古井贡Ｂ：2020年半年度报告（英文版）

ANHUI GUJING DISTILLERY COMPANY LIMITED

INTERIM REPORT 2020

August 2020

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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 shallNOT be considered as absolute promises of the Company to investors. Investors, amongothers, shall be sufficiently aware of the risk and shall differentiate between plans/forecastsand promises. Again, investors are kindly reminded to pay attention to possible investmentrisks.Investors’ attention is kindly directed to the risk factors that might have an adverse impact onthe fulfillment of the Company’s development strategies and business objectives for the future,as well as to the countermeasures intended to be taken, which have been detailed in “X RisksFacing the Company and Countermeasures” in “Part IV Performance Discussion andAnalysis” of this Report.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 2Part II Corporate Information and Key Financial Information 5Part III Business Summary 8Part IV Operating Performance Discussion and Analysis 9Part V Significant Events 20Part VI Share Changes and Shareholder Information 29Part VII Preferred Shares 34Part VIII Convertible Corporate Bonds 35Part IX Directors, Supervisors and Senior Management 36Part X Corporate Bonds 38Part XI Financial Statements 39Part XII Documents Available for Reference 182

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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 2019 Annual Report.

IV Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

	H1 2020	H1 2019	Change (%)
Operating revenue (RMB)	5,519,621,000.62	5,988,112,999.09	-7.82%
Net profit attributable to the listed company’s shareholders (RMB)	1,024,936,604.36	1,248,316,314.01	-17.89%
Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB)	1,007,918,868.52	1,165,870,979.10	-13.55%
Net cash generated from/used in operating activities (RMB)	2,341,638,100.64	1,041,733,748.83	124.78%
Basic earnings per share (RMB/share)	2.04	2.48	-17.74%
Diluted earnings per share (RMB/share)	2.04	2.48	-17.74%
Weighted average return on equity (%)	10.84%	16.71%	-5.87%
	30 June 2020	31 December 2019	Change (%)
Total assets (RMB)	15,329,688,946.81	13,871,297,363.16	10.51%
Equity attributable to the listed company’s shareholders (RMB)	9,213,648,368.80	8,944,111,764.44	3.01%

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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)	-2,218,309.96
Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards)	14,980,731.46
Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other investments in debt obligations (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business)	14,943,442.93
Non-operating income and expense other than the above	-1,408,695.54
Less: Income tax effects	7,739,708.20
Non-controlling interests effects (net of tax)	1,539,724.85
Total	17,017,735.84	--

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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 13th SIALParis, 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 Analysis

I Overview

The first half of 2020 saw a gradual recovery in China’s economic growth against the adverse impact of the COVID-19 pandemic.Yet the pandemic is still spreading globally and how it will continue to affect the world economy remains to be seen, posing morerisks and challenges and putting pressure on recovery of the domestic economy.Under the common efforts of the Board and all the staff, for the six months from January to June 2020, the Company recordedoperating revenue of RMB5.520 billion, down 7.82% compared to the same period of last year; a net profit attributable to owners ofthe Company as the parent of RMB1.025 billion, representing a year-on-year decline of 17.89%; and net cash generated fromoperating activities of RMB2.342 billion, up 124.78% year-on-year. Key work done in the Reporting Period was as follows: ①adopting effective anti-pandemic measures to ensure the smooth resumption of work/production; ② developing innovative marketingmodels and continuing to carry out sales promotions; ③ continuously strengthen the special inspection of quality management andfurther improve the quality management system; ④ enhancing safety and environmental management to ensure safe, smooth andorderly production; and ⑤ refining organizational management and further adhering to the guidance of the governing party.

II Analysis of Core Businesses

See “I Overview” above.Year-on-year changes in key financial data:

Unit: RMB

	H1 2020	H1 2019	Change (%)	Main reason for change
Operating revenue	5,519,621,000.62	5,988,112,999.09	-7.82%
Cost of sales	1,313,925,592.48	1,394,156,734.55	-5.75%
Selling expense	1,618,049,637.27	1,840,489,439.70	-12.09%
Administrative expense	395,687,673.15	302,045,457.13	31.00%	Salary adjustments and annuity benefits for employees
Finance costs	-68,208,467.94	-4,302,625.30	-1,485.28%	Increase in interest income
Income tax expense	370,635,522.24	419,145,404.31	-11.57%
Net cash generated from/used in operating activities	2,341,638,100.64	1,041,733,748.83	124.78%	Increase in cash inflow through note discounting
Net cash generated from/used in investing activities	61,995,665.31	1,273,479,672.84	-95.13%	Decrease in payments for investments

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Net cash generated from/used in financing activities	49,803,791.67	-755,400,000.00	106.59%	The 2019 final dividend was paid out in July 2020
Net increase in cash and cash equivalents	2,453,437,557.62	1,559,813,421.67	57.29%	Increase in net cash generated from operating activities

	H1 2020		H1 2019		Change (%)
	Operating revenue	As % of total operating revenue (%)	Operating revenue	As % of total operating revenue (%)
Total	5,519,621,000.62	100.00%	5,988,112,999.09	100.00%	-7.82%
By operating division
Manufacturing	5,519,621,000.62	100.00%	5,988,112,999.09	100.00%	-7.82%
By product category
Liquor and spirits	5,432,930,105.02	98.43%	5,877,046,855.59	98.14%	-7.56%
Hotel services	21,665,219.12	0.39%	39,956,640.89	0.67%	-45.78%
Other	65,025,676.48	1.18%	71,109,502.61	1.19%	-8.56%
By operating segment
Domestic	5,518,556,118.98	99.98%	5,980,801,339.96	99.88%	-7.73%
Overseas	1,064,881.64	0.02%	7,311,659.13	0.12%	-85.44%

	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	5,519,621,000.62	1,313,925,592.48	76.20%	-7.82%	-5.75%	-0.52%
By product category
Liquor and spirits	5,432,930,105.02	1,260,831,898.19	76.79%	-7.56%	-4.83%	-0.65%
Hotel services	21,665,219.12	12,896,631.01	40.47%	-45.78%	-31.74%	-12.25%

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Other	65,025,676.48	40,197,063.28	38.18%	-8.56%	-20.21%	9.02%
By operating segment
Domestic	5,518,556,118.98	1,313,054,410.31	76.21%	-7.73%	-5.60%	-0.53%
Overseas	1,064,881.64	871,182.17	18.19%	-85.44%	-72.71%	-38.15%

	30 June 2020		30 June 2019		Change in percentage (%)	Reason for any significant change
	Amount	As % of total assets	Amount	As % of total assets
Monetary assets	7,418,187,475.71	48.39%	3,179,334,513.57	25.39%	23.00%
Accounts receivable	44,592,707.52	0.29%	30,086,692.70	0.24%	0.05%
Inventories	2,920,772,885.04	19.05%	2,417,356,086.41	19.31%	-0.26%
Investment property	4,551,514.78	0.03%	4,868,657.29	0.04%	-0.01%
Long-term equity investments	4,624,650.90	0.03%	4,735,005.81	0.04%	-0.01%
Fixed assets	1,629,268,366.99	10.63%	1,684,243,384.48	13.45%	-2.82%
Construction in progress	258,954,824.33	1.69%	162,876,312.37	1.30%	0.39%
Short-term borrowings	50,094,500.00	0.33%	0.00	0.00%	0.33%

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Item	Beginning amount	Gain/loss on fair-value changes in the Reporting Period	Cumulative fair-value changes charged to equity	Impairment allowance for the Reporting Period	Purchased in the Reporting Period	Sold in the Reporting Period	Other changes	Ending amount
Financial assets
1. Held-for-trading financial assets (exclusive of derivative financial assets)	509,031,097.02	8,380,431.17	0.00	0.00	23,000,000.00	310,146,591.78	0.00	230,264,936.41
Subtotal of financial assets	509,031,097.02	8,380,431.17	0.00	0.00	23,000,000.00	310,146,591.78	0.00	230,264,936.41
Total of the above	509,031,097.02	8,380,431.17	0.00	0.00	23,000,000.00	310,146,591.78	0.00	230,264,936.41
Financial liabilities	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00

Item	Ending carrying value	Reasons
Bank deposits	2,020,000,000.00	Structured deposit not available for advance withdrawal, term deposit and term deposit as pledge for banker’s acceptance bill
Notes receivable	382,801,475.30	As pledge for banker’s acceptance bill
Total	2,402,801,475.30	--

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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 Assets at Fair Value

√ Applicable □ Not applicable

Unit: RMB

Type of assets	Initial investment cost	Gain/loss on fair value changes in the Reporting Period	Accumulated fair value changes recorded in equity	Purchased in the Reporting Period	Sold in the Reporting Period	Accumulated return on investment	Ending amount	Funding source
Asset management plan	200,000,000.00	8,380,431.17	0.00	0.00	0.00	0.00	220,264,936.41	Self-funded
Wealth management product of bank	19,170,000.00	0.00	0.00	23,000,000.00	32,170,000.00	965,847.68	10,000,000.00	Self-funded
Total	219,170,000.00	8,380,431.17	0.00	23,000,000.00	32,170,000.00	965,847.68	230,264,936.41	--

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5. 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	Funding source
Asset management plan		ZXYSDP Assets Management Plan	200,000,000.00	Fair value method	211,884,505.24	8,380,431.17	0.00	0.00	0.00	0.00	220,264,936.41	Held-for-trading financial assets	Self-funded
Other ending holding securities investments			0.00	--	0.00	0.00	0.00	0.00	0.00	0.00	0.00	--	--
Total			200,000,000.00	--	211,884,505.24	8,380,431.17	0.00	0.00	0.00	0.00	220,264,936.41	--	--
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

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Unit: RMB’0,000

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 debt

Naught

No

Reverse repurchase of national debt

0.00

30 June 2020

1 July 2020

0.00

2,180

1,090

0.00

1,090

0.12%

0.35

Total

0.00

--

--

0.00

2,180

1,090

0.00

1,090

0.12%

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

Naught

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related assumptions and parameters)
Significant changes in accounting policies and specific accounting principles adopted for derivative investments in the Reporting Period compared to previous reporting period	Naught
Opinion of independent directors on derivative investments and risk control	Based on the sustainable development of the main business and the sufficient free idle money, the Company increased the profits through investing in the reasonable financial derivative instruments, which was in favor of improving the service efficiency of the idle funds; in order to reduce the investment risks of the financial derivative instruments, the Company had set up corresponding supervision mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific principles of financial accounting; the derivative Investment business developed separately took national debts as mortgage object, which was met with the cautious and steady risks management principle and the interest of the Company and shareholders. Therefore, agreed the Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit of RMB0.3 billion.

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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, assistant materials, etc.	84,864,497.89	3,917,537,914.28	468,788,052.95	5,379,716,066.56	475,987,289.78	354,520,816.52
Anhui Longrui Glass Co., Ltd	Subsidiary	Manufacture and sale of glass products, etc.	86,660,268.98	350,751,875.50	299,589,668.42	120,358,287.52	20,056,396.38	16,132,321.23
Yellow Crane Tower Wine Industry Co., Ltd	Subsidiary	Production and sales of distilled spirit, etc.	400,000,000.00	1,081,786,957.15	672,089,942.73	181,381,939.34	-45,250,310.16	-35,698,415.71
Shanghai Gujing Jinhao	Subsidiary	Hotel management, house	54,000,000.00	194,940,975.63	74,229,622.39	19,793,964.81	-2,004,207.83	-2,802,722.94

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Hotel Management Co., Ltd.

lease, etc.

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(3) Engineering Construction

The Company accelerated the planning design and phased construction of the smart technology transformation project (smart park)for liquor production, prepared its fund planning and financing work, and adhered to high standards and high quality to promote theconstruction of smart park projects.

(4) Informatization Construction

The Company which took informatization into its whole management system and centered on SAP ERP system and digital marketingproject, actively pushed the second phase construction of the digital marketing project. By enhancing its data management,strengthening data application empowerment, establishing smart management corporate and setting up an integrated corporatemanagement platform, the Company has achieved a concentrated control and operation to promote process standardization, datavisualization, and management standardization, and support its business innovation and development.

(5) Human Resource

Based on the demands of the Company’s strategic development, the Company continuously optimized the channels for talentsintroduction, further improved talent structure and salary structure; strengthened the orientation of performance appraisal,continuously innovated performance management model; incessantly cemented talent echelon construction, conducted talent trainingand cultivation in a comprehensive, multidimensional and targeted way.

(6) Internal Management

The Company deeply carried out the “four revolutions” (ideological revolution, organizational revolution, behavioral revolution,management revolution), and solidly implemented the “five goals and six projects”; adhered to the “four betters” orientation (betterpositioning, better process, better state, better management), established the consciousness for the better, work hard on the word“better”. Through transforming strict management into normalcy, the Company strengthened the ideological education of employees,focused on management innovation, employed innovative thinking, made full use of new methods and tools to break the inertial workmode, prevent aging mentality and old-fashioned manage, comprehensively improve work efficiency, and stimulate creativeorganizations.

(7) Corporate Culture Construction

The Company should continue to strengthen the leadership team’s construction, temper the core team of “loyalty and cleanness”;continue to carry out warning education on integrity, and further build an ideological line of defense against corruption; continue torectify formalism, bureaucracy, and “laziness, randomness, fatigue, glibness and complacency” and dogmatism, cultivate pragmaticand rigorous work style of cadres and employees; continue to strengthen ideological and political work, maintain the main position ofcultural propaganda and ideological work; continue to strengthen the leadership of Party building, and gather the strong power of therevolution. At the same time, the Company needs to focus on the construction of civilization practice center for a new era and culturalcommunication base of Gujing contribution, promote the “Nie Guangrong Spirit” to the entire industry, and further deepen theGujing corporate culture.

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

1. General Meetings Convened during the Reporting Period

Meeting	Type	Investor participation ratio	Convened date	Disclosure date	Index to disclosed information
The 2019 Annual General Meeting	Annual General Meeting	65.52%	19 June 2020	20 June 2020	For details, see Announcement about Resolutions of 2019 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 20 June 2020.

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The interim financial statements have not been audited.V Explanations Given by the Board of Directors and the Supervisory Committee Regardingthe Independent Auditor's “Modified Opinion” on the Financial Statements of the ReportingPeriod

□ Applicable √ Not applicable

VI Explanations Given by the Board of Directors Regarding the Independent Auditor's“Modified Opinion” on the Financial Statements of Last Year

□ Applicable √ Not applicable

VII Insolvency and Reorganization

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

IX Doubts from Media

□ Applicable √ Not applicable

The Company had no issues about which media generally raised doubts in the Reporting Period.X Punishments and Rectifications

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XI Credit Quality of the Company as well as its Controlling Shareholder and De FactoController

□ Applicable √ Not applicable

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XII Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIII Major Related-Party Transactions

1. Continuing Related-Party Transactions

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments

□ 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. Amounts Due to and from Related Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Other Major Related-Party Transactions

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIV Occupation of the Company’s Capital by the Controlling Shareholder or any of ItsRelated Parties for Non-Operating Purposes

□ Applicable √ Not applicable

No such cases in the Reporting Period.

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XV Major Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(3) Leases

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Major Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Cash Entrusted for Wealth Management

√ Applicable □ Not applicable

Unit: RMB’0,000

Type	Funding source	Amount	Undue amount	Unrecovered overdue amount
Others	Self-owned	20,000	20,000	0.00
Bank financial products	Self-owned	2,300	1,000	0.00
Total		22,300	21,000	0.00

Name of the trustee

Type of the trustee

Type of the product

Amount

Capital resource

Start date

End date

Use of fund

Determination method of

Annual yield for reference

Estimate profit (if any)

Amount of actual profit or loss

Actual recovery of profit or loss

Allowance for impairment

Legal procedures or not

Plan for entrusted asset

Overviews of events and

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								remuneration			in Reporting Period	in Reporting Period	(if any)		management in the future or not	query index (if any
CITIC Wings Asset Management Company Limited	Limited Liability Company	Asset management plan	20,000	Self-owned			Purchasing new shares offline, products with fixed earnings, reverse repurchase of national debt, and etc.	1.2% of products’ net value and 20% of excess earnings	7.00%	0.00	0.00	N/A		Yes	No
Total			20,000	--	--	--	--	--	--	0.00	0.00	--		--	--	--

Name of polluter

Name of major pollutants

Way of discharge

Number of discharg

Distribution of discharge outlets

Discharge concentration

Discharge standards implemented

Total discharge

Approved total discharge

Excessive discharge

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			e outlets
Anbui Gujing Distillery Co., Ltd.	COD	Directly discharge	3	Gujing plant, Zhangji plant, Headquarter plant	24.72mg/L 32.58mg/L 45.21mg/L	Gujing plant≦50mg/L Zhangji plant, Headquarter plant≦100mg/L	Gujing plant：10.65t Zhangji plant：3.14t Headquarter plant：31.78t	Gujing plant：105.916t Zhangji plant：26.504t Headquarter plant：116.0596t	Naught
Anbui Gujing Distillery Co., Ltd.	NH3-N	Directly discharge	3	Gujing plant, Zhangji plant, Headquarter plant	0.27mgL 0.76mg/L 0.84mg/L	Gujing plant≦5mg/L Zhangji plant, Headquarter plant≦10mg/L	Gujing plant：0.11t Zhangji plant：0.07t Headquarter plant：0.59t	Gujing plant：10.5916t Zhangji plant：2.6504t Headquarter plant：11.606t	Naught
Anbui Gujing Distillery Co., Ltd.	Smoke	Organized discharge through chimney	3	Gujing plant, Zhangji plant, Headquarter plant	2.06mg/m? 0.87mg/m? 2.22mg/m?	Gujing plant, Headquarter plant ≦10mg/m? Zhangji plant ≦20mg/m?	Gujing plant：0.312t Zhangji plant：0.013t Headquarter plant：0.69t	Gujing plant：4.301t Zhangji plant：/ Headquarter plant：5.01t	Naught
Anbui Gujing Distillery Co., Ltd.	Sulfur Dioxide	Organized discharge through chimney	3	Gujing plant, Zhangji plant, Headquarter plant	3.21mg/m? 0.46mg/m? 7.61mg/m?	Gujing plant, Headquarter plant≦35mg/m? Zhangji plant ≦50mg/m?	Gujing plant：0.486t Zhangji plant：0.007t Headquarter plant：2.37t	Gujing plant：15.055t Zhangji plant：/ Headquarter plant：17.536t	Naught
Anbui Gujing Distillery Co., Ltd.	Nitrogen oxide	Organized discharge through chimney	3	Gujing plant, Zhangji plant, Headquarter plant	7.18mg/m? 42.73mg/m? 19.29mg/m?	Gujing plant, Headquarter plant≦50mg/m? Zhangji plant ≦150mg/m?	Gujing plant：1.087t Zhangji plant：0.622t Headquarter plant：6.013t	Gujing plant：21.056t Zhangji plant：10.318t Headquarter plant：	Naught

~ 26 ~

								25.051t
Anhui Longrui Glass Co., Ltd	Smoke	Organized discharge through chimney	2	No. 1 furnace, No. 3 furnace	8.25mg/m? 67.2mg/m?	No. 1 furnace≦30mg/m? No. 3 furnace≦200mg/m?	No. 1 furnace：0.44t No. 3 furnace：1.33t	Naught	Naught
Anhui Longrui Glass Co., Ltd	Sulfur Dioxide	Organized discharge through chimney	2	No. 1 furnace, No. 3 furnace	37.5mg/m? 10.7mg/m?	No. 1 furnace≦20mg/m? No. 3 furnace≦850mg/m?	No. 1 furnace：1.78t No. 3 furnace：0.21t	Naught	Naught
Anhui Longrui Glass Co., Ltd	Nitrogen oxide	Organized discharge through chimney	2	No. 1 furnace, No. 3 furnace	67.5mg/m? 55mg/m?	No. 1 furnace≦400mg/m? No. 3 furnace≦700mg/m?	No. 1 furnace：3.29t No. 3 furnace：1.09t	Naught	Naught

~ 27 ~

and are running stably. No.1 furnace adopts bag dust removal + dry desulfurization + SCR denitrification by catalytic reduction.Waste gas from No. 1 furnace is discharged through the 45-meter-tall exhaust funnel after the waste gas treatment is up to thestandard. The emission of waste gas conforms to the circular emission requirements of Notice on the Issuance of < Action Plan forComprehensive Air Pollution Control in Autumn and Winter 2019-2020 in the Yangtze River Delta Region> (smoke ≤30mg/m

,SO2≤200mg/m

, NOx≤400mg/m

) No.3 furnace adopts bag dust removal + dry desulfurization + SCR denitrification by catalyticreduction. Waste gas is discharged through the 45-meter-tall exhaust funnel after the waste gas treatment is up to the standard. Thedischarge of flue gas meets the requirements in GB9078-1996 Emission Standard of Air Pollutants for Boiler.In H1 2020, the environment protection facilities of Anhui Gujing Distillery Company Limited and its subsidiaries ran normally ingeneral, main pollutants can achieve up-to-standard discharge, environment information is opened to the public normally, and theyhave performed their social responsibilities properly.Environmental impact assessment of construction project and other administrative license situation in respect ofenvironmental protection

No.	Item	Category of EIA	EIA approval (filing) time	EIA approval (filing) number
1	Upgrading renovation project of sewage treatment station in Gujing Plant of Anhui Gujing Distillery Company Limited	Environment affection form	29 April 2020	Reference number: BHB [2020] No. 7
2	Technological transformation project of automatic inspection line for unprocessed grain	Environment affection form	11 June 2020	Record number: 202034160200000209

~ 28 ~

poor village and household and put them on file. In the first half of 2020, the social poverty alleviation work has been successfullycompleted so that various targeted poverty alleviation tasks of "the unit cover villages and the individual cover the households" alsohave been completed, and organized a series of activities such as "Warm winter action", "Sending blessings to welcome the NewYear · Assisting targeted poverty alleviation", "Warm feelings of children · Micro love to realize dreams" and caring for youngpeople with difficulties.

(2) Subsequent Plans

First of all, the Company will continue to consolidate the achievements of poverty alleviation and strengthen the partnership with thepoor households; Secondly, the Company will continue to carry out and implement the assistance work deployed by the ProvincialGovernment and Municipal Government. In accordance with relevant requirements, the Company will steadily push forward thepoverty alleviation work and fulfil its social responsibilities.XVII Other Significant Events

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

~ 29 ~

Part VI Share Changes and Shareholder InformationI Share Changes

Unit: share

	Before		Increase/decrease (+/-)					After
	Percentage (%)	New issues	Shares as dividend converted from profit	Shares as dividend converted from capital reserves	Other	Subtotal	Shares	Percentage (%)	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%

~ 30 ~

III Shareholders and Their Holdings as at the Period-End

Unit: share

Number of ordinary shareholders		25,645				Number of preference shareholders with resumed voting rights (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 ordinary shares held at the period-end	Increase/decrease in the Reporting Period		Restricted ordinary shares held	Non-restricted ordinary shares held	Shares in pledge or frozen
									Status	Shares
ANHUI GUJING GROUP COMPANY LIMITED	State-owned legal person		53.89%	271,404,022				271,404,022	In pledge	114,000,000
GAOLING FUND,L.P.	Foreign legal person		2.47%	12,446,408				12,446,408
AGRICULTURAL BANK OF CHINA- E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND	Other		2.27%	11,456,769				11,456,769
CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD	Foreign legal person		1.75%	8,808,452				8,808,452
HONG KONG SECURITIES CLEARING COMPANY LTD.	Foreign legal person		1.63%	8,216,655				8,216,655
UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD)	Foreign legal person		1.40%	7,048,161				7,048,161
CENTRAL	State-owned		1.30%	6,543,600				6,543,600

~ 31 ~

HUIJIN ASSET MANAGEMENT CO., LTD.	legal person
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED- INVESCO GREAT WALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND	Other	1.07%	5,399,890			5,399,890
GREENWOODS CHINA ALPHA MASTER FUND	Foreign legal person	0.92%	4,614,326			4,614,326
INDUS SELECT MASTER FUND, LTD.	Foreign legal person	0.74%	3,729,186			3,729,186
Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (see note 3)		N/A
Related or acting-in-concert parties among the shareholders above		Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies.
Top 10 non-restricted ordinary shareholders
Name of shareholder		Non-restricted shares held at the period-end					Shares by type
							Type		Shares
ANHUI GUJING GROUP COMPANY LIMITED		271,404,022					RMB ordinary share		271,404,022
GAOLING FUND,L.P.		12,446,408					Domestically listed foreign		12,446,408

~ 32 ~

		stock
AGRICULTURAL BANK OF CHINA- E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND	11,456,769	RMB ordinary share	11,456,769
CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD	8,808,452	Domestically listed foreign stock	8,808,452
HONG KONG SECURITIES CLEARING COMPANY LTD.	8,216,655	RMB ordinary share	8,216,655
UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD)	7,048,161	Domestically listed foreign stock	7,048,161
CENTRAL HUIJIN ASSET MANAGEMENT CO., LTD.	6,543,600	RMB ordinary share	6,543,600
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED- INVESCO GREAT WALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND	5,399,890	RMB ordinary share	5,399,890
GREENWOODS CHINA ALPHA MASTER FUND	4,614,326	Domestically listed foreign stock	4,614,326
INDUS SELECT MASTER FUND, LTD.	3,729,186	Domestically listed foreign stock	3,729,186
Related or acting-in-concert parties among top 10 unrestricted ordinary shareholders, as well as between top 10 unrestricted ordinary shareholders and top 10 ordinary shareholders	Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies.
Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4)	N/A

~ 33 ~

No such cases in the Reporting Period.IV Change of the Controlling Shareholder or the De Facto ControllerChange of the controlling shareholder in the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.Change of the de facto controller in the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.

~ 34 ~

Part VII Preference Shares

□ Applicable √ Not applicable

No preference shares in the Reporting Period.

~ 35 ~

Part VIII Convertible Corporate Bonds

□ Applicable √ Not applicable

No convertible corporate bonds in the Reporting Period.

~ 36 ~

Part IX Directors, Supervisors and Senior ManagementI Change in Shareholdings of Directors, Supervisors and Senior Management

□ Applicable √ Not applicable

No changes occurred to the shareholdings of the directors, supervisors and senior management in the Reporting Period. See the 2019Annual Report for more details.

II Change of Directors, Supervisors and Senior Management

√ Applicable □ Not applicable

Name	Office title	Type	Date	Reason
Liang Jinhui	Chairman of the Board	Elected	19 June 2020	General election
Li Peihui	Director	Elected	19 June 2020	General election
Zhou Qingwu	Director, GM	Elected and appointed	19 June 2020	General election
Yan Lijun	Director, Executive Deputy GM	Elected and appointed	19 June 2020	General election
Xu Peng	Director, Deputy GM	Elected and appointed	19 June 2020	General election
Ye Changqing	Director, Deputy GM, Chief Accountant, Secretary of the Board	Elected and appointed	19 June 2020	General election
Zhang Guiping	Independent director	Elected	19 June 2020	General election
Wang Ruihua	Independent director	Elected	19 June 2020	General election
Xu Zhihao	Independent director	Elected	19 June 2020	General election
Sun Wanhua	Chairman of Supervisory Committee	Elected	19 June 2020	General election
Yang Xiaofan	Supervisor	Elected	19 June 2020	General election
Lu Duicang	Supervisor	Elected	19 June 2020	General election

~ 37 ~

Wang Zibin	Employee supervisor	Elected	19 June 2020	General election
Zhang Bo	Employee supervisor	Elected	19 June 2020	General election
Zhang Lihong	Deputy GM	Appointed	19 June 2020	General election
Zhu Xianghong	GM assistant	Appointed	19 June 2020	General election
Gao Jiakun	GM assistant	Appointed	19 June 2020	General election
Wang Gao	Independent director	Leaving for expiration of the term	19 June 2020	General election
Song Shuyu	Independent director	Leaving for expiration of the term	19 June 2020	General election

~ 38 ~

Part X Corporate BondsDoes the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?No.

~ 39 ~

Part XI Financial StatementsI Independent Auditor’s Report

Are these interim financial statements audited by an independent auditor?

□ Yes √ No

These interim financial statements have not been audited by an independent auditor.

II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Anhui Gujing Distillery Company Limited

30 June 2020

Unit: RMB

Item	30 June 2020	31 December 2019
Current assets:
Monetary assets	7,418,187,475.71	5,619,749,918.09
Settlement reserve
Interbank loans granted
Held-for-trading financial assets	230,264,936.41	509,031,097.02
Derivative financial assets
Notes receivable	1,036,114,364.10	1,004,217,431.56
Accounts receivable	44,592,707.52	40,776,567.96
Accounts receivable financing
Prepayments	93,705,156.53	197,453,313.96
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables	36,472,434.42	25,746,957.22
Including: Interest receivable	10,600,806.32	1,908,788.81
Dividends receivable
Financial assets purchased under

~ 40 ~

resale agreements
Inventories	2,920,772,885.04	3,015,051,961.78
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets	103,093,691.95	114,439,167.07
Total current assets	11,883,203,651.68	10,526,466,414.66
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments	4,624,650.90	4,678,282.24
Investments in other equity instruments
Other non-current financial assets
Investment property	4,551,514.78	4,710,086.02
Fixed assets	1,629,268,366.99	1,722,572,998.79
Construction in progress	258,954,824.33	183,984,816.07
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	890,598,069.49	785,717,932.76
Development costs
Goodwill	478,283,495.29	478,283,495.29
Long-term prepaid expense	57,681,212.58	70,240,106.82
Deferred income tax assets	121,949,134.77	90,494,544.51
Other non-current assets	574,026.00	4,148,686.00
Total non-current assets	3,446,485,295.13	3,344,830,948.50
Total assets	15,329,688,946.81	13,871,297,363.16
Current liabilities:
Short-term borrowings	50,094,500.00	0.00
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities

~ 41 ~

Derivative financial liabilities
Notes payable	1,020,583,475.29	703,679,646.86
Accounts payable	386,356,621.01	563,494,195.40
Advances from customers	0.00	529,863,011.73
Contract liabilities	727,347,929.08	0.00
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Employee benefits payable	298,227,276.86	454,189,532.89
Taxes payable	476,872,467.49	482,903,109.59
Other payables	2,190,846,597.94	1,315,878,229.01
Including: Interest payable
Dividends payable	755,400,000.00	0.00
Handling charges and commissions payable
Reinsurance payables
Liabilities directly associated with assets held for sale
Current portion of non-current liabilities
Other current liabilities	306,044,574.61	197,484,121.41
Total current liabilities	5,456,373,442.28	4,247,491,846.89
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable

~ 42 ~

Provisions
Deferred income	74,384,425.08	72,778,437.92
Deferred income tax liabilities	115,734,840.78	118,872,366.61
Other non-current liabilities
Total non-current liabilities	190,119,265.86	191,650,804.53
Total liabilities	5,646,492,708.14	4,439,142,651.42
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
Specific reserve
Surplus reserves	256,902,260.27	256,902,260.27
General reserve
Retained earnings	7,157,740,516.28	6,888,203,911.92
Total equity attributable to owners of the Company as the parent	9,213,648,368.80	8,944,111,764.44
Non-controlling interests	469,547,869.87	488,042,947.30
Total owners’ equity	9,683,196,238.67	9,432,154,711.74
Total liabilities and owners’ equity	15,329,688,946.81	13,871,297,363.16

Item	30 June 2020	31 December 2019
Current assets:
Monetary assets	3,777,904,155.80	2,919,818,830.20
Held-for-trading financial assets	220,264,936.41	489,861,097.02
Derivative financial assets

~ 43 ~

Notes receivable	611,813,648.59	378,740,100.82
Accounts receivable	1,591,313.17	218,558,555.07
Accounts receivable financing
Prepayments	43,507,722.75	17,906,999.63
Other receivables	121,302,078.58	125,219,213.84
Including: Interest receivable	301,888.89	301,888.89
Dividends receivable
Inventories	2,532,862,118.85	2,688,839,871.27
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets	10,900,000.00	1,280,998.32
Total current assets	7,320,145,974.15	6,840,225,666.17
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
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	4,551,514.78	4,710,086.02
Fixed assets	1,230,406,181.70	1,310,704,771.36
Construction in progress	112,168,345.25	84,477,784.02
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	354,086,966.94	243,928,047.95
Development costs
Goodwill
Long-term prepaid expense	39,004,662.92	48,354,967.15
Deferred income tax assets	27,832,342.65	31,360,809.87
Other non-current assets	574,026.00	574,026.00
Total non-current assets	2,916,837,705.56	2,872,324,157.69

~ 44 ~

Total assets	10,236,983,679.71	9,712,549,823.86
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable	0.00	49,114,582.04
Accounts payable	313,257,868.54	450,303,984.53
Advances from customers	0.00	31,724.77
Contract liabilities	96,866,235.95	0.00
Employee benefits payable	107,051,733.88	100,357,808.20
Taxes payable	305,205,907.01	371,012,223.50
Other payables	1,055,693,921.51	274,053,511.54
Including: Interest payable
Dividends payable	755,400,000.00	0.00
Liabilities directly associated with assets held for sale
Current portion of non-current liabilities
Other current liabilities	13,957,054.12	11,953,800.20
Total current liabilities	1,892,032,721.01	1,256,827,634.78
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income	31,467,109.09	33,229,246.47
Deferred income tax liabilities	20,344,502.23	22,799,814.64
Other non-current liabilities
Total non-current liabilities	51,811,611.32	56,029,061.11
Total liabilities	1,943,844,332.33	1,312,856,695.89

~ 45 ~

Owners’ equity:
Share capital	503,600,000.00	503,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves	1,247,162,107.35	1,247,162,107.35
Less: Treasury stock
Other comprehensive income
Specific reserve
Surplus reserves	251,800,000.00	251,800,000.00
Retained earnings	6,290,577,240.03	6,397,131,020.62
Total owners’ equity	8,293,139,347.38	8,399,693,127.97
Total liabilities and owners’ equity	10,236,983,679.71	9,712,549,823.86

Item	H1 2020	H1 2019
1. Revenue	5,519,621,000.62	5,988,112,999.09
Including: Operating revenue	5,519,621,000.62	5,988,112,999.09
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses	4,162,705,858.66	4,416,581,005.79
Including: Cost of sales	1,313,925,592.48	1,394,156,734.55
Interest expense
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense

~ 46 ~

Taxes and surcharges	887,997,040.72	869,527,762.04
Selling expense	1,618,049,637.27	1,840,489,439.70
Administrative expense	395,687,673.15	302,045,457.13
R&D expense	15,254,382.98	14,664,237.67
Finance costs	-68,208,467.94	-4,302,625.30
Including: Interest expense	28,973,275.97	14,173,972.09
Interest income	96,891,173.45	20,466,649.02
Add: Other income	14,974,353.66	30,783,918.68
Return on investment (“-” for loss)	18,485,972.20	77,347,047.53
Including: Share of profit or loss of joint ventures and associates	-53,631.34	-164,994.19
Income from the derecognition of financial assets at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss)	-3,596,160.61	11,320,345.56
Credit impairment loss (“-” for loss)	-388,444.57	-476,569.40
Asset impairment loss (“-” for loss)	-5,693,185.77	-5,945,248.67
Asset disposal income (“-” for loss)	77,867.25	119,488.56
3. Operating profit (“-” for loss)	1,380,775,544.12	1,684,680,975.56
Add: Non-operating income	20,575,161.54	11,150,763.53
Less: Non-operating expense	24,273,656.49	1,737,611.07
4. Profit before tax (“-” for loss)	1,377,077,049.17	1,694,094,128.02
Less: Income tax expense	370,635,522.24	419,145,404.31
5. Net profit (“-” for net loss)	1,006,441,526.93	1,274,948,723.71
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net loss)	1,006,441,526.93	1,274,948,723.71
5.1.2 Net profit from discontinued operations (“-” for net loss)
5.2 By ownership

~ 47 ~

5.2.1 Net profit attributable to owners of the Company as the parent	1,024,936,604.36	1,248,316,314.01
5.2.1 Net profit attributable to non-controlling interests	-18,495,077.43	26,632,409.70
6. Other comprehensive income, net of tax
Attributable to owners of the Company as the parent
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes caused by remeasurements on defined benefit schemes
6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in other equity instruments
6.1.4 Changes in the fair value arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to profit or loss
6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other debt obligations
6.2.3 Other comprehensive income arising from the reclassification of financial assets
6.2.4 Credit impairment allowance for investments in other debt obligations
6.2.5 Reserve for cash flow hedges
6.2.6 Differences arising from the translation of foreign currency-denominated financial statements
6.2.7 Other
Attributable to non-controlling interests

~ 48 ~

7. Total comprehensive income	1,006,441,526.93	1,274,948,723.71
Attributable to owners of the Company as the parent	1,024,936,604.36	1,248,316,314.01
Attributable to non-controlling interests	-18,495,077.43	26,632,409.70
8. Earnings per share
8.1 Basic earnings per share	2.04	2.48
8.2 Diluted earnings per share	2.04	2.48

Item	H1 2020	H1 2019
1. Operating revenue	3,297,117,172.49	3,144,682,463.58
Less: Cost of sales	1,317,059,263.62	1,277,918,576.91
Taxes and surcharges	826,730,898.61	764,598,846.12
Selling expense	22,901,348.42	45,886,471.81
Administrative expense	287,708,363.27	202,658,261.68
R&D expense	9,137,959.37	9,036,129.81
Finance costs	-44,796,771.26	-2,059,057.16
Including: Interest expense	28,288,982.29	14,006,847.09
Interest income	73,155,252.32	17,740,923.04
Add: Other income	4,622,731.11	3,372,718.25
Return on investment (“-” for loss)	12,434,590.21	31,883,868.76
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)	-3,596,160.61	11,320,345.56

~ 49 ~

Credit impairment loss (“-” for loss)	540,745.12	-186,067.78
Asset impairment loss (“-” for loss)	-5,693,185.77	-5,945,248.67
Asset disposal income (“-” for loss)	60,176.99	36,552.41
2. Operating profit (“-” for loss)	886,745,007.51	887,125,402.94
Add: Non-operating income	15,201,396.26	9,342,723.23
Less: Non-operating expense	20,488,855.01	1,225,313.77
3. Profit before tax (“-” for loss)	881,457,548.76	895,242,812.40
Less: Income tax expense	232,611,329.35	211,262,069.16
4. Net profit (“-” for net loss)	648,846,219.41	683,980,743.24
4.1 Net profit from continuing operations (“-” for net loss)	648,846,219.41	683,980,743.24
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes caused by remeasurements on defined benefit schemes
5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in other equity instruments
5.1.4 Changes in the fair value arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to profit or loss
5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in other debt obligations
5.2.3 Other comprehensive income arising from the reclassification of financial assets

~ 50 ~

5.2.4 Credit impairment allowance for investments in other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the translation of foreign currency-denominated financial statements
5.2.7 Other
6. Total comprehensive income	648,846,219.41	683,980,743.24
7. Earnings per share
7.1 Basic earnings per share	1.29	1.36
7.2 Diluted earnings per share	1.29	1.36

Item	H1 2020	H1 2019
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services	6,336,568,642.45	5,352,480,704.00
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates	3,020,222.21	15,816,253.89

~ 51 ~

Cash generated from other operating activities	1,323,750,535.31	276,731,904.68
Subtotal of cash generated from operating activities	7,663,339,399.97	5,645,028,862.57
Payments for commodities and services	733,871,614.50	899,005,913.59
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in interbank loans granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees	1,250,084,349.76	1,006,137,070.65
Taxes paid	1,853,009,320.89	2,001,653,338.87
Cash used in other operating activities	1,484,736,014.18	696,498,790.63
Subtotal of cash used in operating activities	5,321,701,299.33	4,603,295,113.74
Net cash generated from/used in operating activities	2,341,638,100.64	1,041,733,748.83
2. Cash flows from investing activities:
Proceeds from disinvestment	309,070,000.00	2,576,300,054.88
Return on investment	18,539,603.54	72,002,136.32
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets	92,400.01	33,700.00
Net proceeds from the disposal of subsidiaries and other business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities	327,702,003.55	2,648,335,891.20
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets	220,906,338.24	152,296,054.86
Payments for investments	44,800,000.00	1,222,560,163.50

~ 52 ~

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	265,706,338.24	1,374,856,218.36
Net cash generated from/used in investing activities	61,995,665.31	1,273,479,672.84
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests to subsidiaries
Borrowings raised	50,094,500.00	0.00
Cash generated from other financing activities
Subtotal of cash generated from financing activities	50,094,500.00	0.00
Repayment of borrowings
Interest and dividends paid	290,708.33	755,400,000.00
Including: Dividends paid by subsidiaries to non-controlling interests
Cash used in other financing activities
Subtotal of cash used in financing activities	290,708.33	755,400,000.00
Net cash generated from/used in financing activities	49,803,791.67	-755,400,000.00
4. Effect of foreign exchange rates changes on cash and cash equivalents
5. Net increase in cash and cash equivalents	2,453,437,557.62	1,559,813,421.67
Add: Cash and cash equivalents, beginning of the period	2,944,749,918.09	835,560,865.12
6. Cash and cash equivalents, end of the period	5,398,187,475.71	2,395,374,286.79

Item

H1 2020

H1 2019

~ 53 ~

1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services	3,777,524,502.26	3,351,164,696.89
Tax rebates
Cash generated from other operating activities	936,783,738.07	248,907,013.29
Subtotal of cash generated from operating activities	4,714,308,240.33	3,600,071,710.18
Payments for commodities and services	1,149,042,873.79	847,532,691.56
Cash paid to and for employees	450,118,968.16	355,855,901.15
Taxes paid	1,415,720,556.26	1,260,288,640.64
Cash used in other operating activities	508,102,703.30	145,296,084.94
Subtotal of cash used in operating activities	3,522,985,101.51	2,608,973,318.29
Net cash generated from/used in operating activities	1,191,323,138.82	991,098,391.89
2. Cash flows from investing activities:
Proceeds from disinvestment	276,900,000.00	1,400,740,054.88
Return on investment	12,434,590.21	31,890,794.48
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets	68,000.00	41,304.23
Net proceeds from the disposal of subsidiaries and other business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities	289,402,590.21	1,432,672,153.59
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets	160,840,403.43	116,751,759.47
Payments for investments	21,800,000.00	726,900,163.50
Net payments for the acquisition of subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing activities	182,640,403.43	843,651,922.97
Net cash generated from/used in	106,762,186.78	589,020,230.62

~ 54 ~

investing activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing activities
Subtotal of cash generated from financing activities
Repayment of borrowings
Interest and dividends paid	0.00	755,400,000.00
Cash used in other financing activities
Subtotal of cash used in financing activities	0.00	755,400,000.00
Net cash generated from/used in financing activities	0.00	-755,400,000.00
4. Effect of foreign exchange rates changes on cash and cash equivalents
5. Net increase in cash and cash equivalents	1,298,085,325.60	824,718,622.51
Add: Cash and cash equivalents, beginning of the period	2,079,818,830.20	708,172,917.59
6. Cash and cash equivalents, end of the period	3,377,904,155.80	1,532,891,540.10

~ 55 ~

7. Consolidated Statements of Changes in Owners’ Equity

H1 2020

Unit: RMB

Item

H1 2020

Equity attributable to owners of the Company as the parent

Non-controlling interests

Total owners’ equity

Share capital

Other equity instruments

Capital reserves

Less: Treasury stock

Other comprehensive income

Specific reserve

Surplus reserves

General reserve

Retained earnings

Other

Subtotal

Preferred shares

Perpetual bonds

Other

1. Balance as at the end of the prior year

503,600,000.00

1,295,405,592.25

256,902,260.27

6,888,203,911.92

8,944,111,764.44

488,042,947.30

9,432,154,711.74

Add: Adjustment for change in accounting policy

Adjustment for correction of previous error

Adjustment for business combination

~ 56 ~

under common control
Other adjustments
2. Balance as at the beginning of the year	503,600,000.00				1,295,405,592.25				256,902,260.27		6,888,203,911.92		8,944,111,764.44	488,042,947.30	9,432,154,711.74
3. Increase/ decrease in the period (“-” for decrease)											269,536,604.36		269,536,604.36	-18,495,077.43	251,041,526.93
3.1 Total comprehensive income											1,024,936,604.36		1,024,936,604.36	-18,495,077.43	1,006,441,526.93
3.2 Capital increased and reduced by owners
3.2.1 Ordinary shares increased by owners
3.2.2 Capital increased by

~ 57 ~

holders of other equity instruments
3.2.3 Share-based payments included in owners’ equity
3.2.4 Other
3.3 Profit distribution											-755,400,000.00		-755,400,000.00		-755,400,000.00
3.3.1 Appropriation to surplus reserves
3.3.2 Appropriation to general reserve
3.3.3 Appropriation to owners (or shareholders)											-755,400,000.00		-755,400,000.00		-755,400,000.00
3.3.4 Other

~ 58 ~

3.4 Transfers within owners’ equity

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

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

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit schemes transferred to retained earnings

~ 59 ~

3.4.5 Other comprehensive income transferred to retained earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the period	503,600,000.00				1,295,405,592.25				256,902,260.27		7,157,740,516.28		9,213,648,368.80	469,547,869.87	9,683,196,238.67

Item

H1 2019

Equity attributable to owners of the Company as the parent

Non-controlling interests

Total owners’ equity

Share capital

Other equity

Capital

Less:

Other

Specifi

Surplus

Gener

Retained

Othe

Subtotal

~ 60 ~

		instruments			reserves	Treasury stock	comprehensive income	c reserve	reserves	al reserve	earnings	r
		Preferred shares	Perpetual bonds	Other
1. Balance 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: Adjustment for change in accounting policy							-4,794,830.59				4,794,830.59
Adjustment for correction of previous error
Adjustment for business combination under common control
Other adjustments
2. Balance as at the beginning of	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

~ 61 ~

the year
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 owners
3.2.2 Capital increased by holders of other equity instruments
3.2.3 Share-based payments included in owners’

~ 62 ~

equity
3.2.4 Other
3.3 Profit distribution											-755,400,000.00		-755,400,000.00		-755,400,000.00
3.3.1 Appropriation to surplus reserves
3.3.2 Appropriation to general reserve
3.3.3 Appropriation to owners (or shareholders)											-755,400,000.00		-755,400,000.00		-755,400,000.00
3.3.4 Other
3.4 Transfers within owners’ equity
3.4.1 Increase in capital (or

~ 63 ~

share capital) from capital reserves

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

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit schemes transferred to retained earnings

3.4.5 Other comprehensive income transferred to retained earnings

3.4.6

~ 64 ~

Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the period	503,600,000.00				1,295,405,592.25				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 2020

Share capital

Other equity instruments

Capital reserves

Less: Treasury stock

Other comprehensive income

Specific reserve

Surplus reserves

Retained earnings

Other

Total owners’ equity

Preferred shares

Perpetual bonds

Other

1. Balance as at the end of the prior year

503,600,000.00

1,247,162,107.35

251,800,000.00

6,397,131,020.62

8,399,693,127.97

Add: Adjustment for change in accounting policy

~ 65 ~

Adjustment for correction of previous error
Other adjustments
2. Balance as at the beginning of the year	503,600,000.00				1,247,162,107.35				251,800,000.00	6,397,131,020.62		8,399,693,127.97
3. Increase/ decrease in the period (“-” for decrease)										-106,553,780.59		-106,553,780.59
3.1 Total comprehensive income										648,846,219.41		648,846,219.41
3.2 Capital increased and reduced by owners
3.2.1 Ordinary shares increased by owners
3.2.2 Capital increased by holders of other equity instruments
3.2.3 Share-based payments included in owners’ equity
3.2.4 Other
3.3 Profit										-755,400,000.00		-755,400,000.00

~ 66 ~

distribution

3.3.1 Appropriation to surplus reserves

3.3.2 Appropriation to owners (or shareholders)

-755,400,000.00

-755,400,000.00

3.3.3 Other

3.4 Transfers within owners’ equity

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

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

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit schemes transferred to retained earnings

3.4.5 Other comprehensive income transferred to

~ 67 ~

retained earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the period	503,600,000.00				1,247,162,107.35				251,800,000.00	6,290,577,240.03		8,293,139,347.38

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. Balance 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: Adjustment for change in accounting policy							-4,794,830.59			4,794,830.59
Adjustment for correction of previous error
Other adjustments
2. Balance as at the beginning of the	503,600,000.00				1,247,162,107.35		0.00		251,800,000.00	5,167,149,578.00		7,169,711,685.35

~ 68 ~

year
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 owners
3.2.2 Capital increased by holders of other equity instruments
3.2.3 Share-based payments included in owners’ equity
3.2.4 Other
3.3 Profit distribution										-755,400,000.00		-755,400,000.00
3.3.1 Appropriation to surplus reserves
3.3.2										-755,400,000.00		-755,400,000.00

~ 69 ~

Appropriation to owners (or shareholders)

3.3.3 Other

3.4 Transfers within owners’ equity

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

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

3.4.3 Loss offset by surplus reserves

3.4.4 Changes in defined benefit schemes transferred to retained earnings

3.4.5 Other comprehensive income transferred to retained earnings

3.4.6 Other

3.5 Specific

~ 70 ~

reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the 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

~ 71 ~

Anhui Gujing Distillery Company LimitedNotes to Financial Statements for H1 2020(Currency Unit Is RMB Unless Otherwise Stated)

1. BASIC INFORMATION ABOUT THE COMPANY

1.1 Corporate Information

Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property,Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company 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 on

~ 72 ~

29 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 16,800,000ordinary 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 2020, 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 28 August 2020 by the Board of Directors.

1.2 Scope of Consolidation and Changes Thereof

(1) Incorporated subsidiaries of the Company

Sequence Number	Name of Subsidiaries	Abbreviation of Subsidiaries	Proportion of Shareholding (or similar equity interest) (%)
			Direct	Indirect
1	Bozhou Gujing Sales Co., Ltd.	Gujing Sales	100.00	-
2	Anhui Jinyunlai Culture & Media Co., Ltd.	Jinyunlai	100.00	-

~ 73 ~

Sequence Number	Name of Subsidiaries	Abbreviation of Subsidiaries	Proportion of Shareholding (or similar equity interest) (%)
			Direct	Indirect
3	Anhui Ruisiweier Technology Co., Ltd.	Ruisiweier	100.00
4	Anhui Colorful Taste Wine Co., Ltd.	Colorful Taste Wine	100.00
5	Anhui Longrui Glass Co., Ltd.	Longrui Glass	100.00
6	Bozhou Gujing Waste Recycling Co., Ltd.	Gujing Waste	100.00
7	Shanghai Gujing Jinhao hotel management company	Jinhao Hotel	100.00
8	Bozhou Gujing hotel Co., Ltd	Gujing Hotel	100.00
9	Anhui Yuanqing environmental protection Co., Ltd.	Yuanqing Environmental Protection	100.00
10	Anhui Gujing Yunshang Electronic Commerce Co., Ltd	Gujing Electronic Commerce	100.00
11	Anhui Zhenrui Construction Engineering Co., Ltd	Zhenrui Construction Engineering	100.00
12	Anhui RunanxinkeTesting Tech. Co., Ltd.	Runanxinke Testing	100.00
13	Yellow Crane Tower Wine Co., Ltd	Yellow Crane Tower Wine	51.00
14	Yellow Crane Tower Wine (Suizhou) Co., Ltd	Suizhou Yellow Crane Tower		51.00
15	Hubei Junhe Advertising Co., Ltd.	Junhe Advertising		51.00
16	Hubei Yellow Crane Tower Beverage Co., Ltd.	Yellow Crane Tower Beverage		51.00
17	Yellow Crane Tower Wine (Xianning) Co., Ltd.	Xianning Yellow Crane Tower		51.00
18	Wuhan Yashibo tech. Co., Ltd.	Yashibo		51.00
19	Wuhan Tianlong Jindi Technology Development Co., Ltd.	Tianlong Jindi		51.00

~ 74 ~

Sequence Number	Name of Subsidiaries	Abbreviation of Subsidiaries	Proportion of Shareholding (or similar equity interest) (%)
			Direct	Indirect
20	Wuhan Junya Sales Co., Ltd.	Junya Sales		51.00
21	Xianning Junhe Sales Co., Ltd.	Xianning Junhe		51.00
22	Suizhou Junhe Commercial Co., Ltd.	Suizhou Junhe		51.00

~ 75 ~

3.4 Currency Used in Bookkeeping

The Company's functional currency is RMB, and its overseas subsidiaries are operated in the currency of the maineconomic environment in which they operate.

3.5 Accounting Treatment of Business Combinations under and not under Common Control(a) Business combinations under common controlThe assets and liabilities that the Company obtains in a business combination under common control shall bemeasured at their carrying amount of the acquired entity at the combination date. If the accounting policy adoptedby the acquired entity is different from that adopted by the acquiring entity, the acquiring entity shall, according toaccounting policy it adopts, adjust the relevant items in the financial statements of the acquired party based on theprincipal of materiality. As for the difference between the carrying amount of the net assets obtained by theacquiring entity and the carrying amount of the consideration paid by it, the capital reserve (capital premium orshare premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not sufficient toabsorb the difference, any excess shall be adjusted against retained earnings.For the accounting treatment of business combination under common control by step acquisitions, please refer toNote 3.6 (6).(b) Business combinations not under common controlThe assets and liabilities that the Company obtains in a business combination not under common control shall bemeasured at their fair value at the acquisition date. If the accounting policy adopted by the acquired entity isdifferent from that adopted by the acquiring entity, the acquiring entity shall, according to accounting policy itadopts, adjust the relevant items in the financial statements of the acquired entity based on the principal ofmateriality. The acquiring entity shall recognise the positive balance between the combination costs and the fairvalue of the identifiable net assets it obtains from the acquired entity as goodwill. The acquiring entity shall,pursuant to the following provisions, treat the negative balance between the combination costs and the fair valueof the identifiable net assets it obtains from the acquired entity:

(i) It shall review the measurement of the fair values of the identifiable assets, liabilities and contingent liabilitiesit obtains from the acquired entity as well as the combination costs;(ii) If, after the review, the combination costs are still less than the fair value of the identifiable net assets itobtains from the acquired entity, the balance shall be recognised in profit or loss of the reporting period.For the accounting treatment of business combination under the same control by step acquisitions, please refer toNote 3.6 (f).(c) Treatment of business combination related costsThe intermediary costs such as audit, legal services and valuation consulting and other related management coststhat are directly attributable to the business combination shall be charged in profit or loss in the period in whichthey are incurred. The costs to issue equity or debt securities for the consideration of business combination shall

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be recorded as a part of the value of the respect equity or debt securities upon initial recognition.

3.6 Method of Preparing the Consolidated Financial Statements

(a) Scope of consolidationThe scope of consolidated financial statements shall be determined on the basis of control. It not only includessubsidiaries determined based on voting power (or similar) or other arrangement, but also structured entities underone or several contract arrangements.Control exists when the Company has all the following: power over the investee; exposure, or rights to variablereturns from the Company’s involvement with the investee; and the ability to use its power over the investee toaffect the amount of the investor’s returns. Subsidiaries are the entities that controlled by the Company (includingenterprise, a divisible part of the investee, and structured entity controlled by the enterprise). A structured entity(sometimes called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights arenot the dominant factor in deciding who controls the entity.(b) Special requirement as the parent company is an investment entityIf the parent company is an investment entity, it should measure its investments in particular subsidiaries asfinancial assets at fair value through profit or loss instead of consolidating those subsidiaries in its consolidatedand separate financial statements. However, as an exception to this requirement, if a subsidiary providesinvestment-related services or activities to the investment entity, it should be consolidated.The parent company is defined as investment entity when meets following conditions:

a. Obtains funds from one or more investors for the purpose of providing those investors with investmentmanagement services;b. Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation,investment income or both; andc. Measures and evaluates the performance of substantially all of its investments on a fair value basis.If the parent company becomes an investment entity, it shall cease to consolidate its subsidiaries at the date of thechange in status, except for any subsidiary which provides investment-related services or activities to theinvestment entity shall be continued to be consolidated. The deconsolidation of subsidiaries is accounted for asthough the investment entity partially disposed subsidiaries without loss of control.When the parent company previously classified as an investment entity ceases to be an investment entity,subsidiary that was previously measured at fair value through profit or loss shall be included in the scope ofconsolidated financial statements at the date of the change in status. The fair value of the subsidiary at the date ofchange represents the transferred deemed consideration in accordance with the accounting for businesscombination not under common control.(c) Method of preparing the consolidated financial statementsThe consolidated financial statements shall be prepared by the Company based on the financial statements of the

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Company and its subsidiaries, and using other related information.When preparing consolidated financial statements, the Company shall consider the entire group as an accountingentity, adopt uniform accounting policies and apply the requirements of Accounting Standard for BusinessEnterprises related to recognition, measurement and presentation. The consolidated financial statements shallreflect the overall financial position, operating results and cash flows of the group.(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are combined with thoseof the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against the parent’sportion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or betweensubsidiaries, and when intragroup transactions indicate an impairment of related assets, the losses shall berecognised in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements when subsidiaries are acquired ordisposed in the reporting period(i) Acquisition of subsidiaries or businessSubsidiaries or business acquired through business combination under common controlWhen preparing consolidated statements of financial position, the opening balance of the consolidated balancesheet shall be adjusted. Related items of comparative financial statements shall be adjusted as well, deeming thatthe combined entity has always existed ever since the ultimate controlling party began to control.Incomes, expenses and profits of the subsidiary incurred from the beginning of the reporting period to the end ofthe reporting period shall be included into the consolidated statement of profit or loss. Related items ofcomparative financial statements shall be adjusted as well, deeming that the combined entity has always existedever since the ultimate controlling party began to control.Cash flows from the beginning of the reporting period to the end of the reporting period shall be included into theconsolidated statement of cash flows. Related items of comparative financial statements shall be adjusted as well,deeming that the combined entity has always existed ever since the ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common controlWhen preparing the consolidated statements of financial position, the opening balance of the consolidatedstatements of financial position shall not be adjusted.Incomes, expenses and profits of the subsidiary incurred from the acquisition date to the end of the reportingperiod shall be included into the consolidated statement of profit or loss.Cash flows from the acquisition date to the end of the reporting period shall be included into the consolidatedstatement of cash flows.

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(ii) Disposal of subsidiaries or businessWhen preparing the consolidated statements of financial position, the opening balance of the consolidatedstatements of financial position shall not be adjusted.Incomes, expenses and profits incurred from the beginning of the subsidiary to the disposal date shall be includedinto the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into the consolidatedstatement of cash flows.(e) Special consideration in consolidation elimination(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised as treasury stock ofthe Company, which is offset with the owner’s equity, represented as “treasury stock” under “owner’s equity” inthe consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking long-term equityinvestment held by the Company to its subsidiaries as reference. That is, the long-term equity investment iseliminated (off- set) against the portion of the corresponding subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve, and being different from retainedearnings and undistributed profit, “Specific reserves” and “General risk provision” shall be recovered based on theproportion attributable to owners of the parent company after long-term equity investment to the subsidiaries iseliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the consolidatedstatement of financial position and their tax basis is generated as a result of elimination of unrealizedinter-company transaction profit or loss, deferred tax assets of deferred tax liabilities shall be recognised, andincome tax expense in the consolidated statement of profit or loss shall be adjusted simultaneously, excludingdeferred taxes related to transactions or events directly recognised in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assets to itssubsidiaries shall be eliminated against “net profit attributed to the owners of the parent company” in full.Unrealized inter-company transactions profit or loss generated from the subsidiaries selling assets to the Companyshall be eliminated between “net profit attributed to the owners of the parent company” and “non-controllinginterests” pursuant to the proportion of the Company in the related subsidiaries. Unrealized inter-companytransactions profit or loss generated from the assets sales between the subsidiaries shall be eliminated between“net profit attributed to the owners of the parent company” and “non-controlling interests” pursuant to theproportion of the Company in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the proportion ofnon-controlling interest in this subsidiary at the beginning of the period, non-controlling interest is still to bewritten down.

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(f) Accounting for Special Transactions(i) Purchasing of non-controlling interestsWhere, the Company purchases non-controlling interests of its subsidiary, in the separate financial statements ofthe Company, the cost of the long-term equity investment obtained in purchasing non-controlling interests ismeasured at the fair value of the consideration paid. In the consolidated financial statements, difference betweenthe cost of the long-term equity investment newly obtained in purchasing non-controlling interests and share ofthe subsidiary’s net assets from the acquisition date or combination date continuingly calculated pursuant to thenewly acquired shareholding proportion shall be adjusted into capital reserve (capital premium or share premium).If capital reserve is not enough to be offset, surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactionsBusiness combination under common control in stages through multiple transactionsOn the combination date, in the separate financial statement, initial cost of the long-term equity investment isdetermined according to the share of carrying amount of the acquiree’s net assets in the ultimate controllingentity’s consolidated financial statements after combination. The difference between the initial cost of thelong-term equity investment and the carrying amount of the long -term investment held prior of control plus bookvalue of additional consideration paid at acquisition date is adjusted into capital reserve (capital premium or sharepremium). If the capital reserve is not enough to absorb the difference, any excess shall be adjusted againstsurplus reserve and undistributed profit in turn.In the consolidated financial statements, the assets and liabilities acquired during the combination should berecognized at their carrying amount in the ultimate controlling entity’s consolidated financial statements on thecombination date unless any adjustment is resulted from the difference in accounting policies. The differencebetween the carrying amount of the investment held prior of control plus book value of additional considerationpaid on the acquisition date and the net assets acquired through the combination is adjusted into capital reserve(capital premium or share premium). If the capital reserve is not enough to absorb the difference, any excess shallbe adjusted against retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date and the equityinvestment is accounted for under the equity method, related profit or loss, other comprehensive income and otherchanges in equity which have been recognised during the period from the later of the date of the Companyobtaining original equity interest and the date of both the acquirer and the acquiree under common control of thesame ultimate controlling party to the combination date should be offset against the opening balance of retainedearnings at the comparative financial statements period respectively.Business combination not under common control in stages through multiple transactionsOn the consolidation date, in the separate financial statements, the initial cost of long-term equity investment isdetermined according to the carrying amount of the original long-term investment plus the cost of new

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investment.In the consolidated financial statements, the equity interest of the acquired entity held prior to the acquisition dateshall be re-measured at its fair value on the acquisition date. Difference between the fair value of the equityinterest and its book value is recognised as investment income. The other comprehensive income related to theequity interest held prior to the acquisition date calculated through equity method, should be transferred tocurrent investment income of the acquisition period, excluding other comprehensive income resulted from theremeasurement of the net assets or net liabilities under defined benefit plan. The Company shall discloseacquisition-date fair value of the equity interest held prior to the acquisition date, and the related gains or lossesdue to the remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of controlFor partial disposal of the long-term equity investment in the subsidiaries without a loss of control, when theCompany prepares consolidated financial statements, difference between consideration received from the disposaland the corresponding share of subsidiary’s net assets cumulatively calculated from the acquisition date orcombination date shall be adjusted into capital reserve (capital premium or share premium). If the capital reserveis not enough to absorb the difference, any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of controlDisposal through one transactionIf the Company loses control in an investee through partial disposal of the equity investment, when theconsolidated financial statements are prepared, the retained equity interest should be re-measured at fair value atthe date of loss of control. The difference between i) the fair value of consideration received from the disposalplus non-controlling interest retained; ii) share of the former subsidiary’s net assets cumulatively calculated fromthe acquisition date or combination date according to the original proportion of equity interest, shall be recognisedin current investment income when control is lost.Moreover, other comprehensive income and other changes in equity related to the equity investment in the formersubsidiary shall be transferred into current investment income when control is lost, excluding othercomprehensive income resulted from the remeasurement of the movement of net assets or net liabilities underdefined benefit plan.Disposal in stagesIn the consolidated financial statements, whether the transactions should be accounted for as “a single transaction”needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction”, in the separate financial statements, fortransactions prior of the date of loss of control, carrying amount of each disposal of long-term equity investmentneed to be recognized, and the difference between consideration received and the carrying amount of long-termequity investment corresponding to the equity interest disposed should be recognized in current investment

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income; in the consolidated financial statements, the disposal transaction should be accounted for according torelated policy in “Disposal of long-term equity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction”, these transactions should be accounted foras a single transaction of disposal of subsidiary resulting in loss of control. In the separate financial statements, foreach transaction prior of the date of loss of control, difference between consideration received and the carryingamount of long-term equity investment corresponding to the equity interest disposed should be recognised asother comprehensive income firstly, and transferred to profit or loss as a whole when control is lost; in theconsolidated financial statements, for each transaction prior of the date of loss of control, difference betweenconsideration received and proportion of the subsidiary’s net assets corresponding to the equity interest disposedshould be recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact, the presence ofone or more of the following indicators may lead to account for multiple transactions as a single transaction:

(a) The transactions are entered into simultaneously or in contemplation of one another.(b) The transactions form a single transaction designed to achieve an overall commercial effect.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) One transaction, when considered on its own merits, does not make economic sense, but when consideredtogether with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by thesubsidiaries’ minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the subsidiaries, whichresulted in the dilution of equity interest of parent company in these subsidiaries. In the consolidated financialstatements, difference between share of the corresponding subsidiaries’ net assets calculated based on the parent’sequity interest before and after the capital injection shall be adjusted into capital reserve (capital premium or sharepremium). If the capital reserve is not enough to absorb the difference, any excess shall be adjusted againstretained earnings.

3.7 Classification of Joint Arrangements and Accounting for Joint OperationA joint arrangement is an arrangement of which two or more parties have joint control. Joint arrangement of theCompany is classified as either a joint operation or a joint venture.(a) Joint operationA joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rightsto the assets, and obligations for the liabilities, relating to the arrangement.The Company shall recognise the following items in relation to shared interest in a joint operation, and accountfor them in accordance with relevant accounting standards of the Accounting Standards for Business Enterprises:

(i) its assets, including its share of any assets held jointly;

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(ii) its liabilities, including its share of any liabilities incurred jointly;(iii) its revenue from the sale of its share of the output arising from the joint operation;(iv) its share of the revenue from the sale of the output by the joint operation; and(v) its expenses, including its share of any expenses incurred jointly.(b) Joint ventureA joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights tothe net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of long-term equityinvestment.

3.8 Cash and Cash Equivalents

Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents includeshort-term (generally within three months of maturity at acquisition), highly liquid investments that are readilyconvertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

3.9 Foreign Currency Transactions and Translation of Foreign Currency Financial Statements(a) Determination of the exchange rate for foreign currency transactionsAt the time of initial recognition of a foreign currency transaction, the amount in the foreign currency shall betranslated into the amount in the functional currency at the spot exchange rate of the transaction date, or at anexchange rate which is determined through a systematic and reasonable method and is approximate to the spotexchange rate of the transaction date (hereinafter referred to as the approximate exchange rate).(b) Translation of monetary items denominated in foreign currency on the balance sheet dateThe foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. Thebalance of exchange arising from the difference between the spot exchange rate on the balance sheet date and thespot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded into theprofits and losses at the current period. The foreign currency non-monetary items measured at the historical costshall still be translated at the spot exchange rate on the transaction date; for the foreign currency non-monetaryitems restated to a fair value measurement, shall be translated into the at the spot exchange rate at the date whenthe fair value was determined, the difference between the restated functional currency amount and the originalfunctional currency amount shall be recorded into the profits and losses at the current period.(c) Translation of foreign currency financial statementsBefore translating the financial statements of foreign operations, the accounting period and accounting policyshall be adjusted so as to conform to the Company. The adjusted foreign operation financial statementsdenominated in foreign currency (other than functional currency) shall be translated in accordance with thefollowing method:

(i) The asset and liability items in the statement of financial position shall be translated at the spot exchange rates

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at the date of that statement of financial position.. The owners’ equity items except undistributed profit shall betranslated at the spot exchange rates when they are incurred.(ii) The income and expense items in the statement of profit and other comprehensive income shall be translated atthe spot exchange rates or approximate exchange rate at the date of transaction.(iii)Foreign currency cash flows and cash flows of foreign subsidiaries shall be translated at the spot exchange rateor approximate exchange rate when the cash flows are incurred. The effect of exchange rate changes on cash ispresented separately in the statement of cash flows as an adjustment item.(iv) The differences arising from the translation of foreign currency financial statements shall be presentedseparately as “other comprehensive income” under the owners’ equity items of the consolidated statement offinancial position.When disposing a foreign operation involving loss of control, the cumulative amount of the exchange differencesrelating to that foreign operation recognised under other comprehensive income in the statement of financialposition, shall be reclassified into current profit or loss according to the proportion disposed.

3.10 Financial Instruments

Financial instrument is any contract which gives rise to both a financial asset of one entity and a financial liabilityor equity instrument of another entity.(a) Recognition and derecognition of financial instrumentA financial asset or a financial liability should be recognised in the statement of financial position when, and onlywhen, an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:

(i) The rights to the contractual cash flows from a financial asset expire(ii) The financial asset has been transferred and meets one of the following derecognition conditions:

Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e., when theobligation specified in the contract is discharged or cancelled or expires. An exchange of the Company (borrower)and lender of debt instruments that carry significantly different terms or a substantial modification of the terms ofan existing liability are both accounted for as an extinguishment of the original financial liability and therecognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade dateaccounting. A regular-way purchase or sale of financial assets is a transaction under a contract whose termsrequire delivery of the asset within the time frame established generally by regulations or convention in themarket place concerned. Trade date is the date at which the entity commits itself to purchase or sell an asset.(b) Classification and measurement of financial assetsAt initial recognition, the Company classified its financial asset based on both the business model for managingthe financial asset and the contractual cash flow characteristics of the financial asset: financial asset at amortised

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cost, financial asset at fair value through profit or loss (FVTPL) and financial asset at fair value through othercomprehensive income (FVTOCI). Reclassification of financial assets is permitted if, and only if, the objective ofthe entity’s business model for managing those financial assets changes. In this circumstance, all affectedfinancial assets shall be reclassified on the first day of the first reporting period after the changes in businessmodel; otherwise the financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured at FVTPL,transaction costs are recognised in current profit or loss. For financial assets not measured at FVTPL, transactioncosts should be included in the initial measurement. Notes receivable or accounts receivable that arise from salesof goods or rendering of services are initially measured at the transaction price defined in the accounting standardof revenue where the transaction does not include a significant financing component.Subsequent measurement of financial assets will be based on their categories:

(i)Financial asset at amortised costThe financial asset at amortised cost category of classification applies when both the following conditions are met:

the financial asset is held within the business model whose objective is to hold financial assets in order to collectcontractual cash flows, and the contractual term of the financial asset gives rise on specified dates to cash flowsthat are solely payment of principal and interest on the principal amount outstanding. These financial assets aresubsequently measured at amortised cost by adopting the effective interest rate method. Any gain or loss arisingfrom derecognition according to the amortization under effective interest rate method or impairment arerecognised in current profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)The financial asset at FVTOCI category of classification applies when both the following conditions are met: thefinancial asset is held within the business model whose objective is achieved by both collecting contractual cashflows and selling financial assets, and the contractual term of the financial asset gives rise on specified dates tocash flows that are solely payment of principle and interest on the principal amount outstanding. All changes infair value are recognised in other comprehensive income except for gain or loss arising from impairment orexchange differences, which should be recognised in current profit or loss. At derecognition, cumulative gain orloss previously recognised under OCI is reclassified to current profit or loss. However, interest income calculatedbased on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument investments asmeasured through FVTOCI. All changes in fair value are recognised in other comprehensive income except fordividend income recognised in current profit or loss. At derecognition, cumulative gain or loss are reclassified toretained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair value through

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other comprehensive income (FVTOCI), should be classified as financial asset at fair value through profit or loss(FVTPL). These financial assets should be subsequently measured at fair value. All the changes in fair value areincluded in current profit or loss.(c) Classification and measurement of financial liabilitiesThe Company classified the financial liabilities as financial liabilities at fair value through profit or loss (FVTPL),loan commitments at a below-market interest rate and financial guarantee contracts and financial asset atamortised cost.Subsequent measurement of financial assets will be based on the classification:

(i)Financial liabilities at fair value through profit or loss (FVTPL)Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial liabilitiesdesignated at FVTPL are classified as financial liabilities at FVTP. After initial recognition, any gain or loss(including interest expense) are recognised in current profit or loss except for those hedge accounting is applied.For financial liability that is designated as at FVTPL, changes in the fair value of the financial liability that isattributable to changes in the own credit risk of the issuer shall be presented in other comprehensive income. Atderecognition, cumulative gain or loss previously recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contractsLoan commitment is a commitment by the Company to provide a loan to customer under specified contract terms.The provision of impairment losses of loan commitments shall be recognised based on expected credit lossesmodel.Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse theholder for a loss it incurs because a specified debtor fails to make payment when due in accordance with theoriginal or modified terms of a debt instrument. Financial guarantee contracts liability shall be subsequentlymeasured at the higher of: The amount of the loss allowance recognised according to the impairment principles offinancial instruments; and the amount initially recognised less the cumulative amount of income recognised inaccordance with the revenue principles.(iii)Financial liabilities at amortised costAfter initial recognition, the Company measured other financial liabilities at amortised cost using the effectiveinterest method.Except for special situation, financial liabilities and equity instrument should be classified in accordance with thefollowing principles:

(i) If the Company has no unconditional right to avoid delivering cash or another financial instrument to fulfill acontractual obligation, this contractual obligation meet the definition of financial liabilities. Some financialinstruments do not comprise terms and conditions related to obligations of delivering cash or another financialinstrument explicitly, they may include contractual obligation indirectly through other terms and conditions.

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(ii) If a financial instrument must or may be settled in the Company's own equity instruments, it should beconsidered that the Company’s own equity instruments are alternatives of cash or another financial instrument, orto entitle the holder of the equity instruments to sharing the remaining rights over the net assets of the issuer. If theformer is the case, the instrument is a liability of the issuer; otherwise, it is an equity instrument of the issuer.Under some circumstances, it is regulated in the contract that the financial instrument must or may be settled inthe Company's own equity instruments, where, amount of contractual rights and obligations are calculated bymultiplying the number of the equity instruments to be available or delivered by its fair value upon settlement.Such contracts shall be classified as financial liabilities, regardless that the amount of contractual rights andliabilities is fixed, or fluctuate totally or partially with variables other than market price of the entity’s own equityinstruments(d) Derivatives and embedded derivativesAt initial recognition, derivatives shall be measured at fair value at the date of derivative contracts are signed andsubsequently measured at fair value. The derivative with a positive fair value shall be recognized as an asset, andwith a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into current profitor loss except for the effective portion of cash flow hedges which shall be recognised in other comprehensiveincome and reclassified into current profit or loss when the hedged items affect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host, the Company shallapply the requirements of financial asset classification to the entire hybrid contract. If a host that is not a financialasset and the hybrid contract is not measured at fair value with changes in fair value recognised in profit or loss,and the economic characteristics and risks of the embedded derivative are not closely related to the economiccharacteristics and risks of the host, and a separate instrument with the same terms as the embedded derivativewould meet the definition of a derivative, the embedded derivative shall be separated from the hybrid instrumentand accounted for as a separate derivative instrument. If the Company is unable to measure the fair value of theembedded derivative at the acquisition date or subsequently at the balance sheet date, the entire hybrid contract isdesignated as financial assets or financial liabilities at fair value through profit or loss.(e) Impairment of financial instrumentThe Company shall recognise a loss allowance based on expected credit losses on a financial asset that ismeasured at amortised cost, a debt investment at fair value through other comprehensive income, a contract asset,a lease receivable, a loan commitment and a financial guarantee contract.(i) Measurement of expected credit lossesExpected credit losses are the weighted average of credit losses of the financial instruments with the respectiverisks of a default occurring as the weights. Credit loss is the difference between all contractual cash flows that aredue to the Company in accordance with the contract and all the cash flows that the Company expects to receive,

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discounted at the original effective interest rate or credit- adjusted effective interest rate for purchased ororiginated credit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible default events over theexpected life of a financial instrument.12-month expected credit losses are the portion of lifetime expected credit losses that represent the expected creditlosses that result from default events on a financial instrument that are possible within the 12 months after thereporting date (or the expected lifetime, if the expected life of a financial instrument is less than 12 months).At each reporting date, the Company classifies financial instruments into three stages and makes provisions forexpected credit losses accordingly. A financial instrument of which the credit risk has not significantly increasedsince initial recognition is at stage 1. The Company shall measure the loss allowance for that financial instrumentat an amount equal to 12-month expected credit losses. A financial instrument with a significant increase in creditrisk since initial recognition but is not considered to be credit-impaired is at stage 2. The Company shall measurethe loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses. Afinancial instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. TheCompany shall measure the loss allowance for that financial instrument at an amount equal to the lifetimeexpected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantly since initialrecognition if the financial instrument is determined to have low credit risk at the reporting date and measure theloss allowance for that financial instrument at an amount equal to 12-month expected credit losses.For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shall be calculatedby applying the effective interest rate to the gross carrying amount of a financial asset. For financial instrument atstage 3, interest revenue shall be calculated by applying the effective interest rate to the amortised cost afterdeducting of impairment loss.For notes receivable, accounts receivable and accounts receivable financing, no matter it contains a significantfinancing component or not, the Company shall measure the loss allowance at an amount equal to the lifetimeexpected credit losses.ReceivablesFor the notes receivable, accounts receivable, other receivables, accounts receivable financing and long-termreceivables which are demonstrated to be impaired by any objective evidence, or applicable for individualassessment, the Company shall individually assess for impairment and recognise the loss allowance for expectedcredit losses. If the Company determines that no objective evidence of impairment exists for notes receivable,accounts receivable, other receivables, accounts receivable financing and long-term receivables, or the expectedcredit loss of a single financial asset cannot be assessed at reasonable cost, such notes receivable, accountsreceivable, other receivables, accounts receivable financing and long-term receivables shall be divided into

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several groups with similar credit risk characteristics and collectively calculated the expected credit loss. Thedetermination basis of groups is as following:

Determination basis of notes receivable is as following:

Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor each group, the Company calculates expected credit losses through default exposure and the lifetime expectedcredit losses rate, taking reference to historical experience for credit losses and considering current condition andexpectation for the future economic situation.Determination basis of accounts receivable is as following:

Group 1: Accounts receivables due from the company within the scope of consolidationGroup 2: Accounts receivables due from other customersFor each group, the Company calculates expected credit losses through preparing an aging analysis schedule withthe lifetime expected credit losses rate, taking reference to historical experience for credit losses and consideringcurrent condition and expectation for the future economic situation.Determination basis of other receivables is as following:

Group 1: Other receivables due from the company within the scope of consolidationGroup 2: Other receivables due from othersFor each group, the Company calculates expected credit losses through default exposure and the 12-months orlifetime expected credit losses rate, taking reference to historical experience for credit losses and consideringcurrent condition and expectation for the future economic situation.Debt investment and other debt investmentFor debt investment and other debt investment, the Company shall calculate the expected credit loss through thedefault exposure and the 12-month or lifetime expected credit loss rate based on the nature of the investment,counterparty and the type of risk exposure.(ii) Low credit riskIf the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cashflow obligations in the near term and adverse changes in economic and business conditions in the longer term may,but will not necessarily, reduce the ability of the borrower to fulfill its contractual cash flow obligations.(iii) Significant increase in credit riskThe Company shall assess whether the credit risk on a financial instrument has increased significantly since initialrecognition, using the change in the risk of a default occurring over the expected life of the financial instrument,through the comparison of the risk of a default occurring on the financial instrument as at the reporting date withthe risk of a default occurring on the financial instrument as at the date of initial recognition.To make that assessment, the Company shall consider reasonable and supportable information, that is available

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without undue cost or effort, and that is indicative of significant increases in credit risk since initial recognition,including forward-looking information. The information considered by the Company are as following:

? Significant changes in internal price indicators of credit risk as a result of a change in credit risk since

inception? Existing or forecast adverse change in the business, financial or economic conditions of the borrower thatresults in a significant change in the borrower’s ability to meet its debt obligations；? An actual or expected significant change in the operating results of the borrower; An actual or expectedsignificant adverse change in the regulatory, economic, or technological environment of the borrower；? Significant changes in the value of the collateral supporting the obligation or in the quality of third-partyguarantees or credit enhancements, which are expected to reduce the borrower’s economic incentive to makescheduled contractual payments or to otherwise have an effect on the probability of a default occurring;? Significant change that are expected to reduce the borrower’s economic incentive to make scheduledcontractual payments;? Expected changes in the loan documentation including an expected breach of contract that may lead tocovenant waivers or amendments, interest payment holidays, interest rate step-ups, requiring additionalcollateral or guarantees, or other changes to the contractual framework of the instrument；? Significant changes in the expected performance and behaviour of the borrower；? Contractual payments are more than 30 days past due.Depending on the nature of the financial instruments, the Company shall assess whether the credit risk hasincreased significantly since initial recognition on an individual financial instrument or a group of financialinstruments. When assessed based on a group of financial instruments, the Company can group financialinstruments on the basis of shared credit risk characteristics, for example, past due information and credit riskrating.Generally, the Company shall determine the credit risk on a financial asset has increased significantly since initialrecognition when contractual payments are more than 30 days past due. The Company can only rebut thispresumption if the Company has reasonable and supportable information that is available without undue cost oreffort, that demonstrates that the credit risk has not increased significantly since initial recognition even thoughthe contractual payments are more than 30 days past due.(iv) Credit-impaired financial assetThe Company shall assess at each reporting date whether the credit impairment has occurred for financial asset atamortised cost and debt investment at fair value through other comprehensive income. A financial asset iscredit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of thatfinancial asset have occurred. Evidences that a financial asset is credit-impaired include observable data about thefollowing events:

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Significant financial difficulty of the issuer or the borrower；a breach of contract, such as a default or past dueevent; the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financialdifficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider；it isbecoming probable that the borrower will enter bankruptcy or other financial reorganisation；the disappearance ofan active market for that financial asset because of financial difficulties；the purchase or origination of a financialasset at a deep discount that reflects the incurred credit losses.(v) Presentation of impairment of expected credit lossIn order to reflect the changes of credit risk of financial instrument since initial recognition, the Company shall ateach reporting date remeasure the expected credit loss and recognise in profit or loss, as an impairment gain orloss, the amount of expected credit losses addition (or reversal). For financial asset at amortised cost, the lossallowance shall reduce the carrying amount of the financial asset in the statement of financial position; for debtinvestment at fair value through other comprehensive income, the loss allowance shall be recognised in othercomprehensive income and shall not reduce the carrying amount of the financial asset in the statement of financialposition.(vi) Write-offThe Company shall directly reduce the gross carrying amount of a financial asset when the Company has noreasonable expectations of recovering the contractual cash flow of a financial asset in its entirety or a portionthereof. Such write-off constitutes a derecognition of the financial asset. This circumstance usually occurs whenthe Company determines that the debtor has no assets or sources of income that could generate sufficient cashflow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment loss.(f) Transfer of financial assetsTransfer of financial assets refers to following two situations:

? Transfers the contractual rights to receive the cash flows of the financial asset;? Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows ofthe financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assetsIf the Company transfers substantially all the risks and rewards of ownership of the financial asset, or neithertransfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retainedcontrol of the financial asset, the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’s ability to sell theasset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is ableto exercise that ability unilaterally and without needing to impose additional restrictions on the transfer, theCompany has not retained control.

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The Company judges whether the transfer of financial asset qualifies for derecognition based on the substance ofthe transfer.If the transfer of financial asset qualifies for derecognition in its entirety, the difference between the followingshall be recognised in profit or loss:

? The carrying amount of transferred financial asset;? The sum of consideration received and the part derecognised of the cumulative changes in fair valuepreviously recognised in other comprehensive income (The financial assets involved in the transfer areclassified as financial assets at fair value through other comprehensive income in accordance with Article 18of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of FinancialInstruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for derecognition, theprevious carrying amount of the larger financial asset shall be allocated between the part that continues to berecognised (For this purpose, a retained servicing asset shall be treated as a part that continues to be recognised)and the part that is derecognised, based on the relative fair values of those parts on the date of the transfer. Thedifference between following two amounts shall be recognised in profit or loss:

? The carrying amount (measured at the date of derecognition) allocated to the part derecognised；? The sum of the consideration received for the part derecognised and part derecognised of the cumulative

changes in fair value previously recognised in other comprehensive income (The financial assets involved inthe transfer are classified as financial assets at fair value through other comprehensive income in accordancewith Article 18 of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurementof Financial Instruments).(ii) Continuing involvement in transferred assetsIf the Company neither transfers nor retains substantially all the risks and rewards of ownership of a transferredasset, and retains control of the transferred asset, the Company shall continue to recognise the transferred asset tothe extent of its continuing involvement and also recognise an associated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which it is exposed tochanges in the value of the transferred asset(iii) Continue to recognise the transferred assetsIf the Company retains substantially all the risks and rewards of ownership of the transferred financial asset, theCompany shall continue to recognise the transferred asset in its entirety and the consideration received shall berecognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accounting period, theCompany shall continuously recognise any income (gain) arising from the transferred asset and any expense (loss)incurred on the associated liability.

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(g) Offsetting financial assets and financial liabilitiesFinancial assets and financial liabilities shall be presented separately in the statement of financial position andshall not be offset. When meets the following conditions, financial assets and financial liabilities shall be offsetand the net amount presented in the statement of financial position:

The Company currently has a legally enforceable right to set off the recognised amounts; The Company intendseither to settle on a net basis, or to realise the asset and settle the liability simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the Company shall notoffset the transferred asset and the associated liability.(h) Determination of fair value of financial instrumentsDetermination of financial assets and financial liabilities please refer to Note 3.11

3.11 Fair Value Measurement

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in the principalmarket, or in the absence of a principal market, in the most advantageous market price for the related asset orliability. The fair value of an asset or a liability is measured using the assumptions that market participants woulduse when pricing the asset or liability, assuming that market participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the greatestvolume and frequency. The most advantageous market is the market which maximizes the value that could bereceived from selling the asset and minimizes the value which is needed to be paid in order to transfer a liability,considering the effect of transport costs and transaction costs both.If the active market of the financial asset or financial liability exists, the Company shall measure the fair valueusing the quoted price in the active market. If the active market of the financial instrument is not available, theCompany shall measure the fair value using valuation techniques.A fair value measurement of a non-financial asset takes into account a market participant’s ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participant thatwould use the asset in its highest and best use.? Valuation techniquesThe Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data areavailable to measure fair value, including the market approach, the income approach and the cost approach. TheCompany shall use valuation techniques consistent with one or more of those approaches to measure fair value. Ifmultiple valuation techniques are used to measure fair value, the results shall be evaluated considering thereasonableness of the range of values indicated by those results. A fair value measurement is the point within thatrange that is most representative of fair value in the circumstances.

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When using the valuation technique, the Company shall give the priority to relevant observable inputs. Theunobservable inputs can only be used when relevant observable inputs is not available or practically would not beobtained. Observable inputs refer to the information which is available from market and reflects the assumptionsthat market participants would use when pricing the asset or liability. Unobservable Inputs refer to the informationwhich is not available from market and it has to be developed using the best information available in thecircumstances from the assumptions that market participants would use when pricing the asset or liability.? Fair value hierarchyTo Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniquesused to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs and second to theLevel 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in activemarkets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs areinputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directlyor indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

3.12 Inventories

(a) Classification of inventoriesInventories are finished goods or products held for sale in the ordinary course of business, in the process ofproduction for such sale, or in the form of materials or supplies to be consumed in the production process or in therendering of services, including raw materials, work in progress, semi-finished goods, finished goods, goods instock, turnover material, etc.(b) Measurement method of cost of inventories sold or usedInventories are initially measured at the actual cost. Cost of inventories includes purchase cost, processing cost,and other costs. Cost of the issue is measured using the weighted average method.(c) Inventory systemThe perpetual inventory system is adopted. The inventories should be counted at least once a year, and surplus orlosses of inventory stocktaking shall be included in current profit and loss.(d) Provision for impairment of inventoryInventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable value ofthe inventories is recognised as provision for impairment of inventory, and recognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained, and factorssuch as purpose of holding the inventory and impact of post balance sheet event shall be considered.(i) In normal operation process, finished goods, products and materials for direct sale, their net realizable valuesare determined at estimated selling prices less estimated selling expenses and relevant taxes and surcharges; forinventories held to execute sales contract or service contract, their net realizable values are calculated on the basisof contract price. If the quantities of inventories specified in sales contracts are less than the quantities held by the

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Company, the net realizable value of the excess portion of inventories shall be based on general selling prices. Netrealizable value of materials held for sale shall be measured based on market price.(ii) For materials in stock need to be processed, in the ordinary course of production and business, net realisablevalue is determined at the estimated selling price less the estimated costs of completion, the estimated sellingexpenses and relevant taxes. If the net realisable value of the finished products produced by such materials ishigher than the cost, the materials shall be measured at cost; if a decline in the price of materials indicates that thecost of the finished products exceeds its net realisable value, the materials are measured at net realisable value anddifferences shall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For inventories withlarge quantity and low unit price, the provisions for inventory impairment are determined on a category basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date, the amountswritten down are recovered and reversed to the extent of the inventory impairment, which has been provided for.The reversal shall be included in profit or loss.(e) Amortisation method of low-value consumablesLow-value consumables: One-off writing off method is adoptedPackage material: One-off writing off method is adopted

3.13 Long-term Equity Investments

Long-term equity investments refer to equity investments where an investor has control of, or significant influenceover, an investee, as well as equity investments in joint ventures. Associates of the Company are those entitiesover which the Company has significant influence.(a) Determination basis of joint control or significant influence over the investeeJoint control is the relevant agreed sharing of control over an arrangement, and the arranged relevant activity mustbe decided under unanimous consent of the parties sharing control. In assessing whether the Company has jointcontrol of an arrangement, the Company shall assess first whether all the parties, or a group of the parties, controlthe arrangement. When all the parties, or a group of the parties, considered collectively, are able to direct theactivities of the arrangement, the parties control the arrangement collectively. Then the Company shall assesswhether decisions about the relevant activities require the unanimous consent of the parties that collectivelycontrol the arrangement. If two or more groups of the parties could control the arrangement collectively, it shallnot be assessed as have joint control of the arrangement. When assessing the joint control, the protective rights arenot considered.Significant influence is the power to participate in the financial and operating policy decisions of the investee butis not control or joint control of those policies. In determination of significant influence over an investee, theCompany should consider not only the existing voting rights directly or indirectly held but also the effect ofpotential voting rights held by the Company and other entities that could be currently exercised or converted,

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including the effect of share warrants, share options and convertible corporate bonds that issued by the investeeand could be converted in current period.If the Company holds, directly or indirectly 20% or more but less than 50% of the voting power of the investee, itis presumed that the Company has significant influence of the investee, unless it can be clearly demonstrated thatin such circumstance, the Company cannot participate in the decision-making in the production and operating ofthe investee.(b) Determination of initial investment cost(i) Long-term equity investments generated in business combinationsFor a business combination involving enterprises under common control, if the Company makes payment in cash,transfers non-cash assets or bears liabilities as the consideration for the business combination, the share ofcarrying amount of the owners’ equity of the acquiree in the consolidated financial statements of the ultimatecontrolling party is recognised as the initial cost of the long-term equity investment on the combination date. Thedifference between the initial investment cost and the carrying amount of cash paid, non-cash assets transferredand liabilities assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be offset,undistributed profit shall be offset in turn.For a business combination involving enterprises under common control, if the Company issues equity securitiesas the consideration for the business combination, the share of carrying amount of the owners’ equity of theacquiree in the consolidated financial statements of the ultimate controlling party is recognised as the initial costof the long-term equity investment on the combination date. The total par value of the shares issued is recognisedas the share capital. The difference between the initial investment cost and the carrying amount of the total parvalue of the shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be offset,undistributed profit shall be offset in turn.For business combination not under common control, the assets paid, liabilities incurred or assumed and the fairvalue of equity securities issued to obtain the control of the acquiree at the acquisition date shall be determined asthe cost of the business combination and recognised as the initial cost of the long-term equity investment. Theaudit, legal, valuation and advisory fees, other intermediary fees, and other relevant general administrative costsincurred for the business combination, shall be recognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination, the investment cost shall bedetermined based on the following requirements:

For long-term equity investments acquired by payments in cash, the initial cost is the actually paid purchase cost,including the expenses, taxes and other necessary expenditures directly related to the acquisition of long-termequity investments.For long-term equity investments acquired through issuance of equity securities, the initial cost is the fair value ofthe issued equity securities.

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For the long-term equity investments obtained through exchange of non-monetary assets, if the exchange hascommercial substance, and the fair values of assets traded out and traded in can be measured reliably, the initialcost of long-term equity investment traded in with non-monetary assets are determined based on the fair values ofthe assets traded out together with relevant taxes. Difference between fair value and book value of the assetstraded out is recorded in current profit or loss. If the exchange of non-monetary assets does not meet the abovecriterion, the book value of the assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring, the initial cost is determined based on thefair value of the equity obtained and the difference between initial investment cost and carrying amount of debtsshall be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or lossLong-term equity investment to an entity over which the Company has ability of control shall be accounted for atcost method. Long-term equity investment to a joint venture or an associate shall be accounted for at equitymethod.(i) Cost methodFor Long-term equity investment at cost method, cost of the long-term equity investment shall be adjusted whenadditional amount is invested or a part of it is withdrawn. The Company recognises its share of cash dividends orprofits which have been declared to distribute by the investee as current investment income.(ii) Equity methodIf the initial cost of the investment is in excess of the share of the fair value of the net identifiable assets in theinvestee at the date of investment, the difference shall not be adjusted to the initial cost of long-term equityinvestment; if the initial cost of the investment is in short of the share of the fair value of the net identifiable assetsin the investee at the date investment, the difference shall be included in the current profit or loss and the initialcost of the long-term equity investment shall be adjusted accordingly.The Company recognises the share of the investee’s net profits or losses, as well as its share of the investee’sother comprehensive income, as investment income or losses and other comprehensive income respectively, andadjusts the carrying amount of the investment accordingly. The carrying amount of the investment shall bereduced by the share of any profit or cash dividends declared to distribute by the investee. The investor’s share ofthe investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, othercomprehensive income or profit distribution, shall be recognised in the investor’s equity, and the carrying amountof the long-term equity investment shall be adjusted accordingly. The Company recognises its share of theinvestee’s net profits or losses after making appropriate adjustments of investee’s net profit based on the fairvalues of the investee’s identifiable net assets at the investment date. If the accounting policy and accountingperiod adopted by the investee is not in consistency with the Company, the financial statements of the investeeshall be adjusted according to the Company’s accounting policies and accounting period, based on which,

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investment income or loss and other comprehensive income, etc., shall be adjusted. The unrealized profits orlosses resulting from inter-company transactions between the company and its associate or joint venture areeliminated in proportion to the company’s equity interest in the investee, based on which investment income orlosses shall be recognised. Any losses resulting from inter-company transactions between the investor and theinvestee, which belong to asset impairment, shall be recognised in full.Where the Company obtains the power of joint control or significant influence, but not control, over the investee,due to additional investment or other reason, the relevant long-term equity investment shall be accounted for byusing the equity method, initial cost of which shall be the fair value of the original investment plus the additionalinvestment. Where the original investment is classified as available-for sale investment, difference between its fairvalue and the carrying value, in addition to the cumulative changes in fair value previously recorded in othercomprehensive income, shall be recogised into current profit or loss using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such as disposal ofequity investment, the retained interest shall be measured at fair value and the difference between the carryingamount and the fair value at the date of loss the joint control or significant influence shall be recognised in profitor loss. When the Company discontinues the use of the equity method, the Company shall account for all amountspreviously recognised in other comprehensive income under equity method in relation to that investment on thesame basis as would have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for saleAny retained interest in the equity investment not classified as held for sale, shall be accounted for using equitymethod.When an equity investment in an associate or a joint venture previously classified as held for sale no longer meetsthe criteria to be so classified, it shall be accounted for using the equity method retrospectively as from the date ofits classification as held for sale. Financial statements for the periods since classification as held for sale shall beamended accordingly.(f) Impairment testing and provision for impairment lossFor investment in subsidiaries, associates or a joint venture, provision for impairment loss please refer to Note

3.19.

3.14 Investment Properties

(a) Classification of investment propertiesInvestment properties are properties to earn rentals or for capital appreciation or both, including:

(i)Land use right leased out(ii)Land held for transfer upon appreciation(iii)Buildings leased out(b) The measurement model of investment property

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The Company adopts the cost model for subsequent measurement of investment properties. For provision forimpairment please refer to Note 3.20.The Company calculates the depreciation or amortization based on the net amount of investment property cost lessthe accumulated impairment and the net residual value using straight-line method.

3.15 Fixed Assets

Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing commodities,rendering services, renting or business management with useful lives exceeding one year.(a) Recognition criteria of fixed assetsFixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria aresatisfied:

(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognition criteria of fixedassets are satisfied, otherwise the expenditure shall be recorded in current profit or loss when incurred.(b) Depreciation methods of fixed assetsThe Company begins to depreciate the fixed asset from the next month after it is available for intended use usingthe straight-line-method. The estimated useful life and annual depreciation rates which are determined accordingto the categories, estimated economic useful lives and estimated net residual rates of fixed assets are listed asfollowings:

Category	Depreciation method	Estimated useful life (year)	Residual rates (%)	Annual depreciation rates (%)
Buildings and constructions	straight-line-method	8.00-35.00	3.00-5.00	2.70-12.10
Machinery equipment	straight-line-method	5.00-10.00	3.00-5.00	9.50-19.40
Vehicles	straight-line-method	4.00	3.00	24.25
Office equipment and others	straight-line-method	3.00	3.00	32.33

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at the lower of the fair value of the leased assets and the present value of the minimum lease payment on the dateof the lease. The fixed assets obtained by a finance lease are depreciated in the method which is consistent withthe self-owned fixed assets of the Company. For fixed assets obtained through a finance lease, if it is reasonablycertain that the ownership of the leased assets will be transferred to the lessee by the end of the lease term, theyshall be depreciated over their remaining useful lives; otherwise, the leased assets shall be depreciated over theshorter of the lease terms or their remaining useful lives.

3.16 Construction in Progress

(a) Classification of construction in progressConstruction in progress is measured on an individual project basis.(b) Recognition criteria and timing of transfer from construction in progress to fixed assetsThe initial book values of the fixed assets are stated at total expenditures incurred before they are ready for theirintended use, including construction costs, original price of machinery equipment, other necessary expensesincurred to bring the construction in progress to get ready for its intended use and borrowing costs of the specificloan for the construction or the proportion of the general loan used for the constructions incurred before they areready for their intended use. The construction in progress shall be transferred to fixed asset when the installationor construction is ready for the intended use. For construction in progress that has been ready for their intendeduse but relevant budgets for the completion of projects have not been completed, the estimated values of projectbudgets, prices, or actual costs should be included in the costs of relevant fixed assets, and depreciation should beprovided according to relevant policies of the Company when the fixed assets are ready for intended use. After thecompletion of budgets needed for the completion of projects, the estimated values should be substituted by actualcosts, but depreciation already provided is not adjusted.

3.17 Borrowing Costs

(a) Recognition criteria and period for capitalization of borrowing costsThe Company shall capitalize the borrowing costs that are directly attributable to the acquisition, construction orproduction of qualifying assets when meet the following conditions:

(i) Expenditures for the asset are being incurred;(ii) Borrowing costs are being incurred, and;(iii) Acquisition, construction or production activities that are necessary to prepare the assets for their intended useor sale are in progress.Other borrowing cost, discounts or premiums on borrowings and exchange differences on foreign currencyborrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or productionof a qualifying asset is interrupted abnormally and the interruption is for a continuous period of more than 3months.

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Capitalization of such borrowing costs ceases when the qualifying assets being acquired, constructed or producedbecome ready for their intended use or sale. The expenditure incurred subsequently shall be recognised asexpenses when incurred.(b) Capitalization rate and measurement of capitalized amounts of borrowing costsWhen funds are borrowed specifically for purchase, construction or manufacturing of assets eligible forcapitalization, the Company shall determine the amount of borrowing costs eligible for capitalisation as the actualborrowing costs incurred on that borrowing during the period less any interest income on bank deposit orinvestment income on the temporary investment of those borrowings.Where funds allocated for purchase, construction or manufacturing of assets eligible for capitalization are part of ageneral borrowing, the eligible amounts are determined by the weighted-average of the cumulative capitalexpenditures in excess of the specific borrowing multiplied by the general borrowing capitalization rate. Thecapitalization rate will be the weighted average of the borrowing costs applicable to the general borrowing.

3.18 Intangible Assets

(a) Measurement method of intangible assetsIntangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assets(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:

Category	Estimated useful life	Basis
Land use right	50 years	Legal life
Patent right	10 years	The service life is determined by reference to the period that can bring economic benefits to the Company
Software	3-5 years	The service life is determined by reference to the period that can bring economic benefits to the Company
Trademark	10 years	The service life is determined by reference to the period that can bring economic benefits to the Company

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systematically amortised on a straight-line basis over the useful life. The amortisation amount shall be recognizedinto current profit or loss according to the beneficial items. The amount to be amortised is cost deducting residualvalue. For intangible assets which has impaired, the cumulative impairment provision shall be deducted as well.The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless: there is acommitment by a third party to purchase the asset at the end of its useful life; or there is an active market for theasset and residual value can be determined by reference to that market; and it is probable that such a market willexist at the end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses the useful lives ofthose assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite,the useful lives shall be estimated and the intangible assets shall be amortised systematically and reasonablywithin the estimated useful lives.(c) Criteria of classifying expenditures on internal research and development projects into research phaseand development phasePreparation activities related to materials and other relevant aspects undertaken by the Company for the purposeof further development shall be treated as research phase. Expenditures incurred during the research phase ofinternal research and development projects shall be recognised in profit or loss when incurred.Development activities after the research phase of the Company shall be treated as development phase.(d) Criteria for capitalization of qualifying expenditures during the development phaseExpenditures arising from development phase on internal research and development projects shall be recognisedas intangible assets only if all of the following conditions have been met:

(i) Technical feasibility of completing the intangible assets so that they will be available for use or sale;(ii) Its intention to complete the intangible asset and use or sell it;(iii) The method that the intangible assets generate economic benefits, including the Company can demonstratethe existence of a market for the output of the intangible assets or the intangible assets themselves or, if it is to beused internally, the usefulness of the intangible assets;(iv) The availability of adequate technical, financial and other resources to complete the development and to useor sell the intangible asset; and(v) Its ability to measure reliably the expenditure attributable to the intangible asset.

3.19 Impairment of Long-Term Assets

Impairment loss of long-term equity investment in subsidiaries, associates and joint ventures, investmentproperties, fixed assets and constructions in progress subsequently measured at cost, intangible assets, shall bedetermined according to following method:

The Company shall assess at the end of each reporting period whether there is any indication that an asset may beimpaired. If any such indication exists, the Company shall estimate the recoverable amount of the asset and test

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for impairment. Irrespective of whether there is any indication of impairment, the Company shall test forimpairment of goodwill acquired in a business combination, intangible assets with an indefinite useful life orintangible assets not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and thepresent values of the estimated future cash flows of the long-term assets. The Company estimate the recoverableamounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset, theCompany estimates the recoverable amount of the groups of assets that the individual asset belongs to.Identification of an group of asset is based on whether the cash inflows from it are largely independent of the cashinflows from other assets or groups of assets.If, and only if, the recoverable amount of an asset or a group of assets is less than its carrying amount, the carryingamount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall berecognised accordingly.For the purpose of impairment testing, goodwill acquired in a business combination shall, from the acquisitiondate, be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevantgroup of assets, good will shall be allocated to relevant combination of asset groups. The relevant group of assetsor combination of asset groups is a group of assets or combination of asset groups that is benefit from thesynergies of the business combination and is not larger than the reporting segment determined by the Company.When test for impairment, if there is an indication that relevant group of assets or combination of asset groupsmay be impaired, impairment testing for group of assets or combination of asset groups excluding goodwill shallbe conducted first, and calculate the recoverable amount and recognize the impairment loss. Then the group ofassets or combination of asset groups including goodwill shall be tested for impairment, by comparing thecarrying amount with its recoverable amount. If the recoverable amount is less than the carrying amount, theCompany shall recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognised.

3.20 Long-term Deferred Expenses

Long-term deferred expenses are various expenses already incurred, which shall be amortised over current andsubsequent periods with the amortisation period exceeding one year. Long-term deferred expenses are evenlyamortised over the beneficial period

3.21 Employee Benefits

Employee benefits refer to all forms of consideration or compensation given by the Company in exchange forservice rendered by employees or for the termination of employment relationship. Employee benefits includeshort-term employee benefits, post-employment benefits, termination benefits and other long-term employeebenefits. Benefits provided to an employee's spouse, children, dependents, family members of decreasedemployees, or other beneficiaries are also employee benefits.

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According to liquidity, employee benefits are presented in the statement of financial position as “Employeebenefits payable” and “Long-term employee benefits payable”.(a) Short-term employee benefits(i) Employee basic salary (salary, bonus, allowance, subsidy)The Company recognises, in the accounting period in which an employee provides service, actually occurredshort-term employee benefits as a liability, with a corresponding charge to current profit except for thoserecognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfareThe Company shall recognise the employee welfare based on actual amount when incurred into current profit orloss or related capital expenditure. Employee welfare shall be measured at fair value as it is a non-monetarybenefit.(iii) Social insurance such as medical insurance, work injury insurance and maternity insurance, housing funds,labor union fund and employee education fundPayments made by the Company of social insurance for employees, such as medical insurance, work injuryinsurance and maternity insurance, payments of housing funds, and labor union fund and employee educationfund accrued in accordance with relevant requirements, in the accounting period in which employees provideservices, is calculated according to required accrual bases and accrual ratio in determining the amount ofemployee benefits and the related liabilities, which shall be recognised in current profit or loss or the cost ofrelevant asset.(iv) Short-term paid absencesThe company shall recognise the related employee benefits arising from accumulating paid absences when theemployees render service that increases their entitlement to future paid absences. The additional payable amountsshall be measured at the expected additional payments as a result of the unused entitlement that has accumulated.The Company shall recognise relevant employee benefit of non-accumulating paid absences when the absencesactually occurred.(v) Short-term profit-sharing planThe Company shall recognise the related employee benefits payable under a profit-sharing plan when all of thefollowing conditions are satisfied:

(i) The Company has a present legal or constructive obligation to make such payments as a result of past events;and(ii) A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can bemade.(b) Post-employment benefits(i) Defined contribution plans

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The Company shall recognise, in the accounting period in which an employee provides service, the contributionpayable to a defined contribution plan as a liability, with a corresponding charge to the current profit or loss or thecost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve monthsafter the end of the annual reporting period in which the employees render the related service, they shall bediscounted using relevant discount rate (market yields at the end of the reporting period on high quality corporatebonds in active market or government bonds with the currency and term which shall be consistent with thecurrency and estimated term of the defined contribution obligations) to measure employee benefits payable.(ii) Defined benefit planThe present value of defined benefit obligation and current service costsBased on the expected accumulative welfare unit method, the Company shall make estimates about demographicvariables and financial variables in adopting the unbiased and consistent actuarial assumptions and measuredefined benefit obligation, and determine the obligation period. The Company shall discount the obligation arisingfrom defined benefit plan using relevant discount rate (market yields at the end of the reporting period on highquality corporate bonds in active market or government bonds with the currency and term which shall beconsistent with the currency and estimated term of the defined benefit obligations) in order to determine thepresent value of the defined benefit obligation and the current service cost.The net defined benefit liability or assetThe net defined benefit liability (asset) is the deficit or surplus recognised as the present value of the definedbenefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan, it shall measure the net defined benefit asset at thelower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or lossService cost comprises current service cost, past service cost and any gain or loss on settlement. Other service costshall be recognised in profit or loss unless accounting standards require or allow the inclusion of current servicecost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets, interest cost onthe defined benefit obligation and interest on the effect of the asset ceiling, shall be included in profit or loss.The amount recognised in other comprehensive incomeChanges in the net liability or asset of the defined benefit plan resulting from the remeasurements including:

? Actuarial gains and losses, the changes in the present value of the defined benefit obligation resulting fromexperience adjustments or the effects of changes in actuarial assumptions;? Return on plan assets, excluding amounts included in net interest on the net defined benefit liability or asset;? Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined

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benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive income shall not bereclassified to profit or loss in a subsequent period. However, the Company may transfer those amountsrecognised in other comprehensive income within equity.(c) Termination benefitsThe Company providing termination benefits to employees shall recognise an employee benefits liability fortermination benefits, with a corresponding charge to the profit or loss of the reporting period, at the earlier of thefollowing dates:

(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employmenttermination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves the payment oftermination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end of the annualreporting period, the Company shall discount the termination benefits using relevant discount rate (market yieldsat the end of the reporting period on high quality corporate bonds in active market or government bonds with thecurrency and term which shall be consistent with the currency and estimated term of the defined benefitobligations) to measure the employee benefits.(d) Other long-term employee benefits(i) Meet the conditions of the defined contribution planWhen other long-term employee benefits provided by the Company to the employees satisfies the conditions forclassifying as a defined contribution plan, all those benefits payable shall be accounted for as employee benefitspayable at their discounted value.(ii) Meet the conditions of the defined benefit planAt the end of the reporting period, the Company recognised the cost of employee benefit from other long-termemployee benefits as the following components:

? Service costs;? Net interest cost for net liability or asset of other long-term employee benefits? Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefitsIn order to simplify the accounting treatment, the net amount of above items shall be recognised in profit or lossor relevant cost of assets.

3.22 Estimated Liabilities

(a) Recognition criteria of estimated liabilitiesThe Company recognises the estimated liabilities when obligations related to contingencies satisfy all thefollowing conditions:

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(i) That obligation is a current obligation of the Company;(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance of theobligation; and(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilitiesThe estimated liabilities of the Company are initially measured at the best estimate of expenses required for theperformance of relevant present obligations. The Company, when determining the best estimate, has had acomprehensive consideration of risks with respect to contingencies, uncertainties and the time value of money.The carrying amount of the estimated liabilities shall be reviewed at the end of every reporting period. Ifconclusive evidences indicate that the carrying amount fails to be the best estimate of the estimated liabilities, thecarrying amount shall be adjusted based on the updated best estimate.

3.23 Principles and measurement methods of revenue recognition

Revenue is the total inflow of economic benefits formed in the daily activities of the Company, which will lead tothe increase of shareholders' equity and is not related to the capital invested by shareholders.The Company has fulfilled the performance obligations in the contract, that is, the revenue is recognized when thecustomer obtains the relevant commodity control rights. To gain control of relevant commodities means to be ableto dominate the use of the commodities and obtain almost all the economic benefits from them.If the contract contains two or more performance obligations, the Company shall at the beginning of the contractallocate the transaction price to each individual performance obligation according to the relative proportion of theindividual selling price of the commodities or services committed by each individual performance obligation, andmeasure the income according to the transaction price allocated to each individual performance obligation.The transaction price is the amount of consideration to which the Company is expected to be entitled as a result ofthe transfer of goods or services to the customer, excluding payments received on behalf of the third parties. Whendetermining the contract transaction price, if there is a variable consideration, the Company determines the bestestimate of the variable consideration in accordance with the expected value or the amount most likely to occur,and includes the transaction price in the amount not exceeding the amount that would most likely not result in asignificant reversal of the accumulated recognized revenue when the relevant uncertainties are eliminated. If thereis a significant composition of financing in the contract, the Company will determine the transaction price by theamount paid in cash, according to when the customer get the commodities control. The difference between thetransaction price and the contract price shall be amortized by the effective interest rate method during the contractperiod. If the interval between the transfer of control and the payment by the customer is not more than one year,the Company shall not consider the financing component.If one of the following conditions is met, the performance obligations shall be performed within a certain periodof time; Otherwise, the performance obligation shall be performed at a certain point:

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①The client obtains and consumes the economic benefits brought by the Company's performance of the contractat the same time;

②The customer can control the commodities under construction during the performance of the Company;

③The commodities produced by the Company during the performance of the contract shall have irreplaceableuses and the Company shall be entitled to receive payment for the accumulated part of the performance of thecontract to date throughout the contract period.For the performance obligations performed within a certain period of time, the Company shall recognize theincome according to the performance progress within that period, except where the performance progress cannotbe reasonably determined. The Company shall determine the performance progress of the service providedaccording to the input method (or output method). When the performance schedule cannot be reasonablydetermined and the Company is expected to be compensated for the costs incurred, the revenue shall berecognized according to the amount of the costs incurred until the performance schedule can be reasonablydetermined.For performance obligations performed at a certain point, the Company recognizes revenue at the point when thecustomer acquires control over the relevant commodities. In determining whether the customer has acquiredcontrol over the goods or services, the Company will consider the following indications:

①The Company has a current payment right in respect of the goods or services, that is, the customer has a currentpayment obligation in respect of the goods;

②The Company has transferred the legal ownership of the commodity to the customer, that is, the customer hasthe legal ownership of the commodity;

③The Company has transferred the physical goods to the customer, that is, the customer has physical possessionof the goods;

④The Company has transferred the main risks and remuneration on the ownership of the goods to the customer,that is, the customer has acquired the main risks and remuneration on the ownership of the goods;

⑤The customer has accepted the goods.

3.24 Government Grants

(a) Recognition of government grantsA government grant shall not be recgonised until there is reasonable assurance that:

(i) The Company will comply with the conditions attaching to them; and(ii) The grants will be received.(b) Measurement of government grantsMonetary grants from the government shall be measured at amount received or receivable, and non-monetarygrants from the government shall be measured at their fair value or at a nominal value of RMB 1.00 when reliablefair value is not available.

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(c) Accounting for government grants(i) Government grants related to assetsGovernment grants pertinent to assets mean the government grants that are obtained by the Company used forpurchase or construction, or forming the long-term assets by other ways. Government grants pertinent to assetsshall be recognised as deferred income, and should be recognised in profit or loss on a systematic basis over theuseful lives of the relevant assets. Grants measured at their nominal value shall be directly recognised in profit orloss of the period when the grants are received. When the relevant assets are sold, transferred, written off ordamaged before the assets are terminated, the remaining deferred income shall be transferred into profit or loss ofthe period of disposing relevant assets.(ii) Government grants related to incomeGovernment grants other than related to assets are classified as government grants related to income. Governmentgrants related to income are accounted for in accordance with the following principles:

If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses infuture periods, such government grants shall be recognised as deferred income and included into profit or loss inthe same period as the relevant expenses or losses are recognised;If the government grants related to income are used to compensate the enterprise’s relevant expenses or lossesincurred, such government grants are directly recognised into current profit or lossFor government grants comprised of part related to assets as well as part related to income, each part is accountedfor separately; if it is difficult to identify different part, the government grants are accounted for as governmentgrants related to income as a whole.Government grants related to daily operation activities are recognised in other income in accordance with thenature of the activities, and government grants irrelevant to daily operation activities are recognised innon-operating income.(iii) Loan interest subsidyWhen loan interest subsidy is allocated to the bank, and the bank provides a loan at lower-market rate of interestto the Company, the loan is recognised at the actual received amount, and the interest expense is calculated basedon the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company, the subsidy shall be recognised as offsetting therelevant borrowing cost.(iv) Repayment of the government grantsRepayment of the government grants shall be recorded by increasing the carrying amount of the asset if the bookvalue of the asset has been written down, or reducing the balance of relevant deferred income if deferred incomebalance exists, any excess will be recognised into current profit or loss; or directly recognised into current profitor loss for other circumstances.

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3.25 Deferred Tax Assets and Deferred Tax Liabilities

Temporary differences are differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base at the balance sheet date. The Company recognise and measure the effect oftaxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities ordeferred tax assets using liability method. Deferred tax assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assetsDeferred tax assets should be recognised for deductible temporary differences, the carryforward of unused taxlosses and the carryforward of unused tax credits to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences, the carryforward of unused tax losses and thecarryforward of unused tax credits can be utilised at the tax rates that are expected to apply to the period when theasset is realised, unless the deferred tax asset arises from the initial recognition of an asset or liability in atransaction that:

(i) Is not a business combination; and(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)The Company shall recognise a deferred tax asset for all deductible temporary differences arising frominvestments in subsidiaries, associates and joint ventures, only to the extent that, it is probable that:

(i) The temporary difference will reverse in the foreseeable future; and(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.At the end of each reporting period, if there is sufficient evidence that it is probable that taxable profit will beavailable against which the deductible temporary difference can be utilized, the Company recognises a previouslyunrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The Companyshall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficienttaxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any suchreduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilitiesA deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that are expected toapply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:

? The initial recognition of goodwill; or? The initial recognition of an asset or liability in a transaction which: is not a business combination; and at thetime of the transaction, affects neither accounting profit nor taxable profit (tax loss)(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated withinvestments in subsidiaries, associates, and joint ventures, except to the extent that both of the following

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conditions are satisfied:

? The Company is able to control the timing of the reversal of the temporary difference; and? It is probable that the temporary difference will not reverse in the foreseeable future.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events(i) Deferred tax liabilities or assets related to business combinationFor the taxable temporary difference or deductible temporary difference arising from a business combination notunder common control, a deferred tax liability or a deferred tax asset shall be recognised, and simultaneously,goodwill recognised in the business combination shall be adjusted based on relevant deferred tax expense(income).(ii) Items directly recognised in equityCurrent tax and deferred tax related to items that are recognised directly in equity shall be recognised in equity.Such items include: other comprehensive income generated from fair value fluctuation of available for saleinvestments; an adjustment to the opening balance of retained earnings resulting from either a change inaccounting policy that is applied retrospectively or the correction of a prior period (significant) error; amountsarising on initial recognition of the equity component of a compound financial instrument that contains bothliability and equity component.(iii) Unused tax losses and unused tax creditsUnsused tax losses and unused tax credits generated from daily operation of the Company itselfDeductible loss refers to the loss calculated and permitted according to the requirement of tax law that can beoffset against taxable income in future periods. The criteria for recognising deferred tax assets arising from thecarryforward of unused tax losses and tax credits are the same as the criteria for recognising deferred tax assetsarising from deductible temporary differences. The Company recognises a deferred tax asset arising from unusedtax losses or tax credits only to the extent that there is convincing other evidence that sufficient taxable profit willbe available against which the unused tax losses or unused tax credits can be utilised by the Company. Incometaxes in current profit or loss shall be deducted as well.Unsused tax losses and unused tax credits arising from a business combinationUnder a business combination, the acquiree’s deductible temporary differences which do not satisfy the criteria atthe acquisition date for recognition of deferred tax asset shall not be recognised. Within 12 months after theacquisition date, if new information regarding the facts and circumstances exists at the acquisition date and theeconomic benefit of the acquiree’s deductible temporary differences at the acquisition is expected to be realised,the Company shall recognise acquired deferred tax benefits and reduce the carrying amount of any goodwillrelated to this acquisition. If goodwill is reduced to zero, any remaining deferred tax benefits shall be recognisedin profit or loss. All other acquired deferred tax benefits realised shall be recognised in profit or loss.(iv) Temporary difference generated in consolidation elimination

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When preparing consolidated financial statements, if temporary difference between carrying value of the assetsand liabilities in the consolidated financial statements and their taxable bases is generated from elimination ofinter-company unrealized profit or loss, deferred tax assets or deferred tax liabilities shall be recognised in theconsolidated financial statements, and income taxes expense in current profit or loss shall be adjusted as wellexcept for deferred tax related to transactions or events recognised directly in equity and business combination.(v) Share-based payment settled by equityIf tax authority permits tax deduction that relates to share-based payment, during the period in which the expensesare recognised according to the accounting standards, the Company estimates the tax base in accordance withavailable information at the end of the accounting period and the temporary difference arising from it. Deferredtax shall be recognised when criteria of recognition are satisfied. If the amount of estimated future tax deductionexceeds the amount of the cumulative expenses related to share-based payment recognised according to theaccounting standards, the tax effect of the excess amount shall be recognised directly in equity.

3.26 Changes in Significant Accounting Policies and Accounting Estimates

(1) Changes in accounting polices

√ Applicable □ Not applicable

Contents of changes in accounting policies and reasons thereof	Approval procedures	Note
On 5 July 2017, the Ministry of Finance issued the Notice on Revising and Issuing the Accounting Standards for Business Enterprises No.14-Revenue (CK(2017)No.22 and required those enterprises both listed in domestic and aboard and those enterprises overseas listed with International Financial Reporting Standards or Accounting Standards for Business Enterprises for preparation of financial statements to implement it since 1 January 2018, required other domestically listed enterprises to implement it since 1 January 2020 and required non-listed enterprises carrying out the Accounting Standards for Business Enterprises to implement it since 1 January 2021. The Company starts to implement the new accounting policy since the date stipulated in above document and starts to implement the new standards governing revenue since 1 January 2020.	Reviewed and approved on the 14th Meeting of the 8th Board of Directors and the 11th 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 on 27 April 2020

~ 112 ~

The Ministry of Finance issued the Notice on Revising and Issuing of Formats of 2019 Financial Statements for General Enterprises (CK[2019]No.16) (hereinafter referred to as “Revising Notice”) on 19 September 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 and subsequent periods in accordance with provisions stipulated in accounting standards for business enterprises and the Revising Notice.

Reviewed and approved on the 14th Meeting of the 8th Board of Directors and the 11th 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 on 27 April 2020

Item	31 December 2019	1 January 2020	Adjusted
Current assets:
Monetary assets	5,619,749,918.09	5,619,749,918.09
Settlement reserve
Interbank loans granted
Held-for-trading financial assets	509,031,097.02	509,031,097.02
Derivative financial assets
Notes receivable	1,004,217,431.56	1,004,217,431.56
Accounts receivable	40,776,567.96	40,776,567.96
Accounts receivable financing
Prepayments	197,453,313.96	197,453,313.96
Premiums receivable
Reinsurance receivables

~ 113 ~

Receivable reinsurance contract reserve
Other receivables	25,746,957.22	25,746,957.22
Including: Interest receivable	1,908,788.81	1,908,788.81
Dividends receivable
Financial assets purchased under resale agreements
Inventories	3,015,051,961.78	3,015,051,961.78
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets	114,439,167.07	114,439,167.07
Total current assets	10,526,466,414.66	10,526,466,414.66
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments	4,678,282.24	4,678,282.24
Investments in other equity instruments
Other non-current financial assets
Investment property	4,710,086.02	4,710,086.02
Fixed assets	1,722,572,998.79	1,722,572,998.79
Construction in progress	183,984,816.07	183,984,816.07
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	785,717,932.76	785,717,932.76
Development costs

~ 114 ~

Goodwill	478,283,495.29	478,283,495.29
Long-term prepaid expense	70,240,106.82	70,240,106.82
Deferred income tax assets	90,494,544.51	90,494,544.51
Other non-current assets	4,148,686.00	4,148,686.00
Total non-current assets	3,344,830,948.50	3,344,830,948.50
Total assets	13,871,297,363.16	13,871,297,363.16
Current liabilities:
Short-term borrowings
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable	703,679,646.86	703,679,646.86
Accounts payable	563,494,195.40	563,494,195.40
Advances from customers	529,863,011.73	0.00	-529,863,011.73
Contract liabilities	0.00	529,863,011.73	529,863,011.73
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Employee benefits payable	454,189,532.89	454,189,532.89
Taxes payable	482,903,109.59	482,903,109.59
Other payables	1,315,878,229.01	1,315,878,229.01
Including: Interest payable
Dividends payable
Handling charges and commissions payable
Reinsurance payables

~ 115 ~

Liabilities directly associated with assets held for sale
Current portion of non-current liabilities
Other current liabilities	197,484,121.41	197,484,121.41
Total current liabilities	4,247,491,846.89	4,247,491,846.89
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income	72,778,437.92	72,778,437.92
Deferred income tax liabilities	118,872,366.61	118,872,366.61
Other non-current liabilities
Total non-current liabilities	191,650,804.53	191,650,804.53
Total liabilities	4,439,142,651.42	4,439,142,651.42
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
Specific reserve

~ 116 ~

Surplus reserves	256,902,260.27	256,902,260.27
General reserve
Retained earnings	6,888,203,911.92	6,888,203,911.92
Total equity attributable to owners of the Company as the parent	8,944,111,764.44	8,944,111,764.44
Non-controlling interests	488,042,947.30	488,042,947.30
Total owners’ equity	9,432,154,711.74	9,432,154,711.74
Total liabilities and owners’ equity	13,871,297,363.16	13,871,297,363.16

Item	31 December 2019	1 January 2020	Adjusted
Current assets:
Monetary assets	2,919,818,830.20	2,919,818,830.20
Held-for-trading financial assets	489,861,097.02	489,861,097.02
Derivative financial assets
Notes receivable	378,740,100.82	378,740,100.82
Accounts receivable	218,558,555.07	218,558,555.07
Accounts receivable financing
Prepayments	17,906,999.63	17,906,999.63
Other receivables	125,219,213.84	125,219,213.84
Including: Interest receivable	301,888.89	301,888.89
Dividends receivable
Inventories	2,688,839,871.27	2,688,839,871.27
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets	1,280,998.32	1,280,998.32
Total current assets	6,840,225,666.17	6,840,225,666.17
Non-current assets:
Investments in debt

~ 117 ~

obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments	1,148,213,665.32	1,148,213,665.32
Investments in other equity instruments
Other non-current financial assets
Investment property	4,710,086.02	4,710,086.02
Fixed assets	1,310,704,771.36	1,310,704,771.36
Construction in progress	84,477,784.02	84,477,784.02
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets	243,928,047.95	243,928,047.95
Development costs
Goodwill
Long-term prepaid expense	48,354,967.15	48,354,967.15
Deferred income tax assets	31,360,809.87	31,360,809.87
Other non-current assets	574,026.00	574,026.00
Total non-current assets	2,872,324,157.69	2,872,324,157.69
Total assets	9,712,549,823.86	9,712,549,823.86
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable	49,114,582.04	49,114,582.04
Accounts payable	450,303,984.53	450,303,984.53
Advances from customers	31,724.77	0.00	-31,724.77
Contract liabilities	0.00	31,724.77	31,724.77
Employee benefits payable	100,357,808.20	100,357,808.20

~ 118 ~

Taxes payable	371,012,223.50	371,012,223.50
Other payables	274,053,511.54	274,053,511.54
Including: Interest payable
Dividends payable
Liabilities directly associated with assets held for sale
Current portion of non-current liabilities
Other current liabilities	11,953,800.20	11,953,800.20
Total current liabilities	1,256,827,634.78	1,256,827,634.78
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income	33,229,246.47	33,229,246.47
Deferred income tax liabilities	22,799,814.64	22,799,814.64
Other non-current liabilities
Total non-current liabilities	56,029,061.11	56,029,061.11
Total liabilities	1,312,856,695.89	1,312,856,695.89
Owners’ equity:
Share capital	503,600,000.00	503,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds

~ 119 ~

Capital reserves	1,247,162,107.35	1,247,162,107.35
Less: Treasury stock
Other comprehensive income
Specific reserve
Surplus reserves	251,800,000.00	251,800,000.00
Retained earnings	6,397,131,020.62	6,397,131,020.62
Total owners’ equity	8,399,693,127.97	8,399,693,127.97
Total liabilities and owners’ equity	9,712,549,823.86	9,712,549,823.86

Category of taxes	Basis of tax assessment	Tax rate
VAT	Taxable sales revenue	13%（16%）、10%、6%
Consumption tax	Taxable price or ex factory price	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	Urban maintenance and construction taxes are paid on turnover taxes	7%、5%
Education expenses surcharge	Educational surcharges are paid on turnover taxes	3%
Local education surcharge	Local educational surcharges are paid on turnover taxes	2%
Enterprise income tax	Business taxes are calculated and paid on taxable revenues	See the table below

Name of the entities	Income tax rate
Anhui Longrui Glass Co., Ltd	15%
Anhui Ruisiweier Technology Co., Ltd	15%
Wuhan Yashibo Technology Co., Ltd	15%

~ 120 ~

Name of the entities	Income tax rate
Anhui Zhenrui Construction Engineering Co., Ltd	10%
Bozhou Gujin Rubbish Recycling Co., Ltd	5%
Hubei Junhe Advertising Co., Ltd.	5%
Hubei Yellow Crane Tower Beverage Co., Ltd.	5%
Anhui Gujing gongjiu Co., Ltd. and other subsidiaries	25%

~ 121 ~

tax is paid at the rate of 20%. The subsidiaries Gujing waste company, Junhe Advertising and Yellow CraneTower Beverage meet the condition of annual taxable income not exceeding 1 million yuan while actual tax ratein H1 2020 was 5%. The subsidiary Zhenrui Construction meets the condition of annual taxable income exceeding1 million yuan but not exceeding 3 million yuan while actual tax rate for H1 2020 was 10%.

5. Notes to Major Items in the Consolidated Financial Statements of the Company

5.1 Monetary Assets

Item	30 June 2020	31 December 2019
Cash on hand	254,747.79	292,465.36
Cash in bank	7,417,660,747.68	5,618,712,121.81
Other monetary assets	271,980.24	745,330.92
Total	7,418,187,475.71	5,619,749,918.09

Item	30 June 2020	31 December 2019
Financial Assets at Fair Value through Profit or Loss	230,264,936.41	509,031,097.02
Including: bank financial products	10,000,000.00	297,146,591.78
Fund investment	220,264,936.41	211,884,505.24
Total	230,264,936.41	509,031,097.02

Category	30 June 2020			31 December 2019
	Carrying amount	Bad debt provision	Carrying value	Carrying amount	Bad debt provision	Carrying value
Bank acceptance bills	1,035,170,219.39	0.00	1,035,170,219.39	1,002,758,533.39	0.00	1,002,758,533.39
Commercial acceptance bills	993,836.54	49,691.83	944,144.71	1,493,836.54	34,938.37	1,458,898.17
Total	1,036,164,055.93	49,691.83	1,036,114,364.10	1,004,252,369.93	34,938.37	1,004,217,431.56

~ 122 ~

(2) Notes Receivable Pledged by the Company at the Period-end

Item	Pledged amount
Bank acceptance bills	382,801,475.30
Total	382,801,475.30

Item	Amount of derecognition	Amount of recognition
Bank acceptance bills	1,668,974,827.37	0.00
Total	1,668,974,827.37	0.00

Category	30 June 2020
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion	Amount	Withdrawal proportion
Provision for bad debt recognised individually
Provision for bad debt recognised collectively	1,036,164,055.93	100.00	49,691.83	0.00	1,036,114,364.10
Including: Group 1	993,836.54	0.10	49,691.83	5.00	944,144.71
Group 2	1,035,170,219.39	99.90	0.00	0.00	1,035,170,219.39
Total	1,036,164,055.93	100.00	49,691.83	0.00	1,036,114,364.10

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within 1 year	993,836.54	49,691.83	5.00
Of which:1-6 months
7-12 months	993,836.54	49,691.83	5.00

~ 123 ~

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Total	993,836.54	49,691.83	5.00

Category	31 December 2019	Changes in the Reporting Period			30 June 2020
		Withdrawal	Reversal or recovery	Write-off
Commercial acceptance bills	34,938.37	14,753.46	0.00	0.00	49,691.83
Total	34,938.37	14,753.46	0.00	0.00	49,691.83

Aging	30 June 2020	31 December 2019
Within one year	43,013,302.45	41,004,875.62
Of which:1-6 months	31,855,517.41	37,333,246.24
7-12 months	11,157,785.04	3,671,629.38
1-2 years	2,728,605.43	365,118.07
2-3 years	209.20	0.00
Over 3 years	0.00	141,121.87
Subtotal	45,742,117.08	41,511,115.56
Less: Bad debt provision	1,149,409.56	734,547.60
Total	44,592,707.52	40,776,567.96

Category	30 June 2020
	Carrying amount	Bad debt provision	Carrying value

~ 124 ~

	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	45,742,117.08	100.00	1,149,409.56	2.51	44,592,707.52
Of which: Group 1
Group 2	45,742,117.08	100.00	1,149,409.56	2.51	44,592,707.52
Total	45,742,117.08	100.00	1,149,409.56	2.51	44,592,707.52

Category	31 December 2019
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	41,511,115.56	100.00	734,547.60	1.77	40,776,567.96
Of which: Group 1
Group 2	41,511,115.56	100.00	734,547.60	1.77	40,776,567.96
Total	41,511,115.56	100.00	734,547.60	1.77	40,776,567.96

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	43,013,302.45	876,444.43	2.04
Of which:1-6 months	31,855,517.41	318,555.18	1.00
7-12 months	11,157,785.04	557,889.25	5.00
1-2 years	2,728,605.43	272,860.53	10.00
2-3 years	209.20	104.60	50.00
Over 3 years
Total	45,742,117.08	1,149,409.56	2.51

~ 125 ~

by group.On 31 December 2019, Accounts receivable with bad debt provision withdrawn by group 2

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	41,004,875.62	556,913.92	1.36
Of which:1-6 months	37,333,246.24	373,332.45	1.00
7-12 months	3,671,629.38	183,581.47	5.00
1-2 years	365,118.07	36,511.81	10.00
2-3 years
Over 3 years	141,121.87	141,121.87	100.00
Total	41,511,115.56	734,547.60	1.77

Category	31 December 2019	Changes in the Reporting Period			30 June 2020
		Withdrawal	Recovery or reversal	Write-off
Accounts receivable with insignificant amount but bad debt provision withdrawn separately
Group 2: Bad debt provision withdrawn by group	734,547.60	414,861.96			1,149,409.56
Total	734,547.60	414,861.96			1,149,409.56

Entity name	Balance at 30 June 2020	Proportion of the balance to the total accounts receivable (%)	Bad debt provision
No. 1	4,956,160.50	10.84	49,561.61
No. 2	4,316,440.00	9.44	43,164.40
No. 3	3,193,774.58	6.98	156,016.38
No. 4	2,901,645.00	6.34	98,327.80
No. 5	2,547,734.97	5.57	25,477.35
Total	17,915,755.05	39.17	372,547.54

~ 126 ~

5. Prepayment

(1) Disclosure by aging

Aging	30 June 2020		31 December 2019
	Amount	Proportion (%)	Amount	Proportion (%)
Within one year	90,383,425.38	96.45	196,781,962.46	99.66
1 to 2 years	3,266,389.16	3.49	647,771.50	0.33
2 to 3 years	31,761.99	0.03	-	-
Over 3 years	23,580.00	0.03	23,580.00	0.01
Total	93,705,156.53	100.00	197,453,313.96	100.00

Entity name	Balance on 30 June 2020	Proportion of the balance to the total prepayment (%)
No. 1	8,490,566.30	9.07
No. 2	7,036,794.75	7.51
No. 3	3,980,935.51	4.25
No. 4	3,272,798.50	3.49
No. 5	3,152,000.00	3.36
Total	25,933,095.06	27.68

Item	30 June 2020	31 December 2019
Interest receivable	10,600,806.32	1,908,788.81
Dividends receivable	0.00	0.00
Other receivables	25,871,628.10	23,838,168.41
Total	36,472,434.42	25,746,957.22

Item	30 June 2020	31 December 2019
Interest on large-denomination certificates of deposit	10,600,806.32	1,908,788.81
Less: Bad debt provision	0.00	0.00

~ 127 ~

Item	30 June 2020	31 December 2019
Total	10,600,806.32	1,908,788.81

Aging	30 June 2020	31 December 2019
Within one year	24,840,606.02	21,391,891.49
Of which:1-6 months	22,423,471.08	16,704,667.12
7-12 months	2,417,134.94	4,687,224.37
1-2 years	1,000,035.64	2,804,920.23
2-3 years	951,997.22	646,513.23
Over 3 years	42,130,262.35	42,087,287.44
Subtotal	68,922,901.23	66,930,612.39
Less: Bad debt provision	43,051,273.13	43,092,443.98
Total	25,871,628.10	23,838,168.41

Nature	30 June 2020	31 December 2019
Investment in securities	40,850,949.35	40,850,949.35
Deposit and guarantee	5,011,416.41	5,343,741.34
Borrowing for business trip expenses	284,063.80	884,420.74
Rent, utilities and gasoline charges	8,139,458.33	8,479,446.65
Other	14,637,013.34	11,372,054.31
Subtotal	68,922,901.23	66,930,612.39
Less: Bad debt provision	43,051,273.13	43,092,443.98
Total	25,871,628.10	23,838,168.41

Stage	Carrying amount	Bad debt provision	Carrying value
Stage 1	28,071,951.88	2,200,323.78	25,871,628.10
Stage 2	0.00	0.00	0.00
Stage 3	40,850,949.35	40,850,949.35	0.00

~ 128 ~

Stage	Carrying amount	Bad debt provision	Carrying value
Stage 1	28,071,951.88	2,200,323.78	25,871,628.10
Stage 2	0.00	0.00	0.00
Total	68,922,901.23	43,051,273.13	25,871,628.10

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	28,071,951.88	7.84	2,200,323.78	25,871,628.10
Of which: Group 1
Group 2	28,071,951.88	7.84	2,200,323.78	25,871,628.10
Total	28,071,951.88	7.84	2,200,323.78	25,871,628.10

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	24,840,606.02	345,008.61	1.39
Of which:1-6 months	22,423,471.08	224,151.86	1.00
7-12 months	2,417,134.94	120,856.75	5.00
1-2 years	1,000,035.64	100,003.56	10.00
2-3 years	951,997.22	475,998.61	50.00
Over 3 years	1,279,313.00	1,279,313.00	100.00
Total	28,071,951.88	2,200,323.78	7.84

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately	40,850,949.35	100.00	40,850,949.35	0.00
Bad debt provision withdrawn by group
Of which: Group 1

~ 129 ~

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Group 2
Total	40,850,949.35	100.00	40,850,949.35	0.00

Name	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	The enterprise enters the bankruptcy liquidation procedure
Jianqiao Securities Co., Ltd.	11,840,500.00	11,840,500.00	100.00	The enterprise enters the bankruptcy liquidation procedure
Total	40,850,949.35	40,850,949.35	100.00	--

Stage	Carrying amount	Bad debt provision	Carrying value
Stage 1	26,079,663.04	2,241,494.63	23,838,168.41
Stage 2	0.00	0.00	0.00
Stage 3	40,850,949.35	40,850,949.35	0.00
Total	66,930,612.39	43,092,443.98	23,838,168.41

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	26,079,663.04	8.59	2,241,494.63	23,838,168.41
Of which: Group 1	0.00	0.00	0.00	0.00
Group 2	26,079,663.04	8.59	2,241,494.63	23,838,168.41
Total	26,079,663.04	8.59	2,241,494.63	23,838,168.41

~ 130 ~

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	21,391,891.49	401,407.90	1.88
Of which:1-6 months	16,704,667.12	167,046.67	1.00
7-12 months	4,687,224.37	234,361.23	5.00
1-2 years	2,804,920.23	280,492.02	10.00
2-3 years	646,513.23	323,256.62	50.00
Over 3 years	1,236,338.09	1,236,338.09	100.00
Total	26,079,663.04	2,241,494.63	8.59

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately	40,850,949.35	100.00	40,850,949.35	0.00
Bad debt provision withdrawn by group
Of which: Group 1
Group 2
Total	40,850,949.35	100.00	40,850,949.35	0.00

Name	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	The enterprise enters the bankruptcy liquidation procedure
Jianqiao Securities Co., Ltd.	11,840,500.00	11,840,500.00	100.00	The enterprise enters the bankruptcy liquidation procedure
Total	40,850,949.35	40,850,949.35	100.00	--

Category

31 December 2019

Changes in the Reporting Period

30 June 2020

~ 131 ~

		Withdrawal	Recovery or reversal	Write-off
Bad debt provision withdrawn separately	40,850,949.35		0.00		40,850,949.35
Bad debt provision withdrawn by group	2,241,494.63		41,170.85		2,200,323.78
Total	43,092,443.98		41,170.85		43,051,273.13

Entity name	Nature	Balance at 30 June 2020	Aging	Proportion of the balance to the total other receivables (%)	Bad debt provision
No. 1	Securities investment	29,010,449.35	Over 3 years	42.09	29,010,449.35
No. 2	Securities investment	11,840,500.00	Over 3 years	17.18	11,840,500.00
No. 3	Oil cost	6,436,108.96	Within 6 months	9.34	64,361.09
No. 4	Deposit	3,953,761.28	Within 6 months	5.74	39,537.61
No. 5	Other	1,576,841.20	Within 6 months	2.29	15,768.41
Total	--	52,817,660.79	--	76.64	40,970,616.46

Item	30 June 2020
	Carrying amount	Falling price reserves	Carrying value
Raw materials and package materials	151,425,817.44	19,925,649.07	131,500,168.37
Semi-finished goods and work in process	2,632,022,035.43	0.00	2,632,022,035.43
Finished goods	160,297,894.70	3,047,213.46	157,250,681.24
Total	2,943,745,747.57	22,972,862.53	2,920,772,885.04

~ 132 ~

(Continued)

Item	31 December 2019
	Carrying amount	Falling price reserves	Carrying value
Raw materials and package materials	177,976,566.48	14,772,001.80	163,204,564.68
Semi-finished goods and work in process	2,291,945,127.85	0.00	2,291,945,127.85
Finished goods	562,948,591.57	3,046,322.32	559,902,269.25
Total	3,032,870,285.90	17,818,324.12	3,015,051,961.78

Items	31 December 2019	Increase		Decrease		30 June 2020
		Withdrawal	Other	Reversal or recovery	Other
Raw materials and package materials	14,772,001.80	5,258,503.74		104,856.47		19,925,649.07
Finished goods	3,046,322.32	434,682.03		433,790.89		3,047,213.46
Total	17,818,324.12	5,693,185.77		538,647.36		22,972,862.53

Item	30 June 2020	31 December 2019
Deductible tax	92,193,691.95	114,439,167.07
Pledge-style repo of treasury bonds	10,900,000.00	0.00
Total	103,093,691.95	114,439,167.07

Investees	31 December 2019	Changes in the Reporting Period
		Additional investments	Reduced investments	Profit and loss on investments confirmed according to equity law	Adjustment of other comprehensive income	Changes in other equity
I. Associated enterprises
Beijing Guge Trading Co., Ltd.	4,678,282.24			-53,631.34

~ 133 ~

Investees	31 December 2019	Changes in the Reporting Period
		Additional investments	Reduced investments	Profit and loss on investments confirmed according to equity law	Adjustment of other comprehensive income	Changes in other equity
Total	4,678,282.24			-53,631.34

Investees	Changes in the Reporting Period			30 June 2020	Balance of impairment provision
	Declaration of cash dividends or distribution of profit	Withdrawal of impairment provision	Other
I. Associated enterprises
Beijing Guge Trading Co., Ltd.				4,624,650.90
Total				4,624,650.90

Items	Building and plants	Land use rights	Total
I. Original carrying value
1. Balance on 31 December 2019	8,680,555.75	2,644,592.00	11,325,147.75
2. Increase during the Reporting Period	0.00	0.00	0.00
3. Decrease during the Reporting Period	0.00	0.00	0.00
4. Balance on 30 June 2020	8,680,555.75	2,644,592.00	11,325,147.75
II. Accumulated depreciation and amortization:
1. Balance on 31 December 2019	5,915,361.87	699,699.86	6,615,061.73
2. Increase during the Reporting Period	130,557.96	28,013.28	158,571.24
(1) Withdrawal or amortization	130,557.96	28,013.28	158,571.24
3. Decrease during the Reporting Period	0.00	0.00	0.00
4. Balance on 30 June 2020	6,045,919.83	727,713.14	6,773,632.97
III. Impairment provision
1. Balance on 31 December 2019	0.00	0.00	0.00
2. Increase during the Reporting Period	0.00	0.00	0.00

~ 134 ~

11. Fixed Assets

(1) Listed by category

Item	30 June 2020	31 December 2019
Fixed assets	1,629,268,366.99	1,722,572,998.79
Disposal of fixed assets	0.00	0.00
Total	1,629,268,366.99	1,722,572,998.79

Items	Buildings and constructions	Machinery equipments	Vehicles	Office equipment and other	Total
I. Original carrying value
1. Balance on 31 December 2019	2,034,543,017.61	1,002,176,887.05	60,967,511.99	170,904,070.21	3,268,591,486.86
2. Increase during the Reporting Period	0.00	8,118,223.00	2,891,743.16	5,906,716.55	16,916,682.71
(1) Acquisition	0.00	3,670,477.43	2,891,743.16	4,207,601.55	10,769,822.14
(2) Transfer from construction in progress	0.00	4,447,745.57	0.00	1,699,115.00	6,146,860.57
3. Decrease during the Reporting Period	6,831,022.80	14,047,285.07	279,075.12	1,119,654.19	22,277,037.18
(1) Disposal or scrap	6,831,022.80	14,047,285.07	279,075.12	1,119,654.19	22,277,037.18
4. Balance on 30 June 2020	2,027,711,994.81	996,247,824.98	63,580,180.03	175,691,132.57	3,263,231,132.39
II. Accumulated depreciation
1. Balance on 31 December 2019	810,920,134.01	575,262,319.33	51,633,020.95	103,244,644.01	1,541,060,118.30
2. Increase during the Reporting Period	36,210,126.91	51,670,929.87	3,060,438.40	16,674,135.79	107,615,630.97
(1) Withdrawal	36,210,126.91	51,670,929.87	3,060,438.40	16,674,135.79	107,615,630.97
3. Decrease during the	6,174,155.47	11,556,705.91	270,702.87	1,093,536.48	19,095,100.73

3. Decrease during the Reporting Period	0.00	0.00	0.00
4. Balance on 30 June 2020	0.00	0.00	0.00
IV. Original carrying value
1. Carrying value on 30 June 2020	2,634,635.92	1,916,878.86	4,551,514.78
2. Carrying value on 31 December 2019	2,765,193.88	1,944,892.14	4,710,086.02

~ 135 ~

Items	Buildings and constructions	Machinery equipments	Vehicles	Office equipment and other	Total
Reporting Period
(1) Disposal or scrap	6,174,155.47	11,556,705.91	270,702.87	1,093,536.48	19,095,100.73
4. Balance on 30 June 2020	840,956,105.45	615,376,543.29	54,422,756.48	118,825,243.32	1,629,580,648.54
III. Impairment provision
1. Balance on 31 December 2019	3,311,778.44	1,053,187.15	7,047.07	586,357.11	4,958,369.77
2. Increase during the Reporting Period	0.00	0.00	0.00	0.00	0.00
(1) Withdrawal	0.00	0.00	0.00	0.00	0.00
3. Decrease during the Reporting Period	520,414.64	55,838.27	0.00	0.00	576,252.91
(1) Disposal or scrap	520,414.64	55,838.27	0.00	0.00	576,252.91
4. Balance on 30 June 2020	2,791,363.80	997,348.88	7,047.07	586,357.11	4,382,116.86
IV. Carrying value of fixed assets
1. Carrying value on 30 June 2020	1,183,964,525.56	379,873,932.81	9,150,376.48	56,279,532.14	1,629,268,366.99
2. Carrying value on 31 December 2019	1,220,311,105.16	425,861,380.57	9,327,443.97	67,073,069.09	1,722,572,998.79

Item	Original carrying value	Accumulated depreciation	Impairment provision	Carrying value	Note
Buildings and constructions	8,155,407.00	5,263,789.95	2,791,363.80	100,253.25
Machinery equipments	6,398,959.48	5,369,319.30	997,348.88	32,291.30
Vehicles	58,119.66	49,329.00	7,047.07	1,743.59
Office equipment and others	843,135.27	244,860.60	586,357.11	11,917.56
Total	15,455,621.41	10,927,298.85	4,382,116.86	146,205.70

Items

Carrying value

Reason

~ 136 ~

Items	Carrying value	Reason
Buildings and constructions	715,850,341.33	In process
Total	715,850,341.33	--

Item	30 June 2020	31 December 2019
Construction in progress	258,954,824.33	183,984,816.07
Engineering materials	0.00	0.00
Total	258,954,824.33	183,984,816.07

Item	30 June 2020			31 December 2019
	Carrying amount	Depreciation reserve	Carrying value	Carrying amount	Depreciation reserve	Carrying value
Brewing automatization technological improvement project	84,453,154.26		84,453,154.26	74,782,393.43		74,782,393.43
Furnace project (No.5)	50,058,863.82		50,058,863.82	43,893,912.18		43,893,912.18
Suizhou new plant phase I project	81,059,874.07		81,059,874.07	40,023,041.23		40,023,041.23
Machine installment	11,820,431.52		11,820,431.52	10,393,296.42		10,393,296.42
Liquid filling line renovation project	5,934,194.72		5,934,194.72	5,934,194.72		5,934,194.72
Gujing digital marketing project Phase II	6,479,804.63		6,479,804.63	2,150,943.39		2,150,943.39
Renovation project of potential safety concerns	0.00		0.00	387,770.85		387,770.85
Advanced sewage treatment system	6,262,773.98		6,262,773.98	0.00		0.00
Intelligent technology renovation of brewing production	391,792.45		391,792.45	0.00		0.00
Other individual project	12,493,934.88	0.00	12,493,934.88	6,419,263.85	0.00	6,419,263.85
Total	258,954,824.33		258,954,824.33	183,984,816.07		183,984,816.07

Project

Budget (RMB’0,000)

31 December 2019

Increase during the Reporting

Amount transferred to

Decrease during

30 June 2020

~ 137 ~

			Period	fixed asset	the Reporting Period
Brewing automatization technological improvement project	27,430.00	74,782,393.43	9,938,942.66	268,181.83	0.00	84,453,154.26
Furnace project (No.5)	7,134.35	43,893,912.18	6,164,951.64	0.00	0.00	50,058,863.82
Suizhou new plant phase I project	26,000.00	40,023,041.23	41,036,832.84	0.00	0.00	81,059,874.07
Machine installment	4,741.05	10,393,296.42	1,692,621.84	265,486.74	0.00	11,820,431.52
Liquid filling line renovation project	4,000.00	5,934,194.72	0.00	0.00	0.00	5,934,194.72
Gujing digital marketing project Phase II	1,656.75	2,150,943.39	4,328,861.24	0.00	0.00	6,479,804.63
Renovation project of potential safety concerns	67.30	387,770.85	166,187.58	553,958.43	0.00	0.00
Advanced sewage treatment system	2,358.98	0.00	6,262,773.98	0.00	0.00	6,262,773.98
Intelligent technology renovation of brewing production	828,965.74	0.00	391,792.45	0.00	0.00	391,792.45
Other individual project	13,018.00	6,419,263.85	11,133,904.60	5,059,233.57	0.00	12,493,934.88
Total	915,372.17	183,984,816.07	81,116,868.83	6,146,860.57	0.00	258,954,824.33

Project	Proportion of project input to budgets (%)	Schedule (%)	Cumulative amount of interest capitalization	Of which: Interest capitalized during the reporting period	Interest capitalization during the Reporting Period (%)	Source of funds
Brewing automatization technological improvement project	39.21	80.00				Self-owned fund

~ 138 ~

Project	Proportion of project input to budgets (%)	Schedule (%)	Cumulative amount of interest capitalization	Of which: Interest capitalized during the reporting period	Interest capitalization during the Reporting Period (%)	Source of funds
Furnace project (No.5)	70.17	100.00				Self-owned fund
Suizhou new plant phase I project	18.53	18.53				Self-owned fund
Machine installment	24.93	89.00				Self-owned fund
Liquid filling line renovation project	14.84	50.00				Self-owned fund
Gujing digital marketing project Phase II	39.11	60.00				Self-owned fund
Renovation project of potential safety concerns	82.31	100.00				Self-owned fund
Advanced sewage treatment system	26.55	8.00				Self-owned fund
Intelligent technology renovation of brewing production	0.01	1.00				Self-owned fund
Other individual project	62.00	62.00				Self-owned fund
Total	--	--	--	--	--	--

Item	Land use rights	Software	Patents and trademark	Total
I. Original carrying value
1. Balance on 31 December 2019	683,451,302.56	105,085,318.08	215,006,066.19	1,003,542,686.83
2. Increase during the Reporting Period	122,043,483.02	0.00	0.00	122,043,483.02
(1) Acquisition	122,043,483.02	0.00	0.00	122,043,483.02
(2) Transfer from construction in progress	0.00	0.00	0.00	0.00
3. Decrease during the Reporting	0.00	18,867.92	0.00	18,867.92

~ 139 ~

Item	Land use rights	Software	Patents and trademark	Total
Period
(1) Disposal	0.00	0.00	0.00	0.00
(2) Other	0.00	18,867.92	0.00	18,867.92
4. Balance on 30 June 2020	805,494,785.58	105,066,450.16	215,006,066.19	1,125,567,301.93
II. Accumulated amortization:
1. Balance on 31 December 2019	143,777,958.04	27,857,857.39	46,188,938.64	217,824,754.07
2. Increase during the Reporting Period	7,748,741.11	9,371,698.38	24,038.88	17,144,478.37
(1) Withdrawal	7,748,741.11	9,371,698.38	24,038.88	17,144,478.37
3. Decrease during the Reporting Period	0.00	0.00	0.00	0.00
(1) Disposal	0.00	0.00	0.00	0.00
4. Balance on 30 June 2020	151,526,699.15	37,229,555.77	46,212,977.52	234,969,232.44
III. Impairment provision
1. Balance on 31 December 2019	0.00	0.00	0.00	0.00
2. Increase during the Reporting Period	0.00	0.00	0.00	0.00
3. Decrease during the Reporting Period	0.00	0.00	0.00	0.00
4. Balance on 30 June 2020	0.00	0.00	0.00	0.00
IV. Original carrying value
1. Carrying value on 30 June 2020	653,968,086.43	67,836,894.39	168,793,088.67	890,598,069.49
2. Carrying value on 31 December 2019	539,673,344.52	77,227,460.69	168,817,127.55	785,717,932.76

Investees or matters that goodwill arising from	31 December 2019	Increase		Decrease		30 June 2020
		Formed by business combination	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

~ 140 ~

(2) Impairment provision of goodwill

Investees or matters that goodwill arising from	31 December 2019	Increase		Decrease		30 June 2020
		Withdrawal	Other	Disposal	Other
Yellow Crane Tower Distillery Co., Ltd.	0.00	0.00	0.00	0.00	0.00	0.00
Total	0.00	0.00	0.00	0.00	0.00	0.00

Item	31 December 2019	Increase	Decrease		30 June 2020
			Amortization	Other decrease
Experience center	26,238,799.46	0.00	3,912,625.17	0.00	22,326,174.29
Pottery	1,836,642.57	0.00	1,836,642.57	0.00	0.00
Sewage treatment project	3,767,377.05	0.00	461,311.48	0.00	3,306,065.57
Yellow Crane Tower chateau and museum	11,496,948.62	0.00	1,757,322.57	0.00	9,739,626.05
Gujing party building cultural center	4,727,272.73	0.00	590,909.09	0.00	4,136,363.64
Yantai wine museum project	1,293,370.71	0.00	221,720.69	0.00	1,071,650.02
Other individual project with insignificant amounts	20,879,695.68	103,884.64	3,882,247.31	0.00	17,101,333.01
Total	70,240,106.82	103,884.64	12,662,778.88	0.00	57,681,212.58

Item	30 June 2020		31 December 2019
	Deductible temporary differences	Deferred tax assets	Deductible temporary differences	Deferred tax assets
Asset impairment provision	27,354,979.39	6,833,265.18	22,776,693.89	5,688,693.81
Credit impairment provision	44,250,374.52	11,046,978.77	43,861,929.95	10,955,709.29
Unrealized intragroup profit	24,800,846.93	6,200,211.73	32,086,076.52	8,021,519.13
Deferred income	74,384,425.08	18,187,119.73	72,778,437.92	17,941,534.40

~ 141 ~

Item	30 June 2020		31 December 2019
	Deductible temporary differences	Deferred tax assets	Deductible temporary differences	Deferred tax assets
Deductible losses	47,496,756.92	11,805,516.94	0.00	0.00
Carry-over of payroll payables deductible during the next period	0.00	0.00	32,995,460.19	8,248,865.05
Accrued expenses and discount	271,504,169.67	67,876,042.42	158,552,891.33	39,638,222.83
Total	489,791,552.51	121,949,134.77	363,051,489.80	90,494,544.51

Item	30 June 2020		31 December 2019
	Taxable temporary differences	Deferred tax liabilities	Taxable temporary differences	Deferred tax liabilities
Difference in accelerated depreciation of fixed assets	61,113,072.51	15,278,268.13	73,614,107.09	18,403,526.77
Assets appreciation arising from business combination not under the same control	381,561,354.20	95,390,338.55	384,290,207.88	96,072,551.97
Changes in fair value of trading financial assets	20,264,936.41	5,066,234.10	17,585,151.48	4,396,287.87
Total	462,939,363.12	115,734,840.78	475,489,466.45	118,872,366.61

Item	30 June 2020	31 December 2019
Deductible losses	8,243,989.86	8,072,655.25
Total	8,243,989.86	8,072,655.25

Item	30 June 2020	31 December 2019
Prepayments for equipment and constructions	574,026.00	4,148,686.00
Total	574,026.00	4,148,686.00

Item

30 June 2020

31 December 2019

~ 142 ~

Item	30 June 2020	31 December 2019
Credit borrowings	30,094,500.00	0.00
Guarantee borrowings	20,000,000.00	0.00
Total	50,094,500.00	0.00

Category	30 June 2020	31 December 2019
Bank acceptance bills	1,020,583,475.29	654,965,064.82
Commercial acceptance bills	0.00	48,714,582.04
Total	1,020,583,475.29	703,679,646.86

Item	30 June 2020	31 December 2019
Payments for goods	242,832,951.18	399,583,249.41
Payments for constructions and equipment	80,488,599.59	88,412,144.22
Other	63,035,070.24	75,498,801.77
Total	386,356,621.01	563,494,195.40

Item	30 June 2020	Reason
No. 1	2,252,093.02	Final payment
No. 2	577,691.84	Final payment
No. 3	393,392.70	Final payment
No. 4	348,350.03	Final payment
No. 5	244,906.28	Final payment
Total	3,816,433.87	--

Item	30 June 2020	31 December 2019
Loan	0.00	529,863,011.73
Total	0.00	529,863,011.73

~ 143 ~

Item	30 June 2020	31 December 2019
Loans	727,347,929.08	0.00
Total	727,347,929.08	0.00

Item	31 December 2019	Increase	Decrease	30 June 2020
I. Short-term employee benefits	453,674,655.69	1,071,079,133.49	1,227,668,307.07	297,085,482.11
II. Post-employment benefits-defined contribution plans	514,877.20	23,661,037.84	23,034,120.29	1,141,794.75
III. Termination benefits	0.00	0.00	0.00	0.00
Total	454,189,532.89	1,094,740,171.33	1,250,702,427.36	298,227,276.86

Item	31 December 2019	Increase	Decrease	30 June 2020
I. Salaries, bonuses, allowances and subsidies	357,387,670.42	925,474,559.57	1,066,882,430.78	215,979,799.21
II. Employee benefits	45,069.27	44,330,742.23	44,330,742.23	45,069.27
III. Social insurance	607,379.61	12,927,727.56	12,983,943.54	551,163.63
Of which: Health insurance	590,576.75	12,540,804.58	12,603,695.76	527,685.57
Injury insurance	5,730.43	384,567.63	378,878.03	11,420.03
Birth insurance	11,072.43	2,355.35	1,369.75	12,058.03
IV. Housing accumulation fund	4,465,854.45	35,906,861.82	36,227,524.29	4,145,191.98
V. Labor union funds and employee education funds	73,606,168.29	12,803,169.96	14,427,759.75	71,981,578.50
VI. Enterprise annuity	17,562,513.65	39,636,072.35	52,815,906.48	4,382,679.52
Total	453,674,655.69	1,071,079,133.49	1,227,668,307.07	297,085,482.11

Item	31 December 2019	Increase	Decrease	30 June 2020
1. Basic endowment insurance	509,340.98	22,905,408.65	22,287,978.80	1,126,770.83
2. Unemployment insurance	5,536.22	755,629.19	746,141.49	15,023.92

~ 144 ~

Item	31 December 2019	Increase	Decrease	30 June 2020
Total	514,877.20	23,661,037.84	23,034,120.29	1,141,794.75

Item	30 June 2020	31 December 2019
VAT	134,321,025.20	16,929,480.44
Consumption tax	165,311,329.62	347,582,441.49
Enterprise income tax	139,093,438.30	94,038,327.53
Individual income tax	1,791,267.81	1,173,190.21
Urban maintenance and construction tax	15,163,554.83	9,328,392.65
Stamp duty	965,306.80	1,058,588.17
Educational surcharge	14,929,428.45	7,991,963.70
Other	5,297,116.48	4,800,725.40
Total	476,872,467.49	482,903,109.59

Item	30 June 2020	31 December 2019
Interest payable	0.00	0.00
Dividends payable	755,400,000.00	0.00
Other payables	1,435,446,597.94	1,315,878,229.01
Total	2,190,846,597.94	1,315,878,229.01

Item	30 June 2020	31 December 2019
Ordinary stock dividends	755,400,000.00	0.00
Total	755,400,000.00	0.00

Item	30 June 2020	31 December 2019
Security deposit and guarantee	1,323,160,418.91	1,206,935,123.77
Warranty	45,615,013.51	42,966,560.82
Personal housing fund paid by company	4,112,923.98	4,465,854.45
Borrowing of business trip expenses	0.00	296,993.67

~ 145 ~

Item	30 June 2020	31 December 2019
Other	62,558,241.54	61,213,696.30
Total	1,435,446,597.94	1,315,878,229.01

Item	30 June 2020	31 December 2019
Accrued expenses	306,044,574.61	197,484,121.41
Total	306,044,574.61	197,484,121.41

Item	31 December 2019	Increase	Decrease	30 June 2020	Reason
Government grants	72,778,437.92	3,870,000.00	2,264,012.84	74,384,425.08	Grants received from government
Total	72,778,437.92	3,870,000.00	2,264,012.84	74,384,425.08	--

Item	31 December 2019	Increase during the Reporting Period	Recognized in other income during the Reporting Period	Other changes	30 June 2020	Related to assets/related to income
Wine production system technical transformation	192,708.47		31,249.98		161,458.49	Related to assets
Instrument subsidy	1,550,437.50		76,329.89		1,474,107.61	Related to assets
Intelligent solid brewing technology innovation project	119,791.53		15,625.02		104,166.51	Related to assets
Anhui province development of direct funds of service industry	795,122.12		146,341.44		648,780.68	Related to assets
Anhui province subsidy of innovative province construction capacity for independent innovation	1,948,120.00		365,272.50		1,582,847.50	Related to assets
Equipment subsidy	1,068,028.16		102,807.24		965,220.92	Related to assets

~ 146 ~

Enterprise development funds	22,500.00		15,000.00		7,500.00	Related to assets
Internet traceability system project	1,856,250.00		556,875.00		1,299,375.00	Related to assets
Subsidy for Suizhou new factory infrastructure	35,338,000.00		0.00		35,338,000.00	Related to assets
Motor and boiler energy-saving technical transformation project	275,000.24		68,749.98		206,250.26	Related to assets
Automation of check and storage, on-line monitoring of product quality	265,625.00		46,875.00		218,750.00	Related to assets
Funds for research projects of koji-making Technology	1,000,000.00		0.00		1,000,000.00	Related to assets
Gujing Zhangji wine cellar optimization and reconstruction project	835,208.43		23,749.98		811,458.45	Related to assets
Subsidy for food safety improvement project	689,655.25		68,965.50		620,689.75	Related to assets
Subsidy for key technical cooperation project on the authenticity of important food isotopes	600,000.00		0.00		600,000.00	Related to assets
Comprehensive subsidy fund for air pollution prevention and control	2,345,083.29		131,500.02		2,213,583.27	Related to assets
Funds for strategic emerging industry agglomeration development base	798,080.00	2,000,000.00	111,360.00		2,686,720.00	Related to assets
Refund of Land payment	22,562,827.93		275,103.09		22,287,724.84	Related to assets
Specific funds for side management of power demand	516,000.00		72,000.00		444,000.00	Related to assets
Project subsidy for coal to gas of 1# furnace	0.00	1,870,000.00	156,208.20		1,713,791.80	Related to assets
Total	72,778,437.92	3,870,000.00	2,264,012.84		74,384,425.08	--

Item

31 December 2019

Changes during the Reporting Period (+,-)

30 June 2020

~ 147 ~

		New issues	Bonus issues	Capitalization of reserves	Others	Subtotal
The sum of shares	503,600,000.00						503,600,000.00

Item	31 December 2019	Increase	Decrease	30 June 2020
Capital premium (share premium)	1,262,552,456.05			1,262,552,456.05
Other capital reserves	32,853,136.20			32,853,136.20
Total	1,295,405,592.25			1,295,405,592.25

Item	31 December 2019	Increase	Decrease	30 June 2020
Statutory surplus reserve	256,902,260.27			256,902,260.27
Total	256,902,260.27			256,902,260.27

Item	Reporting Period	Same period of last year
Beginning balance of retained earnings before adjustments	6,888,203,911.92	5,541,281,341.47
Total beginning balance of retained earnings before adjustment (increase+, decrease-)	0.00	4,794,830.59
Beginning balance of retained earnings after adjustments	6,888,203,911.92	5,546,076,172.06
Add: Net profit attributable to owners of the Company as the parent	1,024,936,604.36	2,097,527,739.86
Dividend of ordinary shares payable	755,400,000.00	755,400,000.00
Ending retained earnings	7,157,740,516.28	6,888,203,911.92

Item	Reporting Period		Same period of last year
	Operating revenue	Costs of sales	Operating revenue	Costs of sales
Main operations	5,495,370,627.67	1,301,529,714.81	5,958,624,293.86	1,380,565,871.04
Other operations	24,250,372.95	12,395,877.67	29,488,705.23	13,590,863.51

~ 148 ~

Item	Reporting Period		Same period of last year
	Operating revenue	Costs of sales	Operating revenue	Costs of sales
Total	5,519,621,000.62	1,313,925,592.48	5,988,112,999.09	1,394,156,734.55

Item	Reporting Period	Same period of last year
Consumption tax	731,743,604.96	711,806,689.93
Urban maintenance and construction tax and educational surcharge	129,960,286.58	138,007,221.23
Land use tax	6,984,861.27	3,447,726.79
Property tax	8,847,804.72	4,547,732.36
Stamp duty	4,724,705.33	5,043,756.63
Other	5,735,777.86	6,674,635.10
Total	887,997,040.72	869,527,762.04

Item	Reporting Period	Same period of last year
Employment benefits	269,309,951.20	197,359,561.67
Travel fees	55,722,038.26	60,001,666.01
Advertisement fees	453,767,973.19	442,193,538.62
Transportation charges	24,048,795.64	27,580,054.90
Comprehensive promotion costs	445,968,323.13	787,961,795.81
Service fees	299,367,311.62	281,570,342.23
Other	69,865,244.23	43,822,480.46
Total	1,618,049,637.27	1,840,489,439.70

Item	Reporting Period	Same period of last year
Employee benefits	253,062,668.21	180,945,738.54
Office fees	22,537,545.08	17,415,335.29
Maintenance expenses	26,618,712.24	17,708,807.57
Depreciation	36,411,144.00	30,873,944.56
Amortization of intangible assets	12,940,993.85	9,656,033.10
Pollution discharge	7,786,943.40	9,730,796.01

~ 149 ~

Travel expenses	3,183,652.98	1,375,252.69
Water and electricity charges	3,790,246.91	6,162,660.18
Other	29,355,766.48	28,176,889.19
Total	395,687,673.15	302,045,457.13

Item	Reporting Period	Same period of last year
Labor cost	11,741,116.01	8,702,736.52
Direct input costs	383,301.13	1,225,388.53
Depreciation expense	1,658,315.10	1,633,752.38
Other	1,471,650.74	3,102,360.24
Total	15,254,382.98	14,664,237.67

Item	Reporting Period	Same period of last year
Interest expenses	28,973,275.97	14,173,972.09
Less: Interest income	96,891,173.45	20,466,649.02
Net interest expenses	-67,917,897.48	-6,292,676.93
Net foreign exchange losses	13,095.11	1,577,281.36
Bank charges and others	-303,665.57	412,770.27
Total	-68,208,467.94	-4,302,625.30

Item	Reporting Period	Same period of last year	Related to assets /related to income
I. Government grants recorded to other income
Of which: Government grant related to deferred income	2,264,012.84	2,450,178.09	Related to assets
Government grant recorded to current profit or loss	12,710,340.82	28,333,740.59	Related to income
Total	14,974,353.66	30,783,918.68	--

Item	Reporting Period	Same period of last year
Investment income from long-term equity investments under	-53,631.34	-164,994.19

~ 150 ~

Item	Reporting Period	Same period of last year
equity method
Investment income from holding of trading financial assets	0.00	0.00
Other investment income	18,539,603.54	77,512,041.72
Total	18,485,972.20	77,347,047.53

Sources	2020年1-6月	2019年1-6月
Trading financial assets
Of which: Changes in fair value of designated as trading financial assets	-3,596,160.61	11,320,345.56
Total	-3,596,160.61	11,320,345.56

Item	Reporting Period	Same period of last year
Bad debt of notes receivable	-14,753.46	0.00
Bad debt of accounts receivable	-414,861.96	-75,535.11
Bad debt of other receivables	41,170.85	-401,034.29
Total	-388,444.57	-476,569.40

Item	Reporting Period	Same period of last year
I. Inventory falling price loss	-5,693,185.77	-5,945,248.67
II. Impairment loss of fixed assets	0.00	0.00
Total	-5,693,185.77	-5,945,248.67

Item	Reporting Period	Same period of last year
Gains/losses from disposal of fixed assets, construction in progress, productive biological assets and intangible assets not classified as held for sale	77,867.25	119,488.56
Of which: Fixed assets	77,867.25	119,488.56
Total	77,867.25	119,488.56

~ 151 ~

Item	Reporting Period	Same period of last year	Recognized in current non-recurring profit or loss
Gains from damage or scrapping of non-current asset	588.35	146,982.76	588.35
Government grants irrelevant to daily operation activities	6,377.80	20,000.00	6,377.80
Income from penalties and compensation	14,641,373.42	9,154,446.13	14,641,373.42
Sales of wastes	3,144,859.28	1,527,143.43	3,144,859.28
Other	2,781,962.69	302,191.21	2,781,962.69
Total	20,575,161.54	11,150,763.53	20,575,161.54

Item	Reporting Period	Same period of last year	Related to assets/related to income
Other rewards	6,377.80	20,000.00	Related to income
Total	6,377.80	20,000.00	--

Item	Reporting Period	Same period of last year	Recognized in current non-recurring profit or loss
Loss from damage or scrapping of non-current assets	2,296,765.56	576,926.25	2,296,765.56
Other	21,976,890.93	1,160,684.82	21,976,890.93
Total	24,273,656.49	1,737,611.07	24,273,656.49

Item	Reporting Period	Same period of last year
Current tax expenses	405,227,638.33	479,158,161.69
Deferred tax expenses	-34,592,116.09	-60,012,757.38
Total	370,635,522.24	419,145,404.31

Item	Reporting Period
Profit before taxation	1,377,077,049.17

~ 152 ~

Current income tax expense accounted at applicable tax rate of the Company as the parent	344,269,262.29
Influence of applying different tax rates by subsidiaries	-2,506,979.36
Influence of income tax before adjustment	20,003,127.36
Influence of non-taxable income	0.00
Influence of non-deductable costs, expenses and losses	11,060,996.69
Influence of deductable losses of unrecognized deferred income tax at the beginning of the Reporting Period	0.00
Influence of deductable temporary difference or deductable losses of unrecognized deferred income tax in the Reporting Period	42,833.65
Influence of development expense deduction	-2,233,718.39
Tax rate adjustment to the beginning balance of deferred income tax assets/liabilities	0.00
Income tax credits	0.00
Total	370,635,522.24

Item	Reporting Period	Same period of last year
Security deposit, guarantee and warranty	118,873,747.83	103,959,881.28
Government grants	11,109,436.15	11,786,600.00
Interest income	88,199,155.94	20,466,649.02
Release of restricted monetary assets	1,085,000,000.00	100,200,000.00
Other	20,568,195.39	40,318,774.38
Total	1,323,750,535.31	276,731,904.68

Item	Reporting Period	Same period of last year
Cash paid in sales and distribution expenses and general and administrative expense	1,031,070,499.98	657,188,029.24
Time deposits or deposits pledged for the issuance of notes payable	30,000,000.00	13,960,226.78
Structured time deposits that cannot be withdrawn in advance	400,000,000.00	0.00
Other	23,665,514.20	25,350,534.61
Total	1,484,736,014.18	696,498,790.63

~ 153 ~

48. Supplementary Information to the Statement of Cash Flows

(1) Supplementary information to the statement of cash flows

Supplementary information	Reporting Period	Same period of last year
1. Reconciliation of net profit to net cash flows generated from operating activities:
Net profit	1,006,441,526.93	1,274,948,723.71
Add: Provisions for impairment of assets	6,081,630.34	6,421,818.07
Depreciation of fixed assets, investment properties, oil and gas assets and productive biological assets	107,774,202.21	102,235,366.57
Amortization of intangible assets	17,144,478.37	12,195,535.21
Amortization of long-term deferred expenses	12,662,778.88	13,486,720.57
Losses from disposal of fixed assets, intangible assets and other long-term assets (gains: negative)	-77,867.25	-119,488.56
Losses on scrapping of fixed assets (gains: negative)	2,296,177.21	429,943.49
Losses on changes in fair value (gains: negative)	3,596,160.61	-11,320,345.56
Finance costs (gains: negative)	290,708.33	14,173,972.09
Investment losses (gains: negative)	-18,485,972.20	-77,347,047.53
Decreases in deferred tax assets (increase: negative)	-31,454,590.26	-63,337,537.53
Increases in deferred tax liabilities (decrease: negative)	-3,137,525.83	3,324,780.16
Decreases in inventories (increase: negative)	88,585,890.97	-14,040,094.66
Decreases in operating receivables (increase: negative)	-350,818,607.86	146,484,134.95
Increases in operating payables (decrease: negative)	413,475,097.35	-463,552,554.06
Amortization of deferred income	2,264,012.84	-2,450,178.09
Other*1	1,085,000,000.00	100,200,000.00
Net cash flows from operating activities	2,341,638,100.64	1,041,733,748.83
2. Significant investing and financing activities without involvement of cash receipts and payments
Conversion of debt into capital
Current portion of convertible corporate bonds
Fixed assets acquired under finance leases
3. Net increase/decrease of cash and cash equivalents:
Ending balance of cash	5,398,187,475.71	2,395,374,286.79

~ 154 ~

Supplementary information	Reporting Period	Same period of last year
Less: Beginning balance of cash	2,944,749,918.09	835,560,865.12
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents	2,453,437,557.62	1,559,813,421.67

Item	Reporting Period	Same period of last year
I. Cash	5,398,187,475.71	2,395,374,286.79
Including: Cash on hand	254,747.79	374,122.81
Bank deposit on demand	5,397,660,747.68	2,394,869,696.55
Other monetary assets on demand	271,980.24	130,467.43
II. Cash equivalents	0.00	0.00
Of which: Bond investments maturing within three months	0.00	0.00
III. Ending balance of cash and cash equivalents	5,398,187,475.71	2,395,374,286.79
Of which: cash and cash equivalents with restriction to use in the subsidies of the Company as the parent or Group	0.00	0.00

Item	Carrying value on 30 June 2020	Reason
Bank deposits	2,020,000,000.00	Structured deposit and fixed deposit which cannot be withdrawn in advance as well as time deposits pledged for issuance of bank acceptance bills
Notes receivable	382,801,475.30	Pledged for issuance of bank acceptance bills
Total	2,402,801,475.30	--

Item	Amount	Item presented in the statement of financial position	Recognized in current profit or loss or as deduct of related cost		Presented item recorded to current profit or loss or as deduct of related cost
			Reporting Period	Same period of last year

~ 155 ~

Technical transformation of brewing production system	161,458.49	Deferred income	31,249.98	31,249.98	Other income
Equipment subsidy	1,474,107.61	Deferred income	76,329.89	110,250.00	Other income
Intelligent solid brewing technology innovation project	104,166.51	Deferred income	15,625.02	15,625.02	Other income
Guiding funds for the development of service industry in Anhui Province	648,780.68	Deferred income	146,341.44	146,341.44	Other income
Subsidy for the construction of independent innovation capacity of Anhui Province	1,582,847.50	Deferred income	365,272.50	365,272.50	Other income
Energy saving transformation project of coal-fired industrial boiler and glass furnace	0.00	Deferred income	0.00	12,750.00	Other income
Project fund of Bozhou logistics center	0.00	Deferred income	0.00	30,000.00	Other income
Equipment subsidy	965,220.92	Deferred income	102,807.24	101,399.82	Other income
Financial subsidy for technological transformation	0.00	Deferred income	0.00	267,110.76	Other income
Special funds for enterprise development	7,500.00	Deferred income	15,000.00	15,000.00	Other income
Internet of things traceability system project	1,299,375.00	Deferred income	556,875.00	556,875.00	Other income
Electric motor and boiler energy saving technology transformation project	206,250.26	Deferred income	68,749.98	68,749.98	Other income
Whole process online monitoring of hook and store automation and product quality	218,750.00	Deferred income	46,875.00	46,875.00	Other income
Gujing Zhangji liquor warehouse optimization and transformation project	811,458.45	Deferred income	23,749.98	23,749.98	Other income
Subsidy for food safety	620,689.75	Deferred	68,965.50	68,965.50	Other income

~ 156 ~

improvement project		income
Comprehensive subsidy fund for air pollution prevention and control	2,213,583.27	Deferred income	131,500.02	131,500.02		Other income
Funds for strategic emerging industry agglomeration development base	2,686,720.00	Deferred income	111,360.00	111,360.00		Other income
Refund for land payment	22,287,724.84	Deferred income	275,103.09	275,103.09		Other income
Suizhou new plant construction subsidy	35,338,000.00	Deferred income	0.00	0.00		Other income
Funds for research projects of koji-making technology	1,000,000.00	Deferred income	0.00	0.00		Other income
Subsidy for key technical cooperation project on the authenticity of important food isotopes	600,000.00	Deferred income	0.00	0.00		Other income
Specific funds for side management of power demand	444,000.00	Deferred income	72,000.00	72,000.00		Other income
Project subsidy of coal to gas in 1#	1,713,791.80	Deferred income	156,208.20	0.00		Other income
Total	74,384,425.08	--	2,264,012.84			--

Item	Amount	Item presented in the statement of financial position	Recognized in current profit or loss or as deduct of related cost		Presented item recorded to current profit or loss or as deduct of related cost
			Reporting Period	Same period of last year
Tax refund	2,937,700.91	Other income	2,937,700.91	15,816,253.89	Other income
2019 subsidy fund and reward for being manufacture province and development policy of private economy	600,000.00	Other income	600,000.00	0.00	Other income
Subsidy from Social Security Bureau	910,749.30	Other income	910,749.30	0.00	Other income
Agriculture and Rural Areas award of Xianning	50,000.00	Other income	50,000.00	0.00	Other income

~ 157 ~

Unemployment insurance premium refund	2,314,709.05	Other income	2,314,709.05	2,000.00	Other income
Provincial Skilled Master Award	250,000.00	Other income	250,000.00	0.00	Other income
Tourism entrepreneurship marketing subsidy	100,000.00	Other income	100,000.00	0.00	Other income
Fund of Wuhan Hanyang Industrial and Commercial Association	50,000.00	Other income	50,000.00	0.00	Other income
Financial support of Wuhan Hanyang Treasury Collection and Payment Center	2,364,000.00	Other income	2,364,000.00	0.00	Other income
Subsidies for statisticians of the Management Committee of Xianning Hi-tech Industrial Development Zone	3,600.00	Other income	3,600.00	0.00	Other income
Tax breaks for veterans	90,000.00	Other income	90,000.00	0.00	Other income
Local financial funds of Xianning High-tech Industrial Development Zone	350,000.00	Other income	350,000.00	0.00	Other income
Fund of Xianning Economy and information Bureau	100,000.00	Other income	100,000.00	0.00	Other income
Subsidies for the municipal Innovation Platform of Xianning Science and Technology Bureau in 2019	50,000.00	Other income	50,000.00	0.00	Other income
Additional deduction of VAT	2,539,581.56	Other income	2,539,581.56	864,686.70	Other income
2018 project funds for being manufacture province	0.00	Other income	0.00	9,180,000.00	Other income
The State intellectual property rights demonstration enterprises award	0.00	Other income	0.00	1,200,000.00	Other income
Grant from Xianning	0.00	Other income	0.00	50,000.00	Other income

~ 158 ~

Science and Technology Bureau
Subsidy for Wuhan Science and Technology Bureau commissioner workstation	0.00	Other income	0.00	200,000.00	Other income
Subsidy for Xianning High-tech Zone industrial enterprise technology project	0.00	Other income	0.00	200,000.00	Other income
Bozhou Science and Technology Bureau award	0.00	Other income	0.00	50,000.00	Other income
Robot project subsidy of Commission of Economy and Information Technology	0.00	Other income	0.00	300,000.00	Other income
Other	0.00	Other income	0.00	470,800.00	Other income
Other not related to daily operation	0.00	Non-operating income	0.00	20,000.00	Non-operating income
Total	12,710,340.82	--	12,710,340.82	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.	Anhui Bozhou	Anhui Bozhou	Commercial trade	100.00		Investment establishment
Anhui Longrui Glass Co., Ltd	Anhui Bozhou	Anhui Bozhou	Manufacture	100.00		Investment establishment
BozhouGujing Waste Reclamation Co., Ltd.	Anhui Bozhou	Anhui Bozhou	Waste recycle	100.00		Investment establishment
Anhui Jinyunlai Culture & Media Co., Ltd.	Anhui Hefei	Anhui Hefei	Advertisement marketing	100.00		Investment establishment
Anhui Ruisiweier Technology Co.,	Anhui Bozhou	Anhui Bozhou	Technical research	100.00		Investment

~ 159 ~

Name	Main operating place	Registration place	Nature of business	Holding percentage (%)		Way of gaining
				Directly	Indirectly
Ltd.						establishment
Anhui Baiweilu Liquor Co., Ltd.	Anhui Bozhou	Anhui Bozhou	Manufacture	100.00		Investment establishment
Shanghai Gujing Jinhao Hotel Management Co., Ltd.	Shanghai	Shanghai	Hotel management	100.00		Business combination under the same control
Bozhou Gujing Hotel Co., Ltd	Anhui Bozhou	Anhui Bozhou	Hotel operating	100.00		Business combination under the same control
Anhui Yuanqing Environmental Protection Co., Ltd.	Anhui Bozhou	Anhui Bozhou	Sewage treatment	100.00		Investment establishment
Anhui Gujing Yunshang E-commerce Co., Ltd.	Anhui Hefei	Anhui Hefei	Electronic commerce	100.00		Investment establishment
Anhui Zhenrui Construction Engineering Co., Ltd	Anhui Bozhou	Anhui Bozhou	Construction	100.00		Investment establishment
Anhui RunAnXinKe Testing Technology Co., Ltd.	Anhui Bozhou	Anhui Bozhou	Food testing	100.00		Investment establishment
Yellow Crane Tower Distillery Co., Ltd.	Hubei Wuhan	Hubei Wuhan	Manufacture	51.00		Business combination not under the same control
Yellow Crane Tower Distillery (Xianning) Co., Ltd.	Hubei Xianning	Hubei Xianning	Manufacture		51.00	Business combination not under the same control
Yellow Crane Tower Distillery (Suizhou) Co., Ltd.	Hubei Suizhou	Hubei Suizhou	Manufacture		51.00	Business combination not under the same

~ 160 ~

Name	Main operating place	Registration place	Nature of business	Holding percentage (%)		Way of gaining
				Directly	Indirectly
						control
Hubei Junhe Advertising Co., Ltd.	Hubei Wuhan	Hubei Wuhan	Advertisement marketing		51.00	Business combination not under the same control
Hubei Yellow Crane Tower Beverage Co., Ltd.	Hubei Xianning	Hubei Xianning	Manufacture		51.00	Investment establishment
Wuhan Yashibo Technology Co., Ltd.	Hubei Wuhan	Hubei Wuhan	Technology development		51.00	Investment establishment
Wuhan Tianlong Jindi Technology Development Co., Ltd	Hubei Wuhan	Hubei Wuhan	Commercial trade		51.00	Business combination not under the same control
Xianning Junhe Sales Co., Ltd	Hubei Xianning	Hubei Xianning	Commercial trade		51.00	Business combination not under the same control
Wuhan Junya Sales Co., Ltd	Hubei Wuhan	Hubei Wuhan	Commercial trade		51.00	Investment establishment
Suizhou Junhe Commercial Co., Ltd.	Hubei Suizhou	Hubei Suizhou	Commercial trade		51.00	Investment establishment

Name	Shareholding proportion of non-controlling interests	The profit or loss attributable to the non-controlling interests	Declaring dividends distributed to non-controlling interests	Balance of non-controlling interests at the period-end
Yellow Crane Tower Distillery Co., Ltd.	49.00	-18,495,077.43	0.00	469,547,869.87

Name	30 June 2020

~ 161 ~

	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liability	Total liabilities
Yellow Crane Tower Distillery Co., Ltd.	686,235,476.83	777,112,835.05	1,463,348,311.88	373,556,283.73	131,531,069.23	505,087,352.96

Name	31 December 2019
	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liability	Total liabilities
Yellow Crane Tower Distillery Co., Ltd.	755,439,438.85	742,229,246.05	1,497,668,684.90	369,369,757.38	132,292,912.62	501,662,670.00

Name	Reporting Period
	Operating revenue	Net profit	Total comprehensive income	Cash flows from operating activities
Yellow Crane Tower Distillery Co., Ltd.	181,381,939.34	-37,745,055.98	-37,745,055.98	-107,245,907.79

Name	Same period of last year
	Operating revenue	Net profit	Total comprehensive income	Cash flows from operating activities
Yellow Crane Tower Distillery Co., Ltd.	457,947,025.03	54,351,856.52	54,351,856.52	39,866,055.42

~ 162 ~

1. Credit Risk

Credit risk is the risk of one party of the financial instrument face to a financial loss because the other party of thefinancial instrument fails to fulfill its obligation. The credit risk of the Company is related to cash and equivalent,notes receivable, accounts receivables, other receivables and long-term receivables. Credit risk of these financialassets is derived from the counterparty’s breach of contract. The maximum risk exposure is equal to the carryingamount of these financial instruments.Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited in such financialinstitutions as commercial bank, of which the Company thinks with higher reputation and financial position.For notes receivable, other receivables and long-term receivables, the Company establishes related policies tocontrol their credit risk exposure. The Company assesses credit capability of its customers and determines theircredit terms based on their financial position, possibility of the guarantee from third party, credit record and otherfactors. The Company monitors its customers’ credit record periodically, and for those customers with poor creditrecord, the Company will take measures such as written call, shortening or cancelling their credit terms so as toensure the overall credit risk of the Company is controllable.

2. Liquidity Risk

Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering cash orother financial assets. The Company is responsible for the capital management of all of its subsidiaries, includingshort-term investment of cash surplus and dealing with forecasted cash demand by raising loans. The Company’spolicy is to monitor the demand for short-term and long-term floating capital and whether the requirement of loancontracts is satisfied so as to ensure to maintain adequate cash and cash equivalents.

3. Market Risk

(1) Foreign currency risk

Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The core business ofthe Company is on the mainland of China and trading with RMB. Foreign exchange risk is minimal.

(2) Interest rate risk

The operating fund of the Company is sufficient, and there is no loan in recent years so that the risk of interest isvery small for the Company.

(3) Other price risk

The trading financial assets of the Company are measured by fair value. Therefore, the Company bears the risk ofthe change of security market. To decrease the risk, the management decided that the Company held acombination of several equities and securities.IX. The Disclosure of Fair ValueThe inputs used in the fair value measurement in its entirety are to be classified in the level of the hierarchy inwhich the lowest level input that is significant to the measurement is classified.

~ 163 ~

Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilitiesLevel 2: Inputs for the assets or liabilities (other than those included in Level 1) that are directly or indirectlyobservable.Level 3: Inputs are unobservable inputs for the assets or liabilities

1. Assets and liabilities measured at fair value on 30 June 2020

Item	Fair value on 30 June 2020
	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. Financial assets assigned measured by fair value and the changes be included in the current gains and losses		230,264,936.41		230,264,936.41
(1) Debt instrument investment
(2) Equity instrument investment		230,264,936.41		230,264,936.41
(3) Derivative financial assets
Total assets consistently measured at fair value		230,264,936.41		230,264,936.41

~ 164 ~

jointly controlled or exerted significant influence.

1. General Information of the Parent Company

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 Bozhou	Beverages, construction materials, manufacturing plastic production	1,000,000,000.00	53.89	53.89

Name	Relationship with the Company
Anhui Ruifuxiang Food Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Ruijing Catering Management Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Haochidian Catering Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Shanghai Beihai Hotel Co., Ltd	An affiliate of the actual controller and controlling shareholder
Anhui Ruijing Business Travel (Group) Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Bozhou Hotel Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Orient Ruijing Enterprise Investment Development Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Hengxin Pawn Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Bozhou Ruineng Thermal Power Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Hefei Gujing Holiday Hotel Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Bozhou Ruifyxiang High Protein Feed Co. Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Gujing Hotel Development Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Ruixin Pawn Co. Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Zhongxin Finance Leasing Co. Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Huixin Finance Investment Group Co., Ltd	An affiliate of the actual controller and controlling shareholder

~ 165 ~

Name	Relationship with the Company
Hefei Longxin Financial Management Consulting Co., Ltd	An affiliate of the actual controller and controlling shareholder
Bozhou Anxin Micro Finance Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Youxin Financing Guarantee Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Lixin E-commerce Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Gujing Huishenglou Catering Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Bozhou Gujing Junlai Hotel Co., Ltd	An affiliate of the actual controller and controlling shareholder
Anhui Gujing International Tourism Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Gujing Health Industry Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Lejiu Home Tourism Management Co., Ltd.	An affiliate of the actual controller and controlling shareholder
Anhui Shenglong Commercial Co., Ltd.	An affiliate of the actual controller and controlling shareholder

Related party	Content	Reporting Period	Same period of last year
Anhui Gujing International Tourism Co., Ltd.	Labor service	0.00	786,329.00
Anhui Gujing International Development Co., Ltd.	Labor service	103,773.58	0.00
Anhui Gujing Group Co., Ltd.	Labor service	0.00	63,716.81
Anhui Gujing Group Co., Ltd.	Purchase of materials	56,952.00	0.00
Anhui Gujing Health Industry Co., Ltd.	Purchase of materials	191,893.81	19,433.63
Anhui Gujing Hotel Development Co., Ltd.	Catering and accommodation service	121,508.00	16,766.00
Anhui Gujing Hotel Development Co., Ltd.	Labor service	3,413.21	31.51
Anhui Haochidian Catering Co., Ltd.	Labor service	991,145.50	0.00
Anhui Haochidian Catering Co., Ltd.	Catering and accommodation service	884,017.40	34,440.00
Anhui Haochidian Catering Co., Ltd.	Purchase of materials	8,757,860.85	245,594.50
Anhui Huixin Finance Investment Group Co., Ltd	Labor service	0.00	55,722.40

~ 166 ~

Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Labor service	0.00	25,821.13
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Afforestation fees	0.00	404,865.62
Anhui Ruijing Catering Management Co., Ltd.	Catering and accommodation service	0.00	33,725.00
Anhui Ruijing Business Travel (Group) Co., Ltd.	Purchase of materials	525,535.82	3,076,852.09
Anhui Xinyuan Municipal Garden Engineering Co., Ltd	Afforestation fees	0.00	31,849.06
Beijing Anhui Building	Catering and accommodation service	0.00	1,285.00
Bozhou Hotel Co., Ltd.	Catering and accommodation service	1,439,005.95	3,257,170.88
Anhui Gujing Huishenglou Catering Co., Ltd.	Catering and accommodation service	416,771.00	2,695,540.00
Bozhou Gujing Junlai Hotel Co., Ltd	Catering and accommodation service	0.00	234,710.54
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Purchase of materials and labor service	201,143.63	0.00
Anhui Lejiu Home Tourism Management Co., Ltd.	Purchase of materials and labor service	99,546.43	0.00
Hefei Gujing Holiday Hotel Co., Ltd.	Purchase of materials	149,618.90	387,017.20
Hefei Gujing Holiday Hotel Co., Ltd.	Catering and accommodation service	63,570.78	14,865.26
Total	--	14,005,756.86	11,385,735.63

Related party	Content	Reporting Period	Same period of last year
Anhui Gujing International Tourism Co., Ltd.	Catering and accommodation service	0.00	206.00
Anhui Gujing International Tourism Co., Ltd.	Sales of small materials	0.00	404.78
Anhui Gujing International Tourism Co., Ltd.	Sales of liquor	0.00	389.36
Anhui Gujing Group Co., Ltd.	Catering and accommodation service	28,125.00	87,090.19
Anhui Gujing Group Co., Ltd.	Sales of small materials	35,549.10	63,778.94
Anhui Gujing Health Industry Co., Ltd.	Catering and accommodation	1,250.00	29,059.00

~ 167 ~

	service
Anhui Gujing Health Industry Co., Ltd.	Labor service	232,430.19	501,596.23
Anhui Gujing Health Industry Co., Ltd.	Sales of liquor	5,738,435.24	5,473,459.08
Anhui Gujing Health Industry Co., Ltd.	Sales of small materials	1,314.60	3,136.93
Anhui Gujing Hotel Development Co., Ltd.	Sales of liquor	94,938.00	45,325.31
Anhui Haochidian Catering Co., Ltd.	Sales of liquor	48,584.08	0.00
Anhui Hengxin Pawn Co., Ltd.	Sales of liquor	6,244.25	0.00
Anhui Huixin Finance Investment Group Co., Ltd	Sales of liquor	21,225.67	452,567.02
Anhui Lejiu Home Tourism Management Co., Ltd.	Sales of hydropower	51,180.85	179,311.29
Anhui Lejiu Home Tourism Management Co., Ltd.	Labor service	7,620.00	0.00
Anhui Lejiu Home Tourism Management Co., Ltd.	Sales of small materials	0.00	5,849.50
Anhui Lejiu Home Tourism Management Co., Ltd.	Sales of liquor	4,539.82	3,114.91
Anhui Lixin E-commerce Co., Ltd.	Sales of liquor	7,461.93	63,756.26
Anhui Ruijing Business Travel (Group) Co., Ltd.	Catering and accommodation service	600.00	22,829.26
Anhui Ruijing Business Travel (Group) Co., Ltd.	Sales of liquor	251,495.58	2,979,148.41
Anhui Ruixin Pawn Co. Ltd.	Sales of liquor	3,512.39	2,731.85
Anhui Shenglong Commercial Co., Ltd.	Catering and accommodation service	3,800.00	5,909.00
Anhui Shenglong Commercial Co., Ltd.	Sales of liquor	1,450,295.22	6,206.90
Anhui Youxin Financing Guarantee Co., Ltd.	Sales of liquor	3,122.12	2,203.45
Anhui Zhongxin Finance Leasing Co. Ltd.	Sales of liquor	8,115.92	3,956.90
Bozhou Anxin Micro Finance Co., Ltd.	Sales of liquor	8,506.19	3,724.14
Bozhou Hotel Co., Ltd.	Sales of liquor	50,575.23	17,379.31
Anhui Gujing Huishenglou Catering Co., Ltd.	Sales of liquor	68,654.87	17,767.24
Bozhou Gujing Junlai Hotel Co., Ltd	Sales of liquor	0.00	4,655.17
Bozhou Ruifyxiang High Protein Feed Co. Ltd.	Sales of liquor	0.00	11,405.17
Bozhou Ruineng Thermal Power Co., Ltd.	Sales of liquor	74,150.45	190,103.02
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Sales of small materials	2,631.13	841.63
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Catering and accommodation service	420.00	2,735.00

~ 168 ~

Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Labor service	2,889.91	15,665.68
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Sales of liquor	88,799.29	902,976.02
Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	Sales of hydropower	0.00	36,105.11
Hefei Gujing Holiday Hotel Co., Ltd.	Catering and accommodation service	0.00	2,937.76
Hefei Gujing Holiday Hotel Co., Ltd.	Sales of liquor	14,336.28	0.00
Shanghai Beihai Hotel Co., Ltd	Sales of liquor	8,601.77	7,964.60
Anhui Lvyuan Ecological Agriculture Development Co., Ltd.	Sales of small materials	0.00	3,724.33
Anhui Gujing International Development Co., Ltd.	Sales of small materials	5,437.89	0.00
Anhui Gujing International Development Co., Ltd.	Catering and accommodation service	2,820.00	0.00
Anhui Gujing International Development Co., Ltd.	Sales of liquor	1,700,563.88	0.00
Total	--	10,028,226.85	11,150,014.75

Name of lessee	Category of leased assets	The lease income confirmed in the Reporting Period	The lease income confirmed in the same period of last year
Anhui Gujing Hotel Development Co., Ltd.	Houses and buildings	417,153.83	689,124.81
Total	--	417,153.83	689,124.81

Name of lessor	Category of leased assets	The lease fee confirmed in the Reporting Period	The lease fee confirmed in the same period of last year
Anhui Gujing Group Co., Ltd.	Houses and buildings	749,786.08	1,095,238.10
Total	--	749,786.08	1,095,238.10

Item	Related party	30 June 2020	31 December 2019
Accounts payable	Anhui Ruijing Business Travel (Group) Co., Ltd.	147,120.00	147,120.00
Accounts payable	Anhui Haochidian Catering Co., Ltd.	280,520.87	0.00

~ 169 ~

Item	Related party	30 June 2020	31 December 2019
Advances from customers	Anhui Ruijing Business Travel (Group) Co., Ltd.	788,175.25	913,047.40
Advances from customers	Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	0.00	490,292.90
Advances from customers	Anhui Gujing Health Industry Co., Ltd.	704,379.00	6,625,624.40
Advances from customers	Bozhou Ruineng Thermal Power Co., Ltd.	0.00	2,883.84
Advances from customers	Anhui Gujing International Development Co., Ltd.	128,004.36	1,038,479.00
Advances from customers	Anhui Shenglong Commercial Co., Ltd.	0.00	144,580.50
Other receivables	Anhui Gujing Hotel Development Co., Ltd.	100,000.00	50,000.00
Other receivables	Anhui Ruijing Business Travel (Group) Co., Ltd.	123,500.00	85,000.00
Other receivables	Dazhongyuan Wine Valley Culture Tourism Development Co., Ltd.	0.00	50,000.00
Other receivables	Anhui Gujing International Development Co., Ltd.	0.00	16,200.00
Other receivables	Anhui Shenglong Commercial Co., Ltd.	0.00	4,300.00

~ 170 ~

Aging	30 June 2020	31 December 2019
Within one year	1,591,313.17	218,558,555.07
Of which:1-6 months	1,591,313.17	218,558,555.07
7-12 months	0.00	0.00
1-2 years	0.00	0.00
2-3 years	0.00	0.00
Over 3 years	0.00	141,121.87
Subtotal	1,591,313.17	218,699,676.94
Less: Bad debt provision	0.00	141,121.87
Total	1,591,313.17	218,558,555.07

Item	30 June 2020
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	1,591,313.17	100.00	0.00	0.00	1,591,313.17
Of which: Group 1	1,591,313.17	100.00	0.00	0.00	1,591,313.17
Group 2	0.00	0.00	0.00	0.00	0.00
Total	1,591,313.17	100.00	0.00	0.00	1,591,313.17

Item	31 December 2019
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	218,699,676.94	100.00	141,121.87	0.06	218,558,555.07

~ 171 ~

Item	31 December 2019
	Carrying amount		Bad debt provision		Carrying value
	Amount	Proportion (%)	Amount	Withdrawal proportion (%)
Bad debt provision withdrawn separately
Of which: Group 1	218,558,555.07	99.94	0.00	0.00	218,558,555.07
Group 2	141,121.87	0.06	141,121.87	100.00	0.00
Total	218,699,676.94	100.00	141,121.87	0.06	218,558,555.07

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Related parties within the scope of consolidation	1,591,313.17	0.00	0.00
Total	1,591,313.17	0.00	0.00

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Related parties within the scope of consolidation	218,558,555.07	0.00	0.00
Total	218,558,555.07	0.00	0.00

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year
Of which:1-6 months
7-12 months
1-2 years
2-3 years

~ 172 ~

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Over 3 years	141,121.87	141,121.87	100.00
Total	141,121.87	141,121.87	100.00

Investees	31 December 2019	Changes in the Reporting Period			30 June 2020
		Withdrawal	Reversal or recovery	Write-off
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	141,121.87		141,121.87
Total	141,121.87		141,121.87

Entity name	Balance on 30 June 2020	Proportion of the balance to the total accounts receivable (%)	Bad debt provision
No. 1	728,777.34	45.80
No. 2	430,560.24	27.06
No. 3	328,613.03	20.65
No. 4	75,977.37	4.77
No. 5	27,385.19	1.72
Total	1,591,313.17	100.00

Item	30 June 2020	31 December 2019
Interest receivable	301,888.89	301,888.89
Dividends receivable	0.00	0.00
Other receivables	121,000,189.69	124,917,324.95
Total	121,302,078.58	125,219,213.84

~ 173 ~

(2) Other receivables

①Disclosure by aging

Aging	30 June 2020	31 December 2019
Within one year	120,530,314.73	64,773,476.22
Of which:1-6 months	39,092,200.18	50,595,906.92
7-12 months	81,438,114.55	14,177,569.30
1-2 years	355,158.20	59,983,186.13
2-3 years	392,570.00	525,794.00
Over 3 years	41,228,262.35	41,540,607.44
Subtotal	162,506,305.28	166,823,063.79
Less: Bad debt provision	41,506,115.59	41,905,738.84
Total	121,000,189.69	124,917,324.95

Nature	30 June 2020	31 December 2019
Related parties within the scope of consolidation	117,715,798.06	120,200,301.28
Security investment	40,850,949.35	40,850,949.35
Security deposit and guarantee	1,882,139.09	1,850,139.09
Rent, water, electricity and gas	277,104.86	853,843.90
Other	1,780,313.92	3,067,830.17
Total	162,506,305.28	166,823,063.79

Stage	Carrying amount	Bad debt provision	Carrying value
Stage 1	121,655,355.93	655,166.24	121,000,189.69
Stage 2	0.00	0.00	0.00
Stage 3	40,850,949.35	40,850,949.35	0.00
Total	162,506,305.28	41,506,115.59	121,000,189.69

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn

~ 174 ~

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
separately
Bad debt provision withdrawn by group	121,655,355.93	0.54	655,166.24	121,000,189.69
Of which: Group 1	117,715,798.06	0.00	0.00	117,715,798.06
Group 2	3,939,557.87	16.63	655,166.24	3,284,391.63
Total	121,655,355.93	0.54	655,166.24	121,000,189.69

Aging	30 June 2020
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	2,814,516.67	46,052.42	1.64
Of which:1-6 months	2,366,835.25	23,668.35	1.00
7-12 months	447,681.42	22,384.07	5.00
1-2 years	355,158.20	35,515.82	10.00
2-3 years	392,570.00	196,285.00	50.00
Over 3 years	377,313.00	377,313.00	100.00
Total	3,939,557.87	655,166.24	16.63

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately	40,850,949.35	100.00	40,850,949.35	0.00
Bad debt provision withdrawn by group	0.00	0.00	0.00	0.00
Of which: Group 1	0.00	0.00	0.00	0.00
Group 2	0.00	0.00	0.00	0.00
Total	40,850,949.35	100.00	40,850,949.35	0.00

Name	30 June 2020

~ 175 ~

	Carrying amount	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	The enterprise enters the bankruptcy liquidation procedure
Jianqiao Securities Co., Ltd.	11,840,500.00	11,840,500.00	100.00	The enterprise enters the bankruptcy liquidation procedure
Total	40,850,949.35	40,850,949.35	--	--

Stage	Carrying amount	Bad debt provision	Carrying value
Stage 1	125,972,114.44	1,054,789.49	124,917,324.95
Stage 2	0.00	0.00	0.00
Stage 3	40,850,949.35	40,850,949.35	0.00
Total	166,823,063.79	41,905,738.84	124,917,324.95

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group	125,972,114.44	0.84	1,054,789.49	124,917,324.95
Of which: Group 1	120,200,301.28	0.00	0.00	120,200,301.28
Group 2	5,771,813.16	18.27	1,054,789.49	4,717,023.67
Total	125,972,114.44	0.84	1,054,789.49	124,917,324.95

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
Within one year	4,312,272.07	77,825.50	1.80
Of which:1-6 months	3,444,702.77	34,447.03	1.00
7-12 months	867,569.30	43,378.47	5.00

~ 176 ~

Aging	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)
1-2 years	244,089.00	24,408.90	10.00
2-3 years	525,794.00	262,897.00	50.00
Over 3 years	689,658.09	689,658.09	100.00
Total	5,771,813.16	1,054,789.49	18.27

Category	Carrying amount	12-month expected credit losses rate (%)	Bad debt provision	Carrying value
Bad debt provision withdrawn separately	40,850,949.35	100.00	40,850,949.35	0.00
Bad debt provision withdrawn by group	0.00	0.00	0.00	0.00
Of which: Group 1	0.00	0.00	0.00	0.00
Group 2	0.00	0.00	0.00	0.00
Total	40,850,949.35	100.00	40,850,949.35	0.00

Name	31 December 2019
	Carrying amount	Bad debt provision	Withdrawal proportion (%)	Withdrawal reason
Hengxin Securities Co., Ltd.	29,010,449.35	29,010,449.35	100.00	The enterprise enters the bankruptcy liquidation procedure
Jianqiao Securities Co., Ltd.	11,840,500.00	11,840,500.00	100.00	The enterprise enters the bankruptcy liquidation procedure
Total	40,850,949.35	40,850,949.35	--	--

Category	31 December 2019	Changes in the Reporting Period			30 June 2020
		Withdrawal	Reversal or recovery	Write-off

~ 177 ~

Category	31 December 2019	Changes in the Reporting Period			30 June 2020
		Withdrawal	Reversal or recovery	Write-off
Bad debt provision withdrawn separately	40,850,949.35	0.00	0.00	0.00	40,850,949.35
Bad debt provision withdrawn by group	1,054,789.49	0.00	399,623.25	0.00	655,166.24
Total	41,905,738.84	0.00	399,623.25	0.00	41,506,115.59

	Nature	Balance at 30 June 2020	Aging	Proportion of the balance to the total other receivables (%)	Bad debt provision
No. 1	Related party within the scope of consolidation	89,300,433.13	Within 1 year	54.95	0.00
No. 2	Security Investment	29,010,449.35	Over 3 years	17.85	29,010,449.35
No. 3	Related party within the scope of consolidation	27,950,553.93	Within 1 year	17.20	0.00
No. 4	Security Investment	11,840,500.00	Over 3 years	7.29	11,840,500.00
No. 5	Related party within the scope of consolidation	464,811.00	Within 1 year	0.29	0.00
Total	--	158,566,747.41	--	97.58	40,850,949.35

Item	30 June 2020			31 December 2019
	Carrying amount	Depreciation reserve	Carrying value	Carrying amount	Depreciation reserve	Carrying value
Investment in 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

~ 178 ~

Investees	31 December 2019	Increase during the Reporting Period	Decrease during the Reporting Period	30 June 2020	Impairment provision during the Reporting Period	Provision for impairment at 30 June 2020
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
BozhouGujing Hotel Co., Ltd.	648,646.80	0.00	0.00	648,646.80	0.00	0.00
Anhui Ruisiweier Technology Co., Ltd.	40,000,000.00	0.00	0.00	40,000,000.00	0.00	0.00
Anhui Baiweilu Liquor Co., Ltd.	30,000,000.00	0.00	0.00	30,000,000.00	0.00	0.00
Anhui Yuanqing Environmental Protection Co., Ltd.	16,000,000.00	0.00	0.00	16,000,000.00	0.00	0.00
Anhui Gujing Yunshang 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
Yellow Crane Tower Distillery Co., Ltd.	816,000,000.00	0.00	0.00	816,000,000.00	0.00	0.00
Anhui Jinyunnlai Cultural Media Co., Ltd.	15,000,000.00	0.00	0.00	15,000,000.00	0.00	0.00
Bozhou Gujing Waste Recycling Co., Ltd.	1,441,423.94	0.00	0.00	1,441,423.94	0.00	0.00
Anhui RunanXinke Testing	10,000,000.00	0.00	0.00	10,000,000.00	0.00	0.00

~ 179 ~

Investees	31 December 2019	Increase during the Reporting Period	Decrease during the Reporting Period	30 June 2020	Impairment provision during the Reporting Period	Provision for impairment at 30 June 2020
Technology Co., Ltd.
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
Main operations	3,264,418,953.05	1,298,189,995.07	3,104,047,962.07	1,254,351,553.67
Other operations	32,698,219.44	18,869,268.55	40,634,501.51	23,567,023.24
Total	3,297,117,172.49	1,317,059,263.62	3,144,682,463.58	1,277,918,576.91

Item	Reporting Period	Same period of last year
Gains on disposal of available-for-sale financial assets
Investment income from trading financial assets during the holding period
Other investment income	12,434,590.21	31,883,868.76
Total	12,434,590.21	31,883,868.76

Item	Amount	Note
Gains/losses on the disposal of non-current assets	-2,218,309.96
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	14,980,731.46
Capital occupation charges on non-financial

~ 180 ~

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 derivative financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment in other debt obligations, other than valid hedging related to the Company’s common businesses	14,943,442.93
Depreciation reserves returns of receivables and contract assets with separate depreciation test
Gain/loss on entrustment loans
Gain/loss on change of the fair value of

~ 181 ~

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	-1,408,695.54
Project confirmed with the definition of non-recurring gains and losses
Less: Income tax effects	7,739,708.20
Non-controlling interests effects	1,539,724.85
Total	17,017,735.84	--

Profit as of Reporting Period	Weighted average ROE (%)	EPS (Yuan/share)
		EPS-basic	EPS-diluted
Net profit attributable to ordinary shareholders of the Company	10.84	2.04	2.04
Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit and loss	10.66	2.00	2.00

~ 182 ~

Part XII 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);(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; and(III) The interim report disclosed in other securities markets.

Chairman of the Board: (Liang Jinhui)

Anhui Gujing Distillery Company Limited

28 August 2020