古井贡Ｂ：2019年半年度报告（英文版）

ANHUI GUJING DISTILLERY COMPANY LIMITED

INTERIM REPORT 2019

August 2019

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Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Anhui Gujing Distillery Company Limited (hereinafterreferred to as the “Company”) hereby guarantee the factuality, accuracy and completeness ofthe contents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.Liang Jinhui, the Company’s legal representative, Ye Changqing, the Company’s ChiefAccountant, and Zhu Jiafeng, head of the Company’s financial department (equivalent tofinancial manager) hereby guarantee that the Financial Statements carried in this Report arefactual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Any plans for the future and other forward-looking statements mentioned in this Report andits summary shall NOT be considered as absolute promises of the Company to investors.Therefore, investors are reminded to exercise caution when making investment decisions.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.

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Part I Important Notes, Table of Contents and Definitions 2

Part II Corporate Information and Key Financial Information 5

Part III Business Summary 8

Part IV Operating Performance Discussion and Analysis 9

Part V Significant Events 20

Part VI Share Changes and Shareholder Information 27

Part VII Preferred Shares 31

Part VIII Directors, Supervisors and Senior Management 32

Part IX Corporate Bonds 33

Part X Financial Statements 34

Part XI Documents Available for Reference 170

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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.

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Part II Corporate Information and Key Financial InformationI 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. (if any)	古井
Company name in English (if any)	ANHUI GUJING DISTILLERY COMPANY LIMITED
Abbr. (if any)	GU JING
Legal representative	Liang Jinhui

	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.	[phone]	[phone]
Fax	[phone]	[phone]
Email address	[e-mail]	[e-mail]

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□ Applicable √ Not applicable

The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing theCompany’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information canbe found in the 2018 Annual Report.IV Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

	H1 2019	H1 2018	Change (%)
Operating revenue (RMB)	5,988,112,999.09	4,783,083,895.33	25.19%
Net profit attributable to the listed company’s shareholders (RMB)	1,248,316,314.01	892,422,337.64	39.88%
Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB)	1,165,870,979.10	872,348,474.12	33.65%
Net cash generated from/used in operating activities (RMB)	1,041,733,748.83	668,946,891.61	55.73%
Basic earnings per share (RMB/share)	2.48	1.77	40.11%
Diluted earnings per share (RMB/share)	2.48	1.77	40.11%
Weighted average return on equity (%)	16.71%	13.94%	2.77%
	30 June 2019	31 December 2018	Change (%)
Total assets (RMB)	12,520,063,624.92	12,509,928,449.72	0.08%
Equity attributable to the listed company’s shareholders (RMB)	8,094,900,338.59	7,601,984,024.58	6.48%

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XI Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item	Reporting Period	Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs)	-310,454.93
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 government’s uniform standards)	30,803,918.68
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)	83,312,387.28
Non-operating income and expense other than above	9,823,095.95
Less: Income tax effects	30,769,441.49
Non-controlling interests effects (net of tax)	10,414,170.58
Total	82,445,334.91	--

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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.II Significant Changes in Major Assets

1. Significant Changes in Major Assets

□ Applicable √ Not applicable

2. Major Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness Analysis

Is the Company subject to any industry-specific disclosure requirements?No.No significant changes occurred to the Company’s core competitiveness in the Reporting Period.

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Part IV Operating Performance Discussion and AnalysisI OverviewIn the first half of 2019, China’s economy saw progress amid stability, with the financial condition continuously improving and thelevel of interest rates maintaining a downward trend. As for the liquor and spirits industry, growth further slowed down.Under the common efforts of the Board and all the staff, for the six months from January to June 2019, the Company recordedoperating revenue of RMB5,988 million, up 25.19% compared to the same period of last year; and a net profit attributable to theCompany as the parent of RMB1,248 million, representing a year-on-year growth of 39.88%, Net operating cash flow was 1.042billion , an increase of 55.73% over the same period last year.. As such, the operating goals that the Company had set for the first halfof 2019 at the beginning of the year were all accomplished. To achieve that, the Company took the following main measures in theReporting Period: ① continuously strengthening branding with more investments to carry forward the brand revitalization programme;

② promoting digital marketing for smarter corporate management;③ proactively exploring internal innovation mechanism to build“small-and-micro platforms” and profit centres; ④ enhancing safety and environmental management to ensure safe, smooth andorderly production; ⑤ improving corporate culture by promoting party committee-management integration.

II Analysis of Core BusinessesSee “I Overview” above.Year-on-year changes in key financial data:

Unit: RMB

	H1 2019	H1 2018	Change (%)	Main reason for change
Operating revenue	5,988,112,999.09	4,783,083,895.33	25.19%
Cost of sales	1,394,156,734.55	1,042,675,468.24	33.71%	Increase in labor cost
Selling expense	1,840,489,439.70	1,597,300,315.17	15.23%
Administrative expense	302,045,457.13	272,473,203.36	10.85%
Finance costs	-4,302,625.30	-20,284,906.55	78.79%	Increase in discounted notes
Income tax expense	419,145,404.31	320,789,915.24	30.66%
Net cash generated from/used in operating activities	1,041,733,748.83	668,946,891.61	55.73%	Increase in customer payments
Net cash generated from/used in investing activities	1,273,479,672.84	-266,649,560.60	577.59%	Increase in net cash proceeds from disinvestment
Net cash generated from/used in financing	-755,400,000.00	-503,600,000.00	-50.00%	Increase in dividends distributed

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activities
Net increase in cash and cash equivalents	1,559,813,421.67	-101,302,668.99	1,639.76%	Increase in net cash generated from operating and investing activities
	30 June 2019	31 December 2018	Change (%)	Main reason for change
Monetary capital	3,179,334,513.57	1,705,760,865.12	86.39%	Increase in customer payments and proceeds from disinvestment
Construction in progress	162,876,312.37	93,320,557.56	74.53%	The building of a digital information system
Deferred income tax assets	149,917,708.59	86,580,171.06	73.15%	Increase in accrued expenses and discounts
Other non-current assets	200,574,026.00	16,544,407.51	1,112.34%	Increase in investments in wealth management
Notes payable	476,808,340.53	349,203,413.72	36.54%	Increase in trade acceptance bills issued
Advances from customers	517,109,674.60	1,149,143,310.48	-55.00%	Increase in sales revenue
Other current liabilities	443,198,383.65	295,164,745.44	50.15%	Increase in accrued expenses

	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	5,988,112,999.09	1,394,156,734.55	76.72%	25.19%	33.71%	-1.48%
By product category
Liquor and spirits	5,877,046,855.59	1,324,886,967.90	77.46%	24.85%	31.06%	-1.07%
Hotel services	39,956,640.89	18,893,242.40	52.72%	-4.00%	3.85%	-3.57%
Other	71,109,502.61	50,376,524.25	29.16%	107.60%	270.76%	-31.18%
By operating segment
Domestic	5,980,801,339.96	1,390,964,711.11	76.74%	25.21%	33.70%	-1.48%
Overseas	7,311,659.13	3,192,023.44	56.34%	11.11%	37.96%	-8.50%

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III Analysis of Non-Core Businesses

□ Applicable √ Not applicable

IV Analysis of Assets and Liabilities

1. Material Changes in Asset Composition

Unit: RMB

	30 June 2019		30 June 2018		Change in percentage (%)	Reason for material change
	Value	As % of total assets	Value	As % of total assets
Monetary capital	3,179,334,513.57	25.39%	967,785,957.41	8.63%	16.76%	Increase in customer payments and proceeds from disinvestment
Accounts receivable	30,086,692.70	0.24%	19,492,576.07	0.17%	0.07%
Inventories	2,417,356,086.41	19.31%	2,140,586,455.59	19.09%	0.22%
Investment property	4,868,657.29	0.04%	5,055,069.67	0.05%	-0.01%
Fixed assets	1,684,243,384.48	13.45%	1,717,043,900.68	15.32%	-1.87%
Construction in progress	162,876,312.37	1.30%	76,076,053.22	0.68%	0.62%

Item	Beginning amount	Gain/loss on fair-value changes in Reporting Period	Cumulative fair-value changes charged to equity	Impairment allowance for Reporting Period	Purchased in Reporting Period	Sold in Reporting Period	Ending amount
Financial assets
1. Trading financial assets (exclusive of derivative financial	2,965,016,000.42	11,320,345.56	0.00	0.00	971,660,000.00	2,374,400,054.88	1,573,596,291.10

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assets)
Subtotal of financial assets	2,965,016,000.42	11,320,345.56	0.00	0.00	971,660,000.00	2,374,400,054.88	1,573,596,291.10
Total of the above	2,965,016,000.42	11,320,345.56	0.00	0.00	971,660,000.00	2,374,400,054.88	1,573,596,291.10
Financial liabilities	0.00	0.00	0.00	0.00	0.00	0.00	0.00

Item	Ending carrying value	Reasons
Bank deposits	770,000,000.00	A structured time deposit not available for early withdrawal with a maturity of three months
Notes receivable	159,686,231.66	In pledge for issuing bank acceptance bills
Other monetary capital	13,960,226.78	Security deposits for notes
Total	943,646,458.44	--

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V Investments Made

1. Total Investments Made

□ Applicable √ Not applicable

2. Significant Equity Investments Made in the Reporting Period

□ Applicable √ Not applicable

3. Significant 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

Funds

ZXYSDP 1st Assets Management Plan

200,000,000.00

Fair value method

206,393,107.46

11,203,183.64

0.00

0.00

0.00

0.00

217,596,291.10

Trading financial assets

Self-owned funds

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Other ending holding securities investments		--								--	--
Total	200,000,000.00	--	206,393,107.46	11,203,183.64	0.00	0.00	0.00	0.00	217,596,291.10	--	--
Disclosure date of the announcement about the board’s consent for the securities investment	Naught
Disclosure date of the announcement about the general meeting’s consent for the securities investment (if any)	Naught

Operator

Relationship with the Company

Related-party 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

17,990

0.00

1,090

0.13%

0.35

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debt
Total		0.00	--	--	17,990	1,090	17,990	0.00	1,090	0.13%	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)		N/A
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,

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agreed the Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit ofRMB0.3 billion.

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 Main Controlled and Joint Stock Companies

√ Applicable □ Not applicable

Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits

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 Co., Ltd	Subsidiary	Wholesales of distilled spirit, construction materials, feeds and	84,864,497.89	3,301,747,907.17	632,802,748.56	5,420,576,901.76	668,101,750.92	491,864,613.88

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		assistant materials
Anhui Longrui Glass Co., Ltd	Subsidiary	Manufacture and sale of glass products	86,660,268.98	298,918,747.85	255,698,223.86	116,611,732.13	14,166,219.72	12,607,737.86
Yellow Crane Tower Wine Industry Co., Ltd	Subsidiary	Production and sales of distilled spirit	400,000,000.00	973,430,257.56	636,511,743.27	457,947,025.03	77,329,932.54	57,327,050.43
Shanghai Gujing Jinhao Hotel Management Co., Ltd.	Subsidiary	Hotel management and house lease	54,000,000.00	197,082,023.45	81,380,130.84	35,064,499.99	5,673,772.84	2,726,078.50

Name of subsidiary	Principal place of business	Place of registration	Business nature	The Company’s interest (%)		How the subsidiary was obtained
				Direct	Indirect
Hubei Yellow Crane Tower Beverage Co., Ltd.	Xianning, Hubei	Xianning, Hubei	Commerce and trade		51.00	Incorporated with investment

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VIII Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

IX Performance Forecast for January-September 2019Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end ofthe next reporting period, as well as the reasons:

□ Applicable √ Not applicable

X Risks Facing the Company and Countermeasures

1. 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 the change of consumption behaviors and habits on the consumption crowds and trend replacement of distilled spirits.

2. Countermeasures

1. Marketing

Strengthen the brand promotion at home and abroad, and apply internet thoughts to integrate brand promotion systematically.Strengthen investment promotion at home and abroad, do well the management, training and service work of customers anddevelopment and maintenance of new customers, and push forward globalization of liquor and spirits. Centering round consumptionscenarization, improve middle-end experience, online and offline integration, enhance interaction of experience shops.

2. Product Management

Continuously boost intelligent and green brewing process, enhance information, scientific and systematic management of productquality, lay a solid foundation for quality management. And continuously strengthen the research on heath factors in distilled spirits.Continue to deeply boost product, technology and operation standardization.

3. Management Innovation

Centering round the users, build a digitalized Gujing. With information linking the management system, consolidate managementcontexts, optimize business efficiency and build an intelligent management enterprise. Implement integration of industry and finance,transform its financial management mode and build a close-loop financial sharing platform. With the key laid on pushing forwardconstruction of ERP system, build an integrated enterprise management platform and achieve concentrated management, control andoperation. Explore internal innovation incentive mechanisms actively, and arouse the passion and motivation of staff members intheir business starting and innovation.

4. Human Resource

Optimize construction of the talent team, deepen the construction of "artisan pool", "elite pool", "management channel" and"technical channel", optimize assessment of various levels and personnel management work, implement the flexible employmentmechanism and improve the multi-level talent cultivation system, further improve the assessment and appraisal system and incentiveand restraint mechanism for various kinds of talents.

5. Corporate Cultural Construction

Implementing the party construction principle of "grasp party construction work and promote development centering round businessoperation" and the core values of "being honest, offering quality liquor, being stronger and being helpful to the society", deepen party

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construction work and construction of corporate culture, and play the guiding and promotion role of party construction and culture incorporate development. Conduct the education of anti-corruption and occupational warning, enhance ideological and political workall-roundly and build a firm ideological defense. Guided by party construction and motivated by red army's history, concentrateenergy for promoting development.

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Part V Significant EventsI Annual and Extraordinary General Meeting Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Meeting	Type	Investor participation ratio	Convened date	Disclosure date	Index to disclosed information
The 2018 Annual General Meeting	Annual General Meeting	61.15%	20 May 2019	21 May 2019	For details, see Announcement about Resolutions of 2018 Annual General Meeting of the Company disclosed on China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK), and http://www.cninfo.com.cn on 21 May 2019.

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This Interim Report is unaudited.V Explanations Given by Board of Directors and Supervisory Committee Regarding“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period

□ Applicable √ Not applicable

VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issuedfor Last Year

□ Applicable √ Not applicable

VII Bankruptcy and Restructuring

□ Applicable √ Not applicable

No such cases in the Reporting Period.VIII Legal MattersSignificant lawsuits or arbitrations:

□ Applicable √ Not applicable

No such cases in the Reporting Period.Other legal matters:

□ Applicable √ Not applicable

IX Punishments and Rectifications

□ Applicable √ Not applicable

No such cases in the Reporting Period.

X Credit Conditions of the Company as well as its Controlling Shareholder and ActualController

□ Applicable √ Not applicable

XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

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XII Significant Related-party Transactions

1. Related-party Transactions Relevant to Routine Operations

□ 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-party Transactions Regarding Joint Investments in Third Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Credits and Liabilities with Related-party Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Other Significant Related-party Transactions

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIII. Particulars about the Non-operating Occupation of Funds by the ControllingShareholder and Other Related Parties of the Company

□ Applicable √ Not applicable

The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other connected partiesduring the Reporting Period.XIV. Significant Contracts and Execution

1. Entrustment, Contracting and Leasing

(1) Entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

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(2) Contracting

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(3) Leasing

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Significant Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Other Significant Contracts

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XV. Corporate Social Responsibility (CSR)Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmentalprotection authorities of ChinaYes

Name of company or subsidiary company	Name of major pollutant and typical pollutant	Way of discharge	Quantity of discharge outlet	Distribution of discharge outlet	Discharge concentration	Pollutant discharge standard implemented	Total discharge	Permitted discharge	Excess discharge
Anbui Gujing Distillery Co., Ltd.	COD	Directly discharge	3	Gujing plant Zhangji plant Headquarter plant	26.08mg/L 34.34mg/L 64.37mg/L	≦50mg/L ≦100mg/L ≦100mg/L	69.48 t	155.05 t	Naught
Anbui Gujing Distillery Co., Ltd.	NH3-N	Directly discharge	3	Gujing plant Zhangji plant Headquarter plant	2.17mg/L 3.10mg/L 8.21mg/L	≦5mg/L ≦10mg/L ≦10mg/L	8.06 t	15.53 t	Naught

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Anbui Gujing Distillery Co., Ltd.	Smoke	Organized discharge	3	Gujing plant Zhangji plant Headquarter plant	4.97mg/m? 27.78mg/m? 5.68mg/m?	≦10mg/m? ≦80mg/m? ≦10mg/m?	3.4 t	Naught	Naught
Anbui Gujing Distillery Co., Ltd.	Sulfur Dioxide	Organized discharge	3	Gujing plant Zhangji plant Headquarter plant	11.34mg/m? 166.26mg/m? 25.29mg/m?	≦35mg/m? ≦400mg/m? ≦35mg/m?	15.48 t	Naught	Naught
Anbui Gujing Distillery Co., Ltd.	Nitrogen oxide	Organized discharge	3	Gujing plant Zhangji plant Headquarter plant	34.07mg/m? 202.92mg/m? 22.52mg/m?	≦50mg/m? ≦400mg/m? ≦50mg/m?	20.02 t	Naught	Naught
Anhui Longrui Glass Co., Ltd	Smoke	Organized discharge	3	No. 1 furnace No. 2 furnace No. 3 furnace	19.22mg/m? Out of service 19.76mg/m?	≦200mg/m?	8.03 t	Naught	Naught
Anhui Longrui Glass Co., Ltd	Sulfur Dioxide	Organized discharge	3	No. 1 furnace No. 2 furnace No. 3 furnace	Naught Out of service Naught	≦850mg/m?	0.00 t	Naught	Naught
Anhui Longrui Glass Co., Ltd	Nitrogen oxide	Organized discharge	3	No. 1 furnace No. 2 furnace No. 3 furnace	143mg/m? Out of service 73mg/m?	≦700mg/m?	28.37 t	Naught	Naught

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completed. The discharge of sewage for the Reporting Period is in compliance with the direct discharge requirements in the Table 3of GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.

(2) The sewage treatment capacity of the sewage treatment station of the headquarters of Anhui Gujing Distillery Co., Ltd andZhangji Plant are respectively about 4300 tons per day and 600 tons per day. IC anaerobic jar, A?/O and in-depth treatment processhas been adopted. The sewage is discharged after treatment and up to the standard, and discharge of sewage for the Reporting Periodis in compliance with the direct discharge requirements in the Table 2 of GB27631-2011 Discharge Standard of Water Pollutants forFermentation Alcohol and Distilled Spirits Industry.

(3) 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 initiated in June 2018, a super-low discharge renovation project was started, and the process of cloth-bag dustremoval +Limestone-Wet flue gas Desulfurization +SNCR Denitrification by non-catalytic reduction + SCR Denitrificationbycatalytic reduction + Wet electrostatic precipitator has been adopted. As for the project, the transformation was completed and thecompletion acceptance is in progress.

(2) As for the coal-to-gas project for the thermal power station of Zhangji Plant under Anhui Gujing Distillery Company Limited, theinstallment of boilers and principal part of the gas station has finished and it comes into the stage of fire control acceptance waitingfor debugging. During the Reporting Period, the original coal-fired boiler runs normally. The process of cloth-bag dust removal+Desulfurization in limestone furnace+SNCR Denitrification by non-catalytic reduction has been adopted, and discharge of flue gasmeets the requirements for coal-fired boiler in the Table 1 of GB13271-2014 Emission Standard of Air Pollutants for Industrial Kilnand Furnace.

(3) No.2 furnace of Anhui Longrui Glass Co., Ltd has been out of service, No.1 and No.3 furnaces have completed coal-to-gas workand are running stably. SCR Denitrification by catalytic reduction has been adopted, and discharge of flue gas meets the requirementsin GB9078-1996 Emission Standard of Air Pollutants for Boiler.For the Reporting Period, the environment protection facilities of Anhui Gujing Distillery Company Limited and its subsidiaries rannormally in general, main pollutants can achieve up-to-standard discharge, environment information is opened to the public normally,and they have 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	Construction and renovation of 11# integrated storage center of Anhui Gujing Distillery Company Limited	EIA report form	15 April 2019	BHB [2019] No. 11

~ 26 ~

NaughtOther related environment protection informationNaught

2. Measures Taken for Targeted Poverty Alleviation

(1) Summary of Precision Poverty Alleviation for the Reporting Period

In accordance with the requirements of the State, Anhui Provincial Party Committee and Government, and Bozhou Municipal PartyCommittee and Government on precision poverty alleviation, the Company has established targeted support towards poor families inBali village, Wuma town, Qiaocheng District, Bozhou. The Company has established a complete and formal long-term mechanismfor poverty alleviation targeted at those families. A supporting policy of one file for one family, one card for one family, and onepolicy for one family has been implemented based on the principle of “organizations are responsible for villages and cadres areresponsible for families”, and files have been created based on family members, major labor force, farmland and income structure ofpoor families in each poor village. Since the implementation of poverty alleviation work, Bali Village in Wuma Town has allachieved poverty alleviation and has a fixed income.

(2) Subsequent Plan for Precision Poverty Alleviation

First, the Company will continue to engage in poverty alleviation and strengthen its efforts in targeted support towards poor families;second, the Company will continue to implement the supporting policy of the Provincial Party Committee and Government and theMunicipal Party Committee and Government, soundly advancing the poverty alleviation work in line with the relevant requirementsto carry out the social responsibility.XVI. Other Significant Events

□ Applicable √ Not applicable

No such cases in the Reporting Period.XVII. Significant Events of Subsidiaries

□ Applicable √ Not applicable

~ 27 ~

Part VI Share Changes and Shareholder Information

I. Share Changes

Unit: share

	Before		Increase/decrease (+/-)					After
	Number	Percentage (%)	New issues	Bonus shares	Bonus issue from profit	Other	Subtotal	Number	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%

~ 28 ~

III. Total Number of Shareholders and Their Shareholdings

Unit: share

Total number of ordinary shareholders at the period-end		20,504				Total number of preference shareholders with resumed voting rights at the period-end (if any) (see Note 8)			0
5% or greater ordinary shareholders or the top 10 ordinary shareholders
Name of shareholder	Nature of shareholder		Shareholding percentage (%)	Total shares held at the period-end	Increase/decrease during the Reporting Period		Number of restricted shares held	Number of non-restricted shares held	Pledged or frozen shares
									Status	Number
ANHUI GUJING GROUP COMPANY LIMITED	State-owned legal person		53.89%	271,404,022				271,404,022	Pledged	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		2.15%	10,838,286				10,838,286
HONG KONG SECURITIES CLEARING COMPANY LTD.	Foreign legal person		1.75%	8,816,700				8,816,700
CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD	Foreign legal person		1.73%	8,714,643				8,714,643
NORGES BANK	Foreign legal person		1.59%	8,027,356				8,027,356
UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD)	Foreign legal person		1.40%	7,068,861				7,068,861
CENTRAL HUIJIN ASSET	State-owned legal person		1.30%	6,543,600				6,543,600

~ 29 ~

MANAGEMENT CO., LTD.
GREENWOODS CHINA ALPHA MASTER FUND	Foreign legal person	1.12%	5,657,150			5,657,150
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED-JINGSHUN GREATWALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND	Other	0.95%	4,774,497			4,774,497
Strategic investor or general corporation becoming a top ten shareholder due to placing of new shares (if any) (note 3)		N/A
Explanation on connected relationship or/and persons acting in concert among the above-mentioned shareholders		Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a connected 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 connected 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.
Shareholdings of the top ten non-restricted ordinary shareholders
Name of shareholder		Number of non-restricted shares held at the period-end					Type of shares
							Type		Number
ANHUI GUJING GROUP COMPANY LIMITED		271,404,022					RMB ordinary share		271,404,022
GAOLING FUND,L.P.		12,446,408					Domestically listed foreign share		12,446,408
AGRICULTURAL BANK OF CHINA- E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND		10,838,286					RMB ordinary share		10,838,286
HONG KONG SECURITIES CLEARING COMPANY LTD.		8,816,700					RMB ordinary share		8,816,700

~ 30 ~

CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD	8,714,643	Domestically listed foreign share	8,714,643
NORGES BANK	8,027,356	Domestically listed foreign share	8,027,356
UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD)	7,068,861	Domestically listed foreign share	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 share	5,657,150
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED-JINGSHUN GREATWALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND	4,774,497	RMB ordinary share	4,774,497
Related or acting-in-concert parties among the top ten non-restrictedly tradable share holders and between the top ten non-restrictedly tradable share holders and the top ten 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 ten ordinary shareholders conducting securities margin trading (if any) (see Note 4)	N/A

~ 31 ~

Part VII Preferred Shares

□ Applicable √ Not applicable

No preferred shares in the Reporting Period.

~ 32 ~

Part VIII Directors, Supervisors and Senior ManagementI Changes in Shareholdings of Directors, Supervisors and Senior Management

□ Applicable √ Not applicable

There were no changes in shareholdings of directors, supervisors, and senior management in the Reporting Period. For details, seeAnnual Report of 2018.II Changes in Directors, Supervisors and Executive Officers

√ Applicable □ Not applicable

Name	Office title	Type	Date	Reason
Sun Wanhua	Chairman of the Supervisory Committee	Elected	20 May 2019
Lu Duicang	Supervisor	Elected	20 May 2019
Wang Feng	Chairman of the Supervisory Committee	Left	20 May 2019	Adjustment of post
Fu Qiangxin	Supervisor	Left	20 May 2019	Adjustment of post

~ 33 ~

Part IX Corporate BondsAre there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of thisReport or were due but could not be redeemed in full?No

~ 34 ~

Part X Financial StatementsI. Auditor’s ReportWhether the interim report has been audited?

□Yes √ No

The interim report of the Company has not been audited.

II. Financial StatementsThe unit of the financial statements attached: RMB

1. Consolidated Balance Sheet

Prepared by Anhui Gujing Distillery Company Limited

30 June 2019

Unit: RMB

Item	30 June 2019	31 December 2018
Current assets:
Monetary capital	3,179,334,513.57	1,705,760,865.12
Settlement reserve
Interbank loans granted
Trading financial assets	1,573,596,291.10	0.00
Financial assets at fair value through profit or loss	0.00	622,892.96
Derivative financial assets
Notes receivable	1,317,423,562.34	1,347,427,811.34
Accounts receivable	30,086,692.70	29,748,068.74
Financing backed by accounts receivable
Prepayments	129,888,415.85	182,558,000.75
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables	48,528,411.45	43,342,878.22

~ 35 ~

Including: Interest receivable	30,443,178.08	24,923,178.08
Dividends receivable
Financial assets purchased under resale agreements
Inventories	2,417,356,086.41	2,407,306,664.86
Contract assets
Assets classified as held for sale
Current portion of non-current assets	300,000,000.00	300,000,000.00
Other current assets	29,538,776.67	3,012,478,687.20
Total current assets	9,025,752,750.09	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	4,735,005.81	4,900,000.00
Investments in other equity instruments
Other non-current financial assets
Investment property	4,868,657.29	5,027,228.53
Fixed assets	1,684,243,384.48	1,763,988,530.56
Construction in progress	162,876,312.37	93,320,557.56
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	733,039,684.21	742,083,609.10
R&D expense
Goodwill	478,283,495.29	478,283,495.29
Long-term prepaid expense	75,772,600.79	83,561,473.46
Deferred income tax assets	149,917,708.59	86,580,171.06
Other non-current assets	200,574,026.00	16,544,407.51
Total non-current assets	3,494,310,874.83	3,480,682,580.53
Total assets	12,520,063,624.92	12,509,928,449.72

~ 36 ~

Current liabilities:
Short-term borrowings
Borrowings from central bank
Interbank loans obtained
Trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable	476,808,340.53	349,203,413.72
Accounts payable	337,532,981.76	484,952,598.59
Advances from customers	517,109,674.60	1,149,143,310.48
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Payroll payable	310,846,649.23	457,299,476.43
Taxes payable	368,743,282.05	372,993,624.18
Other payables	1,337,734,331.13	1,192,020,147.82
Including: Interest payable
Dividends payable
Handling charges and commissions payable
Reinsurance payables
Contract liabilities
Liabilities directly associated with assets classified as held for sale
Current portion of non-current liabilities
Other current liabilities	443,198,383.65	295,164,745.44
Total current liabilities	3,791,973,642.95	4,300,777,316.66
Non-current liabilities:
Insurance contract reserve

~ 37 ~

Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income	74,300,122.46	76,636,500.55
Deferred income tax liabilities	104,491,018.40	102,764,515.11
Other non-current liabilities
Total non-current liabilities	178,791,140.86	179,401,015.66
Total liabilities	3,970,764,783.81	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	6,038,992,486.07	5,541,281,341.47
Total equity attributable to owners of the Company as the parent	8,094,900,338.59	7,601,984,024.58
Non-controlling interests	454,398,502.52	427,766,092.82
Total owners’ equity	8,549,298,841.11	8,029,750,117.40
Total liabilities and owners’ equity	12,520,063,624.92	12,509,928,449.72

~ 38 ~

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item	30 June 2019	31 December 2018
Current assets:
Monetary capital	1,802,891,540.10	1,078,172,917.59
Trading financial assets	1,283,596,291.10	0.00
Financial assets at fair value through profit or loss	0.00	622,892.96
Derivative financial assets
Notes receivable	1,108,974,294.31	1,256,336,386.34
Accounts receivable	10,652,383.81	9,385,950.54
Financings backed by accounts receivable
Prepayments	32,040,928.40	10,869,911.54
Other receivables	105,037,195.62	110,800,665.19
Including: Interest receivable
Dividends receivable
Inventories	2,054,730,290.11	2,125,826,967.11
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets	10,900,000.00	1,764,267,968.83
Total current assets	6,408,822,923.45	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	4,868,657.29	24,715,657.40

~ 39 ~

Fixed assets	1,250,784,248.86	1,290,714,455.79
Construction in progress	152,636,993.95	86,634,753.93
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	186,197,455.70	189,968,142.25
R&D expense
Goodwill
Long-term prepaid expense	51,792,292.31	56,643,945.05
Deferred income tax assets	25,828,182.26	37,415,458.17
Other non-current assets	574,026.00	12,474,026.00
Total non-current assets	2,820,895,521.69	3,053,173,211.37
Total assets	9,229,718,445.14	9,409,456,871.47
Current liabilities:
Short-term borrowings
Trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable	49,462,005.58	28,648,913.72
Accounts payable	250,260,975.12	362,290,556.21
Advances from customers	1,270,017,763.69	1,123,125,892.84
Contract liabilities
Payroll payable	94,335,702.40	117,748,485.96
Taxes payable	155,090,249.07	161,176,957.25
Other payables	267,083,819.65	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	3,203,092.77	32,605,794.55
Total current liabilities	2,089,453,608.28	2,198,498,893.75
Non-current liabilities:

~ 40 ~

Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Provisions
Deferred income
Deferred income tax liabilities	34,425,436.60	36,417,554.85
Other non-current liabilities	7,546,971.67	4,828,737.52
Total non-current liabilities
Total liabilities	41,972,408.27	41,246,292.37
Owners’ equity:	2,131,426,016.55	2,239,745,186.12
Share capital
Other equity instruments	503,600,000.00	503,600,000.00
Including: Preferred shares
Perpetual bonds
Capital reserves
Less: Treasury stock	1,247,162,107.35	1,247,162,107.35
Other comprehensive income
Specific reserve	0.00	4,794,830.59
Surplus reserves
General reserve	251,800,000.00	251,800,000.00
Retained earnings	5,095,730,321.24	5,162,354,747.41
Total owners’ equity	7,098,292,428.59	7,169,711,685.35
Total liabilities and owners’ equity	9,229,718,445.14	9,409,456,871.47

Item	H1 2019	H1 2018
1. Revenue	5,988,112,999.09	4,783,083,895.33
Including: Operating revenue	5,988,112,999.09	4,783,083,895.33
Interest income
Premium income

~ 41 ~

Handling charge and commission income
2. Costs and expenses	4,416,581,005.79	3,629,658,388.11
Including: Cost of sales	1,394,156,734.55	1,042,675,468.24
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	869,527,762.04	729,467,173.53
Selling expense	1,840,489,439.70	1,597,300,315.17
Administrative expense	302,045,457.13	272,473,203.36
R&D expense	14,664,237.67	8,027,134.36
Finance costs	-4,302,625.30	-20,284,906.55
Including: Interest expense	14,173,972.09	0.00
Interest income	20,466,649.02	21,644,883.48
Add: Other income	30,783,918.68	4,487,036.05
Return on investment (“-” for loss)	77,347,047.53	68,775,019.95
Including: Share of profit or loss of joint ventures and associates
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)	11,320,345.56	236,707.77

~ 42 ~

Credit impairment loss (“-” for loss)
Asset impairment loss (“-” for loss)	-6,421,818.07	-1,171,911.36
Asset disposal income (“-” for loss)	119,488.56	154,437.81
3. Operating profit (“-” for loss)	1,684,680,975.56	1,225,906,797.44
Add: Non-operating income	11,150,763.53	14,758,797.76
Less: Non-operating expense	1,737,611.07	4,438,013.04
4. Profit before tax (“-” for loss)	1,694,094,128.02	1,236,227,582.16
Less: Income tax expense	419,145,404.31	320,789,915.24
5. Net profit (“-” for net loss)	1,274,948,723.71	915,437,666.92
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net loss)	1,274,948,723.71	915,437,666.92
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	1,248,316,314.01	892,422,337.64
5.2.1 Net profit attributable to non-controlling interests	26,632,409.70	23,015,329.28
6. Other comprehensive income, net of tax	0.00	-45,102,275.58
Attributable to owners of the Company as the parent	0.00	-45,102,275.58
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

~ 43 ~

6.1.5 Other
6.2 Items that will be reclassified to profit or loss	0.00	-45,102,275.58
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	-45,102,275.58
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	1,274,948,723.71	870,335,391.34
Attributable to owners of the Company as the parent	1,248,316,314.01	847,320,062.06
Attributable to non-controlling interests	26,632,409.70	23,015,329.28
8. Earnings per share
8.1 Basic earnings per share	2.48	1.77
8.2 Diluted earnings per share	2.48	1.77

~ 44 ~

Legal representative: Liang Jinhui The Company’s chief accountant: Ye ChangqingHead of the Company’s financial department: Zhu Jiafeng

4. Income Statement of the Company as the Parent

Unit: RMB

Item	H1 2019	H1 2018
1. Operating revenue	3,144,682,463.58	2,373,509,719.96
Less: Cost of sales	1,277,918,576.91	962,446,727.32
Taxes and surcharges	764,598,846.12	612,880,006.38
Selling expense	45,886,471.81	90,185,702.99
Administrative expense	202,658,261.68	183,435,604.67
R&D expense	9,036,129.81	7,385,784.90
Finance costs	-2,059,057.16	-17,205,534.12
Including: Interest expense	14,006,847.09	0.00
Interest income	17,740,923.04	20,244,281.30
Add: Other income	3,372,718.25	2,363,480.01
Return on investment (“-” for loss)	31,883,868.76	61,302,268.33
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)	11,320,345.56	236,707.77
Credit impairment loss (“-” for loss)
Asset impairment loss (“-” for loss)	-6,131,316.45	-1,440,847.72
Asset disposal income (“-” for loss)	36,552.41	0.00
2. Operating profit (“-” for loss)	887,125,402.94	596,843,036.21
Add: Non-operating income	9,342,723.23	12,278,301.09
Less: Non-operating expense	1,225,313.77	3,316,344.52

~ 45 ~

3. Profit before tax (“-” for loss)	895,242,812.40	605,804,992.78
Less: Income tax expense	211,262,069.16	162,576,738.06
4. Net profit (“-” for net loss)	683,980,743.24	443,228,254.72
4.1 Net profit from continuing operations (“-” for net loss)	683,980,743.24	443,228,254.72
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax	0.00	-45,064,475.58
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	-45,064,475.58
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	-45,064,475.58
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

~ 46 ~

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	683,980,743.24	398,163,779.14
7. Earnings per share
7.1 Basic earnings per share	1.36	0.88
7.2 Diluted earnings per share	1.36	0.88

Item	H1 2019	H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services	5,352,480,704.00	4,168,785,414.04
Net increase in customer deposits and interbank deposits
Net increase in borrowings from 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

~ 47 ~

Net proceeds for acting trading of securities
Tax rebates	15,816,253.89	1,526,552.28
Cash generated from other operating activities	276,731,904.68	578,221,173.31
Subtotal of cash generated from operating activities	5,645,028,862.57	4,748,533,139.63
Payments for commodities and services	899,005,913.59	805,659,265.35
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank loans granted
Payments for claims on original insurance contracts
Net increase in financial assets held for trading
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees	1,006,137,070.65	777,363,928.00
Taxes paid	2,001,653,338.87	1,875,377,764.19
Cash used in other operating activities	696,498,790.63	621,185,290.48
Subtotal of cash used in operating activities	4,603,295,113.74	4,079,586,248.02
Net cash generated from/used in operating activities	1,041,733,748.83	668,946,891.61
2. Cash flows from investing activities:
Proceeds from disinvestment	2,576,300,054.88	1,050,984,415.12
Return on investment	72,002,136.32	64,643,822.92
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets	33,700.00	170,207.20
Net proceeds from the disposal of subsidiaries and other business units

~ 48 ~

Cash generated from other investing activities
Subtotal of cash generated from investing activities	2,648,335,891.20	1,115,798,445.24
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets	152,296,054.86	160,906,209.61
Payments for investments	1,222,560,163.50	1,221,541,796.23
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	1,374,856,218.36	1,382,448,005.84
Net cash generated from/used in investing activities	1,273,479,672.84	-266,649,560.60
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests to subsidiaries
Borrowings obtained
Net proceeds from issuance of bonds
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
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

~ 49 ~

4. Effect of foreign exchange rate changes on cash and cash equivalents
5. Net increase in cash and cash equivalents	1,559,813,421.67	-101,302,668.99
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	2,395,374,286.79	922,785,957.41

Item	H1 2019	H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services	3,351,164,696.89	1,823,943,040.35
Tax rebates
Cash generated from other operating activities	248,907,013.29	637,265,577.14
Subtotal of cash generated from operating activities	3,600,071,710.18	2,461,208,617.49
Payments for commodities and services	847,532,691.56	621,024,637.00
Cash paid to and for employees	355,855,901.15	299,547,110.96
Taxes paid	1,260,288,640.64	1,185,933,500.57
Cash used in other operating activities	145,296,084.94	122,550,902.77
Subtotal of cash used in operating activities	2,608,973,318.29	2,229,056,151.30
Net cash generated from/used in operating activities	991,098,391.89	232,152,466.19
2. Cash flows from investing activities:
Proceeds from disinvestment	1,400,740,054.88	860,984,415.12
Return on investment	31,890,794.48	62,684,376.34
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets	41,304.23	0.00
Net proceeds from the disposal of

~ 50 ~

subsidiaries and other business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities	1,432,672,153.59	923,668,791.46
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets	116,751,759.47	84,656,707.92
Payments for investments	726,900,163.50	621,541,796.23
Net payments for the acquisition of subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities	843,651,922.97	706,198,504.15
Net cash generated from/used in investing activities	589,020,230.62	217,470,287.31
3. Cash flows from financing activities:
Capital contributions received
Borrowings obtained
Net proceeds from the issuance of bonds
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	824,718,622.51	-53,977,246.50

~ 51 ~

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	1,532,891,540.10	772,284,862.52

~ 52 ~

7. Consolidated Statements of Changes in Owners’ Equity

H1 2019

Unit: RMB

Item

H1 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

~ 53 ~

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)											492,916,314.01		492,916,314.01	26,632,409.70	519,548,723.71
3.1 Total comprehensive income											1,248,316,314.01		1,248,316,314.01	26,632,409.70	1,274,948,723.71
3.2 Capital increased and reduced by owners
3.2.1 Ordinary shares increased by

~ 54 ~

shareholders
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 Appropriatio											-755,400,000.00		-755,400,000.00		-755,400,000.00

~ 55 ~

n to owners (or shareholders)

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

~ 56 ~

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

~ 57 ~

4. Balances as at the end of the period

503,600,000.00

1,295,405,592.25

0.00

256,902,260.27

6,038,992,486.07

8,094,900,338.59

454,398,502.52

8,549,298,841.11

Item

H1 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

~ 58 ~

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)							-45,102,275.58				388,822,337.64		343,720,062.06	23,015,329.28	366,735,391.34
3.1 Total comprehensive income							-45,102,275.58				892,422,337.64		847,320,062.06	23,015,329.28	870,335,391.34
3.2 Capital increased and reduced by owners
3.2.1 Ordinary

~ 59 ~

shares increased by shareholders

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

-503,600,000.00

3.3.1 Appropriation to surplus reserves

3.3.2 Appropriation to general reserve

~ 60 ~

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

~ 61 ~

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

~ 62 ~

period
3.6 Other
4. Balances as at the end of the period	503,600,000.00				1,295,405,592.25		8,418,551.86		256,902,260.27		4,738,472,036.06		6,802,798,440.44	405,115,957.61	7,207,914,398.05

Item

H1 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

~ 63 ~

3. Increase/ decrease in the period (“-” for decrease)										-71,419,256.76		-71,419,256.76
3.1 Total comprehensive income										683,980,743.24		683,980,743.24
3.2 Capital increased and reduced by owners
3.2.1 Ordinary shares increased by shareholders
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										-755,400,000.00		-755,400,000.00

~ 64 ~

shareholders)

3.3.3 Other

3.4 Transfers within owners’ equity

3.4.1 Increase in capital (or share capital) from capital reserves

3.4.2 Increase in capital (or share capital) from surplus reserves

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit 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

~ 65 ~

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		0.00		251,800,000.00	5,095,730,321.24		7,098,292,428.59

Item	H1 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)							-45,064,475.58			-60,371,745.28		-105,436,220.86

~ 66 ~

3.1 Total comprehensive income							-45,064,475.58			443,228,254.72		398,163,779.14
3.2 Capital increased and reduced by owners
3.2.1 Ordinary shares increased by shareholders
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										-503,600,000.00		-503,600,000.00

~ 67 ~

shareholders)

3.3.3 Other

3.4 Transfers within owners’ equity

3.4.1 Increase in capital (or share capital) from capital reserves

3.4.2 Increase in capital (or share capital) from surplus reserves

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit pension schemes transferred to retained earnings

3.4.5 Other comprehensive income transferred to retained earnings

3.4.6 Other

3.5 Specific reserve

~ 68 ~

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		8,390,260.80		251,800,000.00	4,042,780,098.10		6,053,732,466.25

~69~

Anhui Gujing Distillery Company LimitedNotes to Financial Statements for H1 2019(Currency Unit Is RMB Unless Otherwise Stated)I. Company ProfileAuthorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property,Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company withnet assets of RMB377,167,700 and state-owned shares of 155,000,000 shares and considered Anhui GujingCompany as the only promoter. The registration place was Bozhou Anhui China. The Company was establishedon 5 March 1996 by document of WZM (1996) No.42 of Anhui People’s Government. The Company set upplenary session on 28 May 1996 and registered in Anhui on 30 May 1996 with business license of 14897271-1.The Company has issued 60,000,000 domestic listed foreign shares (“B” shares) in June 1996 and 20,000,000ordinary shares (“A shares) on September 1996, ordinary shares are listed in national and par value is RMB1.00per share. Those A shares and B shares are listed in Shenzhen Stock exchange.Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries (the Company)specialize in producing and selling white spirit.Registered capitals of the Company were RMB235,000,000 with stocks of 235,000,000, of which 155,000,000shares were issued in China, B shares of 60,000,000 shares and A shares of 20,000,000 shares. The book value ofthe stocks of the Company was of RMB1 per share.On 29 May 2006, a shareholder meeting was held to discuss and approval a program of equity division of A share,the program was implement in June 2006. After implementation, all shares are outstanding share, which include147,000,000 shares with restrict condition on disposal, represent 62.55% of total equity, and 88,000,000 shareswithout restrict condition on disposal, represent 37.45% of total equity.The Company issued <Announcement of release restriction shares by Anhui Gujing Distillery Company Limited>on 27 June 2007, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 29June 2007. Up to that day, outstanding shares with restrict condition on disposal are 135,250,000, representing

57.55% of total equity, the share without restrict condition are 99,750,000, representing 42.45% of total equity.The Company issued <Announcement of release restriction shares by Anhui Gujing Distillery Company Limited>on 17 July 2008, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on 18July 2008. Up to that day, outstanding shares with restrict condition on disposal are 123,500,000, representing

52.55% of total equity, the share without restrict condition are 111,500,000, representing 47.45% of total equity.The Company issued <Announcement of release restriction shares by Anhui Gujing Distillery Company Limited>on 24 July 2009, 123,500,000 outstanding shares with restrict condition on disposal are listed in stock market on29 July 2009. Up to that day, the Company’s all shares are all tradable.Approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943, the Company privately offered 16,800,000

~70~

ordinary shares (A-shares) to special investors on 15 July 2011, with a par value of RMB1 and the price ofRMB75.00 per share, raising RMB1,260,000,000.00 in total, the net amount of raised funds stood atRMB1,227,499,450.27 after deducting RMB32,500,549.73 of various issuance expenses. Certified PublicAccountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi[2011] No. 1065. After private issuance, the share capital of the Company increased to RMB251.8 million.Pursuant to the Resolution of The 2011 Annual General Meeting, the Company that considered 251,800,000shares as base number on 31 December 2011 transferred capital reserve into share capital at a rate of “10 sharesfor per 10 shares” accounting for 251,800,000 shares and implemented in the year of 2012. Upon the transference,the registered capitals increased to RMB503,600,000.In April 2016, the Company entered a strategic cooperation agreement with Wuhan Tianlong Yellow Crane TowerCo., Ltd., creating a new age for cooperation related to Chinese famous spirit. As the only Chinese famous spiritin Hubei Province, it features unique mellow taste, elegant appearance and tempting smell. Moreover, YellowCrane Tower White Spirit won the Golden Prize respectively in 1984 and 1989 National White Spirit AppraisalCompetition as one of the business card representing Hubei Province’s economy. At present, the Company hasestablished three major bases in Wuhan, Xianning and Suizhou, of which, Xianning Base has integratedmodernism, ecologism and high technology as a new spirit-making base, known as “the most beautiful chateau inChina”. In 2016, Yellow Crane Tower Spirit won “2015 Top 10 Star Product in Hubei Province”.By 30 June 2019, the Company issued 503,600,000 shares.The Company is registered at Gujing Town, Bozhou City, Anhui Province.The approved business of the Company including procurement of grain (operating with business license),manufacture of distilled spirits, wine distilling facilities, packaging material, bottles, alcohol, grease (limited tobyproducts from wine manufacture), and research and development of high-tech, biotechnology development,agricultural and sideline products deep processing, as well as sale of self-manufacturing products.The Company as the parent and the final company as the parent is Anhui Gujing Company Co., Ltd in China.Financial statement of the Company will be released on 23 August 2019 by the Board of Directors.On 30 June 2019, there were 22 subsidiaries included in the consolidation scope. Please refer to Note VIII “Rightsand Interests in other Entities” for details. During the Reporting Period, only 1 subsidiary was added into theconsolidation scope when compared to that of the same period of last year. Please refer to Note VII “Change of theConsolidation Scope” for details.II. Basis for the Preparation of Financial Statements

1. Basis for the Preparation

With the going-concern assumption as the basis and based on transactions and other events that actually occurred,the Company prepared financial statements in accordance with the ASBE-Basic Standard (No. 33 issued decreedby Ministry of Finance and No. 76 revised decreed by Ministry of Finance), the 41 specific standards of

~71~

Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 February 2006and revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation ofAccounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the AccountingStandards for Business Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Conventionof Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in2014) by China Securities Regulatory Commission.In line with relevant rules of ASBE, financial accounting of the Company is based on accrual system. Exceptfinancial instruments and instrument real estate, the financial statement is calculated on the basis of history costs.Available-for-sale non-current assets are calculated by the lower one of fair value deducting estimated costs andoriginal costs meeting the standard of available-for-sale. If assets confront impairment, it shall be withdrawnprovision for impairment in line with relevant stipulations.

2. Continuous Operation

The management of the Company executed the assessment on the continuation ability and had not discovered anyevent or situation caused significant suspicion on the continuation ability. Thus, the financial statements compiledbased on the hypothesis of the continuation.III. Declaration of Compliance with the Enterprise Accounting StandardsThe financial statements of the Company have been prepared in accordance with the Enterprise AccountingStandards to present truly and completely the financial position of the Company on 30 June 2019, operatingresults, cash flow from January to June in 2019 and other relevant information. The financial statement of theCompany met the relevant disclosure requirements of financial statement and notes of “Compiling stipulations ofpublic information disclosure No.15---general rules of financial statement” (revised in 2014).IV. Main Accounting Policies and Accounting EstimatesThe Company and various subsidiaries are mainly specialized in manufacturing and selling white spirit.According to the actual production & operation and related ASBE provisions, this company and varioussubsidiaries have formulated some specific accounting policies and estimations related to various transactions andmatters including revenue recognition. Please refer to Note IV. 24 “Revenues” for details. For any description ofmajor accounting judgment and estimations made by the company’s management, please refer to Note IV. 28“Other Significant Accounting Policies and Estimates” for details.

1. Accounting Period

Accounting Period is divided to annual term and interim term. Accounting medium refers to reporting periodshorter than a complete accounting period. The Company employs a period of calendar days from January 1

sttoDecember 31

steach year as accounting year.

2. Operating Cycle

Normal operating cycle refers to the period from the Company purchases the assets for processing to realize the

~72~

cash or cash equivalents. The Company regards 12 months as an operating cycle and regards which as thepartition criterion of the mobility of the assets and liabilities.

3. Bookkeeping Base Currency

Renminbi is the dominant currency used in the economic circumstances where the Company and its domesticsubsidiaries are involved. Therefore, the Company and its domestic subsidiaries use Renminbi as theirbookkeeping base currency. And the Company adopted Renminbi as the bookkeeping base currency whenpreparing the financial statements for the reporting period.

4. Accounting Treatment Methods for Business Combinations Under the Same Control and those not Underthe Same ControlThe term “business combinations” refers to a transaction or event bringing together two or more separateenterprises into one reporting entity. Business combinations are classified into the business combinations underthe same control and the business combinations not under the same control.

(1) Accounting treatment of the business combination that is under the same controlA business combination involving enterprises under common control is a business combination in which all of thecombining enterprises are ultimately controlled by the same party or parties both before and after the businesscombination, and that control is not transitory. The assets and liabilities obtained are measured at the carryingamounts as recorded by the enterprise being combined at the combination date. The difference between thecarrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (orthe total face value of shares issued) is adjusted to share premium in the capital reserve. If the balance of sharepremium is insufficient, any excess is adjusted to retained earnings. Other direct expenses occur when theCompany conducting business combinations is recognized in current profit and loss. The combination date is thedate on which one combining enterprise effectively obtains control of the other combining enterprises.Those assets and liabilities obtained by the Company during the business combination should be recognized in thecarrying value of the equity of the merged party on the merger date. The difference between the carrying amountof the net assets obtained and carrying amount of the merger consideration (or total par value of issued shares)paid shall be adjusted to capital reserve. If the capital reserve is not sufficient to absorb the difference, any excessshall be adjusted against retained earnings.Direct costs of a business combination shall be reckoned into current gains and losses.

(2) Accounting treatment of the business combination that is not under the same controlA business combination involving entities not under common control is a business combination in which all of thecombining entities are not ultimately controlled by the same party or parties both before and after the businesscombination. In business combination not under the same control, acquirer refers to party obtaining control ofother combining corporations in the date of acquisition and acquiree refers to corporation participating incombination. Date of acquire refers to the date the acquirer actually obtaining control of the acquiree.

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As for combination not under the same control, costs of combination includes assets that acquirers occur in thedate of combination in order to obtain control of acquirees, loans, fair value of issued equity securities,intermediary costs such as audit, legal services and evaluation consultation, and other administrative fees occurredin the reporting period. As for trading costs that acquirers as combination consideration issue equity securities ordebt securities, it shall be reckoned into initial accounts of equity securities or debt securities. As for businesscombination realized by several exchanges and trades, in the combined financial statement of the Company, theCompany shall recalculate the stock right obtained by acquirees before the date of acquisition in line with fairvalue of the stock right in the date of acquisition. When the Company acts as the combination party, the cost of abusiness combination paid by the acquirer is the aggregate of the fair value at the acquisition date of assets given(including share equity of the acquiree held before the combination date), liabilities incurred or assumed, andequity securities issued by the acquirer. Any excess of the cost of a business combination over the acquirer’sinterest in the fair value of the acquiree’s identifiable net assets is recognized as goodwill, while any excess of theacquirer’s interest in the fair value of the acquiree’s identifiable net assets over the cost of a business combinationis recognized in profit or loss. The cost of equity securities or liability securities as on combination considerationoffering is recognized in initial recording capital on equity securities or liability securities. Other direct expensesoccur when the Company conducting business combinations is recognized in current profit and loss. Thedifference between the fair value and the carrying amount of the assets given is recognized in profit or loss. TheCompany, at the acquisition date, recognized the acquiree’s identifiable asset, liabilities and contingent liabilitiesat their fair value at that date. The acquisition date is the date on which the acquirer effectively obtains control ofthe acquiree.As for deductible temporary difference of acquirers obtained by acquirers which can’t be confirmed due to failureof meeting the confirmation requirements of deferred income tax assets, if there is newly information proving theexistence of relevant situation in the date of acquisition in a year after the acquisition date and financial benefits ofdeductible temporary difference of acquirers in the date of acquisition are estimated to be realized, deferredincome tax assets shall be confirmed. At the same time, goodwill shall be decreased. If goodwill is insufficient,the difference shall be reckoned into current gains and losses; except the above circumstance, reliable deferredincome tax assets relevant to the Company shall be reckoned into current gains and losses.For a business combination not involving enterprise under common control, which achieved in stages thatinvolves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance ofAccounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) and Article 51 of Accounting Standards forEnterprises No. 33 – Consolidated Financial Statements on the “package deal” criterion (see Note IV. 5 (2)), tojudge the multiple exchange transactions whether they are the “package deal”. If it belongs to the “package deal”in reference to the preceding paragraphs of this section and the Notes described in Note IV. 14 “long-term equityinvestment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual

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financial statements and the consolidated financial statements related to the accounting treatment:

In the individual financial statements, the sum of the book value and new investment cost of the Company holdsin the acquiree before the acquiring date shall be considered as initial cost of the investment. Other relatedcomprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiringdate shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities whendisposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assetswith a defined benefit plan measured at the equity method arising from the acquiree’s re-measurement, the othersshall be transferred into current investment gains).In the Company’s consolidated financial statements, as for the equity interests that the Company holds in theacquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date;the positive difference between their fair values and carrying amounts shall be recorded into the investment gainsfor the period including the acquiring date. Other related comprehensive gains in relation to the equity intereststhat the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquireedirectly disposes the related assets or liabilities when disposing the investment (that is, except for thecorresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at theequity method arising from the acquiree’s re-measurement, the others shall be transferred into current investmentgains on the acquiring date).

5. Methods for Preparing Consolidated Financial Statements

(1) Principle for determining the consolidation scope

The consolidation scope for financial statements is determined on the basis of control. The term “control” is thepower of the Company upon an investee, with which it can take part in relevant activities of the investee to obtainvariable returns and is able to influence the amount of returns. The consolidated financial statements comprise thefinancial statements of the Company and its subsidiaries. A subsidiary is an enterprise or entity controlled by theCompany.The Company would reassess it if the involved relevant factors of above control definitions changed, which wascaused by changes of relevant facts and situations.

(2) Methods for preparing the consolidated financial statements

The Company begins to include subsidiaries into consolidation scope from the date obtaining net assets ofsubsidiaries and actual control of production and operation and terminates to include subsidiaries intoconsolidation scope from the date losing actual control of subsidiaries. As for the disposal of subsidiaries,operating results and cash flow are included in consolidated income statement and consolidated statement of cashflow before the date of the disposal; as for current disposal of subsidiaries, opening balance of the consolidatedbalance sheet shall not be adjusted. As for subsidiaries increased in the combination not under the same control,operating results and cash flow after the date of the acquisition are included in consolidated income statement and

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consolidated statement of cash flow, in addition, opening balance of the consolidated balance sheet shall not beadjusted. As for subsidiaries increased in the combination under the same control and combined parties underacquisition, operating results and cash flow from the beginning of combination to the date of combination areincluded in consolidated income statement and consolidated statement of cash flow, in addition, opening balanceof the consolidated balance sheet shall be adjusted.Where a subsidiary was acquired during the reporting period, through a business combination involving entitiesunder common control, the financial statements of the subsidiary are included in the consolidated financialstatements as if the combination had occurred at the date that common control was established. Therefore theopening balances and the comparative figures of the consolidated financial statements are restated. In thepreparation of the consolidated financial statements, the subsidiary’s assets, liabilities and results of operations areincluded in the consolidated balance sheet based on their carrying amounts; while results of operations areincluded in the consolidated income statement, from the date that common control was established.All the significant inter-company balances, trading and unrealized profits shall be offset when preparing theconsolidated financial statement.If current loss shoulder by minority shareholders of a subsidy over the proportion enjoyed by minorityshareholders in a subsidy at owners’ equity at period-begin, its balance still offset minority shareholders’ equity.When the accounting period or accounting policies of a subsidiary are different from those of the Company, theCompany makes necessary adjustments to the financial statements of the subsidiary based on the Company’s ownaccounting period or accounting policies. Intra-Company balances and transactions, and any unrealized profit orloss arising from intra-Company transactions, are eliminated in preparing the consolidated financial statements.Unrealized losses resulting from intra-Company transactions are eliminated in the same way as unrealized gainsbut only to the extent that there is no evidence of impairment.When losing control right of subsidiaries because of the disposal of stock right investment or other reasons, theCompany shall recalculate residual stock right in accordance to the fair value in the date of losing control right. Asfor remaining equity investment after disposal, the Company will re-account it according to the fair value at thedate the control was lost. Any profit or loss occurred shall be recorded into the investment income during theperiod of losing control right. Then follow-up measurement of remaining equity shall be arranged in line with “No.2—Long-term Equity Investment” or “No. 22—Affirmation and Calculation of Financial Instrument”. Moredetails please refer to Note IV, 14 “Long-term Equity Investment” or Note IV, 9 “Financial Instrument”.The Company through multiple transactions step deals with disposal of the subsidiary's equity investment until theloss of control; need to distinguish between equity until the disposal of a subsidiary's loss of control over whetherthe transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject tothe following conditions and the economic impact of one or more of cases, usually indicates that severaltransactions should be accounted for as a package deal: ① these transactions are considered simultaneously, or inthe case of mutual influence made, ② these transactions as a whole in order to achieve a complete business results;

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③ the occurrence of a transaction depends on occurs at least one other transaction ; ④ a transaction look alone isnot economical, but when considered together with other transaction is economical. If they do not belong to thepackage deal, each of them separately, as the case of a transaction in accordance with “without losing control overthe disposal of a subsidiary part of long-term equity investments” (see Note IV. 14. (2) ④)) and “due to thedisposal of certain equity investments or other reasons lost control of a subsidiary of the original” (see previousparagraph) principles applicable accounting treatment. Until the disposal of the equity investment loss of controlof a subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of asubsidiary and the loss of control of the transaction. However, before losing control of the price of each disposalentitled to share in the net assets of the subsidiary's investment corresponding to the difference between thedisposals, recognized in the consolidated financial statements as other comprehensive income, loss of control overthe transferred together with the loss of control or loss in the period.

6. Classification of Joint Arrangements and Accounting Treatment of Joint OperationsA joint arrangement refers to an arrangement jointly controlled by two participants or above. The Companyclassifies joint arrangements into joint operations and joint ventures according to its rights and duties in the jointarrangements. A joint operation refers to a joint arrangement where the Company enjoys assets and has to bearliabilities related to the arrangement. A joint venture refers to a joint arrangement where the Company is onlyentitled to the net assets of the arrangement.The Company’s investments in joint ventures are measured at the equity method according to the accountingpolicies mentioned in Note IV. 14 (2) ② “Long-term equity investments measured at the equity method”.For a joint operation, the Company, as a joint operator, recognizes the assets and liabilities that it holds and bearsin the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to theCompany’s stake in the joint operation; recognizes the income from sale of the Company’s share in the output ofthe joint operation; recognizes the income from sale of the joint operation’s outputs according to the Company’sstake in it; and recognizes the expense solely incurred to the Company and the expense incurred to the jointoperation according to the Company’s stake in it.When the Company, as a joint operator, transfers or sells assets (the assets not constituting business, the samebelow) to the joint operation, or purchases assets from the joint operation, before the assets are sold to a third party,the Company only recognizes the share of the other joint operators in the gains and losses arising from the sale.Where impairment occurs to the assets as prescribed in <The Accounting Standard No. 8 for BusinessEnterprises—Asset Impairment>, the Company shall fully recognizes the loss for a transfer or sale of assets to ajoint operation; and shall recognize the loss according to its stake in the joint operation for a purchase of assetsfrom the joint operation.

7. Recognition Standard for Cash and Cash Equivalents

Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having

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short holding term (normally will be due within three months from the day of purchase), with strong liquidity andeasy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.

8. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements

(1) Accounting treatments for translation of foreign currency transactions

The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying [thespot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchangerate on the date of transaction]. The exchange of foreign currency and transactions related to the foreign exchangeare translated at the spot exchange rate.

(2) Accounting treatments for translation of foreign currency monetary items and non-monetary itemsAt the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at thebalance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ① thoserelating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, whichare capitalized in accordance with the principle of capitalization of borrowing costs, ② hedging accounting, theexchange difference related to hedging instruments for the purpose of net oversea operating investment isrecorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period;exchange difference from changes of other account balance of foreign currency monetary items, ③available-for-trade is recorded into profit or loss except for amortized cost.Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rateprevailing on the transaction date, and the amount denominated in the functional currency is not changed.Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing atthe date when the fair values are determined. The exchange difference thus resulted are recognized in profit or lossfor the current period or as capital reserve.

9. Financial Instruments

The Company recognizes a financial asset or liability when it becomes a party of the relevant financial instrumentcontract.

(1) Classification, recognition and measurement of financial assets

The Company classifies the financial assets into financial assets measured at amortized cost, financial assetsmeasured by the fair value and the changes recorded in other comprehensive income and financial assets at fairvalue through profit or loss based on the business model for financial assets management and characteristics ofcontractual cash flow of financial assets. Financial assets initially recognized shall be measured at their fairvalues. For financial assets measured at their fair values and of which the variation is recorded into the profit orloss of the current period, the transaction expenses thereof shall be directly included into the current profit or loss;for other financial assets, the transaction expenses thereof shall be included into the initially recognized amount.

①Financial assets measured by the amortized cost

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The business mode of the Company to manage the financial assets targets at collecting the contractual cash flow,that is, the cash flow generated in the specific date is the payment of the interest based on the principal andoutstanding principal amount. This kind of financial assets of the Company shall be subsequently measured basedon the amortized cost and effective interest method, and the gains or losses arising from the amortization,impairment shall be included into current profit and loss.

②Financial assets measured at the fair value with its changes included into other comprehensive incomeBusiness mode for managing financial assets of the Company takes contract cash flow collected as target andselling as target. The Company calculates such financial assets as per fair value whose change is included intocorresponding comprehensive income, but impairment loss or gain, exchange gain or loss and interest incomecalculated as per actual interest rate method are included into the current profit and loss. Furthermore, theCompany designates partial non-tradable equity vehicle investment as the financial asset measured with fair valuewhose change is included into other comprehensive income. The Company includes the related dividend incomeof such financial assets into the current profit and loss with the change in fair value included into othercomprehensive income. At the time of derecognition of such financial assets, accumulated gain or loss includedinto other comprehensive income before will be shifted to retained earnings from other comprehensive incomesbut not included into the current profit and loss.

③Financial assets at fair value through profit or loss

The Company classifies financial assets except for above-mentioned financial assets measured with amortizedcost and financial assets measured with fair value whose change is included into other comprehensive income intofinancial assets at fair value through profit or loss

(2) Classification, recognition and measurement of financial liabilities

The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value throughprofit or loss and financial liabilities measured with amortized cost.

①Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include trading financial liabilities which are subsequentlymeasured at fair value and the changes of fair value are recorded into the current profit or loss. When the liabilitiesare derecognized, the difference between their fair values and their initial recorded amount was recognized asinvestment income and at the same time the gains and losses of fair value shall be adjusted.

②Financial liabilities with amortized cost

Financial liabilities with amortized cost shall be subsequently measured at the amortized cost. And gains or lossesgenerated from derecognition or amortization shall be recorded into the current profit or loss.

(3) Recognition basis and measurement of financial assets transfer

A financial asset when one of the following conditions is met will be derecognized:

①the rights to receive cash flows from the asset have expired;

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②the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-througharrangement; or

③the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferredsubstantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all therisks and rewards of the asset, but has transferred control of the asset.For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount ofthe financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulativegain or loss that had been recognized in other comprehensive income, is recognized in profit or loss. If a part ofthe transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset isallocated between the part that continues to be recognized and the part that is derecognized, based on the relativefair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and(b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated tothe part derecognized which has been previously recognized in other comprehensive income, is recognized inprofit or loss.If the Company endorses the financial assets sold by right of recourse and holding financial assets, it needs toconfirm that whether almost all risks and remuneration in the ownership of financial assets have been transferredor not. Where an enterprise has transferred nearly all of the risks and rewards related to the ownership of thefinancial asset to the transferee, it shall stop recognizing the financial asset； If it retained nearly all of the risksand rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. If theCompany does not transfer or retain nearly all of the risks and rewards related to the ownership of the financialasset, then it continuously judges that whether the Company retain the control of the assets, and conductsaccounting treatment according to the principles described in former paragraphs.

(4) De-recognition of financial liabilities

Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of thefinancial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with acreditor so as to substitute the existing financial liabilities by way of any new financial liability, and if thecontractual stipulations regarding the new financial liability is substantially different from that regarding theexisting financial liability, it terminates the recognition of the existing financial liability, and at the same timerecognizes the new financial liability. Where the recognition of a financial liability is totally or partiallyterminated, the enterprise concerned shall include into the profits and losses of the current period for the gapbetween the book value which has been terminated from recognition and the considerations it has paid (includingthe non-cash assets it has transferred out and the new financial liabilities it has assumed)

(5) Determination of financial assets and liabilities’ fair value

For a financial instrument which has an active market, the Company uses quoted price in the active market to

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establish its fair value. For a financial instrument which does not have an active market, the Company establishesfair value by using a valuation technique. In valuation, the Company adopts applicable valuation techniquessupported by sufficient utilizable data and other information in current circumstances, selects input valuesconsistent with asset or liability characteristics considered in relevant asset or liability transactions of marketparticipators and prioritizes the applying relevant observable input values. Unobservable input values shall not beapplied unless relevant observable input values are not accessible or feasible.

(6) Impairment of financial assets

The Company estimates the expected credit loss of financial assets measured at the amortized cost and thosemeasured at fair value and whose changes are included in other comprehensive income (debt instruments) basedon expected credit loss. The measurement of expected credit loss depends on whether the credit risk of financialassets has increased significantly since the initial confirmation. In case of d significant increase, the Companymeasures its loss provisions according to the amount equivalent to the expected credit loss of the financialinstrument during its entire life; otherwise, the Company measures its loss provisions according to the amountequivalent to the expected credit loss of the financial instrument in the next 12 months, and the increased orreversed amount of loss provisions resulting therefrom shall be included in profits and losses of the current periodas impairment losses or gains.

10. Notes Receivable

All notes receivable settled of the Company are bank’s acceptance bill and L/C. Based on the credit riskcharacteristics of notes receivable and comprehensive evaluation of their credit risk characteristics, the Companydoes not withdraw credit impairment losses for notes receivable.

11. Receivables

The receivables by the Company include accounts receivable, and other receivables.

(1) Criteria for recognition of bad debts:

The Company carries out an inspection on the balance sheet date. Where there is any objective evidence provingthat the receivables have been impaired, an impairment provision shall be made:

1) A serious financial difficulty occurs to the issuer or debtor;

2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment ofinterests or the principal, etc.;

3) The debtor will probably become bankrupt or carry out other financial reorganizations;

4) Other objective evidences showing the impairment of the receivables.

(2) Method for bad debts provision

① Provisions of bad debts in accounts receivables that is individually significant.The Company recognized the accounts receivable which amounted to more than 2 million as the accounts

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receivable that is individual significant.For an accounts receivable that is individually significant, the asset is individually assessed for impairment, theimpairment loss is recognized at the difference between the present value of future cash flow less the carryingamount, and provision is made accordingly.

② Provisions of bad debts in accounts receivable that individually insignificant item with similar credit riskcharacteristics that have significant risk:

A. Evidence of credit risk characteristicsWhether the financial asset is individually significant or not individually significant, it is included in a group offinancial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit riskreflects the repayment of all due amount under the contract, and is related to the estimation of future cash flowexpected to be derived from the assets.Evidence of portfolios:

Item	Basis
Age portfolios	Age
Related party portfolios	Companies within the combination scope of the Company

Item	Provision
Age portfolios	Age analysis method
Related party portfolios	Don’t withdraw the bad debts provision unless the related-party lost the repaying capability

Aging	Proportion for accounts receivable (%)	Proportion for other receivables (%)
Within 1 year (including 1 year, similarly hereinafter)
Including: [within 6 months]	1.00	1.00
[7 to 12 months]	5.00	5.00
1 to 2 years	10.00	10.00
2 to 3 years	50.00	50.00

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Aging	Proportion for accounts receivable (%)	Proportion for other receivables (%)
Over 3 years	100.00	100.00

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After withdrawing the depreciation reserves for inventories, if the factors, which cause any write-down of theinventories, have disappeared, the amount of write-down shall be recovered and reversed from the originalamount of depreciation reserve for inventories. The reversed amount shall be included in the profits and losses ofthe current period.

(4) Inventory system for inventories is perpetual inventory system

(5) Amortization method of the low-value consumption goods and packing articlesLow-value consumption goods: one-off amortization method; Packing articles: one-off amortization method

13. Assets Held for Sale and Disposal Group

The Company classifies a non-current asset or disposal group as held for sale if its carrying amount will berecovered principally through a sale transaction rather than through continuing use. For this to be the case, thefollowing conditions shall be met: a) the asset (or disposal group) must be available for immediate sale in itspresent condition subject to terms that are usual and customary for sales of such assets or disposal groups; b) thecompany has made the resolution on the disposal plan and must be committed to a plan to sell the asset (ordisposal group); c) the sale is expected to be completed within one year from the date of classification. A disposalgroup is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, andliabilities directly associated with those assets that will be transferred in the transaction. The group shall includegoodwill acquired in a business combination if the group is a cash-generating unit to which goodwill has beenallocated in accordance with the requirements of Accounting Standard for Business Enterprises No. 8 –Impairment of assets.The Company measure a non-current asset or disposal group classified as held for sale at the lower of its carryingamount and fair value less costs to sell on initial recognition and subsequent remeasuremnt on the balance sheetdate. An impairment loss is recognized when the carrying amount is higher than the fair value less costs to sell,and allowance for impairment is recognized accordingly. For the disposal group, the recognized impairment losson assets is offset against the carrying amount of the goodwill in the disposal group, and then reduced inproportion of the book value of the non-current assets applicable to "Accounting Standard for BusinessEnterprises No. 42 - Non-current Assets Held for Sale, Disposal Group and Discontinued Operations (hereinafterreferred to as "held for sale accounting principle") measurement requirements. The company shall recognize again during the period for any subsequent increase in fair value less costs to sell of an asset, but not in excess ofthe cumulative impairment loss that has been recognized after the reclassification to non-current assets held forsale. The book value of assets in the disposal group is increased proportionately according to the proportion of thebook value of each non-current asset except for goodwill. Impairment loss recognized before the reclassificationto non-current assets held for sell shall not be recovered.Non-current asset or non-current asset in the disposal group classified as held for sale is not subject todepreciation or amortization. The interest and other expenses on liabilities held in the disposal group for sale are

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continuously recognized.Non-current assets or disposal group that no longer meet the conditions of non-current asset held for sell shall beremoved from the category, and shall be measured at the lower of the following: (1) The carrying amount beforeclassification as held for sale after adjustment of depreciation, amortization or impairment that should berecognized if it is not classified as non-current assets held for sell; (2) recoverable amount.

14. Long-term Equity Investments

The long-term equity investments of this part refer to the long-term equity investments that the Company hascontrol, joint control or significant influence over the investees. The long-term equity investment that theCompany does not have control, joint control or significant influence over the investees, should be recognized asavailable-for-sale financial assets or be measured by fair value with the changes should be included in thefinancial assets accounting of the current gains and losses, and please refer the details of the accounting policies toNotes IV. 9 “Financial instrument”.Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by theCompany and the relevant activities of the arrangement should be decided only after the participants which sharethe control right make consensus. Significant influence refers to the power of the Company which could anticipatein the finance and the operation polices of the investees, but could not control or jointly control the formulation ofthe policies with the other parties.

(1) Recognition of investment costs

As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, theshare of the book value of the owner’s equity of the merged enterprise, on the date of merger, is regarded as theinitial cost of the long-term equity investment. The difference between the initial cost of the long-term equityinvestment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne bythe merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retainedearnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall,on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise onthe consolidated financial statement of the ultimate control party as the initial cost of the long-term equityinvestment. The total face value of the stocks issued shall be regarded as the capital stock, while the differencebetween the initial cost of the long-term equity investment and total face value of the shares issued shall offsetagainst the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.The equities of the combined party which respectively acquired through multiple transaction under the samecontrol that ultimately form into the combination of the enterprises under the same control, should be disposedaccording whether belongs to package deal; if belongs to package deal, each transaction would be executedaccounting treatment by the Company as a transaction of acquiring the control right. If not belongs to packagedeal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the

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merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of thelong-term equity investment, and as for the difference between the initial investment cost of the long-term equityinvestment and sum of the book value of the long-term equity investment before the combination and the bookvalue of the consideration of the new payment that further required on the combination date, should adjust thecapital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equityinvestment held before the combination date which adopted the equity method for accounting, or the othercomprehensive income confirmed for the available-for-sale financial assets, should not have any accountingdisposal for the moment.For the long-term investment required from the business combination under different control, the initialinvestment cost regarded as long-term equity investment on the purchasing date according to the combination cost,the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed andthe equity securities issued by the Company. The equities of the acquirees which respectively acquired throughmultiple transaction that ultimately form into the combination of the enterprises under the different control, shouldbe disposed according whether belongs to package deal; if belongs to package deal, each transaction would beexecuted accounting treatment by the Company as a transaction of acquiring the control right. If not belongs topackage deal, the sum of the book value of the original held equity investment of the acquirees and the newlyadded investment cost should be regarded as the initial investment cost of the long-term equity investment thatchanged to be accounted by cost method. If the original held equity is calculated by cost method, the otherrelevant comprehensive income would not have any accounting disposal for the moment. If the original heldequity investment is the financial assets available for sale, its difference between the fair value and the book valueas well as the accumulative changes of the fair value that include in the other comprehensive income, shouldtransfer into the current gains and losses.The commission fees for audit, law services, assessment and consultancy services and other relevant expensesoccurred in the business combination by the combining party or the purchase party, shall be recorded into currentprofits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bondssecurities which are as consideration for combination by the combining party, should be recorded as the initialamount of equity securities and bonds securities.Besides the long-term equity investments formed by business combination, the other long-term equity investmentsshall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cashpayment paid by the Company, the fair value of equity securities issued by the Company, the agreed value of theinvestment contract or agreement, the fair value or original carrying amount of exchanged assets fromnon-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses,taxes and other necessary expenditures directly related with gaining the long-term equity investments shall also berecorded into investment cost. The long-term equity investment cost for those could execute significant influences

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on the investees because of appending the investment or could execute joint control but not form as control,should be as the sum of the fair value of the original held equity investment and the newly added investment costrecognized according to the No. 22 of Accounting Standards for Business Enterprises—Recognition andMeasurement of Financial Instrument.

(2) Subsequent measurement and recognition of gains or losses

A long-term equity investment where the investing enterprise has joint control (except for which forms intocommon operators) or significant influence over the investors should be measured by equity method. Moreover,long-term equity investment adopting the cost method in the financial statements, and which the Company hascontrol on invested entity.

① Long-term equity investment measured by adopting cost method

The price of a long-term equity investment measured by adopting the cost method shall be included at its initialinvestment cost and append as well as withdraw the cost of investing and adjusting the long-term equityinvestment. The return on investment at current period shall be recognized in accordance with the cash dividendor profit announced to distribute by the invested entity, except the announced but not distributed cash dividend orprofit included in the actual payment or consideration upon gaining the investment.

②Long-term equity investment measured by adopting equity method

If the initial cost of a long-term equity investment is more than the Company’s attributable share of the fair valueof the invested entity’s identifiable net assets for the investment, the initial cost of the long-term equity investmentmay not be adjusted. If the initial cost of a long-term equity investment is less than the Company’s attributableshare of the fair value of the invested entity’s identifiable net assets for the investment, the difference shall beincluded in the current profits and losses and the cost of the long-term equity investment shall be adjustedsimultaneously.When measured by adopting equity method, respectively recognize investment income and other comprehensiveincome according to the net gains and losses as well as the portion of other comprehensive income which shouldbe enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment;corresponding reduce the book value of the long-term equity investment according to profits which be declared todistribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for theother changes except for the net gains and losses, other comprehensive income and the owners’ equity except forthe profits distribution of the investees, should adjust the book value of the long-term equity investment as well asinclude in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiableassets of the invested entity when it obtains the investment, recognize the attributable share of the net profits andlosses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies adoptedby the investees is not accord with that of the Company, should be adjusted according to the accounting policies ofthe Company and the financial statement of the investees during the accounting period and according which to

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recognize the investment income as well as other comprehensive income. For the transaction happened betweenthe Company and associated enterprises as well as joint ventures, if the assets launched or sold not form intobusiness, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Companyaccording to the calculation of the enjoyed proportion, should recognize the investment gains and losses on thebasis. But the losses of the unrealized internal transaction happened between the Company and the investeeswhich belongs to the impairment losses of the transferred assets, should not be neutralized. The assets launched bythe Company to the associated enterprises or the joint ventures if could form into business, the long-term equityinvestment without control right which acquired by the investors, should regard the fair value of the launchedbusiness as the initial investment cost the newly added long-term equity investment, and for the differencebetween the initial investment cost and the book value of the launched business, should be included into thecurrent gains and losses with full amount. The assets sold by the Company to the associated enterprises or thejoint ventures if could form into business, the difference between the acquired consideration and the book value ofthe business should be included in the current gains and losses with full amount. The assets purchased by theCompany to the associated enterprises or the joint ventures if could form into business, should be accountingdisposed according to the regulations of No. 20 of ASBE—Business Combination, and should be recognized gainsor losses related to the transaction with full amount.The Company shall recognize the net losses of the invested enterprise until the book value of the long-term equityinvestment and other long-term rights and interests which substantially form the net investment made to theinvested entity are reduced to zero. However, if the Company has the obligation to undertake extra losses, it shallbe recognized as the estimated liabilities in accordance with the estimated duties and then recorded intoinvestment losses at current period. If the invested entity realizes any net profits later, the Company shall, after theamount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resumerecognizing its attributable share of profits.For the long-term equity investment held by the Company before the first execution of the new accountingcriterion of the associated enterprises and joint ventures, if there is debit difference of the equity investmentrelated to the investment, should be included in the current gains and losses according to the amount of thestraight-line amortization during the original remained period.

③ Acquiring shares of minority interest

In the preparation for the financial statements, the balance existed between the long-term equity investmentincreased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated bythe increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, ifthe capital reserves are not sufficient to offset, the retained profits shall be adjusted.

④ Disposal of long-term equity investment

In the preparation of financial statements, the Company disposed part of the long-term equity investment on

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subsidiaries without losing its controlling right on them, the balance between the disposed price and attributablenet assets of subsidiaries by disposing the long-term equity investment shall be recorded into owners’ equity;where the Company losses the controlling right by disposing part of long-term equity investment on suchsubsidiaries, it shall treated in accordance with the relevant accounting policies in Note IV. 5 (2) “Method onpreparation of combined financial statements”.For other ways on disposal of long-term equity investment, the balance between the book value of the disposedequity and its actual payment gained shall be recorded into current profits and losses.For the long-term equity investment measured by adopting equity method, if the remained equity after disposalstill adopts the equity method for measurement, the other comprehensive income originally recorded into owners’equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposedby the investees according to the corresponding proportion. The owners’ equity recognized owning to the changesof the other owners’ equity except for the net gains and losses, other comprehensive income and the profitsdistribution of the investees, should be transferred into the current gains and losses according to the proportion.For the long-term equity investment which adopts the cost method of measurement, if the remained equity stilladopt the cost method, the other comprehensive income recognized owning to adopting the equity method formeasurement or the recognition and measurement standards of financial instrument before acquiring the control ofthe investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directlydisposed by the investees and should be carried forward into the current gains and losses according to theproportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensiveincome and the profits distribution among the net assets of the investees which recognized by adopting the equitymethod for measurement, should be carried forward into the current gains and losses according to the proportion.For those the Company lost the control of the investees by disposing part of the equity investment as well as theremained equity after disposal could execute joint control or significant influences on the investees, should changeto measure by equity method when compiling the individual financial statement and should adjust themeasurement of the remained equity to equity method as adopted since the time acquired; if the remained equityafter disposal could not execute joint control or significant influences on the investees, should change theaccounting disposal according to the relevant regulations of the recognition and measurement standards offinancial instrument, and its difference between the fair value and book value on the date lose the control rightshould be included in the current gains and losses. For the other comprehensive income recognized by adoptingequity method for measurement or the recognition and measurement standards of financial instrument before theCompany acquired the control of the investees, should execute the accounting disposal by adopting the same basisof the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose thecontrol of them, while the changes of the other owners’ equity except for the net gains and losses, othercomprehensive income and the profits distribution among the net assets of the investees which recognized by

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adopting the equity method for measurement, should be carried forward into the current gains and lossesaccording to the proportion. Of which, for the disposed remained equity which adopted the equity method formeasurement, the other comprehensive income and the other owners’ equity should be carried forward accordingto the proportion; for the disposed remained equity which changed to execute the accounting disposal according tothe recognition and measurement standards of financial instrument, the other comprehensive income and the otherowners’ equity should be carried forward in full amount.For those the Company lost the control of the investees by disposing part of the equity investment, the disposedremained equity should change to calculate according to the recognition and measurement standards of financialinstrument, and difference between the fair value and book value on the date lose the control right should beincluded in the current gains and losses. For the other comprehensive income recognized from the original equityinvestment by adopting the equity method, should execute the accounting disposal by adopting the same basis ofthe accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate theequity method for measurement, while for the owners’ equity recognized owning to the changes of the otherowner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of theinvestees, should be transferred into the current investment income with full amount when terminate adopting theequity method.The Company respectively disposes the equity investment of the subsidiaries through multiple transactions untillose the control right, if the above transactions belongs to the package deal, should execute the accountingdisposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until losethe control right, while the difference between each expenses of the disposal and the book value of the long-termequity investment in accord with the disposed equity before losing the control right, should firstly be recognizedas other comprehensive income then be transferred into the current gains and losses of losing the control rightalong until the time when lose it.

15. Investment Property

Investment property is held to earn rentals or for capital appreciation or for both. Investment property includesleased or ready to transfer after capital appreciation land use rights and leased buildings. Besides, for the idleconstructions held by the Company for operation and lease, if the Board of Directors (or the similar institutions)made the written resolutions which affirmatively disclosed to use which for operation and lease with the intentionwould not change in the short term, should also be presented as the investment property.Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate arelikely to flow about the economic benefits of the asset and its cost can be measured reliably, is included in the costof investment real estate. Other subsequent expenditures of gains or losses should be recorded in the current gainsand losses when occurred.The Company uses the cost model for subsequent measurement of investment property, and in accordance with

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the depreciation or amortization of buildings or land use rights policy.Investment property impairment test method and impairment accrual method described in Note IV. 20 “Long-termassets impairment”.Occupied real estate for investment property or investment property is transferred to owner-occupied real estate orstock conversion as the recorded value after the conversion, according to the book value before the conversion.From the date of transference, investment properties shall be transferred into fixed assets or intangible assets wheninvestment properties transfer into self-owned properties. From the date of transference, fixed assets or intangibleassets shall be transferred into investment properties when the intention of self-owned properties changes to beearning rents. Upon transference, investment properties using cost modeling shall use its book value beforetransference as the entry value after transference; investment properties using fair value shall use its fair value inthe date of transference as the entry value after transference.As for investment property disposed or perpetually out of use, and estimated without economic benefits from thedisposal, confirmation shall be terminated. Disposal consideration of the investment property after sale,transference, discard or damage deducting its book value and relating taxes shall be recorded into current gainsand losses.

16. Fixed Assets

(1) Recognized standard of fixed assets

The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they areheld for the sake of producing commodities, rendering labor service, renting or business management; and theiruseful life is in excess of one fiscal year.

(2) Depreciation methods of fixed assets

The initial measurement of a fixed asset shall be made at its cost after considering the effect of expected discardexpenses. The Group shall withdraw the depreciation of fixed assets by adopting the straight-line method since thesecond month of its useful life. Useful life, expected net salvage value (refers to the expected amount that theGroup may obtain from the current disposal of a fixed asset after deducting the expected disposal expenses at theexpiration of its expected useful life) and annual depreciation rate of each fixed assets are as below:

Category of fixed assets	Method	Useful life (Y)	Expected net salvage value (%)	Annual deprecation (%)
Housing and building	Straight-line method	8.00-35.00	3.00-5.00	2.70-12.10
Machinery equipments	Straight-line method	5.00-10.00	3.00-5.00	9.50-19.40
Transportation vehicle	Straight-line method	4.00	3.00	24.25
Office equipment and others	Straight-line method	3.00	3.00	32.33

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Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal ofthe asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expectedservice life in the end.

(3) Measurement and recognition of fixed assets impairment

Impairment and provisions of fixed assets are disclosed on Note IV. 21 “Long-term assets impairment”.

(4) Fixed Assets under finance leases

A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.Title may or may not eventually be transferred. Fixed assets that are held under finance leases shall be depreciatedby applying the same policy as that for the fixed assets owned by the Company. If it can be reasonably determinedthat the ownership of the leased assets can be obtained at the end of the lease period, the leased assets aredepreciated over their useful lives; otherwise, the leased assets are depreciated over the shorter of the lease termsand the useful lives of the leased assets.

(5) Others

A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to theCompany and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset thatmeet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of thecomponent of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall berecognized in profit or loss in the period in which they are incurred.The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deductionof carrying value and related tax.The Company conducts a review of useful life, expected net realizable value and depreciation methods of thefixed asset at least on an annual base. Any change is regarded as change in accounting estimates.

17. Construction in Progress

Construction in progress is measured at its actual cost. The actual costs include various construction expendituresduring the construction period, borrowing costs capitalized before it is ready for intended use and other relevantcosts. Construction in progress is transferred to a fixed asset when it is ready for intended use.Testing method for provision impairment of construction in progress and accrued method for provisionimpairment please refer to Note IV. 21 “Long-term assets impairment”.

18. Borrowing Costs

Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costsincurred in connection with the arrangement of borrowings, and exchange differences arising from foreigncurrency borrowings. The borrowing costs that are directly attributable to the acquisition, construction orproduction of a qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as

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an expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment propertyand inventories, etc.) that necessarily take a substantial period of time for acquisition, construction or productionto get ready for their intended use or sale.Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interestexpense incurred on that borrowing for the period less any bank interest earned from depositing the borrowedfunds before being used on the asset or any investment income on the temporary investment of those funds. Wherefunds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings isdetermined by applying a weighted average interest rate to the weighted average of the excess amounts ofaccumulated expenditure on the asset over and above the amounts of specific-purpose borrowings.During the capitalization period, exchange differences related to a specific-purpose borrowing denominating inforeign currency are all capitalized. Exchange differences in connection with general-purpose borrowings arerecognized in profit or loss in the period in which they are incurred.Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long timeof construction or production activities before ready for intended used or sale.Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or productionof a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended useor sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred duringthese periods recognized as an expense for the current period until the acquisition, construction or production isresumed.

19. Intangible Assets

(1) Intangible asset

The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed orcontrolled by enterprises.The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economicbenefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can bemeasured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked inthe profit or loss when they occur.Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such asplants that are developed and constructed by the Company, and relevant land use rights and buildings, areaccounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchasedare allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the landuse rights and buildings should accounted for as fixed assets.When an intangible asset with a definite useful life is available for use, its original cost less net residual value and

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any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. Anintangible asset with an indefinite useful life is not amortized.For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method atthe end of the period, and makes adjustment when necessary. An additional review is also carried out for usefullife of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period ofeconomic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortizeaccording to the policy of intangible assets with definite useful life.

(2) Research and development cost

Cost of research and development is distinguished into the research phase and the development phases.Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss inthe period in which it is incurred:

① it is technically feasible to complete the intangible asset so as to use it or sell it;

② it is clearly invented to complete the intangible asset in order to use it or sell it;

③ it is probable that the intangible asset is capable of generating future economic benefit, such as the market for theproduct produced by the intangible asset or the intangible asset itself, it is objectively evidential that the intangibleasset is economically usable if it is going to be used internally;

④ there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell it;

⑤ the cost of the development of the intangible can be measured reliably.

If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profitor loss for the period in which it is incurred.

(3) Impairment of intangible assets

Impairment and provisions of intangible assets are disclosed on Note IV. 21 “Long-term assets impairment”.

20. Long-term Deferred Expenditure

An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (aperiod during which an expense is expected to bring economic benefits to an entity) which is longer than one yearand which includes at least part of the reporting period during which the expense was incurred and subsequentreporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expenseincurred and allocated in each month of the beneficial period using the straight line method.

21. Long-term Assets Impairment

Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets withdefinite useful lives, investment properties measured by cost methods and long-term equity investment onsubsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all

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non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimatedif such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assetsnot ready for use, are tested for impairment annually regardless of indicators of impairment.Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets islower than the book value. The recoverable value is the higher of estimated present value of the future expectedcash flows from the asset and net fair value of the asset less disposed cost. The fair value of asset is determined bythe sales agreement price within an arm’s length transaction. In case there is no sales agreement, but there is activemarket of assets, the fair value can be determined by the selling price. If there is neither sales agreement nor activemarket, the fair value of the asset can be estimated based on the best information obtained. Disposal expensesinclude expenses related to the legislation, taxes, transportations and the direct expense for the asset to be readyfor sale. When calculating the present value of expected future cash flows from an asset or asset Group, themanagement shall estimate the expected future cash flows from the asset or asset Group and choose a suitablediscount rate in order to calculate the present value of those cash flows.Provision for asset impairment is calculated and determined on the individual basis. If the recoverable ofindividual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subjectasset belongs. Asset Group is the smallest set of assets that can have cash flow in independently.The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation ofthe present value of the future expected cash flows from the asset Groups or sets of asset Groups to which thegoodwill is allocated. Estimating the present value requires the Company to make an estimate of the expectedfuture cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order tocalculate the present value of those cash flows.Once the loss from above asset impairment is recognized, the recoverable part cannot be reserved in thesubsequent periods.

22. Payroll

The payroll of the Company mainly includes the short-term employee compensation, welfare after demission,demission welfare and other long-term employee benefits. Of which:

Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services andbenefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housingfund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-termcompensation actually happened during the accounting period when the active staff offering the service for theGroup should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Ofwhich the non-monetary benefits should be measured according to the fair value.Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includesbasic endowment insurance, unemployment insurance and annuity etc, and the corresponding payable and deposit

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amount should be included into the relevant assets cost or the current gains and losses when happen.If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant laborcontract or brings forward any compensation proposal for the purpose of encouraging the employee to accept alayoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier datebetween the time when the Group could not one-sided withdraw the demission welfare which offered by the planor layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to thereorganization of the payment of the demission welfare and at the same time includes which into the current gainsand losses. But if the demission welfare is estimated that could not totally pay after the end of the annual reportwithin 12 months, should be disposed according to other long-term payroll payment.The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.The group would recorded the salary and the social security insurance fees paid and so on from the employee’sservice terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under thecondition that they meet the recognition conditions of estimated liabilities.The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should beaccounting disposed according to the setting drawing plan, while the rest should be disposed according to thesetting revenue plan.

23. Provisions

Recognition of accrued liabilities:

Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee onquality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, andmeet the follow condition simultaneously would determined as liabilities: (1) This obligation is current obligationof the Company; and, (2) The performance of this obligation will probably cause economic benefits outflow of theCompany; and, (3) The amount of this obligation can be reliably measured.On balance sheet date the Company performed relate obligation that consider risk, incertitude, time value ofcurrency of contingency factor. According to the best estimate of the expenditure required to settle the presentobligation for estimated liabilities measured.If the expenditure required to settle the liability is expected to be fully or partly compensated by a third party, todetermine the amount of compensation will be received at the basic, separately recognized as an asset, and isrecognized in the amount of compensation does not exceed the carrying value of estimated liabilities.

24. Revenues

(1) Commodity sales revenues

No revenue from selling goods may be recognized unless the following conditions are met simultaneously: thesignificant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the

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enterprise retains neither continuous management right that usually keeps relation with the ownership noreffective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; therelevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can bemeasured in a reliable way.In the Company’s daily accounting practices, as for the domestic sales, when the products had shipped out of thelibrary and had handed over to the buyers, and the major risk as well as the reward on the ownership of theproducts had transferred to them, without keeping any continued management right which commonly related tothe ownership nor carrying out any effective control of the products which had been sold, and at the same time theamounts received could be calculated reliably, and the relevant economic interest may flow into the enterprise, aswell as the relevant costs which had occurred or is going to occur could be calculated reliably, should recognizethe implementation of the commodity sales revenues. As for the overseas sales, should recognize theimplementation of the revenues when the goods had made shipment and gained the customs export declaration.

(2) Revenues from providing labor services

If an enterprise can reliably estimate the outcome of a transaction concerning the labor services it provides, it shallrecognize the revenue from providing services employing the percentage-of-completion method on the balancesheet date. The percentage-of-completion is determined by the proportion of the costs incurred against theestimated total costs.The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, meansthat the following conditions shall be met simultaneously: ① The amount of revenue can be measured in a reliableway; ② The relevant economic benefits are likely to flow into the enterprise; ③ The schedule of completion underthe transaction can be confirmed in a reliable way; ④ The costs incurred or to be incurred in the transaction can bemeasured in a reliable way.If the Company can not measure the result of a transaction concerning the providing of labor services in a reliableway, it shall be conducted in accordance with the following circumstances, respectively: If the cost of laborservices incurred is expected to be compensated, the compensation amount for the cost of labor services shall berecognized as the revenue from providing labor service, and the cost of labor service incurred shall be as thecurrent cost; if the cost of labor services incurred is not expected to compensate, no revenue from the providing oflabor services may be recognized.Where a contract or agreement signed between Group and other enterprises concerns selling goods and providingof labor services, if the part of sale of goods and the part of providing labor services can be distinguished fromeach other and can be measured respectively, the part of sale of goods and the part of providing labor servicesshall be treated respectively. If the part of selling goods and the part of providing labor services can not bedistinguished from each other, or if the part of sale of goods and the part of providing labor services can bedistinguished from each other but can not be measured respectively, both parts shall be conducted as sellinggoods.

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(3) Royalty revenue

In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenueon accrual basis. In the Company’s daily accounting practices, it should be calculated and recognized according tothe chargeable time and methods in accordance with the relevant contract or agreement.

(4) Interest revenue

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

25. Government Subsidies

Government grants are transfer of monetary assets and non-monetary assets from the government to the Companyat no consideration, excluding the capital invested by the government as equity owner. Government grant can beclassified as grant related to the assets and grants related to the income. The government grants which wereacquired by the Company will be used to purchase or otherwise form become long-term assets will be defined asgrant related to the assets; the others will be defined as grants related to the income. If the files have not clearlydefined government grants objects, it will be divided in the following manner compartmentalize the grants intorant related to the assets and grants related to the income: (1) government documents defined specific projectstargets, according to the relative proportion of the budgets of specific items included the expenditure of to formassets and the expenditure will be charged into expense to be divided, the division ratio required at each balancesheet date for review and make changes if necessary; (2) government documents to make a general presentationpurposes only, does not specify a particular project, as grants related to the income.If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received orreceivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fairvalue cannot be reliably determined, it is measured at a nominal amount. A government grant measured at anominal amount is recognized immediately in profit or loss for the period.When received the government grants actually, recognized and measured them by the actual amount received.However, there is strong evidence that the end of fiscal support policies able to meet the conditions specified inthe relevant funds are expected to be able to receive financial support, measured at the amount receivable.Government grants are measured according to the amount receivable shall also comply with the followingconditions: (1) grants receivable of government departments issued a document entitled have been confirmed, orcould reasonably estimated in accordance with the relevant provisions of its own official release of financialresources management approach, and the expected amount of a material uncertainty which does not exist; (2) it isbased on the local financial sector to be officially released and financial support for the project and its financialfund management approach voluntarily disclosed in accordance with the provisions of “Regulations on DisclosureGovernment Information”, and the management approach should be (inclusive of any compliance businessconditions may apply), and not specifically formulated for specific businesses;(3) related grants approval has beenclearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that

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will be received within the prescribed period with the a reasonable assurance; (4) according to the specificcircumstances of the Company and the subsidy matter, should satisfy the other conditions (if any).A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or lossover the useful life of the related asset in a reasonable and systematic manner. For a government grant related toincome, if the grant is a compensation for related expenses or losses to be incurred in subsequent period, the grantis recognized as deferred income, and recognized in profit or loss over the periods in which the related costs arerecognized. If the grant is a compensation for related expenses or losses already incurred, the grant is recognizedimmediately in profit or loss for the period.Government subsidies including both assets-related parts and income-related parts should be treated separately. Ifit is difficult to separate, the government subsidies as a whole will be classified as income-related governmentgrants.The government grants related to the daily activities of the Company are included in other income or offset therelated costs according to the essence of the economic business. The government grants unrelated to the dailyactivities are included in the non-operating income and expenses.For repayment of a government grant already recognized, if there is a related deferred income, the repayment isoffset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for theperiod. If there is no related deferred income, the repayment is recognized immediately in profit or loss for theperiod.

26. Deferred Tax Assets and Deferred Tax Liabilities

(1) Income tax for the current period

At the balance sheet date, current income tax liabilities or assets for the current and prior periods are measured atthe amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation forincome tax expenses in the current period is based on the taxable income according to the related tax laws afteradjustment to the accounting profit of the reporting period.

(2) Deferred income tax assets and liabilities

For temporary differences between the carrying amount of certain assets or liabilities and their tax base, orbetween the nil carrying amount of those items that are not recognized as assets or liabilities and their tax basethat can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balancesheet liability method.For temporary differences associated with the initial recognition of goodwill and the initial recognition of an assetor liability arising from a transaction (not a business combination) that affects neither the accounting profit nortaxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized. Fortaxable temporary differences associated with investments in subsidiaries and associates, and interests in jointventures, no deferred income tax liability related is recognized except where the Company is able to control the

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timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse inthe foreseeable future. All deferred income tax liabilities arising from taxable temporary differences except theones mentioned above are recognized.For temporary deductible differences associated with the initial recognition of an asset or liability arising from atransaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductiblelosses) at the time of transaction, no deferred tax asset is recognized. For taxable temporary deductible differencesassociated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income taxasset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, or it isnot probable to obtain taxable income which can be used for the deduction of the temporary difference in thefuture. Except mentioned above, the Company recognizes other deferred income tax assets that can deducttemporary differences to the extent that it is probable that taxable profits will be available against which thedeductible temporary differences can be utilized.For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporarydifferences are recognized to the extent that it is probable that taxable profits will be available against which thedeductible temporary differences can be utilized.At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws,which are expected to apply in the period in which the asset is realized or the liability is settled.At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longerprobable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred taxassets to be used, the Company reduces the carrying amount of deferred tax assets. The amount of such reductionis reversed when it becomes probable that sufficient taxable profit will be available.

(3) Income tax expenses

Income tax expenses consist of current income tax and deferred income tax.The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit orloss in current accounting period, except expense for income tax of the current period and deferred income taxthat booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose frombusiness combination.

(4) Income tax offset

When we have the legal right, and have intended to, to make settlement with net amount or through the assetacquisition and liability fulfillment simultaneously, the Company shall present the net value from the offsetbetween current income tax asset and current income tax liability in the financial statement.When the Company has the legal right to make a settlement with the current income tax asset and current incometax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxablesubject under the same tax payer, or related to different taxable subject, but the intension of net value settlement inregard of the current income tax asset and current income tax liability, the Company shall present net value after

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the offset of deferred income tax asset and deferred income tax liability.

27. Leases

A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.

(1) The Company as Lessee under operating Lease

Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term,and either included in the cost of the related asset or charged to profit or loss for the current period. The contingentrents shall be recorded in the profit or loss of the period in which they actually arise.

(2) The Company as Leaser under operating Lease

Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis overthe lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis ismore systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period inwhich they actually arise.

(3) The Company as Lessee under financing Lease

For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at thelower of its fair value at the lease commencement and the present value of the minimum lease payments, and theminimum lease payment is recorded as the carrying amount of the long-term payables; the difference between therecorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognizedfinance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the leaseagreement shall be added to the amount recognized for the leased asset. The net amount of minimum leasepayment deducted by the unrecognized finance shall be separated into long-term liabilities and long-term liabilitywithin one year for presentation.Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingentrent shall be booked into profit or loss when actually incurred.

(4) In the case of the lessor of a financing lease

For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inceptionof the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value isrecorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs,and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned financeincome, which is amortized using the effective interest rate method over each period during the lease term.Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-termliability within one year for presentation.Unearned finance income shall be computed by the effective interest method during the lease term. Contingentrent shall be credited into profit or loss in which actually incurred.

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28. Other Significant Accounting Policies and Estimates

The Company is required to make judgments, estimates and assumptions about the carrying amounts of items inthe financial statements that cannot be measured accurately, due to the internal uncertainties of operation activities.These judgments, estimates and assumptions are based on historical experiences of the Company’s managementas well as other factors that are considered to be relevant. These judgments, estimates and assumptions may affectvalue of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency atthe balance sheet date. However, the result derived from those uncertainties in estimates may lead significantadjustments to the carrying amounts of the assets or liabilities affected in the future.The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern.Where the changes in accounting estimates only affect the period when changes occurred, and they are recognizedwithin the same period. Where the changes in accounting estimates affect both current period and future period,the changes are recognized within the period of change and future period.At balance sheet date, the followings are the significant areas where the Company needs to make judgment,estimates and assumptions over the value of items in the financial statements:

(1) Classification of lease

The Company classifies leases as operating lease and financing lease according to the rule stipulated in theAccounting Standard for Business Enterprises No. 21—Leasing. The management shall make analysis andjudgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, orwhether the Company has substantially held the risks and rewards related to the ownership of leased assets.

(2) Allowance for bad debt

According to the relevant accounting policies of the Company in receivables, allowance method is used for baddebt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable ofreceivables. Assurance of receivable impairment needs judgments and estimations from the management. Thedifference between actual results and original estimates shall have impact on the carrying amount of receivablesand receivable bad debt provisions or the reverse during the change of estimation.

(3) Impairment of inventories

The Company measures inventories by the lower of cost and realizable net value according to the accountingpolicies in regard of inventories and provisions for decline in value of inventories are made if the cost is higherthan their net realizable value and obsolete and slow-movement inventories. Inventories decline in value to netrealizable value is the estimated selling price in the ordinary course of business. Net realizable value is determinedon the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effectof post balance sheet events. The difference between the actual result and the original estimates shall have impacton reverse of the carrying amount of the inventories and their decline in value or provisions during the period ofchange.

(4) The fair value of financial instruments

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For a financial instrument which has no active market, the Company establishes fair value by using variousvaluation methods, including of discounted cash flow analysis model. The Company needs to estimate future cashflow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Suchassumptions have uncertainties and their changes shall have impact on the fair value of financial instruments.

(5) Impairment of long-term assets

The Company assesses whether there are any indicators of impairment for all non-current assets other thanfinancial assets at the balance sheet date. For an intangible asset that has indefinite useful life, impairment test ismade in addition to the annual impairment test if there is any indication of impairment. For non-current assetsother than financial assets, impairment test is made when there is any indication that its account balance cannot berecovered.Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal andpresent value of the future cash flows expected to be derived from the asset.Net value between the difference of fair value and disposal cost is determined by reference of the price of similarproduct in a sale agreement in an arm’s length transaction or an observable market price less the additional costdirectly attributable to the disposal of the asset.When estimating the present value of future cash flow, significant judgments are made over the asset’s production,selling price and relevant operating expenses, and discount rate used to calculate present value. All availablematerials that are considered to be relevant shall be used in the estimation of recoverable value. These materialsinclude estimations of production, selling price and operating expenses based on reasonable and supportableassumptions.The Company makes an impairment test for goodwill at least at each year end. This requires an estimation ofpresent value of future cash flow of the assets or assets group where goodwill has been allocated. The Companyshall makes estimation on the future cash flow derived from assets or assets group and determine an appropriatediscount rate for the present value of future cash flow when the estimation of present value of future cash flow ismade.

(6) Depreciation and amortization

Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-linemethod over their useful lives after taking into account residual value. The useful lives are regularly reviewed todetermine the depreciation and amortization costs charged in each reporting period. The useful lives aredetermined based on historical experience of similar assets and the estimated technical changes. If there is anindication that there has been a change in the factor used to determine the depreciation or amortization, the rate ofdepreciation or amortization is revised.

(7) Deferred tax assets

The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that futuretaxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This

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requires the management of the Company make a lot of judgments over the estimation of time period, value andtax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.

(8) Income tax

There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’severyday operation. If it is possible for any item to make expenditure before tax that needs to be approved fromcompetent tax authorities. If there is any difference between finalized determination value and their initialestimations value, the difference shall have the impact on the income tax and deferred income tax of the currentperiod during the final determination.

(9) Provisions

According with the terms of the contract, the existing knowledge and historical experience, product qualityassurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized asaccrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likelyto lead to the outflow of economic benefits of the Company, the Company or the best estimate of the currentobligation expenditure required recognized as a accrued liabilities. Recognition and measurement of accruedliabilities is dependent on the judgment of management. In the processing of judgment the company needed toappraise the related risks, uncertainties and time value of money and other factors.

29. Changes in Main Accounting Policies and Estimates

(1) Significant Changes in Accounting Policies

Contents of changes in accounting policies and reasons thereof	Approval procedures	Note
The Ministry of Finance issued the Notice on Revising and Issuing of Formats of 2019 Financial Statements for General Enterprises (CK[2019]No.6) (hereinafter referred to as “Revising Notice”) on 30 April 2019, in which the formats of financial statements for general enterprises are revised and non-financial enterprises carrying out accounting standards for business enterprises are required to prepare the financial statements for 2019, H1 of 2019 and subsequent periods in accordance with provisions stipulated in accounting standards for business enterprises and the Revising Notice. The Company belongs to the company that has implemented the new standards governing financial instruments but not carried out the new standards governing revenue and new standards	Reviewed and approved on the 10th Meeting of the 8th Board of Directors and the 9th Meeting of the 8th Supervisory Committee	For details, please refer to the announcement on changes in accounting policies disclosed on http://www.cninfo.com.cn

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governing leases. The Company adjustedthe formats of financial statements andpresentation of some items as required bythe Revising Notice.

In line with provisions of the Revising Notice, the Company adjusted the formats of financial statements asfollows:

① Balance sheet

The item of “notes receivable and accounts receivable” is split into two items of “notes receivable” and “accountsreceivable”;The item of “notes payable and accounts payable” is split into two items of “notes payable” and “accountspayable”;The item of “financing backed by accounts receivable” is added to reflect the notes receivable and accountsreceivable measured at fair value and changes thereof recorded into other comprehensive income on the balancesheet date.

② Income statement

The “less: asset impairment loss” is adjusted into “add: asset impairment loss (“-“ for loss)”;The “less: credit impairment loss” is adjusted into “add: credit impairment loss (“-“ for loss);For the item of “R&D expense”, the amortization of developing intangible assets recorded into administrativeexpense is supplemented;The item of “income from the derecognition of financial assets at amortized cost” is added to reflect gains orlosses of the Company from the derecognition of financial assets at amortized cost due to cases like transfer. Thisitem shall be filled based on the amount of classification item related to “investment income”, and “-“ for loss.

③ Cash flow statement

For cash flow statements, the filling requirements governing government subsidies are clarified that governmentsubsidies no matter related to assets or income are presented in the item of “cash generated from other operatingactivities”.

④ Statements of changes in owners’ equity

For statements of changes in owners’ equity, the filling requirements governing “capital increased by holders ofother equity instruments” are clarified to reflect the amount of capital increased by holders of financialinstruments except ordinary shares issued by the Company and classified as equity instruments. The item is filledbased on the amount of classification item related to financial instruments.

(2) Significant Changes in Accounting Estimates

Not applicable

(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New StandardsGoverning Financial Instruments, Revenue or Leases

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Consolidated Balance Sheet

Unit: RMB

Item	31 December 2018	1 January 2019	Adjusted
Current assets:
Monetary capital	1,705,760,865.12	1,705,760,865.12
Settlement reserve
Interbank loans granted
Trading financial assets	0.00	2,965,016,000.42	2,965,016,000.42
Financial assets at fair value through profit or loss	622,892.96	0.00	-622,892.96
Derivative financial assets
Notes receivable	1,347,427,811.34	1,347,427,811.34
Accounts receivable	29,748,068.74	29,748,068.74
Financing backed by accounts receivable
Prepayments	182,558,000.75	182,558,000.75
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables	43,342,878.22	43,342,878.22
Including: Interest receivable	24,923,178.08	24,923,178.08
Dividends receivable
Financial assets purchased under resale agreements
Inventories	2,407,306,664.86	2,407,306,664.86
Contract assets
Assets classified as held for sale
Current portion of non-current assets	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:
Loans and advances to

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customers
Investments in debt obligations
Available-for-sale financial assets	206,393,107.46	0.00	-206,393,107.46
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments	4,900,000.00	4,900,000.00
Investments in other equity instruments
Other non-current financial assets
Investment property	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
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	742,083,609.10	742,083,609.10
R&D expense
Goodwill	478,283,495.29	478,283,495.29
Long-term prepaid expense	83,561,473.46	83,561,473.46
Deferred income 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:
Short-term borrowings
Borrowings from central bank
Interbank loans obtained
Trading financial liabilities

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Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable	349,203,413.72	349,203,413.72
Accounts payable	484,952,598.59	484,952,598.59
Advances from customers	1,149,143,310.48	1,149,143,310.48
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Payroll 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: Interest payable
Dividends payable
Handling charges and commissions payable
Reinsurance payables
Contract liabilities
Liabilities directly associated with assets classified as held for sale
Current portion of non-current liabilities
Other current liabilities	295,164,745.44	295,164,745.44
Total current liabilities	4,300,777,316.66	4,300,777,316.66
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares

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Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income	76,636,500.55	76,636,500.55
Deferred income tax liabilities	102,764,515.11	102,764,515.11
Other non-current liabilities
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
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	4,794,830.59	0.00	-4,794,830.59
Specific reserve
Surplus reserves	256,902,260.27	256,902,260.27
General reserve
Retained earnings	5,541,281,341.47	5,546,076,172.06	4,794,830.59
Total equity attributable to owners of the Company as the parent	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

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(CK[2017]No.9), and the Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments(CK[2017]No.14). The Company starts to implement aforesaid new standards since 1 January 2019. In line with the link up rules,when the data of financial statements involved in prior years are inconsistent with the new standards, no adjustment is necessary.Specific items and amount thereof affected are presented in above adjustment statements.Balance Sheet of the Company as the Parent

Unit: RMB

Item	31 December 2018	1 January 2019	Adjusted
Current assets:
Monetary capital	1,078,172,917.59	1,078,172,917.59
Trading financial assets	0.00	1,807,016,000.42	1,807,016,000.42
Financial assets at fair value through profit or loss	622,892.96	0.00	-622,892.96
Derivative financial assets
Notes receivable	1,256,336,386.34	1,256,336,386.34
Accounts receivable	9,385,950.54	9,385,950.54
Financings backed by accounts receivable
Prepayments	10,869,911.54	10,869,911.54
Other receivables	110,800,665.19	110,800,665.19
Including: Interest receivable
Dividends receivable
Inventories	2,125,826,967.11	2,125,826,967.11
Contract assets
Assets classified as held for sale
Current portion of non-current assets
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:
Investments in debt obligations
Available-for-sale financial assets	206,393,107.46	0.00	-206,393,107.46
Investments in other debt obligations

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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	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
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	189,968,142.25	189,968,142.25
R&D expense
Goodwill
Long-term prepaid expense	56,643,945.05	56,643,945.05
Deferred income 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:
Short-term borrowings
Trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable	28,648,913.72	28,648,913.72
Accounts payable	362,290,556.21	362,290,556.21
Advances from customers	1,123,125,892.84	1,123,125,892.84
Contract liabilities
Payroll payable	117,748,485.96	117,748,485.96
Taxes payable	161,176,957.25	161,176,957.25

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Other payables	372,902,293.22	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	32,605,794.55	32,605,794.55
Total current liabilities	2,198,498,893.75	2,198,498,893.75
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Provisions
Deferred income
Deferred income tax liabilities	36,417,554.85	36,417,554.85
Other non-current liabilities	4,828,737.52	4,828,737.52
Total non-current liabilities
Total liabilities	41,246,292.37	41,246,292.37
Owners’ equity:	2,239,745,186.12	2,239,745,186.12
Share capital
Other equity instruments	503,600,000.00	503,600,000.00
Including: Preferred shares
Perpetual bonds
Capital reserves
Less: Treasury stock	1,247,162,107.35	1,247,162,107.35

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Other comprehensive income
Specific reserve	4,794,830.59	0.00	-4,794,830.59
Surplus reserves
General reserve	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

Category of taxes	Particulars about specific tax rate
VAT	Income tax was in accordance with 16%,13%, 10%,9% and 6% of tax rate to calculate output tax and according to the balance of the current the deductibility deduct the input tax to calculate value added tax.
Consumption tax	Sales of wine RMB1 per 1000 ml or per kg to calculate the amount of consumption tax, a flat rate, 20% of the annual turnover to calculate the amount of consumption tax at valorem.
Urban maintenance and construction tax	1%, 5%, 7% of the actual taxable turnover amount.
Education expenses surcharge	3% of the actual taxable turnover amount.
Local education surcharge	2% of the actual taxable turnover amount.
Enterprise income tax	For details, see the table below.

Name of the entities	Income tax rate
Anhui Longrui Glass Co., Ltd	15%
Anhui Ruisiweier Technology Co., Ltd	15%
Bozhou Gujin Rubbish Recycling Co., Ltd	5%

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Name of the entities	Income tax rate
Wuhan Yashibo Technology Co., Ltd	5%
Hubei Hechuanyuan Trade Co., Ltd	5%
Anhui Gujing Distillery Company Limited and its other subsidiaries	5%
Anhui Longrui Glass Co., Ltd	25%

Item	Ending balance	Beginning balance
Cash in treasury	374,122.81	353,429.67
Bank deposit	3,164,869,696.55	1,705,175,643.46
Other monetary funds	14,090,694.21	231,791.99

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Item	Ending balance	Beginning balance
Total	3,179,334,513.57	1,705,760,865.12
Of which: The total amount deposited in overseas	0.00	0.00

Item	Ending balance	Beginning balance
Financial assets at fair value through profit or loss	1,573,596,291.10	2,965,016,000.42
Of which:
Equity instrument investment	217,596,291.10	207,016,000.42
Other	1,356,000,000.00	2,758,000,000.00
Total	1,573,596,291.10	2,965,016,000.42

Item	Ending balance	Beginning balance
Bank acceptance bill	1,317,423,562.34	1,347,427,811.34
Trade acceptance bill	0.00	0.00
Total	1,317,423,562.34	1,347,427,811.34

Item	Pledged amount at the period-end
Bank acceptance bill	159,686,231.66
Trade acceptance bill	0.00
Total	159,686,231.66

Item	Amount of recognition termination at the period-end	Amount of not terminated recognition at the period-end
Bank acceptance bill	1,257,471,419.07	0.00

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Item	Amount of recognition termination at the period-end	Amount of not terminated recognition at the period-end
Trade acceptance bill	0.00	0.00
Total	1,257,471,419.07	0.00

Category	Ending balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Accounts receivable with significant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Accounts receivable withdrawal of bad debt provision of by credit risks characteristics:	30,811,517.08	100.00	724,824.38	2.35	30,086,692.70
Accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	30,811,517.08	100.00	724,824.38	2.35	30,086,692.70

Category	Beginning balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Accounts receivable with significant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Accounts receivable withdrawal of bad debt provision of by credit risks characteristics:	30,397,358.01	100.00	649,289.27	2.14	29,748,068.74
Accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	30,397,35	100.00	649,289	2.14	29,748,06

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Category	Beginning balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
	8.01		.27		8.74

Aging	Ending balance
	Account receivable	Bad debt provision	Withdrawal proportion (%)
Within 1 year	29,358,361.66	422,193.75	1.44
[Of which: within 6 months]	26,143,108.14	261,431.08	1.00
[7-12 months]	3,215,253.52	160,762.67	5.00
1 to 2 years	1,277,227.55	127,722.76	10.00
2 to 3 years	2,040.00	1,020.00	50.00
Over 3 years	173,887.87	173,887.87	100.00
Total	30,811,517.08	724,824.38	2.35

Aging	Ending balance		Beginning balance
	Amount	Proportion	Amount	Proportion
Within 1 year	125,311,525.02	96.48	182,122,465.92	99.76
1 to 2 years	4,576,890.83	3.52	145,534.83	0.08

~117~

Aging	Ending balance		Beginning balance
	Amount	Proportion	Amount	Proportion
2 to 3 years	0.00	0.00		0.00
Over 3 years	0.00	0.00	290,000.00	0.16
Total	129,888,415.85	100.00	182,558,000.75	100.00

Item	Ending balance	Beginning balance
Interest receivable	30,443,178.08	24,923,178.08
Dividend receivable	0.00	0.00
Other accounts receivable	18,085,233.37	18,419,700.14
Total	48,528,411.45	43,342,878.22

Item	Ending balance	Beginning balance
Interest of certificate of deposit	30,443,178.08	24,923,178.08
Total	30,443,178.08	24,923,178.08

Category	Ending balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Other accounts receivable with significant single amount for which bad debt provision separately accrued	40,850,949.35	67.12	40,850,949.35	100.00	0.00
Other accounts receivable withdrawn bad debt provision according to credit risks characteristics	20,009,405.04	32.88	1,924,171.67	9.62	18,085,233.37
Other accounts receivable with insignificant single amount for which	0.00	0.00	0.00	0.00	0.00

~118~

Category	Ending balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
bad debt provision separately accrued
Total	60,860,354.39	100.00	42,775,121.02	70.28	18,085,233.37

Category	Beginning balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Other accounts receivable with significant single amount for which bad debt provision separately accrued	40,850,949.35	67.20	40,850,949.35	100.00	0.00
Other accounts receivable withdrawn bad debt provision according to credit risks characteristics	19,942,837.52	32.80	1,523,137.38	7.64	18,419,700.14
Other accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	60,793,786.87	100.00	42,374,086.73	69.70	18,419,700.14

Other accounts receivable (by unit)	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	Enter enterprise bankruptcy liquidation
Jianqiao Securities Co., Ltd.	11,840,500.00	11,840,500.00	100.00	Enter enterprise bankruptcy liquidation

~119~

Other accounts receivable (by unit)	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	Enter enterprise bankruptcy liquidation
Total	40,850,949.35	40,850,949.35	100.00

Aging	Ending balance
	Other accounts receivable		Other accounts receivable
Within 1 year	17,302,210.29	218,377.57	1.26
[Of which: within 6 months]	16,168,323.61	161,683.24	1.00
[7-12 months]	1,133,886.68	56,694.33	5.00
1 to 2 years	861,702.24	86,170.22	10.00
2 to 3 years	451,737.27	225,868.64	50.00
Over 3 years	1,393,755.24	1,393,755.24	100.00
Total	20,009,405.04	1,924,171.67	9.62

Nature	Ending carrying amount	Beginning carrying amount
Securities investment	40,850,949.35	40,850,949.35
Margin &cash pledge	3,648,377.30	4,749,457.78
Business travel borrowing charges	1,176,663.88	426,435.85
Rent and utilities fee	8,688,782.19	6,786,659.62
Others	6,495,581.67	7,980,284.27
Total	60,860,354.39	60,793,786.87

~120~

Name of the entity	Relationship	Nature	Ending balance	Aging	Proportion (%)	Bad debt provision Ending balance
No.1	Non-related party	Securities investment	29,010,449.35	Over 3 years	47.67	29,010,449.35
No.2	Non-related party	Securities investment	11,840,500.00	Over 3 years	19.46	11,840,500.00
No. 3	Non-related party	Prepayment of oil fee	5,935,503.54	Within 6 months	9.75	59,355.04
No. 4	Non-related party	Cash deposit	640,288.05	Within 6 months	1.05	6,402.88
No. 5	Non-related party	Prepayment of oil fee	500,000.00	Within 6 months	0.82	5,000.00
Total	--	--	47,926,740.94	--	78.75	40,921,707.27

Item	Ending balance
	Carrying amount	Falling price reserves	Carrying value
Raw materials& package	158,807,985.16	19,753,803.07	139,054,182.09
Homemade semi-finished products and goods in process	2,107,408,415.79	0.00	2,107,408,415.79
Finished product	173,141,865.95	2,248,377.42	170,893,488.53
Total	2,439,358,266.90	22,002,180.49	2,417,356,086.41

Item	Beginning balance
	Carrying amount	Falling price reserves	Carrying value
Raw materials& package	144,856,930.02	13,808,554.40	131,048,375.62
Homemade semi-finished products and goods in process	1,957,452,112.24	0.00	1,957,452,112.24
Finished product	322,031,842.20	3,225,665.20	318,806,177.00
Total	2,424,340,884.46	17,034,219.60	2,407,306,664.86

~121~

Item	Beginning balance	Increase		Decrease		Ending balance
		Withdrawal	Others	Reverse or write-off	Others
Raw materials& package	13,808,554.40	5,945,248.67	0.00	0.00	0.00	19,753,803.07
Finished product	3,225,665.20	0.00	0.00	977,287.78	0.00	2,248,377.42
Total	17,034,219.60	5,945,248.67	0.00	977,287.78	0.00	22,002,180.49

Item	Specific basis of withdrawal of falling price reserves of inventory	Reasons for reversal	Reasons for write-off
Raw materials& package	The realizable net value was lower than the cost	--	The raw material withdrawn impairment disposed in Reporting Period
Finished product	The realizable net value was lower than the cost	--	The raw material withdrawn impairment disposed in Reporting Period

Item	Ending balance	Beginning balance
Pledged reverse repurchase of national debt	10,900,000.00	179,900,000.00
Tax to be deducted	18,638,776.67	74,578,687.20
Total	29,538,776.67	254,478,687.20

Item	Ending balance	Beginning balance	Notes
Current portion of non-current assets	300,000,000.00	300,000,000.00
Total	300,000,000.00	300,000,000.00

Investee

Beginnin

Increase/decrease

~122~

	g balance	Additional investment	Reduced investment	Gains and losses recognized under the equity method	Adjustment of other comprehensive income	Changes of other equity
I.Associated enterprise
Beijing Guge Trading Co., Ltd.	4,900,000.00	0.00	0.00	-164,994.19	0.00	0.00
Total	4,900,000.00	0.00	0.00	-164,994.19	0.00	0.00

Investee	Increase/decrease			Ending balance	Ending balance impairment provision
	Cash bonus or profits announced to issue	Withdrawal of impairment provision	Other
I.Associated enterprise
Beijing Guge Trading Co., Ltd.	0.00	0.00	0.00	4,735,005.81	0.00
Total	0.00	0.00	0.00	4,735,005.81	0.00

Item	Houses and buildings	Land use right	Total
I. Original carrying value
1. Beginning balance	8,680,555.75	2,644,592.00	11,325,147.75
2. Increased amount of the period	0.00	0.00	0.00
3. Decreased amount of the period	0.00	0.00	0.00
(1) Transfer to fixed assets	0.00	0.00	0.00
(2) Other transfer	0.00	0.00	0.00
4. Ending balance	8,680,555.75	2,644,592.00	11,325,147.75

~123~

Item	Houses and buildings	Land use right	Total
II. Accumulative depreciation and accumulative amortization
1. Beginning balance	5,654,245.92	643,673.30	6,297,919.22
2. Increased amount of the period	130,557.96	28,013.28	158,571.24
Withdrawal or amortization	130,557.96	28,013.28	158,571.24
Transfer from fixed assets	0.00	0.00	0.00
3. Decreased amount of the period	0.00	0.00	0.00
(1) Transfer to fixed assets	0.00	0.00	0.00
(2) Other transfer	0.00	0.00	0.00
4. Ending balance	5,784,803.88	671,686.58	6,456,490.46
III. Depreciation reserves
1. Beginning balance	0.00	0.00	0.00
2. Increased amount of the period	0.00	0.00	0.00
Withdrawal	0.00	0.00	0.00
3. Decreased amount of the period	0.00	0.00	0.00
(1) Transfer to fixed assets	0.00	0.00	0.00
(2) Other transfer	0.00	0.00	0.00
4. Ending balance	0.00	0.00	0.00
IV. Carrying value
1. Ending carrying value	2,895,751.87	1,972,905.42	4,868,657.29
2. Beginning carrying value	3,026,309.83	2,000,918.70	5,027,228.53

Item	Ending balance	Beginning balance
Fixed assets	1,684,243,384.48	1,763,988,530.56
Disposal of fixed assets	0.00	0.00
Total	1,684,243,384.48	1,763,988,530.56

Item

Houses and buildings

Machinery equipment

Transportation equipment

Office equipment and other

Total

~124~

Item	Houses and buildings	Machinery equipment	Transportation equipment	Office equipment and other	Total
I. Original carrying value
1. Beginning balance	2,006,674,799.70	920,022,112.79	58,064,314.20	157,194,996.51	3,141,956,223.20
2. Increased amount of the period	10,628,048.20	6,493,754.22	2,466,474.24	3,765,714.87	23,353,991.53
(1) Purchase	10,547,596.62	5,568,337.36	2,466,474.24	2,209,832.53	20,792,240.75
(2) Transfer of project under construction	80,451.58	925,416.86	0.00	1,555,882.34	2,561,750.78
(3) Enterprise combination increase	0.00	0.00	0.00	0.00	0.00
(4) Taking back of rental housing	0.00	0.00	0.00	0.00	0.00
3. Decreased amount of the period	186,521.55	4,308,790.12	1,212,091.63	650,860.17	6,358,263.47
(1) Disposal or scrap	186,521.55	4,308,790.12	1,212,091.63	650,860.17	6,358,263.47
(2) Transfer to investment property	0.00	0.00	0.00	0.00	0.00
4. Ending balance	2,017,116,326.35	922,207,076.89	59,318,696.81	160,309,851.21	3,158,951,951.26
II. Accumulative depreciation
1. Beginning balance	737,756,223.41	495,710,974.90	49,030,197.42	90,459,858.92	1,372,957,254.65
2. Increased amount of the period	35,879,060.65	49,319,894.61	2,484,811.80	14,393,028.27	102,076,795.33
(1) Withdrawal	35,879,060.65	49,319,894.61	2,484,811.80	14,393,028.27	102,076,795.33
(2) Enterprise combination increase	0.00	0.00	0.00	0.00	0.00
(3) Taking back of rental housing	0.00	0.00	0.00	0.00	0.00
3. Decreased amount of the period	163,672.92	3,326,105.71	1,166,618.20	633,731.57	5,290,128.40
(1) Disposal or scrap	163,672.92	3,326,105.71	1,166,618.20	633,731.57	5,290,128.40
(2) Transfer to investment property	0.00	0.00	0.00	0.00	0.00
4. Ending balance	773,471,611.14	541,704,763.80	50,348,391.02	104,219,155.62	1,469,743,921.58
III. Depreciation reserves
1. Beginning balance	3,396,292.79	1,020,057.51	7,047.07	587,040.62	5,010,437.99
2. Increased amount of the period	0.00	0.00	0.00	0.00	0.00
(1) Withdrawal	0.00	0.00	0.00	0.00	0.00
3. Decreased amount of the period	17,252.98	27,856.30	0.00	683.51	45,792.79
(1) Disposal or scrap	17,252.98	27,856.30	0.00	683.51	45,792.79
4. Ending balance	3,379,039.81	992,201.21	7,047.07	586,357.11	4,964,645.20

~125~

Item	Houses and buildings	Machinery equipment	Transportation equipment	Office equipment and other	Total
IV. Carrying value
1. Ending carrying value	1,240,265,675.40	379,510,111.88	8,963,258.72	55,504,338.48	1,684,243,384.48
2. Beginning carrying value	1,265,522,283.50	423,291,080.38	9,027,069.71	66,148,096.97	1,763,988,530.56

Item	Original carrying value	Accumulative depreciation	Impairment provision	Carrying value	Notes
Houses and buildings	10,553,688.29	7,074,810.79	3,379,039.81	99,837.69
Machinery equipment	7,337,349.26	6,287,337.89	992,201.21	57,810.16
Transportation equipment	58,119.66	49,329.00	7,047.07	1,743.59
Office equipment and others	923,873.41	309,813.59	586,357.11	27,702.71
Total	18,873,030.62	13,721,291.27	4,964,645.20	187,094.15

Item	Carrying value	Reason
Houses and building	756,078,944.64	In process
Total	756,078,944.64	--

Item	Ending balance	Beginning balance
Construction in process	162,876,312.37	93,320,557.56
Engineering materials	0.00	0.00
Total	162,876,312.37	93,320,557.56

Item	Ending balance			Beginning balance
	Carrying amount	Depreciation reserves	Carrying value	Carrying amount	Depreciation reserves	Carrying value
Digital marketing system	10,191,844.60	0.00	10,191,844.60	0.00	0.00	0.00
SAP ERP system		0.00		0.00	0.00	0.00

~126~

Item	Ending balance			Beginning balance
	Carrying amount	Depreciation reserves	Carrying value	Carrying amount	Depreciation reserves	Carrying value
	20,742,671.34		20,742,671.34
Gujing Party Construction Cultural Center	0.00	0.00	0.00	1,435,187.95	0.00	1,435,187.95
Renovation project of potential safety concerns	1,263,728.57	0.00	1,263,728.57	1,263,728.57	0.00	1,263,728.57
Equipment installation project	9,283,726.61	0.00	9,283,726.61	5,596,060.05	0.00	5,596,060.05
Desulfurization and denitrification project	29,676,888.70	0.00	29,676,888.70	28,768,115.33	0.00	28,768,115.33
Technical improvement project of automation of brewing	43,388,604.05	0.00	43,388,604.05	17,307,839.93	0.00	17,307,839.93
Half open wine library in Gujing plant	33,804,583.10	0.00	33,804,583.10	30,391,615.08	0.00	30,391,615.08
Phase I of Suizhou new factory	4,431,551.81	0.00	4,431,551.81	2,597,498.75	0.00	2,597,498.75
Other projects with small single amount	10,092,713.59	0.00	10,092,713.59	5,960,511.90	0.00	5,960,511.90
Total	162,876,312.37	0.00	162,876,312.37	93,320,557.56	0.00	93,320,557.56

Name o f item

Estimated number

Beginning balance

Increase Amount

Amount that transferred to fixed assets of the period

Other decreased amount of the period

Ending balance

~127~

Name o f item	Estimated number	Beginning balance	Increase Amount	Amount that transferred to fixed assets of the period	Other decreased amount of the period	Ending balance
Digital marketing system	3,500.00	0.00	10,191,844.60	0.00	0.00	10,191,844.60
SAP, ERP system	4,450.00	0.00	20,742,671.34	0.00	0.00	20,742,671.34
Gujing Party Construction Cultural Center	1,160.00	1,435,187.95	2,319,051.71	0.00	3,754,239.66	0.00
Renovation project of potential safety concerns	18,010.76	1,263,728.57	0.00	0.00	0.00	1,263,728.57
Equipment installation project	10,834.65	5,596,060.05	3,687,666.56	0.00	0.00	9,283,726.61
Desulfurization and denitrification project	7,176.00	28,768,115.33	908,773.37	0.00	0.00	29,676,888.70
Technical improvement project of automation of brewing	27,430.00	17,307,839.93	26,080,764.12	0.00	0.00	43,388,604.05
Half open wine library in Gujing plant	11,194.15	30,391,615.08	3,412,968.02	0.00	0.00	33,804,583.10
Phase I of Suizhou new factory	26,000.00	2,597,498.75	1,834,053.06	0.00	0.00	4,431,551.81
Other projects with small single amount	7,628.67	5,960,511.90	9,772,036.59	2,561,750.78	3,078,084.12	10,092,713.59

~128~

Name o f item	Estimated number	Beginning balance	Increase Amount	Amount that transferred to fixed assets of the period	Other decreased amount of the period	Ending balance
Total	117,384.23	93,320,557.56	78,949,829.37	2,561,750.78	6,832,323.78	162,876,312.37

Project name	Proportion estimated of the project accumulative input (%)	Project Progress (%)	Accumulative amount of capitalized interests	Of which: the amount of the capitalized interests of the period	Capitalization rate of the interests of the period (%)	Capital resources
Digital marketing system	29.12	65.00	0.00	0.00	0.00	Self-owned fund
SAP, ERP system	46.61	60.00	0.00	0.00	0.00	Self-owned fund
Gujing Party Construction Cultural Center	81.87	100.00	0.00	0.00	0.00	Self-owned fund
Renovation project of potential safety concerns	82.00	93.00	0.00	0.00	0.00	Self-owned fund
Equipment installation project	17.02	30.00	0.00	0.00	0.00	Self-owned fund
Desulfurization and denitrification project	41.67	96.00	0.00	0.00	0.00	Self-owned fund
Technical improvement project of automation of brewing	19.06	19.00	0.00	0.00	0.00	Self-owned fund
Half open wine library in Gujing plant	69.06	97.00	0.00	0.00	0.00	Self-owned fund
Phase I of Suizhou new factory	1.70	5.00	0.00	0.00	0.00	Self-owned

~129~

Project name	Proportion estimated of the project accumulative input (%)	Project Progress (%)	Accumulative amount of capitalized interests	Of which: the amount of the capitalized interests of the period	Capitalization rate of the interests of the period (%)	Capital resources
						fund
Other projects with small single amount	82.13	82.00	0.00	0.00	0.00	Self-owned fund
Total	--	--	0.00	0.00	0.00	--

Item	Land use right	Patent right	Software	Trademark	Total
I. Original carrying value
1. Beginning balance	683,451,302.56	45,889,466.19	32,106,185.73	169,116,600.00	930,563,554.48
2. Increased amount of the period	0.00	0.00	3,151,610.32	0.00	3,151,610.32
(1) Purchase	0.00	0.00	188,679.29	0.00	188,679.29
(2) Internal R & D	0.00	0.00	0.00	0.00	0.00
(3) Transfer of construction in progress	0.00	0.00	2,962,931.03	0.00	2,962,931.03
3. Decreased amount of the period	0.00	0.00	0.00	0.00	0.00
(1) Disposal	0.00	0.00	0.00	0.00	0.00
4. Ending balance	683,451,302.56	45,889,466.19	35,257,796.05	169,116,600.00	933,715,164.80
II. Accumulated amortization
1. Beginning balance	129,394,359.27	45,769,591.73	12,944,725.23	371,269.15	188,479,945.38
2. Increased amount of the period	7,191,799.45	24,038.88	4,979,696.88	0.00	12,195,535.21
(1) Withdrawal	7,191,799.45	24,038.88	4,979,696.88	0.00	12,195,535.21
3. Decreased amount of the period	0.00	0.00	0.00	0.00	0.00
(1) Disposal	0.00	0.00	0.00	0.00	0.00

~130~

Item	Land use right	Patent right	Software	Trademark	Total
4. Ending balance	136,586,158.72	45,793,630.61	17,924,422.11	371,269.15	200,675,480.59
III. Depreciation reserves
1. Beginning balance	0.00	0.00	0.00	0.00	0.00
2. Increased amount of the period	0.00	0.00	0.00	0.00	0.00
(1) Withdrawal	0.00	0.00	0.00	0.00	0.00
3. Decreased amount of the period	0.00	0.00	0.00	0.00	0.00
(1) Disposal	0.00	0.00	0.00	0.00	0.00
4. Ending balance	0.00	0.00	0.00	0.00	0.00
IV. Carrying value
1. Ending carrying value	546,865,143.84	95,835.58	17,333,373.94	168,745,330.85	733,039,684.21
2. Beginning carrying value	554,056,943.29	119,874.46	19,161,460.50	168,745,330.85	742,083,609.10

Item	Beginning balance	Increase		Decrease		Ending balance
		Generated from enterprise merger	Other	Disposal	Other
Yellow Crane Tower Distillery Co., Ltd.	478,283,495.29	0.00	0.00	0.00	0.00	478,283,495.29
Total	478,283,495.29	0.00	0.00	0.00	0.00	478,283,495.29

Item	Beginning balance	Increased amount	Amortization amount	Other decrease	Ending balance
Experience center	36,671,977.31	36,354.70	4,748,907.28	0.00	31,959,424.73
Pottery jar warehouse	6,244,584.78	0.00	2,203,971.00	0.00	4,040,613.78
Sewage Treatment Project	3,050,000.00	1,640,000.00	461,311.50	0.00	4,228,688.50
Yellow Crane Tower Chateau and museum	16,531,666.46	0.00	2,328,900.37	0.00	14,202,766.09
Gujing Party Construction Cultural Center	5,909,090.91	3,754,239.66	1,112,331.25	0.00	8,550,999.32

~131~

Item	Beginning balance	Increased amount	Amortization amount	Other decrease	Ending balance
Other projects with small single amount	15,154,154.00	267,253.54	2,631,299.17	0.00	12,790,108.37
Total	83,561,473.46	5,697,847.90	13,486,720.57	0.00	75,772,600.79

Item	Ending balance		Beginning balance
	Deductible temporary differences	Deferred income tax assets	Deductible temporary differences	Deferred income tax assets
Bad debt provision	43,499,945.40	10,866,529.15	43,023,376.00	10,749,392.31
Impairment of inventories	21,985,965.74	5,461,318.38	17,018,004.85	4,219,328.16
Impairment provision of the fixed assets	4,964,645.20	1,241,161.31	5,010,437.99	1,252,609.50
Deferred income	74,300,122.46	18,308,505.09	76,636,500.55	18,877,272.61
Accrued expenses and discount	437,378,318.85	109,344,579.72	153,988,413.40	38,497,103.35
Deductible losses	1,768,111.99	410,365.65	111,851.71	5,592.58
Unrealized internal profits	17,201,753.99	4,285,249.29	16,788,054.95	4,181,824.54
Change of fair value of trading financial assets	0.00	0.00	117,161.92	29,290.48
Deducted payroll payable carryingforward to the next period	0.00	0.00	35,071,030.14	8,767,757.53
Total	601,098,863.63	149,917,708.59	347,764,831.51	86,580,171.06

Item	Ending balance		Beginning balance
	Taxable temporary differences	Deferred income tax liabilities	Taxable temporary differences	Deferred income tax liabilities
Change of fair value of trading financial assets	17,596,291.10	4,399,072.78	0.00	0.00

~132~

Change in fair value of available-for-sale financial assets			6,393,107.46	1,598,276.87
accelerated depreciation of difference of fixed assets	12,591,595.58	3,147,898.89	12,921,842.60	3,230,460.65
Asset evaluation increment of business combination not under the same control	387,776,186.92	96,944,046.73	391,743,110.36	97,935,777.59
Total	417,964,073.60	104,491,018.40	411,058,060.42	102,764,515.11

Item	Ending balance	Beginning balance
Deductible temporary difference	16,214.75	16,214.75
Deductible losses	5,432,144.69	5,089,008.12
Total	5,448,359.44	5,105,222.87

Item	Ending balance	Beginning balance
Certificate of deposit	200,000,000.00	0.00
Prepayment of equipment and house purchase	574,026.00	16,544,407.51
Total	200,574,026.00	16,544,407.51

Category	Ending balance	Beginning balance
Bank acceptance bill	428,927,100.00	320,554,500.00
Trade acceptance	47,881,240.53	28,648,913.72
Total	476,808,340.53	349,203,413.72

Item	Ending balance	Beginning balance
Payment for materials	205,184,631.16	277,765,943.47
Prepayment for projects and equipment	67,828,201.29	111,498,555.89
Others	64,520,149.31	95,688,099.23
Total	337,532,981.76	484,952,598.59

~133~

(2) Significant Accounts Payable Aging over One Year

Item	Ending balance	Unpaid/ Un-carry-over reason
A Company	1,115,215.57	Final payment of the project
B Company	7,544,026.71	Final payment of the project
C Company	3,744,927.40	Final payment of the project
D Company	1,300,000.00	Final payment of the project
E Company	3,445,131.03	Final payment of the project
Total	17,149,300.71	--

Item	Ending balance	Beginning balance
Loans	517,109,674.60	1,149,143,310.48
Total	517,109,674.60	1,149,143,310.48

Item	Beginning balance	Increase	Decrease	Ending balance
I. Short-term salary	456,935,872.94	787,677,386.74	934,115,923.79	310,497,335.89
II. Post-employment benefit-defined contribution plans	363,603.49	69,442,152.68	69,456,442.83	349,313.34
III. Termination benefits	0.00	0.00	0.00	0.00
IV. Other benefits due within one year	0.00	0.00	0.00	0.00
Total	457,299,476.43	857,119,539.42	1,003,572,366.62	310,846,649.23

Item	Beginning balance	Increase	Decrease	Ending balance
1. Salary, bonus, allowance, subsidy	371,643,470.87	709,042,606.80	850,536,199.87	230,149,877.80
2. Employee welfare	6,468,163.00	9,972,320.26	16,440,483.26	0.00
3. Social insurance	233,210.91	27,163,747.13	27,393,663.48	3,294.56
Of which: Medical insurance premiums	226,816.90	24,127,024.75	24,350,547.09	3,294.56
Work-related injury insurance	1,487.67	949,793.30	951,280.97	0.00

~134~

Item	Beginning balance	Increase	Decrease	Ending balance
Maternity insurance	4,906.34	2,086,929.08	2,091,835.42	0.00
4. Housing fund	2,867,327.46	30,502,119.49	29,425,126.35	3,944,320.60
5.Labor union budget and employee education budget	75,723,700.70	10,996,593.06	10,320,450.83	76,399,842.93
6. Short-term paid absence	0.00	0.00	0.00	0.00
7. Short-term profits sharing plan	0.00	0.00	0.00	0.00
Total	456,935,872.94	787,677,386.74	934,115,923.79	310,497,335.89

Item	Beginning balance	Increase	Decrease	Ending balance
1. Basic pension benefits	347,894.88	66,950,290.72	66,948,872.26	349,313.34
2. Unemployment insurance	15,708.61	2,491,861.96	2,507,570.57	0.00
Total	363,603.49	69,442,152.68	69,456,442.83	349,313.34

Item	Ending balance	Beginning balance
VAT	89,384,986.50	162,028,367.23
Consumption tax	113,591,123.33	99,133,181.43
Corporate income tax	139,532,581.81	75,107,410.70
Personal income tax	1,564,596.45	1,307,281.11
Urban maintenance and construction tax	10,863,973.17	13,142,342.60
Stamp tax	746,938.60	549,270.06
Education Surcharge	10,275,939.43	12,301,477.16
Others	2,783,142.76	9,424,293.89
Total	368,743,282.05	372,993,624.18

Nature	Ending balance	Beginning balance
Interest payable	0.00	0.00
Dividend payable	0.00	0.00
Other accounts payable	1,337,734,331.13	1,192,020,147.82

~135~

Nature	Ending balance	Beginning balance
Total	1,337,734,331.13	1,192,020,147.82

Nature	Ending balance	Beginning balance
Margin and cash pledge	1,211,205,092.51	1,064,059,562.95
Business travel charges advance	72,197.21	145,447.82
Quality guarantee deposit	33,390,136.01	14,693,150.14
Housing deduction	3,944,320.60	2,867,327.46
Unsettled sales discount	18,404,995.42	30,212,626.88
Others	70,717,589.38	80,042,032.57
Total	1,337,734,331.13	1,192,020,147.82

Item	Ending balance	Beginning balance
Accrued expenses	443,198,383.65	295,164,745.44
Total	443,198,383.65	295,164,745.44

Item	Beginning balance	Increase	Decrease	Ending balance	Formed reason
Government subsidies	76,636,500.55	113,800.00	2,450,178.09	74,300,122.46	Related to assets
Total	76,636,500.55	113,800.00	2,450,178.09	74,300,122.46	--

Item	Beginning balance	Newly-increased amount of subsidy	Recorded into non-operating revenue	Recorded into other income	Other changes	Ending balance	Related to assets/related to income
Technical reform of wine production system	255,208.43	0.00	0.00	31,249.98	0.00	223,958.45	Related to the assets
Instruments subsidies	992,250.00	0.00	0.00	110,250.00	0.00	882,000.00	Related to

~136~

Item	Beginning balance	Newly-increased amount of subsidy	Recorded into non-operating revenue	Recorded into other income	Other changes	Ending balance	Related to assets/related to income
							the assets
Intelligent solid brewing technology innovation project	151,041.57	0.00	0.00	15,625.02	0.00	135,416.55	Related to the assets
Anhui service industry development guide fund	1,087,805.00	0.00	0.00	146,341.44	0.00	941,463.56	Related to the assets
Anhui innovative province construction independent innovation ability construction subsidy	2,678,665.00	0.00	0.00	365,272.50	0.00	2,313,392.50	Related to the assets
Energy-saving and reform project of coal-fired industry boiler and glass furnace	12,750.00	0.00	0.00	12,750.00	0.00	0.00	Related to the assets
Bozhou city logistics center project	60,000.00	0.00	0.00	30,000.00	0.00	30,000.00	Related to the assets
Equipment subsidy	1,252,062.37	0.00	0.00	101,399.82	0.00	1,150,662.55	Related to the assets
Financial subsidy for technology innovation	415,930.90	0.00	0.00	267,110.76	0.00	148,820.14	Related to the assets
Special fund to enterprise development	52,500.00	0.00	0.00	15,000.00	0.00	37,500.00	Related to the assets
Iot traceability system project	2,970,000.00	0.00	0.00	556,875.00	0.00	2,413,125.00	Related to assets
Infrastructure subsidies of Suizhou new factory	35,338,000.00	0.00	0.00	0.00	0.00	35,338,000.00	Related to assets
Motor and boiler energy-saving reform project	412,500.20	0.00	0.00	68,749.98	0.00	343,750.22	Related to assets
Automated storage hook and product quality online monitoring	359,375.00	0.00	0.00	46,875.00	0.00	312,500.00	Related to assets

~137~

Item	Beginning balance	Newly-increased amount of subsidy	Recorded into non-operating revenue	Recorded into other income	Other changes	Ending balance	Related to assets/related to income
Research fund on smart Koji-making technology	886,200.00	113,800.00	0.00	0.00	0.00	1,000,000.00	Related to assets
Renovation of Gujing Zhangji Spirit Room	882,708.39	0.00	0.00	23,749.98	0.00	858,958.41	Related to assets
Food security enhancement project	827,586.25	0.00	0.00	68,965.50	0.00	758,620.75	Related to assets
Key technical cooperation on isotopic authenticity of important food	600,000.00	0.00	0.00	0.00	0.00	600,000.00	Related to assets
Comprehensive subsidies for air pollution prevention	2,608,083.33	0.00	0.00	131,500.02	0.00	2,476,583.31	Related to assets
Fund of strategic emerging industries cluster development foundation	1,020,800.00	0.00	0.00	111,360.00	0.00	909,440.00	Related to assets
Land refund	23,113,034.11	0.00	0.00	275,103.09	0.00	22,837,931.02	Related to assets
Special fund to power demand side management	660,000.00	0.00	0.00	72,000.00	0.00	588,000.00	Related to assets
Total	76,636,500.55	113,800.00	0.00	2,450,178.09	0.00	74,300,122.46	--

Item	Beginning balance	Increase/decrease in Reporting Period (+/-)					Ending balance
		Newly issue share	Bonus shares	Bonus issue from profit	Others	Subtotal
The sum of shares	503,600,000.00	0.00	0.00	0.00	0.00	0.00	503,600,000.00

Item	Beginning balance	Increase	Decrease	Ending balance
Capital premium	1,262,552,456.05	0.00	0.00	1,262,552,456.05
Other capital reserves	32,853,136.20	0.00	0.00	32,853,136.20

~138~

Item	Beginning balance	Increase	Decrease	Ending balance
Total	1,295,405,592.25	0.00	0.00	1,295,405,592.25

Item	Beginning balance	Increase	Decrease	Ending balance
Statutory surplus reserves	256,902,260.27	0.00	0.00	256,902,260.27
Total	256,902,260.27	0.00	0.00	256,902,260.27

Item	Reporting Period	Same period of last year
Beginning balance of retained profits before adjustments	5,541,281,341.47	4,349,649,698.42
Total beginning balance of retained profits before adjustments (Increase+, decrease-)	4,794,830.59	0.00
Beginning balance of retained profits after adjustments	5,546,076,172.06	4,349,649,698.42
Add: Net profit attributable to owners of the Company	1,248,316,314.01	1,695,231,643.05
Less: Withdrawal of statutory surplus reserves	0.00	0.00
Withdrawal of discretional surplus reserves	0.00	0.00
Withdrawal of generic risk reserve	0.00	0.00
Dividend of common stock payable	755,400,000.00	503,600,000.00
Dividend of common stock transfer into share capital	0.00	0.00
Ending retained profits	6,038,992,486.07	5,541,281,341.47

Item	Reporting Period		Same period of last year
	Sales revenue	Cost of sales	Sales revenue	Cost of sales
Main operations	5,958,624,293.86	1,380,565,871.04	4,761,127,411.98	1,030,168,914.20
Other operations	29,488,705.23	13,590,863.51	21,956,483.35	12,506,554.04
Total	5,988,112,999.09	1,394,156,734.55	4,783,083,895.33	1,042,675,468.24

Item

Reporting Period

Same period of last year

~139~

Item	Reporting Period	Same period of last year
Consumption tax	711,806,689.93	563,325,650.24
Urban maintenance, construction tax and educational surcharge	138,007,221.23	142,213,013.80
Urban land use tax	3,447,726.79	6,015,282.37
Real estate tax	4,547,732.36	8,375,687.33
Stamp duty	5,043,756.63	3,804,040.42
Others	6,674,635.10	5,733,499.37
Total	869,527,762.04	729,467,173.53

Item	Reporting Period	Same period of last year
Employee’s remuneration	197,359,561.67	136,422,226.05
Business travel charges	60,001,666.01	46,668,654.04
Advertising expense	442,193,538.62	340,669,501.89
Transport fees	27,580,054.90	26,869,004.77
Comprehensive promotion fees	787,961,795.81	815,172,181.29
Labor cost	281,570,342.23	194,269,250.64
Other sales expenses	43,822,480.46	37,229,496.49
Total	1,840,489,439.70	1,597,300,315.17

Item	Reporting Period	Same period of last year
Employee’s remuneration	180,945,738.54	156,429,758.02
Office expenses	17,415,335.29	15,386,308.57
Repair charge	17,708,807.57	30,444,032.33
Depreciation charge	30,873,944.56	29,064,059.09
Amortization of intangible assets	9,656,033.10	8,489,059.99
Sewage charge	9,730,796.01	6,066,176.72
Business travel charges	1,375,252.69	1,093,709.89

~140~

Item	Reporting Period	Same period of last year
Water & electricity fees	6,162,660.18	5,668,025.21
Others	28,176,889.19	19,832,073.54
Total	302,045,457.13	272,473,203.36

Item	Reporting Period	Same period of last year
Employee’s remuneration	8,702,736.52	4,225,844.44
Direct input expense	1,225,388.53	665,769.98
Depreciation expense	1,633,752.38	1,071,724.10
Other related expense	3,102,360.24	2,063,795.84
Total	14,664,237.67	8,027,134.36

Item	Reporting Period	Same period of last year
Interest expenses	14,173,972.09	0.00
Less: Interest income	20,466,649.02	21,644,883.48
Exchange gains and losses	1,577,281.36	608,331.71
Others	412,770.27	751,645.22
Total	-4,302,625.30	-20,284,906.55

Item	Reporting Period	Same period of last year
Bad debt loss	-476,569.40	105,638.14
Inventory falling price loss	-5,945,248.67	-1,277,549.50
Total	-6,421,818.07	-1,171,911.36

Sources	Reporting Period	Same period of last year
Trading financial assets	11,320,345.56	236,707.77
Of which: gains on changes in fair value of derivative financial assets	0.00	0.00
Total	11,320,345.56	236,707.77

~141~

39. Investment Income

Item	Reporting Period	Same period of last year
Long-term equity investment income accounted by equity method	-164,994.19	0.00
Investment income from disposal of long-term equity investment
Investment income from holding of trading financial assets
Investment income from disposal of trading financial assets	0.00	1,271,471.00
Dividend income from holding of other equity instrument investment
Investment income from holding of held-to-maturity investment	0.00	0.00
Investment income from holding of available-for-dale financial assets	0.00	50,743,630.89
Investment income from disposal of available-for-sale financial assets	0.00	10,999,123.54
Investment income from disposal of held-to-maturity investment
Income from remeasurement of residual stock rights at fair value after losing control power
Interest income from holding of creditors’ investment
Interest income from holding of other creditors’ investment
Interest income from disposal of other creditors’ investment
Other investment income	77,512,041.72	5,760,794.52
Total	77,347,047.53	68,775,019.95

Item	Reporting Period	Same period of last year	Amount recorded in the current non-recurring profit or loss
Fixed assets disposal income	119,488.56	154,437.81	119,488.56
Total	119,488.56	154,437.81	119,488.56

~142~

41. Other Income

Item	Reporting Period	Same period of last year	Amount recorded in the current non-recurring profit or loss
Tax rebates	15,816,253.89	1,426,552.29	15,816,253.89
Amortization of differed income	2,450,178.09	2,566,383.76	2,450,178.09
Government subsidy related to routine business activities	12,517,486.70	494,100.00	12,517,486.70
Total	30,783,918.68	4,487,036.05	30,783,918.68

Item	Reporting Period	Same period of last year	Amount recorded in the current non-recurring profit or loss
Gains from damage or scrap of non-current assets	146,982.76	728,876.14	146,982.76
Government subsidy unrelated to routine business activities	20,000.00	221,000.00	20,000.00
Income from penalty and compensations	9,154,446.13	7,587,991.61	9,154,446.13
Sales of scrap	1,527,143.43	5,808,369.37	1,527,143.43
Other	302,191.21	412,560.64	302,191.21
Total	11,150,763.53	14,758,797.76	11,150,763.53

Item	Reporting Period			Same period of last year			Related to the assets/related to income
	Recorded into non-operating income	Recorded into other income	Offset costs	Recorded into non-operating income	Recorded into other income	Offset costs
Other rewards	20,000.00	0.00	0.00	21,000.00	0.00	0.00	Related to income
Reward of taxpayer in Xiannning high-tech zone	0.00	0.00	0.00	100,000.00	0.00	0.00	Related to income
Fund for postdoctoral	0.00	0.00	0.00	100,000.00	0.00	0.00	Related to income

~143~

Item	Reporting Period			Same period of last year			Related to the assets/related to income
	Recorded into non-operating income	Recorded into other income	Offset costs	Recorded into non-operating income	Recorded into other income	Offset costs
innovation practice base
Total	20,000.00	0.00	0.00	221,000.00	0.00	0.00	--

Item	Reporting Period	Same period of last year	Amount recorded in the current non-recurring profit or loss
Losses on damage or scrap of non-current assets	576,926.25	4,303,286.91	576,926.25
Other	1,160,684.82	134,726.13	1,160,684.82
Total	1,737,611.07	4,438,013.04	1,737,611.07

Item	Reporting Period	Same period of last year
Current income tax expense	479,158,161.69	452,080,424.72
Deferred income tax expense	-60,012,757.38	-131,290,509.48
Total	419,145,404.31	320,789,915.24

Item	Reporting Period	Same period of last year
Margin	103,959,881.28	52,007,634.47
Government subsidies	11,786,600.00	615,100.00
Interest income	20,466,649.02	21,644,883.48
Recovery of restricted monetary capital	100,200,000.00	460,000,000.00
Other	40,318,774.38	43,953,555.36
Total	276,731,904.68	578,221,173.31

~144~

Item	Reporting Period	Same period of last year
Cash paid in selling expense and administrative expense	657,188,029.24	526,682,839.55
Pledged fixed term deposits used to issue notes payable or cash deposit of notes	13,960,226.78	45,000,000.00
Structural deposit not withdrawable in advance	0.00	0.00
Other	25,350,534.61	49,502,450.93
Total	696,498,790.63	621,185,290.48

Supplemental information	Reporting Period	Same period of last year
1. Reconciliation of net profit to net cash flows generated from operating activities
Net profit	1,274,948,723.71	915,437,666.92
Add: Provision for impairment of assets	6,421,818.07	1,171,911.36
Depreciation of fixed assets, oil-gas assets, and productive living assets	102,076,795.33	96,520,768.95
Amortization of investment property	158,571.24	168,913.08
Amortization of intangible assets	12,195,535.21	8,489,059.99
Amortization of long-term prepaid expenses	13,486,720.57	10,844,242.64
Losses on disposal of fixed assets, intangible assets and other long-lived assets (gains: negative)	-119,488.56	154,437.81
Losses on scrap of fixed assets (gains: negative)	429,943.49	3,574,410.77
Losses from variation of fair value (gains: negative)	-11,320,345.56	-236,707.77
Finance costs (gains: negative)	14,173,972.09	608,331.71
Investment loss (gains: negative)	-77,347,047.53	-68,775,019.95
Decrease in deferred income tax assets (gains: negative)	-63,337,537.53	-131,582,903.72
Increase in deferred income tax liabilities (“-” means decrease)	3,324,780.16	292,394.23
Decrease in inventory (gains: negative)	-14,040,094.66	-77,733,707.57
Decrease in accounts receivable generated from operating activities (gains: negative)	146,484,134.95	-1,205,967,657.32
Increase in accounts payable used in operating activities (decrease: negative)	-463,552,554.06	708,414,366.71

~145~

Supplemental information	Reporting Period	Same period of last year
Amortization of deferred income	-2,450,178.09	2,566,383.76
Certificate of deposit	100,200,000.00	405,000,000.00
Net cash generated from/used in operating activities	1,041,733,748.83	668,946,891.61
2. Significant investing and financing activities without involvement of cash receipts and payments
Conversion of debt into capital	0.00	0.00
Convertible corporate bonds due within one year	0.00	0.00
Fixed assets under financing lease	0.00	0.00
3. Net increase/decrease of cash and cash equivalents:
Ending balance of cash	2,395,374,286.79	922,785,957.41
Less: Beginning balance of cash	835,560,865.12	1,024,088,626.40
Add: Ending balance of cash equivalents	0.00	0.00
Less: Beginning balance of cash equivalents	0.00	0.00
Net increase in cash and cash equivalents	1,559,813,421.67	-101,302,668.99

Item	Ending balance	Beginning balance
I. Cash	2,395,374,286.79	835,560,865.12
Of which: cash on hand	374,122.81	353,429.67
Bank deposits on demand	2,394,869,696.55	835,175,643.46
Other monetary funds on demand	130,467.43	31,791.99
II. Cash and cash equivalents	0.00	0.00
Of which: Bond investment due within three months	0.00	0.00
III. Ending balance of cash and cash equivalents	2,395,374,286.79	835,560,865.12

Item	Reporting Period
Negotiability amount of trade bills	639,142,983.76
Of which: Payment for goods	630,885,014.82

~146~

Item	Reporting Period
Purchase of fixed assets and other long-term assets	8,257,968.94

Item	Ending carrying value	Restriction reason
Other monetary capital	770,000,000.00	Structural deposit not withdrawable in advance, due within 3 months
Notes receivable	159,686,231.66	Pledge for issuing bank acceptance bill
Other monetary capital	13,960,226.78	Bill deposit
Total	943,646,458.44	--

Category	Amount	Presented item	Amount recorded into current profit or loss
Tax rebates	15,816,253.89	Other income	15,816,253.89
Project fund of 2018 manufacturing industry province	9,180,000.00	Other income	9,180,000.00
Reward of demonstration enterprise in national intellectual property	1,200,000.00	Other income	1,200,000.00
Subsidy for stabilizing posts of unemployment insurance fund	2,000.00	Other income	2,000.00
Subsidy of Bureau of Science and Technology of Xianning	50,000.00	Other income	50,000.00
Subsidy for special workstation of Bureau of Science and Technology of Wuhan	200,000.00	Other income	200,000.00
Fund for industrial enterprise technology project in Xianning high-tech zone	200,000.00	Other income	200,000.00
Reward of Bureau of Science and Technology of Bozhou	50,000.00	Other income	50,000.00
Fund for robot project of Economy and Information Technology Committee	300,000.00	Other income	300,000.00
Research fund on smart Koji-making technology	113,800.00	Deferred income	0.00
Other rewards	470,800.00	Other income	470,800.00
Additional deduction of VAT	864,686.70	Other income	864,686.70
Other rewards	20,000.00	Non-operating	20,000.00

~147~

Category	Amount	Presented item	Amount recorded into current profit or loss
		income
Total	28,467,540.59	--	28,353,740.59

Name	Main operating place	Registration place	Nature of business	Holding percentage (%)		Way of gaining
				Directly	Indirectly
Bozhou Gujing Sales Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Business trading	100.00		Investment
Anhui Longrui Glass Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Production	100.00		Investment
Bozhou Gujing Waste Reclamation Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Waste cycled	100.00		Investment
Anhui Jinyunlai Culture & Media Co., Ltd.	Hefei Anhui	Hefei Anhui	Ads marketing	100.00		Investment
Anhui Swisse Will Science & Technology Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Technology research	100.00		Investment
Anhui Subway Cordial Wine Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Production	100.00		Investment
Shanghai Gujing Jinhao Hotel Management Co., Ltd.	Shanghai	Shanghai	Hotel management	100.00		Business combination under the same control
Bozhou Gujing Hotel Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Hotel operating	100.00		Business combination under the same control

~148~

Name	Main operating place	Registration place	Nature of business	Holding percentage (%)		Way of gaining
				Directly	Indirectly
Anhui Yuanqing Environmental Co. , Ltd.	Bozhou, Anhui	Bozhou, Anhui	Sewage Treatment	100.00		Investment
Anhui Gujing Cloud E-commerce Co., Ltd.	Hefei, Anhui	Hefei, Anhui	E-commerce	100.00		Investment
Anhui Zhenrui Construction Engineering Co., Ltd.	Bozhou, Anhui	Bozhou, Anhui	Engineering construction	100.00		Investment
Anhui RunAnXinKe Testing Technology Co., Ltd	Bozhou, Anhui	Bozhou, Anhui	Food detection	100.00		Investment
Wuhan Pride Yellow Crane Tower Distillery Co., Ltd.	Wuhan, Hubei	Wuhan, Hubei	Production	51.00		Business combination not under the same control
Pride Yellow Crane Tower Distillery (Xianning) Co., Ltd.	Xianning, Hubei	Xianning, Hubei	Production		51.00	Business combination not under the same control
Hubei Yellow Crane Tower Distillery Co., Ltd.	Suizhou, Hubei	Suizhou, Hubei	Production		51.00	Business combination not under the same control
Tian Long Jin Di (Wuhan) Co., Ltd.	Wuhan, Hubei	Wuhan, Hubei	Commercial trade		51.00	Business combination not under the same control
Xianning Junhe Sales Co., Ltd.	Xianning, Hubei	Xianning, Hubei	Commercial trade		51.00	Business combination not under the same control
Hubei Junhe Advertising Co., Ltd.	Wuhan, Hubei	Wuhan, Hubei	Ads marketing		51.00	Business combination not under the same control
Wuhan Junya Shibo Technology Co., Ltd.	Wuhan, Hubei	Wuhan, Hubei	Technology development		51.00	Investment
Wuhan Junya Sales Co., Ltd.	Wuhan,	Wuhan, Hubei	Commercial		51.00	Investment

~149~

Name	Main operating place	Registration place	Nature of business	Holding percentage (%)		Way of gaining
				Directly	Indirectly
	Hubei		trade
Suizhou Junhe Trading Co., Ltd.	Suizhou, Hubei	Suizhou, Hubei	Business trading		51.00	Investment
Hubei Yellow Crane Tower Beverage Co., Ltd.	Xianning, Hubei	Xianning, Hubei	Business trading		51.00	Investment

Name	Shareholding proportion of non-controlling interests	The profit or loss attributable to non-controlling interests	Declaring dividends distributed to non-controlling interests	Ending balance of non-controlling interests
Wuhan Pride Yellow Crane Tower Distillery Co., Ltd.	49.00	26,632,409.70	0.00	454,398,502.52

Name	Ending balance
	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liability	Total liabilities
Wuhan Pride Yellow Crane Tower Distillery Co., Ltd	647,335,956.02	713,870,487.69	1,361,206,443.71	300,618,523.68	133,244,037.34	433,862,561.02

Name	Beginning balance
	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liability	Total liabilities
Wuhan Pride Yellow Crane Tower Distillery 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

~150~

Name	Reporting Period				Same period of last year
	Operating revenue	Net profit	Total comprehensive income	Cash flows from operating activities	Operating revenue	Net profit	Total comprehensive income	Cash flows from operating activities
Wuhan Pride Yellow Crane Tower Distillery Co., Ltd.	457,947,025.03	54,351,856.52	54,351,856.52	39,866,055.42	429,495,365.21	46,956,428.75	46,956,428.75	73,102,943.91

~151~

(3) Other Price Risk

What the Company held are classified as available-for-sale financial assets and trading financial assetsmeasured at fair value on balance sheet date. Thus, the Company bares the risk change of securities market.The Company adopts variety of equity group to reduce the price risk in equity security investment.

2. Credit Risk

On 30 June 2019, the largest credit risk exposure what may lead to the financial losses was the other party ofthe contract failed to fulfill the obligations and causes loss of the Company’s financial assets and financialguarantee, which including: carrying value of financial assets recognized in consolidated balance sheet; asfor the financial instruments measured at fair value, the carrying value reflects its risk exposure, but not thelargest one, the largest risk exposure will change when the future fair value changes.The Company only trade with the third party authorized with good credit and large scale. In line with thepolicies of the Company and the items of sale contracts, the Company gives priority to first paymentshipment, only small amount of credit transactions and examines and verifies the credit of the client whotrading with by credit way.The Company’s working capital was in bank with higher credit rating, so credit risk of working capital waslow.

3. Liquidity RiskWhen managing liquidity risk, the Company maintained the management’s believe that supervising thesufficient cash and cash equivalents to meet the operating demand of the Company and reduce the influenceof the fluctuation of cash flow.

X. The Disclosure of Fair Value

1. Ending Fair Value of Assets and Liabilities at Fair Value

Item	Ending fair value
	Fair value measurement items at level 1	Fair value measurement items at level 2	Fair value measurement items at level 3	Total
I. Consistent fair value measurement
(I) Trading financial assets	1,573,596,291.10			1,573,596,291.10
1. Financial assets at fair value through profit or loss
(1) Debt instrument investment	1,356,000,000.00			1,356,000,000.00
(2) Equity instrument investment	217,596,291.10			217,596,291.10
(3) Derivative financial assets
Total assets consistently measured at fair	1,573,596,291.10			1,573,596,291.10

~152~

Item	Ending fair value
	Fair value measurement items at level 1	Fair value measurement items at level 2	Fair value measurement items at level 3	Total
value

Name	Registration place	Nature of business	Registered capital	Proportion of share held by the Company as the parent against the Company (%)	Proportion of voting rights owned by the Company as the parent against the Company (%)
Anhui Gujing Group Co., Ltd.	Anhui	Beverage, Construction materials, and plastic productions manufacture	1,000,000,000.00	53.89	53.89

Name	Relationship
Anhui Ruifuxiang Food Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruijing Restaurant Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Haochidian Catering Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Shanghai Ruiyao Hotel Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Shanghai Beihai Restaurant Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller

~153~

Name	Relationship
Anhui Ruijing Trade Travel (Group) Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Hotel Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Real Estates Group Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
East Ruijing Enterprise Investment Development Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Anhui Hengxin Pawn Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Ruineng Thermoelectricity Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Holiday Inn Hefei	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Rufuxiang High-protein Feed Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Hotel Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Ruixin Pawn Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Anhui Zhongxin Financial Leasing Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Huixin Finance Investment Group Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Hefei Longxin Financial Management Consulting Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Anxin Microcredit Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Xinyuan Government Landscape Engineering Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Hotel Co., Ltd	Affiliated enterprise of controlling shareholder and actual controller
Anhui Youxin Financing Guarantee Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Aoxin Real Estate Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Lixin E-Commerce Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Xinxin Property Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Huisheng Building Catering Company	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Junlai Hotel Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller

~154~

Name	Relationship
Bozhou Gujing Real Estates Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Bozhou Gujing Real Estates Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing International Travel Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Jinzhai Gujing Real Estate Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing Health Industry Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Lejiu Home Tourism Management Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Shenglong Trading Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller
Anhui Gujing International Development Co., Ltd.	Affiliated enterprise of controlling shareholder and actual controller

Connected party	Content	Reporting Period	Same period of last year
Anhui Gujing International Travel Co., Ltd.	Accepting labor service	786,329.00	38,228.00
Anhui Gujing Health Industry Co., Ltd.	Purchase of materials	19,433.63	0.00
Anhui Gujing Hotel Development Co., Ltd.	Accepting labor service	31.51	156.04
Anhui Gujing Hotel Development Co., Ltd.	Accepting food and accommodation services	16,766.00	4,819.00
Anhui Haochidian Catering Co., Ltd.	Purchase of materials	245,594.50	0.00
Anhui Haochidian Catering Co., Ltd.	Accepting food and accommodation services	34,440.00	30,300.00
Anhui Huixin Finance Investment Group Co., Ltd.	Accepting labor service	55,722.40	134,803.75
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Accepting labor service	25,821.13	0.00
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Afforestation fees	404,865.62	0.00
Anhui Ruijing Restaurant Management Co., Ltd.	Accepting food and accommodation services	33,725.00	23,043.00
Anhui Xinyuan Government Landscape Engineering Co., Ltd.	Afforestation fees	31,849.06	482,050.39
Beijing Anhui Building	Accepting food and	1,285.00	0.00

~155~

Connected party	Content	Reporting Period	Same period of last year
	accommodation services
Bozhou Hotel Co., Ltd.	Accepting food and accommodation services	3,257,170.88	1,859,506.20
Bozhou Huisheng Building Catering Company	Accepting food and accommodation services	2,695,540.00	1,349,445.00
Bozhou Gujing Junlai Hotel Management Co., Ltd.	Accepting food and accommodation services	234,710.54	259,021.00
Holiday Inn Hefei	Purchase of materials	387,017.20	132,717.52
Holiday Inn Hefei	Accepting food and accommodation services	14,865.26	41,549.36
Anhui Ruijing Trade Travel (Group) Co., Ltd	Purchase of materials	3,076,852.09	0.00
Anhui Gujing Group Co., Ltd.	Accepting labor service	63,716.81	0.00
Total	--	11,385,735.63	4,355,639.26

Connected party	Content	Reporting Period	Same period of last year
Anhui Aoxin Real Estate Development Co., Ltd.	Sales of white spirit	0.00	7,553.44
Anhui Gujing Real Estates Group Co., Ltd.	Sales of white spirit	0.00	531,449.33
Anhui Gujing International Travel Co., Ltd.	Providing catering and accommodation services	206.00	46,824.00
Anhui Gujing International Travel Co., Ltd.	Sales of white spirit	389.36	0.00
Anhui Gujing International Travel Co., Ltd.	Sales of small sized materials	404.78	470.95
Anhui Gujing Group Co., Ltd.	Providing catering and accommodation services	87,090.19	124,239.79
Anhui Gujing Group Co., Ltd.	Sales of small sized materials	63,778.94	19,624.03

~156~

Connected party	Content	Reporting Period	Same period of last year
Anhui Gujing Health Industry Co., Ltd.	Providing catering and accommodation services	29,059.00	0.00
Anhui Gujing Health Industry Co., Ltd.	Providing labor service	501,596.23	0.00
Anhui Gujing Health Industry Co., Ltd.	Sales of white spirit	5,473,459.08	3,103.45
Anhui Gujing Health Industry Co., Ltd.	Sales of small sized materials	3,136.93	10,061.26
Anhui Gujing Hotel Development Co., Ltd.	Sales of white spirit	45,325.31	73,937.00
Anhui Huixin Finance Investment Group Co., Ltd.	Sales of white spirit	452,567.02	1,236,821.89
Anhui Lejiu Home Tourism Management Co., Ltd.	Utilities	179,311.29	0.00
Anhui Lejiu Home Tourism Management Co., Ltd.	Sales of white spirit	3,114.91	0.00
Anhui Lejiu Home Tourism Management Co., Ltd.	Sales of small sized materials	5,849.50	0.00
Anhui Lixin E-Commerce Co., Ltd.	Sales of white spirit	63,756.26	64,181.89
Anhui Lvyuan Ecological Agriculture Development Co., Ltd	Sales of small sized materials	3,724.33	0.00
Anhui Xinyuan Government Landscape Engineering Co., Ltd.	Sales of small sized materials	0.00	8,100.01
Anhui Ruijing Trade Travel (Group) Co., Ltd.	Providing catering and accommodation services	22,829.26	12,388.57
Anhui Ruijing Trade Travel (Group) Co., Ltd.	Sales of white spirit	2,979,148.41	5,718,162.07
Anhui Ruixin Pawn Co., Ltd.	Sales of white spirit	2,731.85	9,755.53
Anhui Shenglong Trading Co., Ltd.	Providing catering and accommodatio	5,909.00	6,900.00

~157~

Connected party	Content	Reporting Period	Same period of last year
	n services
Anhui Shenglong Trading Co., Ltd.	Sales of white spirit	6,206.90	247,600.01
Anhui Xinxin Property Management Co., Ltd.	Sales of white spirit	0.00	23,587.69
Anhui Youxin Financing Guarantee Co., Ltd.	Sales of white spirit	2,203.45	4,374.98
Anhui Zhongxin Finance Leasing Co., Ltd.	Sales of white spirit	3,956.90	7,026.79
Bozhou Anxin Small Loan Co., Ltd.	Sales of white spirit	3,724.14	7,399.60
Bozhou Hotel Co., Ltd.	Sales of white spirit	17,379.31	47,383.29
Bozhou Gujing Huishenglou Catering Co., Ltd.	Sales of white spirit	17,767.24	34,082.23
Bozhou Gujing Junlai Hotel Management Company	Sales of white spirit	4,655.17	9,270.55
Bozhou Ruifuxiang High Protein Feed Co., Ltd.	Sales of white spirit	11,405.17	18,051.34
Bozhou Ruinong Thermal Power Co., Ltd.	Sales of white spirit	190,103.02	145,564.41
Bozhou Gujing Hotel Co., Ltd.	Sales of white spirit	0.00	9,363.27
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Water and electricity	36,105.11	39,974.95
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Providing catering and accommodation services	2,735.00	10,818.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Providing services	15,665.68	15,057.68
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Sales of white spirit	902,976.02	1,135,798.58

~158~

Connected party	Content	Reporting Period	Same period of last year
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	Sales of small materials	841.63	2,516.56
Holiday Inn Hefei	Providing catering and accommodation services	2,937.76	56,825.49
Shanghai Beihai Restaurant Co., Ltd.	Sales of white spirit	7,964.60	0.00
Anhui Jinzhai Gujing Real Estate Development Co., Ltd.	Sales of white spirit	0.00	95,255.39
Anhui Gujing Real Estates Group Co., Ltd.	Providing services	0.00	6,756.76
Bozhou Ruineng Thermoelectricity Co., Ltd.	Providing services	0.00	252,252.25
Anhui Ruijing Trade Travel (Group) Co., Ltd.	Sales materials	0.00	356.00
Bozhou Rufuxiang High-protein Feed Co., Ltd.	Sales of white spirit	0.00	331,900.64
Anhui Hengxin Pawnbroking Co., Ltd.	Sales of white spirit	0.00	3,683.59
Anhui Haochidian Catering Co., Ltd.	Sales of white spirit	0.00	25,571.62
Hefei Longxin Financial Management Consulting Co., Ltd.	Sales of white spirit	0.00	1,510.68
Anhui Medieval Tourism Development Co., Ltd.	Sales of small materials	0.00	120.85
Anhui Medieval Tourism Development Co., Ltd.	Providing catering and accommodation services	0.00	13,125.00
Bozhou Gujing Real Estate Development Co., Ltd.	Sales of white	0.00	11,475.45

~159~

Connected party	Content	Reporting Period	Same period of last year
	spirit
Bozhou Gujing Property Management Co., Ltd.	Sales of white spirit	0.00	39,987.82
Total	--	11,150,014.75	10,470,264.68

Name of lessor	Category of leased assets	The lease income confirmed in the Reporting Period	The lease income confirmed in the Same period of last year
Anhui Gujing Group Co., Ltd.	Houses and buildings	1,095,238.10	1,095,238.10

Name of lessee	Category of leased assets	The lease income confirmed in the Reporting Period	The lease income confirmed in the Same period of last year
Anhui Gujing Hotel Management Co., Ltd.	Houses and buildings	689,124.81	246,190.48

Item	Ending balance	Beginning balance
Other accounts receivable:
Bozhou Ruineng Thermoelectricity Co., Ltd.	14,521.45	14,521.45
Anhui Gujing Real Estates Group Co., Ltd.	0.00	25,342.50
Total	14,521.45	39,863.95

Item	Ending balance	Beginning balance
Advances from customers:
Anhui Ruijing Trade Travel (Group) Co., Ltd.	1,866,176.31	4,085,856.31
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	1,744,615.38	1,881,236.80
Anhui Gujing Health Industry Co., Ltd.	1,858,304.40	4,036,729.60

~160~

Item	Ending balance	Beginning balance
Bozhou Ruineng Thermoelectricity Co., Ltd.	0.00	43,200.00
Anhui Shenglong Trading Co., Ltd.	141,581.50	0.00
Total	5,610,677.59	10,047,022.71
Other accounts payable:
Anhui Gujing Hotel Development Co., Ltd.	50,000.00	50,000.00
Large Central Plain Wine Valley Culture Tourism Development Co., Ltd.	50,000.00	0.00
Anhui Ruijing Trade Travel (Group) Co., Ltd.	85,000.00	35,000.00
Total	185,000.00	85,000.00

Item	Ending balance	Beginning balance
Minimum lease payments of irrevocable operating lease
1 year after balance date	2,300,000.00	2,300,000.00
2 years after balance date	2,300,000.00	2,300,000.00
3 years after balance date	2,300,000.00	2,300,000.00
Subsequent years	18,208,333.33	19,358,333.33
Total	25,108,333.33	26,258,333.33

~161~

There was no segment information based on operating segments to disclose, since the Company didn’tdetermine operating segments in accordance with internal organizational structure, management requirementsand internal report systems.

XV. Notes of Main Items in the Financial Statements of the Company

1. Accounts Receivable

(1) Accounts Receivable Disclosed by Category

Category	Ending balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Accounts receivable with significant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Accounts receivable withdrawal of bad debt provision of by credit risks characteristics:	10,793,505.68	100.00	141,121.87	1.31	10,652,383.81
Accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	10,793,505.68	100.00	141,121.87	1.31	10,652,383.81

Category	Beginning balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Proportion (%)
Accounts receivable with significant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Accounts receivable withdrawal of bad debt provision of by credit risks characteristics:	9,527,072.41	100.00	141,121.87	1.48	9,385,950.54
Accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	9,527,072.41	100.00	141,121.87	1.48	9,385,950.54

~162~

Aging	Ending balance
	Accounts receivable	Bad debt provision	Withdrawal proportion (%)
Within 1 year	0.00	0.00	0.00
[Of which: Within 6 months]	0.00	0.00	0.00
[7-12 months]	0.00	0.00	0.00
1 to 2 years	0.00	0.00	0.00
2 to 3 years	0.00	0.00	0.00
Over 3 years	141,121.87	141,121.87	100.00
Total	141,121.87	141,121.87	100.00

Name of the group	Ending balance
	Accounts receivable	Bad debt provision	Withdrawal proportion (%)
Connected group within the combination scope	10,652,383.81	0.00	0.00
Total	10,652,383.81	0.00	0.00

Item	Ending balance	Beginning balance
Interest receivable	0.00	0.00
Dividend receivable	0.00	0.00
Other accounts receivable	105,037,195.62	110,800,665.19
Total	105,037,195.62	110,800,665.19

~163~

Category	Ending balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Other accounts receivable with significant single amount for which bad debt provision separately accrued	40,850,949.35	27.82	40,850,949.35	100.00	0.00
Other accounts receivable withdrawn bad debt provision according to credit risks characteristics	106,003,851.26	72.18	966,655.64	0.91	105,037,195.62
Other accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	146,854,800.61	100.00	41,817,604.99	28.48	105,037,195.62

Category	Beginning balance
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Other accounts receivable with significant single amount for which bad debt provision separately accrued	40,850,949.35	26.80	40,850,949.35	100.00	0.00
Other accounts receivable withdrawn bad debt provision according to credit risks characteristics	111,581,253.05	73.20	780,587.86	0.70	110,800,665.19
Other accounts receivable with insignificant single amount for which bad debt provision separately accrued	0.00	0.00	0.00	0.00	0.00
Total	152,432,202.40	100.00	41,631,537.21	27.31	110,800,665.19

Other accounts receivable (by unit)	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason

~164~

Other accounts receivable (by unit)	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities	29,010,449.35	29,010,449.35	100.00	Under the bankruptcy liquidation
Jianqiao Securities	11,840,500.00	11,840,500.00	100.00	Under the bankruptcy liquidation
Total	40,850,949.35	40,850,949.35	--

Aging	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)
Within 1 year	3,685,136.21	49,084.05	1.33
[Of which: Within 6 months]	3,379,319.03	33,793.19	1.00
[7-12 months]	305,817.18	15,290.86	5.00
1 to 2 years	392,570.00	39,257.00	10.00
2 to 3 years	377,313.00	188,656.50	50.00
Over 3 years	689,658.09	689,658.09	100.00
Total	5,144,677.30	966,655.64	18.79

Name of the group	Ending balance
	Other accounts receivable	Bad debt provision	Withdrawal proportion (%)
Connected group within the consolidation scope	100,859,173.96	0.00	0.00
Total	100,859,173.96	0.00	0.00

Nature	Ending carrying amount	Beginning carrying amount
Intercourse funds between entities within combination scope	100,859,173.96	108,389,173.96
Securities investment	40,850,949.35	40,850,949.35
Margin and cash pledge	2,508,139.09	909,657.06

~165~

Nature	Ending carrying amount	Beginning carrying amount
Rent and utilities fee	807,179.22	639,732.73
Others	1,829,358.99	1,642,689.30
Total	146,854,800.61	152,432,202.40

Name of the entity	Relationship	Nature	Ending balance	Aging	Proportion to total ending balance of other accounts receivable (%)	Ending balance of bad debt provision
No.1	Related party within combination scope	Related party within combination scope	86,909,097.13	Within 3 years	59.18	0.00
No.2	Non-connected party	Securities investment	29,010,449.35	Over 3 years	19.75	29,010,449.35
No. 3	Related party within combination scope	Related party within combination scope	13,950,076.83	Within 3 years	9.50	0.00
No. 4	Non-connected party	Securities investment	11,840,500.00	Over 3 years	8.06	11,840,500.00
No. 5	Non-connected party	Margin	500,000.00	Within 6 months	0.34	5,000.00
Total	--	--	142,210,123.31	--	96.83	40,855,949.35

Item	Ending balance			Beginning balance
	Carrying amount	Depreciation reserve	Carrying value	Carrying amount	Depreciation reserve	Carrying value

~166~

Item	Ending balance			Beginning balance
	Carrying amount	Depreciation reserve	Carrying value	Carrying amount	Depreciation reserve	Carrying value
Investment to subsidiaries	1,148,213,665.32	0.00	1,148,213,665.32	1,148,213,665.32	0.00	1,148,213,665.32
Total	1,148,213,665.32	0.00	1,148,213,665.32	1,148,213,665.32	0.00	1,148,213,665.32

Investee	Beginning balance	Increase	Decrease	Ending balance	Depreciation reserve withdrawn	Ending balance of depreciation reserve
Bozhou Gujing Sales Co., Ltd.	68,949,286.89	0.00	0.00	68,949,286.89	0.00	0.00
Anhui Longrui Glass Co., Ltd.	85,267,453.06	0.00	0.00	85,267,453.06	0.00	0.00
Shanghai Gujing Jinhao Hotel Management Co., Ltd.	49,906,854.63	0.00	0.00	49,906,854.63	0.00	0.00
Bozhou Gujing Hotel Co., Ltd.	648,646.80	0.00	0.00	648,646.80	0.00	0.00
Anhui Swisse Will Science & Technology Co., Ltd.	40,000,000.00	0.00	0.00	40,000,000.00	0.00	0.00
Anhui Subway Cordial Wine Co., Ltd.	30,000,000.00	0.00	0.00	30,000,000.00	0.00	0.00
Anhui Yuanqing Environmental Co. , Ltd.	16,000,000.00	0.00	0.00	16,000,000.00	0.00	0.00
Anhui Gujing Cloud E-commerce Co., Ltd.	5,000,000.00	0.00	0.00	5,000,000.00	0.00	0.00
Anhui Zhenrui Construction Engineering Co., Ltd.	10,000,000.00	0.00	0.00	10,000,000.00	0.00	0.00
Wuhan Pride Yellow Crane Tower Distillery Co., Ltd.	816,000,000.00	0.00	0.00	816,000,000.00	0.00	0.00
Anhui Jinyunlai Culture & Media Co., Ltd.	15,000,000.00	0.00	0.00	15,000,000.00	0.00	0.00
Bozhou Gujing Waste Reclamation Co., Ltd.	1,441,423.94	0.00	0.00	1,441,423.94	0.00	0.00
Anhui RunAnXinKe Testing Technology Co., Ltd	10,000,000.00	0.00	0.00	10,000,000.00	0.00	0.00
Total	1,148,213,665.32	0.00	0.00	1,148,213,665.32	0.00	0.00

Item	Reporting Period		Same period of last year
	Operating revenue	Cost of sales	Operating revenue	Cost of sales

~167~

Item	Reporting Period		Same period of last year
	Operating revenue	Cost of sales	Operating revenue	Cost of sales
Main operations	3,104,047,962.07	1,254,351,553.67	2,331,145,973.42	930,097,754.58
Other operations	40,634,501.51	23,567,023.24	42,363,746.54	32,348,972.74
Total	3,144,682,463.58	1,277,918,576.91	2,373,509,719.96	962,446,727.32

Item	Reporting Period	Same period of last year
Investment income generating from long-term equity accounted by cost method
Investment income generating from long-term equity accounted by equity method
Investment income from disposal of long-term equity investment
Investment income from holding of trading financial assets	0.00	1,271,471.00
Investment income from disposal of trading financial assets
Dividend income from holding of other equity instrument investment
Investment income from holding of held-to-maturity investment
Investment income from holding of available-for-dale financial assets	0.00	49,031,673.79
Investment income from disposal of available-for-sale financial assets	0.00	10,999,123.54
Investment income from disposal of held-to-maturity investment
Income from remeasurement of residual stock rights at fair value after losing control power
Interest income from holding of credit investment
Interest income from holding of other credit investment
Interest income from disposal of other credit investment

~168~

Other investment income	31,883,868.76	0.00
Total	31,883,868.76	61,302,268.33

Item	Amount	Explanation
Gains/losses on the disposal of non-current assets	-310,454.93
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of official approval documents
Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the government’s unified standards	30,803,918.68
Capital occupation charges on non-financial enterprises that are recorded into current gains and losses
Gains due to that the investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the enjoyable fair value of the identifiable net assets of the investees when making the investments
Gain/loss on non-monetary asset swap
Gain/loss on entrusting others with investments or asset management
Asset impairment provisions due to acts of God such as natural disasters
Gains and losses from debt restructuring
Expenses on business reorganization, such as expenses on staff arrangements, integration, etc.
Gain/loss on the part over the fair value due to transactions with distinctly unfair prices
Current net gains and losses of subsidiaries acquired in business combination under the same control from period-begin to combination date
Profit and loss from contingencies irrelative to the normal business operations of company
Gain/loss from change of fair value of trading financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities and available-for-sale financial assets, other than valid hedging related to the Company’s common businesses	83,312,387.28
Depreciation reserves returns of receivables with separate depreciation test
Gain/loss on entrustment loans

~169~

Item	Amount	Explanation
Gain/loss on change of the fair value of investing real estate of which the subsequent measurement is carried out adopting the fair value method
Effect on current gains/losses when a one-off adjustment is made to current gains/losses according to requirements of taxation, accounting and other relevant laws and regulations
Custody fee income when entrusted with operation
Other non-operating income and expense other than the above	9,823,095.95
Project confirmed with the definition of non-recurring gains and losses and losses
Subtotal	123,628,946.98
Income tax effects	30,769,441.49
Non-controlling interests effects (after tax)	10,414,170.58
Total	82,445,334.91

Profit as of Reporting Period	Weighted average ROE (%)	EPS (Yuan/share)
		EPS-basic	EPS-diluted
Net profit attributable to ordinary shareholders of the Company	16.71	2.48	2.48
Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit and loss	15.61	2.32	2.32

~170~

Part XI Documents Available for Reference(I) Financial statements signed and sealed by the Company’s legal representative, theCompany’s Chief Accountant and the head of the Company’s financial department(equivalent to financial manager); and(II) All originals of the Company’s documents and announcements that have beenpublicly disclosed in the Reporting Period on the media designated by the ChinaSecurities Regulatory Commission.(III) The interim report disclosed in other securities markets.

Chairman of the Board: (Liang Jinhui)

Anhui Gujing Distillery Company Limited

23 August 2019