2013 Annual Report of Anhui Gujing Distillery Company Limited ANHUI GUJING DISTILLERY COMPANY LIMITED
2013 Annual Report
April 2014
2013 Annual Report of Anhui Gujing Distillery Company Limited Section I. Important Reminders, Catalogue& Explanation
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of Anhui Gujing Distillery Company Limited (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
TheCompany’s profit distribution preplan upon review and approval of this board session: Based on the total shares of the Company as at 31 Dec. 2013, a cash dividend of RMB 3.50 (tax included) will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no capital reserve will be turned into share capital.
Yu Lin, company principal, Ye Changqing, chief of the accounting work, and Zhu Jiafeng, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete.
This report involves futures plans and some other forward-looking statements, which shall not be considered as virtual promises to investors. Investors are kindly reminded to pay attention to possible risks.
2013 Annual Report of Anhui Gujing Distillery Company Limited Catalogue
Section I. Important Reminders, Catalogue& Explanation ........................................ 2 Section II. Company Profile ....................................................................................... 6 Section III. Accounting& Financial Indicator Highlights........................................... 9 Section IV. Report of the Board of Directors ............................................................ 12 V. Significant Events ................................................................................................ 31 Section VI. Changes in Share Capital and Particulars about Shareholders ................ 36 Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees of the Company ..................................................................................... 42 Section VIII. Corporate Governance ........................................................................ 51 Section IX Internal Control ...................................................................................... 55 Section X. Financial report ....................................................................................... 57 Section XI. Documents Available for Reference ..................................................... 166
2013 Annual Report of Anhui Gujing Distillery Company Limited Explanation
||||
|-|-|-|
||Refers||
|Term||Contents|
||to||
||Refers||
|Company, the Company, Gu Jing||Anhui Gujing Distillery Company Limited|
||to||
||Refers||
|Group, the Group||Anhui Gujing Distillery Company Limited (consolidated)|
||to||
||Refers||
|Gujing Group||Anhui Gujing Group Co., Ltd.|
||to||

2013 Annual Report of Anhui Gujing Distillery Company Limited Reminder of Major Risks
1. We have disclosed in this report the major risk factors that may prevent us from fulfilling our future development strategies and operating goals. Please refer to the possible risks in the outlook of the future development of the Company in the report given by the
6th
Board of Directors.
2. China Securities Journal, Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn are designated by the Company as the media for information disclosure. All information of the Company shall be subject to what is disclosed by the Company on the said media. And Investors are kindly reminded to pay attention to possible investment risks.
3. This report is prepared in both Chinese and English. Should there be any understanding discrepancy between the two versions, the Chinese version shall prevail.
2013 Annual Report of Anhui Gujing Distillery Company Limited Section II. Company Profile
I. Company information
|||||
|-|-|-|-|
|Stock abbreviation|GJGJ, GJGB|Stock code|000596, 200596|
|Stock exchange listed with|Shenzhen Stock Exchange|||
|Chinese name of the Company|安徽古井贡酒股份有限公司|||
|Abbr. of the Chinese name of||||
||古井|||
|the Company||||
|English name of the Company||||
||ANHUI GUJING DISTILLERY COMPANY LIMITED|||
|(if any)||||
|Abbr. of the English name of||||
||GU JING|||
|the Company (if any)||||
|Legal representative of the|Yu Lin|||
|Company||||
|Registered address|Gujing Town, Bozhou City, Anhui Province|||
|Postal code for the registered||||
||236820|||
|address||||
|Office address|Gujing Town, Bozhou City, Anhui Province|||
|Postal code for the office||||
||236820|||
|address||||
|Internet website of the||||
||http://www.gujing.com|||
|Company||||
|Email address|gjzqb@gujing.com.cn|||

II. Contact us
||||
|-|-|-|
||Company Secretary|Securities Affairs Representative|
|Name|Ye Changqing|Ma Junwei|
||Gujing Town, Bozhou City, Anhui|Gujing Town, Bozhou City, Anhui|
|Address|||
||Province|Province|
|Tel.|（0558）5712231|（0558）5710057|
|Fax|（0558）5317706|（0558）5317706|
|E-mail|ycq@gujing.com.cn|gjzqb@gujing.com.cn|

2013 Annual Report of Anhui Gujing Distillery Company Limited III. About information disclosure and where this report is placed
|||
|-|-|
|Newspapers designated by the Company for||
||China Securities Journal, Securities Times, Ta Kung Pao (HK)|
|information disclosure||
|Internet website designated by CSRC for||
||http://www.cninfo.com.cn|
|disclosing this report||
|Where this report is placed|Company Secretary Office|

IV. Change of the registered information
|||||||
|-|-|-|-|-|-|
|||||Registration code of||
||Registration date|Registration place|Business license No.||Organizational code|
|||||taxation||
|||Industrial &||||
|||Commercial||||
|Initial registration|30 May 1996|Administration|14897271-1|341600151940008|15194000-8|
|||Bureau of Anhui||||
|||Province||||
|||Industrial &||||
|||Commercial||||
|At the end of the||||||
||9 Jul. 2012|Administration|340000400001632|341600151940008|15194000-8|
|reporting period||||||
|||Bureau of Anhui||||
|||Province||||
|Changes of the main business since listing||||||
|||Unchanged||||
|(if any)||||||
|Changes of the controlling shareholder (if||||||
|||Unchanged||||
|any)||||||

V. Other information
The CPAs firm hired by the Company:
|||
|-|-|
|Name|Ruihua Certified Public Accountants LLP|
||5-11 F, West Tower, China Overseas Property Plaza, Building No. 7, Courtyard No. 8, Xi|
||5-11 F, West Tower, China Overseas Property Plaza, Building No. 7, Courtyard No. 8, Xi|
|Office address||
||Binhe Road, Yong Ding Men, Dong Cheng District, Beijing, China|
|Signing accountants|Yang Ganlin, Zhang Liping|

Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|Name|Office address|Sponsor representative|Consistent supervision period|
||43/F, Metropolitan Plaza,|||
|GF Securities Co., Ltd.|183-187 Tianhe North Rd.,|He Xiaoshe, Yan Peng|15 Aug. 2011-31 Dec. 2013|
||Tianhe District, Guangzhou,|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Guangdong Province, China|

Financial consultant engaged by the Company to conduct sustained supervision during the reporting period□ Applicable√ Inapplicable
2013 Annual Report of Anhui Gujing Distillery Company Limited Section III. Accounting& Financial Indicator Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error?
□ Yes√ No
||||||
|-|-|-|-|-|
||||Increase or decrease of||
||2013|2012|this year over last year|2011|
||||(%)||
|Operating revenues (RMB Yuan)|4,580,575,654.71|4,197,057,315.26|9.14%|3,307,979,236.00|
|Net profit attributable to|622,004,915.79|725,589,286.31|||
|shareholders of the Company|||-14.28%|566,390,286.36|
|(RMB Yuan)|||||
|Net profit attributable to|||||
|shareholders of the Company after|593,950,787.12|711,934,788.75|-16.57%|553,567,092.68|
|extraordinary gains and losses|||||
|(RMB Yuan)|||||
|Net cash flows from operating|638,255,355.31|1,086,867,364.46|||
||||-41.28%|625,901,467.35|
|activities (RMB Yuan)|||||
|Basic EPS (RMB Yuan/share)|1.24|1.44|-13.89%|2.34|
|Diluted EPS (RMB Yuan/share)|1.24|1.44|-13.89%|2.34|
|Weighted average ROE (%)|17.47%|23.8%|-6.33%|31.65%|
||||Increase or decrease of||
||As at 31 Dec. 2013|As at 31 Dec. 2012|this year-end than last|As at 31 Dec. 2011|
||||year-end (%)||
|Total assets (RMB Yuan)|5,816,934,562.27|5,308,127,471.04|9.59%|4,241,819,550.30|
|Net assets attributable to|3,742,756,257.05|3,375,488,108.64|||
|shareholders of the Company|||10.88%|2,761,115,284.45|
|(RMB Yuan)|||||

II. Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
Unit: RMB Yuan
|||
|-|-|
|Net profit attributable to shareholders of the|Net assets attributable to shareholders of the|
|Company|Company|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
||2013|2012|Closing amount|Opening amount|
|According to Chinese|622,004,915.79|725,589,286.31|3,742,756,257.05|3,375,488,108.64|
|accounting standards|||||
|Items and amounts adjusted according to international accounting standards|||||

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Net profit attributable to shareholders of the||Net assets attributable to shareholders of the||
||Company||Company||
||2013|2012|Closing amount|Opening amount|
|According to Chinese|622,004,915.79|725,589,286.31|3,742,756,257.05|3,375,488,108.64|
|accounting standards|||||
|Items and amounts adjusted according to overseas accounting standards|||||

3. Explain reasons for the differences between accounting data under domestic and overseas accounting standards
III. Items and amounts of extraordinary gains and losses
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|2013|2012|2011|Note|
|Gains/losses on the disposal of non-current|-1,394,990.98||||
|assets (including the offset part of the asset||465,158.50|186,246.05||
|impairment provisions)|||||
|Government grants recognized in the current|6,438,091.17||||
|period, except for those acquired in the|||||
|ordinary course of business or granted at||5,871,645.90|4,111,902.86||
|certain quotas or amounts according to the|||||
|government’s unified standards|||||
|Gains and losses on change in fair value|10,050,415.19||||
|from tradable financial assets and tradable|||||
|financial liabilities, as well as investment|||||
|income from disposal of tradable financial|||||
|assets and tradable financial liabilities and|||||
|financial assets available for sales except for|||||
|effective hedging related with normal|||||
|businesses of the Company|||||
|Impairment provision reversal of accounts|||||
||||4,106,508.26||
|receivable on which the impairment test is|||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|carried out separately|||||
|Non-operating income and expense other|22,311,989.53||||
|||12,188,577.39|9,993,800.13||
|than the above|||||
|Less: Income tax effects|9,351,376.24|4,870,884.23|5,575,263.62||
|Total|28,054,128.67|13,654,497.56|12,823,193.68|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable√ Inapplicable
2013 Annual Report of Anhui Gujing Distillery Company Limited Section IV. Report of the Board of Directors
I. Overview
In 2013, in strict compliance with the powers bestowed by the Company Law, the Securities Law and theCompany’s Articles of Association, the Board of Directors of the Company strictly executed all resolutions of theShareholders’ General Meeting, firmly adhered to the operating objectives and studied and judged the situation with a clear and calm mind to make adaptive adjustments in response to changes in the industry and markets. Externally, we allocated resources on a rational basis, focused on markets, solidified the market basis and further enlarged the market share. Internally, we carried through the Lean Thinking, deepened cost control and implemented the outstanding performance management, which helped steadily improve the operation& management capability.
II. Main business analysis
1. Overview
For 2013, the Company achieved operating revenues of RMB 4,580,575,700, up9.14% over last year; total profit of RMB 851,911,200, down12.39% over last year; net profit of RMB 622,004,900, down14.28% over last year; EPS of RMB 1.24/share, down13.89% over last year; and net operating cash flows of RMB 638,255,400, down41.28% over last year.
Review the progress of the previously disclosed development strategy and business plan in the reporting period:
General operation of the Company in the reporting period
(I) continuously concentrated on market construction, constantly strengthen internal operation and improved brand influence and promoted sales growth of the Company.
During the reporting period, the Company based on the guidelines of “Persistence and Holding Fast, Mending and Promotion, Practicing Hard of Internal Work, Operating in Efficiency”, focused on the Anhui market and significant market construction out the province, made the sales channel constantly go deep, the vendor Relations constantly strengthened, the customer structure constantly optimized and the brand influence constantly reinforced through the constant optimization of the organization team, which ensured the healthy improvement of the market as well as the whole sales continued improving. In 2013, the Company had the honor to get the laurel of “Top 10 of the Most International Influence China Wines of 2013 Annual Huazun Cup” with the brand value which reached up to 26.165 billion and the products of the Company also be chosen as the sole assigned white spirit of the 2013 Snooker(China·Haikou) Casio World Open.
(II) Promoted deeply of the outstanding performance management model, realized the nation-wide lean and the steadily improved the products quality which had the honor to get the “Provincial Government Quality Prize”. For years, the Company constantly carried out the lean management thought through the deeply promotion of the outstanding performance management model and recently had appeared the rudiment of lean enterprise prototype with whole system, whole flow and whole coverage. In addition, the Company blended the lean thought in the quality management and started from each pass of the quality management which realized the risk screening,
2013 Annual Report of Anhui Gujing Distillery Company Limited monitoring, improvement and enhancing of the products quality. In 2013, the task of the QC circle of the Company acquired 1 national award, 3 provincial prizes and 7 industry awards and the lean training dojo of Gujing had officially completed and put into use as well as the Company became the enterprise which was the first to received the provincial government quality prize in the Anhui liquor industry.
(III) Took the “Cost Control Year” as an opportunity, deeply developed the cost control activities, promoted and constructed the long-term mechanism of cost control through dig out the connotative growth potential.
In 2013, the Company took the “Cost Control Year” as an opportunity, combined with its actual situation, persisted in the principle of the whole staff participation and overall control, formulated the specific cost control plan and target involved with the links such as management flow, productsR&D, purchase, production, sales, human resources and investment and financing embraced the income increasing and expenditure reducing as well as the cost decreasing and benefit increasing, each control unit executed well-aligned rectification and implement contrasted with the established plan; after experienced the three phases promotion and execution of launching and enacting the plan and target, implementation and inspection, consolidation and enhancing, appeared a series of excellent cost control plan and gained favorable economic benefits, which laid a favorable foundation for promoting the construction of the long-term mechanism of cost control.
(IV) Reinforced the enterprise cultural construction, deeply developed the practice activity of theme education and constantly strengthen the organization vitality through constantly behaving excelling in competition.
During the reporting period, the enterprise cultural construction of the Company made steady headway, and the “Gujing Brewing Site” including the Northern Wei Dynasty Gujing, the Song Dynasty Gujing, Ming and Qing Dynasties Pits Communities and Ming and Qing Dynasties Brewing Site were among the list of the 7th National Key Cultural Relics Protection Units issued by the State Cultural Relics Bureau. The Company became the enterprise with most national historical relics, largest volume and longest history in the national liquor industry that further enriched the properties of Gujing and enhanced the brand value of the Company; the Company also carried out the practice activity of theme education of “Making an Example Diligent, Incorruptible and Practical, Being a Pioneer with magnificent Gujing” that deepened the construction of excelling in competition which arose the enthusiasm of the general staffs and caused favorable demonstration driving effect as well as reinforced the enterprise vitality.
State the reasons why theCompany’s actual business performance is20% lower or higher than the earning forecast for the reporting period which has been publicly disclosed earlier:
□ Applicable√ Inapplicable
2. Revenues
Explanation:
N/A
Are theCompany’s goods selling revenue higher than the service revenue?
√ Yes□ No
||||||
|-|-|-|-|-|
|Industry|Items|2013 (ton)|2012 (ton)|YoY +/- (%)|
||Sales volume|64,427.29|54,529.63|18.15%|
|White spirit making|Output|66,309.20|52,770.09|25.66%|
||Stock|3,915.07|2,033.16|92.56%|

Reasons for anyover-30% YoY movement of the data above:
2013 Annual Report of Anhui Gujing Distillery Company Limited√ Applicable□ Inapplicable
The inventory up to 31 Dec. 2013 increased92.56% over last year and mainly because the Company stocked up for the Spring Festival.
Major orders held:
□ Applicable√ Inapplicable
Significant change or adjustment of theCompany’s products or services during the reporting period:
□ Applicable√ Inapplicable
Major customers:
|||
|-|-|
|Total sales to the top 5 customers (RMB Yuan)|1,020,515,628.42|
|Ratio of the total sales to the top 5 customers to the||
||22.28%|
|annual total sales (%)||

Information about the top 5 customers:
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|Serial No.|Name of customer|Sales (RMB Yuan)|Proportion in annual total sales|
|1|Distributor A|381,157,853.15|8.32%|
|2|Distributor B|310,785,023.86|6.78%|
|3|Distributor C|183,949,960.60|4.02%|
|4|Distributor D|77,680,272.68|1.7%|
|5|Distributor E|66,942,518.13|1.46%|
|Total|--|1,020,515,628.42|22.28%|

 3. Costs
Classified by industry:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
||||Proportion in||Proportion in||
|Industry|Item|||||YoY +/- (%)|
|||Amount|operating costs|Amount|operating costs||
||||(%)||(%)||
|Food making||1,285,722,076.73|95.35%|1,138,829,249.65|95.4%|-0.05%|

 Classified by product:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
||||Proportion in||Proportion in||
|Product|Item|||||YoY +/- (%)|
|||Amount|operating costs|Amount|operating costs||
||||(%)||(%)||
|Distilled spirit|||||||
|||1,285,722,076.73|95.35%|1,138,829,249.65|95.4%|-0.05%|
|products|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
|Hotel revenue|38,970,804.86|2.89%|39,515,901.20|3.31%|-0.42%|
|Others|23,680,998.95|1.76%|15,382,786.48|1.29%|0.47%|

 Explanation:
Naught
Major suppliers
Information about the top 5 suppliers:
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|||Procurement amount (RMB|Proportion in annual total procurement|
|Serial No.|Name of supplier|||
|||Yuan)|amount (%)|
|1|Supplier A|155,458,894.06|15.5%|
|2|Supplier B|68,640,132.39|6.85%|
|3|Supplier C|55,470,136.50|5.53%|
|4|Supplier D|40,730,561.09|4.06%|
|5|Supplier E|36,454,884.31|3.64%|
|Total|--|356,754,608.35|35.58%|

 4. Expense
Financial expenses stood at RMB -47,011,977.06, down46.84%, which was mainly because the raised funds was continued put into use and part of the self-owned funds was used for purchasing break-even floating income wealth management products, with the principal used of fixed time deposit of bank and the corresponding interest revenue decreased.
5.R&D expenses
TheR&D expenses in the reporting period stood at RMB 182,407,000, accounting for4.87% of the net assets and3.98% of the operating revenues.
6. Cash flows
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|2013|2012|YoY +/-|
|Subtotal of cash inflows from|5,681,044,259.07|5,409,722,258.53||
||||5.02%|
|operating activities||||
|Subtotal of cash outflows from|5,042,788,903.76|4,322,854,894.07||
||||16.65%|
|operating activities||||
|Net cash flows from operating|638,255,355.31|1,086,867,364.46||
||||-41.28%|
|activities||||
|Subtotal of cash inflows from|948,305,978.93|308,940.95|306,853.80%|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||
|-|-|-|-|
|investing activities||||
|Subtotal of cash outflows from|2,437,480,975.37|646,248,607.55||
||||277.17%|
|investing activities||||
|Net cash flows from investing|-1,489,174,996.44|-645,939,666.60||
||||-130.54%|
|activities||||
|Subtotal of cash inflows from|251,800,000.00|113,310,000.00||
||||122.22%|
|financing activities||||
|Subtotal of cash outflows from|-251,800,000.00|-113,310,000.00||
||||-122.22%|
|financing activities||||
|Net cash flows from financing|-1,102,719,641.13|327,617,860.76||
||||-436.59%|
|activities||||

Reasons for anyover-30% YoY movement of the data above:
√ Applicable□ Inapplicable
1. Net cash flows from operating activities stood at RMB 638,255,355.31 during the reporting period, down by41.28% over the same period of last year, which was mainly because the Company purchased products and accepted labor service.
2. Net cash flows from investing activities stood at RMB -1,489,174,996.44 during the reporting period, down by130.54% over the same period of last year, which was mainly because the Company invested in the finance products.
3. Net cash flows from financing activities stood at RMB -251,800,000.00 during the reporting period, down by122.22% over the same period of last year, which was mainly because the Company distributed the bonus and dividend.
Reasons for a big difference between the operating cash flows and the net profit:
□ Applicable√ Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease||Increase/decrease|
||||||Increase/decrease||
||Operating||Gross profit rate|of operating||of gross profit|
|||Operating costs|||of operating costs||
||revenues||(%)|revenues over last||rate over last year|
||||||over last year (%)||
|||||year (%)||(%)|
|Classified by industry:|||||||
|Manufacture|4,540,933,231.07|1,348,373,880.54|70.31%|9.45%|12.95%|-0.92%|
|Classified by product:|||||||
|Distilled spirit|||||||
||4,438,676,469.44|1,285,722,076.73|71.03%|9.72%|12.9%|-0.82%|
|products|||||||
|Hotel revenue|72,754,798.07|38,970,804.86|46.44%|2.11%|-1.38%|1.89%|
|Other|29,501,963.56|23,680,998.95|19.73%|-7.52%|53.94%|-32.05%|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||||
|-|-|-|-|-|-|-|
|Classified by region:|||||||
|Domestic|4,538,849,950.31|1,347,836,127.33|70.30%|9.54%|13.05%|-0.92%|
|Overseas|2,083,280.76|537,753.21|74.19%|-59.91%|-63.45%|2.50%|

IV. Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||As at 31 Dec. 2013||As at 31 Dec. 2012||||
|||Proportion in|||Proportion||
|||||Proportion in||Explain any major change|
||Amount|total assets|Amount||change (%)||
|||||total assets (%)|||
|||(%)|||||
|Monetary funds|1,381,930,710.96|23.76%|2,609,650,352.09|49.16%|-25.4%||
|Accounts|6,374,469.99||7,887,007.25||||
|||0.11%||0.15%|-0.04%||
|receivable|||||||
|Inventories|1,075,033,137.30|18.48%|782,399,498.85|14.74%|3.74%||
|Investing real|35,188,079.66||31,451,269.49||||
|||0.6%||0.59%|0.01%||
|estate|||||||
|Fixed assets|1,266,481,752.59|21.77%|783,740,205.15|14.76%|7.01%||
|Construction in|377,338,939.54||423,672,281.54||||
|||6.49%||7.98%|-1.49%||
|process|||||||

2. Significant changes in liabilities
Naught
3. Assets and liabilities measured at fair value
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss from|Accumulative||Amount|||
|||||Impairment||Amount sold in|Closing|
|Item|Opening|change in fair|change in fair|provision for|purchased in|||
||balance|value in this|value recorded|||this period|balance|
|||year|into equity|this period|this period|||
|Financial assets||||||||
|Financial assets|27,991,376.84||-3,915,689.84||||24,075,687.00|
|available for||||||||
|sale||||||||

Whether the measurement attributes of the main assets of the Company had significant changes during the reporting period or not?
□ Yes√ No
2013 Annual Report of Anhui Gujing Distillery Company Limited V. Analysis to the core competitiveness
During the reporting period, there was no significant change of the core competitiveness of the Company.
VI. Analysis to the investment situation
1. Particulars about external equity investment
(1) Particulars about external investment
Naught
(2) Particulars about holding equity of financial enterprises
Naught
(3) Particulars about securities investment
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||Number|Sharehold||Sharehold||Gain/loss|||
||||Initial|||Number||Closing||||
|||||of shares|ing||ing||for|||
|||Abbreviat|investmen|||of shares||book||||
|Variety of|Code of|||held at|percentag||percentag||reporting|Accounti|Source of|
|||ion of|t cost|||held at||value||||
|securities|securities|||period-be|e at||e at||period|ng title|stock|
|||securities|(RMB|||period-en||(RMB||||
|||||gin|period-be||period-en||(RMB|||
||||Yuan)|||d (share)||Yuan)||||
|||||(share)|gin (%)||d (%)||Yuan)|||
|||||||||||Available||
||||25,199,99|||||24,075,68||-for-sale|Subscript|
|Stock|002374|LPGF||1,938,461|1.82%|3,489,229|1.82%|||||
||||3.00|||||7.00||financial|ion|
|||||||||||assets||
||||25,199,99|||||24,075,68||||
|Total||||1,938,461|--|3,489,229|--||0.00|--|--|
||||3.00|||||7.00||||

Explanation on holding equity of other listed companies
□ Applicable√ Inapplicable
2. Entrusted financial management, derivatives investment and entrustment loans
(1) Entrusted financial management
Naught
(2) Derivatives investment
Unit: RMB Ten Thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Operator|Relation|Related-p|Type of|Initial|Start date|Ending|Opening|Impairme|Closing|Proportio|Actual|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||arty|derivative|investmen||date|investmen|nt|investmen|n of the|gain/loss|
||transactio|investmen|t amount|||t amount|provision|t amount|closing|in|
||n or not|t|||||(if any)||investmen|reporting|
||||||||||t amount|period|
||||||||||in the||
||||||||||Company||
||||||||||’s closing||
||||||||||net assets||
|||Reverse|||||||||
|||repurchas|||||||||
|||||2 Sep.|||||||
||No|e of|0|||||8000|2.14%|366.62|
|||||2013|||||||
|||national|||||||||
|||debt|||||||||
|Total|||0|--|--|0||8000|2.14%|366.62|
|Capital source for derivative investment|||Self-owned funds of the Company||||||||
|Cases involving lawsuit (if applicable)|||Naught||||||||
|Disclosure date of the board announcementapproving the wealth managemententrustment (if any)|||||||||||
||||30 Aug. 2013||||||||
|Analysis on risks and control measures of|||||||||||
|derivative products held in the reporting|||||||||||
||||The Company had controlled the relevant risks strictly according to the Derivatives||||||||
|period (including but not limited to market|||||||||||
||||Investment Management System.||||||||
|risk, liquidity risk, credit risk, operation|||||||||||
|risk, law risk, etc.)|||||||||||
|Changes of market prices or fair values in|||||||||||
|the reporting period of the invested|||||||||||
|derivatives. And the analysis on the fair|||||||||||
||||Naught||||||||
|value of the derivatives should include the|||||||||||
|specific use methods and the relevant|||||||||||
|assumptions and parameters.|||||||||||
|Whether significant changes occurred to|||||||||||
|the Company’s accounting policy and|||||||||||
|specific accounting principles of|||Naught||||||||
|derivatives in the reporting period|||||||||||
|compared to the previous reporting period|||||||||||
||||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||||||||
|Specific opinion from independent|||derivative instruments, which was in favor of improving the service efficiency of the||||||||
|directors on the Company’s derivatives|||idle funds; in order to reduce the investment risks of the financial derivative||||||||
|investment and risk control|||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||||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|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|
|RMB 0.3 billion.|

(3) Entrustment loans
Naught
3. Particulars about the use of raised funds
(1) Overview of the use of raised funds
Unit: RMB Ten Thousand Yuan
|||
|-|-|
|Total amount of raised funds|122,749.95|
|Total amount of raised funds input in the reportingperiod||
||34,152.30|
|Total amount of raised funds accumulatively input|94,556.72|
|Explanation on overview of the use of raised funds||
|The Company’s raised funds were used stably as scheduled, without any changes.||

(2) Projects promised to be invested with raised funds
Unit: RMB Ten Thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Date||||
||Project|||||Investme|||||
||||||Accumul||when the|||Material|
|Projects invested with|changed|||||nt||Profit|||
|||Raised|Investment|Input in|ative||project||Reach the|change in|
|raised capital as|or not|||||progress||generated|||
|||capital|after|the|input up||reaches||expected|the|
|promised and|(includin|||||up to the||in the|||
|||input as|adjustment|reporting|to the||the||profit or|project|
|investments with|g|||||period-en||reporting|||
|||promised|(1)|year|period-en||expected||not|feasibility|
|over-raised capital|partially|||||d (%)(3)||period|||
||||||d (2)||usable|||or not|
||changed)|||||＝(2)/(1)|||||
||||||||condition||||
|Projects invested with raised capital as promised|||||||||||
|Technological|||||||||||
|Transform on the|||||||April 30,||||
||No|13,500|12,194.42|1,999.74|9,302.24|76.28%||||No|
|Brewage of|||||||||||
||||||||2014||||
|High-quality Base|||||||||||
|Wine|||||||||||
|Construction of Base|||||||||||
||||||||April 30,||||
|Wine Blending &|No|68,600|65,921.06|28,913.59|51,281.35|77.79%||||No|
|Filling Centre and|||||||2014||||
|Ancillary Facilities|||||||||||
|Construction of|No|27,500|27,500|3,141.8|16,948.07|61.63%|April 30,|||No|
|Marketing Network|||||||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||2014||||
|||||||||Cannot|Cannot||
|||||||||be|be||
||||||||Decembe||||
|||||||||calculate|calculate||
|Construction of Brand|No|17,000|17,000|97.17|17,025.06|100.15%|r 31,|||No|
|Promotion||||||||d|d||
||||||||2012||||
|||||||||separatel|separatel||
|||||||||y|y||
|Subtotal of promised|||||||||||
||--|126,600|122,615.48|34,152.3|94,556.72|--|--|0|--|--|
|investment projects|||||||||||
|Investments of over-raised capital|||||||||||
|Total|--|126,600|122,615.48|34,152.3|94,556.72|--|--|0|--|--|
|Reason for failing to|High quality base liquor production technological transformation project and base liquor storage, filling||||||||||
|reach scheduled|centers and facilities construction project fails to meet the schedule, the main reason is related equipment||||||||||
|progress or projected|and facilities are debugging.||||||||||
|income (explain one|Marketing network construction project fails to meet the schedule, the main reason is the municipal||||||||||
|project by one project)|engineering construction leads to experience center cannot be planned construction.||||||||||
|Explanation on|||||||||||
|significant changes in|Naught||||||||||
|feasibility of projects|||||||||||
|Amount, usage and|Inapplicable||||||||||
|usage progress of|||||||||||
|over-raised capital|||||||||||
|Change of the|Inapplicable||||||||||
|implementation|||||||||||
|location of any raised|||||||||||
|funds investment|||||||||||
|project|||||||||||
|Adjustment of the|Inapplicable||||||||||
|implementation|||||||||||
|method of any raised|||||||||||
|funds investment|||||||||||
|project|||||||||||
||Applicable||||||||||
||In accordance with the explanation of the Particulars on the Private Issuance of A-share of Anhui GujingDistillery Co., Ltd. and the Listing Announcement, “Before the raised proceeds being in place, the Companycan use the self-raised proceeds to input preliminarily in accordance with the actual progress of raisedproceeds investment projects; after the raised proceeds being in place, the Company can use the raisedproceeds to replace the self-raised proceeds preliminarily input”. And the Proposal on Using the RaisedProceeds to Replace the Self-raised Proceeds Preliminarily Input to the Raised Proceeds Investment Projectswas reviewed and approved at the 7th Session of the 6th Board of Directors, which agreed to use the raisedproceeds to replace the self-raised proceeds of RMB 27,058,143.42 preliminarily input to the raised||||||||||
|Advanced input and|||||||||||
|exchange of any raised|||||||||||
|funds investment|||||||||||
|project|||||||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
||proceeds investment projects. The above funds replacement was completed on 6 Jan. 2012.|
|Idle raised capital for|Inapplicable|
|temporarily||
|supplementing working||
|capital||
|Outstanding raised|Inapplicable|
|funds in project||
|implementation and||
|reasons||
|Usage and whereabouts||
||Deposited in the special account for raised proceeds|
|of unused raise capital||
|Problems found in the||
||The actual used raised funds of the brand promotion project of the Company was of RMB 170,250, 600 that|
|usage and disclosure||
||exceeded RMB 250,600 investment of the original plan, which was the interest of the special account of the|
|affairs of raised capital||
||raised funds.|
|and other situations||

(3) Change of projects invested with raised funds
Naught
4. Analysis to main subsidiaries and stock-participating companies
Main subsidiaries and stock-participating companies
Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Main|||||||
|Company|Company|||Registered|||Operating|Operating||
|||Industry|products/ser||Total assets|Net assets|||Net profit|
|name|variety|||capital|||revenues|profit||
||||vices|||||||
||||Wholesales|||||||
||||of distilled|||||||
|Bozhou|||spirit,|||||||
|Gujing||Business|construction|84,860,000.|1,253,140,9|156,265,783|4,437,393,2|689,673,402|522,992,729|
||Subsidiary|||||||||
|Sales Co.,||trading|materials,|00|06.37|.43|04.68|.19|.91|
|Ltd|||feeds and|||||||
||||assistant|||||||
||||materials|||||||
|Bozhou|||Transportati|||||||
|Gujing||Transportati|on, sales|6,950,000.0|3,587,200.6|2,475,117.0||||
||Subsidiary||||||0.00|0.00|0.00|
|Transportati||on|and repair|0|0|2||||
|on Co., Ltd|||service|||||||
|Bozhou|||Manufactur|||||||
|||Manufactur||86,660,300.|164,916,322|131,912,710|207,304,367|28,046,498.|21,438,909.|
||Subsidiary|||||||||
|Gujing|||e and sale|||||||
|||e||00|.99|.53|.96|69|32|
|Glass Co.,|||of glass|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Ltd|||products|||||||
||||Collect and|||||||
|Bozhou||||||||||
||||sale of|||||||
|Gujing||||||||||
|||Waste|recycled|1,000,000.0|1,641,317.2|1,328,428.9|7,268,446.3|||
|Waste|Subsidiary|||||||32,742.29|12,904.66|
|||recycle|glass bottle,|0|7|2|4|||
|Reclamatio||||||||||
||||glass,|||||||
|n Co., Ltd||||||||||
||||wastebasket|||||||
||||Production,|||||||
||||publish,|||||||
||||design and|||||||
||||proxy of ads|||||||
|Anhui||||||||||
||||in China;|||||||
|Jinyunlai||||||||||
|||Ads|ceremony|2,000,000.0|91,730,441.|3,883,307.2|433,122,447|6,277,603.8|4,685,918.1|
|Culture &|Subsidiary|||||||||
|||marketing|service for|0|49|1|.44|5|7|
|Media Co.,||||||||||
||||conferences|||||||
|Ltd.||||||||||
||||as well as|||||||
||||sales of|||||||
||||gifts in arts|||||||
||||and crafts|||||||
||||Administrat|||||||
||||ive license|||||||
||||items:|||||||
||||Naught;|||||||
||||General|||||||
||||operating|||||||
||||items:|||||||
|Bozhou|||providing|||||||
|||Production||||||||
|Gujing|||packing for|30,000,000.|40,887,564.|30,904,458.|10,111,658.|6,084,770.4|4,535,206.9|
||Subsidiary|and||||||||
|Packing|||Gujing|00|20|89|04|8|9|
|||manufacture||||||||
|Co., Ltd.|||Brand,|||||||
||||serials wine,|||||||
||||fruit and|||||||
||||vegetable|||||||
||||wine, health|||||||
||||wine of|||||||
||||Gujing|||||||
||||Brand|||||||
|Shanghai|||Production,|||||||
|Hongbang|||publish,|||||||
|Culture||Ads|design and|5,000,000.0|5,000,000.0|5,000,000.0|1,086,074.5|||
||Subsidiary|||||||543,193.07|401,346.14|
|Communica||marketing|proxy of ads|0|0|0|9|||
|tion Co.,|||in China;|||||||
|Ltd.|||ceremony|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||service for|||||||
||||conferences|||||||
||||and sales of|||||||
||||craft gifts|||||||
||||Hotel|||||||
||||managemen|||||||
||||t (Except|||||||
||||for catering|||||||
||||managemen|||||||
||||t、Except for|||||||
||||hotel|||||||
||||operation);|||||||
||||Self-owned|||||||
|Shanghai|||housing|||||||
|Gujing|||rental;|||||||
|||Hotel||||||||
|Jinhao|||establish|54,000,000.|238,365,793|88,269,207.|70,406,145.|5,440,931.5|4,879,223.8|
||Subsidiary|managemen||||||||
|Hotel|||branch. (If|00|.43|86|56|3|5|
|||t||||||||
|Managemen|||the|||||||
|t Co., Ltd.|||enterprise|||||||
||||operation|||||||
||||involves the|||||||
||||administrati|||||||
||||ve|||||||
||||licensing, it|||||||
||||shall|||||||
||||operate|||||||
||||based on the|||||||
||||license).|||||||
||||Accommod|||||||
||||ation and|||||||
||||parking|||||||
||||services;|||||||
|Bozhou|||lunch|||||||
|||Hotel||||||||
|Gujing|||processing,||||3,776,562.0|||
||Subsidiary|managemen||628,000.00|676,763.94|-177,230.56||-176,312.03|-190,168.16|
|Hotel Co.,|||sales of||||0|||
|||t||||||||
|Ltd.|||alcohol and|||||||
||||tobacco and|||||||
||||sales of|||||||
||||daily|||||||
||||commodity|||||||
|Anhui Ruisi|||Research|||||||
|||Technology||50,000,000.0|50,000,000.0|50,000,000.0||||
|Weier|Subsidiary||and||||0.00|0.00|0.00|
|||research||0|0|0||||
|Technology|||extension|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|Co Ltd|engineering|
||and|
||technology;|
||information|
||systems|
||planning,|
||design;|
||computer|
||software|
||and|
||hardware,|
||network|
||communicat|
||ion system|
||design,|
||developmen|
||t, sales of|
||enterprise|
||managemen|
||t consulting|
||and|
||services.|
||(business|
||involving|
||administrati|
||ve license|
||or|
||qualificatio|
||n, by|
||license or|
||qualificatio|
||n certificate|
||managemen|
||t)|

Explanation on main subsidiaries and stock-participating companies
Particulars about subsidiaries gained and disposed during the reporting period
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
||Purpose for acquiring or|Way of acquiring or disposing|Influence on the overall|
|Name of subsidiary|disposing the subsidiary in the|the subsidiary in the reporting|production and business|
||reporting period|period|performance|
|Anhui Swisse Will Science &||||
||Company development needs|Establishment||
|Technology Co., Ltd.||||

5. Particulars about significant projects invested by non-raised funds
2013 Annual Report of Anhui Gujing Distillery Company Limited Unit: RMB Ten Thousand Yuan
|||||||
|-|-|-|-|-|-|
||||Accumulative|||
|||Amount of input||||
||Total planed amount||amount actually|||
|Name of project||during the reporting||Progress of project|Gains from project|
||of investment||input as of the|||
|||period||||
||||period-end|||
|Relocation and||||||
|Technological||||||
|Transform on the||||||
|Brewage of Base|80,000.00|32,419.58|67,671.00|85.00%||
|Wine and the||||||
|supporting facilities||||||
|projects||||||
|Total|80,000.00|32,419.58|67,671.00|--|--|

Notes: The investment project was belonging to the sub-project of the liquor industrial park project disclosed by the Company on 29 Mar. 2012.
VII. Predict the operating results of Jan.-Mar. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable√ Inapplicable
VIII. Particulars about special purpose entities controlled by the Company
Naught
IX. Outlook of theCompany’s future development
(I) Industry development prospects of the Company
1. From macroscopic view: the GDP of our nation grew7.7% on Y0Y basis in 2013 which was the lowest growth in 14 years. About the overseas demand, the economy of the developed countries maintained recovery and the growth of the emerging economies had slow down with the global economy continuous improved on the whole and the overseas demand probably be mild and would rise again. About the domestic demand: influenced by the decreased of the food and beverage revenue, the consumption growth rate declined and the combat corruption and uphold integrity in 2014 was still impacted the high-end consumption, while influenced by the base effect, the overseas demand had get milder and the estimated domestic consumption growth rate was expected to recovery companied with the release of the reform bonus.
2. From development tendency of the industry: the “Injunction” of 2014 had gradually upgraded, the supervision continued raising, with the high-end consumption suffocated and the low-end competition aggravated, as well as the integration of the industry accelerated and the white spirits demands got further intimated among citizens;
preference of other consumers transferred with the succedaneums such as red wine, beer and health care wine
developed rapidly and the alcohol consumption continued to be diversification; recently, the circulation channel of
white spirit faced up with significant transform, new modes and new channels such as e-commerce, 020 and chain
2013 Annual Report of Anhui Gujing Distillery Company Limited emerged in endlessly, the age of “Channel Delayering and Elaboration” with continuous innovation had came. 3. From future development of the Company: the industry adjustment continued deepen, the innovation and transformation speed accelerated, the operation cost of the Company continued increased, the region pioneering advantages continued faced with challenges and the competition risks continued enlarged.
(II) Operating measures of the Company in 2014
1. Carry out marketing innovation and constantly improve the driving force of the Company brand.
The Company will reinforce the strategy research and make precise localization and optimized layout in practice to strengthen the control power of the market; it should fully exert the radiation effect of Bozhou and Hefei and should promote the national process with firm strategic insight when concentrate the superior resources on doing thorough the “Three Direct Links”; it should constantly innovate and enrich the channels and products structure, should develop new consumption channels such as e-commerce in order to adjust in the emerging buying behaviors; should continues to the strengthen the experiential marketing activities such as “Raw Wine Exploration” and convey the positive energy of the Chinese spirits culture.
2. Carry out excellent performance and reinforce the quality control as well as constantly strengthen the technical study.
Quality is the theme of an enterprise and under the background of the maturing supervision, the Company is more needed to ensure the products quality, abide strictly by the standard as well as to ensure the high level of the products inspection and the scientific research and technology; it should stick to the bottom line of the food safety standards unwaveringly, enlarge theR&D power, develop multiple topics research and prompt the technical equipments becomeR&D ability; it should positively anticipate in the 3C Plan of the Chinese Liquor of “Honest Quality, Earnest Service and trustworthy Industry”, develop project application such as Chinese Quality Award; it should constantly improve the traditional technique and constantly enrich the products system as well as improve the quality brand by taking advantage of the superior resources of the whole process of production.
3. Rely on the “Improving Year of Human Resources” and constantly enlarge the talents value.
The Company will rely on the execution of the systems such as the “Improving Year of Human Resources” and measures to enhance the vitality of the talents, acknowledge, management and innovation; it should truly make the mutual promotion between the employees treatment and the enterprise revenue and should forge the employee training channels and professional growth channel with multidirectional; it should base on the optimization and the top-level design of the system and should constantly enlarge the talents value and fully dig out the employee potency through system, organization and process construction.
4. Further promote the construction of the target cost management and control system and enhance the low cost operation ability.
The Company will construct the target cost management and control system which based on the market chain and supported by business drivers, focus on the internal and external standard, search for the differences, alert of the abnormity, predict the performance as well as strengthen the systematic low-cost operation ability of the Company and support the transformation of the products structure so thus to prompt the better and faster development. Y2014 is also a brand-new starting point and faced with the complex market environment, the Company will continue to strengthen its conviction, unite and cooperate, exploit and innovate and move ahead abreast to the “Magnificent Gujing” again.
2013 Annual Report of Anhui Gujing Distillery Company Limited X. Explanation of the Board of Directors on “Non-standardAuditor’s Report” issued by the CPA firm for the reporting period
Naught
XI. Explanation on change of accounting policy, accounting estimates and accounting methods as compared with the financial report in last year
Naught
XII. Explanation on the retrospective restatement for correcting the significant accounting errors during the reporting period
Naught
XIII. Explanation on changes in the consolidated scope compared with the financial report in last year
The subsidiaries, special purpose entities and operating entities with control right formed by entrusted operation or lease that newly included in the consolidated scope
||||
|-|-|-|
|Name|Closing net assets|Net profit in current period|
|Anhui Swisse Will Science &Technology Co., Ltd.|50,000,000.00|0.00|

Anhui Swisse Will Science& Technology Co., Ltd. was the subsidiary gained by establishment or investment in the year.
XIV. Particulars about the profit distribution and dividend policy of the Company
Formulation, execution or adjustment of theCompany’s profit distribution policy, especially the cash dividend policy, during the reporting period:
√ Applicable□ Inapplicable
According to the Proposal on the Profit Distribution of 2012 of the Company approved by the 2012 Annual General Meeting on 31 May 2013, the Company distributed the cash dividends to the whole shareholders of RMB 0.5 per share which amounted to RMB 251,800,000.00 calculated by the issued shares amount of 503,600,000 shares.
|||
|-|-|
|Special explanation of the cash dividend policy||
|Whether conformed with the regulations of the Articles||
|of association or the requirements of the resolutions of|Yes|
|the shareholders’ meeting:||
|Whether the dividend standard and the proportion were||
||Yes|
|definite and clear:||
|Whether the relevant decision-making process and the||
||Yes|
|system were complete:||
|Whether the independent director acted dutifully and|Yes|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|exerted the proper function:||
|Whether the medium and small shareholders had the||
|chances to fully express their suggestions and appeals, of|Yes|
|which their legal interest had gained fully protection:||
|Whether the conditions and the process met the||
|regulations and was transparent of the adjustment or|Inapplicable|
|altered of the cash dividend policy:||

TheCompany’s preplans on profit distribution and turning capital reserve into share capital for the recent three years (including the reporting year):
1. TheCompany’s preplan on cash distribution in 2013 was as follows: a cash of RMB 3.5 (tax included) was distributed for each 10 shares, with no capital reserves turned into share capitals.
2. TheCompany’s plan on cash distribution in 2012 was as follows: a cash of RMB 5(tax included) was distributed for each 10 shares, with no capital reserves turned into share capitals.
3. TheCompany’s plan on cash distribution in 2011 was as follows: a cash of RMB 4.5(tax included) was distributed for each 10 shares and dispatched the equity with capital reserves which turned into 10 shares of each 10 shares.
Cash dividend distribution of the Company over the recent three years:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Net profit attributable to||
||||Ratio in net profit attributable to|
|||shareholders of listed||
||Amount of cash dividend||shareholders of listed|
|Year||companies under the||
||(tax included)||companies under the|
|||consolidated statement in the||
||||consolidated statement|
|||year||
|2013|176,260,000.00|622,004,915.79|28.34%|
|2012|251,800,000.00|725,589,286.31|34.7%|
|2011|113,310,000.00|566,390,286.36|20.01%|

 The Company (including its subsidiaries) made profit in the reporting period and the retained profit of the Company (without subsidiaries) was positive, but it did not put forward a preplan for cash dividend distribution:
□ Applicable√ Inapplicable
XV. Pre-plan for profit allocation and turning capital reserve into share capital for the reporting period
|||
|-|-|
|Bonus to every 10 shares (shares)|0|
|Dividends to every 10 shares (shares) (tax|3.50|
|included)||
|Equity base of the preplan for distribution (shares)|503,600,000|
|Total of cash bonus (RMB Yuan) (tax included)|176,260,000.00|
|Distributable profits (RMB Yuan)|1,589,277,915.00|
|Proportion of cash bonus in the total of profit|100%|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|distribution (%)|
|Cash dividend policy:|
|Specific explanation of preplan for profit distribution or preplan for turning capital reserve into share capital|
|The Company planed to based on the total shares at the year-end of 503,600,000 shares to distribute the dividends with a cash of|
|RMB 3.5 (tax included) to the whole shareholders for each 10 shares which was of RMB 176,260,000 and the retained profits of|
|RMB1,413,017,915.00would all transfer to the next year.|

XVI. Social responsibilities
For particulars about the social responsibilities performed by the Company during the reporting period, please refer to the Report on Social Responsibilities disclosed on http://www.cninfo.com.cn dated 18 Apr. 2014.
Whether the listed company and its subsidiaries were belongs to the heavily polluting industries stimulated by the state department of environmental protection
□ Yes√ No□ Inapplicable
Whether there were any significant society security problems of the listed company and its subsidiaries
□ Yes√ No□ Inapplicable
Whether had been administrative punished in the reporting period
□ Yes√ No□ Inapplicable
XVII. Particulars about researches, visits and interviews received in this reporting period There was no any activity of field researches, visits and interviews received during the reporting period of the Company.
2013 Annual Report of Anhui Gujing Distillery Company Limited V. Significant Events
I. Significant lawsuit or arbitration
□ Applicable√ Inapplicable
There was no significant lawsuit or arbitration during the reporting period.
II.Media’s queries
√ Applicable□ Inapplicable
||||
|-|-|-|
|Explanation on media’s queries|Disclosure date|Disclosure index|
|Media report of “On 25 Sep. 2013, the single||For details, please refer to the clarification|
|day sales of the Company’s||announcement No. 2013-017 disclosed by|
||4 Nov. 2013||
|products ”surmounted RMB 0.14 billion||the Company on|
|which again created a new record in history||http://www.cninfo.com.cn.|

III. Occupation of theCompany’s capital by the controlling shareholder and its related parties for non-operating purposes
Naught
IV. Bankruptcy and reorganization
Naught
V. Asset transactions
1. Asset acquisition
Naught
2. Sale of assets
Naught
3. Business combination
Naught
VI. Implementation and influence of equity incentive plan of the Company
Naught
2013 Annual Report of Anhui Gujing Distillery Company Limited VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
Naught
2. Related-party transactions arising from asset acquisition or sale
Naught
3. Significant related-party transactions concerning joint investment in external parties
Naught
4. Credits and liabilities with related parties
Was there any non-operating credit or liability with related parties?
□ Yes√ No
5. Other significant related-party transactions
Naught
VIII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
Explanation on the trusteeship
Naught
The trusteeship whose profits reaching more than10% of the total profits of the Company in the reporting period
□ Applicable√ Inapplicable
(2) Contract
Explanation on the contract
Naught
The contract whose profits reaching more than10% of the total profits of the Company in the reporting period
□ Applicable√ Inapplicable
(3) Lease
Explanation on the lease
Naught
The lease whose profits reaching more than10% of the total profits of the Company in the reporting period
□ Applicable√ Inapplicable
2013 Annual Report of Anhui Gujing Distillery Company Limited 2. Guaranty
Naught
(1) Violation of the external guarantees
Naught
3. Other significant contracts
Naught
4. Other significant transactions
Naught
IX. Performance of commitments
1. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the reporting period or such commitments carried down into the reporting period
Naught
2. If theCompany’s assets or projects existing earnings prediction, and the reporting period is among the prediction period, it shall explain on whether the assets or projects reach the original earnings prediction and relevant reason
Naught
X. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
|||
|-|-|
|Name of domestic CPAs firm|Ruihua Certified Public Accountants (LLP)|
|Remuneration of domestic CPAs firm (RMB Ten||
||110|
|Thousand Yuan)||
|Consecutive years of the audit services provided by||
||1|
|domestic CPAs firm||
|Name of the certified public accountants from the||
||Yang Ganlin, Zhang Liping|
|domestic CPAs firm||

Reengage the CPAs firm at current period or not?
√ Yes□ No
Change the CPAs firm during the audit period or not?
□ Yes√ No
2013 Annual Report of Anhui Gujing Distillery Company Limited Execute the approval procedure to change the CPAs firm or not?
√ Yes□ No
Explain in detail the change of the CPAs firm:
In view of the combination of the original audit institution RSM China Certified Public Accountants and Crowe Horwath Certified Public Accountants which formed into Ruihua Certified Public Accountants, in order to maintain the continuity of theCompany’s audit business and guarantee the audit quality, the whole Directors agreed to engage Ruihua Certified Public Accountants as the 2013 financial and internal control audit institution. See details to the Announcement on the Resolution of the 18th Session of the 6th Board of Directors (No. 2013-013) disclosed on http://www.cninfo.com.cn on 31 Oct. 2013.
Particulars on engaging the audit firm for the internal control, financial adviser or sponsor
√ Applicable□ Inapplicable
In view of the combination of the original audit institution RSM China Certified Public Accountants and Crowe Horwath Certified Public Accountants which formed into Ruihua Certified Public Accountants, in order to maintain the continuity of theCompany’s audit business and guarantee the audit quality, the whole Directors agreed to engage Ruihua Certified Public Accountants as the 2013 financial and internal control audit institution. See details to the Announcement on the Resolution of the 18th Session of the 6th Board of Directors (No. 2013-013) disclosed on http://www.cninfo.com.cn on 31 Oct. 2013.
XI. Explanation of the Supervisory Committee and Independent Directors (if applicable) on the “Non-standardAuditor’s Report” issued by the CPAs firm during the reporting period Inapplicable
XII. Punishment and rectification
Explanation on rectification:
Inapplicable
Particulars about the directors, supervisors, senior management staffs and shareholders holding over5% shares of the Company involving in illegal trading theCompany’s stocks and the Company has disclose to recover the illegal income
□ Applicable√ Inapplicable
XIII. Particulars about trading suspension and termination faced after the disclosure of annual report
Naught
XIV. Other significant events
Naught
XV. Significant events of subsidiaries of the Company
Naught
2013 Annual Report of Anhui Gujing Distillery Company Limited XVI. Corporate bonds issued by the Company
Naught
2013 Annual Report of Anhui Gujing Distillery Company Limited Section VI. Changes in Share Capital and Particulars about Shareholders
I. Changes in share capital
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease (+, -)|||||After the change||
||||||Capitalizat|||||
||||Issuance||ion of|||||
|||Proportion||Bonus|||||Proportio|
||Amount||of new||public|Others|Subtotal|Amount||
|||(%)||shares|||||n (%)|
||||shares||reserve|||||
||||||fund|||||
|I. Shares subject to trading||||||||||
||900|0%||||||900|0%|
|moratorium||||||||||
|Other domestic shares|900|0%||||||900|0%|
|Shares of domestic natural||||||||||
||900|0%||||||900|0%|
|person||||||||||
|II. Shares not subject to|503,599,1|||||||503,599,1||
|||100%|||||||100%|
|trading moratorium|00|||||||00||
|1. Ordinary shares|383,599,1|||||||383,599,1||
|||76.17%|||||||76.17%|
|denominated in RMB|00|||||||00||
|2. Domestically listed|120,000,0|||||||120,000,0||
|||23.83%|||||||23.83%|
|foreign shares|00|||||||00||
||503,600,0|||||||503,600,0||
|III. Total shares||100%|||||||100%|
||00|||||||00||

Reason for the changes in share capital
Approval for changes in share capital
□ Applicable√ Inapplicable
Transfer for changes in share capital
Effects of changes in share capital on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company and other financial indexes over the last year and last period
□ Applicable√ Inapplicable
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
□ Applicable√ Inapplicable
2013 Annual Report of Anhui Gujing Distillery Company Limited II. Issuance and listing of securities
1. Securities issued in the previous three years
||||||||
|-|-|-|-|-|-|-|
|Name of security|||||||
|||Issuing price (or|Number of||Number approved|Ending date of|
|and its derivative|Issuing date|||Listing date|||
|||interest rate)|issuance||for listing|trade|
|security|||||||
|Stock|||||||
|RMB ordinary|||||||
||15 Jul. 2011|75|16,800,000|3 Aug. 2011|16,800,000||
|shares|||||||
|Convertible company bonds, bonds with attached warrant, company bonds, etc.|||||||
|Warrant|||||||

Explanation on securities issuance over the past three years:
The non-public stock offering plan for 2011 was reviewed and approved at the
26th
Session of the
5th
Board of Directors held on 26 Nov. 2010 and later at the
1st
SpecialShareholders’ General Meeting for 2011 held on 14 Jan. 2011. The offering application documents were accepted by CSRC on 29 Jan. 2011, reviewed and approved by the Public Offering Review Committee of CSRC on 20 May 2011 and then approved by CSRC (ZJXK[2011] No. 943) on 15 Jun. 2011. The Company accomplished the issuance-related work of the private offering project on 15 Jul. 2011. The Company issued a total of 16.80 million shares of RMB ordinary shares (A-shares) to 6 specific investors. Reanda Certified Public Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi[2011] No. 1065.
2. Change of the total shares, the shareholder structure, the asset structure and the liability structure Naught
3. Existing shares held by employees
Naught
III. Shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Total number of shareholders on the fifth trading||||||
|Total number of shareholders at the||40,772||||||40,533||
|||||day||||||
|Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 5 of them||||||||||
||||Total|Increase/d|Number||Pledged or frozen shares|||
|||Shareholdi||||Number of||||
||||shares|ecrease|of|||||
|Name of|Nature of|ng||||tradable||||
||||held at|during the|non-trada|||||
|shareholder|shareholder|percentage||||shares|Status of shares||Number of shares|
||||the|reporting|ble shares|||||
|||(%)||||held||||
||||period-en|period|held|||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||||
|-|-|-|-|-|-|-|
||||d||||
|ANHUI GUJINGGROUPCOMPANYLIMITED|State-ownedcorporation|53.89%|271,404,022|271,404,022|||
||||||Pledged|114,000,000|
|AGREEDBUYBACKSPECIALACCOUNT OFGF SECURITIESCO., LTD.|Domesticnon-stated-ownedcorporation|2.98%|15,000,000|15,000,000|||
|KGI ASIALIMITED|Foreigncorporation|1.63%|8,184,894|8,184,894|||
|UBS(LUXEMBOURG) S.A.|Foreigncorporation|1.47%|7,386,523|7,386,523|||
|CHINAMERCHANTSSECURITIES(HK) CO., LTD|State-ownedcorporation|1.06%|5,357,732|5,357,732|||
|GREENWOODSCHINA ALPHAMASTER FUND|Foreigncorporation|0.99%|4,972,503|4,972,503|||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation|0.93%|4,708,153|4,708,153|||
|GOLDENCHINAMASTER FUND|Foreigncorporation|0.73%|3,678,234|3,678,234|||
|NATIONALSOCIALSECURITYFUNDPORTFOLIO 103|Other|0.58%|2,899,575|2,899,575|||
|CCB—BOSERATHEMEINDUSTRYSTOCKSECURITIES|Other|0.49%|2,490,533|2,490,533|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||
|-|-|-|-|
|INVESTMENTFUNDS||||
|Strategic investor or general||||
|corporation becoming a top ten||||
||Inapplicable|||
|shareholder due to placing of new||||
|shares (if any)||||
||Among the shareholders above, no affiliated relationship exists between the Company’s|||
||controlling shareholder—Anhui Gujing Group Company Limited—and other shareholders,|||
|Explanation on associated||||
||nor they are parties acting in concert as defined in the Administrative Measures on|||
|relationship or persons acting in||||
||Information Disclosure of Changes in Shareholding of Listed Companies. As for other|||
|concert among the above-mentioned||||
||shareholders, the Company does not know whether they are related parties or whether they|||
|shareholders:||||
||belong to parties acting in concert as defined in the Administrative Measures on Information|||
||Disclosure of Changes in Shareholding of Listed Companies.|||
|Shares held by the top ten non-restricted share holders||||
|||Type of shares||
|Name of shareholder|Number of non-restricted shares held at the period-end|||
|||Type|Number|
|ANHUI GUJING GROUPCOMPANY LIMITED|271,404,022|Renminbi||
||||271,404,022|
|||ordinary shares||
|AGREED BUYBACK SPECIALACCOUNT OF GF SECURITIESCO., LTD.|15,000,000|||
|||Renminbi||
||||15,000,000|
|||ordinary shares||
|KGI ASIA LIMITED|8,184,894|Domestically||
|||listed foreign|8,184,894|
|||shares||
|UBS (LUXEMBOURG) S.A.|7,386,523|Domestically||
|||listed foreign|7,386,523|
|||shares||
|CHINA MERCHANTSSECURITIES (HK) CO., LTD|5,357,732|Domestically||
|||listed foreign|5,357,732|
|||shares||
|GREENWOODS CHINA ALPHAMASTER FUND|4,972,503|Domestically||
|||listed foreign|4,972,503|
|||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|4,708,153|Domestically||
|||listed foreign|4,708,153|
|||shares||
|GOLDEN CHINA MASTER FUND|3,678,234|Domestically||
|||listed foreign|3,678,234|
|||shares||
|National Social Security Fund 103|2,899,575|Renminbi|2,899,575|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||
|-|-|-|-|
|Group||ordinary shares||
|CCB—Bosera Theme IndustryStock Securities Investment Funds|2,490,533|Renminbi||
||||2,490,533|
|||ordinary shares||
||Among the shareholders above, no affiliated relationship exists between the Company’s|||
|Explanation on associated||||
||controlling shareholder—Anhui Gujing Group Company Limited—and other shareholders,|||
|relationship or/and persons acting in||||
||nor they are parties acting in concert as defined in the Administrative Measures on|||
|concert among the top ten tradable||||
||Information Disclosure of Changes in Shareholding of Listed Companies. As for other|||
|shareholders and between the top ten||||
||shareholders, the Company does not know whether they are related parties or whether they|||
|tradable shareholders and the top ten||||
||belong to parties acting in concert as defined in the Administrative Measures on Information|||
|shareholders||||
||Disclosure of Changes in Shareholding of Listed Companies.|||
|Explanation on the top 10||||
|shareholders participating in the||||
||Inapplicable|||
|margin trading business (if any) (see||||
|note 4)||||

Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
√ Yes□ No
The shareholder of the agreed buyback special account of GF Securities Co., Ltd. was Puning Xinhong Industrial Investment Co., Ltd. The number of shares and the proportion involved in the agreed buy-tack at the beginning of the reporting period were the same with those at the end of the reporting period, i.e. 15,000,000 shares, a stake of2.98%.
2. Particulars about the controlling shareholder
Corporation
|||||||
|-|-|-|-|-|-|
||Legal|||||
|||Date of||||
|Name of controlling|representative|||||
|||establishm|Organization code|Registered capital|Business scope|
|shareholder|/ company|||||
|||ent||||
||principal|||||
||||||Making beverage,|
|ANHUI GUJING GROUP||16 Jan.||||
||Yu Lin||151947437|353,380,000.00|construction materials|
|COMPANY LIMITED||1995||||
||||||and plastic products|
|Operating results, financial||||||
|situation, cash flow and||||||
||Inapplicable|||||
|future development strategy,||||||
|etc.||||||
|Shares held by the||||||
|controlling shareholder in||||||
|other listed companies by|Inapplicable|||||
|holding or shareholding||||||
|during the reporting period||||||

Change of the controlling shareholder during the reporting period
□ Applicable√ Inapplicable
2013 Annual Report of Anhui Gujing Distillery Company Limited 3. Particulars about the actual controller
Corporation
|||||||
|-|-|-|-|-|-|
||Legal|||||
|||Date of||||
||representative|||||
|Name of the actual controller||establishm|Organizational code|Registered capital|Main business scope|
||/ person in|||||
|||ent||||
||charge|||||
|The People’s Government of||||||
|Bozhou||||||
|Operating results, financial||||||
|situation, cash flow and||||||
||Inapplicable|||||
|future development strategy,||||||
|etc.||||||
|Shares held by the||||||
|controlling shareholder in||||||
|other listed companies by|Inapplicable|||||
|holding or shareholding||||||
|during the reporting period||||||

Change of the actual controller during the reporting period
□ Applicable√ Inapplicable
The ownership and controlling relationship between the actual controller of the Company and the Company is detailed as follows: ThePeople’s Gov ernment of Bozhou
60%
Anhui Gujing Gro up Company Limited
||
|-|
|53.89%|

Anhui Gujing Distillery Co., Ltd.
The actual controller controls the Company via trust or other ways of asset management
□ Applicable√ Inapplicable
4. Other corporate shareholders with a shareholding ratio over10%
Naught
IV. Particulars on shareholding increase scheme during the reporting period proposed or implemented by the shareholders and act-in-concert persons
Naught
Explanation of other situations
2013 Annual Report of Anhui Gujing Distillery Company Limited Naught
Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees of the Company
I. Changes in shareholding of directors, supervisors and senior executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Shares at|Increase of|Decrease||
|||||||||||Shares at|
||||||Beginning|Ending|the|shares|of shares||
|||Incumbent||||||||the end of|
|Name|Title||Gender|Age|date of|date of|beginning|during this|during this||
|||or not||||||||this year|
||||||office term|office term|of the year|period|period||
|||||||||||(share)|
||||||||(share)|(share)|(share)||
||Chairman||||||||||
||of the||||15 April|16 April|||||
|YU LIN||Incumbent|Male|60|||||||
||Board of||||2011|2014|||||
||Directors||||||||||
||General||||||||||
|LIANG|||||15 April|16 April|||||
||Manager,|Incumbent|Male|49|||||||
|JINHUI|||||2011|2014|||||
||Director||||||||||
||Director,||||||||||
|ZHOU|Executive||||15 April|16 April|||||
|||Incumbent|Male|40|||||||
|QINGWU|General||||2011|2014|||||
||Manager||||||||||
||Vice||||||||||
||General||||||||||
||Manager,||||||||||
||Secretary||||||||||
|YE|||||||||||
||of the||||15 April|16 April|||||
|CHANGQ||Incumbent|Male|40|||||||
||Board of||||2011|2014|||||
|ING|||||||||||
||Directors,||||||||||
||Chief||||||||||
||Accountan||||||||||
||t||||||||||
|WANG|||||15 April|16 April|||||
||Director|Incumbent|Male|49|||||||
|FENG|||||2011|2014|||||
|YANG|Director|Incumbent|Male|46|15 April|16 April|||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|XIAOFAN|||||2011|2014|||||
|WANG|Independe||||15 April|16 April|||||
|||Incumbent|Male|52|||||||
|RUIHUA|nt Director||||2011|2014|||||
|WU|Independe||||15 April|16 April|||||
|||Incumbent|Male|52|||||||
|CISHENG|nt Director||||2011|2014|||||
|LIU|Independe||||15 April|16 April|||||
|||Incumbent|Male|70|||||||
|LIBIN|nt Director||||2011|2014|||||
||Chairman||||||||||
||of the||||||||||
||||||15 April|16 April|||||
|XU PENG|Supervisor|Incumbent|Male|44|||||||
||||||2011|2014|||||
||y||||||||||
||Committee||||||||||
|NIU|||||15 April|16 April|||||
||Supervisor|Incumbent|Male|43|||||||
|HAITING|||||2011|2014|||||
|FU|||||||||||
||||||15 April|16 April|||||
|QIANGXI|Supervisor|Incumbent|Male|44|||||||
||||||2011|2014|||||
|N|||||||||||
|HU|||||||||||
||||||15 April|16 April|||||
|WENCHA|Supervisor|Incumbent|Male|48|||||||
||||||2011|2014|||||
|O|||||||||||
|LU|||||||||||
||||||15 April|16 April|||||
|DUICAN|Supervisor|Incumbent|Male|34|||||||
||||||2011|2014|||||
|G|||||||||||
||General||||||||||
|ZONG|||||15 April|16 April|||||
||Manage|Incumbent|Male|41|||||||
|ZHAOJI|||||2011|2014|||||
||Assistant||||||||||
|ZHAI|General||||||||||
||||||15 April|16 April|||||
|LIANGD|Manager|Incumbent|Male|43|||1,200|||1,200|
||||||2011|2014|||||
|ONG|Assistant||||||||||
||General||||||||||
||||||15 April|16 April|||||
|FANG JI|Manager|Incumbent|Male|47|||||||
||||||2011|2014|||||
||Assistant||||||||||
||General||||||||||
|ZHANG|||||15 April|16 April|||||
||Manager|Incumbent|Male|45|||||||
|LIHONG|||||2011|2014|||||
||Assistant||||||||||
|Total|--|--|--|--|--|--|1,200|0|0|1,200|

 II. Particulars about the employment
The main work experience of current directors, supervisors and senior executives over the past five years
(I) Mr. Yu Lin, 60 year-old, is Economic Engineer who is postgraduate degree holder, incumbent Director,
Chairman of the Board of the Company, Chairman of the Board of Anhui Gujing Group Co., Ltd. and Vice
2013 Annual Report of Anhui Gujing Distillery Company Limited Chairman of CPPCC of Bozhou ; had ever acted as worker, management of Chemical Fertilizer Plant of Bozhou County, Chief of Corporate Management of Ministry of Agriculture and Economy of Bozhou City, Chief of Corporate Bureau of County of Bozhou City, Deputy Secretary of Bozhou Municipal Government, Chief of Minority Development Bureau of Bozhou City, Director of Ministry of Economy of Bozhou City, Secretary of Party Leadership Group, Vice Chairman of Political Consultative Conference of Bozhou City.
(II) Mr. Liang Jinhui, 49 year-old, is Political Engineer who has educational experience of graduate student, incumbent Director and General Manager of the Company. He ever took posts of Secretary of Information Research Office of the Company, Editor in Chief of Gujing Newspaper Office, Chief of Propaganda and Education Section, Vice Manager of Market Development Department of the company, Supervisor of the Second Supervisory Committee, Manager of Market Development Department, Chief of Market Research and Supervision Center, Supervisor of Third Supervisory Committee and Director of the Fourth and Fifth Board of Directors
(III) Mr. Zhou Qingwu, 40 year-old, is Economist who has educational experience of undergraduate college. At present, he is Director and Executive Deputy General Manager of the Company, Vice Secretary of CPC of Gujing Group. He had ever acted as Clerk and Deputy Sector Chief of Quality Control Section of Business Administration Department of the Company, Director of Quality Control Center of Assets Management Department, Vice Manager and Manager of Quality Control Department, and Chairman and General Manager of Bozhou Gujing Packing Material Co., Ltd.; Director of the
5th
Board of Directors and Vice General Manager. (IV) Mr. Ye Changqing, 40 year-old, holder of master degree and International Certified Internal Auditor. Incumbent Director, Chief Accountant and acting Secretary of Board of Directors of the company; started to work in July 1997, had ever acted Chief Auditor of Audit Department, Vice Manager of Audit Department and Vice Supervisor and Supervisor ofAuditing& Supervision Department; and Supervisor of the Fourth Supervisory Committee; Director and Secretary of the
5th
Board of Directors, Chief Accountant.
(V) Mr. Wang Feng, 49 year-old, is Senior Economic Engineer who is postgraduate degree holder, incumbent Director, Deputy Secretary of CPC of Gujing Group. He had ever acted as Secretary of the League Committee of Bozhou Gujing Distillery; Deputy Director of Economy Development Department; Deputy Director of Enterprises Management Department; Manager of Assets Management Department of Gujing Group; Director, Secretary of the board, Vice General Manager, and General Manager of the Second Board of Directors; Director and Chairman of the Third Board of Directors, and Director as well as Chairman of the Fourth Board of Directors; Director of the
5th
Board of Directors.
(VI) Mr. Yang Xiaofan, 46 year-old, holder of master degree. At present, he is Vice President of Gujing Group. He began to work in 1987, ever took posts of middle school teacher, journalist of newspaper office, propagandist of district office, teacher of normal school, director ofeditors’ board of magazine; in Jul. 1993, he began to work in Gujing, he successively acted as Director of theEditors’ Board of Gujing News, Chief of Propaganda, Manager of Propaganda and Information Department, Vice President and General Manager of Anhui Gujing Real Estates Group Co., Ltd., Director and Assistant Chairman, Vice President of Gujing Group; Director of the
5th
Board of Directors.
(VII) Mr. Wang Ruihua, 52 year-old, doctor degree in accounting, Incumbent Independent Director of the Company, Director of MBA Education Centre of Central University of Finance and Economics, Dean of School of Business of Central University of Finance and Economics, tutor of PHD student, Independent Director of ZHONG KE SAN HUAN, DATANG TELECOM TECHNOLOGY CO., LTD. and Sinolink Securities Co Ltd. He ever took post of Deputy Director of the Graduate Student Department of Central University of Finance and Economics. (VIII) Mr. Wu Cisheng, 52 year-old, who has Ph.D of Management Study, and is Professor of Management School, Dean of Business Administration Department of Hefei University of Technology,
2013 Annual Report of Anhui Gujing Distillery Company Limited Superintendent of Business Administration Research Institute, has gainedMaster’s Degree of Industry Engineering in 1990, Ph. D of Business Administration in 2004; and had presided three national social science fund projects, project topics of National Ministry of Science& Technology and National Bureau of Statistics successively; had issued more than 60 theses on magazines in domestic and abroad successively, and published 6 works; and had gained provincial and ministerial advance prize of science and technology. He is incumbent independent director of the Company.
(IX) Mr. Liu Libin, 70 year-old, is incumbent Vice Chairman and Chief Secretary of China Advertising Association and President and Chief Editor of International Advertising. He is theDoctor’s Tutor of Communication University of China, Visiting Professor of many universities, Advisor of many brands, Superintendent of IAI International Advertising Institute, Chief Editor of Chinese Advertisement Works Almanac and Chief Editor of Chinese Marketing Creative Works Almanac. And he has acted as member of a review committee of various arts and advertisement exhibitions all around the country. And now he is incumbent the Independent Director of the Company.
(X) Mr. Xu Peng, 44 year-old, has educational experience of undergraduate college. He is incumbent Chief Supervisor of the Company, Chief Inspector of Internal Audit Centre. And he had ever acted as Deputy Director and Director of Finance Second Office of Finance Department of the Company, Manager of Finance Department of Anhui Laobada Co., Ltd., and Vice Manager and Manager of Finance Department of the Company, Deputy General Manager and Chief Supervisor of Market Supervision Department of Bozhou Gujing Sales Company. (XI) Mr. Niu Haiting, 43 year-old, has educational experience of undergraduate college. He is incumbent Supervisor of the Company, Member of Party Committee, Chairman of the Labor Union and member of Commission for Disciplinary Inspection. He had ever acted as Personnel Administrator, Vice Chief Supervisor of Human Resource Department of Anhui Gujing Group, Director of the Office Party and Chief Inspector of Safety Management Center.
(XII) Mr. Fu Qiangxin, 44year-old, bachelor degree, accountant, incumbent Supervisor and Vice Secretary of Discipline Inspection Commission of Audit. He ever took posts of accountant of Bozhou Gujing Hotel, Manager of Finance of Bozhou Gujing Integrated Services Company and Bozhou Gujing Import and Export Trade Company, clerk of Planning and Finance Department of Gujing Group, Chief Inspector of Internal Audit Center. (XIII) Mr. Hu Wenchao, is 48 year-old, Registered Senior Human Resource Specialist who has educational experience of undergraduate college, National Trainer Grade 2 and one of Administrators recommended by China Human Resource Development Association. Now he is incumbent Supervisor of the Company, Chief of HR Center of Anhui Gujing Group Co., Ltd. He had ever acted as Labor Allocation Clerk and Deputy GM of Personnel Department, Vice Manager of HR Department of Anhui Gujing Group Co., Ltd., Vice Manager of HR Department of Anhui Gujing Distillery Company Limited.
(XIV) Mr. Lu Duicang, 34 year-old, has educational experience of undergraduate college. Now, he is incumbent Supervisor of the Company and General Supervisor of Finance Department of Anhui Gujing Group Co., Ltd. He had ever acted as Accountant, Vice Director and Director of Finance Department First Center of the Company, Factory Manager of Liquor Filling Branch Factory and Manager of Finished Products Department.
(XV) Mr. Zong Zhaoji, Male, 41-year-old, engineer, achieved the diploma of junior college. He is now acting as General Manager Assistant of the Company, General Manager of Bozhou Gujing Sales Co., Ltd. He once acted as clerk of Production Engineering Department, Workshop Director of Jiufang Pharmaceuticals Company of Gujing Group, Salesman of Bozhou Gujing Sales Co., Ltd., Executive, Manager of Marketing Department, Regional Manager and Marketing Director.
(XVI)Mr. Zhai Liangdong, Male, 43-year-old, achieved the Master degree. He is now acting as General Manager Assistant of the Company, Chief Inspector of Administrative Center. He once acted as clerk of Labor Union
2013 Annual Report of Anhui Gujing Distillery Company Limited Office of Gujing Group; clerk, Secretary, Deputy Director, Director of Gujing Group Office; Director of corporate office.
(XVII) Mr. Fang Ji, Male, 47-year-old, is an account, economic engineer and engineer. He is now acting as General Manager Assistant of the Company, Chief Inspector of Brewing Management Center. He once acted as programmer of corporate computer room, headman of processing equipment team of GujingGroup， Factory Manager of Packaging Materials Factory, Manager of Production Material Control Department, Manager of Power Department, Chief Inspector of Production Management Center.
(XVIII) Mr. Zhang Lihong, Male, 45-year-old, economic engineering, achieved the Bachelor degree. He is now acting as General Manager Assistant of the Company, Chief of HR Center. He once acted as clerk of Bozhou Gujing Sales Co., Ltd., Secretary of Corporate Operation Department, Secretary of Market Development Department, Vice General Manager of Bozhou Gujing Sales Co., Ltd., Director of Comprehensive Office, and Chief Inspector of Comprehensive Service Center.
Employment inshareholders’ entities
√ Applicable□ Non-Applicable
|||||||
|-|-|-|-|-|-|
||||||Whether receiving|
|||Post held in|Beginning date|||
|||||Ending date of|subsidies and|
|Name|Name of shareholders’ entity|shareholders’|of the office|||
|||||the office term|remuneration from|
|||entity|term|||
||||||shareholders’ entities|
|||Chairman of||||
|YU LIN|Anhui Gujing Group Co., Ltd.|the Board of|2010 April||Yes|
|||Directors||||
|||Deputy||||
|||Chairman of||||
|||Party||||
|||Committee,||||
|WANG FENG|Anhui Gujing Group Co., Ltd.||2010 August||Yes|
|||Chairman of||||
|||Discipline||||
|||Inspection||||
|||Committee||||
|YANG||Vice|2009|||
||Anhui Gujing Group Co., Ltd.||||Yes|
|XIAOFAN||President|November|||
|||Deputy||||
|ZHOU||Chairman of|2009|||
||Anhui Gujing Group Co., Ltd.||||No|
|QINGWU||Party|November|||
|||Committee||||
|||Vice||||
|||Chairman of||||
|FU||Discipline||||
||Anhui Gujing Group Co., Ltd.||2010 August||Yes|
|QIANGXIN||Inspection||||
|||Committee,||||
|||Chief||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|||Inspector of|||
|||Audit|||
|||Inspection|||
|||Center|||
|HU||Chief of HR|||
||Anhui Gujing Group Co., Ltd.||2012 June|Yes|
|WENCHAO||Center|||
|||Chief|||
|||Inspector of|||
||||2008||
|LU DUICANG|Anhui Gujing Group Co., Ltd.|Financial||Yes|
||||December||
|||Management|||
|||Center|||
|Explanation|||||
|about|The above-mentioned personnel, though they take posts in shareholders’ entities, comply with the relevant||||
|employment in|employment requirements of Company Law, Securities Law and never were disciplined by CSRC, other relevant||||
|shareholders’|departments and the Stock Exchange.||||
|entities|||||

Employment in other entities
□ Applicable√ Non-Applicable
III. Remuneration of directors, supervisors and senior executives
Decision-making procedure, basis for determination and actual payment of remuneration of directors, supervisors and senior executives
(I) Decision-making procedure for the remuneration of directors, supervisors and senior management
The Remuneration& Appraisal Committee under the Board of Directors is in charge of drafting appraisal index of senior management and checking accomplishment of annual index.
(II) Basis for determining the remuneration of directors, supervisors and senior management
Remuneration of directors, supervisors and senior management is calculated by appraisal index drafted in
year-begin and weight. Financial index is on base ofAuditor’s Report issued by certified public accountant, and comprehensive appraisal index is appraised and discussed by the Remuneration& Appraisal Committee under the Board of Directors.
(III) Actual payment of the remuneration of directors, supervisors and senior management
Payment of the remuneration of directors, supervisors and senior management is with certain amount in advance monthly and distributed annually according to check.
Particulars about remuneration of directors, supervisors and senior executives in the reporting period
Unit: RMB Ten Thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Total amount|Actual|
||||||Total amount|||
|||||||of payment got|payment got at|
|||||Incumbent or|of payment got|||
|Name|Title|Gender|Age|||from the|the end of|
|||||not|from the|||
|||||||shareholders’|reporting|
||||||Company|||
|||||||entities|period|
||Chairman of|||||||
|YU LIN|the Board of|Male|60|Incumbent||100|100|
||Directors|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||
|-|-|-|-|-|-|-|-|
||General|||||||
|LIANG||||||||
||Manager,|Male|49|Incumbent|120.7||120.7|
|JINHUI||||||||
||Director|||||||
||Director,|||||||
|ZHOU|Executive|||||||
|||Male|40|Incumbent|91.97||91.97|
|QINGWU|General|||||||
||Manager|||||||
||Vice General|||||||
||Manager,|||||||
||Secretary of|||||||
|YE||||||||
||the Board of|Male|40|Incumbent|80.21||80.21|
|CHANGQING||||||||
||Directors,|||||||
||Chief|||||||
||Accountant|||||||
|WANG FENG|Director|Male|49|Incumbent||93.41|93.41|
|YANG||||||||
||Director|Male|46|Incumbent||93.41|93.41|
|XIAOFAN||||||||
|WANG|Independent|||||||
|||Male|52|Incumbent|7.5||7.5|
|RUIHUA|Director|||||||
||Independent|||||||
|WU CISHENG||Male|52|Incumbent|7.5||7.5|
||Director|||||||
||Independent|||||||
|LIU LIBIN||Male|70|Incumbent|7.5||7.5|
||Director|||||||
||Chairman of|||||||
|XU PENG|the Supervisory|Male|44|Incumbent|77.32||77.32|
||Committee|||||||
|NIU HAITING|Supervisor|Male|43|Incumbent|28.67|26.84|55.51|
|FU||||||||
||Supervisor|Male|44|Incumbent||55.51|55.51|
|QIANGXIN||||||||
|HU||||||||
||Supervisor|Male|48|Incumbent|26.14|19.68|45.82|
|WENCHAO||||||||
|LU DUICANG|Supervisor|Male|34|Incumbent||55.51|55.51|
||General|||||||
|ZONG||||||||
||Manage|Male|41|Incumbent|98.17||98.17|
|ZHAOJI||||||||
||Assistant|||||||
||General|||||||
|ZHAI||||||||
||Manager|Male|43|Incumbent|72.57||72.57|
|LIANGDONG||||||||
||Assistant|||||||
||General|||||||
|FANG JI||Male|47|Incumbent|76.26||76.26|
||Manager|||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||
|-|-|-|-|-|-|-|-|
||Assistant|||||||
||General|||||||
|ZHANG||||||||
||Manager|Male|45|Incumbent|77.32||77.32|
|LIHONG||||||||
||Assistant|||||||
|Total|--|--|--|--|771.83|444.36|1,216.19|

 Particulars about stock incentive granted to directors, supervisors and senior executives of the Company in the reporting period.□ Applicable√ Non-Applicable
IV. Particulars about resignation and dismissal of directors, supervisors and senior executives None
V. Particulars about changes in personnel of core technical team and crucial technical team (excluding directors, supervisors and senior executives) in the reporting period
None
VI. Employees
Up to 31 Dec. 2013, the total number of current employees in the Company is 5,988
1. Particulars about professional categories
||||
|-|-|-|
|Professional category|Number ofpersonnel|Proportion|
|Production staff|4,086|75.11%|
|Sales staff|570|10.48%|
|Technical staff|278|5.11%|
|Financial staff|77|1.42%|
|Administrativestaff|429|7.89%|
|Total|5,440|100.00%|

Professional categories
Production staff
Sales staff
Technical staff
Financial staff
Administrative staff
2. Level of education
||||
|-|-|-|
|Level ofeducation|Number (person)|proportion|
|High school and|4,305.00|79.14%|
|below|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Junior college|574.00|10.55%|
|Bachelor degree|544.00|10.00%|
|Master degree or|17.00|0.31%|
|above|||
|Total|5,440.00|100.00%|

Level of education
High school and below
Junior college
Bachelor degree
Master degree or above
2013 Annual Report of Anhui Gujing Distillery Company Limited Section VIII. Corporate Governance
I. Basic information about corporate governance
Since foundation, the Company constantly perfects corporate governance structure and standardize its management strictly in accordance with the Company Law, Securities Law, Standard for Governance of Listed Companies, Guide Opinion on Setting up Independent Directors Systems for Listed Companies as well as principles and requirements of other relevant laws, regulations and normative documents.
In the reporting period, the Company developed internal control activity, implemented Rules on Management of Assets Provision for Impairment, The Policy on the Liability of Disclosing Materially Inaccurate Information in Annual Report, Rules for Management of External Information User and Rules for Management of Insider of Inner Information, perfected internal control system step by step, promoted normative operation and healthy development. The Board of Directors, the Supervisory Committee and the management of the Company make decisions, perform rights and assume obligation strictly according to the standard operation rules and inner control system so as to make sure the standard operation of the Company in the frame of rules and systems.
In the reporting period, according to requirements of China Securities Regulatory Commission and Rules for Listing of Shares in Shenzhen Stock Exchange and with the “open, fair and just” principle, the Company seriously and timely performed information disclosure obligation and guaranteed that the information disclosed is true, accurate and complete, free from fictitious presentation, misleading statements or important omissions, so that all the shareholders will equally acquaint themselves with all the notices of the Company.
After the reporting period, the Company will continuously optimize and perfect the corporate governance of listed companies, further improve the standard operation of the Company.
Whether there existed differences between the corporate governance and relevant regulations of Company Law and CSRC or not□ Yes√ No
There existed no difference between the corporate governance and relevant regulations of Company Law and CSRC.
Information about the progress of special activities of corporate governance and the formulation and implementation of registration and management system for insiders
In order to further perfect theCompany’s corporate governance, strengthen the management on the information disclosure for the Company, the Company promulgated the Management Rules for Information Insider and Management Rules for Information Reporting, Submission to and Use by External Parties, which were reviewed and approved at the
20th
Session of the
5th
Board of Directors. In the reporting period, the company secretary was responsible for the disclosure of sensitive information. Before the disclosure of any significant information in periodical reports or interim announcements, the personnel who had access to the insider information all filled in the Registration Form for Information Insiders in a timely manner as required by Anhui Securities Regulatory Bureau and Shenzhen Stock Exchange. During the reporting period, no insider traded theCompany’s shares making use of the insider information before the disclosure of significant sensitive information that might influence theCompany’s stock price. During the reporting period, the Company strictly carried out the Management Rules for Information Reporting, Submission to and Use by External Parties, effectively controlling the reporting and submission of theCompany’s business data, financial statements and other internal information to external parties. No information of the Company was leaked against applicable laws and regulations.
II. Particulars about annualshareholders’ general meetings and temporaryshareholders’
2013 Annual Report of Anhui Gujing Distillery Company Limited general meetings
1. Particulars about annualshareholders’ general meetings
|||||||
|-|-|-|-|-|-|
|Session|Opening date|Name of proposal|Resolution|Disclosure date|Index for disclosure|
|||2012 Annual Report of the||||
||||||On the Cninfo|
|||Board of Directors, 2012||||
||||||website|
|||Annual Report on Financial||||
||||||Announcement on|
|||Statement, 2012 Annual||||
||||||Resolutions Passed|
|2012 Annual||Report and Abstract,|All the|||
||||||on the 2012 Annual|
|Shareholders’|May 31 2013|Proposal on 2012 Annual|proposals|Jun. 1 2013||
||||||Shareholders’|
|General Meeting||Profit Distribution and|were passed.|||
||||||General Meeting|
|||Transfer of Capital Reserve||||
||||||（No. 2013-009）|
|||to Common Shares, Proposal||||
||||||http://www.cninfo.co|
|||on Employing Audit||||
||||||m.cn|
|||Institution for 2013||||

2. Particulars about temporaryshareholders’ general meeting
|||||||
|-|-|-|-|-|-|
|Session|Opening date|Name of proposal|Resolution|Disclosure date|Index for disclosure|
||||||On the Cninfo website|
||||||Announcement on|
|The 1st Temporary|||||Resolutions Passed on the|
|||Proposal on Replacing|All the|||
|Shareholders’|||||1st Temporary|
||Jan. 15 2013|2012 Annual Audit|proposals|Jan. 16 2013||
|General Meeting in|||||Shareholders’ General|
|||Institution|were passed.|||
|2013|||||Meeting in 2013（No.|
||||||2013-001）|
||||||http://www.cninfo.com.cn|

 III. Duty performance of independent directors in the reporting period
1. Particulars about attendance of independent directors in the board meetings andshareholders’ general meetings
||||||||
|-|-|-|-|-|-|-|
|Particulars about attendance of independent directors in the board meetings|||||||
||Number of||||||
||||Number of|||Whether being|
||meetings|Number of||Number of|Number of||
||||meetings|||absent from|
|Name of independent|independent|meetings||meetings|meetings skipped||
||||attended in the|||meetings in|
|director|directors are|attended on the||attended by|from||
||||means of|||person two times|
||supposed to|spot||mandatory|||
||||communication|||in succession|
||attend during the||||||
||reporting period||||||
|WANG RUIHUA|4|2|2|0|0|No|
|WU CISHENG|4|2|2|0|0|No|
|LIU LIBIN|4|1|3|0|0|No|
|Number of shareholders’ general||2|||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|meetings attended by independent|
|directors|

Notes to being absent from meetings in person two times in succession
2. Particulars about objections raised by independent directors about the relevant items of the Company Whether independent directors raised objections about the relevant items of the Company?
□ Yes√ No
In the reporting period, independent directors raised no objection about the relevant items of the Company.
3. Other notes to duty performance of independent directors
Whether the advices of independent directors were taken by the Company?
√ Yes□ No
Explanation about whether the advices of independent directors were taken by the Company
In 2013, the 6th Board of Directors fulfilled their duties faithfully and responsibly, issued independent opinions on Self-appraisal Report of Internal Control and Routine Related Transactions with the Related Parties on the basis of a detailed understanding of corporate operation. They raised many constructive opinions and advices, which played an active part in the scientific and objective decisions of the Board of directors and the benign development of the Company.
IV. Duty performance of special committees affiliated to the Board of Directors in the reporting period
1. Duty performance of the Strategy Committee
The Strategy Committee is under the leadership of the Board of Directors. In the reporting period, in strict compliance with the Specific Implementation Rules for the Strategy Committee, the Strategy Committee conscientiously performed its duties, making a lot of constructive suggestions for the efficient execution of theCompany’s strategy.
2. Duty performance of the Audit Committee
In the reporting period, five members of the Audit Committee diligently and responsibly performed their duties as stipulated in the relevant rules of the Company:
(1) It reviewed the periodical reports of the Company in 2013.
(2) Upon discussion with Ruihua Certified Public Accountants for the 2013 annual audit, it determined the schedule for the financial report and internal control audit for 2013.
(3) It communicated in advance with the CPAs firm and independent directors before the CPAs firm came to the Company and started the 2013 annual audit.
(3) It reviewed the short form of the preliminary financial statements prepared by the financial department of the Company for the first time before the annual auditor came to the Company and made some helpful suggestions. (5) After the annual auditor came to the Company and started the audit, it communicated with the registered accountants on the problems found in the audit and the submission time of the audit report.
(6) After the annual auditor issued the preliminary audit opinion, it reviewed the 2013 annual financial statements again and made the final resolution.
3. Duty performance of the Nomination Committee
In the reporting period, in strict compliance with the Specific Implementation Rules of the Nomination Committee, the Nomination Committee vigorously worked on various tasks, which ensured that the senior management staffs
of the Company were hired in compliance with laws and regulations.
(1) In the reporting period, the senior management staff hired by the Company satisfied the requirements of the
Company Law and other relevant laws and regulations. They were qualified as senior management staff. They
2013 Annual Report of Anhui Gujing Distillery Company Limited were not in such a case where the Company Law should forbid them from being senior management staff. Nor they were forbidden by CSRC from entering the securities market.
(2) In the reporting period, the senior management staff of the Company were nominated and hired in line with the Company Law and theCompany’s Articles of Association. The hired personnel have never been punished by CSRC, other relevant authorities or stock exchanges.
4. Duty performance of Remuneration and Appraisal Committee
(1) The Remuneration and Appraisal Committee affiliated to the Board of Directors, according to relevant regulations of Implementation Rules of Remuneration and Appraisal Committee successfully completed the annual performance appraisal to directors, supervisors and senior executives in line with standards and procedures of performance appraisal during the reporting period.
(2) Through the deliberation and assessment of the committee, the consistent opinion was that the general remuneration level complied with development of the Company; the remuneration level of directors, supervisors and senior executives accurately reflected the overall performance situation of the Company and individual work performance, which complied with the remuneration management system; the remuneration plan and procedure of issuing remuneration were in accordance with the laws and did not violate relevant national laws and regulations. V. Information about work of the Supervisory Committee
Whether there existed any risk in the Company according to the supervision of the Supervisory Committee in the reporting period□ Yes√ No
The Supervisory Committee raised no objection about matters of the Company under its supervision in the reporting period. VI. Particulars about independence and completeness in business, personnel, assets, organizations and financial affairs between this company and controlling shareholders
The company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five independences in terms of business, personnel, assets, organizations and financial affairs, with separate independent calculation, independent and complete business, independent operation ability, and independent responsibilities and risks. Majority shareholders can not surpass theshareholders’ general meeting to directly or indirectly interfere with thecompany’s decisions and legal production and operation activities, and there is no same trade competition state of the same products between the company and majority shareholders.
VII. Particulars about horizontal competition
None
VIII. Particulars about assessment and incentive mechanism to senior executives during the report period
The Company has set up a Performance Appraisal and Incentive Mechanism for Senior Executives, which links remuneration of senior executives with theCompany’ performance, the decision-making management adopts the assessment and incentive measures by linking the annual remuneration with theCompany’ economic indexes& management achievement. To promote the standard, healthy and orderly development of the company and keep the stability of the senior executives, the company annually sets up the assessment index for them and signs a written responsibility of business target at the year-begin, then decides their remuneration and the rewards& punishment at the year-end according to their personal work performance and completion of theCompany’s operating target.
2013 Annual Report of Anhui Gujing Distillery Company Limited Section IX Internal Control
I. Construction of internal control
In the reporting period, the Company, according to the requirements of normative documents including Basic Standards of Corporate Internal Control, Appraisal Guideline for Corporate Internal Control (hereinafter referred to as Appraisal Guideline) and Guideline for Internal Control of Listed Companies issued by Shenzhen Stock Exchange and the stipulations of Management Manual of Internal Control, effectively managed and controlled in the aspects of strategic risks, financial risks, operating risks and market risks, legal risks, enhanced the level of corporate operation and management and the level of risk prevention. Note: for details see Self-assessment Report on 2013 Annual Internal Control published on the Cninfo website on 18 April 2014.
II. Statement on the Responsibility for Internal Control from the Board of Directors
The Board of Directors and all its directors hereby ensure that this announcement contains no false information, misleading statement or material omission, and shall be jointly and severally liable for the factuality, accuracy and completeness of the information carried in this announcement. Establishing, perfecting and effectively conducting internal control is the liability of the Board of Directors; establishment and implementation of internal control conducted by the Board is under the supervision of the supervisory committee; the management is responsible for organizing and guiding daily operation of internal control. The objective of internal control: reasonably guarantee the legality and compliance of theCompany’s operating management, safety of assets, authenticity and completeness of financial report and relevant information; enhance operation efficiency and improve operation results; promote the realization of sustainable development.
III. Basis of establishing internal control of financial statements
Basis of establishing internal control of financial statements: the Company established comparatively sound internal control system of financial management, according to requirements of relevant normative documents like Accounting Law, Accounting Standards for Business Enterprises, Basic Standards of Corporate Internal Control, Evaluation Guideline for Corporate Internal Control. IV. Self-assessment report of internal control
|||
|-|-|
|Specific details about significant defects of internal control during the reporting period found in self-assessment report of internal||
|control||
|None||
|Disclosure date of whole article of||
|self-assessment report of internal|Apr. 18 2014|
|control||
|Index for disclosure of whole||
||Cninfo website (www.cninfo.com.cn) “2013 Annual Self-assessment Report of Internal|
|article of self-assessment report of||
||Control”|
|internal control||

V. Audit report of internal control
√ Applicable□ Non-Applicable
||
|-|
|Audit opinion in audit report of internal control|
|Ruihua Certified Public Accountants (Special General Partnership) believe, Anhui Gujing Distillery Co., Ltd.|
|maintained effective internal control of financial statements in all significant aspects on 31 Dec. 2013 in|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|accordance with Basic Standards for Internal Control and relevant regulations.||
|Disclosure date of whole||
|article of audit report of|Apr. 18 2014|
|internal control||
|Index for disclosure of whole||
|article of audit report of|Cninfo website (www.cninfo.com.cn) “Audit Report of Internal Control”|
|internal control||

Whether the accounting firm issued non-standard audit report of internal control
□ Yes√ No
Whether audit report of internal control issued by accounting firm was consistent with self-assessment report of the board of directors√ Yes□ No
VI. Establishment and implementation of institution of clarifying responsibility for major mistakes in annual report
In order to improve the standard operation of the Company, strengthen the factuality, accuracy, completeness and promptness of information disclosure and enhance the quality and transparency of information disclosed in annual reports, the Company formulated System of Clarifying Responsibility for Major Mistakes in Information Disclosure of Annual Report and clarified the responsibilities for major mistakes in information disclosure of annual reports, according to the relevant laws and regulations. In the reporting period, the Company strictly implemented the above system and did not conduct correction of major mistakes, supplementation for significant omitted information and revise of performance bulletin.
2013 Annual Report of Anhui Gujing Distillery Company Limited Section X. Financial report
I. Audit Report
|||
|-|-|
|Type of audit opinion|Standard unqualified audit opinion|
|Date of signing audit report|Apr. 17 2014|
||Ruihua Certified Public Accountants (Special General|
|Name of audit institution||
||Partnership)|
|Reference number of audit report|Ruihua SZ [2014] No. 48390007|
|Name of CPA|Yang Ganlin, Zhang Liping|

Main body of audit report
To the Shareholders of Anhui Gujing Distillery Co., Ltd.:
We have audited the attached financial statements of Anhui Gujing Distillery Co., Ltd. (“Gujing”), which comprise the consolidated and theCompany’s balance sheet as at December 31, 2013, the consolidated and theCompany’s income statement, the consolidated and theCompany’s cash flow statement, the consolidated and theCompany’s statement of changes inowners’ equity for the year then ended, and the notes to financial statements.
I. Responsibilities of the management concerning the financial statements
The management of the Company is responsible for the preparation of these financial statements and fair presentation. These responsibilities include: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
II.Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Chinese Certified Public Accountants' Auditing Standards. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation of the consolidation financial statements and fair presentation in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Opinion
In our opinion, the financial statements have been prepared in accordance with the requirements of the Enterprises
Accounting Standards promulgated by thePeople’s Republic of China in all material respects, and present fairly the
consolidated operating results of Anhui Gujing Distillery Co., Ltd. and its subsidiaries as at December 31, 2013, and
2013 Annual Report of Anhui Gujing Distillery Company Limited consolidated operating results and cash flow in 2013 as well as the operating results at 31 Dec. 2013 and the operating results& cash flow in 2013 of Anhui Gujing Distillery Co., Ltd..
II. Financial Statement
Unit of statements in the notes appended to financial report is RMB Yuan
1. Consolidated balance sheet
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|1,381,930,710.96|2,609,650,352.09|
|Settlement reserves|||
|Intra-group lendings|||
|Transactional financial assets|||
|Notes receivable|154,408,425.31|156,449,495.65|
|Accounts receivable|6,374,469.99|7,887,007.25|
|Accounts paid in advance|90,217,698.50|85,305,973.47|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable||7,253,858.34|
|Dividend receivable|||
|Other accounts receivable|6,296,326.20|21,559,146.98|
|Financial assets purchased under|||
||80,093,922.21||
|agreements to resell|||
|Inventories|1,075,033,137.30|782,399,498.85|
|Non-current assets due within 1 year|||
|Other current assets|900,000,000.00||
|Total current assets|3,694,354,690.47|3,670,505,332.63|
|Non-current assets:|||
|Loans by mandate and advances|||
|granted|||
|Available-for-sale financial assets|24,075,687.00|27,991,376.84|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Investing property|35,188,079.66|31,451,269.49|
|Fixed assets|1,266,481,752.59|783,740,205.15|
|Construction in progress|377,338,939.54|423,672,281.54|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|315,224,921.54|320,716,225.67|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|60,898,594.60|30,959,542.67|
|Deferred income tax assets|43,371,896.87|19,091,237.05|
|Other non-current assets|||
|Total of non-current assets|2,122,579,871.80|1,637,622,138.41|
|Total assets|5,816,934,562.27|5,308,127,471.04|
|Current liabilities:|||
|Short-term borrowings|||
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Transactional financial liabilities|||
|Notes payable|235,770,000.00|224,460,000.00|
|Accounts payable|442,935,399.44|461,112,575.26|
|Accounts received in advance|147,257,393.88|114,610,235.81|
|Financial assets sold for repurchase|||
|Handling charges and commissions|||
|payable|||
|Employee’s compensation payable|231,343,202.17|178,726,582.68|
|Tax payable|599,513,448.19|645,410,021.57|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|373,903,452.51|297,098,777.98|
|Reinsurance premiums payable|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|3,112,595.04|2,120,250.11|
|Total current liabilities|2,033,835,491.23|1,923,538,443.41|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities||697,845.96|
|Other non-current liabilities|40,342,813.99|8,403,073.03|
|Total non-current liabilities|40,342,813.99|9,100,918.99|
|Total liabilities|2,074,178,305.22|1,932,639,362.40|
|Owners’ equity (or shareholders’|||
|equity)|||
|Paid-up capital (or share capital)|503,600,000.00|503,600,000.00|
|Capital reserves|1,294,095,263.69|1,297,032,031.07|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|256,902,260.27|218,736,964.73|
|Provisions for general risks|||
|Retained profits|1,688,158,733.09|1,356,119,112.84|
|Foreign exchange difference|||
|Total equity attributable to owners of|||
||3,742,756,257.05|3,375,488,108.64|
|the Company|||
|Minority interests|||
|Total owners’ (or shareholders’) equity|3,742,756,257.05|3,375,488,108.64|
|Total liabilities and owners’ (or|||
||5,816,934,562.27|5,308,127,471.04|
|shareholders’) equity|||

2013 Annual Report of Anhui Gujing Distillery Company Limited Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2. Balance sheet of the Company
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|1,040,360,357.51|2,390,346,607.43|
|Transactional financial assets|||
|Notes receivable|81,472,414.44|139,414,615.95|
|Accounts receivable|1,297,542.13|1,293,202.89|
|Accounts paid in advance|1,288,277.31|1,151,359.52|
|Interest receivable||6,129,902.78|
|Dividend receivable|||
|Other accounts receivable|139,654,563.53|161,967,822.69|
|Redemptory monetary capital for sale|80,093,922.21||
|Inventories|1,036,496,459.02|748,777,364.57|
|Non-current assets due within 1 year|||
|Other current assets|900,000,000.00||
|Total current assets|3,280,663,536.15|3,449,080,875.83|
|Non-current assets:|||
|Available-for-sale financial assets|24,075,687.00|27,991,376.84|
|Held-to-maturity investments|||
|Long-term accounts receivable|4,494,950.37|4,172,166.85|
|Long-term equity investment|308,089,408.32|258,089,408.32|
|Investing property|33,124,717.82|29,814,360.87|
|Fixed assets|1,057,111,133.85|562,993,821.32|
|Construction in progress|377,239,903.56|423,672,281.54|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|197,787,553.94|200,084,457.08|
|R&D expense|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Goodwill|||
|Long-term deferred expenses|59,482,540.30|27,338,996.93|
|Deferred income tax assets|34,095,084.20|18,496,292.51|
|Other non-current assets|||
|Total of non-current assets|2,095,500,979.36|1,552,653,162.26|
|Total assets|5,376,164,515.51|5,001,734,038.09|
|Current liabilities:|||
|Short-term borrowings|||
|Transactional financial liabilities|||
|Notes payable|26,150,000.00|80,000,000.00|
|Accounts payable|437,297,694.54|446,890,857.97|
|Accounts received in advance|830,722,853.80|714,794,965.38|
|Employee’s compensation payable|87,936,100.97|79,627,703.42|
|Tax payable|205,717,464.45|314,625,057.22|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|153,888,199.87|168,504,557.80|
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|3,112,595.04|1,998,845.04|
|Total current liabilities|1,744,824,908.67|1,806,441,986.83|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities||697,845.96|
|Other non-current liabilities|40,342,813.99|8,403,073.03|
|Total non-current liabilities|40,342,813.99|9,100,918.99|
|Total liabilities|1,785,167,722.66|1,815,542,905.82|
|Owners’ equity (or shareholders’|||
|equity)|||
|Paid-up capital (or share capital)|503,600,000.00|503,600,000.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Capital reserves|1,246,318,877.85|1,249,255,645.23|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|251,800,000.00|213,634,704.46|
|Provision for general risks|||
|Retained profits|1,589,277,915.00|1,219,700,782.58|
|Foreign exchange difference|||
|Total owners’ (or shareholders’) equity|3,590,996,792.85|3,186,191,132.27|
|Total liabilities and owners’ (or|||
||5,376,164,515.51|5,001,734,038.09|
|shareholders’) equity|||

Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
3. Consolidated income statement
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|I. Total operating revenues|4,580,575,654.71|4,197,057,315.26|
|Including: Sales income|4,580,575,654.71|4,197,057,315.26|
|Interest income|||
|Premium income|||
|Handling charge and|||
|commission income|||
|II. Total operating cost|3,766,069,970.22|3,243,155,636.29|
|Including: Cost of sales|1,384,137,091.08|1,220,831,141.50|
|Interest expenses|||
|Handling charge and|||
|commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the|||
|insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|631,171,183.76|638,945,267.01|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Selling and distribution expenses|1,279,550,577.02|1,075,977,234.87|
|Administrative expenses|510,185,897.33|393,028,645.85|
|Financial expenses|-47,011,977.06|-88,430,981.17|
|Asset impairment loss|8,037,198.09|2,804,328.23|
|Add: Gain/(loss) from change in fair|||
|value (“-” means loss)|||
|Gain/(loss) from investment (“-”|||
||10,050,415.19||
|means loss)|||
|Including: share of profits in associates|||
|and joint ventures|||
|Foreign exchange gains (“-” means|||
|loss)|||
|III. Business profit (“-” means loss)|824,556,099.68|953,901,678.97|
|Add: non-operating income|31,597,842.75|21,972,077.88|
|Less: non-operating expense|4,242,753.03|3,446,696.09|
|Including: loss from non-current asset|||
||2,120,610.71|511,271.68|
|disposal|||
|IV. Total profit (“-” means loss)|851,911,189.40|972,427,060.76|
|Less: Income tax expense|229,906,273.61|246,837,774.45|
|V. Net profit (“-” means loss)|622,004,915.79|725,589,286.31|
|Including: Net profit achieved by|||
|combined parties before the|||
|combinations|||
|Attributable to owners of the|||
||622,004,915.79|725,589,286.31|
|Company|||
|Minority shareholders’ income|||
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|1.24|1.44|
|(II) Diluted earnings per share|1.24|1.44|
|VII. Other comprehensive incomes|-2,936,767.38|2,093,537.88|
|VIII. Total comprehensive incomes|619,068,148.41|727,682,824.19|
|Attributable to owners of the|||
||619,068,148.41|727,682,824.19|
|Company|||
|Attributable to minority|||
|shareholders|||

Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
2013 Annual Report of Anhui Gujing Distillery Company Limited Chief of the accounting division: Zhu Jiafeng
4. Income statement of the Company
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|I. Total sales|2,529,549,854.01|2,535,315,597.69|
|Less: cost of sales|1,398,337,758.52|1,207,277,936.81|
|Business taxes and surcharges|592,720,228.35|604,155,623.28|
|Distribution expenses|182,732,468.72|364,959,419.40|
|Administrative expenses|309,058,351.45|240,774,307.44|
|Financial costs|-44,325,968.34|-71,949,250.84|
|Impairment loss|7,286,854.02|3,629,434.58|
|Add: gain/(loss) from change in fair|||
|value (“-” means loss)|||
|Gain/(loss) from investment (“-” means|||
||600,946,599.56|570,794,532.17|
|loss)|||
|Including: income form investment on|||
|associates and joint ventures|||
|II. Business profit (“-” means loss)|684,686,760.85|757,262,659.19|
|Add: non-business income|16,000,980.87|15,984,988.19|
|Less: non-business expense|3,242,473.29|1,770,071.21|
|Including: loss from non-current asset|||
||1,299,935.04||
|disposal|||
|III. Total profit (“-” means loss)|697,445,268.43|771,477,576.17|
|Less: income tax expense|37,902,840.47|54,810,904.83|
|IV. Net profit (“-” means loss)|659,542,427.96|716,666,671.34|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|1.31|1.42|
|(II) Diluted earnings per share|1.31|1.42|
|VI. Other comprehensive income|-2,936,767.38|2,093,537.88|
|VII. Total comprehensive income|656,605,660.58|718,760,209.22|

 Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2013 Annual Report of Anhui Gujing Distillery Company Limited 5. Consolidated cash flow statement
Prepared by Anhui Gujing Distillery Company Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||5,381,770,280.57|5,256,820,153.39|
|commodities and rendering of service|||
|Net increase of deposits from|||
|customers and dues from banks|||
|Net increase of loans from the central|||
|bank|||
|Net increase of funds borrowed from|||
|other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase of deposits of policy|||
|holders and investment fund|||
|Net increase of disposal of tradable|||
|financial assets|||
|Cash received from interest, handling|||
|charges and commissions|||
|Net increase of intra-group|||
|borrowings|||
|Net increase of funds in repurchase|||
|business|||
|Tax refunds received||642,100.00|
|Other cash received relating to|||
||299,273,978.50|152,260,005.14|
|operating activities|||
|Subtotal of cash inflows from operating|||
||5,681,044,259.07|5,409,722,258.53|
|activities|||
|Cash paid for goods and services|1,673,212,674.71|1,117,167,748.88|
|Net increase of customer lendings|||
|and advances|||
|Net increase of funds deposited in the|||
|central bank and amount due from|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|banks|||
|Cash for paying claims of the original|||
|insurance contracts|||
|Cash for paying interest, handling|||
|charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|924,834,475.73|722,698,221.19|
|Various taxes paid|1,483,773,600.56|1,556,750,391.03|
|Other cash payment relating to|||
||960,968,152.76|926,238,532.97|
|operating activities|||
|Subtotal of cash outflows from|||
||5,042,788,903.76|4,322,854,894.07|
|operating activities|||
|Net cash flows from operating activities|638,255,355.31|1,086,867,364.46|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
|investments|||
|Cash received from return on|||
||10,050,415.19||
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|2,831,977.74|68,940.95|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
||35,423,586.00|240,000.00|
|investing activities|||
|Subtotal of cash inflows from|||
||948,305,978.93|308,940.95|
|investing activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|557,480,975.37|621,048,614.55|
|assets|||
|Cash paid for investment|1,880,000,000.00|25,199,993.00|
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||2,437,480,975.37|646,248,607.55|
|investing activities|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Net cash flows from investing activities|-1,489,174,996.44|-645,939,666.60|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received from borrowings|||
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
|financing activities|||
|Subtotal of cash inflows from financing|||
|activities|||
|Repayment of borrowings|||
|Cash paid for interest expenses and|||
||251,800,000.00|113,310,000.00|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|||
|financing activities|||
|Sub-total of cash outflows from|||
||251,800,000.00|113,310,000.00|
|financing activities|||
|Net cash flows from financing activities|-251,800,000.00|-113,310,000.00|
|IV. Effect of foreign exchange rate|||
|||162.90|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||-1,102,719,641.13|327,617,860.76|
|equivalents|||
|Add: Opening balance of cash and|||
||2,409,650,352.09|2,082,032,491.33|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||1,306,930,710.96|2,409,650,352.09|
|equivalents|||

Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
6. Cash flow statement of the Company
Prepared by Anhui Gujing Distillery Company Limited
2013 Annual Report of Anhui Gujing Distillery Company Limited Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||3,136,291,164.98|3,423,191,472.27|
|commodities and rendering of service|||
|Tax refunds received|||
|Other cash received relating to|||
||116,309,895.62|237,910,854.26|
|operating activities|||
|Subtotal of cash inflows from operating|||
||3,252,601,060.60|3,661,102,326.53|
|activities|||
|Cash paid for goods and services|1,826,604,908.68|1,374,069,572.75|
|Cash paid to and for employees|428,367,064.51|336,171,582.81|
|Various taxes paid|938,402,383.86|1,111,980,958.34|
|Other cash payment relating to|||
||124,356,345.13|273,079,396.45|
|operating activities|||
|Subtotal of cash outflows from|||
||3,317,730,702.18|3,095,301,510.35|
|operating activities|||
|Net cash flows from operating activities|-65,129,641.58|565,800,816.18|
|II. Cash flows from investing activities:|||
|Cash received from retraction of|||
||900,000,000.00|9,900,000.00|
|investments|||
|Cash received from return on|||
||600,946,599.56|570,794,532.17|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|709,777.79|68,940.95|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
||35,423,586.00|1,240,000.00|
|investing activities|||
|Subtotal of cash inflows from|||
||637,079,963.35|582,003,473.12|
|investing activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|547,137,594.99|584,887,244.40|
|assets|||
|Cash paid for investment|1,922,998,976.70|45,197,993.00|
|Net cash paid to acquire subsidiaries|||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||2,470,136,571.69|630,085,237.40|
|investing activities|||
|Net cash flows from investing activities|-933,056,608.34|-48,081,764.28|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Cash received from borrowings|||
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
|financing activities|||
|Subtotal of cash inflows from financing|||
|activities|||
|Repayment of borrowings|||
|Cash paid for interest expenses and|||
||251,800,000.00|113,310,000.00|
|distribution of dividends or profit|||
|Other cash payments relating to|||
|financing activities|||
|Sub-total of cash outflows from|||
||251,800,000.00|113,310,000.00|
|financing activities|||
|Net cash flows from financing activities|-251,800,000.00|-113,310,000.00|
|IV. Effect of foreign exchange rate|||
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||-1,249,986,249.92|404,409,051.90|
|equivalents|||
|Add: Opening balance of cash and|||
||2,290,346,607.43|1,885,937,555.53|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||1,040,360,357.51|2,290,346,607.43|
|equivalents|||

Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
2013 Annual Report of Anhui Gujing Distillery Company Limited 7. Consolidated statement of changes inowners’ equity
Prepared by Anhui Gujing Distillery Company Limited
Amount of this period
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Amount of this period||||||||||
||Equity attributable to owners of the Company||||||||||
||Paid-up||||||||||
|||||||||||Total|
|Item|capital||Less:|||General|||Minority||
|||Capital||Specific|Surplus||Retaine|||owners’|
||(or||treasury|||risk||Others|interests||
|||reserve||reserve|reserve||d profit|||equity|
||share||stock|||reserve|||||
||capital)||||||||||
|I. Balance at the end of the|503,600|1,297,03|||218,736||1,356,11|||3,375,488,|
|previous year|,000.00|2,031.07|||,964.73||9,112.84|||108.64|
|Add: change of accounting|||||||||||
|policy|||||||||||
|Correction of errors in|||||||||||
|previous periods|||||||||||
|Other|||||||||||
|II. Balance at the beginning of|503,600|1,297,03|||218,736||1,356,11|||3,375,488,|
|the year|,000.00|2,031.07|||,964.73||9,112.84|||108.64|
|III. Increase/ decrease of|||||||||||
|||-2,936,7|||38,165,||332,039,|||367,268,14|
|amount in the year (“-” means|||||||||||
|||67.38|||295.54||620.25|||8.41|
|decrease)|||||||||||
||||||||622,004,|||622,004,91|
|(I) Net profit|||||||||||
||||||||915.79|||5.79|
|(II) Other comprehensive||-2,936,7||||||||-2,936,767.|
|incomes||67.38||||||||38|
|||-2,936,7|||||622,004,|||619,068,14|
|Subtotal of (I) and (II)|||||||||||
|||67.38|||||915.79|||8.41|
|(III) Capital paid in and|||||||||||
|reduced by owners|||||||||||
|1. Capital paid in by|||||||||||
|owners|||||||||||
|2. Amounts of share-based|||||||||||
|payments recognized in|||||||||||
|owners’ equity|||||||||||
|3. Others|||||||||||
|(IV) Profit distribution|||||38,165,||-289,96|||-251,800,0|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
||||295.54|5,295.54|00.00|
|1. Appropriations to|||38,165,|-38,165,||
|surplus reserves|||295.54|295.54||
|2. Appropriations to||||||
|general risk provisions||||||
|3. Appropriations to||||-251,80|-251,800,0|
|owners (or shareholders)||||0,000.00|00.00|
|4. Other||||||
|(V) Internal carry-forward of||||||
|owners’ equity||||||
|1. New increase of capital||||||
|(or share capital) from capital||||||
|public reserves||||||
|2. New increase of capital||||||
|(or share capital) from surplus||||||
|reserves||||||
|3. Surplus reserves for||||||
|making up losses||||||
|4. Other||||||
|(Ⅵ) Specific reserve||||||
|1. Withdrawn for the||||||
|period||||||
|2. Used in the period||||||
|(Ⅶ) Other||||||
||503,600|1,294,09|256,902|1,688,15|3,742,756,257.05|
|IV. Closing balance||||||
||,000.00|5,263.69|,260.27|8,733.09||

 Amount of last period
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Amount of last period||||||||||
||Equity attributable to owners of the Company||||||||||
||Paid-up||||||||||
|||||||||||Total|
|Item|capital||Less:|||General|||Minority||
|||Capital||Specific|Surplus||Retaine|||owners’|
||(or||treasury|||risk||Others|interests||
|||reserve||reserve|reserve||d profit|||equity|
||share||stock|||reserve|||||
||capital)||||||||||
|I. Balance at the end of the|251,800|1,546,73|||147,070||815,506,|||2,761,115,|
|previous year|,000.00|8,493.19|||,297.60||493.66|||284.45|
|Add: retrospective|||||||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
|adjustments due to business||||||
|combinations under the same||||||
|control||||||
|Add: change of accounting||||||
|policy||||||
|Correction of errors in||||||
|previous periods||||||
|Other||||||
|II. Balance at the beginning of|251,800|1,546,73|147,070|815,506,|2,761,115,|
|the year|,000.00|8,493.19|,297.60|493.66|284.45|
|III. Increase/ decrease of||||||
||251,800|-249,70|71,666,|540,612,|614,372,82|
|amount in the year (“-” means||||||
||,000.00|6,462.12|667.13|619.18|4.19|
|decrease)||||||
|||||725,589,|725,589,28|
|(I) Net profit||||||
|||||286.31|6.31|
|(II) Other comprehensive||2,093,53|||2,093,537.|
|incomes||7.88|||88|
|||2,093,53||725,589,|727,682,82|
|Subtotal of (I) and (II)||||||
|||7.88||286.31|4.19|
|(III) Capital paid in and||||||
|reduced by owners||||||
|1. Capital paid in by||||||
|owners||||||
|2. Amounts of share-based||||||
|payments recognized in||||||
|owners’ equity||||||
|3. Others||||||
||||71,666,|-184,97|-113,310,0|
|(IV) Profit distribution||||||
||||667.13|6,667.13|00.00|
|1. Appropriations to|||71,666,|-71,666,||
|surplus reserves|||667.13|667.13||
|2. Appropriations to||||||
|general risk provisions||||||
|3. Appropriations to||||-113,31|-113,310,0|
|owners (or shareholders)||||0,000.00|00.00|
|4. Other||||||
|(V) Internal carry-forward of|251,800|-251,80||||
|owners’ equity|,000.00|0,000.00||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
|1. New increase of capital(or share capital) from capitalpublic reserves||||||
||251,800|-251,80||||
||,000.00|0,000.00||||
|2. New increase of capital||||||
|(or share capital) from surplus||||||
|reserves||||||
|3. Surplus reserves formaking up losses||||||
|4. Other||||||
|(Ⅵ) Specific reserve||||||
|1. Withdrawn for theperiod||||||
|2. Used in the period||||||
|(Ⅶ) Other||||||
|IV. Closing balance|503,600|1,297,03|218,736|1,356,11|3,375,488,|
||,000.00|2,031.07|,964.73|9,112.84|108.64|

 Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
8. Statement of changes inowners’ equity of the Company
Prepared by Anhui Gujing Distillery Company Limited
Amount of this period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of this periodPaid-upLess: General Totalcapital (or Capital Specific Surplus Retainedtreasury risk owners’share reserve reserve reserve profitstock reserve equitycapital)||||||||
|||||||Generalriskreserve|||
||||Less:|||||Total|
|Item|capital (or|Capital||Specific|Surplus||Retained||
||||treasury|||||owners’|
||sharecapital)|reserve||reserve|reserve||profit||
||||stock|||||equity|
|I. Balance at the end of the|503,600,00|1,249,255,|||213,634,70||1,219,700,|3,186,191,|
|previous year|0.00|645.23|||4.46||782.58|132.27|
|Add: change of accounting|||||||||
|policy|||||||||
|Correction of errors in|||||||||
|previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of|503,600,00|1,249,255,|||213,634,70||1,219,700,|3,186,191,|
|the year|0.00|645.23|||4.46||782.58|132.27|
|III. Increase/ decrease of amount||-2,936,767.|||38,165,295||369,577,13|404,805,66|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|in the year (“-” means decrease)|38|.54|2.42|0.58|
||||659,542,42|659,542,42|
|(I) Net profit|||||
||||7.96|7.96|
|(II) Other comprehensive|-2,936,767.|||-2,936,767.|
|incomes|38|||38|
||-2,936,767.||659,542,42|656,605,66|
|Subtotal of (I) and (II)|||||
||38||7.96|0.58|
|(III) Capital paid in and|||||
|reduced by owners|||||
|1. Capital paid in by owners|||||
|2. Amounts of share-based|||||
|payments recognized in owners’|||||
|equity|||||
|3. Others|||||
|||38,165,295|-289,965,2|-251,800,0|
|(IV) Profit distribution|||||
|||.54|95.54|00.00|
|1. Appropriations to surplus||38,165,295|-38,165,29||
|reserves||.54|5.54||
|2. Appropriations to general|||||
|risk provisions|||||
|3. Appropriations to owners|||-251,800,0|-251,800,0|
|(or shareholders)|||00.00|00.00|
|4. Other|||||
|(V) Internal carry-forward of|||||
|owners’ equity|||||
|1. New increase of capital|||||
|(or share capital) from capital|||||
|public reserves|||||
|2. New increase of capital|||||
|(or share capital) from surplus|||||
|reserves|||||
|3. Surplus reserves for|||||
|making up losses|||||
|4. Other|||||
|(Ⅵ) Specific reserve|||||
|1. Withdrawn for the period|||||
|2. Used in the period|||||
|(Ⅶ) Other|||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
||503,600,00|1,246,318,|251,800,00|1,589,277,|3,590,996,792.85|
|IV. Closing balance||||||
||0.00|877.85|0.00|915.00||

 Amount of last period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of last period||||||||
||Paid-up||||||||
||||Less:|||General||Total|
|Item|capital (or|Capital||Specific|Surplus||Retained||
||||treasury|||risk||owners’|
||share|reserve||reserve|reserve||profit||
||||stock|||reserve||equity|
||capital)||||||||
|I. Balance at the end of the|251,800,00|1,498,962,|||141,968,03||688,010,77|2,580,740,|
|previous year|0.00|107.35|||7.33||8.37|923.05|
|Add: change of accounting|||||||||
|policy|||||||||
|Correction of errors in|||||||||
|previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of|251,800,00|1,498,962,|||141,968,03||688,010,77|2,580,740,|
|the year|0.00|107.35|||7.33||8.37|923.05|
|III. Increase/ decrease of amount|251,800,00|-249,706,4|||71,666,667||531,690,00|605,450,20|
|in the year (“-” means decrease)|0.00|62.12|||.13||4.21|9.22|
||||||||716,666,67|716,666,67|
|(I) Net profit|||||||||
||||||||1.34|1.34|
|(II) Other comprehensive||2,093,537.||||||2,093,537.|
|incomes||88||||||88|
|||2,093,537.|||||716,666,67|718,760,20|
|Subtotal of (I) and (II)|||||||||
|||88|||||1.34|9.22|
|(III) Capital paid in and|||||||||
|reduced by owners|||||||||
|1. Capital paid in by owners|||||||||
|2. Amounts of share-based|||||||||
|payments recognized in owners’|||||||||
|equity|||||||||
|3. Others|||||||||
||||||71,666,667||-184,976,6|-113,310,0|
|(IV) Profit distribution|||||||||
||||||.13||67.13|00.00|
|1. Appropriations to surplus|||||71,666,667||-71,666,66||
|reserves|||||.13||7.13||
|2. Appropriations to general|||||||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
|risk provisions||||||
|3. Appropriations to owners||||-113,310,0|-113,310,0|
|(or shareholders)||||00.00|00.00|
|4. Other||||||
|(V) Internal carry-forward of|251,800,00|-251,800,0||||
|owners’ equity|0.00|00.00||||
|1. New increase of capital||||||
||251,800,00|-251,800,0||||
|(or share capital) from capital||||||
||0.00|00.00||||
|public reserves||||||
|2. New increase of capital||||||
|(or share capital) from surplus||||||
|reserves||||||
|3. Surplus reserves for||||||
|making up losses||||||
|4. Other||||||
|(Ⅵ) Specific reserve||||||
|1. Withdrawn for the period||||||
|2. Used in the period||||||
|(Ⅶ) Other||||||
||503,600,00|1,249,255,|213,634,70|1,219,700,|3,186,191,|
|IV. Closing balance||||||
||0.00|645.23|4.46|782.58|132.27|

 Legal representative: Yu Lin Person-in-charge of the accounting work: Ye Changqing
Chief of the accounting division: Zhu Jiafeng
Anhui Gujing Distillery Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2013
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
Note 1: Company Profile
Anhui Gujing Distillery Co., Ltd. (hereafter “the Company” or "Company") was the company limited by shares approved by Administration Bureau of State-owned Property of Anhui province following the approval WanGuoZiGongZi (1996) NO. 053(皖国资工字(1996)第053号文), Anhui Gujing Group Co., Ltd. as the sole sponsors, established net assets in the assessment of main
production operating assets of its core company Anhui Bozhou Gujing distillery 377.1677 million transferred into the 155,000,000
state-owned shares, and the registered location was the Bozhou City of People's Republic of China. The company was registered in
2013 Annual Report of Anhui Gujing Distillery Company Limited the The People's Republic of China on 5 March 1996 and was approved byPeople’s Government of Anhui province following the approval WanZhengMin (1996) NO.42(皖政秘(1996)42号文). The company convoked the founding meeting on 28 May 1996, and registrated on 30 May 1996 by Administration for Industry and Commerce of Anhui province. The registration number of Business License for Enterprise as a Legal Person is: 14897271-1.
The Company has been issued 60,000,000 domestic listed foreign shares (hereafter “B” shares) in June 1996 and 20,000,000 domestic listed CNY ordinary shares (hereafter “A” shares) in September 1996, the par value of ordinary shares is CNY1.00 per share. Both A share and B share are listed in Shenzhen Stock exchange.
The headquarters of the company is located in Gujing town, Bozhou city, Anhui province. The company and the subsidiaries (collectively called “Group”) is mainly engaged in liquor production and sales, it belongs to the food manufacturing industry.
The original registered capital was CNY 235 million, the total amount of shares were 235 million, including state-owned shares 155 million ,B shares 60 million and A shares 20 million, the par value is CNY 1 per share.
On 29 May 2006, the shareholder meeting for theCompany’s shareholdings reform of A-share market have been discussed and approved the proposal of the shareholdings reform, and that has been implemented in June 2006. After theCompany’s shareholdings reform implemented, all shares of the Company became floating shares, which including 147,000,000 shares with restrict condition on disposal, represent62.55% of total share capital, and 88,000,000 shares without restrict condition on disposal, represent37.45% of total share capital.
On 27 June 2007, the Company issued the<Announcement of release restriction shares by Anhui Gujing Distillery Co.,Ltd.>, the 11,750,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the conversion date is on 29 June 2007. Hence, outstanding shares with restrict condition on disposal are 135,250,000 shares, representing57.55% of total share capital, the share without restrict condition on disposal are 99,750,000 shares, representing42.45% of total share capital.
On 17 July 2008, the Company issued the<Announcement of release restriction shares by Anhui Gujing Distillery Co.,Ltd.>, the 11,750,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the conversion date is on 18 July 2008. Hence, outstanding shares with restrict condition on disposal are 123,500,000 shares, representing52.55% of total share capital, the share without restrict condition on disposal are 111,500,000 shares, representing47.45% of total share capital.
On 24 July 2009, the Company issued the<Announcement of release restriction shares by Anhui Gujing Distillery Co.,Ltd.>, the 123,500,000 restricted outstanding shares with restrict condition on disposal became non-restricted in stock market, and the conversion date is on 29 July 2009. Hence, all shares of the Company were became outstanding shares without restrict condition on disposal.
According to the approval by China Securities Regulatory Commission (the authorization file No.zhengjianxuke[2011]943), on 15th July 2011, the Company private issued 16,800,000 shares of ordinary share (A shares) to specific investors, the par value in CNY 1 per share, and the offering price is CNY 75 per share, the funds raised amounting to CNY 1,260 million, deduct those sundry
2013 Annual Report of Anhui Gujing Distillery Company Limited issuing charges amounting to CNY 32,500,549.73, the actual funds raised net amounting to CNY 1,227,499,450.27. The above funds have been reviewed by Reanda Certified Public Accountants Co., Ltd., and issued the Capital Verification Report (REANDA YANZI[2011]No.1065). After private issued, the share capital was increased to CNY 251.8 million.
According to the resolution of 2011 annual general meeting of stockholders, every 10 shares transferred to increase 10 shares by capital reserves used the base of the 251.8 million shares on 31 December, 2011, the total amount of increase by transferring were 251.8 million shares and has been implemented in 2012. After increase by transferring the registered capital was increased to CNY 503.6 million.
Up to 31 December 2013, the accumulated total amount of issued capital was 503.6 million shares, see the note 7.27.
The approved business scope: grain procurement (operation by license), manufacture of distilled spirits, beer, red wine, facilities for wine making, packaging materials, and glass bottles, alcohol, feeds, grease (limited to the by-products from alcohol manufacture), development of high-tech, biotechnology development agricultural and sideline products deep processing, sales of goods from own production.
The parent company of the group and ultimate parent company is the Anhui Gujing Group Co., Ltd.
The financial statement is approved by the resolution of board of directors on 17th April, 2014. According to the articles of association, the financial statements will be submitted to the shareholders meeting for consideration.
Note 2: Basis for preparation of the financial statements
The financial statements of company have been prepared on basis of going concern in conformity with Chinese Accounting Standards for Business Enterprises and the Accounting Systems for Business Enterprises issued by the Ministry of Finance ofPeople’s Republic of China in February 2006, and Accounting Standards (order No.38 of the Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15– General Provisions on Financial Reports (2010 Revision) issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the company has adopted the accrual basis of accounting. Except for certain financial instruments which are measured by at fair value, the Company adopts the historical cost as the principle of measurement in the financial statements. Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements.
Note 3: Statement of Compliance with Enterprise Accounting Standards
The financial statements of the company are recognized and measured in accordance with the regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial position, business result and cash flow of the Company as of 31 December 2013 .In addition, the financial statements of the company comply, in all material respects, with the revised disclosing requirements for financial statements and the Compilation Rules for Information Disclosure by Companies Offering Securities to the PublicNo.15—General Provisions on Financial Reports (2010 Revision) issued by China
2013 Annual Report of Anhui Gujing Distillery Company Limited Securities Regulatory Commission (CSRC) in 2010.
Note 4: Important Accounting Principles and Accounting Estimates
4.1 Accounting period
The accounting period of the Company is classified as interim period and annual period. Interim period refers to the reporting period shorter than a complete annual period. The accounting period of the Company is the calendar year from 1st January to 31st December.
4.2 Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional currency. The Company adopts CNY to prepare its functional statements.
4.3 Business combination
A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under common control.
(1) Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is the absorbing party, while that other enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained earnings. The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an expense through profit or loss for the current period when incurred.
(2) Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains
2013 Annual Report of Anhui Gujing Distillery Company Limited control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be offset.
Combination cost of theacquirer’s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference shall be recognized as goodwill. Where the cost of combination is less than theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of theacquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of combination is still less than theacquirer’s interest in the fair values of theacquiree’s identifiable net assets, the acquirer shall recognize the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of deferred income tax assets is related to the combination.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai[2012] No. 19) on the “package deal” criterion (see Note 4.4.2) , to judge the multiple exchange transations whether they are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of this section and the Notes described in 4.10 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
2013 Annual Report of Anhui Gujing Distillery Company Limited For the purpose of the separate financial statements, the cost of acquisition is measured as the sum of the carrying amount of investment in the investee immediately prior to the acquisition and the consideration for the addition investment. Cumulative other comprehensive income relevant to the investment recognised prior to the acquisition is reclassified to profit or loss as investment income at the time of acquisition.
For the purpose of the consolidated financial statements, the investment in the investee prior to the acquisition is premeasured by fair value, difference between the acquisition date fair value of the investment in the investee prior to the acquisition and its carrying amount is recognised in profit or loss as investment income at the time of acquisition. Cumulative other comprehensive income relevant to the investment recognised prior to the acquisition is reclassified to profit or loss as investment income at the time of acquisition.
4.4 Preparation of the consolidated financial statements
(1) The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an enterprise or entity under the control of the Company.
(2) Preparation of the consolidated financial statements
The subsidiary of the Company is included in the consolidated financial statements from the date when the control over the net assets and business decisions of the subsidiary is effectively obtained, and excluded from the date when the control ceases.
For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the date when control is lost) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to the opening balance of the consolidated financial statements. For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on theCompany’s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under
2013 Annual Report of Anhui Gujing Distillery Company Limited common control, the financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet withinshareholders’/owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item. When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’ portion of the opening balance of[shareholders’][owners’] equity of the subsidiary, the excess is allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the formersubsidiary’s net assets immediately before the loss of the control is recognized as investment income for the current period when control is lost. The amount recognized in other comprehensive income in relation to the formersubsidiary’s equity investment is reclassified as investment income for the current period when control is lost. The retained interest is subsequently measured according to the rules stipulated in the “Chinese Accounting Standards for Business EnterprisesNo.2—Long-term equity investment” or “Chinese Accounting Standards for Business EnterprisesNo.22—Determination and measurement of financial instruments” . See Note 4.10 Long-term equity investments and Note 4.7 Financial instruments for details.
Where loss of control over a subsidiary results from multiple transactions (agreements), assessment shall be made as to whether the multiple agreements shall be viewed as a whole as a single transaction. Multiple agreements giving rise to loss of control over a subsidiary is generally viewed as a whole as a single transaction if the terms, conditions and economic implications of the multiple agreements satisfy one or more of the following conditions: 1) the agreements are entered into simultaneously or taking into account the implication of each other; 2) the business objective cannot be achieved without successful completion of all the agreements; the occurrence of one agreement is dependent on the result of at least another one agreement; and/or 4) any one single agreement is not recognised as economic and the agreements as a whole is economic. Where multiple agreements do not satisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted for in accordance with the provisions of disposal of long-term equity investments not resulting loss of control (see Note 4.10.2.2)) or loss of control due to disposal of shares or other events (see the previous paragraph). Where multiple agreements satisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted for as a transaction which results in loss of control; differences between the consideration for disposals prior to loss of control and the net assets proportionate to the shares disposed prior to loss of control are recognised as other comprehensive income in the consolidated financial statements and transferred to profit or loss at the time of loss of control.
4.5 Cash equivalent
2013 Annual Report of Anhui Gujing Distillery Company Limited Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
4.6 Foreign exchange
(1) Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying[the spot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchange rate on the date oftransaction]. The exchange of foreign currency and transactions related to the foreign exchange are translated at the spot exchange rate.
(2) Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for① those relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing costs;② hedging accounting, the exchange difference related to hedging instruments for the purpose of net oversea operating investment is recorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period; exchange difference from changes of other account balance of foreign currency monetary items,③ available-for-trade is recorded into profit or loss except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate prevailing on the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at the date when the fair values are determined. The exchange difference thus resulted are recognized in profit or loss for the current period or as capital reserve.
4.7 Financial instruments
(1) Determination of financial assets andliabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm’s length transaction. For a financial instrument which has an active market, the Company uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Company establishes fair value by using a valuation technique. Valuation techniques include using recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at the value of acompetitor’s interest rate swap quoted by a recognised financial institution as at theCompany’s balance sheet date in accordance with the principle of
2013 Annual Report of Anhui Gujing Distillery Company Limited consistency.
(2) Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, theCompany’s financial assets are classified into one of the four categories, including financial assets at fair value though profit or loss, held-to maturity investments, loans and receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value. In the case of financial assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and loss of the current period; transaction costs relating to financial assets of other categories are included in the amount initially recognized.
① Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there is objective evidence indicating that the enterprise recently manages this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is reported to theenterprise’s key management personnel. Formal documentation regarding risk management or investment strategy has prepared. Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes in the fair value and any dividends or interest income earned on the financial assets are recognized in the profit or loss.
② Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial
2013 Annual Report of Anhui Gujing Distillery Company Limited asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company shall estimate future cash flow considering all contractual terms of the financial asset or financial liability without considering future credit losses, and also consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
③ Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an active market. Financial assets classified as loans and receivables by the Company include note receivables, account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss.
④ Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are recognized in investment gains.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.
② Impairment loss on available-for-trade financial assets
2013 Annual Report of Anhui Gujing Distillery Company Limited Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an available-for-trade financial asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or loss.
(5) Classification and measurement of financial liabilities
2013 Annual Report of Anhui Gujing Distillery Company Limited TheGroup’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in the initial recognition amounts.
1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to be measured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted for subsequent measurement. All the gains or losses on the change of fair value and the expenses on dividends or interests related to these financial liabilities are recognized in profit or loss for the current period.
2) Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition or amortization are recognized in profit or loss for the current period.
(6) Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has expired. An agreement between the Company (an existing borrower) and existing lender to replace original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial
2013 Annual Report of Anhui Gujing Distillery Company Limited liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset. (9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toshareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
4.8 Receivables
The receivables by the Company includes account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
1) Provisions of bad debts in account receivables that is individually significant.
Individual receivables equal to or higher than CNY 2,000,000.00 are classified as receivables of individual significance.
For an account receivable that is individually significant, the asset is individually assessed for impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount, and provision is made accordingly.
2) Provisions of bad debts in account receivables those individually insignificant items with similar credit risk characteristics that have significant risk:
A. Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow expected to be derived from the assets.
Evidence ofportfolios：
Item Basis
Age portfolios Age
2013 Annual Report of Anhui Gujing Distillery Company Limited Related party portfolios The companies which are in the scope of the consolidation.
B. Provision by credit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by the assessed result from the experience of historical loss and current economic status and the existing loss in the estimated account receivables according to the set of account receivables and credit risk characteristic.
Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Related party portfolios No allowance for bad debt
a. Portfolio by age analysis
||
|-|
|Percentage of carrying amount forrecognition of allowance for bad debtapplicable to accounts receivable|
|1.00|
|5.00|
|10.00|
|50.00|
|100.00|

 3) Provisions of bad debts that is individually insignificant.
For the account receivables not individually significant, the Company assesses the account receivables individually for impairment when are of following characteristics: if there is objective evidence indicating the impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount, and provision is made accordingly. For examples: receivables of individual insignificance bears differing credit risk characteristics to other receivables of individual insignificance account receivables with related parties; account receivables under litigations or arbitrations, or account receivables with obvious indication that debtor cannot fulfill the obligation of repayment.
(3) The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an event
occurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized in profit or
loss. However, the reversal shall not result in a carrying amount that exceeds what the amortized cost would have been had the
impairment loss not been recognized at the date the impairment is reversed.
2013 Annual Report of Anhui Gujing Distillery Company Limited 4.9 Inventories
(1) Classification of inventory
TheCompany’s inventory mainly includes raw materials, semi-finished product, work-in-progress and finished products.
(2) Valuation method of inventories
Inventories are initially carried at the actual cost. Cost of inventories includes purchase cost, conversion cost and other cost. Cost of issue is measured using the weighted average method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is determined normally by the difference of the cost of individual item less its realizable value. For large quantity and low value items of inventories,
provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line that are produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregate basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method; packaging materials are amortized using immediate write-off method.
4.10 Long-term equity investments
(1) Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of the long-term equity investment shall be carrying value of the absorbingparty’s share of theshareholder’s equity of the party being absorbed at the date of combination.
For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc and
2013 Annual Report of Anhui Gujing Distillery Company Limited other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in the business combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially measured by cost. The cost shall be recognized to the difference in the way of acquisition of long-term equity investment. Theses ways include the cash purchase price the Company the Company actually paid, the fair value of equity security issued by the Company, value specified in the investment contract or agreement, the fair value or carrying value of the asset out in the transaction of non-monetary asset exchanges, and the fair value of the long-term equity investment.
Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term equity investment are taken into investment cost.
(2) Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have common control or significant influence over the investee, the investment is not quoted in an active market and its fair value cannot be measured reliably.
Where an investing enterprise can exercise common control or significant influence over the investee,
a long-term investment shall be accounted for using the equity method.
When an investing enterprise can no longer exercise joint control or common control nor significant influence over the investee, and its fair value cannot be measured reliably, a long-term investment shall be counted as financial asset ready-for trade.
A long-term equity investment where cost method is adopted in theCompany’s financial statements
can exercise controls over the investee.
1) Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investingenterprise’s interest in the fair values of theinvestee’s identifiable net assets at the time of acquisition, no adjustment shall be made to the initial investment cost.
Where the initial investment cost of a long-term equity investment is less than the investingenterprise’s interest in the fair values ofinvestee’s identifiable net assets at the time of acquisition, the difference shall be charged to profit or loss for the current period, and the cost of the long-term equity investment shall adjusted accordingly.
Under the equity method, the Company recognizes its share of the net profit or loss of the investee for the period as
2013 Annual Report of Anhui Gujing Distillery Company Limited investment income or loss for the period. The Group recognizes it share of theinvestee’s net profit or loss based on the fair value of theinvestee’s individual separately inventible assets, etc. at the acquisition date after making appropriate adjustments to confirm with theCompany’s accounting policies and accounting period. Unrealized profits or losses resulting from theCompany’s transactions with its associates and joint ventures are recognized as investment income or loss to the extent that those attributable to theCompany’s equity interest are eliminated. However, unrealized losses resulting from theCompany’s transactions with its investees on the transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated. Changes inowners’ equity of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the long-term equity investment, and recognized as other compressive income which is included in the capital reserve. When the investee is recognized net losses, reduce the carrying value of long-term equity investments and long-term equity of net investment (in substance) in investee to zero. In addition, the Company has the obligations on additional losses, then the expected obligation as estimated liabilities and included in the current investment losses. Where the net profit from investee units, restoration confirm the amount of revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption of Accounting Standards for Business Enterprises, where the initial investment cost of a long-term equity investment exceeds theCompany’s interest in theinvestee’s net assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight line basis over the original remaining life.
3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned earnings.
4) Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the difference in the net asset between the amount of disposed long-term investment and the amount of the consideration paid or received is adjusted to theowner’s equity. If the disposal of long-term investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies in Note 4.2(2) applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognized in profit or loss for the period. For long-term equity investment accounted for using the equity method, the amount included in theowners’ equity attributable to the percentage interest disposed is transferred to profit or loss for the period.
For any retained interest, it shall be subsequently measured according to the related accounting policies in regard of long-term equity investments or financial assets as described above if its carrying amount is recognized as long-term equity investments or other related financial assets. Retroactive adjustment is made on the basis of relevant policies if the retained interests are settled from cost method to equity method.
2013 Annual Report of Anhui Gujing Distillery Company Limited (3) Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee held be the investing enterprise or other parties that are currently exercisable or convertible shall be considered.
(4) Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any indication of impairment. If any indication exists that an asset may be impaired, the enterprise shall
estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying amount, a provision for impairment loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
4.11 Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes leased or ready to transfer after capital appreciation land use rights and leased buildings. Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate are likely to flow about the economic benefits of the asset and its cost can be measured reliably, is included in the cost of investment real estate. Other subsequent expenditure in the profit or loss when incurred.
The Group uses the cost model for subsequent measurement of investment property, and in accordance with the depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in Note 17 “Non-current and non-financial assets impairment ".
Occupied real estate for investment property or investment property is transferred to owner-occupied real estate or stock conversion as the recorded value after the conversion, according to the book value before the conversion.
Investment property change into the Owner-occupied real estate, since the change of date for the investment property is transferred to fixed assets or intangible assets. Change the owner-occupied property held to earn rentals or for capital appreciation, since the change of date, the fixed assets or intangible assets to investment property. Conversion occurs when converted to investment property using the cost model, as the book value before the conversion of the recorded value after the conversion; converted to investment property measured at fair value model, the fair value of the conversion date as the recorded value after
2013 Annual Report of Anhui Gujing Distillery Company Limited conversion.
Derecognised when the investment property is disposed of or permanently withdrawn from use and the expected economic benefits can not be obtained from the disposal of investment property. Proceeds on disposal of investment property is sold, transferred, retired or damaged through profit or loss after deducting the book value and related taxes.
4.12 Fixed assets
(1) The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor service, renting or business management and their useful life is in excess of one fiscal year.
(2) The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement. From the following month of state of intended use, depreciation method of the straight-line method is used for different categories of fixed assets to take depreciation. The recognition of the classification, useful life and estimated residual rate are as follows:
|||
|-|-|
|Expected useful life|Estimated residualvalue(%)|
|8-35|3-5|
|8-10|3-5|
|4|3|
|3|3|

 Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected service life in the end. (3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note 4.17 Impairment of non-current and non-financial assets. (4) Fixed Assets under finance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the leased assets are depreciated over the shorter of the lease terms and the useful lives of the leased assets.
(5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and
2013 Annual Report of Anhui Gujing Distillery Company Limited the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction of carrying value and related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
4.13 Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction expenditures during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs. Construction in progress is transferred to a fixed asset when it is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision impairment please refer to Note 4.17.
4.14 Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as an expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment property and inventories, etc.) that necessarily take a substantial period of time for acquisition, construction or production to get ready for their intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determined by applying a weighted average interest rate to the weighted average of the excess amounts of accumulated expenditure on the asset over and above the amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time of construction or production activities before ready for intended used or sale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the
2013 Annual Report of Anhui Gujing Distillery Company Limited interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the current period until the acquisition, construction or production is resumed.
4.15 Intangible assets
(1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such as plants that are developed and constructed by the Company, and relevant land use rights and buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased are allocated between the land use rights and the buildings; if they cannot be reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value and any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method at the end of the period, and makes adjustment when necessary.. An additional review is also carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize according to the policy of intangible assets with definite useful life. (2) Research and development cost
Cost of research and development is distinguished into the research phase and the development phases.
Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in the period in which it is incurred:
1) it is technically feasible to complete the intangible asset so as to use it or sell it;
2) it is clearly invented to complete the intangible asset in order to use it or sell it;
3) it is probable that the intangible asset is capable of generating future economic benefit, such as the market for the product produced by the intangible asset or the intangible asset itself, it is objectively evidential that the intangible asset is economically usable if it is going to be used internally;
4) there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell it;
5) the cost of the development of the intangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit or loss for
2013 Annual Report of Anhui Gujing Distillery Company Limited the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note 4.17.
4.16 Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a period during which an expense is expected to bring economic benefits to an entity) which is longer than one year and which includes at least part of the reporting period during which the expense was incurred and subsequent reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense incurred and allocated in each month of the beneficial period using the straight line method.
4.17 Impairment of non-current and non-financial assets
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with definite useful lives, investment properties measured by cost methods and long-term equity investment on subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimated if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets not ready for use, are tested for impairment annually regardless of indicators of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is lower than the book value. The recoverable value is the higher of estimated present value of the future expected cash flows from the asset and net fair value of the asset less disposed cost. The fair value of asset is determined by the sales agreement price within anarm’s length transaction. In case there is no sales agreement, but there is active market of assets, the fair value can be determined by the selling price. If there is neither sales agreement nor active market, the fair value of the asset can be estimated based on the best information obtained.
Disposal expenses include expenses related to the legislation, taxes, transportations and the direct expense for the asset to be ready for sale. When calculating the present value of expected future cash flows from an asset or asset Group, the management shall estimate the expected future cash flows from the asset or asset Group and choose a suitable discount rate in order to calculate the present value of those cash flows.
Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of individual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subject asset belongs. Asset Group is the smallest set of assets that can have cash flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected future cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order to calculate the present value of those cash flows. Once the loss
2013 Annual Report of Anhui Gujing Distillery Company Limited from above asset impairment is recognized, the recoverable part cannot be reserved in the subsequent periods.
4.18 Assets transfer with buy-back conditions
For the sale of a financial asset with a repurchase agreement
If the sale of a financial asset would be buy-back on a particular date in the future which confirmed in the repurchase agreement should not recognized in the statement of financial position. Cost of repurchase of those financial assets (include interests) disclose as in the statement of financial position. The difference between sales price and repurchase price during agreement period shall be measured as actual interest method and recognize as interest income.
4.19 Accrued liabilities
Contingent events recognised as provision if all or the following conditions are satisfied:
①This obligation is current obligation of the Company; and,
②The performance of this obligation will probably cause economic benefits outflow of the Company; and,
③The amount of this obligation can be reliably measured.
A provision is measured on a balance-sheet date as the best estimate of the amount that is required for the fulfillment of the pr esent obligation after taking into account of the risks and uncertainty associated with the respective contingent events and the time value of money.
If the amount required for settlement of a provision is wholly or partly reimbursed by a third party, the reimbursement is recognised s eparately as an asset to the extent of the carrying amount of the provision if it is probable that the reimbursement becomes receivab le.
4.20 Revenue
(1) Revenue from sales of goods
Revenue from sales of goods is recognized when significant risks and rewards attached to the ownership of the goods sold are passed to the buyer, when neither continual involvement in the rights normally associated with the ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising from the goods sold is reliably measurable, when inflow of future economic benefits is probable, and when cost incurred or to be incurred associated with the goods sold is reliably measurable.
Revenue arising from domestic sales of goods is recognized when goods are dispatched and delivered to the buyer, when significant risks and rewards attached to the ownership of the goods sold are passed to the buyer, when neither continual involvement in the rights normally associated with the ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising from the goods sold is reliably measurable, when inflow of future economic benefits is probable, and when cost incurred or to be incurred associated with the goods sold is reliably measurable. Revenue arising from non-domestic sales of goods is recognised when goods are loaded on board and when the export clearance with the custom is completed.
(2) Revenue from rendering of service
Revenue arising from rendering of services is recognized on the balance date using the percentage of completion method
2013 Annual Report of Anhui Gujing Distillery Company Limited when the outcome of the services rendered can be reliably estimated. The percentage of completion of the services rendered is calculated by dividing the cost to date by the budgeted total cost.
The outcome of the services rendered can be reliably estimated when revenue from the services render can be reliably measured, when the inflow of associated future economic benefits is probable, when the percentage of completion can be reliably measure, and when the cost incurred or to be incurred associated with the services can be reliably measured.
When the outcome of the services rendered cannot be reliably estimate, revenue is recognised as cost reimbursement received or to be received, if any, and cost incurred is recognised in profit or loss for the period in which the cost is incurred. No revenue is recognised if cost reimbursement is not probable.
When a contract between the group and another entity involves both sales of goods and rendering for services, the sales of goods and rendering of services are accounted for separately if they are distinguishable and separately measurable; the contract is accounted for as if it is a contract involves only sales of goods if the sales of goods and rendering of services are either indistinguishable or distinguishable but not separately measurable.
(3) Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
(4) Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actual interest rate.
4.21 Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Company at no consideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grant related to the assets and grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a nominal amount is recognized immediately in profit or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over the useful life of the related asset. For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent period, the grant is recognized as deferred income, and recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a compensation for related expenses or losses already incurred, the grant is recognized immediately in profit or loss for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the period. If there is no related deferred income, the repayment is recognized immediately in profit or loss for the period.
2013 Annual Report of Anhui Gujing Distillery Company Limited 4.22 Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws. The measurement of deferred tax assets and deferred tax liabilities reflects
the tax consequences that would follow from the manner in which the Company expects at the balance sheet date, to recover the assets or settle the liabilities.
At the balance sheet date, current income tax liabilities or assets for the current and prior periods, are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for income tax expenses in the current period is based on the taxable income according to the related tax laws after adjustment to the accounting profit of the reporting period.
(2) Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax liability related is recognized except where the Company is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above are recognized. For temporary deductible differences associated with the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, or it is not probable to obtain taxable income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Company recognizes other deferred income tax assets that can deduct temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized. For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary differences are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary
2013 Annual Report of Anhui Gujing Distillery Company Limited differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws, that are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax assets to be used, the Company reduces the carrying amount of deferred tax assets. The amount of such reduction is reversed when it becomes probable that sufficient taxable profit will be available
(3) Income tax expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or loss in current accounting period, except expense for income tax of the current period and deferred income tax that booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose from business combination.
(4) Income tax offset
When we have the legal right, and have intended to, to make settlement with net amount, or through the asset acquisition and liability fulfillment simultaneously, the Company shall present the net value from the offset between current income tax asset and current income tax liability in the financial statement.
When the Company has the legal right to make a settlement with the current income tax asset and current income tax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxable subject under the same tax payer, or related to different taxable subject, but the intension of net value settlement in regard of the current income tax asset and current income tax liability, the Company shall present net value after the offset of deferred income tax asset and deferred income tax liability.
4.23 Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.
(1) The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, and either included in the cost of the related asset or charged to profit or loss for the current period. The contingent rents shall be recorded in the profit or loss of the period in which they actually arise.
(2) The Company as Leaser under operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in which they actually arise.
(3) The Company as Lessee under financing Lease
2013 Annual Report of Anhui Gujing Distillery Company Limited For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the
long-term payables; the difference between the recorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the lease agreement shall be added to the amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lesser of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance income, which is amortized using the effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent rent shall be credited into profit or loss in which actually incurred.
4.24 Assets held-for-sale
The Company has made decision on disposal of some non-current assets, and signed irrecoverable transferring agreements with buyers. The transaction is probably to be completed with one year. If so, the non-current asset shall be counted as an asset ready-for-sale, not depreciated or amortized, and shall be measured by the lower of carrying amount and faire value less net value of disposal expenses. Non-current assets ready-for-sale includes individual asset and disposal Group. If disposal Group is an asset Group, and has allocated goodwill acquired during the combination according to the Accounting Standard for Business Enterprises No. 8 - Impairment, or. the disposal Group is an operation in the asset Group, the disposal Group includes goodwill in the business combination.
Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the condition of non-current asset ready-for-trade, the Company shall derecognize it as held-for-trade, and measure it by the lower of the followings:
(1) the carrying amount of the asset or disposal Group before it is classified as held-for-trade, the value after the adjustment of depreciation, amortization or impairment recognized under the assumption that it is not classified as held-for-trade;
(2) the recoverable value on the date when decided not to trade any more.
2013 Annual Report of Anhui Gujing Distillery Company Limited 4.25 Employee Benefits
During the accounting period of anemployee’ providing services to the Company, the Company recognizes the compensation payable as liabilities.
The Company participates in the employees social security system set up by government agencies, including pensions, medical insurance, housing fund and other social security system, and the corresponding expenditures are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision shall be recognized for the compensation arising from termination of employment relationship with employees, with a corresponding charge to the profit or loss for the current period. The enterprise cannot unilaterally withdraw from the termination plan or the redundancy offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social insurance (from the date of ceasing services to the date of normal retirement) are paid by the Company, subject to the conditions to be recognized in profit or loss (termination benefits).
4.26 Changes in major accounting policies and accounting estimates
(1) change of accounting policies
There is no significant change of accounting policies for the Company during the reporting period.
(2) change of accounting estimates
There is no significant change of accounting estimates for the Company during the reporting period.
4.27 Correction of prior period errors
There is no significant change of previous accounting errors for the Company during the reporting period.
4.28 Significant account judgment and estimates
The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately, due to the internal uncertainties of operation activities. These judgments, estimates and assumptions are based on historical experiences of theCompany’s management as well as other factors that are considered to be relevant. These judgments, estimates and assumptions may affect value of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency at the balance sheet date. However, the result derived from those uncertainties in estimates may lead significant adjustments to the carrying amounts of the assets or liabilities affected in the future. The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern. Where the changes in accounting estimates only affect the period when changes occurred, and they are recognized within the same period. Where the changes in accounting estimates affect both current period and future period, the changes are recognized within the period of change and future period.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment, estimates and
2013 Annual Report of Anhui Gujing Distillery Company Limited assumptions over the value of items in the financial statements:
(1) Classification of lease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the Accounting Standard for Business Enterprises No. 21--Leasing. The management shall make analysis and judgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, or whether the Company has substantially held the risks and rewards related to the ownership of leased assets.
(2) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance method is used for baddebt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of receivables. Assurance of receivable impairment needs judgments and estimations from the management. The difference between actual results and original estimates shall have impact on the carrying amount of receivables and receivable bad debt provisions or the reverse during the change of estimation.
(3) Impairment of inventories
The Company measures inventories by the lower of cost and realizable net value according to the accounting policies in regard of inventories and provisions for decline in value of inventories is made if the cost is higher than their net realizable value, and obsolete and slow-movement inventories. Inventories decline in value to net realizable value is the estimated selling price in the ordinary course of business. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events. The difference between the actual result and the original estimates shall have impact on reverse of the carrying amount of the inventories and their decline in value or provisions during the period of change.
(4) The fair value of financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using various valuation methods, including of discounted cash flow analysis model. The Company needs to estimate future cash flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such assumptions have uncertainties and their changes shall have impact on the fair value of financial instruments.
(5) Impairment of financial assets available-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions of management, to determine whether impairment loss is recognized in the income statement. The process of making the judgments and assumptions, the Company is required to assess the extent and duration of the fair value of the investment below cost, as well as investment financial position and short-term business outlook, including industry conditions, technological change, the credit rating, default rates and counterparty risk.
(6) Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other than financial assets at
2013 Annual Report of Anhui Gujing Distillery Company Limited the balance sheet date. For an intangible asset that has indefinite useful life, impairment test is made in addition to the annual impairment test if there is any indication of impairment. For non-current assets other than financial assets, impairment test is made when there is any indication that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the price of similar product in a sale agreement in anarm’s length transaction or an observable market price less the additional cost directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over theasset’s production, selling price and relevant operating expenses, and discount rate used to calculate present value. All available materials that are considered to be relevant shall be used in the estimation of recoverable value. These materials include estimations of production, selling price and operating expenses based on reasonable and supportable assumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of present value of future cash flow of the assets or assets group where goodwill has been allocated. The Company shall makes estimation on the future cash flow derived from assets or assets group and determine an appropriate discount rate for the present value of future cash flow when the estimation of present value of future cash flow is made.
(7) Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line method over their useful lives after taking into account residual value. The useful lives are regularly reviewed to determine the depreciation and amortization costs charged in each reporting period. The useful lives are determined based on historical experience of similar assets and the estimated technical changes. If there is an indication that there has been a change in the factor used to determine the depreciation or amortization, the rate of depreciation or amortization is revised.
(8) Deferred tax assets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This requires the management of the Company make a lot of judgments over the estimation of time period, value and tax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.
(9) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in theCompany’s everyday operation. Whether it is possible for some items to make expenditure before tax needs approval from competent tax authorities. If there is any difference between finalized determination value and their initial estimations value, the difference shall have the impact on the
2013 Annual Report of Anhui Gujing Distillery Company Limited income tax and deferred income tax of the current period during the final determination.
(10) Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience, product quality assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized as a accrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likely to lead to the outflow of economic benefits of the Company, the Company or the best estimate of the current obligation expenditure required recognized as a accrued liabilities. Recognition and measurement of accrued liabilities is dependent on the judgment of management. In the processing of judgment the company needed to appraise the related risks, uncertainties and time value of money and other factors.
The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service commitment is accrued liabilities. Accrued liabilities have considered the recent experience in the maintenance data, but recent maintenance experience may not reflect future maintenance. Any increase or decrease in t accrued liabilities may affect the profit or loss in future Note 5: Taxation
5.1 Major taxes and tax rate
Tax Tax rate(%)
Value added tax Revenues from sales of products and raw materials at the rate of17%.
The consumption taxes have been provided at the rate of CNY 1.00 yuan per kg or 1,000 Consumption tax ml follow the quantity, and the consumption tax have been provided at the rate of20% of the taxable sales.
Business tax Business tax rate is the5% of taxable income
Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable for the and construction surcharge reporting period, and exempt and deductible tax at the rate of 1, 5,7%.
Sum of VAT payable, consumption duty payable and business tax payable for the Education surcharge
reporting period, and exempt and deductible tax at the rate of3%.
Sum of VAT payable, consumption duty payable and business tax payable for the Local education surcharge
reporting period, and exempt and deductible tax at the rate of2%.。
Corporate income tax Income tax is calculated with the ratio of25%.
2013 Annual Report of Anhui Gujing Distillery Company Limited Note 6: Business combination and the consolidated financial statements
6.1 Circumstance of subsidiaries
6.1.1 Subsidiaries acquired through incorporation or investment
The monetary unit is ten thousand unless otherwise stated.
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|Typeof incorporation|Placeof registration|Natureof business|Registeredcapital|Business scope|
|wholly-owned subsidiary|Bozhou,Anhui|Trade and business|8,486.00|Wholesales of distilled spirit, construction materials,feeds andassistant materials|
|wholly-owned subsidiary|Bozhou,Anhui|Transportation|695.00|Transportation, Sales, maintenance service|
|wholly-owned subsidiary|Bozhou,Anhui|Manufacturing|8,666.03|Manufacture and sales of glass products|
|Subsidinary of wholly-ownedsubsidiary|Bozhou,Anhui|Recycled|100.00|Collect and sale of recycled glass bottle, glass, andother wastebaskets|
|Subsidinary of wholly-ownedsubsidiary|Hefei,Anhui|Advertisement marketing|200.00|Domestic advertising production, publish, design andagency;conference etiquette service, craft gifts sales|
|wholly-owned subsidiary|Bozhou,|Manufacturing|3,000.00|Approved operating business:None. General operating|

2013 Annual Report of Anhui Gujing Distillery Company Limited
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|-|-|-|-|-|
|Typeof incorporation|Placeof registration|Natureof business|Registeredcapital|Business scope|
||Anhui|||business: Provide packaging services for Gujingdistilled spirit, Gujing Gong series distilled spirit,vegetable and fruit wine, health wine and mixed wine|
|Subsidiary of wholly-ownedsubsidiary|Shanghai|Advertisement marketing|500.00|Domestic advertising production, publish, design andagency;Corporate image design and planning; conferenceetiquette service, craft gifts sales（Except the specialprojects）(Business involving administrative licensing,need to get the operating permit）|
|wholly-owned subsidiary|Bozhou Anhui|Technological research|5,000.00|Engineering and technological research andpromotion; Information system planning and designing;PC software, hardware, planning, developing and salesof network communication system; corporationconsulting and service (Business involvingadministrative licensing, need to get the operatingpermit）|

2013 Annual Report of Anhui Gujing Distillery Company Limited (Continued)
||||||
|-|-|-|-|-|
|Corporaterepresentative|OrganizationRegistrationCode|Actual amount ofinvestment as at31/12/2013|The balance of other items that,substantially constitute the netinvestment in subsidiary|Holdingproportion %|
|Liang Jinhui|151944818|8,486.00|0.00|100.00|
|Bai Yun|151940067|695.00|0.00|100.00|
|Qian Zhenhai|151946047|8,666.03|0.00|100.00|
|Qian Zhenhai|151946522|100.00|0.00|100.00|
|Yan Lijun|562165325|200.00|0.00|100.00|
|Huai Huiying|58886276X|3,000.00|0.00|100.00|
|Yan Lijun|593139218|500.00|0.00|100.00|
|Zhou Qingwu|08757348-4|5,000.00|0.00|100.00|

 (Continued)
||||
|-|-|-|
|Whether consolidatedstatements|Minorityequity|The amount of minority equity used for decreasethe profits and losses of minority shareholders|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|
|Yes|0.00|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited 6.1.2 Subsidiaries acquired through business combination under common control
The monetary unit is ten thousand unless otherwise stated.
||||||||
|-|-|-|-|-|-|-|
|Typeofincorporation|Placeofregistration|Natureof business|Registeredcapital|Business scope|Type ofbusiness|Corporaterepresentative|
|wholly-ownedsubsidiary|Shanghai|HotelManagement|5,400.00|Hotel management（Except for cateringmanagement、Except forhotel operation）Self-owned housing rental;establish branch（If thereis need administrativelicensing,operating based on thelicense.）|limitedliabilitycompany|Gong lei|
|wholly-ownedsubsidiary|Bozhou,Anhui|Hoteloperation|62.80|Accommodation, parkingservices；Chinesemeal process, sales ofcigarette and wine andcommodities|limitedliabilitycompany|ZhaoYufeng|

(Continued)
||||
|-|-|-|
|Actual amount of investmentas at 31/12/2013|The balance of other items that, substantiallyconstitute the net investment in subsidiary|Holdingproportion %|
|4,990.69|0.00|100.00|
|64.86|0.00|100.00|

 (Continued)
||||
|-|-|-|
|Whether consolidatedstatements|Minorityequity|The amount of minority equity used fordecrease the profits and losses of minorityshareholders|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Whether consolidatedstatements|Minorityequity|The amount of minority equity used fordecrease the profits and losses of minorityshareholders|
|Yes|0.00|0.00|
|Yes|0.00|0.00|

6.2 New subsidiaries included in the consolidated financial statement and the subsidiaries no longer included in the consolidated financial statement during current reporting period
New subsidiaries included in the scope of consolidation, special purpose entities formed by the trustee or leasing the right to control the operating entity.
||
|-|
|Net assets value as at 31/12/2013|
|50,000,000.00|

 Note: Anhui Ruisiweier Technology Co., Ltd is the subsidiary acquired through incorporation or investment. (See Note 6.1.1) Note 7: Notes to significant elements of the financial statements
Unless otherwise stated (incl. notes to significant elements of the financial statements is), the year ended is 31st December 2013, the year beginning is 1st January 2013, this year is 2013, prior year is 2012 respectively.
7.1 Monetary funds
||||||
|-|-|-|-|-|
|Balance as at 31/12/2013|||||
|Original amount|Foreignexchangerate|Translated amount|Original amount|Foreignexchange rate|
|||251,743.25|||
|—|—|251,743.25|—|—|
|||1,381,636,737.50|||
|—|—|1,381,636,737.50|—|—|
|0.00|6.0969|0.00|588.17|6.29|
|||42,230.21|||
|—|—|42,230.21|—|—|
|||1,381,930,710.96|||

 Note: On 31 December, 2013, the carrying amount of CNY 75,000,000.00 fixed deposit pledged for bank acceptance.
7.2 Notes receivable
7.2.1 Disclosure by classification
Classification Balance as at 31/12/2013 Balance as at 1/1/2013
2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Balance as at 31/12/2013|
|154,408,425.31|
|154,408,425.31|

 Note: On 31 December, 2013, the carrying amount of CNY 51,020,000.00(31 December 2012: CNY 17,000,000.00) bills pledged for bank acceptance.
7.2.2 The top five pledged of notes receivable amount at the end of the year
||||
|-|-|-|
|Date of issue|Date of maturity|Amount|
|2013/7/12|2014/1/12|5,000,000.00|
|2013/7/12|2014/1/12|5,000,000.00|
|2013/7/12|2014/1/12|5,000,000.00|
|2013/7/12|2014/1/12|4,000,000.00|
|2013/7/16|2014/1/16|4,000,000.00|
|||23,000,000.00|

7.2.3 There has no due to inability of the notes transferred to accounts receivable bills.
7.2.4 The end of the year has been endorsed to other parties but not yet due bills (the largest amount of the top five)
|||||
|-|-|-|-|
|Date of issue|Date of maturity|Amount|Whetherderecognition|
|2013/11/14|2014/5/14|5,000,000.00|Yes|
|2013/11/14|2014/5/14|5,000,000.00|Yes|
|2013/9/11|2014/3/11|3,000,000.00|Yes|
|2013/9/11|2014/3/11|3,000,000.00|Yes|
|2013/11/14|2014/5/14|2,830,000.00|Yes|
|||18,830,000.00||

7.3 Accounts receivable
7.3.1 Disclosure by classification
Balance as at 31/12/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|0.00|0.00|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|7,253,995.93|100.00|879,525.94|
|7,253,995.93|100.00|879,525.94|
|0.00|0.00|0.00|
|7,253,995.93|100.00|879,525.94|

 (Continued)
Balance as at 1/1/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|0.00|0.00|0.00|
|8,727,847.44|100.00|840,840.19|
|8,727,847.44|100.00|840,840.19|
|0.00|0.00|0.00|
|8,727,847.44|100.00|840,840.19|

 7.3.2 Disclosure by age:
||||
|-|-|-|
|Balance as at 31/12/2013|||
|Amount|% of total|Amount|
|5,711,105.76|78.73|6,983,110.97|
|4,455,116.26|61.42|6,194,326.53|
|1,255,989.50|17.31|788,784.44|
|749,254.58|10.33|1,066,990.07|
|192,771.51|2.66|89,975.40|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|600,864.08|8.28|587,771.00|
|7,253,995.93|100.00|8,727,847.44|

 7.3.3 Allowance for bad debt:
① Accounts receivable using the age analysis method for measurement of allowance for bad debt:
||||||
|-|-|-|-|-|
|Balance as at 31/12/2013|||||
|Carrying amount||Allowance forbad debt|Carrying amount||
|Amount|% of total||Amount|% of total|
|5,711,105.76|78.73|107,350.64|6,983,110.97|80.01|
|4,455,116.26|61.42|44,551.16|6,194,326.53|70.97|
|1,255,989.50|17.31|62,799.48|788,784.44|9.04|
|749,254.58|10.33|74,925.46|1,066,990.07|12.23|
|192,771.51|2.66|96,385.76|89,975.40|1.03|
|600,864.08|8.28|600,864.08|587,771.00|6.73|
|7,253,995.93|100.00|879,525.94|8,727,847.44|100.00|

 7.3.4 There has no major impairment allowance of accounts receivable has been recovered/received during current reporting period.
7.3.5 There has no accounts receivable written off during the current reporting period.
7.3.6 There has no accounts receivable owed by entities which own5% or more of the shares of the Company during the current reporting period.
7.3.7 Details of top five accounts receivable:
||||
|-|-|-|
|Relationship withthe Company|Carrying amountas at 31/12/2013|Age|
|Non-related party|1,402,771.88|7 months – 2 years|
|Non-related party|799,188.00|Within 6 months, 7months – 2 years|
|Non-related party|646,891.46|Within 6 months|
|Non-related party|546,205.01|Within 6 months, 7months – 1 year, 2 – 3years|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Relationship withthe Company|Carrying amountas at 31/12/2013|Age|
|Non-related party|397,150.73|Within 6 Months|
||3,792,207.08||

 7.3.8 There has no accounts receivable balance due from related parties during the current reporting period.
7.4 Advances to suppliers
7.4.1 Disclosure by age:
||||
|-|-|-|
|Balance as at 31/12/2013|||
|Amount|% of total|Amount|
|90,017,564.50|99.78|85,184,699.47|
|200,134.00|0.22|121,274.00|
|90,217,698.50|100.00|85,305,973.47|

 7.4.2 Details of top five advance to suppliers:
||||
|-|-|-|
|Relationship withthe Company|Carrying amountas at 31/12/2013|Time of Payment|
|Non-related party|48,710,750.00|Dec-13|
|Non-related party|14,035,000.10|Dec-13|
|Non-related party|8,818,910.38|Dec-13|
|Non-related party|4,339,622.63|Nov-13|
|Non-related party|3,600,000.00|Dec-13|
||79,504,283.11||

7.4.3 There have no advances to entities which own5% or more of the shares of the Company.
7.5 Interest receivables
||
|-|
|Carrying amount as at 31/12/2013|
|0.00|
|0.00|

7.6 Other receivables
2013 Annual Report of Anhui Gujing Distillery Company Limited 7.6.1 Disclosure by classification
Balance as at 31/12/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|51,109,940.55|88.79|51,109,940.55|
|6,453,210.58|11.21|156,884.38|
|6,453,210.58|11.21|156,884.38|
|57,563,151.13|100.00|51,266,824.93|

 (Continued)
Balance as at 1/1/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|51,109,940.55|69.51|51,109,940.55|
|22,424,206.84|30.49|865,059.86|
|22,424,206.84|30.49|865,059.86|
|0.00|0.00|0.00|
|73,534,147.39|100.00|51,975,000.41|

 7.6.2 Disclosure by age:
Age Balance as at 31/12/2013 Balance as at1/1/2013
2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Amount|% of total|Amount|
|5,838,600.41|10.14|21,567,003.41|
|5,531,319.95|9.61|20,250,146.49|
|307,280.46|0.53|1,316,856.92|
|555,244.77|0.96|206,998.42|
|57,365.40|0.10|148,205.01|
|51,111,940.55|88.80|51,611,940.55|
|57,563,151.13|100.00|73,534,147.39|

 7.6.3 Allowance for bad debt:
① Other receivables of individual significance and subject to individual impairment assessment
||||
|-|-|-|
|Carryingamount|Allowance forbad debt|Rate ofallowance(%)|
|12,223,000.00|12,223,000.00|100.00|
|29,502,438.53|29,502,438.53|100.00|
|9,384,502.02|9,384,502.02|100.00|
|51,109,940.55|51,109,940.55|100.00|

② Accounts receivable using the age analysis method for measurement of impairment allowances:
Accounts receivable using the age analysis method for measurement of impairment allowances:
||||||
|-|-|-|-|-|
|Balance as at 12/31/2013|||||
|Carrying amount||Allowance for baddebt|Carrying amount||
|Amount|% of total||Amount|% of total|
|5,838,600.41|90.48|70,677.21|21,567,003.41|96.18|
|5,531,319.95|85.72|55,313.19|20,250,146.49|90.31|
|307,280.46|4.76|15,364.02|1,316,856.92|5.87|
|555,244.77|8.60|55,524.47|206,998.42|0.92|
|57,365.40|0.89|28,682.70|148,205.01|0.66|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|2,000.00|0.03|2,000.00|502,000.00|2.24|
|6,453,210.58|100.00|156,884.38|22,424,206.84|100.00|

 7.6.4 There has no other receivable owed by entities which own5% or more of the shares of the Company during the current reporting period.
7.6.5 Details of top five other receivable:
||||
|-|-|-|
|Relationship withthe Company|Carrying amountas at 31/12/2013|Age|
|Non-related party|12,223,000.00|Over 3 years|
|Non-related party|29,502,438.53|Over 3 years|
|Non-related party|9,384,502.02|Over 3 years|
|Non-related party|508,546.97|Within 6 months|
|Non-related party|500,000.00|Within 6 months|
||52,118,487.52||

 7.6.6 Other receivables from related parties
There is no other receivable from related parties during current reporting period.
7.7 Redemptory monetary capital for sale
||
|-|
|Carrying amountas at 31/12/2013|
|80,093,922.21|
|80,093,922.21|

 Note: The term to maturity of all redemptory monetary capital for sale as at 31/12/2013 were within 30 days since purchase date.
7.8 Inventories
7.8.1 Disclosure by classification
As at 31/12/2013
|||
|-|-|
|Carrying amount|Impairment allowance|
|97,581,058.67|4,164,570.23|
|865,270,677.73|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|122,409,398.01|6,063,426.88|
|1,085,261,134.41|10,227,997.11|

 (Continued)
As at 1/1/2013
Items
|||
|-|-|
|Carrying amount|Impairment allowance|
|98,182,927.82|3,692,051.40|
|582,438,096.08|0.00|
|106,632,198.17|1,161,671.82|
|787,253,222.07|4,853,723.22|

 7.8.2 Impairment allowance for inventories
|||||
|-|-|-|-|
|Carrying amount asat 1/1/2013|Recognisedduring the currentreporting period|Decrease in the current reporting period||
|||Recovered|Carried to profit andloss|
|3,692,051.40|2,571,578.06|0.00|2,099,059.23|
|0.00|0.00|0.00|0.00|
|1,161,671.82|5,612,788.55|0.00|711,033.49|
|4,853,723.22|8,184,366.61|0.00|2,810,092.72|

 7.8.3 Evidence for recognizing or reasons for decreasing of allowance for inventories impairment during the current reporting period
2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|Evidence for recognizing ofimpairment allowance|Reasons for decreasing ofimpairment allowance|
|Net realizable value lowerthan the cost||
|Net realizable value lowerthan the cost||

7.9 Other current assets
|||
|-|-|
|Nature (or Content)|Fair value as at 31/12/2013|
|Bank financial products|900,000,000.00|
||900,000,000.00|

 7.10 Financial assets held-for-sale
||
|-|
|Fair value as at 31/12/2013|
|24,075,687.00|
|0.00|
|24,075,687.00|

 Note: The Company holds available-for-sale equity instruments are the stocks of Lipeng shares.
7.11 Investment property
7.11.1 Details of investment property
||||
|-|-|-|
|Carrying amount asat 1/1/2013|Increase in the currentreporting period|Decrease in thecurrent reportingperiod|
|65,304,784.89|12,088,073.13||
|33,853,515.40|8,351,262.96||
|31,451,269.49|3,736,810.17||

7.11.2 Investment property measured using the historical cost convention
2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Carrying amount as at1/1/2013|Increase in thecurrent reportingperiod|Decrease in thecurrent reportingperiod|
|65,304,784.89|12,088,073.13|0.00|
|62,660,192.89|12,088,073.13|0.00|
|2,644,592.00|0.00||
|33,853,515.40|8,351,262.96|0.00|
|33,549,464.05|8,289,248.40|0.00|
|304,051.35|62,014.56|0.00|
|0.00|0.00|0.00|
|0.00|0.00|0.00|
|0.00|0.00|0.00|
|31,451,269.49|0.00|0.00|
|29,110,728.84|||
|2,340,540.65|||

 7.11.3 The house and buildings with original book value of CNY 12,088,073.13 and accumulated depreciation of CNY 5,574,853.86 transferred into rental, since the change in use the accounting from the corresponding fixed asset transferred into investment property.
7.11.4 The accumulated depreciation and amortization of investment property amounting to CNY 2,776,409.10.
7.11.5 Investment property with pending ownership registration
|||
|-|-|
|The reason of without certificate of title|Estimated time of gonethrough the certificateof title|
|The certificate of title is in proceeding|2014|
|The certificate of title is in proceeding|2014|
|The certificate of title is in proceeding|2014|
|The certificate of title is in proceeding|2014|

 7.12 Fixed assets
7.12.1 Circumstance of fixed assets
2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||
|-|-|-|-|
|Carrying amount asat 1/1/2013|Increase in the current reportingperiod||Decrease in thecurrent reportingperiod|
|1,316,970,713.91|578,500,298.81||32,372,124.72|
|838,150,082.80|421,984,474.31||12,263,159.79|
|390,289,506.58|143,346,295.10||16,181,545.25|
|43,491,873.86|5,704,414.39||2,179,556.46|
|45,039,250.67|7,465,115.01||1,747,863.22|
||Ne wly increased|Recognition forcurrent year||
|526,393,278.88|0.00|85,018,563.38|21,587,245.19|
|303,328,231.38|0.00|33,907,681.89|5,652,969.74|
|165,209,052.09|0.00|37,657,565.53|13,378,324.25|
|22,657,180.86|0.00|7,757,369.60|1,074,266.80|
|35,198,814.55|0.00|5,695,946.36|1,481,684.40|
|790,577,435.03||||
|534,821,851.42||||
|225,080,454.49||||
|20,834,693.00||||
|9,840,436.12||||
|6,837,229.88|0.00||44,691.54|
|4,264,099.10|0.00||0.00|
|1,905,450.42|0.00||44,691.54|
|0.00|0.00||0.00|
|667,680.36|0.00||0.00|
|783,740,205.15||||
|530,557,752.32||||
|223,175,004.07||||

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Carrying amount asat 1/1/2013|Increase in the current reportingperiod|Decrease in thecurrent reportingperiod|
|20,834,693.00|||
|9,172,755.76|||

 Notes: The accumulated depreciation during the current reporting period is CNY 85,018,563.38, cost of fixed assets transferred from construction in progress during the current reporting period amounting to CNY 564,871,834.19.
7.12.2 Details of temporary idle assets as at the end of the period
|||||
|-|-|-|-|
|Cost|Accumulateddepreciation|Accumulatedimpairmentallowance|Net carryingamount|
|15,646,500.09|11,190,960.05|4,264,099.10|191,440.94|
|11,115,403.05|9,139,883.63|1,860,758.88|114,760.54|
|1,772,209.55|1,104,529.19|667,680.36|0.00|
|28,534,112.69|21,435,372.87|6,792,538.34|306,201.48|

7.12.3 Details of fixed assets let under operating leases as at the end of the period
||
|-|
|Carrying amount as at 31/12/2013|
|895,217.66|
|60,422.91|
|955,640.57|

2013 Annual Report of Anhui Gujing Distillery Company Limited 7.12.4 Fixed assets with pending ownership registration.
|||
|-|-|
|The reason of without certificate of title|Estimated time of gone through the certificate of title|
|Registration of ownership in progress|2014|
|Registration of ownership in progress|2014|
|Registration of ownership in progress|2014|
|Registration of ownership in progress|2014|
|Registration of ownership in progress|2014|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|The reason of without certificate of title|Estimated time of gone through the certificate of title|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|
|Registration of ownership in progress|Pooled registration upon industrial park completion|

2013 Annual Report of Anhui Gujing Distillery Company Limited 7.13 Construction in progress
7.13.1 Details of construction in progress
||||||
|-|-|-|-|-|
|As at 31/12/2013|||||
|Carrying amountbefore impairmentallowance|impairmentallowance|Net carrying amount|Carrying amountbefore impairmentallowance|impairmentallowance|
|14,546,665.94|0.00|14,546,665.94|134,984,829.10|0.00|
|3,385,987.81|0.00|3,385,987.81|29,315,006.20|0.00|
|203,661,402.39|0.00|203,661,402.39|147,924,721.89|0.00|
|144,262,343.13|0.00|144,262,343.13|105,640,963.16|0.00|
|0.00|0.00|0.00|1,170,773.54|0.00|
|0.00|0.00|0.00|2,148,230.00|0.00|
|0.00|0.00|0.00|1,875,172.70|0.00|
|3,723,224.99|0.00|3,723,224.99|0.00|0.00|
|7,401,304.94|0.00|7,401,304.94|0.00|0.00|
|358,010.34|0.00|358,010.34|612,584.95|0.00|
|377,338,939.54|0.00|377,338,939.54|423,672,281.54|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited 7.13.2 Movement of significant construction in progress
||||||
|-|-|-|-|-|
|Budgeted cost|Carryingamount a sat 1/1/2013|Increase duringthe currentreportingperiod|Transferred tofixed assetsduring thecurrentreporting period|Other decreaseduring thecurrentreportingperiod|
|275,000,000.00|134,984,829.10|31,290,320.21|135,369,900.00|16,358,583.37|
|102,000,000.00|29,315,006.20|667,019.99|26,596,038.38||
|586,000,000.00|147,924,721.89|162,835,726.89|107,099,046.39|0.00|
|800,000,000.00|105,640,963.16|324,195,857.72|285,574,477.75|0.00|
|1,369,805.00|1,170,773.54||1,170,773.54||
|3,068,900.00|2,148,230.00|474,761.59|2,622,991.59||
|3,050,000.00|1,875,172.70|932,929.41||2,808,102.11|
|7,987,386.68||3,723,224.99|||
|16,425,000.00||7,401,304.94|||
|7,500,000.00|612,584.95|6,632,257.08|6,438,606.54|448,225.15|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|Budgeted cost|Carryingamount a sat 1/1/2013|Increase duringthe currentreportingperiod|Transferred tofixed assetsduring thecurrentreporting period|Other decreaseduring thecurrentreportingperiod|
|1,802,401,091.68|423,672,281.54|538,153,402.82|564,871,834.19|19,614,910.63|

 (Continued)
||||||
|-|-|-|-|-|
|The cumulativeamount ofinterestcapitalized|Including: interestscapitalisedduring the currentreporting period|Capitalisationrate applicableto the currentreportingperiod %|Weight of cost todate in budgetedcost%|Stage ofcompletion%|
|0.00|0.00|0.00|61.63|65.00%|
|0.00|0.00|0.00|76.49|90.00%|
|0.00|0.00|0.00|73.82|90.00%|
|0.00|0.00|0.00|69.44|85.00%|
|0.00|0.00|0.00|85.47|100.00%|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|The cumulativeamount ofinterestcapitalized|Including: interestscapitalisedduring the currentreporting period|Capitalisationrate applicableto the currentreportingperiod %|Weight of cost todate in budgetedcost%|Stage ofcompletion%|
|0.00|0.00|0.00|85.47|100.00%|
|0.00|0.00|0.00|92.07|100.00%|
|0.00|0.00|0.00|46.61|50.00%|
|0.00|0.00|0.00|45.06|50.00%|
|0.00|0.00|0.00|96.60|95.00%|
|0.00|0.00||||

Note: Other decrease of marketing network construction is the decoration of exclusive agency, which has transferred into the Long-term deferred expenses. Other decrease of Gujing operating network has transferred into intangible assets.
7.14 Intangible assets
||||
|-|-|-|
|Carrying amount as at1/1/2013|Current yearincrease|Current yeardecrease|
|392,504,660.06|2,878,002.11|1,778,444.40|
|351,249,420.80|0.00|0.00|
|38,150,000.00|0.00|0.00|
|3,105,239.26|2,878,002.11|1,778,444.40|
|71,230,278.83|8,369,306.24|1,220,288.84|
|31,720,549.23|7,492,878.02|0.00|
|37,984,160.44|45,839.56|0.00|
|1,525,569.16|830,588.66|1,220,288.84|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Carrying amount as at1/1/2013|Current yearincrease|Current yeardecrease|
|558,155.56|0.00|558,155.56|
|0.00|0.00|0.00|
|0.00|0.00|0.00|
|558,155.56|0.00|558,155.56|
|320,716,225.67|||
|319,528,871.57|||
|165,839.56|||
|1,021,514.54|||

 Note: Amortisation recognised during the current reporting year amounted to 8,369,306.24.
7.15 Long-term deferred charge
||||||
|-|-|-|-|-|
|Carrying amountas at 1/1/2013|Current yearincrease|Amortisation forthe currentreporting period|Current yeardecrease|Carrying amount asat 31/12/ 2013|
|2,399,147.90|0.00|1,159,869.27|0.00|1,239,278.63|
|1,750,400.20|0.00|1,312,800.14|0.00|437,600.06|
|1,131,579.14|0.00|550,814.56|0.00|580,764.58|
|738,566.40|0.00|340,876.74|0.00|397,689.66|
|2,740,789.35|18,187,896.00|1,930,927.98|0.00|18,997,757.37|
|18,607,008.62||3,858,943.38|0.00|14,748,065.24|
|3,592,051.06|3,603,200.53|1,230,165.00|0.00|5,965,086.59|
|0.00|16,550,000.00|1,149,900.00|0.00|15,400,100.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|Carrying amountas at 1/1/2013|Current yearincrease|Amortisation forthe currentreporting period|Current yeardecrease|Carrying amount asat 31/12/ 2013|
|0.00|448,225.15|315,972.68|0.00|132,252.47|
|0.00|3,000,000.00|0.00|0.00|3,000,000.00|
|30,959,542.67|41,789,321.68|11,850,269.75|0.00|60,898,594.60|

7.16 Deferred tax assets and deferred tax liabilities
7.16.1 Recognized deferred tax assets and deferred tax liabilities
① Recognized deferred tax assets
||||
|-|-|-|
|Carrying amount as at 31/12/2013|||
|Deferred tax assets|Deductibletemporarydifference and taxloss carriedforwards|Deferred taxassets|
|13,036,587.74|52,146,350.87|13,203,667.18|
|2,556,999.28|10,227,997.11|1,213,430.81|
|1,697,623.76|6,790,495.04|1,709,307.47|
|202,004.95|808,019.79|174,624.28|
|10,863,852.26|43,455,409.03|2,630,830.79|
|0.00|0.00|19,837.63|
|0.00|0.00|139,538.89|
|14,733,752.38|58,935,009.49||
|281,076.50|1,124,306.00|0.00|
|43,371,896.87|173,487,587.33|19,091,237.05|

② Recognized deferred tax liabilities:
2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Carrying amount as at 12/31/2013|||
|Deferred taxliabilities|Taxable temporarydifferences|Deferred tax liabilities|
|0.00|0.00|697,845.96|
|0.00|0.00|697,845.96|

 7.16.2 Unrecognized deferred tax assets
||
|-|
|Carrying amount as at 31/12/2013|
|0.00|
|2,043.30|
|724,118.08|
|726,161.38|

 7.17 Allowance for asset impairment
|||||
|-|-|-|-|
|Carrying amountas at 1/1/2013|Current yearrecognition|Current decrease||
|||Reversal|Expanded|
|52,815,840.60|0.00|147,168.52|522,321.21|
|4,853,723.22|8,184,366.61|0.00|2,810,092.72|
|6,837,229.88|0.00|0.00|44,691.54|
|558,155.56|0.00|0.00|558,155.56|
|65,064,949.26|8,184,366.61|147,168.52|3,935,261.03|

 7.18 The restriction on ownership or use right of fixed assets
||
|-|
|Carrying amount as at31/12/2013|
|75,000,000.00|
|51,020,000.00|
|126,020,000.00|

7.19 Notes payable
2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Carrying amount as at 31/12/2013|
|235,620,000.00|
|150,000.00|
|235,770,000.00|

 Note: Notes payable due in the next reporting period amounts to 235,770,000.00.
7.20 Accounts payable
7.20.1 Detail for accounts payable
||
|-|
|Carrying amount as at 31/12/2013|
|433,467,588.20|
|9,467,811.24|
|442,935,399.44|

 7.20.2 There have no accounts payable owed to investors holding5% or more of the shares of the Company during the current reporting period.
7.20.3 The details of significant accounts payable remaining unsettled for more than one year
|||
|-|-|
|Total amount|Reason(s) forunsettlement|
|155,801.66|rest payment|
|474,696.76|rest payment|
|243,732.61|rest payment|
|129,803.70|rest payment|
|118,834.65|rest payment|
|1,122,869.38||

 7.21 Advances from customers
7.21.1 General information
||
|-|
|Carrying amount as at 31/12/2013|
|139,762,253.28|
|7,495,140.60|

2013 Annual Report of Anhui Gujing Distillery Company Limited Total 147,257,393.88 114,610,235.81 7.21.2 There have no advances from customers owed to investors holding5% or more of the shares of the Company
7.22 Employment benefits payable
||||
|-|-|-|
|Carrying amount as at1/1/2013|Current yearincrease|Current yeardecrease|
|146,956,172.31|811,686,558.31|764,326,343.66|
|0.00|27,162,267.24|27,162,267.24|
|494,015.23|71,377,494.41|69,142,719.10|
|164,605.01|16,136,469.20|15,698,187.66|
|278,916.34|45,730,633.36|44,129,384.72|
|32,409.52|5,090,682.02|4,963,538.22|
|10,270.61|2,649,899.11|2,607,123.94|
|7,813.75|1,769,810.72|1,744,484.56|
|13,601,766.37|49,171,887.50|50,891,180.37|
|17,674,628.77|16,927,729.12|12,186,806.72|
|178,726,582.68|976,325,936.58|923,709,317.09|

 7.23 Taxes and fees payable
||
|-|
|Carrying amount as at 31/12/2013|
|86,131,273.54|
|155,018,644.03|
|357,639.36|
|330,262,070.25|
|5,307,318.66|
|7,354,158.61|
|2,326,681.66|
|7,342,500.00|
|5,413,162.08|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Carrying amount as at 31/12/2013|
|599,513,448.19|

 7.24 Other payables
7.24.1 Detail for other payable
||
|-|
|Carrying amount as at 31/12/2013|
|230,462,880.23|
|143,440,572.28|
|373,903,452.51|

 7.24.2 Other payables owed to investors holding5% or more of the shares of the Company,
See Note 8.5 for detailed related party balances.
7.24.3 Details of significant other payables remaining unsettled for more than one year
|||
|-|-|
|Amount|Reason for pending settlement|
|2,265,300.00|Rest payment of project|
|1,078,000.00|Deposit|
|3,343,300.00||

7.24.4 The explanation of the significant other payables
||
|-|
|Carrying amount as at31/12/2013|
|2,412,069.30|
|2,265,300.00|
|1,558,480.00|
|1,430,581.01|
|1,318,000.00|
|8,984,430.31|

7.25 Other current liabilities
|||
|-|-|
|Contents|Carrying amount as at 31/12/2013|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|Contents|Carrying amount as at 31/12/2013|
|government grant|3,112,595.04|
||3,112,595.04|

 The details of deferred income:
||
|-|
|Carrying amount as at31/12/2013|
|153,000.00|
|60,000.00|
|650,000.04|
|531,623.52|
|534,221.52|
|39,999.96|
|30,000.00|
|0.00|
|1,113,750.00|
|3,112,595.04|

 7.26 Other non-current liabilities
|||
|-|-|
|Contents|Carrying amount as at 31/12/2013|
|government grant|40,342,813.99|
||40,342,813.99|

 The details of deferred income:
|||||||
|-|-|-|-|-|-|
|Carryingamount as at1/1/2013|Recognisedduring currentyear|Amountrecognised asnon-operatingincome|Othermovement|Carryingamount as at31/12/2013|Related toasset orincome|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||
|-|-|-|-|-|-|
|Carryingamount as at1/1/2013|Recognisedduring currentyear|Amountrecognised asnon-operatingincome|Othermovement|Carryingamount as at31/12/2013|Related toasset orincome|
|777,750.00|||-153,000.00|624,750.00|Relatedto asset|
|360,000.00|||-60,000.00|300,000.00|Related toasset|
|1,300,000.16|||-650,000.04|650,000.12|Related toasset|
|2,592,451.00|||-531,623.52|2,060,827.48|Related toasset|
|3,087,038.50|||-534,221.52|2,552,816.98|Related toasset|
|83,333.37|||-39,999.96|43,333.41|Related toasset|
|202,500.00|||-30,000.00|172,500.00|Related toasset|
||8,910,000.00|371,250.00|-1,113,750.00|7,425,000.00|Related toasset|
||26,513,586.00|||26,513,586.00|Related toasset|
|8,403,073.03|35,423,586.00|371,250.00|-3,112,595.04|40,342,813.99||

7.27 Share capital
2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||
|-|-|-|-|-|-|-|-|
|Amount as at1/1/2013||Movements during the current reporting period (+/-)||||||
|Total amount|Percentage %|Newsharesissue|Bonusissue|Conversionfromreserves|Others|Subtotal|Total amount|
|900|0.00||||||900|
|900|0.00||||||900|
|900|0.00||||||900|
|383,599,100|76.17||||||383,599,100|
|120,000,000|23.83||||||120,000,000|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||||||
|-|-|-|-|-|-|-|-|
|Amount as at1/1/2013||Movements during the current reporting period (+/-)||||||
|Total amount|Percentage %|Newsharesissue|Bonusissue|Conversionfromreserves|Others|Subtotal|Total amount|
|503,599,100|100.00||||||503,599,100|
|503,600,000|100.00||||||503,600,000|

 7.28 Capital reserves
||||
|-|-|-|
|Amount as at1/1/2013|Current yearincrease|Current yeardecrease|
|1,262,552,456.05|||
|34,479,575.02||2,936,767.38|
|1,297,032,031.07||2,936,767.38|

 Note: Decrease of other capital reserves for the current period is due to the changes in fair value of available-for-sale financial assets.
7.29 Surplus reserves
||||
|-|-|-|
|Amount as at1/1/2013|Current yearincrease|Current yeardecrease|
|218,736,964.73|38,165,295.54||
|218,736,964.73|38,165,295.54||

 Note: In accordance with the Company Lows and regulations in PRC, Our firm transferred10% of a to a statutory surplus reserve until accumulated amount of such reserve balance reaches50% of theCompany’s registered capital.
After the company draws the statutory surplus reserve, it may, upon a resolution made by the shareholders' meeting or theshareholders’ assembly, draw a discretionary surplus reserve from the after-tax profits. Discretionary surplus reserve as approved by the shareholders in our shareholders' meeting can be used to make good previousyears’ losses or to increase the capital.
7.30 Retained earnings
7.30.1 Movement of retained earnings
|||
|-|-|
|Current year|Prior year|
|1,356,119,112.84|815,506,493.66|
|0.00|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|Current year|Prior year|
|1,356,119,112.84|815,506,493.66|
|622,004,915.79|725,589,286.31|
||0.00|
||0.00|
|38,165,295.54|71,666,667.13|
||0.00|
|251,800,000.00|113,310,000.00|
||0.00|
|1,688,158,733.09|1,356,119,112.84|

7.30.2 Explanation of profit distribution
In accordance with the‘2012 Profit DistributionPlan’ approved by annual general meeting of shareholders on 31st May 2013, our firm distribute cash dividend for CNY 0.50 per share. As the number of issued share is 503,600,000, the distributed cash dividend for the current reporting year is CNY 251,800,000.00.
7.31 Revenue and operating costs
7.31.1 General information
||
|-|
|Current year|
|4,540,933,231.07|
|39,642,423.64|
|4,580,575,654.71|
|1,348,373,880.54|
|35,763,210.54|
|1,384,137,091.08|

 7.31.2 Revenues from principal operating activities by products
||||
|-|-|-|
|Current year|||
|operating revenues|operating costs|operating revenues|
|4,438,676,469.44|1,285,722,076.73|4,045,542,438.97|
|72,754,798.07|38,970,804.86|71,252,072.61|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Current year|||
|operating revenues|operating costs|operating revenues|
|29,501,963.56|23,680,998.95|31,902,522.36|
|4,540,933,231.07|1,348,373,880.54|4,148,697,033.94|

 7.31.3 Principal operating activities by territories
||||
|-|-|-|
|Current year|||
|operating revenues|operating costs|operating revenues|
|388,456,462.44|119,315,278.12|568,399,645.44|
|3,529,341,109.32|1,037,763,211.12|3,148,329,457.17|
|621,052,378.55|190,757,638.09|426,771,503.96|
|2,083,280.76|537,753.21|5,196,427.37|
|4,540,933,231.07|1,348,373,880.54|4,148,697,033.94|

 7.31.4 Operating income from top five customers
||
|-|
|Operating income|
|1,020,515,628.42|
|852,756,890.47|

 7.32 Business tax and surcharges
||
|-|
|Current year|
|520,704,303.63|
|5,603,326.91|
|104,863,553.22|
|0.00|
|631,171,183.76|

 Note: The provision standards for taxes and surcharges refer to Note 5 Taxation.
7.33 Sales expenses
Items Current year Prior year
2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|115,970,094.07|
|61,232,591.69|
|470,563,008.53|
|22,706,743.01|
|245,177,852.07|
|103,000,160.58|
|251,778,479.07|
|9,121,648.00|
|1,279,550,577.02|

 7.34 General and administrative expenses
||
|-|
|Current year|
|318,513,551.08|
|38,272,593.59|
|13,705,921.98|
|12,187,698.65|
|17,238,672.59|
|8,369,306.24|
|10,627,786.12|
|40,506,124.98|
|4,719,007.39|
|6,029,524.90|
|40,015,709.81|
|510,185,897.33|

 7.35 Financial costs
||
|-|
|Current year|
|0.00|
|46,871,321.29|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|0.00|
|-361,052.85|
|0.00|
|220,397.08|
|-47,011,977.06|

 7.36 Impairment loss on assets
||
|-|
|Current year|
|-147,168.52|
|8,184,366.61|
|0.00|
|8,037,198.09|

 7.37 Income of investment
||
|-|
|Current year|
|581,538.48|
|9,468,876.71|
|10,050,415.19|

 7.38 Non-operating income
|||
|-|-|
|Current year|Prior year|
|734,264.74|976,430.18|
|734,264.74|976,430.18|
|3,946,591.06|3,603,355.00|
|15,744,684.78|5,599,396.91|
|5,734,379.04|5,618,885.72|
|3,510.03|927,341.44|
|2,491,500.11|2,268,290.90|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||
|-|-|
|Current year|Prior year|
|2,942,912.99|2,978,377.73|
|31,597,842.75|21,972,077.88|

 Details of government grant:
|||
|-|-|
|Current year|Prior year|
|3,946,591.06|3,603,355.00|
|3,946,591.06|3,603,355.00|

7.39 Non-operating expenses
|||
|-|-|
|Current year|Prior year|
|2,120,610.71|511,271.68|
|2,120,610.71|511,271.68|
|8,645.01|672,811.62|
|2,237.78|434,979.78|
|1,882,810.00|307,789.45|
|0.00|100,000.00|
|228,449.53|1,419,843.56|
|4,242,753.03|3,446,696.09|

 7.40 Income tax expenses
||
|-|
|Current year|
|253,905,856.93|
|-23,999,583.32|
|229,906,273.61|

 7.41 Computation of basic earnings per share and diluted earnings per share
Basic earnings per share are calculated by dividing net profit attributable to shareholders of the parent by the weighted
average number of issued shares. The start date of ordinary shares issued in the period for the purpose of calculation of basic
earnings per share is the date on which subscription becomes receivable per contract of issuance.
2013 Annual Report of Anhui Gujing Distillery Company Limited Diluted earnings per share is calculated by dividing the results of adjustment of net profit attributable to shareholders of the parent for the interest expense for the dilutive convertible instruments, the expected gain or expense at the time of conversion and their related income tax implication by the sum of the weighted average number of issued shares for calculation of basic earnings per shares and the weighted average number of potential shares from convertible instruments.
For the purpose of calculation of the weighted average number of potential shares from convertible instruments, the conversion date for dilutive convertible instruments issued in prior period and dilutive convertible instruments issued in the period is the 1st date of the period and the issue date respectively.
7.41.1 General disclosure
||||
|-|-|-|
|Current year|||
|Basic EPS|Diluted EPS|Basic EPS|
|1.24|1.24|1.44|
|1.18|1.18|1.41|

 7.41.2 Calculation
During the reporting period, the Company does not have dilutive potential ordinary shares; therefore, diluted earnings per share are equal to the basic earnings per share.
① Net profit attributable for ordinary shareholders for the calculation of basic EPS
||
|-|
|Current year|
|622,004,915.79|
|622,004,915.79|
|0.00|
|593,950,787.12|
|593,950,787.12|
|0.00|

②When calculating the basic earnings per share, the denominator is the weighted average number of outstanding ordinary shares, calculated as follows
||
|-|
|Current year|
|503,600,000.00|
|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|0.00|
|503,600,000.00|

 7.42 Other comprehensive income
||
|-|
|Current year|
|-3,915,689.84|
|-978,922.46|
|-2,936,767.38|

 7.43 Notes to the statement of cash flows
7.43.1 Other cash received relating to operating activities
||
|-|
|Current year|
|16,780,231.00|
|3,946,591.06|
|54,125,179.63|
|24,421,976.81|
|200,000,000.00|
|299,273,978.50|

 7.43.2 Other cash payments relating to operating activities
||
|-|
|Current year|
|883,634,258.37|
|75,000,000.00|
|2,333,894.39|
|960,968,152.76|

 7.43.3 Other cash received relating to investing activities
||
|-|
|Current year|
|35,423,586.00|
|35,423,586.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited 7.44 Supplementary information to the statement of cash flows
7.44.1 Reconciliation of cash flows from operating activities to net profit
||
|-|
|Current year|
|622,004,915.79|
|4,704,784.16|
|85,018,563.38|
|2,776,409.10|
|8,369,306.24|
|11,850,269.75|
|1,386,345.97|
|8,645.01|
|0.00|
|0.00|
|-10,050,415.19|
|-24,280,659.82|
|-697,845.96|
|-298,007,912.34|
|21,439,577.42|
|216,224,871.91|
|-2,491,500.11|
|638,255,355.31|
|0.00|
|0.00|
|0.00|
|1,306,930,710.96|
|2,409,650,352.09|
|0.00|
|0.00|
|-1,102,719,641.13|

7.44.2 Composition of cash and cash equivalents
2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|1,306,930,710.96|
|251,743.25|
|1,306,636,737.50|
|42,230.21|
|0.00|
|1,306,930,710.96|

 Note 8: Related parties and related party transaction
8.1 Details of the parent
|||||
|-|-|-|-|
|Relationship|Type ofincorporation|Place ofregistration|Legalrepresentative|
|Controllingshareholders|Limited liability company|Anhui|Yulin|

 (Continued)
|||||
|-|-|-|-|
|Registeredcapital|Shareholdingin the Company %|Voting rightin the Company %|Ultimate controllerof the Company|
|353,380,000.00|53.89|53.89|Anhui Province Bozhou Citythe People’s Government|

8.2 Subsidiaries
See Note 6.1 Subsidiaries.
8.3 Other related parties
||
|-|
|Relationship to the Company|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Relationship to the Company|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|
|Affiliate of the actual controller and controlling shareholder|

 8.4 Related party transactions
8.4.1 Purchase or sale of goods and rendering or acceptance of service
8.4.1.1 Goods purchase and service acceptance
||||||
|-|-|-|-|-|
|Transaction|Pricing principle|Current year|||
|||Amount|% in totaltransaction ofthe samecategory|Amount|
|Procurement alcohol|Market price|5,570,610.49|0.35|46,869,135.05|
|Accept catering andaccommodationservice|Market price|965,127.00|1.46|1,419,862.30|
|Procurementemployee welfaresupplies|Market price|726,084.00|2.67|0.00|
|Procurementemployee welfaresupplies|Market price|2,522,565.71|9.29|0.00|
|||9,784,387.20||48,288,997.35|

2013 Annual Report of Anhui Gujing Distillery Company Limited 8.4.1.2 Sales of goods and rendering of services
||||||
|-|-|-|-|-|
|Transaction|Pricing principle|Current year|Prior year||
|||Amount|% in total transaction ofthe same category|Amount|
|Sales of mini materials|Market price|87,932.56|0.22|33,035.63|
|Provide catering services|Market price|63,206.00|0.09|237,582.16|
|Sales of distilled spirit|Market price|141,509.43|0.00|0.00|
|Sales of distilled spirit|Market price|228,153.84|0.00|136,538.47|
|Provide advertising service|Market price|0.00|0.00|8,100.00|
|Sales of distilled spirit|Market price|23,076.92|0.00|81,461.54|
|Sales of mini materialss|Market price|27076.92|0.07|0.00|
|Sales of distilled spirit|Market price|0.00|0.00|7,692.31|
|Sales of distilled spirit|Market price|287,230.78|0.00|70,769.24|
|Sales of distilled spirit|Market price|48,923.07|0.00|110,153.83|
|Sales of distilled spirit|Market price|28,461.54|0.00|149,384.62|
|Provide advertising service|Market price|4716.98|0.00|0.00|
|Provide catering services|Market price|153,057.27|0.21|0.00|
|Sales of distilled spirit|Market price|84,692.31|0.00|75,538.46|
|Sales of distilled spirit|Market price|13,846.14|0.00|8,461.53|
|Sales of distilled spirit|Market price|5,384.61|0.00|0.00|
|Sales of distilled spirit|Market price|18,384.62|0.00|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|Transaction|Pricing principle|Current year|Prior year||
|||Amount|% in total transaction ofthe same category|Amount|
|Sales of mini materials|Market price|12,307.69|0.03|0.00|
|Sales of distilled spirit|Market price|38,461.54|0.00|0.00|
|Sales of mini materials|Market price|17,958.63|0.05|0.00|
|Sales of distilled spirit|Market price|18,923.09|0.00|0.00|
|||1,303,303.94||918,717.79|

2013 Annual Report of Anhui Gujing Distillery Company Limited 8.4.2 Lease between related parties
||||||
|-|-|-|-|-|
|Leasee|Leased asset|Start date|Expiry date|Pricingprinciple|
|The Company|Buildings and constructions|1/6/2010|31/5/2020|Market price|
|Gujing Hotel|Buildings and constructions|1/6/2010|31/5/2020|Market price|

 8.5 Related party balance
8.5.1 Payables owed to and advances received from related parties
||
|-|
|Carrying amount as at 31/12/2013|
|0.00|
|0.00|
|0.00|
|77,997.24|
|0.00|
|102,000.00|
|0.00|
|179,997.24|

 Note 9: Contingencies
No contingency is subject to disclosure as at 31 December 2013.
Note 10: Commitments
On the reporting date, the non-cancellable operating lease contracts which were signed by the Group are as following:
||
|-|
|Carrying amount as at 31/12/2013|
|2,300,000.00|
|2,300,000.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Carrying amount as at 31/12/2013|
|2,300,000.00|
|30,858,333.33|
|37,758,333.33|

 Note 11: Post reporting date events
The Proposal for Profit Appropriation for the Year ended 31 December 2013 proposing cash dividend amounting to CNY 3.50 (gross) per 10 shares for the 503.60 million shares outstanding as at the reporting date which in total amounts to CNY 176.26 million was approved by the 21th Meeting of the 6th Term of Board of Directors of the Company held on 17th April 2014; the Proposal was pending the approval of the General Meeting of the Company.
Except events mentioned above, there is no other significant subsequent events as at the financial statement date.
Note 12: Notes to the separate financial statements
12.1 Accounts receivable
12.1.1 Classification
Balance as at 31/12/2013
||||
|-|-|-|
|Carrying amount before impairmentallowance|||
|Amount|% of total|Amount|
|0.00|0.00|0.00|
|1,297,542.13|68.82|0.00|
|587,771.00|31.18|587,771.00|
|1,885,313.13|100.00|587,771.00|
|0.00|0.00|0.00|
|1,885,313.13|100.00|587,771.00|

(Continued)
Items Balance as at 1/1/2013
2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|Carrying amount before impairmentallowance|||
|Amount|% of total|Amount|
|0.00|0.00|0.00|
|1,293,202.89|68.75|0.00|
|587,771.00|31.25|587,771.00|
|1,880,973.89|100.00|587,771.00|
|0.00|0.00|0.00|
|1,880,973.89|100.00|587,771.00|

 12.1.2 Disclosure by age
||||
|-|-|-|
|Balance as at 31/12/2013|||
|Amount|% of total|Amount|
|1,297,542.13|68.82|1,293,202.89|
|1,297,542.13|68.82|1,293,202.89|
|0.00|0.00|0.00|
|0.00|0.00|0.00|
|0.00|0.00|0.00|
|587,771.00|31.18|587,771.00|
|1,885,313.13|100.00|1,880,973.89|

 12.1.3 Allowance for bad debt
Accounts receivable using the age analysis method for measurement of allowance for bad debt:
||||||
|-|-|-|-|-|
|Balance as at 31/12/2013|||||
|Carrying amount||Allowance forbad debt|Carrying amount||
|Amount|% of total||Amount|% of total|
|0.00|0.00|0.00|0.00|0.00|
|0.00|0.00|0.00|0.00|0.00|
|0.00|0.00|0.00|0.00|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||||
|-|-|-|-|-|
|0.00|0.00|0.00|0.00|0.00|
|0.00|0.00|0.00|0.00|0.00|
|587,771.00|100.00|587,771.00|587,771.00|100.00|
|587,771.00|100.00|587,771.00|587,771.00|100.00|

 12.1.4 There has no major allowance of accounts receivable impairment has been recovered/received during current reporting period. 12.1.5 There has no accounts receivable written off during the current reporting period.
12.1.6 There has no accounts receivable owed by entities which own5% or more of the shares of the Company during the current reporting period.
12.1.7 Details for top five account receivables.
||||
|-|-|-|
|Relationship with thecompany|Amount|Age|
|Wholly-owned subsidiary|1,297,542.13|Within 6 months|
||1,297,542.13||

 12.1.8 Account receivables from related party
|||
|-|-|
|Relationship with thecompany|Amount|
|Wholly-owned subsidiary|1,297,542.13|
||1,297,542.13|

 12.2 Other receivable
12.2.1 Disclosure by classification
Balance as at 31/12/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|51,109,940.55|26.78|51,109,940.55|
|136,303,423.36|71.41|0.00|
|3,453,495.00|1.81|102,354.83|
|139,756,918.36|73.22|102,354.83|

2013 Annual Report of Anhui Gujing Distillery Company Limited Balance as at 31/12/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|0.00|0.00|0.00|
|190,866,858.91|100.00|51,212,295.38|

 (Continued)
Balance as at 1/1/2013
||||
|-|-|-|
|Carrying amount|||
|Amount|% of total|Amount|
|51,109,940.55|23.97|51,109,940.55|
|155,455,734.86|72.91|0.00|
|6,659,008.94|3.12|146,921.11|
|162,114,743.80|76.03|146,921.11|
|0.00|0.00|0.00|
|213,224,684.35|100.00|51,256,861.66|

 12.2.2 Disclosure by age:
||||
|-|-|-|
|Balance as at 31/12/2013|||
|Amount|% of total|Amount|
|13,508,326.03|7.08|161,623,896.90|
|13,212,905.57|6.93|161,082,945.80|
|295,420.46|0.15|540,951.10|
|126,223,267.93|66.13|457,055.02|
|23,324.40|0.01|31,791.88|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||||
|-|-|-|
|51,111,940.55|26.78|51,111,940.55|
|190,866,858.91|100.00|213,224,684.35|

 12.2.3 Allowance for bad debt:
① Other receivables of individual significance and subject to individual impairment assessment
||||
|-|-|-|
|Carryingamount|Allowance forbad debt|Rate ofallowance(%)|
|12,223,000.00|12,223,000.00|100.00|
|29,502,438.53|29,502,438.53|100.00|
|9,384,502.02|9,384,502.02|100.00|
|51,109,940.55|51,109,940.55|100.00|

② Accounts receivable using the age analysis method for measurement of impairment allowances:
Accounts receivable using the age analysis method for measurement of impairment allowances:
||||||
|-|-|-|-|-|
|Balance as at 31/12/2013|||||
|Carrying amount||Allowance for baddebt|Carrying amount||
|Amount|% of total||Amount|% of total|
|2,954,902.67|85.56|41,365.84|6,168,162.04|92.63|
|2,659,482.21|77.01|26,594.82|5,627,210.94|84.51|
|295,420.46|8.55|14,771.02|540,951.10|8.12|
|473,267.93|13.70|47,326.79|457,055.02|6.86|
|23,324.40|0.68|11,662.20|31,791.88|0.48|
|2,000.00|0.06|2,000.00|2,000.00|0.03|
|3,453,495.00|100.00|102,354.83|6,659,008.94|100.00|

12.2.4 There has no major impairment allowance of accounts receivable has been recovered/received during current reporting period.
12.2.5 There has no accounts receivable owed by entities which own5% or more of the shares of the Company during the current reporting
2013 Annual Report of Anhui Gujing Distillery Company Limited period.
12.2.6 Details of top five other receivable:
||||
|-|-|-|
|Relationship with theCompany|Carrying amountas at 31/12/2013|Age|
|Subsidiary|135,800,000.00|Within 2 years|
|Non-related party|12,223,000.00|Over 3 years|
|Non-related party|29,502,438.53|Over 3 years|
|Non-related party|9,384,502.02|Over 3 years|
|Non-related party|508,546.97|Within 6 months|
||187,418,487.52||

 12.2.7 Other receivables from related parties
|||
|-|-|
|Relationship with the company|Carrying amount as at31/12/2013|
|Subsidiary|135,800,000.00|
|Subsidiary|503,423.36|
||136,303,423.36|

 12.3 Long-term equity investments
12.3.1 Disclosure by classification
||||
|-|-|-|
|Carrying amountas at 1/1/2013|Current yearincrease|Current yeardecrease|
|258,089,408.32|50,000,000.00|0.00|
|0.00|0.00|0.00|
|258,089,408.32|50,000,000.00|0.00|

12.3.2 Details of long-term equity investments
|||||
|-|-|-|-|
|Measurementmethod|Cost of investment|Carrying amountas at 1/1/2013|Current yearmovement|
|Cost method|84,864,497.89|84,864,497.89|0.00|

2013 Annual Report of Anhui Gujing Distillery Company Limited
|||||
|-|-|-|-|
|Cost method|85,793,666.00|85,793,666.00|0.00|
|Cost method|49,906,854.63|49,906,854.63|0.00|
|Cost method|648,646.80|648,646.80|0.00|
|Cost method|6,875,743.00|6,875,743.00|0.00|
|Cost method|30,000,000.00|30,000,000.00|0.00|
|Cost method|50,000,000.00|0.00|50,000,000.00|
||308,089,408.32|258,089,408.32|50,000,000.00|

 (Continued)
||||||
|-|-|-|-|-|
|Shareholding(%)|Voting right(%)|Reason for disagreementbetween shareholding andvoting right|Impairmentallowance|Impairmentallowancerecognised incurrent year|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|
|100.00|100.00||0.00|0.00|

 12.4 Revenue and operating costs
12.4.1 General information
||
|-|
|Current year|
|2,480,700,170.78|
|48,849,683.23|
|2,529,549,854.01|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|1,362,763,770.06|
|35,573,988.46|
|1,398,337,758.52|

 12.4.2 Revenues from principal operating activities by products
||||
|-|-|-|
|Current year|||
|operating revenues|operating costs|operating revenues|
|2,480,700,170.78|1,362,763,770.06|2,481,871,826.30|
|2,480,700,170.78|1,362,763,770.06|2,481,871,826.30|

 12.4.3 Principal operating activities by territories
||||
|-|-|-|
|Current year|||
|operating revenues|operating costs|operating revenues|
|2,478,616,890.02|1,362,226,016.85|2,476,675,398.93|
|2,083,280.76|537,753.21|5,196,427.37|
|2,480,700,170.78|1,362,763,770.06|2,481,871,826.30|

 12.4.4 Operating income from top five customers
||
|-|
|Operating income|
|2,528,239,254.17|
|2,512,094,975.22|

 12.5 Investment income
12.5.1 Detail of investment income
||
|-|
|Current year|
|590,896,184.37|
|581,538.48|
|9,468,876.71|
|600,946,599.56|

2013 Annual Report of Anhui Gujing Distillery Company Limited 12.5.2 Income from long-term equity investments measured at cost
||
|-|
|Current year|
|573,135,439.77|
|0.00|
|9,565,908.70|
|8,194,835.90|
|590,896,184.37|

 12.6 Supplementary information to the statement of cash flows
||
|-|
|Current year|
|659,542,427.96|
|4,382,360.30|
|61,644,382.49|
|2,635,768.14|
|5,105,005.25|
|9,645,778.31|
|804,646.58|
|0.00|
|0.00|
|0.00|
|-600,946,599.56|
|-15,598,791.69|
|-697,845.96|
|-292,750,911.43|
|86,075,298.70|
|17,398,934.37|
|-2,370,095.04|
|-65,129,641.58|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|1,040,360,357.51|
|2,290,346,607.43|
|0.00|
|0.00|
|-1,249,986,249.92|

 Note 13: Supplementary information
13.1 Non-recurring profit and loss
||
|-|
|Current year|
|-1,394,990.98|
|6,438,091.17|

2013 Annual Report of Anhui Gujing Distillery Company Limited
||
|-|
|Current year|
|10,050,415.19|
|22,311,989.53|
|37,405,504.91|
|9,351,376.24|
|28,054,128.67|

 Note: Positive amounts and negative amounts in non-recurring categories mean income and expense or loss respectively.
The Company recognised non-recurring categories of activities in accordance with the Explanatory Announcement regarding Information Disclosure by Publicly Listed Company No. 1 - Non-recurring Profit and Loss (Zhengjianhui Gonggao[2008] No.43).
13.2 Rate of return on net assets and earnings per share
|||
|-|-|
|Weighted average rate ofRONA||
||Basic EPS|
|17.47%|1.24|
|16.68%|1.18|

Note: The calculation of Basic EPS and Diluted EPS please see Note 7.41.
13.3 Significant change of major element of the consolidated financial statements
2013 Annual Report of Anhui Gujing Distillery Company Limited 13.3.1 Monetary funds amounting to CNY 1,381,930,710.96 as at the reporting date:47.05% decrease from last year mainly resulted from investment of industrial park and purchase of bank financial products.
13.3.2 Interests receivable amounting to CNY 0.00 as at the reporting date:100% decrease from last year mainly resulted that all interests receivable carried forward from last year has received during this year.
13.3.3 Other receivables amounting to CNY 6,296,326.20 as at the reporting date:70.80% decrease from last year mainly resulted that main part of other receivables carried forward from last year has received during this year.
13.3.4 Inventories amounting to CNY 1,075,033,137.30 as at the reporting date:37.4% increase from last year mainly resulted from the increase of storage volume of base liquor in industrial park and the increase of work-in-progress.
13.3.5 Fixed assets amounting to CNY 1,266,481,752.59 as at the reporting date:61.59% increase from last year mainly resulted from the completion of industrial park construction, which has transferred from construction in progress.
13.3.6 Long-term deferred charge amounting to CNY 60,898,594.6 as at the reporting date:96.70% increase from last year mainly resulted from the completion of market network– exclusive shop decoration project, which has transferred from construction in progress.
13.3.7 Deferred tax assets amounting to CNY 43,371,896.87 as at the reporting date:127.18% increase from last year mainly resulted from the increase of government grants (related to assets) and accrued expenses, and therefore, the current period tax increased and deferred tax asset has been recognised.
13.3.8 Other current liabilities amounting to CNY3,112,595.04 as at the reporting date:46.8% increase from last year mainly resulted that government grants received during this year would be amortized from next year.
13.3.9 Deferred tax liability amounting to CNY 0.00 as at the reporting date:100% decrease from last year mainly resulted from decrease of taxable temporary differences, which in line with the changes in fair value of available-for-sale financial assets.
13.3.10. Other non-current liabilities amounting to CNY 40,342,813.99 as at reporting date:380.10% increase from last year mainly resulted from recognition of assets related government grant (received during this year) as deferred income.
13.3.11 Financial costs amounting to CNY -47,011,977.06 for the period:46.84% increase from last year mainly resulted from buying break-even financial products, in order to decrease the fixed deposit and interest income decreased proportionately
13.3.12 Impairment loss of assets amounting to CNY 8,037,198.09 as at reporting date:186.6% increase from last year mainly resulted from the increase of allowance of inventory impairments for the current year.
13.3.13 Non-operating income amounting to CNY 31,597,842.75 for the period:43.81% increase from last year mainly resulted from the increase of penalty for non-compliance of cross-regional sales rules since the company has strengthened its distributor management system.
2013 Annual Report of Anhui Gujing Distillery Company Limited Section XI. Documents Available for Reference
1. The accounting statements with personal signatures and seals of Legal Representative, Chief Accountant and the person in charge of the accounting agency (Accountant in charge).
2. The original of theAuditor’s Report with the seals of the CPA firm, as well as the signatures and seals of the registered accountants.
3. The originals of all the documents and public notices disclosed on China Securities Journal and Ta Kung Pao by the Company during the reporting period.
4. Other relevant documents.