government Grants
(a) Recognition of government grantsA 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.(b) Measurement of government grantsMonetary grants from the government shall be measured at amount received or receivable, andnon-monetary grants from the government shall be measured at their fair value or at a nominalvalue of RMB 1.00 when reliable fair value is not available.
(c) Accounting for government grants(i) Government grants related to assetsGovernment grants pertinent to assets mean the government grants that are obtained by theCompany used for purchase or construction, or forming the long-term assets by other ways.Government grants pertinent to assets shall be recognised as deferred income, and should berecognised in profit or loss on a systematic basis over the useful lives of the relevant assets. Grantsmeasured at their nominal value shall be directly recognised in profit or loss of the period when thegrants are received. When the relevant assets are sold, transferred, written off or damaged before theassets are terminated, the remaining deferred income shall be transferred into profit or loss of theperiod of disposing relevant assets.(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 relevantexpenses or losses in future periods, such government grants shall be recognised as deferred incomeand included into profit or loss in the same period as the relevant expenses or losses are recognised;If the government grants related to income are used to compensate the enterprise’s relevantexpenses or losses incurred, such government grants are directly recognised into current profit orlossFor government grants comprised of part related to assets as well as part related to income, eachpart is 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 inaccordance with the nature of the activities, and government grants irrelevant to daily operationactivities 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-marketrate of 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 theasset if the book value of the asset has been written down, or reducing the balance of relevant
deferred income if deferred income balance exists, any excess will be recognised into current profitor loss; or directly recognised into current profit or loss for other circumstances.
3.26 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in thestatement of financial position and its tax base at the balance sheet date. The Company recogniseand measure the effect of taxable temporary differences and deductible temporary differences onincome tax as deferred tax liabilities or deferred tax assets using liability method. Deferred taxassets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assetsDeferred 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 thatare expected to apply to the period when the asset is realised, unless the deferred tax asset arisesfrom the initial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)The Company shall recognise a deferred tax asset for all deductible temporary differences 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 beutilised.At the end of each reporting period, if there is sufficient evidence that it is probable that taxableprofit will be available against which the deductible temporary difference can be utilized, theCompany recognises a previously unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period.The Company shall reduce the carrying amount of a deferred tax asset to the extent that it is nolonger probable that sufficient taxable profit will be available to allow the benefit of part or all ofthat deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that itbecomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilitiesA 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 businesscombination; 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.(c) 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 berecognised in equity. Such items include: other comprehensive income generated from fair valuefluctuation of available for sale investments; an adjustment to the opening balance of retainedearnings resulting from either a change in accounting policy that is applied retrospectively or thecorrection of a prior period (significant) error; amounts arising on initial recognition of the equitycomponent of a compound financial instrument that contains both liability and equity component.(iii) Unused tax losses and unused tax creditsUnsused 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 currentprofit or loss shall be deducted as well.
Unsused 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.Within 12 months after the acquisition date, if new information regarding the facts andcircumstances exists at the acquisition date and the economic benefit of the acquiree’s deductibletemporary differences at the acquisition is expected to be realised, the Company shall recogniseacquired deferred tax benefits and reduce the carrying amount of any goodwill related to thisacquisition. If goodwill is reduced to zero, any remaining deferred tax benefits shall be recognisedin profit or loss. All other acquired deferred tax benefits realised shall be recognised in profit orloss.(iv) Temporary difference generated in consolidation eliminationWhen preparing consolidated financial statements, if temporary difference between carrying valueof the assets and liabilities in the consolidated financial statements and their taxable bases isgenerated from elimination of inter-company unrealized profit or loss, deferred tax assets ordeferred tax liabilities shall be recognised in the consolidated financial statements, and income taxesexpense in current profit or loss shall be adjusted as well except for deferred tax related totransactions or events recognised 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 inwhich the expenses are recognised according to the accounting standards, the Company estimatesthe tax base in accordance with available information at the end of the accounting period and thetemporary difference arising from it. Deferred tax shall be recognised when criteria of recognitionare satisfied. If the amount of estimated future tax deduction exceeds the amount of the cumulativeexpenses related to share-based payment recognised according to the accounting standards, the taxeffect of the excess amount shall be recognised directly in equity.
3.27 Changes in Significant Accounting Policies and Accounting Estimates(a) Changes in accounting policesOn 30 April 2019，Ministry of Finance announced the “Notice of Revising and Issuing the Formatof Financial Statements of General Enterprises for 2019” (Caikuai [2019] No.6) and requiredenterprise which adopted the new financial instrument standard but not yet adopt the new revenuestandard and new lease standard to prepare the financial statements according to the followingrequirements：
In the statement of financial position, “Notes receivable and Accounts receivable” are split into“Notes receivable” and “Accounts receivable”; “Accounts receivable financing” are added toreflect the notes receivable and accounts receivable which measured at fair value through other
comprehensive income on balance sheet date; “Notes payable and Accounts payable” are split into“Notes payable” and “Accounts payable”;In the statement of comprehensive income, “Gains /(losses) from derecognition of financial assetsmeasured at amortised cost” are added under the “Investment income/(losses)”.On 19 September 2019, the Ministry of Finance issued “Notice of Revising and Issuing the Formatof Consolidated Financial Statements for 2019” (Caikuai [2019] No. 16), as a complement of theannouncement Caikuai [2019] No. 6.The Company has prepared comparative financial statements in accordance with the requirement ofCaikuai [2019] No. 6 and and Caikuai [2019] No. 16, and changed the presentation by retrospectiveadjustment method.On 31 March 2017, the Ministry of Finance issued “Accounting Standards for Business EnterprisesNo. 22 - Recognition and Measurement of Financial Instruments (Revised in 2017)” (Caikuai [2017]No. 7), “Accounting Standard for Business Enterprises No. 23 - Transfer of financial assets(Revised in 2017) ”(Caikuai [2017] No. 8), “Accounting Standards for Business Enterprises No. 24- Hedging (Revised in 2017)” (Caikuai [2017] No. 9). On 2 May 2017, the Ministry of Financeissued “Accounting Standards for Business Enterprises No. 37 - Presentation of FinancialInstruments (Revised in 2017)” (Caikuai [2017] No. 14) (the above standards are collectivelyreferred to as the “New Financial Instruments Standards”). Domestic listed companies are requiredto implement the new financial instruments standards from 1 January 2019. The Companyimplemented the above mentioned new financial instrument standards on 1January 2019, andadjusted the relevant contents of accounting policies. Details please refer to Note 3.10.If the recognition and measurement of financial instruments before 1 January 2019 was inconsistentwith the requirements of the new financial instruments’ standards, the Company retroactivelyadjusted the classification and measurement (including impairment) of the financial instruments inaccordance with the new financial instrument standards. The difference between the originalcarrying amount of the financial instrument and the new carrying amount on the date ofimplementation of the new financial instruments’ standards (i.e. 1 January 2019) was recognised inretained earnings or other comprehensive income at 1 January 2019. At the same time, the companydid not adjust the comparative financial statement data.(b) Significant changes in accounting estimatesThe Company has no significant changes in accounting estimates for the reporting period.(c) Adjustments of the financial statements at the beginning of the reporting period for thefirst year adoption of new financial instruments standards.Consolidated Financial Statements
Unit: Yuan Currency: RMB
| Items | 31 December 2018 | 1 January 2019 | Adjustment |
| Current assets: | |||
| Cash and cash equivalents | 1,705,760,865.12 | 1,705,760,865.12 | - |
| Held-for-trading financial assets | N/a. | 2,965,016,000.42 | 2,965,016,000.42 |
| Financial assets at fair value through profit or loss | 622,892.96 | N/a. | -622,892.96 |
| Notes receivable | 1,347,427,811.34 | 1,347,427,811.34 | - |
| Accounts receivable | 29,748,068.74 | 29,748,068.74 | - |
| Advances to suppliers | 182,558,000.75 | 182,558,000.75 | - |
| Other receivables | 43,342,878.22 | 43,342,878.22 | - |
| Including: Interests receivable | 24,923,178.08 | 24,923,178.08 | - |
| Dividend receivable | - | - | |
| Inventories | 2,407,306,664.86 | 2,407,306,664.86 | - |
| Non-current assets maturing within one year | 300,000,000.00 | 300,000,000.00 | - |
| Other current assets | 3,012,478,687.20 | 254,478,687.20 | -2,758,000,000.00 |
| Total current assets | 9,029,245,869.19 | 9,235,638,976.65 | 206,393,107.46 - |
| Non-current assets: | |||
| Available-for-sale financial assets | 206,393,107.46 | N/a. | -206,393,107.46 |
| Long-term equity investments | 4,900,000.00 | 4,900,000.00 | - |
| Investment properties | 5,027,228.53 | 5,027,228.53 | - |
| Fixed assets | 1,763,988,530.56 | 1,763,988,530.56 | - |
| Construction in progress | 93,320,557.56 | 93,320,557.56 | - |
| Intangible assets | 742,083,609.10 | 742,083,609.10 | - |
| Goodwill | 478,283,495.29 | 478,283,495.29 | - |
| Long-term deferred expenses | 83,561,473.46 | 83,561,473.46 | - |
| Deferred tax assets | 86,580,171.06 | 86,580,171.06 | - |
| Other non-current assets | 16,544,407.51 | 16,544,407.51 | - |
| Total non-current assets | 3,480,682,580.53 | 3,274,289,473.07 | -206,393,107.46 |
| Total assets | 12,509,928,449.72 | 12,509,928,449.72 | - |
| Current liabilities | |||
| Notes payable | 349,203,413.72 | 349,203,413.72 | - |
| Items | 31 December 2018 | 1 January 2019 | Adjustment |
| Trade payables | 484,952,598.59 | 484,952,598.59 | - |
| Advances from customers | 1,149,143,310.48 | 1,149,143,310.48 | - |
| Employee benefits payable | 457,299,476.43 | 457,299,476.43 | - |
| Taxes payable | 372,993,624.18 | 372,993,624.18 | - |
| Other payables | 1,192,020,147.82 | 1,192,020,147.82 | - |
| Including: Interests payables | - | - | |
| Dividend payables | - | - | |
| Other current liabilities | 295,164,745.44 | 295,164,745.44 | - |
| Total current liabilities | 4,300,777,316.66 | 4,300,777,316.66 | - |
| Deferred income | 76,636,500.55 | 76,636,500.55 | - |
| Deferred tax liabilities | 102,764,515.11 | 102,764,515.11 | - |
| Total non-current liabilities | 179,401,015.66 | 179,401,015.66 | - |
| Total liabilities | 4,480,178,332.32 | 4,480,178,332.32 | - |
| Owners’ equity | |||
| Share capital | 503,600,000.00 | 503,600,000.00 | - |
| Capital reserves | 1,295,405,592.25 | 1,295,405,592.25 | - |
| Other comprehensive income | 4,794,830.59 | -- | -4,794,830.59 |
| Surplus reserves | 256,902,260.27 | 256,902,260.27 | - |
| Retained earnings | 5,541,281,341.47 | 5,546,076,172.06 | 4,794,830.59 |
| Total owner’s equity attributable to parent company | 7,601,984,024.58 | 7,601,984,024.58 | - |
| Non-controlling interests | 427,766,092.82 | 427,766,092.82 | - |
| Total owners’ equity | 8,029,750,117.40 | 8,029,750,117.40 | - |
| Total liabilities and owners' equity | 12,509,928,449.72 | 12,509,928,449.72 | - |
| Items | 31 December 2018 | 1 January 2019 | Adjustment |
| Current assets: | |||
| Cash and cash equivalents | 1,078,172,917.59 | 1,078,172,917.59 | - |
| Held-for-trading financial assets | N/a. | 1,807,016,000.42 | -1,807,016,000.42 |
| Items | 31 December 2018 | 1 January 2019 | Adjustment |
| Financial assets at fair value through profit or loss | 622,892.96 | N/a. | -622,892.96 |
| Notes receivable | 1,256,336,386.34 | 1,256,336,386.34 | - |
| Accounts receivable | 9,385,950.54 | 9,385,950.54 | - |
| Advances to suppliers | 10,869,911.54 | 10,869,911.54 | - |
| Other receivables | 110,800,665.19 | 110,800,665.19 | - |
| Including: Interests receivable | - | - | |
| Dividend receivable | - | - | |
| Inventories | 2,125,826,967.11 | 2,125,826,967.11 | - |
| Other current assets | 1,764,267,968.83 | 164,267,968.83 | -1,600,000,000.00 |
| Total current assets | 6,356,283,660.10 | 6,562,676,767.56 | 206,393,107.46 |
| Non-current assets: | |||
| Available-for-sale financial assets | 206,393,107.46 | N/a. | -206,393,107.46 |
| Long-term equity investments | 1,148,213,665.32 | 1,148,213,665.32 | - |
| Investment properties | 24,715,657.40 | 24,715,657.40 | - |
| Fixed assets | 1,290,714,455.79 | 1,290,714,455.79 | - |
| Construction in progress | 86,634,753.93 | 86,634,753.93 | - |
| Intangible assets | 189,968,142.25 | 189,968,142.25 | - |
| Long-term deferred expenses | 56,643,945.05 | 56,643,945.05 | - |
| Deferred tax assets | 37,415,458.17 | 37,415,458.17 | - |
| Other non-current assets | 12,474,026.00 | 12,474,026.00 | - |
| Total non-current assets | 3,053,173,211.37 | 2,846,780,103.91 | -206,393,107.46 |
| Total assets | 9,409,456,871.47 | 9,409,456,871.47 | - |
| Current liabilities: | |||
| Notes payable | 28,648,913.72 | 28,648,913.72 | - |
| Trade payables | 362,290,556.21 | 362,290,556.21 | - |
| Advances from customers | 1,123,125,892.84 | 1,123,125,892.84 | - |
| Employee benefits payable | 117,748,485.96 | 117,748,485.96 | - |
| Taxes payable | 161,176,957.25 | 161,176,957.25 | - |
| Other payables | 372,902,293.22 | 372,902,293.22 | - |
| Items | 31 December 2018 | 1 January 2019 | Adjustment |
| Including: Interests payables | - | - | |
| Dividend payables | - | - | |
| Other current liabilities | 32,605,794.55 | 32,605,794.55 | - |
| Total current liabilities | 2,198,498,893.75 | 2,198,498,893.75 | - |
| Non-current liabilities: | |||
| Deferred income | 36,417,554.85 | 36,417,554.85 | - |
| Deferred tax liabilities | 4,828,737.52 | 4,828,737.52 | - |
| Total non-current liabilities | 41,246,292.37 | 41,246,292.37 | - |
| Total liabilities | 2,239,745,186.12 | 2,239,745,186.12 | - |
| Owners’ equity | |||
| Share capital | 503,600,000.00 | 503,600,000.00 | - |
| Capital reserves | 1,247,162,107.35 | 1,247,162,107.35 | - |
| Other comprehensive income | 4,794,830.59 | - | -4,794,830.59 |
| Surplus reserves | 251,800,000.00 | 251,800,000.00 | - |
| Retained earnings | 5,162,354,747.41 | 5,167,149,578.00 | 4,794,830.59 |
| Total owners’ equity | 7,169,711,685.35 | 7,169,711,685.35 | - |
| Total liabilities and owners' equity | 9,409,456,871.47 | 9,409,456,871.47 | - |
| 31 December 2018 (Original financial instruments standard) | 1 January 2019 (New financial instruments standard) | ||||
| Items | Measurement category | Carrying amount | Items | Measurement category | Carrying amount |
| Cash and cash equivalents | Amortised cost | 1,705,760,865.12 | Cash and cash equivalents | Amortised cost | 1,705,760,865.12 |
| Financial assets at fair value through profit or loss | Fair value through profit or loss | 622,892.96 | Held-for-trading financial assets | Fair value through profit or loss | 622,892.96 |
| Notes receivable | Amortised cost | 1,347,427,811.34 | Notes receivable | Amortised cost | 1,347,427,811.34 |
| 31 December 2018 (Original financial instruments standard) | 1 January 2019 (New financial instruments standard) | ||||
| Items | Measurement category | Carrying amount | Items | Measurement category | Carrying amount |
| Accounts receivable | Amortised cost | 29,748,068.74 | Accounts receivable | Amortised cost | 29,748,068.74 |
| Other receivables | Amortised cost | 43,342,878.22 | Other receivables | Amortised cost | 43,342,878.22 |
| Available-for-sale financial assets | Fair value through other comprehensive income (equity instrument) | 206,393,107.46 | Held-for-trading financial assets | Fair value through profit or loss | 206,393,107.46 |
| Other current assets | Amortised cost | 3,012,478,687.20 | Held-for-trading financial assets | Fair value through profit or loss | 2,758,000,000.00 |
| Other current assets | Amortised cost | 254,478,687.20 | |||
| Other non-current assets | Amortised cost | 16,544,407.51 | Other non-current assets | Amortised cost | 16,544,407.51 |
| 31 December 2018 (Original financial instruments standard) | 1 January 2019 (New financial instruments standard) | ||||
| Items | Measurement category | Carrying amount | Items | Measurement category | Carrying amount |
| Cash and cash equivalents | Amortised cost | 1,078,172,917.59 | Cash and cash equivalents | Amortised cost | 1,078,172,917.59 |
| Financial assets at fair value through profit or loss | Fair value through profit or loss | 622,892.96 | Held-for-trading financial assets | Fair value through profit or loss | 622,892.96 |
| Notes receivable | Amortised cost | 1,256,336,386.34 | Notes receivable | Amortised cost | 1,256,336,386.34 |
| Accounts receivable | Amortised cost | 9,385,950.54 | Accounts receivable | Amortised cost | 9,385,950.54 |
| Other receivables | Amortised cost | 110,800,665.19 | Other receivables | Amortised cost | 110,800,665.19 |
| 31 December 2018 (Original financial instruments standard) | 1 January 2019 (New financial instruments standard) | ||||
| Items | Measurement category | Carrying amount | Items | Measurement category | Carrying amount |
| Other current assets | Amortised cost | 1,764,267,968.83 | Held-for-trading financial assets | Fair value through profit or loss | 1,600,000,000.00 |
| Other current assets | Amortised cost | 164,267,968.83 | |||
| Available-for-sale financial assets | Fair value through other comprehensive income (equity instrument) | 206,393,107.46 | Held-for-trading financial assets | Fair value through profit or loss | 206,393,107.46 |
| Other non-current assets | Amortised cost | 12,474,026.00 | Other non-current assets | Amortised cost | 12,474,026.00 |
| Items | Carrying amount at 31 December 2018 (Original financial instruments standards) | Reclassification | Remeasurement | Carrying amount at 1 January 2019 (New financial instruments standards) |
| Financial assets measured at fair value through profit or loss based on new financial instruments standards | ||||
| Financial assets at fair value through profit or loss | 622,892.96 | - | - | - |
| Other current assets | 2,758,000,000.00 | - | - | - |
| Add: Transfer from available-for-sale financial assets | - | 206,393,107.46 | - | - |
| Held-for-trading financial assets | - | - | - | 2,965,016,000.42 |
| Items | Carrying amount at 31 December 2018 (Original financial instruments standards) | Reclassification | Remeasurement | Carrying amount at 1 January 2019 (New financial instruments standards) |
| Financial assets measured at fair value through profit or loss based on new financial instruments standards | ||||
| Financial assets at fair value through profit or loss | 622,892.96 | - | - | - |
| Other current assets | 1,600,000,000.00 | - | - | - |
| Add: Transfer from available-for-sale financial assets | - | 206,393,107.46 | ||
| Held-for-trading financial assets | - | - | - | 1,807,016,000.42 |
| Items | Carrying amount at 31 December 2018 (Original financial instruments standards) | Reclassification | Remeasurement | Carrying amount at 1 January 2019 (New financial instruments standards) |
| Financial assets measured at amortised cost | ||||
| Including: Impairment provision of notes receivable | - | - | - | - |
| Impairment provision of accounts receivable | 649,289.27 | - | - | 649,289.27 |
| Impairment provision of other receivables | 42,374,086.73 | - | - | 42,374,086.73 |
| Items | Carrying amount at 31 December 2018 (Original financial instruments standards) | Reclassification | Remeasurement | Carrying amount at 1 January 2019 (New financial instruments standards) |
| Financial assets measured at amortised cost | ||||
| Including: Impairment provision of notes receivable | - | - | - | - |
| Impairment provision of accounts receivable | 141,121.87 | - | - | 141,121.87 |
| Impairment provision of other receivables | 41,631,537.21 | - | - | 41,631,537.21 |
| Categories of tax | Basis of tax assessment | Tax rate |
| Value added tax (VAT) | Output VATs are calculated and paid on taxable revenues at a tax rateof 13%（16%）or 10% or 6%, and VATs are paid at the net amounts after deducting input VATs for the reporting period | 13%（16%）、10%、6% |
| Consumption taxes | The consumption taxes are paid on the taxable sales | For the liquor sold, the ad valorem consumption tax shall be calculated and paid as RMB 1.00 yuan per kilogram or 1000ml, and the ad valorem consumption tax shall be calculated and paid as per 20% of the taxable sales |
| Urban maintenance and construction tax | Urban maintenance and construction taxes are paid on turnover taxes | 7%、5% |
| Educational surcharge | Educational surcharges are paid on turnover taxes | 3% |
| Local educational surcharge | Local educational surcharges are paid on turnover taxes | 2% |
| Enterprise income tax | Business taxes are calculated and paid on taxable revenues | 25% |
(Certificate Number:GR201842002339) which is valid for 3 years. According to Enterprise IncomeTax Law and other relevant regulations, the company is subject to a national high-tech enterpriseincome tax rate at 15% for three years from January 1, 2018 to December 31, 2020.(iv) According to Notice from Ministry of Finance and State Administration of Taxation on theImplementation of Inclusive Tax Reduction Policy for Small and Micro Enterprises (Caishui [2019]No.13), from January 1, 2019 to December 31, 2021 the portion of the enterprise's annual taxableincome which does not exceed 1 million yuan is reduced to 25% as taxable income, and income taxis paid at a tax rate of 20%. For the annual taxable income of more than 1 million yuan but not morethan 3 million yuan, this part is reduced to 50% as taxable income, income tax is paid at the rate of20%. The subsidiaries Gujing waste company, Junhe Advertising and Yellow Crane TowerBeverage meet the condition of annual taxable income not exceeding 1 million yuan while actualtax rate in 2019 was 5%. The subsidiary Zhenrui Construction meets the condition of annual taxableincome exceeding 1 million yuan but not exceeding 3 million yuan while actual tax rate for 2019was 10%.
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Cash and Cash Equivalents
| Items | 31 December 2019 | 31 December 2018 |
| Cash on hand | 292,465.36 | 353,429.67 |
| Cash in bank | 5,618,712,121.81 | 1,705,175,643.46 |
| Other monetary funds | 745,330.92 | 231,791.99 |
| Total | 5,619,749,918.09 | 1,705,760,865.12 |
of collection of sales receivables as well as the decrease of closing balance offinancial products investment.
5.2 Held-for-trading financial assets
| Items | 31 December 2019 | 31 December 2018 |
| Financial Assets at Fair Value through Profit or Loss | 509,031,097.02 | - |
| Including: bank financial products | 297,146,591.78 | - |
| Fund investment | 211,884,505.24 | - |
| Total | 509,031,097.02 | - |
| Items | 31 December 2019 | 31 December 2018 |
| Held-for-trading financial assets: | 622,892.96 | |
| Including: Equity instruments investment | - | 622,892.96 |
| Total | - | 622,892.96 |
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book Balance | Provision for bad debt | Carrying amount | Book Balance | Provision for bad debt | Carrying amount | |
| Bank acceptance bills | 1,002,758,533.39 | - | 1,002,758,533.39 | 1,347,427,811.34 | - | 1,347,427,811.34 |
| Commercial acceptance bills | 1,493,836.54 | 34,938.37 | 1,458,898.17 | - | - | - |
| Total | 1,004,252,369.93 | 34,938.37 | 1,004,217,431.56 | 1,347,427,811.34 | - | 1,347,427,811.34 |
| Items | Pledged amount |
| Bank acceptance bills | 349,377,134.82 |
| Total | 349,377,134.82 |
| Items | Amount of derecognition | Amount of recognition |
| Bank acceptance bills | 1,185,260,793.87 | - |
| Total | 1,185,260,793.87 | - |
| Category | 31 December 2019 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for bad debt recognised individually | - | - | - | - | - |
| Provision for bad debt recognised collectively | 1,004,252,369.93 | 100.00 | 34,938.37 | 0.00 | 1,004,217,431.56 |
| Including: Group 1 | 1,493,836.54 | 0.15 | 34,938.37 | 2.34 | 1,458,898.17 |
| Group 2 | 1,002,758,533.39 | 99.85 | - | - | 1,002,758,533.39 |
| Total | 1,004,252,369.93 | 100.00 | 34,938.37 | 0.00 | 1,004,217,431.56 |
| Name | 31 December 2019 | ||
| Notes receivable | Provision for bad debt | Provision ratio (%) | |
| Name | 31 December 2019 | ||
| Notes receivable | Provision for bad debt | Provision ratio (%) | |
| Within 1 year | 1,493,836.54 | 34,938.37 | |
| Including:1-6months | 993,836.54 | 9,938.37 | 1.00 |
| 7-12months | 500,000.00 | 25,000.00 | 5.00 |
| Total | 1,493,836.54 | 34,938.37 | 2.34 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| Commercial acceptance bills | - | - | - | 34,938.37 | - | - | 34,938.37 |
| Total | - | - | - | 34,938.37 | - | - | 34,938.37 |
| Aging | 31 December 2019 | 31 December 2018 |
| Within one year | 41,004,875.62 | 29,725,877.02 |
| Including:1-6months | 37,333,246.24 | 26,516,294.24 |
| 7-12months | 3,671,629.38 | 3,209,582.78 |
| 1-2 years | 365,118.07 | 497,593.12 |
| Aging | 31 December 2019 | 31 December 2018 |
| 2-3 years | - | - |
| Over 3 years | 141,121.87 | 173,887.87 |
| Subtotal | 41,511,115.56 | 30,397,358.01 |
| Less: provision for bad debt | 734,547.60 | 649,289.27 |
| Total | 40,776,567.96 | 29,748,068.74 |
| Category | 31 December 2019 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for bad debt recognised individually | - | - | - | - | - |
| Provision for bad debt recognized collectively | 41,511,115.56 | 100.00 | 734,547.60 | 1.77 | 40,776,567.96 |
| Including: Group1 | - | - | - | - | - |
| Group2 | 41,511,115.56 | 100.00 | 734,547.60 | 1.77 | 40,776,567.96 |
| Total | 41,511,115.56 | 100.00 | 734,547.60 | 1.77 | 40,776,567.96 |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Accounts receivable with individually significant balance and provision for bad debt recognised individually | - | - | - | - | - |
| Accounts receivable with bad debt provision recognised collectively by similar credit | 30,397,358.01 | 100.00 | 649,289.27 | 2.14 | 29,748,068.74 |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Accounts receivable with individually significant balance and provision for bad debt recognised individually | - | - | - | - | - |
| risk characteristics | |||||
| Accounts receivable with individually insignificant balance but provision for bad debt recognised individual | - | - | - | - | - |
| Total | 30,397,358.01 | 100.00 | 649,289.27 | 2.14 | 29,748,068.74 |
| Aging | 31 December 2019 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | 41,004,875.62 | 556,913.92 | 1.36 |
| Including:1-6months | 37,333,246.24 | 373,332.45 | 1.00 |
| 7-12months | 3,671,629.38 | 183,581.47 | 5.00 |
| 1-2 years | 365,118.07 | 36,511.81 | 10.00 |
| 2-3 years | - | - | - |
| Over 3 years | 141,121.87 | 141,121.87 | 100.00 |
| Total | 41,511,115.56 | 734,547.60 | 1.77 |
| Aging | 31 December 2018 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | 29,725,877.02 | 425,642.08 | 1.43 |
| Including:1-6months | 26,516,294.24 | 265,162.94 | 1.00 |
| Aging | 31 December 2018 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| 7-12months | 3,209,582.78 | 160,479.14 | 5.00 |
| 1-2 years | 497,593.12 | 49,759.32 | 10.00 |
| 2-3 years | - | - | - |
| Over 3 years | 173,887.87 | 173,887.87 | 100.00 |
| Total | 30,397,358.01 | 649,289.27 | 2.14 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| Accounts receivable with individually insignificant balance but provision for bad debt recognised individual | - | - | - | - | - | - | - |
| Group2: Provision for bad debt recognized collectively | 649,289.27 | - | 649,289.27 | 175,624.33 | 90,366.00 | 734,547.60 | |
| Total | 649,289.27 | - | 649,289.27 | 175,624.33 | 90,366.00 | 734,547.60 | |
| Entity name | Balance at 31 December 2019 | Proportion of the balance to the total accounts receivable (%) | Provision for bad debt |
| No. 1 | 3,979,721.98 | 9.59 | 39,797.22 |
| No. 2 | 3,748,388.91 | 9.03 | 37,483.89 |
| No. 3 | 3,564,484.80 | 8.59 | 40,405.49 |
| No. 4 | 2,529,753.91 | 6.09 | 25,297.54 |
| No. 5 | 2,432,000.00 | 5.86 | 24,320.00 |
| Total | 16,254,349.60 | 39.16 | 167,304.14 |
| Aging | 31 December 2019 | 31 December 2018 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within one year | 196,781,962.46 | 99.66 | 182,122,465.92 | 99.76 |
| 1 to 2 years | 647,771.50 | 0.33 | 145,534.83 | 0.08 |
| 2 to 3 years | - | - | - | - |
| Over 3 years | 23,580.00 | 0.01 | 290,000.00 | 0.16 |
| Total | 197,453,313.96 | 100.00 | 182,558,000.75 | 100.00 |
| Entity name | Balance at 31 December 2019 | Proportion of the balance to the total advances to suppliers (%) |
| No. 1 | 155,120,800.50 | 78.56 |
| No. 2 | 3,228,301.96 | 1.63 |
| No. 3 | 1,456,310.68 | 0.74 |
| No. 4 | 1,437,916.44 | 0.73 |
| No. 5 | 841,273.23 | 0.43 |
| Total | 162,084,602.81 | 82.09 |
(a) Other receivables by category
| Items | 31 December 2019 | 31 December 2018 |
| Interest receivable | 1,908,788.81 | 24,923,178.08 |
| Dividend receivable | - | - |
| Other receivables | 23,838,168.41 | 18,419,700.14 |
| Total | 25,746,957.22 | 43,342,878.22 |
| Items | 31 December 2019 | 31 December 2018 |
| Interest on large-denomination certificates of deposit | 1,908,788.81 | 24,923,178.08 |
| Less: Provision for bad debt | - | - |
| Total | 1,908,788.81 | 24,923,178.08 |
| Aging | 31 December 2019 | 31 December 2018 |
| Within one year | 21,391,891.49 | 17,617,762.53 |
| Including:1-6months | 16,704,667.12 | 16,726,199.24 |
| 7-12months | 4,687,224.37 | 891,563.29 |
| 1-2 years | 2,804,920.23 | 934,319.75 |
| 2-3 years | 646,513.23 | 345,780.00 |
| Over 3 years | 42,087,287.44 | 41,895,924.59 |
| Subtotal | 66,930,612.39 | 60,793,786.87 |
| Less: provision for bad debt | 43,092,443.98 | 42,374,086.73 |
| Total | 23,838,168.41 | 18,419,700.14 |
| Nature | 31 December 2019 | 31 December 2018 |
| Investment in securities | 40,850,949.35 | 40,850,949.35 |
| Nature | 31 December 2019 | 31 December 2018 |
| Deposit and guarantee | 5,343,741.34 | 4,749,457.78 |
| Borrowing for business trip expenses | 884,420.74 | 426,435.85 |
| Rent, utilities and gasoline charges | 8,479,446.65 | 6,786,659.62 |
| Others | 11,372,054.31 | 7,980,284.27 |
| Subtotal | 66,930,612.39 | 60,793,786.87 |
| Less: provision for bad debt | 43,092,443.98 | 42,374,086.73 |
| Total | 23,838,168.41 | 18,419,700.14 |
| Stages | Book balance | Provision for bad debt | Carrying acount |
| Stage 1 | 26,079,663.04 | 2,241,494.63 | 23,838,168.41 |
| Stage 2 | - | - | - |
| Stage 3 | 40,850,949.35 | 40,850,949.35 | - |
| Total | 66,930,612.39 | 43,092,443.98 | 23,838,168.41 |
| Category | Book balance | 12-month expected credit losses rate (%) | Provision for bad debt | Carrying amount | Reason |
| Provision for bad debt recognised individually | - | - | - | - | - |
| Provision for bad debt recognised collectively | 26,079,663.04 | 8.59 | 2,241,494.63 | 23,838,168.41 | 26,079,663.04 |
| Including: Group1 | - | - | - | - | - |
| Group2 | 26,079,663.04 | 8.59 | 2,241,494.63 | 23,838,168.41 | 26,079,663.04 |
| Total | 26,079,663.04 | 8.59 | 2,241,494.63 | 23,838,168.41 | 26,079,663.04 |
| Aging | 31 December 2019 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| Within one year | 21,391,891.49 | 401,407.90 | 1.88 |
| Including:1-6months | 16,704,667.12 | 167,046.67 | 1.00 |
| 7-12months | 4,687,224.37 | 234,361.23 | 5.00 |
| 1-2 years | 2,804,920.23 | 280,492.02 | 10.00 |
| 2-3 years | 646,513.23 | 323,256.62 | 50.00 |
| Over 3 years | 1,236,338.09 | 1,236,338.09 | 100.00 |
| Total | 26,079,663.04 | 2,241,494.63 | 8.59 |
| Category | Book balance | Lifetime expected credit losses rate (%) | Provision for bad debt | Carrying amount | Reason |
| Provision for bad debt recognised individually | 40,850,949.35 | 100.00 | 40,850,949.35 | - | 40,850,949.35 |
| Provision for bad debt recognised collectively | - | - | - | - | - |
| Including: Group1 | - | - | - | - | - |
| Group2 | - | - | - | - | - |
| Total | 40,850,949.35 | 100.00 | 40,850,949.35 | - | 40,850,949.35 |
| Entity name | 31 December 2019 | |||
| Book balance | Provision for bad debt | Provision ratio (%) | Reason | |
| Hengxin Securities Co., Ltd. | 29,010,449.35 | 29,010,449.35 | 100.00 | The enterprise enters the bankruptcy liquidation procedure |
| Jianqiao Securities Co., Ltd. | 11,840,500.00 | 11,840,500.00 | 100.00 | The enterprise enters the bankruptcy |
| liquidation procedure | ||||
| Total | 40,850,949.35 | 40,850,949.35 | 100.00 |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Other receivables with individually significant balance and provision for bad debt recognised individually | 40,850,949.35 | 67.20 | 40,850,949.35 | 100.00 | - |
| Other receivables with bad debt provision recognised collectively by similar credit risk characteristics | 19,942,837.52 | 32.80 | 1,523,137.38 | 7.64 | 18,419,700.14 |
| Other receivable with individually insignificant balance but recognised provision for bad debt individually | - | - | - | - | - |
| Total | 60,793,786.87 | 100.00 | 42,374,086.73 | 69.70 | 18,419,700.14 |
| Entity name | 31 December 2018 | |||
| Other receivables | Provision for bad debt | Provision ratio (%) | Reason | |
| Hengxin Securities Co., Ltd. | 29,010,449.35 | 29,010,449.35 | 100.00 | The enterprise enters the bankruptcy liquidation procedure |
| Jianqiao Securities Co., Ltd. | 11,840,500.00 | 11,840,500.00 | 100.00 | The enterprise enters |
| Entity name | 31 December 2018 | |||
| Other receivables | Provision for bad debt | Provision ratio (%) | Reason | |
| the bankruptcy liquidation procedure | ||||
| Total | 40,850,949.35 | 40,850,949.35 | 100.00 | |
| Aging | 31 December 2018 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | 17,617,762.53 | 211,840.16 | 1.20 |
| Including:1-6months | 16,726,199.24 | 167,261.99 | 1.00 |
| 7-12months | 891,563.29 | 44,578.17 | 5.00 |
| 1-2 years | 934,319.75 | 93,431.98 | 10.00 |
| 2-3 years | 345,780.00 | 172,890.00 | 50.00 |
| Over 3 years | 1,044,975.24 | 1,044,975.24 | 100.00 |
| Total | 19,942,837.52 | 1,523,137.38 | 7.64 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| Provision for bad debt recognised individually | 40,850,949.35 | - | 40,850,949.35 | - | - | - | 40,850,949.35 |
| Provision for bad debt recognised collectively | 1,523,137.38 | - | 1,523,137.38 | 722,167.14 | - | 3,809.89 | 2,241,494.63 |
| Total | 42,374,086.73 | - | 42,374,086.73 | 722,167.14 | - | 3,809.89 | 43,092,443.98 |
| Entity name | Nature | Balance at 31 December 2019 | Aging | Proportion of the balance to the total other receivables (%) | Provision for bad debt |
| No. 1 | Securities investment | 29,010,449.35 | Over 3 years | 43.34 | 29,010,449.35 |
| No. 2 | Securities investment | 11,840,500.00 | Over 3 years | 17.69 | 11,840,500.00 |
| No. 3 | Others | 1,814,794.17 | Within 6 months | 2.71 | 18,147.94 |
| No. 4 | Security deposit | 500,000.00 | Within 6 months | 0.75 | 5,000.00 |
| No. 5 | Security deposit | 350,000.00 | 7-12months | 0.52 | 17,500.00 |
| Total | —— | 43,515,743.52 | —— | 65.01 | 40,891,597.29 |
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Raw materials and package materials | 177,976,566.48 | 14,772,001.80 | 163,204,564.68 | 144,856,930.02 | 13,808,554.40 | 131,048,375.62 |
| Semi-finished goods and work in process | 2,291,945,127.85 | - | 2,291,945,127.85 | 1,957,452,112.24 | - | 1,957,452,112.24 |
| Finished goods | 562,948,591.57 | 3,046,322.32 | 559,902,269.25 | 322,031,842.20 | 3,225,665.20 | 318,806,177.00 |
| Total | 3,032,870,285.90 | 17,818,324.12 | 3,015,051,961.78 | 2,424,340,884.46 | 17,034,219.60 | 2,407,306,664.86 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | ||
| Provision | Others | Reversal or written-down | Others | |||
| Raw materials and package materials | 13,808,554.40 | 979,662.15 | - | 16,214.75 | - | 14,772,001.80 |
| Finished goods | 3,225,665.20 | 99,318.29 | 278,661.17 | 3,046,322.32 | ||
| Total | 17,034,219.60 | 1,078,980.44 | 294,875.92 | 17,818,324.12 | ||
| Items | 31 December 2019 | 31 December 2018 |
| Non-current Assets Maturing within One Year | - | 300,000,000.00 |
| Total | - | 300,000,000.00 |
| Items | 31 December 2019 | 31 December 2018 |
| Financial products | - | 2,758,000,000.00 |
| Pledge-style repo of treasury bonds | - | 179,900,000.00 |
| Deductible tax | 114,439,167.07 | 74,578,687.20 |
| Total | 114,439,167.07 | 3,012,478,687.20 |
5.11 Available-for-sale Financial Assets
(a) General information of available-for-sale financial assets
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Available-for-sale equity instruments | - | - | - | 206,393,107.46 | - | 206,393,107.46 |
| Including: measured by fair value | - | - | - | 206,393,107.46 | - | 206,393,107.46 |
| Total | - | - | - | 206,393,107.46 | - | 206,393,107.46 |
| Investees | 31 December 2018 | Changes during the reporting period | ||||
| Increase during the reporting period | Decrease during the reporting period | Gains /(losses) on investments under the equity method | Adjustments of other comprehensive income | Changes in other equity | ||
| Associates | ||||||
| Beijing Guge Trading Co., Ltd. | 4,900,000.00 | - | - | -221,717.76 | - | - |
| Total | 4,900,000.00 | - | - | -221,717.76 | - | - |
| Investees | Changes during the reporting period | 31 December | Provision for |
| Declaration of cash dividends or distribution of profit | Provision for impairment | Others | 2019 | impairment at 31 December 2019 | |
| Associates | |||||
| Beijing Guge Trading Co., Ltd. | - | - | - | 4,678,282.24 | - |
| Total | - | - | - | 4,678,282.24 | - |
| Items | Building and plants | Land use rights | Total |
| Initial cost: | |||
| Balance at 31 December 2018 | 8,680,555.75 | 2,644,592.00 | 11,325,147.75 |
| Increase during the reporting period | - | - | - |
| Decrease during the reporting period | - | - | - |
| Balance at 31 December 2019 | 8,680,555.75 | 2,644,592.00 | 11,325,147.75 |
| Accumulated depreciation and amortisation: | |||
| Balance at 31 December 2018 | 5,654,245.92 | 643,673.30 | 6,297,919.22 |
| Increase during the reporting period | 261,115.95 | 56,026.56 | 317,142.51 |
| (i) Provision | 261,115.95 | 56,026.56 | 317,142.51 |
| Decrease during the reporting period | - | - | - |
| Balance at 31 December 2019 | 5,915,361.87 | 699,699.86 | 6,615,061.73 |
| Provision for impairment | |||
| Balance at 31 December 2018 | - | - | - |
| Increase during the reporting period | - | - | - |
| Decrease during the reporting period | - | - | - |
| Balance at 31 December 2019 | - | - | - |
| Carrying amount: | |||
| Balance at 31 December 2019 | 2,765,193.88 | 1,944,892.14 | 4,710,086.02 |
| Balance at 31 December 2018 | 3,026,309.83 | 2,000,918.70 | 5,027,228.53 |
| Items | 31 December 2019 | 31 December 2018 |
| Fixed assets | 1,722,572,998.79 | 1,763,988,530.56 |
| Disposal of fixed assets | - | - |
| Total | 1,722,572,998.79 | 1,763,988,530.56 |
| Items | Buildings and constructions | Machinery equipments | Vehicles | Office equipment and others | Total |
| Initial cost: | |||||
| Balance at 31 December 2018 | 2,006,674,799.70 | 920,022,112.79 | 58,064,314.20 | 157,194,996.51 | 3,141,956,223.20 |
| Increase during the reporting period | 42,058,074.12 | 106,980,384.01 | 5,654,034.83 | 20,652,185.83 | 175,344,678.79 |
| (i) Acquisition | 1,841,669.47 | 32,454,864.01 | 5,654,034.83 | 13,339,053.16 | 53,289,621.47 |
| (ii)Transfer from construction in progress | 40,216,404.65 | 74,525,520.00 | - | 7,313,132.67 | 122,055,057.32 |
| Items | Buildings and constructions | Machinery equipments | Vehicles | Office equipment and others | Total |
| Decrease during the reporting period | 14,189,856.21 | 24,825,609.75 | 2,750,837.04 | 6,943,112.13 | 48,709,415.13 |
| (i) Disposal | 14,189,856.21 | 24,825,609.75 | 2,750,837.04 | 6,943,112.13 | 48,709,415.13 |
| Balance at 31 December 2019 | 2,034,543,017.61 | 1,002,176,887.05 | 60,967,511.99 | 170,904,070.21 | 3,268,591,486.86 |
| Accumulated depreciation: | |||||
| Balance at 31 December 2018 | 737,756,223.41 | 495,710,974.90 | 49,030,197.42 | 90,459,858.92 | 1,372,957,254.65 |
| Increase during the reporting period | 84,535,134.09 | 98,379,650.23 | 5,266,789.72 | 17,666,813.49 | 205,848,387.53 |
| (i) Provision | 84,535,134.09 | 98,379,650.23 | 5,266,789.72 | 17,666,813.49 | 205,848,387.53 |
| Decrease during the reporting period | 11,371,223.49 | 18,828,305.80 | 2,663,966.19 | 4,882,028.40 | 37,745,523.88 |
| (i) Disposal | 11,371,223.49 | 18,828,305.80 | 2,663,966.19 | 4,882,028.40 | 37,745,523.88 |
| Balance at 31 December 2019 | 810,920,134.01 | 575,262,319.33 | 51,633,020.95 | 103,244,644.01 | 1,541,060,118.30 |
| Provision for impairment: | |||||
| Balance at 31 December 2018 | 3,396,292.79 | 1,020,057.51 | 7,047.07 | 587,040.62 | 5,010,437.99 |
| Increase during the reporting period | - | 138,765.07 | - | - | 138,765.07 |
| (i) Provision | - | 138,765.07 | - | - | 138,765.07 |
| Decrease during the reporting period | 84,514.35 | 105,635.43 | - | 683.51 | 190,833.29 |
| (i) Disposal | 84,514.35 | 105,635.43 | - | 683.51 | 190,833.29 |
| Balance at 31 December 2019 | 3,311,778.44 | 1,053,187.15 | 7,047.07 | 586,357.11 | 4,958,369.77 |
| Items | Buildings and constructions | Machinery equipments | Vehicles | Office equipment and others | Total |
| Carrying amount: | |||||
| Balance at 31 December 2019 | 1,220,311,105.16 | 425,861,380.57 | 9,327,443.97 | 67,073,069.09 | 1,722,572,998.79 |
| Balance at 31 December 2018 | 1,265,522,283.50 | 423,291,080.38 | 9,027,069.71 | 66,148,096.97 | 1,763,988,530.56 |
| Item | Initial cost | Accumulated depreciation | Provision for impairment | Carrying amount | Note |
| Buildings and constructions | 10,108,234.09 | 6,709,981.59 | 3,311,778.44 | 86,474.06 | —— |
| Machinery equipments | 6,461,779.99 | 5,376,301.54 | 1,053,187.15 | 32,291.30 | —— |
| Vehicles | 58,119.66 | 49,329.00 | 7,047.07 | 1,743.59 | —— |
| Office equipment and others | 896,981.09 | 283,728.04 | 586,357.11 | 26,895.94 | —— |
| Total | 17,525,114.83 | 12,419,340.17 | 4,958,369.77 | 147,404.89 | —— |
| Items | Carrying amount | Reason |
| Buildings and constructions | 739,313,343.70 | Under processing |
| Items | 31 December 2019 | 31 December 2018 |
| Construction in progress | 183,984,816.07 | 93,320,557.56 |
| Construction materials | - | - |
| Total | 183,984,816.07 | 93,320,557.56 |
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Brewing automatization technological improvement project | 74,782,393.43 | - | 74,782,393.43 | 17,307,839.93 | - | 17,307,839.93 |
| Furnace project (No.5) | 43,893,912.18 | - | 43,893,912.18 | 780,479.49 | - | 780,479.49 |
| Suizhou new plant phase I project | 40,023,041.23 | - | 40,023,041.23 | 2,597,498.75 | - | 2,597,498.75 |
| Machine installment | 10,393,296.42 | - | 10,393,296.42 | 5,596,060.05 | - | 5,596,060.05 |
| Liquid filling line renovation project | 5,934,194.72 | - | 5,934,194.72 | - | - | - |
| Gujing digital marketing project | 2,150,943.39 | - | 2,150,943.39 | - | - | - |
| Renovation project of potential safety concerns | 387,770.85 | - | 387,770.85 | 1,263,728.57 | - | 1,263,728.57 |
| Gujing plant half-open wine cellar | - | - | - | 30,391,615.08 | - | 30,391,615.08 |
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Gujing party building cultural museum | - | - | - | 1,435,187.95 | - | 1,435,187.95 |
| Desulfurization and denitrification projects | - | - | - | 28,768,115.33 | - | 28,768,115.33 |
| Other individual project | 6,419,263.85 | - | 6,419,263.85 | 5,180,032.41 | - | 5,180,032.41 |
| Total | 183,984,816.07 | - | 183,984,816.07 | 93,320,557.56 | - | 93,320,557.56 |
| Projects | Budget (ten thousand yuan) | 31 December 2018 | Increase during the reporting period | Amount transferred to fixed asset | Decrease during the reporting period | 31 December 2019 |
| Brewing automatization technological improvement project | 27,430.00 | 17,307,839.93 | 71,314,035.28 | 13,839,481.78 | - | 74,782,393.43 |
| Furnace project (No.5) | 7,134.35 | 780,479.49 | 43,113,432.69 | - | - | 43,893,912.18 |
| Suizhou new plant phase I project | 26,000.00 | 2,597,498.75 | 37,455,254.45 | - | 29,711.97 | 40,023,041.23 |
| Machine installment | 10,834.65 | 5,596,060.05 | 16,935,672.58 | 12,138,436.21 | - | 10,393,296.42 |
| Liquid filling line renovation project | 4,000.00 | - | 5,934,194.72 | - | - | 5,934,194.72 |
| Gujing digital marketing project | 4,190.15 | - | 31,169,697.46 | - | 29,018,754.07 | 2,150,943.39 |
| Renovation project of potential safety concerns | 18,010.76 | 1,263,728.57 | 519,468.76 | 1,395,426.48 | - | 387,770.85 |
| Gujing plant half-open wine cellar | 11,194.15 | 30,391,615.08 | 9,655,471.24 | 40,047,086.32 | - | - |
| Gujing party building cultural museum | 1,160.00 | 1,435,187.95 | 2,152,781.88 | 3,587,969.83 | - | - |
| Desulfurization and denitrification project | 7,176.00 | 28,768,115.33 | 10,246,755.41 | 39,014,870.74 | - | - |
| SAP-ERP | 4,450.00 | 31,669,064.53 | - | 31,669,064.53 | - | |
| Other individual project | 7,628.67 | 5,180,032.41 | 24,100,638.06 | 12,031,785.96 | 10,829,620.66 | 6,419,263.85 |
| Total | 129,208.73 | 93,320,557.56 | 284,266,467.06 | 122,055,057.32 | 71,547,151.23 | 183,984,816.07 |
| Projects | Proportion of project input to budgets (%) | Rate of progress | Cumulative amount of interest capitalisation | Including: interest capitalised during the reporting period | Interest capitalisation rate during the reporting period (%) | Source of funds |
| Brewing automatization technological improvement | 35.59 | 73.00 | - | - | - | Enterprise’s own fund |
| Projects | Proportion of project input to budgets (%) | Rate of progress | Cumulative amount of interest capitalisation | Including: interest capitalised during the reporting period | Interest capitalisation rate during the reporting period (%) | Source of funds |
| project | ||||||
| Furnace project(No.5) | 60.43 | 60.43 | - | - | - | Enterprise’s own fund |
| Suizhou new plant phase I project | 15.40 | 15.40 | - | - | - | Enterprise’s own fund |
| Machine installment | 29.25 | 80.00 | - | - | - | Enterprise’s own fund |
| Liquid filling line renovation project | 14.84 | 14.84 | - | - | - | Enterprise’s own fund |
| Gujing digital marketing project | 74.39 | 74.39 | - | - | - | Enterprise’s own fund |
| Renovation project of potential safety concerns | 82.99 | 98.00 | - | - | - | Enterprise’s own fund |
| Gujing plant half-open wine cellar | 74.64 | 100.00 | - | - | - | Enterprise’s own fund |
| Gujing party building cultural museum | 81.87 | 100.00 | - | - | - | Enterprise’s own fund |
| Desulfurization and denitrification project | 54.68 | 100.00 | - | - | - | Enterprise’s own fund |
| Projects | Proportion of project input to budgets (%) | Rate of progress | Cumulative amount of interest capitalisation | Including: interest capitalised during the reporting period | Interest capitalisation rate during the reporting period (%) | Source of funds |
| SAP-ERP | 71.17 | 100.00 | - | - | - | Enterprise’s own fund |
| Other individual project | 97.77 | 97.77 | - | - | - | Enterprise’s own fund |
| Total | —— | —— | —— | —— | —— | —— |
| Items | Land use rights | Software | Patents and Trademark | Total |
| Initial cost: | ||||
| Balance at 31 December 2018 | 683,451,302.56 | 32,106,185.73 | 215,006,066.19 | 930,563,554.48 |
| Increase during the reporting period | - | 73,024,431.49 | - | 73,024,431.49 |
| (i) Acquisition | - | 2,452,536.47 | - | 2,452,536.47 |
| (ii) Transfer from construction in progress | 70,571,895.02 | - | 70,571,895.02 | |
| Decrease during the reporting | - | 45,299.14 | - | 45,299.14 |
| Items | Land use rights | Software | Patents and Trademark | Total |
| period | ||||
| (i) Disposal | - | 45,299.14 | - | 45,299.14 |
| Balance at 31 December 2019 | 683,451,302.56 | 105,085,318.08 | 215,006,066.19 | 1,003,542,686.83 |
| Accumulated amortisation: | ||||
| Balance at 31 December 2018 | 129,394,359.27 | 12,944,725.23 | 46,140,860.88 | 188,479,945.38 |
| Increase during the reporting period | 14,383,598.77 | 14,943,160.43 | 48,077.76 | 29,374,836.96 |
| (i) Provision | 14,383,598.77 | 14,943,160.43 | 48,077.76 | 29,374,836.96 |
| Decrease during the reporting period | - | 30,028.27 | - | 30,028.27 |
| (i) Disposal | - | 30,028.27 | - | 30,028.27 |
| Balance at 31 December 2019 | 143,777,958.04 | 27,857,857.39 | 46,188,938.64 | 217,824,754.07 |
| Provision for impairment: | ||||
| Balance at 31 December 2018 | - | - | - | - |
| Increase during the reporting period | - | - | - | - |
| Decrease during the reporting period | - | - | - | - |
| Balance at 31 December 2019 | - | - | - | - |
| Carrying amount: | - | - | ||
| Balance at 31 December 2019 | 539,673,344.52 | 77,227,460.69 | 168,817,127.55 | 785,717,932.76 |
| Balance at 31 December 2018 | 554,056,943.29 | 19,161,460.50 | 168,865,205.31 | 742,083,609.10 |
(c) No Land use rights without certificate of title at 31 December 2019
5.17 Goodwill
(a) Initial recognition
| Investees or matters that goodwill arising from | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | ||
| Business combination | Others | Disposal | Others | |||
| Yellow Crane Tower Wine Co., Ltd. | 478,283,495.29 | - | - | - | - | 478,283,495.29 |
| Total | 478,283,495.29 | - | - | - | - | 478,283,495.29 |
| Investees or matters that goodwill arising from | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | ||
| Provision | Others | Disposal | Others | |||
| Yellow Crane Tower Wine Co., Ltd. | - | - | - | - | - | - |
| Total | - | - | - | - | - | - |
| Investees or matters that goodwill arising from | Main components of CGU or CGUs | Book value (unit: RMB10,000) | Determination method | Whether changes during the reporting period | |||
| Book value of CGU | Book value of goodwill to be allocated | Unconfirmed goodwill attributable to non-controlling interests | Total | ||||
| Yellow Crane Tower Wine Co., Ltd. | Operating asset of Yellow Crane Tower Wine Co., Ltd | 74,474.31 | 47,828.35 | 45,952.73 | 168,255.39 | The cash-generating unit where goodwill lies in has an active market which could generate independent cash flow, therefore taking it as an individual CGU. | no |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | |
| Amortisation | Other decrease | ||||
| Experience center | 36,671,977.31 | - | 10,419,843.26 | 13,334.59 | 26,238,799.46 |
| Pottery | 6,244,584.78 | - | 4,407,942.21 | 1,836,642.57 | |
| Sewage treatment project | 3,050,000.00 | 1,640,000.00 | 922,622.95 | 3,767,377.05 | |
| Yellow Crane Tower chateau and museum | 16,531,666.46 | 568,336.72 | 3,804,430.38 | 1,798,624.18 | 11,496,948.62 |
| Gujing party building cultural center | 5,909,090.91 | - | 1,181,818.18 | 4,727,272.73 | |
| Yantai wine museum project | - | 1,330,324.15 | 36,953.44 | 1,293,370.71 | |
| Other individual project with insignificant amounts | 15,154,154.00 | 12,329,049.20 | 6,603,126.28 | 381.24 | 20,879,695.68 |
| Total | 83,561,473.46 | 15,867,710.07 | 27,376,736.70 | 1,812,340.01 | 70,240,106.82 |
| Items | 31 December 2019 | 31 December 2018 | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for asset impairment | 22,776,693.89 | 5,688,693.81 | 65,051,818.84 | 16,221,329.97 |
| Provision for credit impairment | 43,861,929.95 | 10,955,709.29 | - | - |
| Unrealized intragroup profit | 32,086,076.52 | 8,021,519.13 | 16,788,054.95 | 4,181,824.54 |
| Deferred income | 72,778,437.92 | 17,941,534.40 | 76,636,500.55 | 18,877,272.61 |
| Deductible losses | - | - | 111,851.71 | 5,592.58 |
| Changes in fair value of | - | - | 117,161.92 | 29,290.48 |
| held-for-trading financial assets | ||||
| Carry-over of payroll payables deductible during the next period | 32,995,460.19 | 8,248,865.05 | 35,071,030.14 | 8,767,757.53 |
| Accrued expenses and discount | 158,552,891.33 | 39,638,222.83 | 153,988,413.40 | 38,497,103.35 |
| Total | 363,051,489.80 | 90,494,544.51 | 347,764,831.51 | 86,580,171.06 |
| Items | 31 December 2019 | 31 December 2018 | ||
| Deductible temporary differences | Deferred tax liabilities | Deductible temporary differences | Deferred tax liabilities | |
| Change in fair value of available-for-sale financial assets | - | - | 6,393,107.46 | 1,598,276.87 |
| Difference in accelerated depreciation of fixed assets | 73,614,107.09 | 18,403,526.77 | 12,921,842.60 | 3,230,460.65 |
| Assets appreciation arising from business combination not under common control | 384,290,207.88 | 96,072,551.97 | 391,743,110.36 | 97,935,777.59 |
| Changes in fair value of held-for-trading financial assets | 17,585,151.48 | 4,396,287.87 | - | - |
| Total | 475,489,466.45 | 118,872,366.61 | 411,058,060.42 | 102,764,515.11 |
| Items | 31 December 2019 | 31 December 2018 |
| Deductible temporary differences | - | 16,214.75 |
| Deductible losses | 8,072,655.25 | 5,089,008.12 |
| Total | 8,072,655.25 | 5,105,222.87 |
| Year | 31 December 2019 | 31 December 2018 |
| 2020 | 1,981,272.15 | 2,059,849.97 |
| 2021 | 1,463,251.49 | 1,444,700.17 |
| 2022 | 827,103.78 | 827,103.78 |
| 2023 | 757,354.20 | 757,354.20 |
| 2024 | 3,043,673.63 | - |
| Total | 8,072,655.25 | 5,089,008.12 |
| Items | 31 December 2019 | 31 December 2018 |
| Prepayments for equipment and constructions | 4,148,686.00 | 16,544,407.51 |
| Total | 4,148,686.00 | 16,544,407.51 |
| Category | 31 December 2019 | 31 December 2018 |
| Bank acceptance bills | 654,965,064.82 | 320,554,500.00 |
| Commercial acceptance bills | 48,714,582.04 | 28,648,913.72 |
| Total | 703,679,646.86 | 349,203,413.72 |
| Items | 31 December 2019 | 31 December 2018 |
| Payments for goods | 399,583,249.41 | 277,765,943.47 |
| Payments for constructions and equipment | 88,412,144.22 | 111,498,555.89 |
| Others | 75,498,801.77 | 95,688,099.23 |
| Total | 563,494,195.40 | 484,952,598.59 |
| Items | 31 December 2019 | Reason |
| No. 1 | 2,252,093.02 | Final payment |
| No. 2 | 577,691.84 | Final payment |
| No. 3 | 393,392.70 | Final payment |
| No. 4 | 348,350.03 | Final payment |
| No. 5 | 244,906.28 | Final payment |
| Total | 3,816,433.87 | —— |
| Items | 31 December 2019 | 31 December 2018 |
| Advances for goods | 529,863,011.73 | 1,149,143,310.48 |
| Total | 529,863,011.73 | 1,149,143,310.48 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| Short-term employee benefits | 456,935,872.94 | 1,926,834,740.45 | 1,930,095,957.70 | 453,674,655.69 |
| Post-employment benefits-defined contribution plans | 363,603.49 | 112,584,207.37 | 112,432,933.66 | 514,877.20 |
| Termination benefits | - | - | - | - |
| Total | 457,299,476.43 | 2,039,418,947.82 | 2,042,528,891.36 | 454,189,532.89 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| Salaries, bonuses, allowances and subsidies | 371,643,470.87 | 1,675,987,714.09 | 1,690,243,514.54 | 357,387,670.42 |
| Employee benefits | 6,468,163.00 | 70,605,639.08 | 77,028,732.81 | 45,069.27 |
| Social insurance | 233,210.91 | 49,447,706.55 | 49,073,537.85 | 607,379.61 |
| Health insurance | 226,816.90 | 43,886,066.29 | 43,522,306.44 | 590,576.75 |
| Injury insurance | 1,487.67 | 2,055,399.22 | 2,051,156.46 | 5,730.43 |
| Birth insurance | 4,906.34 | 3,506,241.04 | 3,500,074.95 | 11,072.43 |
| Housing accumulation fund | 2,867,327.46 | 61,840,914.02 | 60,242,387.03 | 4,465,854.45 |
| Labour union funds and employee education funds | 75,723,700.70 | 19,770,918.19 | 21,888,450.60 | 73,606,168.29 |
| Enterprise annuity | - | 49,181,848.52 | 31,619,334.87 | 17,562,513.65 |
| Total | 456,935,872.94 | 1,926,834,740.45 | 1,930,095,957.70 | 453,674,655.69 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| 1. Basic endowment insurance | 347,894.88 | 107,941,383.98 | 107,779,937.88 | 509,340.98 |
| 2. Unemployment insurance | 15,708.61 | 4,642,823.39 | 4,652,995.78 | 5,536.22 |
| Total | 363,603.49 | 112,584,207.37 | 112,432,933.66 | 514,877.20 |
| Items | 31 December 2019 | 31 December 2018 |
| Value added tax (VAT) | 16,929,480.44 | 162,028,367.23 |
| Consumption tax | 347,582,441.49 | 99,133,181.43 |
| Enterprise income tax | 94,038,327.53 | 75,107,410.70 |
| Individual income tax | 1,173,190.21 | 1,307,281.11 |
| Urban maintenance and construction tax | 9,328,392.65 | 13,142,342.60 |
| Stamp duty | 1,058,588.17 | 549,270.06 |
| Educational surcharge | 7,991,963.70 | 12,301,477.16 |
| Others | 4,800,725.40 | 9,424,293.89 |
| Total | 482,903,109.59 | 372,993,624.18 |
| Items | 31 December 2019 | 31 December 2018 |
| Interest payable | - | - |
| Dividend payable | - | - |
| Other payables* | 1,315,878,229.01 | 1,192,020,147.82 |
| Total | 1,315,878,229.01 | 1,192,020,147.82 |
| Items | 31 December 2019 | 31 December 2018 |
| Security deposit and guarantee | 1,206,935,123.77 | 1,064,059,562.95 |
| Warranty | 42,966,560.82 | 14,693,150.14 |
| Personal housing fund paid by company | 4,465,854.45 | 2,867,327.46 |
| Unsettled discount | - | 30,212,626.88 |
| Borrowing of business trip expenses | 296,993.67 | 145,447.82 |
| Others | 61,213,696.30 | 80,042,032.57 |
| Total | 1,315,878,229.01 | 1,192,020,147.82 |
| Items | 31 December 2019 | 31 December 2018 |
| Accrued expenses | 197,484,121.41 | 295,164,745.44 |
| Total | 197,484,121.41 | 295,164,745.44 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | Reason |
| Government grants | 76,636,500.55 | 975,800.00 | 4,833,862.63 | 72,778,437.92 | Grants received from government |
| Total | 76,636,500.55 | 975,800.00 | 4,833,862.63 | 72,778,437.92 |
| Items | 31 December 2018 | Increase during the reporting period | Recognised in other income during the reporting period | Other changes | 31 December 2019 | Related to assets/Related to profit or loss |
| Wine production system technical transformation | 255,208.43 | - | 62,499.96 | - | 192,708.47 | Related to asset |
| Instrument subsidy | 992,250.00 | 843,000.00 | 284,812.50 | - | 1,550,437.50 | Related to asset |
| Intelligent solid brewing technology innovation project | 151,041.57 | - | 31,250.04 | - | 119,791.53 | Related to asset |
| Anhui province development of direct funds of service industry | 1,087,805.00 | - | 292,682.88 | - | 795,122.12 | Related to asset |
| Anhui province subsidy of innovative province construction capacity for independent innovation | 2,678,665.00 | - | 730,545.00 | - | 1,948,120.00 | Related to asset |
| Energy efficiency renovation project for coal industrial boiler and glass furnace | 12,750.00 | - | 12,750.00 | - | - | Related to asset |
| Bozhou logistics center project | 60,000.00 | - | 60,000.00 | - | - | Related to asset |
| Equipment subsidy | 1,252,062.37 | 19,000.00 | 203,034.21 | - | 1,068,028.16 | Related to asset |
| Finance subsidy for technical reconstruction | 415,930.90 | - | 415,930.90 | - | - | Related to asset |
| Enterprise development funds | 52,500.00 | - | 30,000.00 | - | 22,500.00 | Related to asset |
| Internet traceability system project | 2,970,000.00 | - | 1,113,750.00 | - | 1,856,250.00 | Related to asset |
| Subsidy for suizhou new factory infrastructure | 35,338,000.00 | - | - | - | 35,338,000.00 | Related to asset |
| Motor and boiler energy-saving technical transformation project | 412,500.20 | - | 137,499.96 | - | 275,000.24 | Related to asset |
| Automation of check and storage, on-line monitoring of product quality | 359,375.00 | - | 93,750.00 | - | 265,625.00 | Related to asset |
| Funds for research projects of koji-making Technology | 886,200.00 | 113,800.00 | - | - | 1,000,000.00 | Related to asset |
| Gujing Zhangji wine cellar optimization and reconstruction project | 882,708.39 | - | 47,499.96 | - | 835,208.43 | Related to asset |
| Subsidy for food safety improvement project | 827,586.25 | - | 137,931.00 | - | 689,655.25 | Related to asset |
| Subsidy for key technical cooperation project on the authenticity of important food isotopes | 600,000.00 | - | - | - | 600,000.00 | Related to asset |
| Comprehensive subsidy fund for air pollution prevention and control | 2,608,083.33 | - | 263,000.04 | - | 2,345,083.29 | Related to asset |
| Funds for strategic emerging industry agglomeration development base | 1,020,800.00 | - | 222,720.00 | - | 798,080.00 | Related to asset |
| Refund of Land payment | 23,113,034.11 | - | 550,206.18 | - | 22,562,827.93 | Related to asset |
| Specific funds for side management of power demand | 660,000.00 | - | 144,000.00 | - | 516,000.00 | Related to asset |
| Total | 76,636,500.55 | 975,800.00 | 4,833,862.63 | - | 72,778,437.92 | —— |
| 31 December 2018 | Changes during the reporting period (+,-) | 31 December 2019 | |||||
| New issues | Bonus issues | Capitalisation of reserves | Others | Subtotal | |||
| Number of total shares | 503,600,000.00 | - | - | - | - | - | 503,600,000.00 |
| Items | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| Capital premium (share premium) | 1,262,552,456.05 | - | - | 1,262,552,456.05 |
| Other capital reserves | 32,853,136.20 | - | - | 32,853,136.20 |
| Total | 1,295,405,592.25 | - | - | 1,295,405,592.25 |
5.31 Other Comprehensive Income
| Items | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||||
| Amount before tax | Less: Items previously recognized in other comprehensive income being reclassified to current profit or loss | Less: Income tax expenses | Attributable to owners of the Company | Attributable to non-controlling interest | |||||
| Other comprehensive income will not be reclassified into profit or loss | - | - | - | - | - | - | - | - | - |
| Other comprehensive income will be reclassified into profit or loss under equity method | 4,794,830.59 | -4,794,830.59 | - | - | - | - | - | - | - |
| Gains /(losses) arising from changes in fair value of available-for-sale financial assets | 4,794,830.59 | -4,794,830.59 | - | - | - | - | - | - | - |
| Total | 4,794,830.59 | -4,794,830.59 | - | - | - | - | - | - | - |
| Items | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| Items | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 |
| Statutory surplus reserves | 256,902,260.27 | - | 256,902,260.27 | - | - | 256,902,260.27 |
| Total | 256,902,260.27 | - | 256,902,260.27 | - | - | 256,902,260.27 |
| Items | 2019 | 2018 |
| Balance at the end of last period before adjustments | 5,541,281,341.47 | 4,349,649,698.42 |
| Adjustments for the opening balance (increase /(decrease)) | 4,794,830.59 | - |
| Balance at the beginning of the reporting period after adjustments | 5,546,076,172.06 | 4,349,649,698.42 |
| Add: net profit attributable to owners of the parent company for the reporting period | 2,097,527,739.86 | 1,695,231,643.05 |
| Payment of ordinary share dividends | 755,400,000.00 | 503,600,000.00 |
| Balance at the end of the reporting period | 6,888,203,911.92 | 5,541,281,341.47 |
| Items | 2019 | 2018 | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 10,359,521,016.94 | 2,389,208,627.75 | 8,643,055,572.55 | 1,902,024,741.16 |
| Other activities | 57,440,567.29 | 36,838,297.14 | 43,084,764.34 | 30,040,096.49 |
| Total | 10,416,961,584.23 | 2,426,046,924.89 | 8,686,140,336.89 | 1,932,064,837.65 |
| Items | 2019 | 2018 |
| Consumption tax | 1,310,755,555.59 | 1,018,772,391.98 |
| Urban maintenance and construction tax and educational surcharge | 239,699,123.64 | 215,702,291.57 |
| Property tax | 11,812,243.00 | 16,405,271.90 |
| Land use tax | 9,702,285.09 | 11,230,378.26 |
| Stamp duty | 9,282,035.09 | 6,914,493.16 |
| Others | 11,654,311.63 | 9,882,693.22 |
| Total | 1,592,905,554.04 | 1,278,907,520.09 |
| Items | 2019 | 2018 |
| Employment benefits | 539,175,110.66 | 443,674,013.14 |
| Travel fees | 133,377,266.84 | 105,558,192.51 |
| Advertisement fees | 876,445,646.88 | 643,845,577.77 |
| Transportation charges | 52,250,930.23 | 50,301,343.18 |
| Comprehensive promotion costs | 969,501,572.71 | 981,647,916.98 |
| Service fees | 516,683,260.54 | 374,712,968.67 |
| Others | 97,460,433.24 | 82,795,293.01 |
| Total | 3,184,894,221.10 | 2,682,535,305.26 |
| Items | 2019 | 2018 |
| Employment benefits | 418,480,165.12 | 381,810,225.86 |
| Office fees | 45,087,603.23 | 36,115,375.96 |
| Maintenance expenses | 44,265,385.52 | 75,819,068.26 |
| Depreciation | 65,103,145.01 | 59,437,594.57 |
| Amortization of intangible assets | 29,074,836.91 | 19,959,184.85 |
| Items | 2019 | 2018 |
| Pollution discharge | 18,771,523.15 | 14,533,149.92 |
| Travel expenses | 7,637,602.20 | 2,868,419.04 |
| Water and electricity charges | 11,057,588.66 | 10,176,771.91 |
| Others | 45,802,696.65 | 44,277,256.28 |
| Total | 685,280,546.45 | 644,997,046.65 |
| Items | 2019 | 2018 |
| Labour cost | 20,441,413.41 | 10,076,055.90 |
| Direct input costs | 3,975,855.83 | 2,932,841.66 |
| Depreciation | 3,474,875.34 | 2,652,902.88 |
| Others | 14,480,872.75 | 8,304,965.60 |
| Total | 42,373,017.33 | 23,966,766.04 |
| Items | 2019 | 2018 |
| Interest expenses | 33,652,843.25 | 15,408,022.76 |
| Less: Interest income | 133,813,626.35 | 68,964,800.42 |
| Net interest expenses | -100,160,783.10 | -53,556,777.66 |
| Net foreign exchange losses | 1,594,072.93 | 674,321.43 |
| Bank charges and others | 940,906.66 | 1,309,826.50 |
| Total | -97,625,803.51 | -51,572,629.73 |
| Items | 2019 | 2018 | Related to assets /income |
| 1. Government grant recognised in other imcome | |||
| Including: Government grant related to deferred income (related to assets) | 4,833,862.63 | 7,025,202.67 | Related to assets |
| Government grant directly recognised in current profit or loss (related to income) | 93,410,607.69 | 28,676,471.78 | Related to income |
| Total | 98,244,470.32 | 35,701,674.45 |
| Items | 2019 | 2018 |
| Investment income from long-term equity investments under equity method | -221,717.76 | - |
| Gains on disposal of financial assets at fair value through profit or loss | - | 1,238,951.28 |
| Investment income from held-to-maturity investments during holding period | - | 96,034,262.28 |
| Investment income from available-for-sale financial assets during holding period | - | 22,103,586.91 |
| Gains on disposal of available-for-sale financial assets | - | 17,575,818.71 |
| Investment income from held-for-trading financial assets during holding period | 126,649,168.04 | - |
| Others | - | 11,262,849.44 |
| Total | 126,427,450.28 | 148,215,468.62 |
5.42 Gains on Changes in Fair Values
| Sources of gains on changes in fair value | 2019 | 2018 |
| Held-for-trading financial assets | ||
| Including: Changes in fair value of designated as held-for-trading financial assets | 17,585,151.48 | -161,541.19 |
| Total | 17,585,151.48 | -161,541.19 |
| Items | 2019 | 2018 |
| Bad debt of notes receivable | -34,938.37 | — |
| Bad debt of accounts receivable | -175,624.33 | — |
| Bad debt of other receivables | -722,167.14 | — |
| Total | -932,729.84 | — |
| Items | 2019 | 2018 |
| Bad debt of receivables | - | -164,473.83 |
| Impairment of inventories | -1,078,980.44 | -12,377,889.37 |
| Impairment of fixed assets | -138,765.07 | -184,505.54 |
| Total | -1,217,745.51 | -12,726,868.74 |
Note: Impairment loss of assets decreased by 11,509,123.23 yuan compared with that in 2018,mainly because of the decrease of impairment of inventories in 2019.
5.45 Gains/ (losses) from Disposal of Assets
| Items | 2019 | 2018 |
| Gains/(losses) from disposal of fixed assets, construction in progress, productive biological assets and intangible assets not classified as held for sale | 252,518.68 | 526,066.38 |
| Including: Fixed assets | 252,518.68 | 526,066.38 |
| Total | 252,518.68 | 526,066.38 |
| Items | 2019 | 2018 | Recognized in current extraordinary gains and losses |
| Gains from damage or scrapping of non-current asset | 277,478.76 | 75,031.16 | 277,478.76 |
| Government grants irrelevant to daily operation activities | 48,707.00 | 340,000.00 | 48,707.00 |
| Income from penalties and compensation | 26,507,159.08 | 18,476,297.19 | 26,507,159.08 |
| Sales of wastes | 3,575,405.84 | 15,074,253.13 | 3,575,405.84 |
| Accounts payable no need to pay back | 19,614,848.78 | 248,222.02 | 19,614,848.78 |
| Others | 7,782,396.91 | 1,076,176.94 | 7,782,396.91 |
| Total | 57,805,996.37 | 35,289,980.44 | 57,805,996.37 |
| Grant program | 2019 | 2018 | Related to assets /income |
| Other incentives | 48,707.00 | 140,000.00 | Related to income |
| Taxpayer bonus in Xianning high-tech district | - | 100,000.00 | —— |
| Yaohai district shengli street awards | - | 100,000.00 | —— |
| Total | 48,707.00 | 340,000.00 | —— |
| Items | 2019 | 2018 | Recognised in current extraordinary gains and losses |
| Loss from damage or scrapping of non-current assets | 6,966,429.07 | 10,661,117.09 | 6,966,429.07 |
| Others | 1,444,027.58 | 2,499,058.39 | 1,444,027.58 |
| Total | 8,410,456.65 | 13,160,175.48 | 8,410,456.65 |
| Items | 2019 | 2018 |
| Current tax expenses | 702,843,706.67 | 623,207,719.69 |
| Deferred tax expenses | 12,193,478.05 | 4,804,714.84 |
| Total | 715,037,184.72 | 628,012,434.53 |
| Items | 2019 |
| Items | 2019 |
| Profit before tax | 2,872,841,779.06 |
| Income tax expense at the statutory /applicable tax rate | 718,210,444.77 |
| Effect of different tax rate of subsidiaries | -9,655,744.33 |
| Adjustments of impact from prior period income tax | -21,122,989.53 |
| Effect of income that is exempt from taxation | -1,008,198.34 |
| Effect of non-deductible costs, expenses or losses | 28,518,918.92 |
| Effect of previously unrecognized deductible losses recognised as deferred tax assets | 6,216,697.88 |
| Effect of deductible temporary differences and deductible losses not recognised as deferred tax assets | 760,918.41 |
| R&D expenses plus deduction | -6,282,863.06 |
| Tax rate adjustment to the beginning balance of deferred income tax assets/liabilities | - |
| Income tax credits | -600,000.00 |
| Total | 715,037,184.72 |
| Items | 2019 | 2018 |
| Security deposit, guarantee and warrenty | 171,148,971.50 | 159,476,594.48 |
| Government grants | 84,936,396.19 | 50,692,038.13 |
| Interest income | 156,828,015.62 | 68,964,800.42 |
| Release of restricted monetary funds | 870,200,000.00 | 460,000,000.00 |
| Others | 40,619,933.12 | 34,874,949.28 |
| Total | 1,323,733,316.43 | 774,008,382.31 |
| Items | 2019 | 2018 |
| Cash paid in sales and distribution expenses and general and administrative expense | 2,255,773,662.59 | 1,837,245,742.21 |
| Security deposit, guarantee and warrenty | 594,283.56 | - |
| Time deposits or deposits pledged for the issuance of notes payable | 312,000,000.00 | 200,000.00 |
| Structured time deposits that cannot be withdrawn in advance | 2,363,000,000.00 | 870,000,000.00 |
| Others | 27,764,520.81 | 7,774,646.93 |
| Total | 4,959,132,466.96 | 2,715,220,389.14 |
| Items | 2019 | 2018 |
| Cancellation of registration of subsidiary | - | 16,553.34 |
| Total | - | 16,553.34 |
| Supplementary information | 2019 | 2018 |
| (i) Adjustments of net profit to cash flows from operating activities: | ||
| Net profit | 2,157,804,594.34 | 1,740,913,660.88 |
| Add: Provisions for impairment of assets | 2,150,475.35 | 12,726,868.74 |
| Depreciation of fixed assets, Investment Properties, oil and gas asset and productive biological assets | 206,165,530.04 | 194,327,557.29 |
| Amortisation of intangible assets | 29,374,836.96 | 19,959,184.85 |
| Amortisation of long-term deferred expenses | 27,376,736.70 | 21,492,764.36 |
| Losses /(gains) on disposal of fixed assets, intangible assets and other long-term assets | -252,518.68 | -526,066.38 |
| Losses /(gains) on scrapping of fixed assets | 6,688,950.31 | 10,586,085.93 |
| Losses /(gains) on changes in fair value | -17,585,151.48 | 161,541.19 |
| Finance costs /(income) | 35,246,916.18 | 15,408,022.76 |
| Investment losses /(income) | -126,427,450.28 | -148,215,468.62 |
| Decreases /(increases) in deferred tax assets | -3,914,373.45 | 5,577,306.68 |
| Increases /(decreases) in deferred tax liabilities | 16,107,851.50 | -772,591.84 |
| Decreases /(increases) in inventories | -608,824,277.36 | -328,785,250.90 |
| Decreases /(increases) in operating receivables | 258,842,362.46 | -876,884,454.15 |
| Increases /(decreases) in operating payables | 14,492,580.86 | 1,192,137,327.83 |
| Others* | -1,804,800,000.00 | -417,225,202.67 |
| Net cash flows from operating activities | 192,447,063.45 | 1,440,881,285.95 |
| (ii)Significant investing and financing activities not involving cash receipts and payments: | ||
| Conversion of debt into capital | - | - |
| Convertible corporate bonds maturing within one year | - | - |
| Fixed assets acquired under finance leases | - | - |
| (iii)Net increases in cash and cash equivalents: | ||
| Cash at the end of the reporting period | 2,944,749,918.09 | 835,560,865.12 |
| Less: Cash at the beginning of the reporting period | 835,560,865.12 | 1,024,088,626.40 |
| Add: Cash equivalents at the end of the reporting period | - | - |
| Less: Cash equivalents at the beginning of the reporting period | - | - |
| Net increase in cash and cash equivalents | 2,109,189,052.97 | -188,527,761.28 |
| Items | 31 December 2019 | 31 December 2018 |
| (i) Cash | 2,944,749,918.09 | 835,560,865.12 |
| Including: Cash on hand | 292,465.36 | 353,429.67 |
| Cash in bank available for immediate use | 2,943,712,121.81 | 835,175,643.46 |
| Other monetary funds available for immediate use | 745,330.92 | 31,791.99 |
| (ii) Cash equivalents | ||
| Including: Bond investments maturing within three months | ||
| (iii) Cash and cash equivalents at the end of the reporting period | 2,944,749,918.09 | 835,560,865.12 |
| Including: Restricted cash and cash equivalents of the parent company and the subsidiaries of the group |
| Items | Carrying amount at 31 December 2019 | Reason |
| Cash and cash equivalents | 2,675,000,000.00 | Structured deposit and fixed deposit which cannot be withdrawn in advance as well as time deposits pledged for issuance of bank acceptance bills |
| Notes receivable | 349,377,134.82 | Pledged for issuance of bank acceptance bills |
| Total | 3,024,377,134.82 | —— |
| Items | Amount | Items presented in | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current |
| the statement of financial position | 2019 | 2018 | profit or loss or directly as deduct of related cost | ||
| Technical transformation of brewing production system | 192,708.47 | Deferred income | 62,499.96 | Other income | |
| Equipment subsidy | 1,550,437.50 | Deferred income | 284,812.50 | Other income | |
| Intelligent solid brewing technology innovation project | 119,791.53 | Deferred income | 31,250.04 | Other income | |
| Guiding funds for the development of service industry in Anhui Province | 795,122.12 | Deferred income | 292,682.88 | Other income | |
| Subsidy for the construction of independent innovation capacity of Anhui Province | 1,948,120.00 | Deferred income | 730,545.00 | Other income | |
| Energy saving transformation project of coal-fired industrial boiler and glass furnace | - | Deferred income | 12,750.00 | Other income | |
| Project fund of Bozhou logistics center | - | Deferred income | 60,000.00 | Other income | |
| Equipment subsidy | 1,068,028.16 | Deferred income | 203,034.21 | 162,166.54 | Other income |
| Items | Amount | Items presented in the statement of financial position | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current profit or loss or directly as deduct of related cost | |
| 2019 | 2018 | ||||
| Financial subsidy for technological transformation | - | Deferred income | 415,930.90 | Other income | |
| Special funds for enterprise development | 22,500.00 | Deferred income | 30,000.00 | Other income | |
| Internet of things traceability system project | 1,856,250.00 | Deferred income | 1,113,750.00 | Other income | |
| Electric motor and boiler energy saving technology transformation project | 275,000.24 | Deferred income | 137,499.96 | Other income | |
| Whole process online monitoring of hook and store automation and product quality | 265,625.00 | Deferred income | 93,750.00 | Other income | |
| Gujing Zhangji liquor warehouse optimization and transformation project | 835,208.43 | Deferred income | 47,499.96 | Other income | |
| Subsidy for food safety improvement project | 689,655.25 | Deferred income | 137,931.00 | Other income | |
| Comprehensive subsidy fund for air pollution | 2,345,083.29 | Deferred income | 263,000.04 | 2,098,202.98 | Other income |
| Items | Amount | Items presented in the statement of financial position | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current profit or loss or directly as deduct of related cost | |
| 2019 | 2018 | ||||
| prevention and control | |||||
| Funds for strategic emerging industry agglomeration development base | 798,080.00 | Deferred income | 222,720.00 | - | Other income |
| Refund for land payment | 22,562,827.93 | Deferred income | 550,206.18 | Other income | |
| Suizhou new plant construction subsidy | 35,338,000.00 | Deferred income | - | - | Other income |
| Funds for research projects of koji-making technology | 1,000,000.00 | Deferred income | - | - | Other income |
| Subsidy for key technical cooperation project on the authenticity of important food isotopes | 600,000.00 | Deferred income | - | - | Other income |
| Specific funds for side management of power demand | 516,000.00 | Deferred income | 144,000.00 | 60,000.00 | Other income |
| Total | 72,778,437.92 | - | 4,833,862.63 | 2,320,369.52 | |
| Items | Amount | Items presented in the statement | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current |
| of financial position | 2019 | 2018 | profit or loss or directly as deduct of related cost | ||
| Tax refund | 34,825,848.70 | Other income | 34,825,848.70 | 18,279,633.65 | Other income |
| Energy saving and environmental protection industry fund | 500,000.00 | Other income | 500,000.00 | Other income | |
| Bonus of Bozhou science and technology bureau | 800,000.00 | Other income | 800,000.00 | Other income | |
| Incentive payment for manufacturer's subsidiary separation of national development and Reform Commission | 500,000.00 | Other income | 500,000.00 | Other income | |
| 2019 strong industrial cities special fund for developing private economy | 750,000.00 | Other income | 750,000.00 | Other income | |
| Unemployment insurance funds and stabilization allowance | 39,641,870.00 | Other income | 39,641,870.00 | Other income | |
| Standardization work of Bozhou market supervision administration in | 450,000.00 | Other income | 450,000.00 | Other income |
| Items | Amount | Items presented in the statement of financial position | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current profit or loss or directly as deduct of related cost | |
| 2019 | 2018 | ||||
| 2018 | |||||
| Subsidy for robot project | 300,000.00 | Other income | 300,000.00 | Other income | |
| Subsidy from Social Security Bureau | 3,750,000.00 | Other income | 3,750,000.00 | Other income | |
| Project funds from Bozhou economic and Information Bureau | 1,100,000.00 | Other income | 1,100,000.00 | Other income | |
| 2018 patent project award | 400,000.00 | Other income | 400,000.00 | Other income | |
| Special funds for industrial development | Other income | 2,100,000.00 | Other income | ||
| Projects funds for manufacturing strong provinces in 2018 | Other income | 1,800,000.00 | Other income | ||
| Standardized reward | Other income | 1,109,249.00 | Other income | ||
| National intellectual property demonstration enterprise award | 1,200,000.00 | Other income | 1,200,000.00 | Other income | |
| Items | Amount | Items presented in the statement of financial position | Recognised in current profit or loss or directly as deduct of related cost | Presented items that recognised in current profit or loss or directly as deduct of related cost | |
| 2019 | 2018 | ||||
| Subsidy from Bozhou Market Supervision Administration | 559,000.00 | Other income | 559,000.00 | Other income | |
| Others | 8,633,888.99 | Other income | 8,633,888.99 | 5,387,589.13 | Other income |
| Other not related to daily operation | 48,707.00 | Non-operating income | 48,707.00 | 340,000.00 | Non-operating income |
| Total | 93,459,314.69 | —— | 93,459,314.69 | 29,016,471.78 | —— |
| Name of subsidiary | 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. (hereafter Gujing Sales) | Anhui Bozhou | Anhui Bozhou | Commercial trade | 100.00 | Investment establishment | |
| Anhui Longrui Glass Co., Ltd (hereafter Longrui Glass) | Anhui Bozhou | Anhui Bozhou | Manufacture | 100.00 | Investment establishment | |
| Bozhou Gujing Waste Reclamation Co., Ltd. (hereafter Gujing Waste) | Anhui Bozhou | Anhui Bozhou | Waste recycle | 100.00 | Investment establishment | |
| Anhui Jinyunlai Culture & Media Co., Ltd. (hereafter Jinyunlai) | Anhui Hefei | Anhui Hefei | Advertisement marketing | 100.00 | Investment establishment | |
| Anhui Ruisiweier Technology Co., Ltd. | Anhui Bozhou | Anhui Bozhou | Technical research | 100.00 | Investment establishment | |
| Anhui colorful taste wine co., Ltd. | Anhui Bozhou | Anhui Bozhou | Manufacture | 100.00 | Investment establishment | |
| Shanghai Gujing Jinhao hotel management company | Shanghai | Shanghai | Hotel management | 100.00 | Business combination under common control | |
| Bozhou Gujing hotel | Anhui Bozhou | Anhui Bozhou | Hotel operating | 100.00 | Business combination under |
| Co., Ltd | common control | |||||
| Anhui Yuanqing environmental protection Co., Ltd. | Anhui Bozhou | Anhui Bozhou | Sewage treatment | 100.00 | Investment establishment | |
| Anhui Gujing Yunshang Electronic Commerce Co., Ltd | Anhui Hefei | Anhui Hefei | Electronic commerce | 100.00 | Investment establishment | |
| Anhui Zhenrui Construction Engineering Co., Ltd | Anhui Bozhou | Anhui Bozhou | Construction | 100.00 | Investment establishment | |
| Anhui RunanxinkeTesting Tech. Co., Ltd. | Anhui Bozhou | Anhui Bozhou | Food testing | 100.00 | Investment establishment | |
| Yellow Crane Tower Wine Co., Ltd | Hubei Wuhan | Hubei Wuhan | Manufacture | 51.00 | Business combination not under common control | |
| Yellow Crane Tower Wine (Xianning) Co., Ltd | Hubei Xianning | Hubei Xianning | Manufacture | 51.00 | Business combination not under common control | |
| Yellow Crane Tower Wine | Hubei Suizhou | Hubei Suizhou | Manufacture | 51.00 | Business combination not |
| (Suizhou) Co., Ltd | under common control | |||||
| Wuhan Tianlong Jindi Technology Development Co., Ltd | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Business combination not under common control | |
| Xianning Junhe Sales Co., Ltd | Hubei Xianning | Hubei Xianning | Commercial trade | 51.00 | Business combination not under common control | |
| Hubei Junhe Advertising Co., Ltd | Hubei Wuhan | Hubei Wuhan | Advertisement marketing | 51.00 | Business combination not under common control | |
| Hubei Yellow Crane Tower Beverage Co., Ltd | Hubei Wuhan | Hubei Wuhan | Manufacture | 51.00 | Investment establishment | |
| Wuhan Yashibo Technology Co., Ltd. | Hubei Wuhan | Hubei Wuhan | Technology development | 51.00 | Investment establishment | |
| Wuhan Junya Sales Co., Ltd | Hubei Wuhan | Hubei Wuhan | Commercial trade | 51.00 | Investment establishment | |
| Suizhou Junhe Commercial Co., Ltd. | Hubei Suizhou | Hubei Suizhou | Commercial trade | 51.00 | Investment establishment |
| Name of subsidiary | Proportion of ownership interest held by non- controlling interests (%) | Profit or loss attributable to non- controlling interests during the reporting period | Dividends declared to distribute to non-controlling interests during the reporting period | Non-controlling interests at the end of thehe reporting period |
| Yellow Crane Tower Wine Co., Ltd | 49.00 | 60,276,854.48 | - | 488,042,947.30 |
| Name of subsidiary | 31 December 2019 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Yellow Crane Tower Wine Co., Ltd | 755,439,438.85 | 742,229,246.05 | 1,497,668,684.90 | 369,369,757.38 | 132,292,912.62 | 501,662,670.00 |
| Name of subsidiary | 31 December 2018 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Yellow Crane Tower Wine Co., Ltd | 587,458,925.80 | 731,191,284.72 | 1,318,650,210.52 | 311,342,786.19 | 134,315,398.16 | 445,658,184.35 |
| Name of subsidiary | 2019 | |||
| Revenue | Net profit/(loss) | Total comprehensive income | Net cash flows from operating activities | |
| Yellow Crane Tower Wine Co., Ltd | 1,153,666,330.72 | 123,013,988.73 | 123,013,988.73 | 78,635,264.01 |
| Name of subsidiary | 2018 |
| Revenue | Net profit/(loss) | Total comprehensive income | Net cash flows from operating activities | |
| Yellow Crane Tower Wine Co., Ltd | 866,368,765.24 | 93,215,106.83 | 93,215,106.83 | 172,572,976.32 |
8.2 Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement bydelivering cash or other financial assets. The Company is responsible for the capital management ofall of its subsidiaries, including short-term investment of cash surplus and dealing with forecastedcash demand by raising loans. The Company’s policy is to monitor the demand for short-term andlong-term floating capital and whether the requirement of loan contracts is satisfied so as to ensureto maintain adequate cash and cash equivalents.
8.3 Market Risk
(a) Foreign currency riskForeign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The corebusiness of the Company is on the mainland of China and trading with RMB. Foreign exchange riskrisk is minimal.(b)Interest rate riskThe operating fund of the Company is sufficient, and there is no loan in recent years so that the riskof interest is very small for the Company.(c) Other price riskThe Held-for-trading financial assets of the Company is measured by fair value. So, the Companybears the risk of the change of security market. To decrease the risk, the management decided thatthe Company held a combination of several equities and securities.
9. 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 orliabilitiesLevel 2: Inputs for the assets or liabilities (other than those included in Level 1) that are eitherdirectly or indirectly observable.Level 3: Inputs are unobservable inputs for the assets or liabilities
9.1 Assets and Liabilities Measured at Fair Value at 31 December 2019
| Items | Fair value at 31 December 2019 | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Recurring fair value measurements | ||||
| (a) Held-for-trading financial assets | ||||
| (i) Financial assets at fair value through profit or loss | - | 509,031,097.02 | - | 509,031,097.02 |
| Debt instruments | - | - | - | - |
| Bank financial products | - | 297,146,591.78 | - | 297,146,591.78 |
| Fund investment | - | 211,884,505.24 | - | 211,884,505.24 |
| Total assets measured at fair value on a recurring basis | - | 509,031,097.02 | - | 509,031,097.02 |
| Name of the parent | Registered address | Nature of the business | Registered capital | Percentage of equity interests in the | Voting rights in the |
| Company (%) | Company (%) | ||||
| AnhuiGujing Group Co., Ltd. | Anhui Bozhou | Drink, building materials, manufacture plastic production | 1,000,000,000.00 | 53.89 | 53.89 |
| Name | Relationship with the Company |
| Anhui Ruifuxiang Food Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Ruijing catering management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Haochidian Catering Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Shanghai Ruiyao Hotel Management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Shanghai Beihai Hotel Co., Ltd | An affiliate of the actual controller and controlling shareholder |
| Anhui Ruijing Business Travel (Group) Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Bozhou Hotel Co., Ltd. | An affiliate of the actual controller and controlling |
| shareholder | |
| Anhui Gujing Real Estate Group Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Orient Ruijing Enterprise Investment Development Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Hengxin Pawn Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Bozhou Ruineng Thermal Power Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Hefei Gujing Holiday Hotel Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Bozhou Furuixiang high protein feed Co. Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Ruijing restaurant management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Ruixin pawn Co. Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Zhongxin finance lease Co. Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Huixin finance invest group Co., Ltd | An affiliate of the actual controller and controlling shareholder |
| Hefei Longxin Financial Management Consulting Co., Ltd | An affiliate of the actual controller and controlling shareholder |
| Bozhou Anxin Micro Finance Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Xinyuan Municipal Garden Engineering Co., Ltd | An affiliate of the actual controller and controlling shareholder |
| Anhui gujing hotel management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Youxin Financing guarantee Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Aoxin Real estate development Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Lixin Electronic commerce Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Xinxin Property management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Gujing Huishenglou Catering Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Bozhou Gujing Junlai Hotel Management Co., Ltd | An affiliate of the actual controller and controlling shareholder |
| Anhui Gujing Property Management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Gujing Real estate development Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Gujing international tourism Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Jinzhai Gujing Real Estate Development Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Gujing Health Industry Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Lejiu Home Tourism Management Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Anhui Shenglong Commercial Co., Ltd. | An affiliate of the actual controller and controlling shareholder |
| Related parties | Nature of the | 2019 | 2018 |
| transaction(s) | |||
| Anhui Gujing international tourism Co., Ltd. | Labor and accommodation service | 2,742,924.44 | 1,208,159.67 |
| Anhui Gujing Group Co., Ltd. | Labor service | - | 62,068.97 |
| Anhui Gujing Group Co., Ltd. | Purchase of materials | 3,900.00 | - |
| Anhui Gujing Health Industry Co., Ltd. | Purchase of materials and labor service | 19,433.63 | 195,685.75 |
| Anhui gujing hotel management Co., Ltd. | Catering and accommodation service | 606,319.42 | 854,430.39 |
| Anhui gujing hotel management Co., Ltd. | Purchase of materials and labor service | 138,836.65 | - |
| Anhui Haochidian Catering Co., Ltd. | Catering and accommodation service | 52,807.43 | 558,175.10 |
| Anhui Haochidian Catering Co., Ltd. | Purchase of materials and labor service | 12,906,491.94 | - |
| Anhui Huixin finance invest group Co. Ltd. | Labor service | 57,200.80 | 212,248.30 |
| Anhui Ruifuxiang Food Co., Ltd. | Purchase of materials | 24,227.98 | - |
| Anhui Ruijing catering management Co., Ltd. | Catering service | 51,171.00 | 51,631.00 |
| Anhui Ruijing Business Travel (Group) Co., Ltd. | Purchase of materials and labor service | 4,872,511.46 | 43,413.71 |
| Anhui Xinyuan Municipal Garden Engineering Co., Ltd | Labor service | 31,849.06 | 1,173,301.27 |
| Bozhou Hotel Co., Ltd. | Catering and | 5,761,744.42 | 5,007,403.41 |
| accommodation service | |||
| Bozhou Gujing Huishenglou Catering Co., Ltd. | Catering and accommodation service | 6,058,768.50 | 3,233,671.00 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Purchase of materials and labor service | 89,950.55 | |
| Anhui Lvyuan ecological agriculture Co.,Ltd | Purchase of materials and labor service | 1,226,503.81 | |
| Hefei Gujing Holiday Hotel Co., Ltd. | Purchase of materials | 520,630.53 | - |
| Hefei Gujing Holiday Hotel Co., Ltd. | Catering and accommodation service | 15,915.26 | 403,358.10 |
| Total | —— | 35,181,186.88 | 13,003,546.67 |
| Related parties | Nature of the transaction(s) | 2019 | 2018 |
| Anhui Aoxin Real estate development Co., Ltd. | Sales of liquor | - | 13,424.13 |
| Anhui Gujing Real Estate Group Co., Ltd. | Labor service | - | 397,665.85 |
| Anhui Gujing Real Estate Group Co., Ltd. | Sales of liquor | - | 347,880.88 |
| Anhui Gujing international tourism Co., Ltd. | Catering and accommodation service | 206.00 | 51,744.46 |
| Anhui Gujing international tourism Co., Ltd. | Sales of small materials | 702.45 | - |
| Anhui Gujing international tourism Co., Ltd. | Catering and accommodation service | 1,009.71 | - |
| Anhui Gujing Group Co., Ltd. | Catering and accommodation service | 246,231.14 | 384,753.34 |
| Anhui Gujing Group Co., Ltd. | Labor service | - | 16,587.36 |
| Anhui Gujing Group Co., Ltd. | Sales of small materials | 217,725.29 | 283,450.69 |
| Anhui Gujing Health Industry Co., Ltd. | Catering and accommodation service | 37,207.00 | 9,966.00 |
| Anhui Gujing Health Industry Co., Ltd. | Labor service | 844,992.46 | 226,290.57 |
| Anhui Gujing Health Industry Co., Ltd. | Sales of liquor | 10,075,939.40 | 6,396,104.00 |
| Anhui Gujing Health Industry Co., Ltd. | Sales of small materials | 10,036.51 | 39,450.74 |
| Anhui gujing hotel management Co., Ltd. | Sales of liquor | 93,532.67 | 135,940.30 |
| Anhui Haochidian Catering Co., Ltd. | Labor service | - | 33,962.26 |
| Anhui Haochidian Catering Co., Ltd. | Sales of liquor | 23,362.83 | 36,433.69 |
| Anhui Hengxin Pawn Co., Ltd. | Sales of liquor | 5,352.21 | 8,380.14 |
| Anhui Huixin finance invest group Co. Ltd. | Sales of liquor | 470,513.04 | 1,552,580.62 |
| Anhui Jinzhai Gujing Real Estate Development Co., Ltd. | Sales of liquor | - | 143,796.76 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Sales of hydropower | 305,723.42 | 71,030.79 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Catering and accommodation service | - | 5,595.00 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Labor service | - | 7,547.17 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Sales of small materials | 11,685.59 | 64,006.61 |
| Anhui Lejiu Home Tourism Management Co., Ltd. | Sales of liquor | 6,837.04 | - |
| Anhui Lixin Electronic commerce Co., Ltd. | Sales of liquor | 335,889.03 | 117,628.42 |
| Anhui Ruifuxiang Food Co., Ltd. | Sales of liquor | - | 588,449.78 |
| Anhui Ruijing Business Travel (Group) Co., Ltd. | Catering and accommodation service | 49,989.56 | 93,389.27 |
| Anhui Ruijing Business Travel (Group) Co., Ltd. | Sales of liquor | 5,370,339.55 | 8,239,198.27 |
| Anhui Ruijing Business Travel (Group) Co., Ltd. | Sales of packaging materials | - | 832.76 |
| Anhui Ruixin pawn Co. Ltd. | Sales of liquor | 6,453.98 | 14,452.08 |
| Anhui Shenglong Commercial Co., Ltd. | Catering and accommodation service | 17,223.00 | 16,270.00 |
| Anhui Shenglong Commercial Co., Ltd. | Sales of liquor | 1,045,891.85 | 470,660.35 |
| Anhui Xinyuan Municipal Garden Engineering Co., Ltd | Catering and accommodation service | - | 400.00 |
| Anhui Xinyuan Municipal Garden Engineering Co., Ltd | Sales of small materials | 1,551.27 | 30,008.04 |
| Anhui Xinxin Property management Co., Ltd. | Sales of liquor | - | 39,795.45 |
| Anhui youxin financing guarantee Co,.Ltd | Sales of liquor | 5,925.58 | 7,672.40 |
| Anhui Zhongxin finance lease Co. Ltd. | Sales of liquor | 11,559.56 | 13,259.55 |
| Bozhou Anxin Micro Finance | Sales of liquor | 9,927.68 | 13,270.29 |
| Co., Ltd. | |||
| Bozhou Hotel Co., Ltd. | Labor service | - | 113,206.84 |
| Bozhou Hotel Co., Ltd. | Sales of liquor | 17,379.31 | 61,271.22 |
| Bozhou Gujing Hotel Co.,Ltd | Sales of liquor | - | 16,408.09 |
| Bozhou Gujing Huishenglou Catering Co., Ltd. | Sales of liquor | 41,023.88 | 43,547.75 |
| Bozhou Gujing Property management Co., Ltd. | Sales of liquor | - | 60,892.13 |
| Bozhou Gujing Real Estate Group Co., Ltd. | Catering and accommodation service | - | 1,360.00 |
| Bozhou Gujing Real Estate Group Co., Ltd. | Sales of liquor | - | 19,694.42 |
| Bozhou Ruifuxiang High Protein Feed Co., Ltd. | Sales of liquor | 11,405.17 | 32,141.00 |
| Bozhou Ruineng Thermal Power Co., Ltd. | Sales of liquor | 312,907.44 | 258,281.65 |
| Bozhou Ruineng Thermal Power Co., Ltd. | Labor service | 24,866.94 | 269,024.61 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Sales of small materials | - | 29,526.70 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Catering and accommodation service | 5,155.00 | 22,241.00 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Labor service | 17,459.86 | 167,030.67 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Sales of liquor | 2,016,097.62 | 1,959,896.18 |
| Dazhongyuan Wine valley culture tourism development Co., Ltd. | Utility fees | 68,741.74 | 64,024.27 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Catering and accommodation service | 13,139.65 | 57,216.80 |
| Hefei Gujing Holiday Hotel Co., Ltd. | Sales of liquor | - | 15,517.24 |
| Hefei Longxin Financial Management Consulting Co., Ltd | Sales of liquor | - | 2,684.82 |
| Shanghai Beihai Hotel Co., Ltd | Sales of liquor | 16,566.37 | - |
| Anhui Lvyuan ecological agriculture Co.,Ltd | Labor service | 10,058.85 | - |
| Anhui Lvyuan ecological agriculture Co.,Ltd | Sales of small materials | 14,258.21 | - |
| Anhui Gujing International development Co,.Ltd | Catering and accommodation service | 11,940.00 | - |
| Anhui Gujing International development Co,.Ltd | Sales of liquor | 531,906.52 | - |
| Total | —— | 22,318,714.38 | 23,065,843.41 |
| The lessee | Type of assets | 2019 | 2018 |
| Anhui gujing hotel management Co., Ltd. | Buildings and constructions | 1,088,012.40 | 493,611.91 |
| Total | —— | 1,088,012.40 | 493,611.91 |
| The lessor | Type of assets | 2019 | 2018 |
| Anhui Gujing Group Co., Ltd. | Buildings and constructions | 1,799,774.91 | 2,190,476.20 |
| Total | —— | 1,799,774.91 | 2,190,476.20 |
(c) Key management personnel compensation
| Items | 2019 | 2018 |
| Key management personnel compensation | 12,856,300.00 | 9,473,400.00 |
| Items | Related parties | 31 December 2019 | 31 December 2018 | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Other receivables | Anhui Gujing Real Estate Group Co., Ltd. | - | - | 25,342.50 | 253.43 |
| Other receivables | Bozhou Ruineng Thermal Power Co., Ltd. | - | - | 14,521.45 | 145.21 |
| Items | Related parties | 31 December 2019 | 31 December 2018 |
| Accounts payable | Anhui Ruijing Business Travel (Group) Co., Ltd. | 147,120.00 | - |
| Advances from customers | Anhui Ruijing Business Travel (Group) Co., Ltd. | 913,047.40 | 4,085,856.31 |
| Advances from customers | Dazhongyuan Wine valley culture tourism development Co., Ltd. | 490,292.90 | 1,881,236.80 |
| Advances from customers | Anhui Gujing Health Industry Co., Ltd. | 6,625,624.40 | 4,036,729.60 |
| Advances from customers | Bozhou Ruineng Thermal Power Co., Ltd. | 2,883.84 | 43,200.00 |
| Advances from | Anhui Gujing International | 1,038,479.00 | - |
| customers | development Co., Ltd. | ||
| Advances from customers | Anhui Shenglong Commercial Co., Ltd. | 144,580.50 | - |
| Other payables | Anhui Gujing Hotel Development Co., Ltd. | 50,000.00 | 50,000.00 |
| Other payables | Anhui Ruijing Business Travel (Group) Co., Ltd. | 85,000.00 | 35,000.00 |
| Other payables | Dazhongyuan Wine valley culture tourism development Co., Ltd. | 50,000.00 | - |
| Other payables | Anhui Gujing International development Co., Ltd. | 16,200.00 | - |
| Other payables | Anhui Shenglong Commercial Co., Ltd. | 4,300.00 | - |
| Year | 2017 | 2018 | 2019 | 2020 | 2021 |
| Promised operating revenue (Tax inclusive) | 80,500.00 | 100,625.00 | 130,812.50 | 170,056.25 | 204,067.50 |
Company, and the repurchase price is RMB 816 million.The achievement of performance commitment in the separate financial statements of Yellow CraneTower Wine for the year 2019 is as follows:
Unit: RMB 10,000 yuan
| Items | Actual number | Commitment number | Difference | Completion rate |
| Operating revenues (including tax) | 131,006.46 | 130,812.50 | 193.96 | 100.15% |
| Net profit | 12,860.37 | 12,298.61 | 561.76 | 104.57% |
| The net profit margin on sales | 11.15% | 11.00% | 0.15% | 101.36% |
| Aging | 31 December 2019 | 31 December 2018 |
| Within one year | 218,558,555.07 | 9,385,950.54 |
| Including:1-6months | 218,558,555.07 | 9,385,950.54 |
| 7-12months | - | - |
| 1-2 years | - | - |
| 2-3 years | - | - |
| Over 3 years | 141,121.87 | 141,121.87 |
| Subtotal | 218,699,676.94 | 9,527,072.41 |
| Less: provision for bad debt | 141,121.87 | 141,121.87 |
| Total | 218,558,555.07 | 9,385,950.54 |
| Category | 31 December 2019 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for bad debt recognised individually | - | - | - | - | - |
| Provision for bad debt recognized collectively | 218,699,676.94 | 100.00 | 141,121.87 | 0.06 | 218,558,555.07 |
| Including: Group1 | 218,558,555.07 | 99.94 | - | - | 218,558,555.07 |
| Group2 | 141,121.87 | 0.06 | 141,121.87 | 100.00 | - |
| Total | 218,699,676.94 | 100.00 | 141,121.87 | 0.06 | 218,558,555.07 |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Accounts receivable with individually significant balance and provision for bad debt recognised individually | - | - | - | - | - |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Accounts receivable with individually significant balance and provision for bad debt recognised individually | - | - | - | - | - |
| Accounts receivable with bad debt provision recognised collectively by similar credit risk characteristics | 9,527,072.41 | 100.00 | 141,121.87 | 1.48 | 9,385,950.54 |
| Accounts receivable with individually insignificant balance but provision for bad debt recognised | - | - | - | - | - |
| Total | 9,527,072.41 | 100.00 | 141,121.87 | 1.48 | 9,385,950.54 |
| Aging | 31 December 2019 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Related parties within the scope of consolidation | 218,558,555.07 | - | - |
| Total | 218,558,555.07 | - | - |
| Aging | 31 December 2019 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | |||
| 1-2 years | - | - | - |
| 2-3 years | - | - | - |
| Over 3 years | 141,121.87 | 141,121.87 | 100.00 |
| Total | 141,121.87 | 141,121.87 | 100.00 |
| Aging | 31 December 2018 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Related parties within the scope of consolidation | 9,385,950.54 | - | - |
| Total | 9,385,950.54 | - | - |
| Aging | 31 December 2018 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | |||
| 1-2 years | - | - | - |
| 2-3 years | - | - | - |
| Over 3 years | 141,121.87 | 141,121.87 | 100.00 |
| Total | 141,121.87 | 141,121.87 | 100.00 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| Provision for bad debt recognised | - | - | - | - | - | - | - |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| individually | |||||||
| Provision for bad debt recognized collectively | 141,121.87 | - | 141,121.87 | - | - | - | 141,121.87 |
| Total | 141,121.87 | - | 141,121.87 | - | - | - | 141,121.87 |
| Entity name | Balance at 31 December 2019 | Proportion of the balance to the total accounts receivable (%) | Provision for bad debt |
| No. 1 | 216,474,060.56 | 98.98 | - |
| No. 2 | 1,354,558.76 | 0.62 | - |
| No. 3 | 587,904.33 | 0.27 | - |
| No. 4 | 141,121.87 | 0.06 | 141,121.87 |
| No. 5 | 96,544.61 | 0.04 | - |
| Total | 218,654,190.13 | 99.97 | 141,121.87 |
| Items | 31 December 2019 | 31 December 2018 |
| Interest receivable | 301,888.89 | - |
| Dividend receivable | - | - |
| Other receivables | 124,917,324.95 | 110,800,665.19 |
| Total | 125,219,213.84 | 110,800,665.19 |
| Aging | 31 December 2019 | 31 December 2018 |
| Aging | 31 December 2019 | 31 December 2018 |
| Within one year | 64,773,476.22 | 110,277,405.24 |
| Including:1-6months | 50,595,906.92 | 37,174,657.11 |
| 7-12months | 14,177,569.30 | 73,102,748.13 |
| 1-2 years | 59,983,186.13 | 614,189.72 |
| 2-3 years | 525,794.00 | - |
| Over 3 years | 41,540,607.44 | 41,540,607.44 |
| Subtotal | 166,823,063.79 | 152,432,202.40 |
| Less: provision for bad debt | 41,905,738.84 | 41,631,537.21 |
| Total | 124,917,324.95 | 110,800,665.19 |
| Nature | 31 December 2019 | 31 December 2018 |
| Related parties within the scope of consolidation | 120,200,301.28 | 108,389,173.96 |
| Security investment | 40,850,949.35 | 40,850,949.35 |
| Security deposit and guarantee | 1,850,139.09 | 909,657.06 |
| Rent, water, electricity and gas | 853,843.90 | 639,732.73 |
| Others | 3,067,830.17 | 1,642,689.30 |
| Total | 166,823,063.79 | 152,432,202.40 |
| Stages | Book balance | Provision for bad debt | Book value |
| Stage 1 | 125,972,114.44 | 1,054,789.49 | 124,917,324.95 |
| Stage 2 | - | - | - |
| Stage 3 | 40,850,949.35 | 40,850,949.35 | - |
| 合计 | 166,823,063.79 | 41,905,738.84 | 124,917,324.95 |
| Category | Book balance | 12-month expected credit losses rate (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | - | - | - | - |
| Provision for bad debt recognized collectively | 125,972,114.44 | 0.84 | 1,054,789.49 | 124,917,324.95 |
| Including: Group1 | 120,200,301.28 | - | - | 120,200,301.28 |
| Group2 | 5,771,813.16 | 18.27 | 1,054,789.49 | 4,717,023.67 |
| Total | 125,972,114.44 | 0.84 | 1,054,789.49 | 124,917,324.95 |
| Aging | 31 December 2019 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| Within one year | 4,312,272.07 | 77,825.50 | 1.80 |
| Including:1-6months | 3,444,702.77 | 34,447.03 | 1.00 |
| 7-12months | 867,569.30 | 43,378.47 | 5.00 |
| 1-2 years | 244,089.00 | 24,408.90 | 10.00 |
| 2-3 years | 525,794.00 | 262,897.00 | 50.00 |
| Over 3 years | 689,658.09 | 689,658.09 | 100.00 |
| Total | 5,771,813.16 | 1,054,789.49 | 18.27 |
| Category | Book balance | Lifetime expected credit losses rate (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | 40,850,949.35 | 100.00 | 40,850,949.35 | - |
| Provision for bad debt recognized collectively | - | - | - | - |
| Including: Group1 | - | - | - | - |
| Group2 | - | - | - | - |
| Total | 40,850,949.35 | 100.00 | 40,850,949.35 | - |
At 31 December 2019, other receivables with provision for bad debt recognised individually
| Entity name | 31 December 2019 | |||
| Book balance | Provision for bad debt | Provision ratio (%) | Reason | |
| Hengxin securities Co., Ltd. | 29,010,449.35 | 29,010,449.35 | 100.00 | Enterprise enters the bankruptcy liquidation procedure |
| Jiaoqiao securities Co., Ltd. | 11,840,500.00 | 11,840,500.00 | 100.00 | Enterprise enters the bankruptcy liquidation procedure |
| Total | 40,850,949.35 | 40,850,949.35 | - | - |
| Category | 31 December 2018 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Other receivables with individually significant balance and provision for bad debt recognised individually | 40,850,949.35 | 26.80 | 40,850,949.35 | 100.00 | - |
| Other receivables with bad debt provision recognised collectively by similar credit risk characteristics | 111,581,253.05 | 73.20 | 780,587.86 | 0.70 | 110,800,665.19 |
| Other receivable with individually insignificant balance but recognised provision for bad debt individually | - | - | - | - | |
| Total | 152,432,202.40 | 100.00 | 41,631,537.21 | 27.31 | 110,800,665.19 |
B1. At 31 December 2018, other receivables with individually significant balance and recognisedprovision for bad debt individually
| Entity name | 31 December 2018 | |||
| Other receivables | Provision for bad debt | Provision ratio (%) | Reason | |
| Hengxin securities Co., Ltd. | 29,010,449.35 | 29,010,449.35 | 100.00 | Enterprise enters the bankruptcy liquidation |
| Jiaoqiao securities Co., Ltd. | 11,840,500.00 | 11,840,500.00 | 100.00 | Enterprise enters the bankruptcy liquidation |
| Total | 40,850,949.35 | 40,850,949.35 | - | - |
| Aging | 31 December 2018 | ||
| Other receivables | Provision for bad debt | Provision ratio (%) | |
| Within one year | 1,888,231.28 | 29,510.79 | 1.56 |
| Including:1-6months | 1,622,519.22 | 16,225.19 | 1.00 |
| 7-12months | 265,712.06 | 13,285.60 | 5.00 |
| 1-2 years | 614,189.72 | 61,418.98 | 10.00 |
| 2-3 years | - | - | - |
| Over 3 years | 689,658.09 | 689,658.09 | 100.00 |
| Total | 3,192,079.09 | 780,587.86 | 24.45 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| Provision for bad debt | 40,850,949.35 | - | 40,850,949.35 | - | - | - | 40,850,949.35 |
| Category | 31 December 2018 | Changes of accounting policy | 1 January 2019 | Changes during the reporting period | 31 December 2019 | ||
| Provision | Recovery or reversal | Write-off | |||||
| recognised individually | |||||||
| Provision for bad debt recognized collectively | 780,587.86 | - | 780,587.86 | 274,201.63 | - | - | 1,054,789.49 |
| Total | 41,631,537.21 | - | 41,631,537.21 | 274,201.63 | 41,905,738.84 | ||
| Entity name | Nature | Balance at 31 December 2019 | Aging | Proportion of the balance to the total other receivables (%) | Provision for bad debt |
| No. 1 | Related party within the scope of consolidation | 87,260,433.13 | Within 1 year | 52.31 | - |
| No. 2 | Security Investment | 29,010,449.35 | Over 3 years | 17.39 | 29,010,449.35 |
| No. 3 | Related party within the scope of consolidation | 16,080,553.93 | Within 1 year | 9.64 | - |
| No. 4 | Security Investment | 11,840,500.00 | Over 3 years | 7.10 | 11,840,500.00 |
| No. 5 | Related party within the scope of consolidation | 11,445,506.42 | Within 1 year | 6.86 | - |
| Total | —— | 155,637,442.83 | —— | 93.30 | 40,850,949.35 |
| Items | 31 December 2019 | 31 December 2018 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Subsidiaries | 1,148,213,665.32 | - | 1,148,213,665.32 | 1,148,213,665.32 | - | 1,148,213,665.32 |
| Total | 1,148,213,665.32 | - | 1,148,213,665.32 | 1,148,213,665.32 | - | 1,148,213,665.32 |
| Investees | 31 December 2018 | Increase during the reporting period | Decrease during the reporting period | 31 December 2019 | Provision for impairment during the reporting period | Provision for impairment at 31 December 2019 |
| 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 Baiweilu Liquor Co., Ltd. | 30,000,000.00 | - | - | 30,000,000.00 | - | - |
| Anhui Yuanqing Environmental Protection Co., Ltd. | 16,000,000.00 | - | - | 16,000,000.00 | - | - |
| Anhui Gujing Yunshang | 5,000,000.00 | - | - | 5,000,000.00 | - | - |
| Electronic Commerce Co., Ltd. | ||||||
| Anhui Zhenrui Construction Engineering Co., Ltd | 10,000,000.00 | - | - | 10,000,000.00 | - | - |
| Yellow Crane Tower Wine Co., Ltd | 816,000,000.00 | - | - | 816,000,000.00 | - | - |
| Anhui Jinyunnan Cultural Media Co., Ltd. | 15,000,000.00 | - | - | 15,000,000.00 | - | - |
| Bozhou Gujing Waste Recycling Co., Ltd. | 1,441,423.94 | - | - | 1,441,423.94 | - | - |
| Anhui Runanxinke Testing Technology Co., Ltd. | 10,000,000.00 | - | - | 10,000,000.00 | - | - |
| Total | 1,148,213,665.32 | - | - | 1,148,213,665.32 | - | - |
| Items | 2019 | 2018 | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 5,485,034,001.70 | 2,217,395,489.41 | 4,170,643,216.51 | 1,706,721,317.44 |
| Other activities | 79,861,568.03 | 51,860,608.37 | 84,659,046.87 | 65,731,271.22 |
| Total | 5,564,895,569.73 | 2,269,256,097.78 | 4,255,302,263.38 | 1,772,452,588.66 |
| Items | 2019 | 2018 |
| Investment income from long-term equity investments under cost method | 770,000,042.30 | 838,858,228.79 |
| Gains on disposal of financial assets at fair value through profit or loss | - | 1,238,951.28 |
| Investment income from held-to-maturity investments during the holding period | - | 75,591,043.12 |
| Investment income from available-for-sale financial assets during the holding period | - | 20,344,605.22 |
| Gains on disposal of available-for-sale financial assets | - | 17,430,694.36 |
| Investment income from held-for-trading financial assets during the holding period | 76,168,001.78 | - |
| Total | 846,168,044.08 | 953,463,522.77 |
| Items | 2019 | 2018 | Description |
| Gains /(losses) on disposal of non-current assets | -7,615,741.56 | -10,060,019.55 | |
| Government grants recognised in current profit or loss (except government grants that is closely related to operations and determined based on a fixed scale according to the national unified standard) | 98,293,177.32 | 36,041,674.45 | |
| Gains /(losses) arising from changes in fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities during the holding period and investment income arising from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investment except effective hedging transactions related to | 144,234,319.52 | 18,653,228.80 |
| the Company's principal activities | |||
| Other non-operating income/expenses except for items mentioned above | 57,215,092.96 | 32,375,890.89 | |
| Other extraordinary gains/(losses) defined | - | - | |
| Total extraordinary gains/(losses) | 292,126,848.24 | 77,010,774.59 | |
| Less: tax effect | 71,418,613.38 | 18,150,068.72 | |
| Less: net extraordinary gains/(losses) attributable to non-controlling interest | 14,277,652.37 | 1,833,517.16 | |
| Net extraordinary gains/(losses) attributable to ordinary shareholders | 206,430,582.49 | 57,027,188.71 |
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic | Diluted | ||
| Net profit attributable to ordinary shareholders | 25.55 | 4.17 | 4.17 |
| Net profit attributable to ordinary shareholders after extraordinary gains and losses | 23.03 | 3.76 | 3.76 |
Part XIII Documents Available for Reference(I) The financial statements carrying the signatures and stamps of the Company’slegal representative, Chief Accountant and head of the accounting department;(II) The original copy of the Independent Auditor's Report stamped by the CPA firmas well as signed and stamped by the engagement certified public accountants;(III) The originals of all the Company’s announcements and documents disclosed onmedia designated by the China Securities Regulatory Commission during theReporting Period; and(IV) The annual report disclosed in other securities markets.
Chairman of the Board:
(Liang Jinhui)Anhui Gujing Distillery Company Limited
24 April 2020