Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report Yantai Changyu Pioneer Wine Co. Ltd.
2015 Annual Report
2016Final01
April, 2016
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report I. Important Notice, Contents and Definition
The Board ofDirectors，the Board ofSupervisors，directors, supervisors& senior managers of the Company collectively and individually accept full responsibility for thetruthfulness， accuracy and completeness of the information contained in this report and confirm that to the best of their knowledge and belief there are no unfaithful facts, significant omissions or misleadingstatements.
Mr. Sun Liqiang (Chairman of the Company), Mr.Leng Bin (Chief Financial Officer) and Mr. Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the financialreportintheannualreport.
Alldirectors personally attendedthe meetingfor deliberatingtheannualreport.
1. The Company may face significant risks in production and operation, please refer to “8.expectation for theCompany’s future development” sector of “5. Risks likely to occur” part in the chapter four named “Board ofDirectors’ Report”. We advise investors to read carefully and pay attention to the investment risks. 2. The business plan and target in the report do not represent the earnings forecast of the listed company in 2016, which depends on several factors including the changes of market conditions and the effort extent of managing teametc.witha greatuncertainty,sothe investorsshouldbe ina specialattention.
TheCompany’s preliminary scheme of profit distribution deliberated and passed by the board of the directors is as following: “Based on the Company total 685,464,000 shares on 31 December2015，we plan to pay CNY 5 in cash as dividends for every 10 shares (including tax) to theCompany’s all shareholders, send 0 bonus(including tax) and capital reserve will notbe transferredtoequity.”
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report Contents
I、ImportantNotice，Contents and Definition..............................................................................2II、BriefIntroduction forthe Company and MainFinancialIndicators ..................................5III、Summaryof theCompany’s Businesses ..............................................................................10IV、Management DiscussionandAnalysis .................................................................................13V、Majorissues .............................................................................................................................33VI、Changes inShares andtheShareholders’ Situation ...........................................................50VII、RelatedSituation of PreferredShares ................................................................................59VIII、 Situation forDirectors,Supervisors,Senior ManagementandStaffs...........................60IX、 Corporate Governance ........................................................................................................70X、 Financial Report ....................................................................................................................80XI、ReferenceDocuments............................................................................................................180
Yantai Changyu Pioneer Wine Co. Ltd. 2015 Annual Report Definition
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|DefinitionItem|Refersto|DefinitionContent|
|Company/The Company|Refersto|YantaiChangyuPioneerWine Co. Ltd.|
|ChangyuGroup/ControllingShareholder|Refersto|YantaiChangyuGroupCo.Ltd.|
|CSRC|Refersto|China SecuritiesRegulatoryCommission|
|SSE|Refersto|ShenzhenStockExchange|
|DeloitteHua Yong|Refersto|Deloitte Hua Yong Certified Public AccountantsCo.,LTD (specialgeneral partnership)|
|CNY|Refersto|ChineseYuan|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. II. Brief Introduction for the Company and Main Financial Indicators1.Company’sinformation
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|Abbreviationof theShares:|ChangyuA、ChangyuB|Code number of theShares|000869、200869|
|Abbreviationof theSharesafteralteration(if have)|_|||
|Placeoflistingof theShares|ShenzhenStockExchange|||
|LegalName inChinese|烟台张裕葡萄酿酒股份有限公司|||
|Abbreviationof Chinesename|张裕|||
|LegalName inEnglish(ifhave)|YANTAI CHANGYUPIONEER WINECOMPANYLIMITED|||
|Abbreviationof English name(ifhave)|CHANGYU|||
|LegalRepresentative|Mr.SunLiqiang|||
|RegisteredAddress|56Dama Road,Yantai,Shandong,China|||
|PostalCode|264000|||
|OfficeAddress|56Dama Road,Yantai,Shandong,China|||
|PostalCode|264000|||
|Website|http://www.changyu.com.cn|||
|E-mail|webmaster@changyu.com.cn|||

2.Contactpersonandinformation
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||Secretarytothe BoardofDirectors|AuthorizedRepresentativeof theSecuritiesAffairs|
|Name|Mr.QuWeimin|Mr.Li Tingguo|
|Address|56Dama Road,Yantai,Shandong,China|56Dama Road,Yantai,Shandong,China|
|Tel|0086-535-6633656|0086-535-6633656|
|Fax|0086-535-6633639|0086-535-6633639|
|E-mail|quwm@changyu.com.cn|stock@changyu.com.cn|

 3.Information disclosure andfilinglocation
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|The newspapersinwhichtheCompany’s information isdisclosed|“ChinaSecuritiesNewspaper” , “SecuritiesTimes” and“HongKongCommercialDaily”|
|WebSiteassignedbyCSRCtocarrytheannualreport|http://www.cninfo.com.cn|
|Filinglocation|Boardof Directors’ Office oftheCompany,|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|56Dama Road,Yantai,Shandong|

4.Registrationchanges
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|OrganizationCode|26710003-5|
|Changes for the mainbusiness of the Companysinceitwas listed(ifhave)|On 18th September 1997 the Company’s operating scope was theproduction, processing and sales of wine, distilled liquor, healthyliquor, fruit liquor, non-alcohol beverages, fruit jam, packingmaterialsandwinemakingmachines.On 17th April 2008, after the deliberation of 2007 shareholders’meeting, the Company’s operating scope is amended to “theCompany, legally registered, is in business of production, processingand sales of wine, distilled liquor, medicated liquor, fruit liquor,non-alcohol beverages, fruit jam, packing materials and winemakingmachines;licensedimport andexport.”On 12th May 2010, after the deliberation of 2009 shareholders’meeting, the Company revised its operating scope to “the Company,legally registered, is in business of production, processing and salesof wine, distilled liquor, medicated liquor, fruit liquor, non-alcoholbeverages, fruit jam, packing materials and its products, winemakingmachines; licensed import and export; external investments accordingtogovernmentalpolicies.|
|Changes for all previouscontrollingshareholders(ifhave)|No.|

5.Other documents
The accountantappointedbythe Company
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|Name|Deloitte Hua Yong Certified Public Accountants Co., LTD(specialgeneralpartnership)|
|Address|No.1EastChang'anAvenue,DongchengDistrict,Beijing|
|Name ofsignatoryaccountants|XuZhaohui,Li Xu|

The sponsor agency the Company appointed to perform the duty of continuous supervision duringthe reportperiod
□Available (cid:53)Not available
The financial adviser the Company appointed to perform the duty of continuous supervision duringthe reportperiod
□Available (cid:53)Not available
6. Keyaccountingdataandfinancial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previousfiscalyearsbecauseof changesofaccountingpolicyand/oraccountingerrors.
□Yes (cid:53)No
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|Item|2015|2014|More or lessthanLastyear(%)|2013|
|Businessrevenue|4,649,722,368.00|4,156,727,525.00|11.86%|4,320,948,572.00|
|Net profit attributedto the shareholdersof the listedcompany|1,030,073,860.00|977,707,711.00|5.36%|1,048,185,927.00|
|Net profit attributedto the shareholdersof the listedcompany afterdeducting theirregular profit andloss|993,268,823.00|950,191,379.00|4.53%|1,017,348,285.00|
|Net cash flowsfrom the operatingactivities|1,143,046,367.00|1,070,083,296.00|6.82%|735,074,307.00|
|Basic earnings pershare|1.50|1.43|4.90%|1.53|
|Diluted earningspershare|1.50|1.43|4.90%|1.53|
|Weighted averagefor earning rate ofthenetassets|14.40%|13.96%|0.44%|16.45%|
||Dec.31st2015|Dec.31st2014|More or lessthanLastyear(%)|Dec.31st2013|
|Totalassets|10,344,211,461.00|8,912,232,640.00|16.07%|7,997,930,542.00|
|Net Assetsattributed to theshareholders of thelistedcompany|7,564,099,003.00|6,840,452,145.00|10.58%|6,208,279,705.00|

7.Differencesinaccountingdataunder PRC accountingstandards andinternational accounting standards
(1) Differences of net profit and net asset in the financial report disclosed according to bothinternational accounting standardsand PRC accountingstandards
□Available (cid:53)Not available
There are no differences of net profit and net asset in the financial report disclosed according
to both international accounting standards and PRC accounting standards during the report
period.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (2) Differences of net profit and net asset in the financial report disclosed according to bothforeign accounting standardsand PRC accounting standards
□Available (cid:53)Not available
There are no differences of net profit and net asset in the financial report disclosed according tobothforeignaccountingstandardsandPRCaccountingstandards duringthe report period. 8.Keyfinancial indicators byquarter
Unit：CNY
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||1stQuarter|2ndQuarter|3rdQuarter|4thQuarter|
|Businessrevenue|1,825,212,207.00|1,000,581,043.00|860,434,812.00|963,494,306.00|
|Net profit attributed tothe shareholders of thelistedcompany|530,248,397.00|215,811,851.00|136,798,209.00|147,417,173.00|
|Net profit attributed tothe shareholders of thelisted company afterdeducting the irregularprofitandloss|526,745,613.00|212,686,390.00|133,641,945.00|120,396,645.00|
|Net cash flows from theoperatingactivities|697,396,327.00|229,766,733.00|292,071,264.00|-76,187,957.00|

Whether there are differences between the above mentioned financial indicators or their sum and the related financial indicators in the quarterly reports and semi-annual reports disclosed bytheCompany.
□Yes (cid:53)No
9.Itemandamount of irregularprofitandloss
V Available□Not available
Unit：CNY
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|Item|2015|2014|2013|Explanation|
|Gain on disposal of non-currentassets, including the reversal ofaccruedimpairmentprovision|136,061.00|-5,086,545.00|271,989.00||
|Tax refund or exemption that is eithernon-recurring or without properapproval||13,405,520.00|||
|Government grants credited in profitand loss (except for those recurringgovernment grants that are closelyrelatedtotheentity'soperation,inlinewith related regulations and haveproperbasisofcalculation)|38,952,919.00|27,140,194.00|36,659,754.00||
|Reversal of impairment loss for||192,908.00|||

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|receivables which was separatelyundertakenimpairmenttest|||||
|Other non-operating income andnon-operating expenses except theaforementioneditems|9,071,448.00|166,987.00|3,302,760.00||
|Less.Incometaxeffect|11,355,391.00|8,302,732.00|9,396,861.00||
|Total|36,805,037.00|27,516,332.00|30,837,642.00|--|

The reasons shall be made clear and definitely as to the irregular profit and loss that the Company has defined by virtue of the Explanatory Announcement on PublicCompany’s Information Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss as specified in the Explanatory Announcement onPublicCompany’sInformation Disclosure No.1- IrregularProfitandLoss.
□Available V Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and loss in accordance with the Explanatory Announcement on PublicCompany’s InformationDisclosureNo.1-IrregularProfitandLoss duringthe report period.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. Summary of theCompany’s Businesses
1.Mainbusinessesduring the reportperiod
During the report period, theCompany’s main businesses is to produce and operate wine and brandy, thus providing the domestic and foreign consumers with healthy and fashionable alcoholic drinks. Compared with earlier stage, there are no significant changes happened to theCompany’s main businesses. The wine industry that the Company involve in is still in the growth stage, the whole domestic wine market is on therising trend. The Companytakesthedominant positioninthedomesticwinemarket.
2.Significant changes of mainassets
(1)Significant changes of mainassets
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|Mainassets|Explanationofsignificant changes|
|Equityasset|No significantchanges|
|Fixedasset|Ayear-on-yeargrowth of21.98% owingthatparts ofconstructionprojectshave completedconstruction andput intoproductionandhencerelatedinvestmentis turnedfromconstructioninprocesstofixedasset|
|Intangible asset|No significantchanges|
|Constructioninprocess|An increase of17.97% owingtothe increasedinvestmentinconstructioninprocess,suchasChangyu InternationalWineCityandsoon|

(2)Mainoverseasassetscondition
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (cid:53)Available □Notavailable
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|Detailsofassets|Formationreasons|Assetsscale|Location|Operationmode|Controlmeasuresforsafeguardingofassetsecurity|Earningcondition|The proportionofoverseasassetsintheCompany’s netassets|Whethertherearesignificantimpairment risks|
|Equityasset|Acquisitionofequity|435,177,537|Spain|Wine productionandoperation||807,079|5.84%|No|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 3.Analysisof core competitiveness
Compared with the participants in the arena of the Chinese wine sector, we believe that the Companyis providedwiththefollowingadvantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years, “Changyu”, “Jiebaina” and “AFIP” are Chinese famous trademarks that have strong influence andgoodreputation.
Secondly, the Company has set up a nationwide marketing network, formed a “three-level” marketing network system mainly composed of thecompany’s salesmen and distributors, possessedthestrongmarketingability andmarketexploitationability.
Thirdly, the Company has already had strong research strength and a productR&D system, owned a one and only “State-level WineR&D Center”, made mastery of advanced winemaking technology and production processes, been powerful enough in product innovationandestablisheda perfectqualitycontrol system.
Fourthly, the Company is in possession of a lot of grape-growing bases to meet its future development, having developed a great deal of vineyards in the most suitable areas for wine grape growing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Shanxi, whose scalesandstructureshave generallymettheCompany’s needsfor development.
Fifthly, the Company has a great variety of products composed of all grades, its wine and brandy of over 100 sorts can meet differentconsumers’ demands. The Company has taken the lead in the domestic wine sector through rapid development in the past 10-odd years and haspossessedcomparativesuperiorityinthefuture competition.
All in all, the Company has built up a strong core competitive edge and obtained and maintainedarelativelydominantpositioninthelong-term marketcompetition.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IV. Management Discussion and Analysis
1.Summarization
In 2015, influenced by the slowdown of domestic economic growth, the overall domestic wine industry is relatively stable, the effective demands for top-level products is weakness, the medium-and-low-level products suitable for mass consumption maintains a favorable growth tendency. Because of the overwhelming flow of foreign wine into Chinese market, the market competition is further intensified, which has brought bigger challenges for the Company to achieve sustained and steady growth. Facing quite a lot of external disadvantages, the Company insists to focus on the market, adjust the marketing tactics and product structure, strive to develop medium and low level products, optimize the market layout, perfect the marketing channels and effort to promote product sales, achieving good results and realizing business income of CNY 4649.72 million, an increase of11.86% compared with last year; but due to the impact of decreasing the proportion of the sales in the products with high gross profit margin and increasing the proportion of the sales in the products with the low profit margin, the Company realized net profit of CNY 1030.07 million belonging to the parentcompany’s shareholders , an increase of5.36% compared with last year.
2.Analysisof mainbusiness
(1)Summarization
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|Description|Increase or decrease ofthe end of the periodovertheendof lastyear|Causeofsignificantchanges|
|Operatingrevenue|11.86%|Mainlybecauseof increasedsalesvolume|
|Operatingcost|10.21%|Mainly because of the increase of sales volume,especially the proportion of sales in medium-lowpriceproducts increased|
|Salesexpense|20.39%|Mainly because of reduction of advertising expense in2015|
|Managementexpense|22.18%|Mainly because of increase of wage & welfare,depreciation and Property tax in 2015 over the lastyearbefore|
|R&Dinvestment|10.18%|Mainly because of increase of expenses for thedevelopmentoftechnologyresearchin2015|
|Financialexpense|165.41%|Mainly because of reduction of interest income due todecreaseoftime depositbalance,andtheincreaseofloaninterestexpenditure.|
|Netamount of cashflowgeneratedinoperatingactivities|6.82%|Mainly because of increased sale volume that makescashinflow ofbusinessactivitiesincreased|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|Netamount of cashflowgeneratedininvestmentactivities|4.57%|Mainly because of decline of cash expenditure for theinvestmentprojects|
|Netamount of cashflowgeneratedincapital-raisingactivities|-1.57%|Mainly because of decline of other received cashrelatedwithfinancingactivities|

Review and summary of the process of theCompany’s early-disclosed development strategy andbusiness planduringthereport period
During the report period, influenced by the decelerated growth on the demand for domestic wine and intensified market competition, the Company has realized the business income of CNY 4.65 billion, increased by 11.86% compared with the last year, exceeding the target fixed in the beginning of the year of realizing business income no less than CNY 4.4 billion. In order to deal with the unfavorable business environment, the Company carried out the operation strategy of steady development in the medium and high-end wines, and vigorous expansion for the low-level wines, brandy and imported wines with own brands. While making efforts to promote the development of medium and high-end wines, the Company made an appropriate tilt on marketing resources to the medium and low level wines, brandy and imported wines with own brands for meeting the market demand, which played an important part in realizing the increase on the business income. The main work in the report periodisas following:
Firstly, the Company further strengthened the construction of marketing system, optimized product structure, increased the marketing promotion efforts and enhanced the marketing capability. The Company further improved the multi-channel and multi-company marketing framework, making the sales system more smoothly from the top down; By increasing the investment in the wine market, strengthening the inspection of terminal work, and strongly pushing the increase in sales of medium-and-low level wines and the promotion of brandy, the Company accelerated the sales of terminal and acquired greater improvement in marketingcapability.
Secondly, the production management was strengthened and the production cost was reduced constantly. The control of major production costs was strengthened and the management methods of both equipment repairing fee and fuel-power fee were improved. The Company strengthened the management of quota funds, perfected the examination and evaluation system to occupied funds, and realized dynamic management and paid use to fund occupation of each unit within the company. The procurement cost of raw materials was further reduced by increasing the centralized procurement. Based on above measures, cost pertonofcomparableproductsreducedCNY 181overthesameperiod ofprevious year.
Thirdly, the research for new products and new technologies was continued being conducted and the quality management was strengthened in order to improve technological level and
product quality. In 2015, the Company implemented 14 key technologies and conducted 57
technological development projects; focused on‘QualityDay’ in every month to further
intensify the examination and supervision of quality system construction; further deepened
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. the quality control of package materials, standardized the legality of package materials in combination with newly-implemented‘Food SafetyLaw’ and‘AdvertisementLaw’. Based on above measures, the inner quality of thecompany’s products got a stable improvement. Koyac XO Porcelain Barrel Brandy won Gold medal in Conours Mondial de Bruxelles 2015-Spirits Selection and the Icewine won Gold medal in‘Quality Wine-Producing Areas ofInternationalLeadersContest’.
Fourthly, the procurement of raw materials such as grapes was completed successfully and the management of grape base was further strengthened. The Company completed the whole year work of grapes procurement and processing according to the plan, which provides a reliable guarantee of raw material for adapting the development of market; stregnthented the budget management of various expense in self-supporting bases, took comprehensive professional training for farmers and strengthened the classified management and classified evaluation of contractual bases; imported 102 mechanized equipment, further improving the machinery utilization rate of Yantai self-supporting bases and each chateau base. By taking above mentioned measures, theCompany’s grape base management has become more standardizedandthequalityofgrapehas beenmuch improved.
Fifthly, the construction of technological upgrading projects is steadily promoted to strengthen momentum for future development. During the report period, the Company has overcomed the various problems and difficulties, steadily carry forward the construction of 9 investment projects which were defined at the beginning of the year, the key investment projectsrunsmoothlywithgoodengineeringquality.
(2)Revenue andcost
(cid:99)Compositionof operating incomes
Unit:CNY
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||2015||2014||Year-on-yearincrease ordecrease(%)|
||Amount|Proportioninoperatingincomes|Amount|Proportioninoperatingincomes||
|Totaloperationrevenue|4,649,722,368.00|100%|4,156,727,525.00|100%|11.86%|
|Industry-classified||||||
|Industry ofliquor andalcoholicbeverage|4,649,722,368.00|100.00%|4,156,727,525.00|100.00%|11.86%|
|Product-classified||||||
|Wine|3,659,597,234.00|78.71%|3,201,368,831.00|77.02%|14.31%|
|Brandy|883,276,247.00|19.00%|813,417,868.00|19.57%|8.59%|
|Others|106,848,887.00|2.30%|141,940,826.00|3.41%|-24.72%|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|Area-classified||||||
|Domestic|4,481,598,915.00|96.38%|4,072,037,577.00|97.96%|10.06%|
|Abroad|168,123,453.00|3.62%|84,689,948.00|2.04%|98.52%|

 (cid:100) The condition of sectors, products or areas accounting for over10% in theCompany’soperating incomesor operatingprofits
(cid:53)Available□Not available
Unit:CNY
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||Operating income|Operatingcost|Grossprofitrate|Year-on-yearincreaseordecrease(%)ofoperatingincome|Year-on-yearincreaseordecrease(%)ofoperatingcost|Year-on-yearincreaseordecrease(%)ofgrossprofitrate|
|Industry-classified|||||||
|Industryof liquorandalcoholicbeverage|4,649,722,368.00|1,512,503,035.00|67.47%|11.86%|10.21%|0.49%|
|Product-classified|||||||
|Wine|3,659,597,234.00|1,145,785,230.00|68.69%|14.31%|13.35%|0.27%|
|Brandy|883,276,247.00|307,213,390.00|65.22%|8.59%|10.72%|-0.67%|
|Area-classified|||||||
|Domestic|4,481,598,915.00|1,456,071,487.00|67.51%|10.06%|8.45%|0.48%|

 (cid:101)WhethertheCompany’ssalesrevenue for materialobjectis morethanlaborincome (cid:53)Yes□No
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|Sector|Project|Unit|2015|2014|Year-on-yearincrease ordecrease(%)|
|Wine|Salesvolume|Ton|86,318|71,854|20.13%|
|Brandy|Salesvolume|Ton|40,074|37,462|6.97%|

Explanationonthecausesofover30% year-on-yearchangesof therelatedcomparisondata.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.□Available (cid:53)Not available
(cid:102) The fulfillment of major sales contract signed by the Company up to the report period
□Available (cid:53)Not available
(cid:103)Compositionof operating costs
Unit:CNY
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|Sector|Project|2015||2014||Year-on-year increase ordecrease(%)|
|||Amount|Proportion in theoperatingcost(%)|Amount|Proportion in theoperatingcost(%)||
|Liquorandalcoholicbeverage|Blendingliquor|813,179,854.00|54.76%|749,104,077.00|55.29%|-0.53%|
||Packingmaterial|515,456,922.00|34.71%|446,560,533.00|32.96%|1.75%|
||Wages|55,456,767.00|3.73%|53,632,561.00|3.96%|-0.22%|
||Productioncost|100,900,541.00|6.79%|105,480,406.00|7.79%|-0.99%|

Explanation
No
(cid:104)Whetherthereare changesof consolidation scope duringthe reportperiod
(cid:53)Yes□No
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in detail. For detail of changes in consolidation scope of the year, please refer to Notes VII "Changeinconsolidationscope".
(cid:105) Major changes or adjustments of theCompany’s products or services during the reportperiod
□Available (cid:53)Not available
(cid:106)Informationof major customersand major suppliers
TheCompany’simportantcustomers
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|The totalsalesamount of thetopfive customers（CNY）|162,300,452.00|
|Total sales of the top five customers accounting for theproportion intotal salesfor the year（%）|3.49%|

InformationontheCompany’s 5biggestcustomers
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|No.|CustomerName|SalesAmount（CNY）|Proportion in Total Sales fortheyear（%）|
|1|ChangyueXin Trade Company in Shenzhencity|35,452,036.00|0.76%|
|2|Baicheng Trade Distribution Center inHanjiang district of Putian city (NewBaicheng Food Trade Company in Hanjiangdistrict of Putian city, Zhongheng FoodTrade Company in Chengxiang district ofPutian city, Baicheng Commerce and TradeCompanyLimitedinPutiancity)|33,579,353.00|0.72%|
|3|Dali Qianxingrong Wine Shop in Nanhaidistrict of Foshan city (Xiqiaolizhi Shop inNanhaidistrictof Foshancity)|32,892,494.00|0.71%|
|4|Wal-Mart (China) Investment CompanyLimited|31,879,636.00|0.69%|
|5|Huhaipengcheng Liquor Industry CompanyLimitedinZhuhaicity|28,496,932.00|0.61%|
|Total|—|162,300,452.00|3.49%|

 Othersituationexplanationof maincustomers
□Available (cid:53)Not available
InformationontheCompany’s importantsuppliers
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|The totalpurchaseamountof thetop5suppliers|57,512,952.00|
|The proportion ofthe totalpurchaseamountof thetop5suppliers inthe annualpurchaseamount|3.56%|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.InformationontheCompany’s top5biggestsuppliers
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|-|-|-|-|
|No.|SupplierName|PurchaseAmount(CNY)|Proportion in Total Purchasefor the year（%）|
|1|YantaiShenma PackagingCo.,Ltd.|153,891,013.00|9.52%|
|2|YantaiChangyuGlassCo.,Ltd.|136,649,691.00|8.46%|
|3|Liquan Sales Department ofShandongYantaiWineryCo.,Ltd.|102,003,625.00|6.31%|
|4|152 regiment of the eighthagricultureproductiondivision|79,434,236.00|4.92%|
|5|YantaiWanfutai WineryCo.,Ltd|57,512,952.00|3.56%|
|Total||529,491,518.00|32.77%|

 Othersituationexplanationof maincustomers
□Available (cid:53)Not available
(3)Costs
Unit:CNY
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|-|-|-|-|-|
||2015|2014|Year-on-yearincreaseordecrease(%)|Explanationofsignificantchanges|
|Salesexpense|1,211,127,163.00|1,006,009,364.00|20.39%|Mainlybecauseofincreasedadvertisingexpensein2015|
|Managementexpense|313,968,409.00|256,980,018.00|22.18%|Mainlybecauseofincreasedwage,welfareexpense，depreciationandbuildingtax|
|Financialexpense|11,287,685.00|-17,256,721.00|165.41%|Mainlybecauseofdecreasedinterestincomeresultingfrom|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||
|-|
|thedecline offixeddepositbalanceandincreasedloaninterestexpenditure|

 (4)Researchand developmentexpenditure
□Available (cid:53)Not available
(5)Cashflow
Unit: CNY
|||||
|-|-|-|-|
|Item|2015|2014|Year-on-yearincreaseordecrease(%)|
|Subtotalofcashinflow inoperatingactivities|5,045,321,545.00|4,830,092,384.00|4.46%|
|Subtotalofcashoutflow inoperatingactivities|3,902,275,178.00|3,760,009,088.00|3.78%|
|Netamount of cashflowgeneratedinoperatingactivities|1,143,046,367.00|1,070,083,296.00|6.82%|
|Subtotalofcashinflow ininvestmentactivities|70,956,457.00|333,107,299.00|-78.70%|
|Subtotalofcashoutflow ininvestmentactivities|1,008,811,136.00|1,315,841,068.00|-23.33%|
|Netamount of cashflowgeneratedininvestmentactivities|-937,854,679.00|-982,733,769.00|-4.57%|
|Subtotalofcashinflow incapital-raisingactivities|604,498,188.00|644,550,372.00|-6.21%|
|Subtotalofcashoutflow incapital-raisingactivities|679,633,059.00|720,926,810.00|-5.73%|
|Netamount of cashflowgeneratedincapital-raisingactivities|-75,134,871.00|-76,376,438.00|-1.63%|
|Netincreaseof cashandcashequivalents|134,207,390.00|3,913,342.00|3,329.48%|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Explanation of main influence factors contributing to great changes in related data on year-on-yearbasis
(cid:53)Available □Not available
During the report period, comparing with the same period of last year, subtotal of cash inflow in investment activities was reduced by78.7%, mainly due to the significant decrease in the fixed deposit whose duration is more than 3 months; subtotal of cash outflow in investment activities was reduced by23.33%, mainly due to the significant decrease in cash paid for purchasing and constructing fixed assets, intangible assets and other long-term assets; net increased amount of cash and cash equivalents increased by3329.48%, mainly due to the significant growth of net amount of cash flow generated both in operating activities and in investment activities.
Explanation on the causes of the major differences between the net cash flow generated bytheCompany’s operatingactivitiesandthisyear’s netprofit duringthereport period.
(cid:53)Available □Not available
3.Analysistonon-main business
□Available (cid:53)Not available
4.Assetsand liabilities situation
(1)Majorchanges ofassets
Unit: CNY
||||||||
|-|-|-|-|-|-|-|
||At theendof 2015||Attheendof 2014||Proportionincrease ordecrease(%)|Explanationon majorchanges|
||Amount|Proportion in thetotalassets(%)|Amount|Proportion in thetotalassets(%)|||
|Monetaryfunds|1,285,362,414.00|12.43%|1,145,365,071.00|12.85%|-0.42%|Nomajorchanges|
|Receivables|197,795,091.00|1.91%|145,672,411.00|1.63%|0.28%|Nomajorchanges|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|Inventory|2,260,852,964.00|21.86%|2,087,376,398.00|23.42%|-1.56%|Nomajorchanges|
|Investmentrealestate||0.00%||0.00%|0.00%|Nomajorchanges|
|Long-termequityinvestments||0.00%||0.00%|0.00%|Nomajorchanges|
|Fixedassets|3,089,245,185.00|29.86%|2,532,682,355.00|28.42%|1.44%|Nomajorchanges|
|Construction inprogress|2,005,990,308.00|19.39%|1,700,466,500.00|19.08%|0.31%|Nomajorchanges|
|Short-termborrowings|665,581,921.00|6.43%|300,000,000.00|3.37%|3.06%|Nomajorchanges|
|Long-termborrowings|71,686,629.00|0.69%|209,380,000.00|2.35%|-1.66%|Nomajorchanges|

 (2)Measuringassets andLiabilitiesat Fair Value
□Available (cid:53)Not available
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 5.Investmentsituation
(1)Overallsituation
(cid:53)Available □Notavailable
||||
|-|-|-|
|Investment amount duringthereport period (CNY)|Investment amount ofthe sameperiodoflastyear(CNY)|Variation|
|842,060,000.00|562,596,634.00|49.67%|

(2)Situation of acquiredmain equityinvestmentsduringthe reportperiod
(cid:53)Available □Notavailable
Unit:CNY
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Investedcompanyname|Mainbusiness|Investmentmode|Investmentamount|Shareholdingrate|Capitalsource|Partner|Investmentperiod|Producttype|Progressup to thebalancesheetdate|Estimatedprofit|Profit andloss ofinvestmentduring thisperiod|Whetherinvolvedinlawsuits|Disclosuredate ifhave|Disclosureindex(ifhave|
|DiscotPartners,S.L|Productionandoperationof wineand otheralcoholicproducts|Acquisition|18625.00|75%|Self-ownedcapital|ComercialGatar,S.L. andestionGanuza,S.L.|50years|wine|completed|5,800,00.00|807,079.00|no|2015.08.28|http://www.cninfo.com.cn/finalpage/2015-08-28/1201509186.PDF|
|SociétéCivile|Productionof|Acquisition|2363.00|90%|Self-ownedcapital|Vignobleset|50years|wine|completed|1,400,000.00|0.00|no|2015.11.25|http://www.cninfo.com.cn/finalpage/2015-11-25/1201786784.PD|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|AgricoleduChâteaudeMirefleurs|top-levelBordeauxwine||DomainesCastel|||F|
|Total||20,988.00||7,200,000.00|807,079.00||

(3)Situation of main ongoingnon-equity investments duringthe reportperiod
(cid:53)Available □Notavailable
Unit:CNY
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Projectname|Investmentmode|Whetheritbelongstofixedassetsinvestment|Involvedsectors|InvestmentAmountduringthisreportperiod|Accumulatedactualinvestmentamountuptotheendofthereportperiod|Capitalsource|Processofproject|Estimatedprofit|Accumulatedrealizedprofituptotheendofthereportperiod|Reasonsforunreachedplanningscheduleandestimatedprofit|Disclosuredate(ifhave)|Disclosureindex(ifhave)|
|YantaiChangyuInternationalWineCityBlendingandCoolingCenter|Self-constructed|Yes|Liquorandalcoholicbeveragesector|265,000,000.00|673,630,000.00|Ownedfunds|75.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|YantaiChangyu|Self-constructed|Yes|Liquorandalcoholic|190,000,000.00|481,690,000.00|Ownedfunds|85.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpa|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|InternationalWineCityBottlingCenter|||beveragesector|||||||||ge/2015-04-28/1200918766.PDF|
|YantaiChangyuInternationalWineCityLogisticsCenter|Self-constructed|Yes|Liquorandalcoholicbeveragesector|86,000,000.00|199,440,000.00|Ownedfunds|95.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|ChangyuVineandWineResearchInstitute|Self-constructed|Yes|Liquorandalcoholicbeveragesector|49,940,000.00|90,760,000.00|Ownedfunds|40.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|TreasureWineChateau|Self-constructed|Yes|Liquorandalcoholicbeveragesector|17,210,000.00|47,990,000.00|Ownedfunds|40.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|KoyacBrandyChateau|Self-constructed|Yes|Liquorandalcoholicbeveragesector|0.00|98,000,000.00|Ownedfunds|40.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|ChangyuInternationalWineCityGrapeBase|Self-constructed|Yes|Liquorandalcoholicbeveragesector|4,290,00|43,700,000.00|Ownedfunds|80.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|GreeningInvestment|Self-constructed|Yes|Liquorandalcoholic|1,740,000.00|38,640,000.00|Ownedfunds|70.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpa|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||beveragesector|||||||||ge/2015-04-28/1200918766.PDF|
|PioneerMonopolyShop|Self-constructed|Yes|Liquorandalcoholicbeveragesector|18,000,000.00|35,550,000.00|Ownedfunds|60.00%|0.00|0.00|—|2015.04.28|http://www.cninfo.com.cn/finalpage/2015-04-28/1200918766.PDF|
|Total|--|--|--|632,180,000.00|1,709,400,000.00|--|--|0.00|0.00|--|--|--|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (4)Financial assetsinvestment
(cid:99)Securityinvestmentsituation
□Available (cid:53)Not available
There isnosecurityinvestmentfor theCompanyduring thereport period.
(cid:100)Derivativesinvestment
□Available (cid:53)Not available
There isnoentrustfinancingfor theCompanyduringthe reportperiod.
(5)The usagesituationofthe raisedcapital
□Available (cid:53)Not available
There isnousage situationof theraisedcapitalfor theCompanyduring thereport period. (6)Sale of major assetsandequities
(cid:99)Saleof majorassets
□Available (cid:53)Not available
There isnosaleofmajor assetsduring thereport period.
(cid:100)Saleof majorequities
□Available (cid:53)Not available
(7)Analysistothemajor holdingandjointstockcompanies
(cid:53)Available □Not available
Situation of main subsidiaries and joint stock companies affecting over10% of theCompany’snet profit
Unit:CNY
||||||||||
|-|-|-|-|-|-|-|-|-|
|Companyname|Companytype|Mainbusiness|Registeredcapital|Totalasset|Netasset|Operationrevenue|Operationprofit|NetProfit|
|YantaiChangyu-Castle|Subsidiary|Toresearch,produce|USD 5million|274,795,419.00|82,896,983.00|98,894,499.00||7,573,641.00|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||||||
|-|-|-|-|-|-|-|-|
|WineChateauCo.LTD.||andsellwineandsparklingwineaswellas thetourismservice||||||
|LangfangCastel-ChangyuWineCo.LTD.|Jointstockcompany|Toproduceandsellwine|USD6,108,818|53,339,634.00|45,425,677.00|51,602,897.00|862,103.00|
|ChateauChangyuAFIPGlobal|Subsidiary|Toresearch,produceandsellbrandyandwine|CNY110million|739,795,780.00|149,283,921.00|170,037,611.00|25,424,015.00|
|ChateauLiaoningChangyuIceWineCo.,Ltd.|Subsidiary|Toproduceicewine|CNY26.30million|72,547,094.00|59,823,627.00|51,657,543.00|-4,223,249.00|
|XinjiangTianzhuWineryCo.,Ltd.|Subsidiary|Toplantgrape,produceandsellgrapejuice,bulkwineandfruit wine|CNY 75million|182,728,427.00|161,838,245.00|107,683,230.00|-37,548.00|

Acquisitionanddisposalof subsidiariesduringthe report period
(cid:53)Available □Not available
||||
|-|-|-|
|Companyname|AcquisitionanddisposalModeofsubsidiariesduringthereport period|Influencetooverall productionandOperationaswellasperformance|
|DicotPartners,S.L.|EquityAcquisition|Beneficialfor enriching the Company’sproductstructureandimprovingprofitability|
|Société CivileAgricoleduChâteaudeMirefleurs|EquityAcquisition|Beneficialfor enriching the Company’sproductstructureandimprovingprofitability|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Informationofmainholdingandjointstockcompanies
No
(8)Mainpart situation ofthespecialpurpose beingcontrolledby the Company
□Available (cid:53)Not available
(9)Expectation for theCompany’s future development
On the basis of our limited experience and special skills, we make the following estimation of thewinesectorandtheCompany’s futuredevelopment:
(1)The sectorcompetitionsetupanddevelopment trend
Due to the continuous limitation for the domestic consumption of premium wine in the future long time, the continuing entrance of imported wines to Chinese market, and the great impact for the traditional sales channels caused by the new channels such as E-commerce, the competition in the domestic wine industry will still be awfully fierce in the current and future long time, the consumption for high-end wine maybe continue to remain weak. But in the long run, thanks to increase of their incomes,people’s pursuits to health and fashion life, the people are favoring wines which fit well with the trend of consumption, it will ceaselessly stimulate their demand for quality wine.That’s to say, the Chinese wine sector still has huge potential to tap. Especially the medium-low level wine with high performance-to-price ratio can have a faster growth. In such a case of long-term coexistence of opportunities and challenges, only those enterprises that possess strong branding influence and marketing ability, catch the opportunities, actively take adjustments and make full use of oncoming and traditional sales channels, can timely get the run of theconsumers’ demands and provide products of high performance-to-price ratio will have an opportunity to be the final winners of competition and form a new structure of the future Chinese winemarket.
(2)TheCompany’s developmentstrategy
The Company will continue to adhere to the strategy of taking wine as pillar product while developing all kinds of products, actively expand the scope of consumption and marketing mode, revise the sales decreased trend of high-end wine; develop middle-level wines and brandy, strengthen the promotion of sparkling wine, make efforts to provide consumers with a rich variety ofproducts inhighcostperformance.
(3)Managementplanina newyear
In 2016, the Company will try its best to realize business income of not less than CNY4.6 billion andcontrol themainoperatingcostsandthreeperiod chargesbelowCNY3.0billion.
(4)The measuresthe Companywilltake
The Company will emphasize the following aspects in 2016, so as to better catch the opportunities andface the challenges:
Firstly, it is to stick to market-orientation and promote the integrated development of various kinds of wine. The Company will continue adhering to wine-based development strategy firmly, improve the construction of sales system for chateau wines, as well as the incentive measures to dealers and thecompany’s staff, so as to promote the sales volume of chateau wines. The governance of market order will be enhanced to consolidate the brand advantages of middle-end wines (represented as Jiebaina). The market promotion of low-end wines will be strengthened to
increase the market shares. The appearance of sparkling wine with low alcohol and Tinlot Reserva
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. products on the market will be completed and the appearance of wines in small package on the market will be quickened. The company will strengthen the construction of Brandy sales system and improve its market promotion. The Koyac Brandy products will be improved and their sales system will be built. In the meantime that the company pay attention to domestic brands, the sales of imported products by the company acting as agency inChina,especially products whose brands areacquiredbythecompany,willbeboostedtosatisfythe demands ofcustomers.
Secondly, it is to strengthen the control for major production costs and expenses, further compressing production cost and reducing expenses. The Company will further reinforce financial management and audit supervision, improve management methods of major expenses in production system, improve centralized procurement rules, improve profit accounting system in subordinate production and operation units, make a good fund plan, enhance fund occupation management and make efforts to reduce production costs and expenses; establish and improve the financial management and auditing system of industrial park, grape bases and overseas investment companies; improve and perfect financial early warning analysis system to prevent operating risks;optimizeproducts’ pricingmechanismandstrivetoimproveproducts’gross profit margin. Thirdly, it is to strengthen the management for vineyards, continually increase the products quality. The Company will carry out the normalization construction and management for the vineyards in accordance with the criterion of scalization, standardization and mechanization, continue to practice the tracking and management of winemakers for the vineyards. For self-supporting bases, the company will enhance the corresponding simulation profit evaluation, build the informatization management system in self-supporting bases, and improve the management level of bases. Besides, the company will fully push the mechanization planting pattern to further reduce the planting cost. For contractual bases, in order to improve the management level of bases, the classified management of grape bases will be continued being implemented and the advanced planting technical training for contracted farmers will also be continued being enhanced. In addition, the company will strengthen the legal education of quality and safety to improvefarmers’ consciousness of food safety. The layout of raw material bases will be implemented worldwide to form the pattern that the quality and quantity of raw materials in domestic bases could be complementary with that in foreign bases. The Company will perfect the classification standards for bulk wine, the quality tracking of bulk wine whole usage process and assessment mechanization, optimize winemaking technology, reinforce the applied research on oak barrels, further improve production quality, strengthen to develop new products, constantly enrich products variety. Further distinguish and clear the products characteristic of general wine in different varieties,formtheproducts linewithdistinctive anduniquestyle.
Fourthly, it is to steadily carry forwards investment projects construction, scientific arrange the progress of construction, guarantee the engineering quality. The Company will continuously promote the projects of Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park) and the construction for pioneer monopoly shops, reinforce the management of construction budget to investment projects, strengthenprojects’ cost review and completion audit, strictly control the investment amount on projects, make sure to finish the construction for all projectsandputthemintooperationonthebasisof scheduledprogressandquality.
(5)Potential risks
A) Risksinprice fluctuationof rawmaterials
Grapes are theCompany’s main raw materials. Thegrape’s yield and quality are affected to a certain extent by the natural factors such as drought, wind, rain, frost and snow. These force
majeure factors greatly influence the quantity and price of the grapes in this Company orders and
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. add the uncertainty to theCompany’s production and operation. Therefore, the Company will lower the risks that are likely to affect grape quality and result in price fluctuation by means of expanding the self-run vineyards, strengthening the vineyard management and optimizing the layoutof vineyards.
B) Risksinuncertaintyof marketinputandoutput
To cope with the cutthroat market competition and to meet the needs for market development, the Company has input more and more capital in the market and the sales expense has taken up a higher percentage point in the business revenue. The input-output ratio will affect theCompany’s operating results to a great extent and the risk that some investments may not reach the expectations is likely to occur. Therefore, the Company will strengthen market research and analysis, enhance market forecast accuracy and continue to perfect the input-output evaluation systemtoensuretheinvestmentsinmarkettobesatisfactoryas expected.
C) Risksinproducttransport
TheCompany’s products are fragile and sent to different places all over the world, mostly by sea, railway and expressway. The peak season of sales is usually in cold winter and close to the spring festival when market has a great demand. At that time, the natural and human factors such as serious shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as well as traffic accidents make the transport departments difficult to send products to markets in time and safely. As a result, it makes this Company have to face the risks of missing the peak season of sales. Therefore, the Company will adopt all methods possible like making precise sales prediction and well designed connection of production and sales, reasonably arranging production and transport means and making use of more available warehouses in different placestolowerthese kindsof risks.
D) Risksininvestmentfaults
According to the plan, currently the Company has finished the production layout at home, and the next step is to pay more attention to the overseas merge and acquisition in the same industry. Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park) has those features such as the big investment amount, long-term construction period and many uncertain factors; more unforeseeable factors for the overseas merge and acquisition projects in the progress ofM&A, it is difficult to make sure the fair and reasonable transaction price, the integration and management afterM&A is also hard. Under the influence of uncertain factors for individual projects, It leads to have the risks of facing with the investment amount out of budget or hardly taking back the expected investment earnings. The Company will take an adequate argument and scientific decision-making for investment projects, try hard to reduce and avoid investment risks.
10.TheCompany’s receptions,studies,communications and visits
(cid:53)Available □Not available
|||||
|-|-|-|-|
|ReceptionTime|Receptionmethod|Receptionobjecttype|Basicinformationindexof studies|
|2015.05.22|Fieldsurvey|Institution|-|
|2015.05.22|Fieldsurvey|Individual|-|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||
|-|-|
|Number ofReception||
|Number ofreceivedinstitution||
|Numberofreceivedindividual||
|Number of otherobject||
|Whetherdisclose,revealor betrayno-publicimportinformation|No|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. V. Major issues
1. TheCompany’s common stock profit distribution and increasing equity with capital reserve
Promulgation,implementationor adjustment ofcommon stockprofit distribution policies especiallycashdividends policiesduringthe reportperiod
(cid:53)Available □Not available
According to the auditing result made by The Deloitte HuaYong certified public accountants co., LTD, the net profit that the Company made in 2014 was CNY977.707711million. After deducting the minorityshareholders’ profit and loss, the net profit belong to theCompany’s shareholders is CNY977.707711 million. After the deliberation of theCompany’s Board of Directors and theShareholders’ Meeting, the profit plan of 2014 is as following: Because the left amount of legal earned surplus reserve is less than50% of the registered capital, while making profit distribution, the legal earned surplus reserve will not be drawn. Then based on theCompany’s 685,464,000 shares at total up to December 31, 2014, we plan to pay CNY4.4 in cash as dividends for every ten shares (including tax) to theCompany’s all shareholders, totaling up to CNY301.60416 million, accounting for30.85% of the net profit CNY 977.707711 million attributable to the shareholders of the parent company in the consolidated statement, the retained and undistributed profit of CNY 676.103551 million will be reserved for the distribution of next year. This plan is in line with the provisions of theCompany’s Articles of Association. On July 5, 2015, the Company published the Implementation Announcement of 2014 Annual Equity Distribution on China Securities Journal, Securities Times and www.cninfo.com.cn, determining that the share registration day of A Stock was on July 10, 2015 and the ex-dividend day was on July 13, 2015, the last trading day of B Stock was on July 10, 2015, the share registration day was on July 15, 2015 and the ex-dividend day was on July 13, 2015. The Company also distributed equity before July 30, 2015 to theCompany’s all A Stock holders registered after closing of Shenzhen Stock Exchange on the afternoon of July 10, 2015 at China Securities Depository and Clearing Corporation Limited Shenzhen Company and theCompany’s all B Stock holders registered after closing of Shenzhen Stock Exchange on the afternoon of July 15, 2015 at China SecuritiesDepositoryandClearingCorporationLimitedShenzhenCompany.
|||
|-|-|
|Specialexplanation||
|Whether it is in accordance with the requirements of the regulation in the ArticlesofAssociationandtheresolutionof shareholders|Yes|
|Whetherthedistributionstandardandproportionisclearanddefinite|Yes|
|Whethertherelativedecisionprocess andmechanismiscomplete|Yes|
|Whethertheindependentdirectors perform their responsibilities andplaytheroles.|Yes|
|Whether the small and middle shareholders have the chance to express theiradvices and appeals, as well as their lawful right and interest is in an enoughprotection.|Yes|
|Whether it is legal and transparent for the condition and process while adjusting|Yes|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||
|-|
|andamendingthe cashdividends distributionpolicy.|

TheCompany’s plan (preliminary scheme) of common stock profit distribution and increasingequitywithcapitalreserve inthe recentthreeyears (includingthereport period). TheCompany’s profit distribution plan in 2013 is as following: Because the left amount of legal earned surplus reserve reaches50% of the registered capital, while making profit distribution, the legal earned surplus reserve will not be drawn. Then based on theCompany’s 685,464,000 shares at total up to December 31, 2013, we plan to pay CNY 5 in cash as dividends for every ten shares (including tax) to theCompany’s all stockholders, totaling up to CNY 342.732 million, accounting for32.70% of the net profit CNY 1048.185927 million attributable to the shareholders of the parent company in the consolidated statement, the retained and undistributed profit of CNY 705.453927 million will bereservedfor thedistributionofnextyear.
TheCompany’s profit distribution in 2014 is as following: Because the left amount of legal earned surplus reserve reaches50% of registered capital, while making profit distribution, the legal earned surplus reserve will be not drawn. Based on theCompany’s 685.464 million shares at total up to December 31, 2014, we plan to pay CNY 4.4 in cash as dividends for every ten share (including tax) to theCompany’s all shareholders, totaling up to CNY 301.60416 million accounted for30.85% of net profits CNY977.707711 million attributable to shareholders of parent company in the consolidated statements. The retained and undistributed profit of CNY 676.103551 million will be reserved for distribution in the next year.
TheCompany’s preliminary scheme of profit distribution plan in 2015 is as following: Because the left amount of legal earned surplus reserve reaches50% of the registered capital, while making profit distribution, the legal earned surplus reserve will not be drawn. Then basedon theCompany’s 685,464,000 shares at total up to December 31,2015, we plan to pay CNY 5 in cash as dividends for every ten shares (including tax) to theCompany’s all stockholders, totaling up to CNY 342.732 million, accounting for33.27% of the net profit CNY 1030.07386 million attributable to the shareholders of the parent company in the consolidated statement, the retained and undistributed profit of CNY 687.34186 million will bereservedfor thedistributionofnextyear.
TheCompany’s common stock cash dividend record in recent three years (including the report period)
Unit:CNY
|||||||
|-|-|-|-|-|-|
|Year ofdistribution|Amount ofcash dividend(includingtax)|Net profitbelonging to thelisted company’sstockholders in theconsolidated|Proportion in thenet profit belongingto the listedcompany’sstockholders in the|Amount of cashdividends in otherways|Proportion of cashdividends in otherways|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||||
|-|-|-|-|-|-|
|||statement of thedistributionyear|consolidatedstatement(%)|||
|2015|342,732,000.00|1,030,073,860.00|33.27%|0.00|0.00%|
|2014|301,604,160.00|977,707,711.00|30.85%|0.00|0.00%|
|2013|342,732,000.00|1,048,185,927.00|32.70%|0.00|0.00%|

During the report period the Company earned profit, the profit of the parent company that could be distributed to common stock shareholders was positive but without proposing common stockcashdividenddistribution.
□Available (cid:53)Not available
2. TheCompany’s preliminary scheme of profit distribution and preliminary scheme of increasingequitywithcapitalreserve
(cid:53)Available □Not available
|||
|-|-|
|Number ofsendingbonus sharespertenshares(share)|0|
|Number ofdividend payoutpertenshares(CNY) (includingtax)|5|
|Number oftransferringper tenshares(share)|0|
|The cardinal number of the capital stocks for the preliminary distributionscheme(shares)|685,464,000|
|Totalcashdividenddistribution （CNY）(includingtax)|342,732,000.00|
|Distributableprofit (CNY)|1,030,073,860.00|
|The proportionofcashdividenddistributioninthe totalprofit distribution|100.00%|
|Cashdividend||
|If the Company’s development is in growth stage, while making profit distribution, theproportionof cashdividendsshouldtakesupnolessthan20% inthisprofit distribution||
|Detailed explanation for the preliminary scheme of profit distribution or increasing equitywithcapitalreserve||
|According to the audit result from Deloitte Hua Yong, the net profit belonging to the parentcompany’s stockholders in the consolidated statement is CNY1030.07386million, the netprofit of theparentcompanyinfinancialstatementisCNY1553.520098million in2015.According to PRC accounting standard, the situation for the attributable profit ofconsolidationandparentcompanyin2015isas following:Unit:CNYConsolidation ParentcompanyUndistributableprofit attheendtheyear 5,980,390,074 5,872,392,075Including:netprofitin2015 1,030,073,860 1,553,520,098Distributable profit carried over to the 5,251,920,374 4,620,476,137beginningof the year||

||||
|-|-|-|
||Consolidation|Parentcompany|
|Undistributableprofit attheendtheyear|5,980,390,074|5,872,392,075|
|Including:netprofitin2015|1,030,073,860|1,553,520,098|
|Distributable profit carried over to thebeginningof the year|5,251,920,374|4,620,476,137|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||
|-|-|-|
|Distributionfor 2014dividend|301,604,160|301,604,160|
|Withdrawing for the legal earned surplusreserve|0|0|

According to regulation of 157th item in the Articles of Association, which is that the Company can distribute dividends either in cash or by stock, the profit to be distributed each year is not less than25% of the distributable profit realized in the same year and the accumulated sum of profit to be distributed in cash in the next three years is not less than30% of the yearly average distributable profit to be realized in the next three years, meanwhile, considering the large amount on the capital expenditure in 2016, under the condition of not influencing the normal production and operation, the Company put forward preliminaryscheme onprofitdistributionin2015as following:
Because the left amount of legal earned surplus reserve reaches50% of the registered capital, while making profit distribution, the legal earned surplus reserve will not be drawn. Then basedon theCompany’s 685,464,000 shares at total up to December 31,2015, we plan to pay CNY 5 in cash as dividends for every ten shares (including tax) to theCompany’s all stockholders, totaling up to CNY 342.732 million, accounting for33.27% of the net profit CNY 1030.07386 million attributable to the shareholders of the parent company in the consolidated statement, the retained and undistributed profit of CNY 687.34186 million will be reserved for the distribution of next year. The cash dividend for the shareholders of B share listed overseas was paid in Hongkong dollar according to the middle rate between CNY and Hongkong dollar issued by thePeople’s Bank of China on the first working day after the resolutiondateof2015shareholders’meeting.
3.Implementationofcommitments
(1)Commitments thatthe Company,shareholders,actualcontrollers,acquirers,directors, supervisors,seniormanagers andotherrelatedpartieshave implementedduringthe report periodandhavenot implementeduptotheendofthe reportperiod
(cid:53)Available □Not available
||||||||
|-|-|-|-|-|-|-|
|Commitments|Commitmentparty|Commitmenttype|Commitmentcontent|Commitmenttime|Commitmentperiod|Implementation|
|Commitmentsatsharereform|－||－||－|－|
|Commitmentsmadeinacquisitionreportorequitychangesreport|－||－||－|－|
|Commitmentsatassetrestructuring|－||－||－|－|
||Yantai|Solvehorizontal|Non-horizontal|18thMay1997|Forever|Has been|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|theinitialpublicofferingorrefinancing|ChangyuGroup Co.Ltd.|competition|competition|||performingstrictly|
||YantaiChangyuGroup Co.Ltd.|Clearthepurposeofbrandroyalty|AccordingtoTrademarkLicenseContract,theCompanywillpaytrademarkroyaltyfor the‘‘Changyu’’productsofYantaiChangyuGroupCo.,Ltdeveryyear,YantaiChangyuGroupCo.,Ltdwillusetrademarkroyaltytoadvertise‘‘Changyu’’trademarksandContractedproductsinthiscontract.|18thMay1997|Forever|Has beenperformingstrictly|
|Equityincentivecommitments|－|－|－||－|－|
|CommitmentsatmiddleandsmallshareholdersoftheCompany|－|－|－||－|－|
|Commitmentundertimelyimplementationornot|Yes||||||
|Whetheror nottohavespecificreasonsof theunimplementedcommitment andnextsteps(if|No||||||

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||
|-|
|any)|

(2)The Company shouldmake astatementonthe achievedoriginal profit forecastof assetsor projects anditsreasonifthere isprofitforecastofCompany’s assets or
projectsand thereportperiodis stillinthe profit forecastperiod
□Available (cid:53)Not available
4. Non-business capital occupying of listed company by controlling shareholder and its relatedparties
□Available (cid:53)Not available
There are no non-business capitals occupying of listed company by controlling shareholder anditsrelatedpartiesduringthe reportperiod.
5. Explanation of Non-standard Audit Report given by accounting firm in the report period from board of directors, board of supervisors and independent directors (if have)
□Available (cid:53)Not available
6. Compared with the previousyear’s financial report, explanation for the changes of accounting policy,accountingestimationandaccounting method
□Available (cid:53)Not available
There are no changes of accounting policy, accounting estimation and accounting method duringthe reportperiod.
7.During the report period, the situation explanation forthe correctionof major accounting errorswhichneedtoberetrospectandrestated.
□Available (cid:53)Not available
There is no situation for the correction of major accounting errors which needto be retrospect and restated.
8. Compared with the previousyear’s financial report, explanation for the changes of
the consolidatedstatements scope.
(cid:53)Available □Not available
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Forconsolidationscope ofthe year,pleaserefertoNotes VIII "Equity inotherentities" in detail. Fordetailofchangesinconsolidationscopeofthe year,please refertoNotes VII "Changeinconsolidationscope".
9.The appointmentand dismissalof certifiedpublic accountants
Currentlyappointedaccountingfirm
|||
|-|-|
|Domestic accounting firm name|Deloitte Hua Yong Certified Public Accountants Co., Ltd.(specialgeneralpartnership)|
|Reward for domestic accounting firm(CNY‘0000)|195|
|Consecutive period for the auditservicesof domestic accountingFirm|3|
|Name of Certified public accountantfor the audit services of domesticaccountingFirm|XuZhaohui,Li Xu|
|Overseas accounting firm name (ifhave)|－|
|Reward for overseas accounting firm(CNY‘0000) (if have)|0|
|Consecutive period for the auditservicesof overseasaccountingFirm|－|
|Name of Certified public accountantfor the audit services of overseasaccountingFirm|－|

Whetheror nottodismiss theaccountingfirm duringthereport period
□Yes (cid:53)No
Toemployinternalcontrol auditaccountingfirms,financialadviserorsponsor.
□Available (cid:53)Not available
10.Faceof suspensionand terminationof listing afterthe disclosureof annual report□Available (cid:53)Not available
11.Bankruptcyreorganization
□Available (cid:53)Not available
There isnobankruptcyreorganizationduringthe reportperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 12.Materiallitigation andarbitration
□Available (cid:53)Not available
There are nomateriallitigation andarbitrationduringthe reportperiod.
13.Penaltyandrectification
□Available (cid:53)Not available
There are nopenalties orrectificationsduringthe report period.
14.Creditofthe Company,holdingshareholdersand actualcontrollers
□Available (cid:53)Not available
15. Implementation of theCompany’s equity inventive plan, employee stock ownership plan orotheremployee incentive measures
□Available (cid:53)Not available
There are no implementation of theCompany’s equity inventive plan, employee stock ownership planandotheremployee incentivemeasures.
16.Significantrelatedtransactions
(1)Relatedtransactionsinrelationtoroutine operations
(cid:53)Available □Not available
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Interrelationship|Type ofrelatedtransaction|Content ofrelatedtransaction|Pricingprincipleofrelatedtransaction|Price ofrelatedtransaction|Amount ofrelatedtransaction(CNY‘0000)|Proportioninthesamekind oftransaction(%)|Approvedtransactionquota|Whether ornotexceedstheapprovedtransactioncredit|Settlementmethod ofrelatedtransaction|Marketprice|Date ofdisclosure|Disclosureindex|
|YantaiShenmaPackingCo.,Ltd.|Under the sameparentcompany|Relatedparty’scommodityand labortransaction|Procurementofcommodityandacceptanceoflaborfromrelatedparty|Agreementprice|－|15,389|11.08%|19,000|No|Check|－|2015.04.25|http://www.cninfo.com.cn|
|Total||||--|--|15,389|--|19,000||--|--|--|--|
|Detailsofrejectionofbigsales||||No||||||||||
|Ifa predictionis made tothetotalamountof routinerelated transactions to occur during this period bytype,whatisthe actualimplementationresultduringthereportperiod(ifhave)||||No||||||||||
|Cause of bigger differences in between transactionpriceandmarketreferenceprice(ifapplicable)||||Thetransactionpriceisfixedinreferencetomarketprice,noobviousdifference.||||||||||

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (2)Relatedtransactions inrelationtoacquisitionand sales ofassetsorequity
□Available (cid:53)Notavailable
Therearenorelatedtransactionsinrelationtoacquisitionorsalesofassetsor equityduringthe report period.
(3)Relatedtransactions inrelationtocommonforeigninvestment
□Available (cid:53)Notavailable
Therearenorelatedtransactionsinrelationtocommonforeign investmentduringthereport period.
(4)Relatedcurrentcreditand debt
(cid:53)Available □Notavailable
Whetherornotexistsnon-operatingrelatedcurrent creditanddebt
□Yes (cid:53)No
Therearenonon-businessrelatedcurrentcreditanddebt.
(5)Other major relatedtransactions
(cid:53)Available □Notavailable
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Detailed information about other related routine transactions among the Company, theCompany’s controlling shareholder Yantai Changyu Group Company Limited and its subsidiaries, please see Part 7‘‘Relation Among Related Parties and TheirTransactions’’ in the financial statement of this report.
Disclosurewebsiteof majorrelatedtransactions’temporaryreports forrelatedquery
||||
|-|-|-|
|Name ofTemporaryannouncement|DisclosuredateofTemporaryannouncement|Disclosurewebsitenameoftemporary announcement|
|Announcementabout2015annualroutine relatedtransactions|2015.04.28|Cninf(http://www.cninfo.com.cn)|

17.Majorandimportant contracts and executionresults
(1)Trusteeship,contractand leaseholdissues
(cid:99) Trusteeshipsituation
□Available (cid:53)Notavailable
Thereis notrusteeshipsituationduringthereport period.
(cid:100) Contractsituation
(cid:53)Available □Notavailable
Contractsituationdescription
During the report period, about theCompany’s contract operation situation, please see‘‘1.Subsidiary’’ in Annex 5‘‘The Consolidation ScopeofConsolidatedFinancialStatements’’ inthefinancialreport ofthis report.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Projectingains andlossesfor the Companytoachievemorethan10% ofthe totalprofit
□Available (cid:53)Notavailable
Therearenocontractprojects ingainsandlosses for the Companyto achieve morethan10%of thetotal profit duringthe reportperiod. (cid:101) Leaseholdsituation
(cid:53)Available □Notavailable
Leaseholdsituationdescription
On 1st January 2012, the Company renewed the Space Lease Agreement with the controlling shareholder Changyu Group, the Company leased the space with 57749.77 square meters located at 174 Shihuiyao Road, Zhifu District,Yantai City and the space with 3038 square meters located at 56 Dama Road, Zhifu District, Yantai City, which are all under the name of controlling shareholder. The rent of the above spaces per year is CNY5.858millionwitha periodof 5yearsfrom 1st January2012to31st December2016.
Projectingains andlossesfor the Companytoachievemorethan10% ofthe totalprofit
□Available (cid:53)Notavailable
Therearenoleaseholdprojects ingainsandlossesfor theCompany toachievemorethan10%of thetotal profit duringthereport period. (2)Majorguarantee
(cid:53)Available □Notavailable
(cid:99) Guarantee situation
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Unit:CNY’0000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|ExternalguaranteeoftheCompanyanditssubsidiaries（excludingguaranteetosubsidiaries）||||||||||
|Guaranteeobjectname|Disclosuredateofrelatedannouncementaboutguaranteequota|Guaranteequota|Actualdateofoccurrence(dateofagreement)|Actualguaranteeamount|Guaranteetype|GuaranteePeriod|Whetherornotcompleteimplement||Whether ornot belong torelated-partyguarantee|
|HSBCBank(China)CompanyLimitedQingdaoBranch|2015.04.28|12500|2014.11.27|11991|Pledge|2014.11.27-2015.11.26|Yes||No|
|Totaloftheexternalguaranteequotaapprovedduringthereportperiod(A1)||0||Totaloftheactualexternalguaranteeamountduringthereportperiod(A2)||0||||
|Totaloftheexternalguaranteequotaapprovedbytheendofthereportperiod(A3)||12500||Balanceoftheactualexternalguaranteebytheendofthereportperiod(A4)||11991||||
|GuaranteebetweentheCompanyandsubsidiaries||||||||||
|Guaranteeobjectname|Disclosuredateofrelatedannouncementaboutguaranteequota|Guaranteequota|Actualdateofoccurrence(dateofagreement)|Actualguaranteeamount|Guaranteetype|GuaranteePeriod||Whetherornotcompleteimplement|Whether ornot belong torelated-partyguarantee|
|Totaloftheguaranteequotaapprovedtosubsidiariesduringthereport||0||Totaloftheactualguaranteeamountfor||0||||

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||||
|-|-|-|-|-|-|-|-|-|
|period(B1)||||subsidiariesduringthereportperiod(B2)|||||
|Totaloftheguaranteequotaapprovedtosubsidiariesbytheendofthereportperiod(B3)||0||Balanceoftheactualguaranteeforsubsidiariesbytheendofthereportperiod(B4)||0|||
|Guaranteebetweensubsidiaries|||||||||
|Guaranteeobjectname|Disclosuredateofrelatedannouncementaboutguaranteequota|Guaranteequota|Actualdateofoccurrence(dateofagreement)|Actualguaranteeamount|Guaranteetype|GuaranteePeriod|Whetherornotcompleteimplement|Whether ornot belong torelated-partyguarantee|
|Totaloftheguaranteequotaapprovedtosubsidiariesduringthereportperiod(C1)||0||Totaloftheactualguaranteeamountforsubsidiariesduringthereportperiod(C2)||0|||
|Totaloftheguaranteequotaapprovedtosubsidiariesbytheendofthereportperiod(C3)||0||Balanceoftheactualguaranteeforsubsidiariesbytheendofthereportperiod(C4)||0|||
|TotaloftheCompany’sguaranteeamount（Totalofabovethreemajoritems）|||||||||
|Totaloftheapprovedguaranteequotaduringthereportperiod（A1+B1+C1）||0||Totaloftheactualguaranteeamountduringthereportperiod（A2+B2+C2）||0|||
|Totaloftheapprovedguaranteequota||12500||Balanceoftheactual||11991|||

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||
|-|-|
|bytheendofthereportperiod（A3+B3+C3）|guaranteebytheendofthereportperiod（A4+B4+C4）|
|TheproportionofActualtotalguaranteeamount(A4+B4+C4)intheCompany’snetasset|1.59%|
|Among:||
|Theamountofguaranteeforshareholders,actualcontrollersandtheirrelatedparties（D）|0|
|Theamountofdebtguaranteefortheguaranteedobjectswhoseasset-liabilityratioismorethan70%directlyorindirectly（E）|0|
|Totalamountofguaranteethatexceeds50%ofnetassets（F）|0|
|Totalamountoftheabove-mentionedthreeitems（D+E+F）|0|
|Explanationforundueguaranteesthathavehappenedwarrantyliabilityormaytakejointpaybackliabilitiesduringthereportperiod（ifhave）|No|
|Explanationforviolatingdueprocesstoprovideexternalguarantee（ifhave）|No|

Specificexplanationonadoptingcomplexguaranteetype
(cid:100) Illegalexternal guarantee
□Available (cid:53)Notavailable
Thereis noillegalguaranteesituationduringthereport period.
(3)Entrustingothers tomanage cashassets
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (cid:99) Financial management entrustment
□Available (cid:53)Notavailable
Thereis nofinancialmanagemententrustmentduringthereport period.
(cid:100) Loanentrustment
□Available (cid:53)Notavailable
Thereis noloanentrustment duringthe reportperiod.
(4)Other important contracts
□Available (cid:53)Notavailable
Therearenootherimportantcontracts duringthereport period.
18.Otherexplanationof major issues
□Available (cid:53)Notavailable
Therearenoothermajor issuesneedtobe explainedduringthereport period.
19.Majorissues ofCompany’s subsidiaries
□Available (cid:53)Notavailable
20.SocialResponsibility
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (cid:53)Available □Notavailable
During the report period, considering the fulfillment of theCompany’s social responsibility, please see 2015 Annual Social Responsibility Report disclosedonwww.cninfo.com.cnon29thApril 2016.
The listed company and its subsidiaries are whether or not to belong to the heavy pollution industry stipulated by the state environmental protectiondepartment.
□Yes (cid:53)No □Not available
21.Relatedcorporationbondssituations
Whether or not the Company has the corporation bonds issued in public, listed in the stock exchange, not due on the annualreport’s authorized issue dateor failedtopayinfull ontheduedate.
No
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. Changes in Shares and theShareholders’ Situation
1.Changes inshares
(1)Changes inshares
Unit:share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amountbeforethischange||Change (+,-)|||||Amountafterthischange||
||Amount|Percentage%|Allotnewshare|Distributebonusshare|Transferothercapital tosharecapital|others|Subtotal|Amount|Percentage%|
|1、Unrestrictedshares|685,464,000|100%||||||685,464,000|100%|
|(1)、Ashares|453,460,800|66.15%||||||453,460,800|66.15%|
|(2)、Bshares|232,003,200|33.85%||||||232,003,200|33.85%|
|2、Totalshares|685,464,000|100%||||||685,464,000|100%|

 Causeofsharechange
□Available (cid:53)Notavailable
Approvalof sharechange
□Available (cid:53)Notavailable
Transferof changedshares
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.□Available (cid:53)Notavailable
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the latestperiod,netassetpersharebelongingtotheCompany’scommonshareholders,etc.
□Available (cid:53)Notavailable
OthercontentstheCompanythinks necessaryor securitiesregulatorydepartmentsasktomake public.
□Available (cid:53)Notavailable
(2)Changes inrestrictedshares
□Available (cid:53)Notavailable
2.Securitiesissuance andlistingsituation
(1)Securities issuance(excludepreferredshare) duringreport period
□Available (cid:53)Notavailable
(2)Explanation of changeinCompany’s totalshares andshareholdingstructure andchange inCompany’sassetsand liability structure 51
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.□Available (cid:53)Notavailable
(3)Current employee shares
□Available (cid:53)Notavailable
3.Situation for shareholders andtheactual controllers
(1)The number ofshareholdersof the Companyandthe shareholdings
Unit：share
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Total shareholders inthe reportperiod|36,963|Total number ofshareholders by the end oflast month before thedisclosure day of theannualreport||36502||Totalnumber of preferredshareholder recoveringvoting power by the endofreport period (if have)(see note 8)||0||Totalnumber of preferredshareholder recoveringvoting power by the end oflast month before thedisclosure day of the annualreport (if have) (see note 8)|||0|
|Shareholdersholdingmore than5% orthe top10shareholdersholdingsituation||||||||||||||
|Name ofShareholders|Characterof shareholders||Percentage(%)||Shares held until theendof thereport period||Changesduring thereportperiod||Numberofrestrictedshares||Number ofunrestrictedshares|Pledgedor frozen||
|||||||||||||Share status|Amount|
|YANTAICHANGYU GROUPCO.LTD.|Domestic non-state-ownedlegalperson||50.4%||345,473,856||0||0||345,473,856||0|
|GAOLINGFUND,L.P.|Foreignlegalperson||3.11%||21,300,919||-2,876,078||0||21,300,919||0|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||||||
|-|-|-|-|-|-|-|-|
|CHINASECURITIESFINANCECORP|State-ownedlegalperson|2.33%|15,997,455|15,997,455|0|15,997,455|0|
|BBH BOS S/AFIDELITY FD -CHINAFOCUS FD|Foreignlegalperson|2.27%|15,576,126|-530,200|0|15,576,126|0|
|GREENWOODSCHINA ALPHAMASTER FUND|Foreignlegalperson|1.26%|8,617,471|8,617,471|0|8,617,471|0|
|GOLDENCHINAMASTER FUND|Foreignlegalperson|1.08%|7,389,916|5,415,971|0|7,389,916|0|
|NORGESBANK|Foreignlegalperson|0.83%|5,698,452|1,187,206|0|5,698,452|0|
|CENTRALHUIJINASSETMANAGEMENTLTD.|State-ownedlegalperson|0.69%|4,761,200|4,761,200|0|4,761,200|0|
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreignlegalperson|0.68%|4,669,572|1,188,656|0|4,669,572|0|
|FUGUOREFORMPOWERMIXEDSECURITIESINVESTMENTFUNDS|Domesticnon-state-ownedlegalperson|0.58%|4,000,000|4,000,000|0|4,000,000|0|

|||
|-|-|
|Strategic investors or legal result of the placement of newsharestobecome a top10shareholders(ifhave)(seenote 3)|No|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||
|-|-|-|-|-|
|The explanation for the associated relationship andaccordantaction|Among the top 10 shareholders, Yantai Changyu Group Company Limited has noassociated relationship or accordant action relationship with the other 9 listed shareholders,andtherelationshipamongthe othershareholdersis unknown.||||
|The top10shareholderswithunrestrictedshares|||||
|Name ofShareholders||Number of unrestrictedshares held until the end oftheyear|Type ofshare||
||||Type ofshare|Amount|
|YANTAI CHANGYUGROUPCO.LTD.||345,473,856|A|345,473,856|
|GAOLING FUND,L.P.||21,300,919|B|21,300,919|
|CHINASECURITIES FINANCECORP||15,997,455|A|15,997,455|
|BBH BOSS/A FIDELITY FD- CHINA FOCUSFD||15,576,126|B|15,576,126|
|GREENWOODSCHINA ALPHA MASTER FUND||8,617,471|B|8,617,471|
|GOLDEN CHINA MASTER FUND||7,389,916|B|7,389,916|
|NORGES BANK||5,698,452|B|5,698,452|
|CENTRALHUIJIN ASSET MANAGEMENTLTD.||4,761,200|A|4,761,200|
|GUOTAI JUNANSECURITIES (HONGKONG) LIMITED||4,669,572|B|4,669,572|
|FUGUOREFORM POWERMIXEDSECURITIES INVESTMENT FUNDS||4,000,000|A|4,000,000|
|The explanation for the associated relationship and accordant action of the top 10shareholders with unrestricted shares, the the associated relationship andaccordant action between the top 10 shareholders with unrestricted shares and thetop10shareholders||Among the top 10 shareholders, Yantai Changyu Group CompanyLimited has no associated relationship or accordant actionrelationship with the other 9 listed shareholders, and the relationshipamongtheothershareholders isunknown.|||
|Explanation for the top 10 shareholders who involved in financing activities andstocktradingbusiness||The top 10 shareholders do not involve in financing activities andstocktrade business.|||

Whether or not theCompany’s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the report period
□Yes (cid:53)No
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. There is no agreed repurchase trading taken by theCompany’s top 10 common shareholders and shareholders with unrestricted shares during the report period.
(2)Situation forthe controlling shareholdersof the Company
Property ofholdingshareholders
Type of holdingshareholders:Legalrepresentative
||||||
|-|-|-|-|-|
|Name ofcontrollingshareholder|Legalrepresentative|Establishmentdate|Organizationcode|Mainbusiness|
|YantaiChangyuGroupCo.Ltd.|SunLiqiang|1997.04.27|26564582－4|Production and distribution of wine,healthy liquor, distilled liquor andnon-alcohol beverages, planting ofagricultural products and exportbusiness under the scope ofpermission.|
|Equity situation for the other domestic listedcompanies controlled or shared by thecontrolling shareholders during the reportperiod|No.||||

Changesinthecontrollingshareholderduringthereport period
□Available (cid:53)Notavailable
Therearenochangesinthe controllingshareholderduringthereport period.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. (3)Situation forthe actualcontrollersof the Company
Propertyofactualcontrollers:domesticotherinstitutions;foreignotherinstitutions
Type of actualcontrollers:Legal representative
||||||
|-|-|-|-|-|
|Name of actualcontrollers|Legalrepresentative|Establishmentdate|Organizationcode|Mainbusiness|
|Yantai Yuhua Investment&Development Co.Ltd|JiangHua|2004.10.28|76779294－7|Under state permission, property investment, tenancy of machine and facility,wholesale and retail of construction material, chemical products (chemicalhazard products excluded), hardware and electronical products, grapeplantation.|
|ILLVA Saronno HoldingSpa|Philippe LEHOUEROU|1984.07.25|－|Directly or indirectly conduct the production and distribution of foodproducts (alcoholic products included) as well as industrial, commercial,financial and service activities of any other kinds through joint-stockcompaniesandorganizations|
|International FinanceCorporation|CaiJinyong|1956.07.25|－|International Finance Corporation is one of the members of World Bank,mainly dedicated to investment in private sectors of developing countrieswhile providing technical support and consultation service. The corporationis a multilateral financial institution that ranks first in the world in terms ofproviding capital stock and loans to developing countries. Its purpose is topromote sustainable investments of private sectors of developing countries inordertoalleviatepovertyandimprove people’s life.|
|Yantai GuofengInvestment Holdings Co.,Ltd|ChenDianxin|2009.02.12|00426068-6|Operating management of state-owned property right (stock right) authorizedby State-owned Assets Supervision and Administration Commission ofYantai Municipal Government; Financing, investment and operatingmanagement of government projects, such as strategic investment andindustrial investment and so on; Capital operation (including acquisition,reintegration and transfer, etc) of state-owned property right and state-ownedstock right within the scope of authorization; Venture capital investment|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
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|-|-|-|
|||business; Agency of venture capital investment business of other ventureinvestment enterprises or individuals; Participation in the establishment ofventure capital investment enterprises and venture capital investmentmanagement consultant institutions; Investment and financing servicebusiness; Investment and financing consultant business; Other businessauthorized by State-owned Assets Supervision and AdministrationCommission of Yantai Municipal Government.(Projects need to beauthorized in accordance with the law could carry out business activities onlyaftertheapprovalof relevantdepartments )|
|Equity situation for theother domestic listedcompanies controlled bythe actual controllerduringthe reportperiod|No||

Changesofthe actualcontrollersduringthereport period
□Available (cid:53)Notavailable
Therearenochangesinactualcontrollers duringthe reportperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Introduction for property right and control relations between the Company and its actual controllers
|||
|-|-|
||YantaiGuofengInvestmentHoldingsCo.,Ltd|
|IllvaSaronnoHoldingSpa||

 Actualcontroller controls the Companythrougha trust or otherassetmanagementways
□Available (cid:53)Not available
(4)Otherinstitutional shareholdersholdingmorethan10%shares
□Available (cid:53)Not available
(5) Shares reduction situations of holding shareholders, actual controllers, restructuring sideand othercommitment subjects
□Available (cid:53)Not available
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VII. Related Situation of Preferred Shares
□Available (cid:53)Not available
There are nopreferredsharesduringthereportperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VIII. Situation for Directors, Supervisors, Senior Management and Staffs
1.
Changes inshareholdings ofdirectors,supervisorsand seniormanagement
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Name|Post|Status|Gender|Age|Beginningdateof thepost|Endingdateof thepost|Sharesheldatthebeginningoftheperiod|Increasedsharesduringtheperiod|Decreasedsharesduringtheperiod|Otherchangesofsharesheld|Sharesheldattheendof theperiod|
|SunLiqiang|ChairmantotheBoardofDirectors|presentincumbent|M|68|2013.05.14.|2016.05.13|0|0|0|0|0|
|ZhouHongjiang|Vice-chairmantothe BoardofDirectorsandgeneralmanager|presentincumbent|M|51|2013.05.14.|2016.05.13|0|0|0|0|0|
|LengBin|Directorandvice-generalmanager|presentincumbent|M|53|2013.05.14.|2016.05.13|0|0|0|0|0|
|QuWeimin|Director,Vice-generalmanagerandSecretarytotheBoardofDirectors|presentincumbent|M|58|2013.05.14.|2016.05.13|0|0|0|0|0|
|ChenJizong|Director|presentincumbent|M|40|2013.05.14.|2016.05.13|0|0|0|0|0|
|AugustoReina|Director|presentincumbent|M|75|2013.05.14.|2016.05.13|0|0|0|0|0|
|AldinoMarzorati|Director|present|M|63|2013.05.14.|2016.05.13|0|0|0|0|0|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||incumbent||||||||||
|AntonioAppignani|Director|presentincumbent|M|77|2013.05.14.|2016.05.13|0|0|0|0|0|
|DaiHui|Director|presentincumbent|F|50|2014.05.23|2016.05.13|||||0|
|XiaoWei|Independentdirector|presentincumbent|M|55|2013.05.14.|2016.05.13|0|0|0|0||
|WangZhuquan|Independentdirector|presentincumbent|M|51|2014.05.23|2016.05.13|||||0|
|WangShigang|Independentdirector|Presentincumbent|M|50|2013.05.14.|2016.05.13|0|0|0|0||
|KongQingkun|Chairman for theBoard ofSupervisors|presentincumbent|M|43|2013.05.14.|2016.05.13|0|0|0|0|0|
|ZhangLanlan|Supervisor|presentincumbent|F|46|2013.05.14.|2016.05.13|0|0|0|0|0|
|GuoYing|Supervisor|presentincumbent|F|41|2013.05.14.|2016.05.13|0|0|0|0|0|
|YangMing|Vice-generalmanager|presentincumbent|M|57|||0|0|0|0|0|
|Li Jiming|Chiefengineer|presentincumbent|M|49|||0|0|0|0|0|
|JiangHua|Vice-generalmanager|presentincumbent|M|52|||0|0|0|0|0|
|SunJian|Vice-generalmanager|presentincumbent|M|49|||0|0|0|0|0|
|JiangJianxun|Financemanager|presentincumbent|M|49|||0|0|0|0|0|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 2.Changes intheCompany’s directors,supervisorsand seniormanagement
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|-|-|Leave post owing toexpirationofthe termofoffice||-|

3.Situationfor workexperience
The professional background, main work experiences and present positions of theCompany’s directors,supervisorsandseniormanagement
The main work experiences of theCompany’s directors, supervisors and senior management intherecent 5years
(1)Membersof Boardof Directors
Mr. Sun Liqiang, a college graduate and senior economist, was the representative of 10th and 11th NationalPeople’s Congress. Now he is the Party Secretary, Chairman and General Manager of Changyu Group. He began serving as chairman of the Company on September 18th,1997andhas heldthepositioneversince.
Mr. Zhou Hongjiang, a doctoral graduate and senior engineer, now is the vice chairman of Changyu Group ,and the representative of 12th NationalPeople’s Congress. He began serving as general manager of the Company on December 28th , 2001, Director, Vice Chairman and concurrently as General Manager of the Company on May 20th , 2002, he has held the positioneversince.
Mr. Leng Bin, a postgraduate and senior accountant and now is the Director of Changyu Group. He began serving as a director of the Company on June 15th, 2000 and held the positioneversince.
Mr. Qu Weimin, a bachelor of engineering and senior economist, has been serving as director, vice General Manager and concurrently as Secretary to the board of directors of the Company since September18th,1997.
Mr. Chen Jizong, a university graduate, the qualifications of statistician and accountant, now is the union director of property management department of SASAC Yantai and Director of ChangyuGroup.He hasbeendirectorof the CompanysinceMay13th2010.
Mr. Augusto Reina is serving as chief executive officer of several companies including Illva Saronno Holding SpA and Illva Saronno Investment SRL, member of the board of directors of Barberini Spa, director of Federvini (Italian Alcohols Production and Export Association), director of Istituto Del Liquore (Wine Research Institute), director of Assovini (Sicily Viniculture and Wine Production Association) and director of Changyu Group. He has been directorof theCompanysince April27th,2006.
Mr. Aldino Marzorati, a university graduate, is the General Manager of Illva Saronno Holding SpA and director of the board of directors of some branches under the group company and the director of Changyu Group. He has been director of the Company since April27th,2006.
Mr. Antonio Appignani, a university graduate, is vice chairman of Italian Business
Consultation Committee, chief of Professional Ethics Committee, teacher of vocational
training course of Industrial and Commercial Consultation Committee, member of Economic
and Commercial Committee of the public university “G. D Annunzio” and concurrently
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. serving as member of the board of directors of different companies and member of the board of directors of several companies under Illva Group and the director of Changyu Group. He hasbeendirector oftheCompanysinceApril 27th,2006.
Mr. Dai Hui, born in 1965, MBA, former project manager of Government Transfer Loan Department in China FOTIC (staying in Beijing), former manager assistant of High Net Worth Center in First Pacific Bank (staying in Hongkong), representative of Rabobank Beijing Office (staying in Beijing) and chief representative of Rabobank Beijing Office (staying in Beijing), is now consultant of IFC, director of Changyu Group Company and directorof ListedCompany.
Mr. Xiao Wei, a postgraduate and a lawyer, now is the partner of Jun He Law Office. He has beenservingasindependentdirectorof theCompany sinceSeptember1st,2010.
Mr.Wang Zhuquan,doctorof management(accountancy),firstbatchofnationalaccounting academicleadingpersonalsof FinancialDepartment,theentrant of accountantmaster
cultivationprojectofFinancialDepartment,Government SpecialAllowance expert,actedas independentdirector from 13th May2010to12th May2013.Now he istheprofessorandthe doctoralsupervisors oftheOceanUniversityof China aswell as independentdirector of
somelistedcompanieswhichcouldbe exemplifiedas QingdaoDoubleStarCo., Ltd.He acts asthe independentdirectorofthe Companyagainfrom 23rd May2014.
Mr. Wang Shigang, MBA and qualification of China Certified Public Accountant, now is the board chairman of Shandong Tianhengxin Construction Cost Consultion Co. Ltd., He previously served as independent director of the Company. He acts as the independent directoragainfrom 14th May2013.
(2)Membersof boardofsupervisors
Mr. Kong Qingkun, MBA and economist, used to be the section member of production department in the healthy liquor branch; the clerk and vice manager of general manager office,nowhe isthemanagerofgeneralmanager office.
Ms. Zhang Lanlan, a university graduate and economist, used to be vice-manager of import/export company, manager of import department; she is manager of board of directors office now.
Ms. Guo Ying, a university graduate and senior accountant, used to be the member of financial audit department of Yantai Yiqing Industry Company; senior staff of operating supervision department of SASAC Yantai, senior staff and vice director of directors& supervisoroffice; nowshe isvicedirectorofdirectors& supervisoroffice ofSASAC Yantai. (3)Other seniormanagers
Mr. Yang Ming, a university graduate and applied researcher, has been serving as Vice GeneralManagerof theCompanysinceAugust 12th,1998.
Mr. Li Jiming, a doctor and applied researcher, has been serving as Chief Engineer of the CompanysinceSeptember 14th,2001.
Mr. Jiang Hua, a postgraduate and senior engineer has been serving as Vice General Manager ofthe CompanysinceSeptember 14th,2001.
Mr. Sun Jian, an MBA and economist, has been serving as Vice General Manager of the CompanysinceMarch22nd,2006.
Mr. Jiang Jianxun, an MBA and accredited accountant, has been serving as Financial Managerofthe CompanysinceMay20th,2002.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Postintheshareholder’s company
(cid:53)Available □Notavailable
|||||||
|-|-|-|-|-|-|
|Name|Shareholder’s Company|Post|Beginningdateofthe post|Endingdate ofthepost|Paidbyshareholder’scompanyor not|
|SunLiqiang|YantaiChangyuGroupCo.Ltd.|Chairman andgeneralmanager|2013.10.08|2017.10.07|No|
|ZhouHongjiang|YantaiChangyuGroupCo.Ltd.|Vicechairman|2013.10.08|2017.10.07|No|
|Li Jiming|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|SunJian|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|ChenJizong|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|AugustoReina|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|AldinoMarzorati|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|AntonioAppignani|YantaiChangyuGroupCo.Ltd.|Director|2013.10.08|2017.10.07|No|
|DaiHui|YantaiChangyuGroupCo.Ltd.|Director|2014.03.06|2017.10.07|No|
|Explanation for the post in theshareholder’scompany|No.|||||

Postatothercompanies
√ Available □ NotAvailable
|||||||
|-|-|-|-|-|-|
|Name|Other’s Company|Postatothercompany|Beginningdateofthe|Endingdate ofthepost|Paidbyothercompanyor not|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||
|-|-|-|-|-|
||||post||
|Leng Bin|Yantai Changyu ZhongyaMedicine & Healthy Liquor Co.,Ltd|Directorandlegalrepresentative|2012.09.10|No|
|Explanation for the post in theshareholder’scompany|No.||||

Disciplinary actions taken by securities regulators in recent 3 years to theCompany’s directors, supervisors and senior management both on the jobandleft duringthereport period
□Available (cid:53)Notavailable
4.Salaryof directors,supervisorsand seniormanagement
Decision-makingprocess,thebasisfor determining,theactualpayments ofdirectors,supervisorsandseniormanagement
The salary for the independent directors is paid according to the resolution ofshareholders’ meeting. The salary for the chairman, directors with administration duty, supervisors, managers and other senior management should be paid on basis of the evaluation result according to the Proposal on Assessment Methods of theCompany’s SeniorOfficers’ Performance from 2014 to 2017 which was passed during the Board ofDirectors’meeting.
Salaryof directors,supervisorsandseniormanagement duringthereport period
Unit:CNY’0000
||||||||
|-|-|-|-|-|-|-|
|Name|Post|Gender|Age|Status|Totalrewardfromthecompanybefore tax|Whethergetrewardfromrelatedparties ofthecompany|
|SunLiqiang|Chairman to the Board ofDirectors|M|68|presentincumbent|135|No|
|ZhouHongjiang|Vice-chairman to the Board ofDirectorsandgeneralmanager|M|51|presentincumbent|135|No|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|LengBin|Director and vice-generalmanager|M|53|presentincumbent|95|No|
|QuWeimin|Director, Vice-general managerand Secretary to the Board ofDirectors|M|58|presentincumbent|94|No|
|ChenJizong|Director|M|40|presentincumbent|0|No|
|AugustoReina|Director|M|75|presentincumbent|0|No|
|AldinoMarzorati|Director|M|63|presentincumbent|0|No|
|AntonioAppignani|Director|M|77|presentincumbent|0|No|
|DaiHui|Director|F|50|presentincumbent|0|No|
|XiaoWei|IndependentDirector|M|55|presentincumbent|5|No|
|WangZhuquan|IndependentDirector|M|51|presentincumbent|5|No|
|WangShigang|IndependentDirector|M|50|presentincumbent|5|No|
|KongQingkun|Chairman for the Board ofsupervisors|M|43|presentincumbent|66|No|
|ZhangLanlan|supervisor|F|46|presentincumbent|19|No|
|GuoYing|supervisor|F|41|presentincumbent|0|No|
|YangMing|Vice-generalmanager|M|57|presentincumbent|88|No|
|Li Jiming|ChiefEngineer|M|49|presentincumbent|85|No|
|JiangHua|Vice-generalmanager|M|52|presentincumbent|95|No|
|SunJian|Vice-generalmanager|M|49|presentincumbent|83|No|
|JiangJianxun|Financemanager|M|49|presentincumbent|66|No|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|Total|-|-|-|-|976|-|

 The awardedequityincentives for thedirectors,supervisorsandseniormanagementof the Companyduringthe report period
□Available (cid:53)Notavailable
5.Staffof the Company
(1)Staff number,specialtyconstitution andeducationdegree
|||
|-|-|
|Incumbentstaffnumberof parentcompany(people)|1,845|
|Incumbentstaffnumberof major subsidiarycompanies(people)|3,155|
|Totalincumbent staff (people)|5,000|
|Totalstaffgettingpaidincurrentperiod(people)|5,000|
|Retired staff number whose expenses are undertaken by parentcompanyor subsidiarycompanies(people)|0|
|Specialtyconstitution||
|Category|Number of people(people)|
|Production staff|1,434|
|Salesstaff|2,563|
|Technicalstaff|194|
|Financialstaff|190|
|Administrativestaff|619|
|Total|5,000|
|Educationdegree||
|Category|Number(People)|
|Bachelorandabove|1,324|
|JuniorCollege|2,299|
|Technicalsecondaryschool|791|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||
|-|-|
|Seniorhighschoolandbelow|586|
|Total|5,000|

 (2)Remunerationpolicy
The Company builds and improves the remuneration and welfare system, including salary system, incentive mechanism, social security and health insurance and so on, to make sure that all staff could be insured. In accordance with the law, the Company buys social old-age insurance, medical insurance, occupational injury insurance, unemployment insurance and maternity insurance, and pay housing fund for staff. Based on the principle of “distribution according to work, equal pay for equal work”, the Company pay thestaff’s remuneration timely. With the increase of theCompany’s profitability, the Company steadily improves thestaff’s remuneration and welfare, and provides the competitive salary income anddevelopment spaceof equalopportunityfor staff.
(3)Trainingplan
In order to further improve theemployees’ comprehensive quality and professional skill, the 2016 training plan for theCompany’s major employeeis shownas follows:
① SeniorandMiddle-levelManagers
Firstly, it is commonality training. Training topics related with industrial development, business orientation and management philosophy would be chosen to open the senior and middle-levelmanagers’ minds, to promote operation philosophy and also to improve scientific decision-making capacity and operation capacity. The Company plans to employ professional lecturers to give lectures in the company or through remote internet videos. There will be four topics arranged for senior and middle-level managers within the year, one topic in each quarter and one to two days for eachtopic.
Secondly, it is professional training. Based on personnel work, senior and middle-level managers would be organized in batches to attend high-end forum and summit of entrepreneur and to visit domestic and foreign successful enterprises for studying. Middle-level managers would be encouraged to take participation in MBA and other master degree. The professional managers related with finance, equipment, safety, technology quality and other professional fields would be organized to attend vocational qualification test to get vocational qualification certificate. Senior and middle-level managers would attend special training organized by theCompany’s professional management department for safety,technology,equipment,financeandtourismandsoon,noless thantwicea year.
② SectionChiefandOrdinaryStaff Members
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Firstly, it is commonality training. Courses would be arranged in order to improve capability of management, innovation and execution. In addition, professional lecturers or college teachers would be employed to give lectures in the company, twice a year and one day for each time. They would attend commonality trainings about enterprise culture, rules and regulation, and various alcohol product knowledge which should be knownandgrasped.
Secondly, it is professional training. Professional and responsible senior managers would choose one book for their subordinate administrative personnel to study on their own. At the end of the year these administrative personnel should propose suggestion for thecompany’s development on the basis of their own work. Eligible general administrative personnel would be encouraged to take participation in MBA and other master degree. The professional administrative personnel related with finance, equipment, safety, technology quality and other professional fields would be organized to attend vocational qualification test to get vocational qualification certificate. Based on their undertaking work, they would attend special training organized by theCompany’s professional management department no less than twice a year, which involve safety, technology, equipment,finance,tourismandcomprehensivemanagementandotherspecialprojects.
③ MarketingPersonnel
Firstly, it is commonality training. They would study training materials related with theCompany’s management system, product knowledge and salesresponsibility system.
Secondly, it is professional training. For personnel whose level is or above manager assistant in the city marketing management company, the Company would invite professional lecturers to the company or by means of remote internet video to give lectures about successful cases and economic situation research incurrent domestic andforeign wine industry, once a quarter andone dayfor each time. For city marketing manager, the Company would strengthen their training for marketing skills as well as execution ability of thecompany’s sales policy. The Company would invite its professional management cadre or employ professional lecturers to take closed training for these managers, once at the beginning of each month and one day for each time. For business directors and other personnel, every marketing management company should be based on the local business and adopt training methods of employing professional lecturers combined with going outside for visit and learning so as to make all marketing personnel within its jurisdiction attend training about successful marketing cases and marketing management philosophy.The frequencyofthistrainingisoncea quarterandonedayfor eachtime.
(4)Labor outsourcing
□Available (cid:53)Notavailable
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IX. Corporate Governance
1. CurrentCorporate GovernanceSituation of theCompany
The Company has, according to relevant national laws and rules including the Company Law of thePeople’s Republic of China, Securities Law of thePeople’s Republic of China, Guidelines on Corporate Governance of Listed Companies, Listing Guidelines at Shenzhen Stock Exchange and also other laws and rules issued by CSRC and Shenzhen Stock Exchange, and combining the own actual situation, established Articles of Associations and other internal governance regulations, constantly improved its legal entity structure and internal management rules, legally conducted its activities and strengthened the information disclosure. TheCompany’s governance structure is in accord with requirements of relevant regulatorydocumentsonlistingcompany’s governanceissuedbyCSRC.
(1)、Aboutshareholdersandshareholders’ meeting
The Company has already set up the Deliberation Rules ofShareholders’ Meeting, and convened theshareholders’ meetings in strict accordance with requirements of standard opinion ofshareholders’ meeting, made the great effort to provide convenient conditions for more shareholders to participate theshareholders’ meeting, and ensured all shareholders to enjoy same equity and well exercised their rights. The Company drew great attention to the communication and exchange with shareholders, actively responded theshareholders’ inquiry and questions, and widely listened to the suggestions and comments from shareholders.
(2)、About the Companyandholdingshareholder
The Company has independent power on business and self-management, and also be independent of its holding shareholder on business, staff, assets, organization and finance. The Board of Directors, Board of Supervisors, management team and also internal organizations operated independently in the Company. The holding shareholder of the Company could regulate its activities, no other behavior was found that surpassed theshareholders’ meeting to directly or indirectly interfere with the decision-making and business activities of the Company, or occupied any assets of the Company which damagedtheCompany’sandmedium& smallshareholders’interests.
(3)、About the directorandboardof directors
The Company strictly appoints all directors in light of Company Law and Articles of Associations. The qualifications of all directors are in line with the requirements of laws and regulations. In accordance with the requirements of Corporate Governance Guidelines, the Company has already carried out the cumulative voting system. At present, the Company has three independent directors accounting for one fourth of all directors, and the number and composition of board of directors was basically in accord with requirements of regulations and also Articles and Associations. All directors of the Company could work in the light of regulations including Rules of Board ofDirectors’ Procedure and Working Rules for Independent Directors, punctually attended board ofdirectors’ andshareholders’ meetings, actively took part in relevant knowledge training, knew very well about the laws and regulations concerned, had a deep knowledge and long experience of practitioners, and
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. performed their duties according to the law and regulations. The Board of Directors convenedthemeetings inaccordancewithrelatedrules andregulations.
(4)、About supervisorandboardofsupervisors
The Company strictly elected all supervisors in light of Company Laws and Articles of Associations. At present, board of supervisors has three people among which one supervisor is representative for staff, the number and composition of board of supervisor was in accord with requirements of regulations and rules. All supervisors of the Company could follow the requirement of Rules of Board ofSupervisors’ Procedure, insist the principle of responsibility to all shareholders, seriously perform their duties, effectively supervise and present their independent opinion on important issues, interrelated deals, financial status, the dutyperformance ofdirectorsandmanagersof the Company.
(5)、 About performance evaluationandincentive system
The engagement of managers was open and transparent, and accorded with laws and regulations. The Company has established and gradually improved the performance evaluation standard and formed efficient incentive system, so as to ensure the salary of staff tobe linkedwithjobperformance.
(6)、 About the partywithrelevantbenefit
The Company could fully respect and safeguard the legal rights of the party with relevant benefit, cooperate actively with the stakeholders, jointly drive the Company to develop continually and stably, pay great attention to the issues such as local environmental protection and public utilities etc., and assume full responsibilities for the social responsibility.
(7)、 About the informationdisclosureandtransparency
The Company has appointed the secretary to Board of Directors to be responsible for investor relation management including information disclosure, investor relations management and reception ofshareholders’ visit and consultation. The Company has also assigned China Securities Newspaper, Securities Times, Honkong Commercial Daily and web site http://www.cninfo.com.cn/ to disclose information, punctually, accurately and truly disclosed any information in the light of requirement of relevant laws and rules, and also ensuredallshareholderstohave same opportunitytoacquireanyinformation.
In order to further perfect theCompany’s governance system, during the report period, the Company formulates Evaluation and Management Methods of Self-supporting Vineyards in 2015, Management Methods of Self-supporting Bases in Yantai, Changyu Company Examination and Evaluation Methods of Contractual Base in 2015, Management Methods of Overseas Enterprises, Evaluation Methods of SAP operating maintenance staff in information management department, Opinions of Strengthening the construction of Provincial and City-level Manager Team, and Opinions of Currently Strengthening Human Resource Management, etc. In addition, the Company also modify and improve some management systems, such as Management Methods of Labor Contract and Opinions of Staff TrainingatAll Levels inBothProductionAnd OrganSystems,etc.
Whether or not there is significant variance between theCompany’s actual situation of corporate governance and the normative documents about listed company governance issued byChinaSecurities RegulatoryCommission.
□Yes (cid:53)No
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. There is no significant variance between theCompany’s actual situation of corporate governance and the normative documents about listed company governance issued by China SecuritiesRegulatoryCommission.
2. Relative to the controlling shareholder, independence of the Company on business, personnel,assets,organization andfinance
(1)、Personnel Arrangement: theCompany’s general manager, vice general managers and other senior officers, all of whom were paid by the Company did not hold any post in the controlling parties. The Company was entirely independent in personnel arrangement, conclusion and adjustment of labor contracts thanks to its sound and independent system for labor,personalandsalarymanagement.
(2)、Assets: Tangible assets and Intangible assets including trademark, industrial property right and non-patent technologies were all clearly divided between the Company and the controlling shareholder, and all legal formalities were completed. The Company being a legal independent entity consistently conducted business activities legally and provided no guarantee in any form with its assets for its shareholders orindividuals’ liabilities or any other legal persons or natural persons. The Company has already transferred free the trademarks to the Company including“黄金冰谷”,“爱斐堡”,“爱菲堡”,“爱斐” and “AFIP”, etc. However, due to some issues from the past,the Company permitted to use “Changyu” etc the intangible assets such as part of trademark ownership and patent still held by the controllingshareholders.
(3)、Finance: The Company has independent finance department, chief account and financial staff, and also complete, independent and standardized accounting system. The Company has also established its own bank accounts, duly and legally paying taxes, workers insurance fund. All financial individuals do not hold any concurrent posts in associated companies and are able to make financial decisions independently. The Company has its own audit department, whichisespeciallyresponsiblefor theinternalauditworkof theCompany.
(4)、Offices: The Company has set up a sound organizational framework, in which the Board of Directors and Board of Supervisors operate independently, no superior and subordinate relationship exists between the functional departments of the controlling shareholder. The Company has its own independent production& business offices, all functional departments are independent to exercise their powers and carry out the production and business activities independently.
(5)、 Operations: the operations of the Company are independent of the controlling shareholder, the Company owns itself completely independent systems covering research and development, accounting, workforce and labor, quality control, raw materials purchase, production and sales, and is possessed of self-run capabilities, and has neither relationship with the controlling shareholder in terms of supply and sales by proxy nor competition with theother.
Progress of theCompany’s special activities in terms of corporate governance as well as formulation and implementation of inside information source registration and management rules
In order to strengthen management of inside information source and prevent occurrence of
backstage deals, theCompany’s 5th session of Board ofDirectors’ 10th meeting deliberated
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. and passed the Inside Information Source Registration and Management Rule on April 18, 2012. The founding of the system standardized the approval process of insid e information reporting, defined the scope of inside information source, and set up a prevention and punishment mechanism of inside information. During the report period, the Company has strictly managed staffs who contact with inside information Source against material inside information of the sensitive disclosure etc such as reporting informationinsiders’ registration, and informing timely to supervisory department. During the report period, there were no in the Company the informationinsiders’ transactions of theCompany’s shares by taking advantage of the sensitive inside information that affects theCompany’s share price before it wasdisclosedandnosupervisorydepartments’ punishment records,either.
3.Situationfor Horizontal Competition
□Available (cid:53)Not available
4. Information for theshareholders’ meeting and temporaryshareholders’ meeting held duringthe reportperiod
(1)Informationfortheshareholders’ meetingduringthe reportperiod
|||||||
|-|-|-|-|-|-|
|Session|Meetingtype|Participationratioof investors|Conveningdate|Disclosuredate|DisclosureIndex|
|Noticeof 2014AnnualShareholders’MeetingResolution|Annualshareholders’meeting|62.32%|2015.05.22|2015.05.23|http://www.cninfo.com.cn/finalpage/2015-05-23/1201050607.PDF|

(2) Request for convening temporaryshareholders’ meeting by priority shareholders owingrecoveredvoting right
□Available (cid:53)Not available
5.Performance ofindependent directors duringthe reportperiod
(1) Attendance of independent directors for the board of directors and theshareholders’ meeting
||||||||
|-|-|-|-|-|-|-|
|Attendanceofindependentdirectors for theboardof directors|||||||
|Name|Requiredattendancetime|Personalattendance|Communicationattendance|Authorizedattendance|Absence|Whether ornot to attendthe meetingspersonally forsuccessivetwice|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||||||
|-|-|-|-|-|-|-|
|WangZhuquan|4|3|1|0|0|No.|
|XiaoWei|4|1|1|2|0|No.|
|WangShigang|4|3|1|0|0|No.|
|Attendance time ofindependent directors forthe shareholders’meeting||1|||||

Explanation for not personally attending the Board ofDirectors’ meetings for successive twice
No
(2)AnyobjectionsfortheCompany’s projectsfrom theindependentdirectors
Whetheror nottheindependentdirectors raisedanyobjectionsfortheCompany’s projects.□Yes (cid:53)No
During the report period, the independent directors did not raise any objections for theCompany’sprojects.
(3)Otherexplanationsonindependentdirectors’performance
Theindependentdirectors’ propositionsareacceptedbythe Companyor not
(cid:53)Yes □No
Explanationonacceptanceorrefusaloftheindependentdirectors’ propositions
Independent directors propose suggestions on enhancing the feasibility study of investment projects. The Company has organized many times both domestic and foreign experts to make study to major investment projects repeatedly and to demonstrate many times, laying foundation forboardofdirectors’scientific decision.
6. Performance of the special committees under the Board of Directors during the reportperiod
(1)Summary reportof theBoardofDirectors’ Audit Committee
1 On March 23th , 2015, after the certified public accountants responsible for annual audits had introduced their preliminary opinions, the independent directors on behalf of the Audit Committee communicated with them and made written comments which read that “we communicated in detail with the certified public accountants responsible for auditing of theCompany’s 2014 Annual Report who expounded the main standards, main emphasis audited field, the problems and the matters necessary to adjust that were found during the auditing.We’ve noticed that the Company has adjusted the matters as the accountants suggested. On the basis of our communication with the accountants, the production and operation results that theCompany’s management reported to us as well as the progress of important events, we believe that we have no objection to theCompany’s 2014 Annual Financial Statement preliminarily examined by Deloitte Hua Yong Certified Public Accounts Co., Ltd. and the
preliminaryauditopinionsof thatServices.”
2 On 26rd April 2015, the Board ofDirectors’ Audit Committee deliberated and passed 2014
Annual Auditing Report, Proposal on 2014 Annual Profit Distribution, Proposal on
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Appointment for Certified Public Accountants Firm, 2014 Annual Self Assessment Report on the Company's Internal Control and 2015 Annual Internal Audit Plan issued by Deloitte Hua YongCertifiedPublic AccountsCo.,Ltd.
All of committee members unanimously agree to submit the above proposals to theCompany’s6th SessionBoardofDirectors’4th Meetingfor deliberation.
The meetingreachedthe followingconsensus:
(A) The clean-opinion auditing report on theCompany’s 2014 Annual Financial Statement issued by Deloitte Hua Yong Certified Public Accounts Co., Ltd reflects theCompany’s financialcondition,operatingresults andcashflowtruly, objectivelyandcorrectly.
(B) The profit distribution scheme that the Company formulated is relatively acceptable, taking theshareholders’ interest into account while paying attention to theCompany’s long-term development.
(C) Considering the strict maintenance of objective and fair standpoint as well as the high audit quality and reasonable arrangement for audit progress during the process of theCompany’s 2014 annual financial audit and internal control audit taken by Deloitte Hua Yong Certified Public Accounts Co., Ltd, it is proposed that the Company will reappoint Deloitte Hua Yong Certified Public Accounts Co., Ltd as the 2015 annual auditor of the Company. The employment period is one year and the audit will be taken from two aspects shownasfollows.
On one hand, Deloitte will take the audit of 2015 annual financial report and issue a Financial Audit Report. On the other hand, Deloitte will take the audit of 2015 annual internal control auditandissueanInternal ControlAudit Report.
The annual auditing fee for the above parts are CNY 1.95million, including travel expense andallservicecharges.
(D) TheCompany’s 2014Annual Self Assessment Report on the Company's Internal Control has truly and objectively mirrored out the present standing of theCompany’s internal control and can basically ensure the effective implementation of its policies and realization of its strategicgoals.
(E) TheCompany’s 2015 Annual Internal Audit Plan is comparatively perfect and practicable, based on which theCompany’s Audit Department will conduct the 2015 annual internal audit.
3 On 26th August 2015, the Board ofDirectors’ Audit Committee deliberated and passed 2015 Semiannual Report and 2015 Semiannual Profit Distribution. The meeting reached the followingconsensus:
TheCompany’s 2015 Semiannual Financial Statements reflected theCompany’s financial condition,operatingresults andcashflow truly,objectivelyandcorrectly.
As the Company just realized 2014 Annual Profit Distribution Scheme in middle July, we propose neither to distribute profits for the first half of 2015 nor to increase theCompany’s capital stock with accumulated public fund. The net profit made in the first half of this year will be reserved and distributed at the end of the year. Our Auditing Committee considers the suggestiontobereasonable.
All of Committee members unanimously agree to submit the above proposals to theCompany’s6th SessionBoardofDirectors’10thMeetingfordeliberation.
(2)Summary reportof theBoardofDirectors’ Emolument Committee
The Board ofDirectors’ Emolument Committee is responsible for assessment of the
economic responsibilities of the directors and the senior managers who receive salaries from
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. the Company and examination of the salary policy and scheme designed for theCompany’s directors andseniormanagers.
1 Propose onCompany’s 2014 Annual SeniorExecutive’s Performance Assessment Results was deliberated and passed by the Board ofDirectors’ Emolument Committee on 26th April 2015, who thought that this document was in compliance with Performance Assessment Methods forCompany’s Senior Executive from 2014 to 2017 approved by theCompany’s 6thSessionBoardofDirectors’4th Meeting.
All committee members unanimously agree to submit the above proposals to theCompany’s6thSessionBoardofDirectors’8thMeetingfor deliberation.
2During the report period, the Board ofDirectors’ Emolument Committee also examined the 2014 annual payroll records of the directors and the senior managers who receive salaries from the Company. The committee believes that theCompany’s directors, supervisors and senior managers got paid completely in line with the processes of theCompany’s economic responsibility assessment system and the salaries the Company made public were in conformitywiththeactuallypaidamount.
7.The workof the Boardof Supervisors
During the report period, whether the board of supervisors found any existence of risk for the Companyduringtheir oversightactivities.
□Yes (cid:53)No
During the report period, the board of supervisors has no objection during their oversight activities.
8.Performance Evaluationand Incentive toSeniorManagement
The Company has already established a sound system for evaluation of achievement of senior management and the related incentive system which linked the reward with theCompany’s benefit and personal achievement. The Emolument Committee under Board of Directors assumed the responsibility of stipulating the policy and appraising the scheme for salaries and rewards. Based on theCompany’s annual production and business goals, this committee examined senior personals and also their responsible subsidiaries or departments according to their management achievement and index, and took these as a criteria of awards or penalties. During the report period, because of not finishing the annual business plan deliberated and passed in the Board ofDirectors’ meeting at the beginning of the year, the total salaries and rewardsof theseniormanagementarebasicallyequaltothatof lastyear.
9.Internal Control
(1)Specific circumstances for the significant defectsof theinternal controlfoundduring the reportperiod
□Yes (cid:53)No
(2)Self-assessment reportoninternal control
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||||
|-|-|-|-|
|Disclosuredateforthefulltextoftheinternalcontrolself-assessmentreport||2016.04.29||
|Disclosureindexforthefulltextoftheinternalcontrolself-assessmentreport||www.cninfo.com.cn||
|StandardsofDefectIdentification||||
|Category|Financialreport||Non-financialreport|
|Qualitativecriteria|Significant defects: one defect of internalcontrol, individually or together with otherdefects, has the reasonable probability to causethe significant misstatements, which can not bepromptly prevented, or found and correctedtimelyinthefinancialreport. Forexample:(cid:99)Company’s Directors, Supervisors and SeniorManagement have fraudulent practices; (cid:100)Company makes corrections for the publishedfinancial report; (cid:101) The audit of externalintermediary agent finds significantmisstatement existing in the current financialreport, but Company does not realize it duringthe operation process; (cid:102) Negative informationfrequentlyappearsinthemediaswithinvolvinga wide scope; (cid:103) Company’s audit committeeand internal audit department makes aninefficient supervision for internal control; (cid:104)Other situations maybe cause significantmisdirection which guides the report users tomaketherightjudgment.Major defects：The defect of internal control,individually or together with other defects, hasthe reasonable probability to cause thesignificant misstatements, which can not bepromptly prevented, or found and correctedtimely in the financial report, although themisstatements neither achieves nor exceeds theimportance level but still arising the attentionof Board of Directors and management team.(cid:99) Failure to select and apply accountingregulations in accordance with generallyaccepted accounting principles; (cid:100) Failure toestablish the anti-fraud procedures and controlmeasures; (cid:101) Failure to set up correspondingcontrol mechanism or to carry out and takecorresponding compensating control for theaccounting treatments with irregular and||Significant defects: Any situations listedbelow appears, it can be regarded assignificant defects. (cid:99) Operation: Unable toachieve all operation target or key businessindex, widely out of budget in variousaspects. (cid:100) Safety accident effects: Cause noless than one person death, or more than 3person serious injuries. (cid:101) Major negativeeffects: Negative information frequentlyappears in the medias with involving a widescope in the international and nationalmainstream media. (cid:102) Environment effects:Create irreparable damages to environment,andcausemassivepubliccomplains.Major defects: Any situations listed belowappears, it can be regarded as major defects.(cid:99) Operation: Unable to achieve partlyoperationtarget,abigmarginoutofbudgetinvarious aspects. (cid:100) Safety accident effects:Without reaching the person loss or thenumber of serious injury of significantdefects. (cid:101) Major negative effects: Negativenews appears in the media with influencing awide scope in the provincial mainstreammedia. (cid:102) Environment effects: Cause heavyenvironment damages and massive publiccomplains, ought to carry out the significantremedialmeasures.General defects: Any situations listed belowappears, it can be regarded asgeneral defects.(cid:99) Operation: Other effects unable toconstitute the significant defects or majordefects. (cid:100) Safety accident effects: Personalinjury less than the quantitative standards ofmajor defects. (cid:101) Major negative effects:Other defects unable to constitute thesignificant defects or major defects. (cid:102)Environment effects: Other environment|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
||||
|-|-|-|
||special deal; (cid:102) Negative news appears in themediawithinfluencingawidescope;(cid:103) Oneormore defects exist in the control during theprocess of the ending financial report, and thetarget of achieving truthfulness and integralitycannot be reasonably guaranteed in thefinancial report; (cid:104) General defects refer to theother control defects, which do not constitutethesignificantandmajordefects.|effects unable to constitute the significantdefectsormajordefects.|
|Quantitativecriterion|Fortotalassets/Owner’sequity:(cid:99)Significantdefects:misstatements ≧1%(cid:100)Majordefects:0.5%≦misstatements<1%(cid:101)Generaldefects:misstatements<0.5%Foroperationrevenue:(cid:99)significantdefects:misstatements ≧1%(cid:100)Majordefects:0.5%≦misstatements<1%(cid:101)Generaldefects:misstatements<0.5%Forpretaxprofit:(cid:99)Significantdefects:misstatements ≧5%(cid:100)Majordefects:2%≦misstatements<5%(cid:101)Generaldefects:misstatements<2%|Fordirectpropertyloss:(cid:99) Significant defects: More than CNY10million(cid:100) Major defects: CNY 1 million-10 million(including1million)(cid:101)Generaldefects:LessthanCNY1million|
|Number of significantdefect in financialreport|0||
|Number of significantdefectin non-financialreport|0||
|Number of majordefect in financialreport|0||
|Number of majordefectin non-financialreport|0||

10.Internal controlauditreport
(cid:53)Available □Not available
|||
|-|-|
|Auditopinionsof theinternalcontrol auditreport||
|We believe that Yantai Changyu Pioneer Wine Co., Ltd. is in accordance with the rules of GeneralCriteria of Company’s Internal Control and other related rules, all significant aspects keep effectiveinternalcontrolinthefinancial report.||
|Disclosure of the internal control audit|Disclosure|

YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.
|||
|-|-|
|report||
|Disclosure date for the full text of theinternalcontrolauditreport|29thApril 2016|
|Disclosure index for the full text of theinternalcontrolauditreport|Document name: 2015 Annual Internal Control ReportonSelfAssessment.Websiteaddress:www.cninfo.com.cn|
|Opinion type of the internal control auditreport|Standardwithoutreservedopinion|
|Whether or not exists significant defects innon-financialreports|No|

Whether or not the certified public accountants issued a non-standard advice for the audit report ofinternalcontrol.
□Yes (cid:53)No
Whether the audit report of internal control issued by the certified public accountants is in consistencywiththeself-assessmentreport of theboardofdirectors.
(cid:53)Yes □No
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. X. Financial Report
1.AuditReport
|||
|-|-|
|Type of auditopinion|Standardunqualifiedauditopinion|
|Date signedonauditreport|25thApril,2015|
|Auditagencyname|Deloitte Hua Yong certified public accountants co.,Ltd.(specialgeneralpartnership)|
|Certifiedpublicaccountant'sname|XuZhaohui LiXu|

DeShi Bao(Shen)Zi(15) No.P1560 AUDITOR'S REPORT
TOTHE SHAREHOLDERSOF
YANTAI CHANGYUPIONEER WINECOMPANYLIMITED
We haveauditedtheaccompanyingfinancialstatementsof YantaiChangyuPioneerWine CompanyLimitedanditssubsidiarieswhichcomprisethe consolidatedandcompany's balance sheetsas at31December2015,andtheconsolidatedandcompany's income statements,the consolidatedandcompany's cashflowstatementsandthe consolidatedandcompany's statements ofchangesinshareholders'equityfor theyearthenended,andthenotes tothe financial statements.
1.Management'responsibilityfor thefinancialstatements
Managementof theCompanyis responsible for thepreparationandfair presentationof these financialstatements. This responsibilityincludes:(1)preparingthe financialstatementsin accordancewithAccountingStandards for BusinessEnterprises toachieve fairpresentationofthe financialstatements;(2)designing,implementingandmaintaininginternalcontrolwhichis necessarytoenablethatthefinancialstatementsare freefrom material misstatement,whetherdue tofraudorerror.
2.Auditor's responsibility
Our responsibilityistoexpress anauditopiniononthesefinancialstatementsbasedonour audit. We conductedour auditinaccordancewithChinaStandards onAuditing. China Standards on Auditingrequire thatwecomplywiththeCode ofEthicsfor ChineseCertifiedPublic
Accountantsandplanandperform the audittoobtainreasonableassuranceaboutwhetherthe financialstatementsarefreefrom materialmisstatement.
Anauditinvolves performing auditprocedurestoobtainauditevidenceabouttheamounts and
disclosuresin thefinancialstatements. The proceduresselecteddependonthe auditor's
judgment,includingtheassessmentof therisks of materialmisstatementof the financial
statements,whetherdue tofraudor error. Inmakingthoserisk assessments,CertifiedPublic
Accountantsconsidertheinternalcontrolrelevanttothepreparationandfairpresentationofthe
financialstatementsinordertodesignauditprocedures thatareappropriate inthe circumstances,
butnot for thepurpose ofexpressinganopinionontheeffectivenessoftheinternalcontrol. An
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. auditalsoincludesevaluatingthe appropriateness ofaccountingpoliciesusedandthe
reasonablenessof accountingestimatesmade bymanagement,aswellas evaluatingthe overall presentationofthe financialstatements.
We believethatthe auditevidencewe haveobtainedissufficientandappropriate toprovidea basisforour auditopinion.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. AUDITOR'S REPORT
TOTHE SHAREHOLDERSOF
YANTAI CHANGYUPIONEER WINECOMPANYLIMITED - continued
3.Opinion
Inouropinion,thefinancialstatementsofYantaiChangyuPioneerWine CompanyLimited presentfairly,inallmaterialrespects, theconsolidatedandcompany's financial positionas of31 December2015,andtheconsolidatedandcompany's results of operationsandcashflows for the yearthenendedinaccordancewithAccountingStandardsfor BusinessEnterprises.
DeloitteToucheTohmatsu ChineseCertifiedPublic Accountant CertifiedPublic AccountantsLLP XuZhaoHui (Signature andseal) Shanghai,China Li Xu(Signatureandseal) 27April2016
YantaiChangyuPioneerWineCo.Ltd.2013AnnualReport. CONSOLIDATED BALANCESHEETS
YEAR ENDED 31DECEMBER2015
ASSETS Notes Closingbalance Openingbalance RMB RMB CURRENTASSETS
Cashandbank VI-1 1,285,362,414 1,145,365,071 Notesreceivable VI-2 113,988,122 138,315,319 Accountsreceivables VI-3 197,795,091 145,672,411 Prepayments VI-4 3,591,098 8,073,786 Interestreceivable VI-5 8,019,338 3,619,429 Otherreceivables VI-6 46,146,487 31,362,302 Inventories VI-7 2,260,852,964 2,087,376,398 Othercurrent assets VI-8 48,449,551 29,662,076____________ ____________ Totalcurrentassets 3,964,205,065 3,589,446,792____________ ____________ NON-CURRENTASSETS
Available-for-salefinancialassets VI-9 402,814 - Fixedassets VI-10 3,089,245,185 2,532,682,355 Constructioninprogress VI-11 2,005,990,308 1,700,466,500 Bearerbiologicalassets VI-12 192,198,283 151,723,241 Intangible assets VI-13 463,899,916 452,951,194 Goodwill VI-14 105,504,426 13,112,525 Long-term prepaidexpenses VI-15 175,124,167 201,911,605 Deferredtaxassets VI-16 302,406,656 254,186,823 Othernon-currentassets VI-17 45,234,641 15,751,605____________ ____________ Totalnon-currentassets 6,380,006,396 5,322,785,848____________ ____________ Totalassets 10,344,211,461 8,912,232,640____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. CONSOLIDATED BALANCESHEETS
YEAR ENDED 31DECEMBER2015-continued
LIABILITIES AND EQUITY Notes Closingbalance Openingbalance RMB RMB CURRENTLIABILITIES
Short-term borrowings VI-18 665,581,921 300,000,000 Notespayable VI-19 29,000,000 10,000,000 Accountspayable VI-20 569,278,368 357,811,822 Receiptsin advance VI-21 234,566,504 215,127,598 Employee benefitspayable VI-22 190,239,451 158,948,592 Taxespayable VI-23 41,285,107 87,504,048 Interestpayable 977,304 3,475,641 Deferredincome VI-24 11,241,873 12,398,718 Otherpayables VI-25 509,226,395 469,804,317 Non-currentliabilities duewithinone year VI-26 156,335,647 -____________ ____________ Totalcurrentliabilities 2,407,732,570 1,615,070,736____________ ____________ NON-CURRENTLIABILITIES
Long-term borrowings VI-27 71,686,629 209,380,000 Deferredincome VI-24 69,836,411 76,024,992 Deferredtaxliabilities VI-16 34,350,349 4,565,636 Othernon-currentliabilities VI-28 4,047,476 3,998,352____________ ____________ Totalnon-currentliabilities 179,920,865 293,968,980____________ ____________ Totalliabilities 2,587,653,435 1,909,039,716____________ ____________ EQUITY
Sharecapital VI-29 685,464,000 685,464,000 Capitalreserve VI-30 565,955,441 563,139,042 Othercomprehensive income VI-31 (10,442,512) (2,803,271) Surplus reserve VI-32 342,732,000 342,732,000 Retainedearnings VI-33 5,980,390,074 5,251,920,374____________ ____________ Equityattributable toshareholders
ofthe Company 7,564,099,003 6,840,452,145 Non-controllinginterests 192,459,023 162,740,779____________ ____________ Totalequity 7,756,558,026 7,003,192,924____________ ____________ Totalliabilitiesandequity 10,344,211,461 8,912,232,640____________ ____________ The accompanyingnotesformanintegralpartof thesefinancialstatements.
The financialstatementsonpages 3to98were signedbythefollowing:
LegalRepresentative:_________________________________
PersoninChargeofthe AccountingBody:_________________
ChiefAccountant:____________________________________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. BALANCESHEET OF THE COMPANY
YEAR ENDED 31DECEMBER2015
ASSETS Notes Closingbalance Openingbalance RMB RMB CURRENTASSETS
Cashandbank XIV-1 280,818,833 496,138,263 Notesreceivable XIV-2 38,429,319 98,158,251 Accountsreceivable XIV-3 2,392,870 1,516,518 Prepayments XIV-4 445,619 1,710,787 Interestreceivable XIV-5 8,019,338 3,580,811 Dividendreceivable XIV-6 788,092,349 402,596,884 Otherreceivables XIV-7 5,734,456,129 4,708,836,276 Inventories XIV-8 728,173,107 681,696,774 Othercurrent assets 22,700,317 14,996,807____________ ____________ Totalcurrentassets 7,603,527,881 6,409,231,371____________ ____________ NON-CURRENTASSETS
Available-for-salefinancialassets VI-8 - - Long-term equityinvestments XIV-9 1,423,725,152 1,093,437,027 Fixedassets XIV-10 369,506,014 403,210,655 Constructioninprogress XIV-11 7,990,777 182,765 Bearerbiologicalassets XIV-12 110,961,189 83,631,722 Intangible assets XIV-13 74,381,525 76,760,678 Deferredtaxassets XIV-14 37,938,692 27,053,571____________ ____________ Totalnon-currentassets 2,024,503,349 1,684,276,418____________ ____________ Totalassets 9,628,031,230 8,093,507,789____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. BALANCESHEET OF THE COMPANY
YEAR ENDED 31DECEMBER2015-continued
LIABILITIES AND EQUITY Notes Closingbalance Openingbalance RMB RMB CURRENTLIABILITIES
Short-term borrowings VI-18 601,297,447 300,000,000 Accountspayable XIV-15 273,091,182 228,052,722 Employee benefitspayable XIV-16 71,058,615 70,233,251 Taxespayable XIV-17 19,331,311 18,205,124 Interestpayable 977,304 3,475,641 Deferredincome 1,767,054 3,017,898 Otherpayables XIV-18 994,821,281 1,030,604,819 Non-currentliabilities duewithinone year VI-26 127,345,600 -____________ ____________ Totalcurrentliabilities 2,089,689,794 1,653,589,455____________ ____________ NON-CURRENTLIABILITIES
Long-term borrowings VI-27 56,761,600 209,380,000 Deferredincome 21,824,352 22,747,915 Othernon-currentliabilities 1,944,955 1,895,828____________ ____________ Totalnon-currentliabilities 80,530,907 234,023,743____________ ____________ Totalliability 2,170,220,701 1,887,613,198____________ ____________ EQUITY
Sharecapital VI-29 685,464,000 685,464,000 Capitalreserve XIV-19 557,222,454 557,222,454 Surplus reserve VI-32 342,732,000 342,732,000 Retainedearnings 5,872,392,075 4,620,476,137____________ ____________ Totalequity 7,457,810,529 6,205,894,591____________ ____________ Totalliabilitiesandequity 9,628,031,230 8,093,507,789____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. CONSOLIDATED INCOMESTATEMENT
YEAR ENDED 31DECEMBER2015
Notes 2015 2014 RMB RMB I.Revenue VI-34 4,649,722,368 4,156,727,525 Less:Costof sales VI-34 1,512,503,035 1,372,444,612 Taxes andsurcharges VI-35 258,013,524 269,446,774 Sellingexpenses VI-36 1,211,127,163 1,006,009,364 Administrativeexpenses VI-37 313,968,409 256,980,018 Impairment loss ofassets VI-38 2,823,115 1,995,877 Financialexpenses VI-39 11,287,685 (17,256,721)____________ ____________ II.Operatingprofit 1,339,999,437 1,267,107,601 Add: Non-operatingincome VI-40 50,065,317 43,996,405 Including:gains fromdisposal
ofnon-current assets 192,945 121,113
Less:Non-operatingexpenses VI-41 1,904,889 8,370,249 Including:lossesfrom disposal
ofnon-current assets 56,884 5,207,658
____________ ____________ III.Profit before tax 1,388,159,865 1,302,733,757 Less:Income tax VI-42 357,884,235 325,026,046____________ ____________ IV.Profit for theyear 1,030,275,630 977,707,711____________ ____________ Attribute toshareholdersofthe Company 1,030,073,860 977,707,711 Minorityinterest income 201,770 -____________ ____________ V.Othercomprehensiveincome (post-tax)
Othercomprehensive income attributable
toshareholders ofthe Company
Othercomprehensive income
tobe reclassifiedtoprofit andloss
Foreigncurrencystatementtranslationdifference (7,639,241) (2,803,271)
Othercomprehensive income attributable
tominority interest (102,535) -____________ ____________ Othercomprehensive income (post-tax) (7,741,776) (2,803,271)____________ ____________ VI.Totalcomprehensiveincome
Attribute toshareholdersofthe Company 1,022,434,619 974,904,440 Attribute tominorityinterest of theCompany 99,235 -____________ ____________ Totalcomprehensiveincome 1,022,533,854 974,904,440____________ ____________ VII.Earningspershare
(I)Basicearnings pershare VI-43 1.50 1.43____________ ____________ (II) Dilutedearningsper share VI-43 N/A N/A____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. INCOMESTATEMENT OFTHE COMPANY
YEAR ENDED 31DECEMBER2015
Notes 2015 2014 RMB RMB I.Revenue XIV -20 1,383,184,483 1,647,825,652 Less:Costof sales XIV-20 1,154,834,509 1,406,987,744 Taxes andsurcharges XIV -21 128,127,130 157,026,901 Administrativeexpenses XIV-22 131,187,795 112,051,545 Impairment loss/(reverse)of assets XIV-23 - (192,908) Financialexpenses XIV -24 18,852,697 (11,053,553) Investmentincome XIV -25 1,587,303,643 1,164,089,666____________ ____________ II.OperatingProfit 1,537,485,995 1,147,095,589 Add: Non-operatingincome 5,229,734 6,371,028 Including:gains fromdisposal
ofnon-current assets 160,609 105,236
Less:Non-operatingexpenses 921,076 5,801,396 Including:lossesfrom disposal
ofnon-current assets 44,269 5,181,727
____________ ____________ III.Profit before tax 1,541,794,653 1,147,665,221 Less:Income tax (11,725,445) (4,096,824)____________ ____________ IV.Profit for theyear
andtotal comprehensiveincome 1,553,520,098 1,151,762,045____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. CONSOLIDATED CASHFLOW STATEMENT
YEAR ENDED 31DECEMBER2015
Notes 2015 2014 RMB RMB CASHFLOWSFROMOPERATINGACTIVITIES
Cashreceiptsfromthesaleofgoods
andtherenderingofservices 5,005,115,064 4,787,289,147 Receiptsoftaxrefunds 17,833,465 18,259,690 Othercashreceiptsrelatingtooperatingactivities VI-44(1) ___2_2_,3_7_3_,0_1_6 ___2_4_,5_4_3_,5_4_7 Sub-totalofcashinflowsfromoperatingactivities _5_,0_4_5_,3_2_1_,5_4_5 _4_,8_3_0_,0_9_2_,3_8_4 Cashpaymentsforgoodspurchasedandservicesreceived 1,106,430,193 1,255,567,298 Cashpaymentstoandonbehalfofemployees 400,245,285 (358,415,330) Paymentofvarioustypesoftaxes 1,312,212,563 1,301,077,872 Othercashpaymentsrelatingtooperatingactivities VI-44(2) _1_,0_8_3_,3_8_7_,1_3_7 __8_4_4_,9_4_8_,5_8_8 Sub-totalofcashoutflowsfromoperatingactivities _3_,9_0_2_,2_7_5_,1_7_8 _3_,7_6_0_,0_0_9_,0_8_8 Netcashflowsfromoperatingactivities VI-45(1) _1_,1_4_3_,0_4_6_,3_6_7 _1_,0_7_0_,0_8_3_,2_9_6 CASHFLOWSFROMINVESTINGACTIVITIES
Decreaseintermdepositsover3months 58,245,260 307,694,951 Proceedsfromreturnoninvestments 9,337,943 24,230,453 Proceedsfromdisposaloffixedassets ____3_,3_7_3_,2_5_4 ____1_,1_8_1_,8_9_5 Sub-totalofcashinflowsfrominvestingactivities ___7_0_,9_5_6_,4_5_7 __3_3_3_,1_0_7_,2_9_9 Cashpaidforacquisitionofproperties,plantsandequipment,
intangibleassetsandotherlong-termassets 775,468,190 1,238,293,585 Cashpaidfortermdepositsover3months 20,000,000 77,547,483 Cashpaidforthepurchasesubsidiariesandotherequity __2_1_3_,3_4_2_,9_4_6 _______-___ Sub-totalofcashoutflowsfrominvestingactivities _1_,0_0_8_,8_1_1_,1_3_6 _1_,3_1_5_,8_4_1_,0_6_8 Netcashflowsfrominvestingactivities VI-44(3) _(_93_7_,_85_4_,6_7_9_) _(_98_2_,_73_3_,7_6_9_) CASHFLOWSFROMFINANCINGACTIVITIES
Cashreceiptsfromborrowings 598,060,185 515,368,080 Othercashreceivedfromfinancingactivities ____4_,0_0_0_,0_0_0 __1_2_9_,1_8_2_,2_9_2 Sub-totalofcashinflowsfromfinancingactivities __6_0_2_,0_6_0_,1_8_5 __6_4_4_,5_5_0_,3_7_2 Cashpaidfordividends,profitsandinterests 326,060,259 353,707,371 Cashpaidforborrowings 325,272,800 242,219,439 Cashpaidforacquisitionminorityinterest 150,000 - Cashpaidfromotherfinancingactivities VI-44(4) ___2_8_,1_5_0_,0_0_0 __1_2_5_,0_0_0_,0_0_0 Sub-totalofcashoutflowsfromfinancingactivities __6_7_9_,6_3_3_,0_5_9 __7_2_0_,9_2_6_,8_1_0 Netcashflowsfromfinancingactivities __(7_7_,_57_2_,8_7_4_) __(7_6_,_37_6_,4_3_8_) Effectofforeignexchangeratechanges
oncashandcashEquivalents 4,150,573 (7,059,747) NETINCREASEOFCASHANDCASHEQUIVALENTS 131,769,387 3,913,342 ADD:CASHANDCASHEQUIVALENTS
ATBEGINNINGOFTHEYEAR VI-45(2) __9_6_0_,4_7_2_,2_7_4 __9_5_6_,5_5_8_,9_3_2 CASHANDCASHEQUIVALENTSATENDOFTHEYEAR VI-45(2) 1,092,241,661 960,472,274__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. CASH FLOW STATEMENTOF THECOMPANY
YEAR ENDED 31DECEMBER2015
Notes 2015 2014 RMB RMB CASHFLOWSFROMOPERATINGACTIVITIES
Cashreceiptsfromthesaleofgoods
andtherenderingofservices 1,407,696,475 1,827,219,301 Othercashreceiptsrelatingtooperatingactivities ____1_,0_5_0_,6_2_8 ___1_2_,1_6_8_,2_0_5 Sub-totalofcashinflowsfromoperatingactivities _1_,4_0_8_,7_4_7_,1_0_3 _1_,8_3_9_,3_8_7_,5_0_6 Cashpaymentsforgoodspurchasedandservicesreceived 944,400,045 1,302,377,275 Cashpaymentstoandonbehalfofemployees 149,896,172 151,732,255 Cashpaymentofvarioustypesoftaxes 191,387,102 257,237,660 Othercashpaymentrelatingtooperatingactivities _1_,1_2_8_,2_3_6_,6_0_2 _1_,5_9_4_,0_2_6_,3_4_1 Sub-totalofcashoutflowsfromoperatingactivities _2_,4_1_3_,9_1_9_,9_2_1 _3_,3_0_5_,3_7_3_,5_3_1 Netcashflowsfromoperatingactivities XIV-26 (1_,_00_5_,_17_2_,8_1_8_) (1_,_46_5_,_98_6_,0_2_5_) CASHFLOWSFROMINVESTINGACTIVITIES
Cashreceiptsfromequityinvestment 350,000 - Cashreceiptsfromdepositsover3months 46,245,260 295,694,951 Cashreceiptsfromreturnoninvestments 1,211,082,256 1,530,610,338 Cashreceiptsfromdisposalsoffixedassets _____1_9_0_,2_0_5 _____5_5_0_,8_2_4 Sub-totalofcashinflowsfrominvestingactivities _1_,2_5_7_,8_6_7_,7_2_1 _1_,8_2_6_,8_5_6_,1_1_3 Cashpaymentsforacquisitionoffixedassets,
intangibleassetsandotherlong-termassets 42,104,159 52,003,088 Cashpaymentsfortermdepositsover3months 20,000,000 53,547,483 Cashpaymentsforsubsidiaryinvestment __3_3_0_,6_3_8_,1_2_5 ___3_7_,9_8_0_,5_0_0 Sub-totalofcashoutflowsfrominvestingactivities __3_9_2_,7_4_2_,2_8_4 __1_4_3_,5_3_1_,0_7_1 Netcashflowsfrominvestingactivities __8_6_5_,1_2_5_,4_3_7 _1_,6_8_3_,3_2_5_,0_4_2 CASHFLOWSFROMFINANCINGACTIVITIES
Cashreceiptsfromborrowings 595,268,270 515,368,080 Othercashreceivedfromfinancingactivities _______-___ __1_2_9_,1_8_2_,2_9_2 Cashinflowsfromfinancingactivities __5_9_5_,2_6_8_,2_7_0 __6_4_4_,5_5_0_,3_7_2 Cashpaidfordividends,profitsandinterests 325,424,652 351,636,158 Cashpaidforborrowings 323,051,320 242,219,439 Cashpaidfromotherfinancingactivities _______-___ __1_2_5_,0_0_0_,0_0_0 Cashoutflowsfromfinancingactivities __6_4_8_,4_7_5_,9_7_2 __7_1_8_,8_5_5_,5_9_7 Netcashflowsfromfinancingactivities __(5_3_,_20_7_,7_0_2_) __(7_4_,_30_5_,2_2_5_) Effectofforeignexchangeratechanges
oncashandcashEquivalents 3,807,697 (6,939,315) INCREASE/(DECREASE)OFCASH
ANDCASHEQUIVALENTS (189,447,386) 136,094,477 ADD:CASHANDCASHEQUIVALENTS
ATBEGINNINGOFTHEYEAR XIV-27 __3_3_3_,2_4_5_,4_6_6 __1_9_7_,1_5_0_,9_8_9 CASHANDCASHEQUIVALENTSATENDOFTHEYEAR XIV-27 143,798,080 333,245,466__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. CONSOLIDATED SATATEMENT OFCHANGESINEQUITY
YEAR ENDED 31DECEMBER2015
2015
AttributabletoshareholdersoftheCompany
Issued Capital Othercomprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total RMB RMB RMB RMB RMB RMB RMB I.Openingbalance
ofthecurrentyear __68_5,_46_4,_00_0 __56_3,_13_9,_04_2 __(2_,8_0_3,2_7_1)___34_2,_73_2,_00_0__5,_25_1,_92_0,_37_4__16_2,_74_0,_77_9__7,_00_3,_19_2,_92_4 II.Changesfortheyear
(I)Totalcomprehensiveincome - - (7,639,241) - 1,030,073,860 99,235 1,022,533,854 (II)Shareholdersinvestmentand
Divestment
1.Acquisitionsubsidiary(VII-1) - - - - - 32,585,408 32,585,408 2.Transactionwithnon-controlling
interests - 2,816,399 - - - (2,966,399) (150,000) (III)Profitdistribution
Distributionsto
shareholders(VI-33)_____-__ _____-__ _____-________-____(3_01_,6_0_4,1_6_0)_____-__ __(3_01_,6_0_4,1_6_0) III.Closingbalanceof
thecurrentyear __68_5,_46_4,_00_0 __56_5,_95_5,_44_1 _(_10_,4_4_2,5_1_2)___34_2,_73_2,_00_0__5,_98_0,_39_0,_07_4__19_2,_45_9,_02_3__7,_75_6,_55_8,_02_6 2014
AttributabletoshareholdersoftheCompany
Issued Capital Othercomprehensive Surplus Retained Non-controlling
capital surplus income reserve earnings interests Total RMB RMB RMB RMB RMB RMB RMB I.Openingbalance
ofthecurrentyear __68_5,_46_4,_00_0 __56_3,_13_9,_04_2 ___-__ ___34_2,_73_2,_00_0__4,_61_6,_94_4,_66_3__16_2,_74_0,_77_9__6,_37_1,_02_0,_48_4 II.Changesfortheyear
(I)Totalcomprehensiveincome - - (2,803,271) - 977,707,711 - 974,904,440 (II)Profitdistribution
Distributionsto
shareholders(VI-33) _____-__ _____-__ ___-__ ______-____(3_42_,7_3_2,0_0_0)_____-__ __(3_42_,7_3_2,0_0_0) III.Closingbalance
ofthecurrentyear __68_5,_46_4,_00_0 __56_3,_13_9,_04_2 (_2,_80_3,_27_1) ___34_2,_73_2,_00_0__5,_25_1,_92_0,_37_4__16_2,_74_0,_77_9__7,_00_3,_19_2,_92_4
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. STATEMENTOF CHANGESIN EQUITY OFTHE COMPANY
YEAR ENDED 31DECEMBER2015
2015
Issuedcapital Capitalreserve Surplusreserve Retainedearnings Total RMB RMB RMB RMB RMB I.Openingbalance
ofthecurrentyear _6_85_,_46_4_,0_0_0 _5_57_,_22_2_,4_5_4 _3_42_,_73_2_,0_0_0 4_,6_2_0_,4_76_,_13_7_ _6_,2_0_5,_89_4_,5_9_1 II.Changesfortheyear
(I)Totalcomprehensiveincome - - - 1,553,520,098 1,553,520,098 (II)Profitdistribution
Distributionstoshareholders(VI-33)______-__ ______-__ ______-__ _(3_0_1_,6_0_4,_16_0_) _(_30_1_,6_0_4,_1_60_) III.Closingbalance
ofthecurrentyear _6_85_,_46_4_,0_0_0 _5_57_,_22_2_,4_5_4 _3_42_,_73_2_,0_0_0 _5_,8_7_2,_39_2_,0_7_5 _7_,4_5_7,_81_0_,5_2_9 2014
Issuedcapital Capitalreserve Surplusreserve Retainedearnings Total RMB RMB RMB RMB RMB I.Openingbalance
ofthecurrentyear _6_85_,_46_4_,0_0_0 _5_57_,_22_2_,4_5_4 _3_42_,_73_2_,0_0_0 _3_,8_1_1,_44_6_,0_9_2 _5_,3_9_6,_86_4_,5_4_6 II.Changesfortheyear
(I)Totalcomprehensiveincome - - - 1,151,762,045 1,151,762,045 (II)Profitdistribution
Distributionstoshareholders(VI-33)______-__ ______-__ ______-__ _(3_4_2_,7_3_2,_00_0_) _(_34_2_,7_3_2,_0_00_) III.Closingbalance
ofthecurrentyear _6_85_,_46_4_,0_0_0 _5_57_,_22_2_,4_5_4 _3_42_,_73_2_,0_0_0 4_,6_2_0_,4_76_,_13_7
_
_6_,2_0_5,_89_4_,5_9_1
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. NOTESTO FINANCIALSTATEMENTS
YEAR ENDED 31DECEMBER2015
I. CORPORATEINFORMATION
Yantai Changyu Pioneer Wine Co., Ltd. (the "Company") was incorporated as a joint stock limited company in accordance with the Company Law of the People's Republic of China (the "PRC") in a reorganization carried out by Yantai Changyu Group Co., Ltd. ("Changyu Group Company"), in which Changyu Group Company injected certain assets and liabilities in relation to the brandy, wine, and sparkling wine production and sales businesses to the Company. The Company and its subsidiaries (the "Group") are principally engaged in the production and sales of wine, brandy, sparkling wine. Registration place of the Company is Yantai, Shandong. Headquarter of the Company is located at No. 56 Da Ma Lu, Zhifu District, Yantai, Shandong, PRC.
As at 31 December 2015 the total shares issued by the Company amounts to 685,464,000 shares. PleaserefertoNotes VI-29indetail.
The holding company of the Group is Changyu Group Company, which is jointly controlled by Yantai SASAC, ILLVA Saronno Investment Italy, International Finance Corporation and Yantai YuhuaInvestment andDevelopmentCompanyLimited.
The financial statements have been authorized by the board of directors on 27 April 2015. According to the Company's articles of association, the financial statements will be reviewed by shareholdersonthe shareholder's meeting.
For consolidation scope of the year, please refer to Notes VIII "Equity in other entities" in detail. For detail of changes in consolidation scope of the year, please refer to Notes VII "Change in consolidationscope".
II. BASISOF PREPARATIONOFFINANCIALSTATEMENTS
1. Basisof preparation
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by the Ministry of Finance (“MoF”). In addition, the Group has disclosed relevant financial information in accordance with Information Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reporting (Revised in 2014).
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. II. BASISOF PREPARATIONOFFINANCIALSTATEMENTS- continued
2. Basisof accountingandprinciple ofmeasurement
The Group has adopted the accrual basis of accounting. The Group adopts the historical cost as the principle of measurement in the financial statements. Where assets are impaired, provisions forassetimpairmentaremade inaccordancewithrelevantrequirements.
Under the historical cost measurement, an asset is measured at the fair value of consideration paid in cash and cash equivalents at the date of the purchase. Liability is measured at the value of asset received through taking current obligation, the contract value for taking current obligation, or the cashandcashequivalentsvalueestimatedfor repayingdebtindailybusiness activity.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined onsucha basis.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair valuemeasurement initsentirety,whicharedescribedas follows:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilitiesthattheentitycanaccessatthe measurementdate;
2) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observablefor theassetor liability,eitherdirectlyorindirectly; and
3) Level3inputsareunobservableinputsfor theassetor liability.
3. Going concern
As at 31 December 2015, the Group evaluated the profitability ability in the foreseeable 12 months and did not notice any event or circumstance that would constitute significant doubt on going concern ability of the Group. Therefore, the financial statements have been prepared on a goingconcernbasis.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING
1. Declarationfor implementingCAS
The financial statements are prepared in accordance with CAS, which showing a true and fair view of the financial position on 31 December 2015, financial performance and cash flow in 2015 ofthe Companyandthe Group.
2. Accountingyear
The accountingyearofthe Groupisfrom 1Januaryto31Decemberofeachcalendaryear. 3. Businesscycle
Business cycle refers to the period from purchasing assets to be processed to receiving cash or cashequivalents bytheCompany.The business cycleof theCompanyis 12months.
4. Reportingcurrency
Renminbi ("RMB") 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 RMB as their functional currency. The Company's foreign subsidiary chooses Currency Euro as its functional currency on the basis of the primary economic environment in which it operates. The Companyadopts RMBtoprepare itsfinancial statements.
5. Businesscombination
5.1Businesscombinationsnotinvolvingenterprisesundercommoncontrolandgoodwill A business combination not involving enterprises under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same partyorpartiesbefore and afterthecombination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree. 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 recognised in profit or loss whentheyare incurred.
Qualified identifiable assets, liabilities and contingent liabilities obtained by acquirer in the acquisitionare measuredusingfairvalue attheacquisition date.
The cost of combination exceeds the acquirer's interest in the fair value of the acquiree's identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is measured at cost on initial recognition. Within the 12 month after acquisition, adjustment for the provisional recognised value will be regarded as the recognition and measurement at acquisition date.
At the end of the year for acquisition, if the fair value for qualified identifiable assets, liabilities and contingent liabilities can be determined temporarily, temporally determined fair value will be
recognisedasconsiderationfor recognitionandmeasurement of acquisition.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
5. Businesscombination-continued
5.1Business combinations not involving enterprises under common control and goodwill-continued
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented separately in the consolidated financial statements. It is tested for impairment atleastattheendof eachyear.
6. Preparationofconsolidatedfinancialstatements
6.1Preparationofconsolidatedfinancialstatements
The scope of consolidation in 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 Group will re-evaluate if changes in relevant facts and circumstances results in changes in relevant factors involved in the above definition of control.
Consolidation of subsidiary starts from the control on the subsidiary by the Group and ends at the lossofcontrol onthesubsidiarybytheGroup.
For a subsidiary disposed of by the Group, 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 consolidatedstatementofcashflows,as appropriate.
For a subsidiary acquired through a business combination not involving enterprises under common control, the operating results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative figures intheconsolidatedfinancialstatements.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the uniform accounting policies and accounting periods set out by the Company.
Allsignificantintra-group balancesandtransactionsare eliminatedonconsolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as non-controlling interests and presented as "non-controlling interests" in the consolidated balance sheet within shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable to non-controlling interests is presented as "non-controlling interests" in the consolidatedincome statementbelowthenet profitlineitem.
When the amount of loss for the period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders' portion of the opening balance of owners' equityof the subsidiary,the excessamount arestillallocatedagainst non-controllinginterests.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
6. Preparationofconsolidatedfinancialstatements- continued
6.1Preparationofconsolidatedfinancialstatements- continued
For the transaction that Purchase minority interest or disposal part of the equity does not loss the control of the subsidiaries, it should treated as equity transaction, andadjust the equity attributable to shareholders and minority interest in order to reflex the changes of equity in subsidiaries. The difference between minority interest adjustment and fair value of received/paid consideration will adjustincapitalreserve,andifcapitalreserveis notenoughfor offset,willadjustsurplusreserve. 7. Cashandcashequivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's short-term, highly liquid investments that are readily convertible to knownamounts ofcashandwhicharesubjecttoaninsignificant riskofchangesinvalue. 8. Translationoftransactionsandfinancial statements denominatedinforeigncurrencies
8.1Transactions denominatedinforeigncurrencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange rateonthedate ofthetransaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous balance sheet date are recognised in profit or loss for the period, except that (1) exchange differences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalisation are capitalised as part of the cost of the qualifying asset during the capitalisation period; (2) exchange differences related to hedging instruments for the purpose of hedging against foreign currency risks are accounted for using hedge accounting; (3) exchange differences arising from available-for-sale non-monetary items denominated in foreign currencies and changes in the carrying amounts of available-for-sale monetary items are recognisedasothercomprehensiveincome andincludedincapitalreserve.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in functional currency at the spot exchange rates on the dates of the transactions and the amounts in functional currency remain unchanged. Foreign currency non-monetary items measured at fair value are re-translated at the spot exchange rate on the date the fair value is determined. Difference between the re-translated functional currency amount and the original functional currency amount is treated as changes in fair value (including changes of exchange rate) and is recognisedinprofitandloss orasothercomprehensive income includedincapitalreserve.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
8. Translationoftransactionsandfinancial statements denominatedinforeigncurrencies- continued 8.2Translationoffinancialstatementsdenominatedinforeigncurrencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are translated from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting the distribution of profits are translated at the spot exchange rates on the dates of the transactions; the opening balance of retained earnings is the translated closing balance of the previous year's retained earnings; the closing balance of retained earnings is calculated and presented on the basis of each translated income statement and profit distribution item. The difference between the translated assets and the aggregate of liabilities and shareholders' equity items is separately presented as the exchange differences arising on translation of financial statements denominated in foreign currencies of other comprehensive income under the shareholders'equityinthebalance sheet.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign subsidiary are translated at the spot exchange rate on the date of the cash flows. The effect of exchange rate changes on cash and cash equivalents is regarded as a reconciling item and presented separately in the cash flow statement as "effect of exchange rate changes on cash and cashequivalents".
The opening balances and the comparative figures of previous year are presented at the translated amountsinthe previous year's financialstatements.
9. Financialinstruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. For other financial assets and financial liabilities, transaction costs are includedin theirinitial recognisedamounts.
9.1Effective interestmethod
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or a group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period, using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to thenetcarryingamount of thefinancial assetorfinancial liability.
When calculating the effective interest rate, the Group estimates future cash flows considering all contractual terms of the financial asset or financial liability (without considering future credit losses), and also considers 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, transactioncosts,andpremiums ordiscounts,etc.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
9. Financialinstruments-continued
9.2Classification,recognitionandmeasurementof financialassets
On initial recognition, the Group's financial assets are classified into one of the four categories, including financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Financial assets of the Groupareloansandreceivablesandavailable-for-salefinancialassets.
9.2.1Loansandreceivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets classified as loans and receivables by the Group include cash and bank, notes receivable, accounts receivable, interest receivable, dividendsreceivable,andotherreceivables.
Loans and receivables are subsequently measured at amortised cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortisation is recognised in profit or loss.
9.2.2Available-for-salefinancialassets
Available-for-sale financial assets include non-derivative financial assets that are designated on initial recognition as available for sale, and financial assets that are not classified as financial assetsat fairvaluethrough profitor loss,loansandreceivablesorheld-to-maturity investments. For investments in equity instruments that do not have a quoted market price in an active market andwhosefairvalue cannotbereliablymeasured,theyaremeasuredatcost.
9.3 Impairmentof financialassets
The Group assesses at each balance sheet date the carrying amounts of financial assets other than those at fair value through profit or loss. If there is objective evidence that a financial asset is impaired, the Group determines the amount of any impairment loss. Objective evidence that a financial asset is impaired is evidence that, arising from one or more events that occurred after the initial recognition of the asset, the estimated future cash flows of the financial asset, which can be reliablymeasured,havebeenaffected.
Objectiveevidencethata financialassetisimpairedincludes thefollowingobservableevents: (1) Significantfinancialdifficulty ofthe issueror obligor;
(2) A breach of contract by the borrower, such as a default or delinquency in interest or principalpayments;
(3) The Group, for economic or legal reasons relating to the borrower's financial difficulty, grantinga concessiontotheborrower;
(4) It becoming probable that the borrower will enter bankruptcy or other financial reorganisations;
(5) The disappearance of an active market for that financial asset because of financial
difficulties ofthe issuer;
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
9. Financialinstruments-continued
9.3Impairmentof financialassets- continued
(6) Upon an overall assessment of a group of financial assets, observable data indicates that there is a measurable decrease in the estimated future cash flows from the group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group. Such observable data includes:
- Adversechangesinthepaymentstatusof borrower inthe groupof assets;
- Economic conditions in the country or region of the borrower which may lead to a failure topaythegroupofassets;
(7) Significant adverse changes in the technological, market, economic or legal environment in which the issuer operates, indicating that the cost of the investment in the equity instrumentmaynot berecoveredbythe investor;
(8) A significant or prolonged decline in the fair value of an investment in an equity instrument belowits cost;
(9) Otherobjectiveevidenceindicatingthere is animpairment of afinancialasset.
-Impairment of financialassetsmeasuredatamortisedcost
If financial assets carried at amortised cost are impaired, the carrying amounts of the financial assets are reduced to the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The amount of reduction is recognised as an impairment loss in profit or loss. If, subsequent to the recognition of an impairment loss on financial assets carried at amortised cost, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognised, the previously recognised impairment loss is reversed. However, the reversal is made to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortisedcostwouldhavebeenhadtheimpairment notbeenrecognised.
For a financial asset that is individually significant, the Group assesses the asset individually for impairment. For a financial asset that is not individually significant, the Group assesses the asset individually for impairment or includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset (whether significant or not), it includes the asset in a group of financial assets with similar credit risk characteristics and collectively reassesses them for impairment. Assets for which an impairment lossisindividuallyrecognisedare notincludedina collectiveassessmentofimpairment. -Impairment of availablefor sale assetsmeasuredatcost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the carrying amount of the financial asset is reduced to the present value of estimated future cash flows discounted at the current market rate of return for a similar financial
asset. The amount of reduction is recognised as an impairment loss in profit or loss. The
impairment lossonsuchfinancialassetis not reversedonce itis recognised.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
9. Financialinstruments-continued
9.4Transferoffinancialassets
The Group derecognises a financial asset if one of the following conditions is satisfied: (1) the contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset is transferred to the transferee; or (3) although the financial asset has been transferred, the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial assetbut has notretainedcontrol ofthefinancialasset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognisedinothercomprehensiveincome,isrecognisedinprofit orloss.
9.5Classification,recognitionandmeasurementof financialliabilities
Debt and equity instruments issued by the Group are classified into financial liabilities or equity on the basis of the substance of the contractual arrangements and definitions of financial liability andequityinstrument.
On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities in group are other financial liabilities, including short-term borrowings, notes payables, account payables, interest payables,otherpayables andlong-termborrowingsetc.
9.5.1Otherfinancialliabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interest method,withgainor lossarisingfromderecognitionor amortisationrecognisedinprofitor loss. 9.6Derecognitionof financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present obligation (or partof it)isdischarged.
When the Group derecognises a financial liability or a part of it, it recognises the difference between the carrying amount of the financial liability (or part of the financial liability) derecognised and the consideration paid (including any non-cash assets transferred or new financialliabilitiesassumed) inprofit orloss.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
9. Financialinstruments-continued
9.7Offsettingfinancialassetsandfinancialliabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial assets and financial liabilities, and intends either to settle on a net basis, or to realise 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 notbe offset.
9.8Equityinstruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The Group does not recognise any changes in the fair value of equityinstruments.The equityinstruments transactionexpensesdeductedfrom equity. The Group treats distribution to equity instrument holders as profit distributions. Shareholder equityisnot affected bysharedividenddistributed.
10. AccountReceivables
10.1 Receivables that are individually significant and for which bad debt provision is individually assessed
A receivable that exceeds RMB 3,000,000 is deemed as an individually significant receivable by theGroup.
For receivables that are individually significant, the Group assesses the receivables individually for impairment. For a financial asset that is not impaired individually, the Group includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Receivables for which an impairment loss is individually recognised are not includedinacollectiveassessmentof impairment.
10.2 Receivables that are not individually significant but for which bad debt provision is individuallyassessed
For receivables that are not individually significant but for which bad debt provision is individually assessed, when objective evidence suggests that the Group cannot collect receivables in accordance with original clauses, the Group would recognize impairment loss and provide bad debtsaccordingtothedifference betweencarryingamount andpresentvalueof future cashflows.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
11. Inventories
11.1Categoriesof inventories
The Group's inventories mainly include raw materials, work in progress and finished goods. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditures incurred in bringing the inventories to their present locationandcondition.
11.2Valuationmethodof inventoriesupondelivery
The actualcostof inventoriesupondeliveryiscalculatedusingtheweightedaveragemethod. Agriculturalproducts harvestedarereportedinaccordancewiththe CAS 1Inventories. 11.3 Basis for determining net realisable value of inventories and provision methods for decline in valueof inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the net realisable value is below the cost of inventories, a provision for decline in value of inventories is made. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimatedcosts necessary to make the sale and relevant taxes. Net realisable 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.
Provision for decline in value of other inventories is made based on the excess of cost of inventoryover its netrealisablevalueonanitem-by-item 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 realisable value of inventories is higher than their cost, the original provision for decline in value isreversedandthereversalisincludedinprofit or lossfor theperiod.
11.4Inventorycountsystem
The perpetualinventorysystemismaintainedfor stocksystem.
11.5Amortisationmethodfor lowcostandshort-livedconsumable items andpackagingmaterials Packaging materials and low cost and short-lived consumable items are amortised using the immediatewrite-off method.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
12. Longtermequityinvestments
12.1Basisfor determiningcontrol,jointcontrolandsignificantinfluence
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating policy 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 (for example, warrants and convertible debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be considered.
12.2Determinationof initialinvestmentcost
For a long-term equity investment acquired not involving enterprises under common control, the investmentcostof thelong-term equityinvestmentisthecostofacquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition are expensedinprofits andlosseswhenhappened.
Other long-term equity investments acquired from other than acquisitions are recognised using originalcost.
12.3Subsequentmeasurementandrecognitionof profit or loss
12.3.1Long-term equityinvestment accountedforusingthecostmethod
The Group accounts for long-term equity investment using the cost method. A subsidiary is an investeethatiscontrolledbytheGroup.
Under the cost method, a long-term equity investment is measured at initial investment cost. Long-term equity investment is adjusted when capital is added or recollected. Investment income is recognised in the period in accordance with the attributable share of cash dividends or profit distributions declaredbythe investee.
12.4Disposaloflong-term equityinvestments
On disposal of a long term equity investment, the difference between the proceeds actually receivedandreceivableandthecarryingamount isrecognisedinprofitorlossfor the period.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
13. Fixedassets
13.1Recognitioncriteriafor fixedassets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognised only when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Fixedassetsare initially measuredatcost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is derecognised. Other subsequent expenditures are recognised in profit or loss in theperiodinwhichtheyareincurred.
13.2Depreciationof eachcategoryoffixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in which it is ready for intended use. The useful life, estimated net residualvalue rate andannualdepreciationrate ofeachcategoryoffixedassetsareas follows: Estimated Estimated Annual usefullife residualrate depreciationrate Buildings 20-40years 0-5% 2.4%-5.0% Machinery 5-20years 0-5% 4.8%-20.0% MotorVehicles 4-12years 0-5% 7.9%-25.0% Estimated net residual value assumes the situation where a fixed asset expire for its estimated useful life and is in its expected final status. Estimated net residual value is the amount that the Groupcanobtainfrom thedisposal lessexpecteddisposalfees.
13.3Otherexplanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and relatedtaxesis recognisedinprofit or lossfor theperiod.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least once at each financial year-end, and account for any change asa change inanaccountingestimate.
14. Constructioninprogress
Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during the construction period, borrowing costs capitalised before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Constructioninprogress istransferredtoa fixedassetwhenit isreadyfor intendeduse.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
15. Borrowingcosts
Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalised when expenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is suspended abnormally and when the suspension is for a continuous period of more than 3 months. Capitalisation is suspended until the acquisition, construction or production of the asset is resumed. Other borrowing costs are recognisedasanexpenseintheperiodinwhichtheyareincurred.
16. Biologicalassets
16.1Bearerbiologicalassets
Bearer biological assets are biological assets, for example, held for the production of agricultural produce, provision of services or rental, Bearer biological assets in the Group are vines. A bearer biological asset is initially measured at cost. The cost of a bearer biological asset self-grown or self-bred comprises those costs necessarily incurred and directly attributable to the asset before the asset becomes available for its intended production and operating purposes, and any borrowingcostmeetingthecapitalisationcriteria.
The Group charge deprecation for productive biological assets which satisfy expected production, and record the deprecation in balance sheet and income statement. The Group uses straight line methodtocalculate thedeprecation,anddetailsas follows:
Estimated Estimated Annual Category useful life residualrate depreciationrate Vines 20years - 5% The Group evaluates the useful life and expected net salvage value by considering the normal producinglife ofthe bearerbiologicalassets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and the depreciation method applied at least once at each financial year-end, and account for any changeasa changeinanaccountingestimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological asset, the proceeds on disposal net of the carrying amount and relevant taxes is recognised in profit or lossfor thecurrent period.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
17. Intangible assets
Intangible assetsinclude landuse rights,software,etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite useful life is available for use, its original cost less net residual value and any accumulated impairment losses is amortised over its estimated useful life using the straight-line method. The usefullives ofthe intangible assetsareasfollows:
Annual Item Useful life Netresidual value amortizationrate Landuserights 40-50years - 2-2.5% Software 5-10years - 10-20% Trademark 10years - 10% For an intangible asset with a finite useful life, the Group reviews the useful life and amortisation methodat theendoftheperiod, andmakesadjustmentswhennecessary.
18. Impairmentof long-termassets
The Group and the Company review the impairment status of long-term equity investments, fixed assets, construction in progress, bearer biological asset and intangible assets with finite useful life at the end of each year. If the assets exist impairment, the Group estimates the recoverable amount ofthe assets.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from theasset.
If recoverable amount of assets is less than book value, the difference is recognised as impairment provision and expensedincurrent period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment testing, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonably allocated to the related assets group (s) or each of assets group (s) expected to benefit from the synergies of the combination. An impairment loss is recognised if the recoverable amount of the assets group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of assets groups, and then to the other assets of the group pro-rataonthe basisofthecarryingamount of eachasset(otherthangoodwill)inthegroup. The impairment is recognised in profit or loss for the period in which it is incurred and will not be reversedinanysubsequentperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
19. Longtermprepaidexpenses
Longtermprepaidexpensesof theGroupare amortizedoverthefollowing period:
Amortizationperiod Landrequisitionfee 50years Landleaseprepayment 50years Greeningfee 5years Leaseholdimprovement 3-5years Others 3years 20. Employeebenefits
20.1Short-term employeebenefits
In an accounting period in which an employee has rendered service to the Group, the Group recognises the actual employee benefits for that service as a liability. The employee benefits of the Group are either included in cost of related assets or charged to profit or loss in the period whenthey are incurred.Non-monetaryemployee benefitsaremeasuredatfair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds, labor union and employee education fees paid by the Group for employees, are recognised as relevant liability in the period in which the employees provide service, in accordance with the regulated recognition basis and percentage. The related expenditures are either included in cost of relatedassetsor chargedtoprofit orlossintheperiodwhentheyareincurred.
20.2Accountingtreatments ofretiredbenefits
Retiredbenefits oftheGroupareallpredeterminedprovision plan.
In the period in which the employees provide service, the Group recognise liability in accordance with the amounts to be paid calculated according to the predetermined provision plan, and the related expenditures are either included in cost of related assets or charged to profit or loss in the periodwhentheyareincurred.
20.3Accountingtreatments ofterminationbenefits
When providing termination benefits to employees, the Group recognise employee benefits payroll resulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from the termination plan or the redundancy offer; the Group recognise relevant costs andexpensesrelatedtothepayment oftermination benefits inreconstructuring.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
21. Revenue
21.1Revenuefrom saleof goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods. The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The amount of revenue can be measured reliably and it is probable that the associated economic benefits will flow to the Group. The associated costs incurred or to be incurredcanbe measuredreliably.
21.2Revenuefrom renderingof services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognized by reference the stage of completion ofthe transactionatthe reportingdate. The outcome of atransactioncanbe estimatedreliably. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the costs incurred that will be recoverable, and the costs incurred are recognised as expenses for the period. When it is not probable that the costsincurredwillbe recovered,revenueisnot recognised.
22. Governmentgrants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Group atno consideration. The income is accounted for as either a government grant related toanassetor a government grantrelatedtoincome basedonitsnature.
A government grant is recognised only when the Group can comply with the conditions attaching to the grant and the Group will receive the grant. Monetary government grants are measured by theamount receivedorreceivable.
22.1Governmentgrantrelatedtoanasset
A government grant related to an asset is recognised as deferred income, and evenly amortised to profit or lossoverthe usefullife oftherelatedasset.
22.2Governmentgrantrelatedtoincome
For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent periods, the grant is recognised as deferred income, and recognised in profit or loss over the periods in which the related costs are recognised. If the grant is a compensation for related expenses or losses already incurred, the grant is recognised immediatelyinprofit or lossfor theperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
23. Deferredtaxassets/deferredtaxliabilities
The income taxexpensesincludecurrent income taxanddeferredincome tax.
23.1 Currentincome tax
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 taxlaws.
23.2Deferredtaxassetsanddeferredtaxliabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognised as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilitiesarerecognisedusingthe balancesheetliabilitymethod.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for deductible temporary differences are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilised. However, 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,nodeferredtaxassetorliabilityisrecognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against whichthedeductible lossesandtaxcredits canbe utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
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 realised or the liabilityissettled.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. III. SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESAND ACCOUNTING -continued
23. Deferredtaxassets/deferredtaxliabilities -continued
23.2Deferredtaxassetsanddeferredtaxliabilities -continued
Current and deferred tax expenses or income are recognised in profit or loss for the period, except when they arise from transactions or events that are directly recognised in other comprehensive income or in shareholders' equity, in which case they are recognised in other comprehensive income or in shareholders' equity; and when they arise from business combinations, in which case theyadjustthecarryingamountof goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilised. Such reduction in amount is reversed when it becomesprobable thatsufficienttaxable profits willbeavailable.
23.3Netoff ofincome taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilitiesareoffsetand presentedon a netbasis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, ineachfutureperiodinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedto bereversed,deferredtaxassetsanddeferredtaxliabilitiesareoffsetandpresentedonanetbasis. 24. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks andrewards of ownershiptothe lessee. Allotherleases areclassifiedas operatingleases. Operatinglease accountingmethods
Operating lease payments are recognised on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. Initialdirectcostsincurredarechargedtoprofitorlossfor theperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IV. CRITICALJUDGMENTSINAPPLYING ACCOUNTINGPOLICIESANDKEY
ASSUMPTIONSAND UNCERTAINTIESINACCOUNTINGESTIMATES
In the application of accounting policies as set out in Note III, the Group 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 the operating activities. These judgments, estimates and assumptions are based on historical experience of the Group's management as well as other factors that are considered to be relevant. Actual results maydiffer from theseestimates.
The Group periodically review the judgments, estimates and assumptions above on a going concern basis. For those changes in accounting policies that only affect current financial statements, the influences are recognized in current period. For those changes in accounting policies that affect both current and future financial statements, the influences are recognized in bothcurrent andprospectiveperiods.
Significant accountingjudgments andaccounting estimates
The following are key assumptions for after balance sheet date event and other factors of uncertain estimation. They may cause material adjustment on balance sheet in following accountingperiod.
Deferredtaxassets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
Depreciation
As set out in Note III-13, the depreciation is calculated on the straight line basis to write-off the cost of each item of fixed assets to its residual value over its estimated useful life. The Group's management determines the estimated useful lives for its fixed assets. This estimate is based on the historical experience of the actual useful lives of fixed assets of similar nature and functions. If the previous estimates have significant changes, and depreciation expenses will be adjusted in thefuture periods.
Usefullife of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical experience of the actual useful lives of intangible assets of similar nature and functions as well as consideringthe contractualrights andstatutoryrights applicable tothe intangible assets. When the estimated useful lives of finite intangible assets are shortened or extended, the amortizationperiods shouldbe adjustedaccordingly.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IV. CRITICALJUDGMENTSINAPPLYING ACCOUNTINGPOLICIESANDKEY ASSUMPTIONSAND UNCERTAINTIESINACCOUNTINGESTIMATES- continued Significant accountingjudgments andaccounting estimates- continued
Impairmentof non-currentassets
The Group assesses whether the recoverable amount is lower than the book value. If there are any indicators that the book value of non-current assets cannot be fully recoverable, impairment lossesshouldbe recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value of the future cash flows expected to be derived from an asset. As it is difficult for the Group to obtain the quoted market price of the assets (or assets group), the fair value of the assets cannot be reliably estimated. When the management make estimation on the expected future cash flows from the asset or cash generating unit, estimates should be made on choosing a suitable production volume, selling price and related operating costs discount rate in order to calculate the present value of those cash flows. When recoverable amounts are undertaken, management may use all available for use information, including the forecast on production volume, selling price andrelatedoperatingcostsinreasonableandsupportableassumptions.
Estimatedprovision for accountsreceivable
A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy are considered indicators that the trade receivable is impaired. The provision is reassessedatthe endof eachyear.
Inventoryprovisionbasedonnetrealizablevalue
The inventory are measured on the lower of carrying value and net realizable value, and provision should be made for impairment on obsolete and slow moving inventories. The group will reassesswhetherthenetrealizablevalueislower thanthecarryingcostatthe endof eachyear. Inventoryprovisionbasedonnetrealizablevalue
The inventory are measured on the lower of carrying value and net realizable value, and provision should be made for impairment on obsolete and slow moving inventories. The group will reassesswhetherthenetrealizablevalueislower thanthecarryingcostatthe endof eachyear.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. V. TAXES
1. Themaintaxesandtaxrateareasfollows:
(1) China
Valueaddedtax VATisleviedat17%onthe invoicedamount afterdeduction ofeligible inputVAT.
Consumptiontax The consumptiontaxof thegroupisleviedongross revenue atrates rangingfrom10%to20%.
Businesstax The Group issubjecttoa businesstaxof5% on its taxablerevenue. Citydevelopmenttax Leviedat7% oftotalbusiness taxpayment.
Corporateincome tax The Groupissubjecttoa corporate income taxrateof25% onitstaxable income.
(2) France
Valueaddedtax VATisleviedat19.6%onthe invoicedamount afterdeduction ofeligible inputVAT.
Corporateincome tax The Groupissubjecttoa corporate income taxrateof33% onitstaxable income.
(3) Spain
Valueaddedtax VATisleviedat21%onthe invoicedamount afterdeduction ofeligible inputVAT.
Corporateincome tax The Groupissubjecttoa corporate income taxrateof30% onitstaxable income.
OtherthantaxincentivesstatedinNotes-V(2),applicabletaxrates ofthe Groupin2015and 2014areallstatedas above.
2. Taxincentivesandrelativepermit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group, whose principal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region. According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures for Implementation, Ningxia Changyu Grape Growing Co., Ltd. enjoys an exemptionof corporate income tax.
A subsidiary of the Company, Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu") which is a wine production enterprise incorporated in Xinjiang Weizu Autonomous. In accordance with (Caishui[2011] No.60) and (Xinzhengfa[2010] No.105), which is from 2012 to 2015, the company apply a privileged corporate income tax rate of15% besides the exemption of corporate income tax whichbelongs tolocal government. The corporate income taxapplicableforcurrentyearis9%. A subsidiary of the Company, Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau") which is a wine production enterprise incorporated in Xinjiang Weizu Autonomous. In accordance with (Caishui[2011] No.60) and (Xinzhengfa[2010] No.105), which is from 2011 to 2015, the company apply a privileged corporate income tax rate of15% besides the exemption of corporate income tax which belongs to local government. The corporate income tax applicable forcurrent yearis9%.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS
1. Cashandbank
Closingbalance Openingbalance RMB RMB Cash 179,488 101,660 Bankbalance 1,103,705,354 1,010,259,393 Othercurrencyfund 181,477,572 135,004,018____________ ____________ Total 1,285,362,414 1,145,365,071____________ ____________ As at 31 December 2015, the balance of restricted cash of the Group is RMB 2,643,181 (31 December2014:RMB2,643,519),whichistheCompany's housingfund.
As at 31 December 2015, the Group's other monetary assets include security of RMB 125,000,000 pledged for a short-term borrowing from HSBC of HKD 152,000,000 (translated as RMB 127,345,600); deposit of RMB 370,000 for letter of credit; Yantai Changyu Wine Research and Development Co., Ltd.(“R&D Centre”) pledged deposit of RMB 26,100,000; refundable deposit for notes payable of Shihezi Chateau of RMB 20,000,000, Xinjiang Tianzhu of RMB 7,000,000 and Xinjiang Changyu Trading Co., Ltd(“Xinjiang Trading”) of RMB 3,000,000; company cards depositguaranteeof RMB 7,572.
As at 31 December 2015, the Group's overseas cash and bank deposit is RMB 6,019,640 (31 December2014:RMB43,746,008).
As at 31 December 2015, The Group's term deposits with original maturity of more than three months when acquired is RMB 9,000,000 (31 December 2014: RMB 47,245,260) with interest ratesrangingfrom1.38%-1.69%.
2. Notesreceivable
(1) Categoriesof notesreceivable
Closingbalance Openingbalance RMB RMB Bank acceptances 113,988,122 138,315,319__________ _________ (2) Notesreceivablewhichhavebeenpledgedas securityat theend oftheperiod:
As at31December2015,there wasnopledgednotesreceivable (31December2014: Nil).
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
2. Notesreceivable- continued
(3) Notesendorsed bytheGrouptootherpartieswhichare not yetdue attheendof theperiod Closingbalance Openingbalance RMB RMB Bank acceptances 84,677,596 47,805,224__________ _________ As at 31 December 2015, notes endorsed by the Group to other parties which are not yet due at the end of the period is RMB 84,677,596 (31 December 2014: RMB 47,805,224). The notes are used for payment to suppliers. The Group believes that due to good reputation of bank, the risk of notes not accepting by bank on maturity is very low, and almost all the risks and rewards on ownership of the notes receivable have been transferred to the supplier, therefore derecognise the note receivables endorsed. If the bank is unable to pay the notes on maturity, according to the relevantlaws andregulationsof China,the Groupwouldundertake limitedliabilityforthe notes. (4) Notes receivable reclassified to accounts receivable due to the drawers' inability to settle the note on maturity
As at 31 December 2015, no notes receivable were reclassified as accounts receivable due to the defaultof drawer(31December2014: Nil).
3. Accountsreceivables
(1) Disclosureof accountsreceivablesbycategories:
Closingbalance Openingbalance
Baddebts Carrying Baddebts Carrying Amount provision amount Amount provision amount Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount RMB % RMB % RMB RMB % RMB % RMB Accountsreceivablethatare
individuallysignificantand
forwhichbaddebtprovision
hasbeenassessedindividually 74,538,738 37.7 - - 74,538,738 67,557,319 46.4 - - 67,557,319 Accountsreceivablethatare
notindividuallysignificantbut
forwhichbaddebtprovision
hasbeenassessedindividually_12_3,_25_6,_35_3_6_2_.3__-____-___12_3,_25_6,_35_3_7_8,_11_5,_09_2_5_3_.6 __-____-___7_8,_11_5,_09_2 Total _19_7,_79_5,_09_1_10_0_.0__-____-___19_7,_79_5,_09_1_14_5,_67_2,_41_1_10_0_.0 __-____-___14_5,_67_2,_41_1
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
3. Accountsreceivable -continued
(1) Disclosureof accountsreceivablebycategories:- continued
The normal creditterm isone month,whichcanbe extendedtooneyearfor certainmajor customers. The accountsreceivableare interest-free.
As at31December2015,ownershiprestricted accounts receivable isRMB23,880,775(31 December2014:Nil),referringtoNoteVI 46.
The aginganalysisisasfollows:
Closingbalance Openingbalance RMB RMB Within1year 197,653,190 145,672,411 1to2years 141,901 -__________ __________ 197,795,091 145,672,411__________ __________ (2) Recognitions,collections andreversals during thecurrent period:
As at 31 December 2015, there was no bad debt provision for accounts receivable (31 December 2014: Nil). There was no bad debt provision made, reversed or written-off by management in 2015(2014:Nil).
(3) Topfiveentities withthelargestbalancesofaccountsreceivable:
Relationship Percentageof withtheGroup Amount Aging totalreceivables RMB % NonggongshangSupermarket
(Group)Co.,Ltd Thirdparty 19,222,933 Within1year 9.7 Wal-Mart(China)InvestmentCo.,Ltd. Thirdparty 12,943,338 Within1year 6.5 DIAMarket Thirdparty 8,698,247 Within1year 4.4 SCHENKGmbH Thirdparty 8,404,733 Within1year 4.2 SuguoSupermarketCo.,Ltd Thirdparty __7_,0_3_2_,2_0_5 Within1year _3_._6 56,301,456 28.4________ ___
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
4. Prepayments
(1) The aginganalysisisas follows:
Closingbalance Openingbalance Amount Ratio Amount Ratio RMB % RMB % Within1year 3,096,223 86.2 8,073,786 100.0 1to2years 494,875 13.8 - -_________ _____ _________ _____ 3,591,098 100.0 8,073,786 100.0_________ _____ _________ _____ (2) Asat31December2015,the top5of prepayments are asfollows:
Reason Percentageof Relationship forbeing totaladvances withtheGroup Amount Aging outstanding tosuppliers RMB % ShandongElectricityCompany
Yantaibranch Thirdparty 423,749 Within1year electricitypurchase 11.8 BeijingDiaoyutaiWineCo. Thirdparty 400,800 1to2years goodsnotreceived 11.1ViñaZorzal Thirdparty 255,427 Within1year goodsnotreceived 7.1 DONELLIVINIS.P.A Thirdparty 224,874 Within1year goodsnotreceived 6.3 BONFILSCo.,Ltd Thirdparty ____14_9_,3_0_9 Within1year goodsnotreceived __4._2 1,454,159 40.5________ ___ 5. Interestreceivable
(1) Categoriesof interestreceivable
Closingbalance Openingbalance RMB RMB Interestsofterm deposits 8,019,338 3,619,429________ ________ (2) Overdueinterest
As at31December2015,there wasnooverdueinterestreceivable(31December2014:Nil).
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
6. Otherreceivables
(1) Disclosureof otherreceivablesbycategories
Closingbalance Openingbalance
Baddebts Carrying Baddebts Carrying Amount provision amount Amount provision amount Amount Proportion Amount Ratio Amount Amount Proportion Amount Ratio Amount RMB % RMB % RMB RMB % RMB % RMB Otherreceivablesthatare
individuallysignificantand
forwhichbaddebtprovision
hasbeenassessedindividually 32,390,931 60.7 (7,199,521) 22.2 25,191,410 16,540,213 42.9 (7,199,521) 43.5 9,340,692 Otherreceivablesthatare
notindividuallysignificantbut
forwhichbaddebtprovision
hasbeenassessedindividually_2_0,_95_5,_07_7_3_9_.3___-____-__2_0,_95_5,_07_7_2_2,_02_1,_61_0_5_7_.1___-____-__2_2,_02_1,_61_0 Total _5_3,_34_6,_00_8_10_0_.0(7_,1_99_,5_2_1)_1_4_.0_4_6,_14_6,_48_7_3_8,_56_1,_82_3_10_0_.0(7_,1_99_,5_2_1)_1_8_.7_3_1,_36_2,_30_2 Other receivables that are individually significant and for which bad debt provision has been assessedindividually:
As at31December2015,the baddebtprovision for individuallysignificantbalance isas follows: Balance Baddebtsprovision Percentage Reasonforprovision RMB RMB %
Thedebtorisinthe processof liquidation
TiantongSecurityCo.,Ltd. 7,199,521 7,199,521 100 Unabletorepay_______ _______
The aginganalysisisasfollows:
Closingbalance Openingbalance
Baddebts Carrying Baddebts Carrying Amount provision amount Amount provision amount Amount Proportion Amount Amount Amount Proportion Amount Amount RMB % RMB RMB RMB % RMB RMB Within1year 36,271,669 68.0 - 36,271,669 22,513,054 58.4 - 22,513,054 1to2years 2,725,644 5.1 - 2,725,644 7,422,977 19.3 - 7,422,977 2to3years 6,840,476 12.8 - 6,840,476 976,083 2.5 - 976,083 Over3years __7_,5_0_8,_21_9__1_4_.1_(_7,_19_9_,5_21_)___3_0_8,_69_8__7_,6_4_9,_70_9__1_9_.8_(_7_,1_99_,5_2_1)___4_5_0,_18_8 Total _5_3_,3_46_,0_0_8_1_0_0._0_(_7,_19_9_,5_21_)_4_6_,1_46_,4_8_7_3_8_,5_61_,8_2_3_1_0_0._0_(_7,_19_9_,5_21_)_3_1_,3_62_,3_0_2 (2) Accrual,reversalandwritten-off duringthe currentperiod
Nobaddebt accruedorreversedin2015(2014: baddebtwas reversedRMB192,908). (3) Otherreceivableswrittenoff inthereportingperiod
Nootherreceivablewrittenoff in2015.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
6. Otherreceivables- continued
(4) Disclosureof otherreceivablesbycategories
Closingbalance Openingbalance RMB RMB Deposit 27,424,926 8,651,139 Investment fund 7,199,521 7,199,521 Pettycash receivable 6,679,122 3,138,780 Refundof consumptiontax,realestatetax 635,482 8,772,123 Others 11,406,957 10,800,260__________ _________ 53,346,008 38,561,823__________ _________ (5) Topfiveentities withthelargestbalancesofotherreceivables
As at31December2015,the top5of otherreceivables areas follows:
Percentageoftotal Baddebt Nature Amount Aging otherreceivable Amount RMB % RMB YantaiDevelopmentZoneConstruction
EnterprisePensionSecurity
ManagementOffice Constructiondeposit 12,325,300 Within1year 23.1 - YantaiDevelopmentZone
FinanceBureau Constructiondeposit 7,866,110 Within1year 14.8 - TiantongSecurityCo.,Ltd. Investmentfund 7,199,521 Over3years 13.5 7,199,521 YantaiDevelopmentZoneConstruction
IndustryAssociation Constructiondeposit 5,000,000 2-3years 9.4 - CanadaOrosIce-wineCo.,Ltd Foreigninvestmentfund___2_,0_5_0,_00_0 Within1year __3_.8 _____-____3_4_,4_40_,9_3_1 _6_4._6 __7_,1_9_9,_52_1 7. Inventories
(1) Disclosureof inventoriesbycategories
Closingbalance Openingbalance
Netcarrying Netcarrying Balance Provision amount Balance Provision amount RMB RMB RMB RMB RMB RMB Rawmaterial 89,256,433 - 89,256,433 74,820,215 - 74,820,215 Workinprogress 1,247,023,301 - 1,247,023,301 919,070,983 - 919,070,983 Finishedgoods __9_42_,_72_0_,7_2_0 (1_8_,1_4_7,_4_90_)__9_2_4,_57_3_,2_3_0_1_,1_0_8,_80_9_,5_7_5(1_5_,3_2_4,_3_75_)_1_,0_9_3,_48_5_,2_0_0 2,279,000,454 (18,147,490) 2,260,852,964 2,102,700,773 (15,324,375) 2,087,376,398_________ _________________________________________ (2) Inventoryprovision
2015 Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB
Finishedgoods 15,324,375 2,823,115 - 18,147,490
________ _______ ________ ________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
8. Othercurrent assets
Closingbalance Openingbalance RMB RMB Prepaidtaxes 31,782,345 22,462,248 Prepaidrent 16,667,206 7,199,828__________ __________ 48,449,551 29,662,076__________ __________ 9. Available-for-salefinancialassets
(1) Available-for-salefinancialassets
Closingbalance Openingbalance
Amount Impairment Carryingamount Amount Impairment Carryingamount RMB RMB RMB RMB RMB RMB Available-for-sale
equityinstruments
measuredatcost 10,402,814 (10,000,000) 402,814 10,000,000 (10,000,000) -_________ _______ ______ _________ _______ ______ (2) Available-for-salefinancialassetsmeasuredatcost
Carryingamount Provisionforimpairmentlosses Proportionof
votingpowerin Cashdividend Investee Opening Increase Decrease Closing Opening Increase Decrease Closing theinvestee(%) fortheperiod RMB RMB RMB RMB RMB RMB RMB RMB RMB YantaiDingtao
Constructionand
DevelopmentCo.,Ltd. 10,000,000 - - 10,000,000 10,000,000 - - 10,000,000 18.0
Other(Note) - 428,062 (25,248) 402,814 - - - - Lessthan1% - 10,000,000 428,062 (25,248) 10,402,814 10,000,000 - - 10,000,000
Note: the Group holding equity ratios of investment companies are less than1%. Investment companies are all unlisted companies, and their fair value cannot be measured reliably, therefore, theGroup usescostmethodtomeasuretheseavailable-for-salefinancialassets.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
10. Fixedassets
(1) Detailsoffixedassets
Buildings Machinery MotorVehicles Total RMB RMB RMB RMB I.Totaloriginalcarryingamount
1.Openingbalance 2,059,698,368 1,373,974,100 25,774,703 3,459,447,171 2.Increase
(1)Purchase 1,221,540 37,341,344 2,682,690 41,245,574 (2)TransferfromCIP 483,914,646 54,214,495 - 538,129,141 (3)Acquisitionincrease 102,584,131 41,163,681 - 143,747,812 3.Decrease
Disposal ________-__ ____(8_,0_7_4,_47_0_) ______-__ ___(_8_,0_7_4,_47_0_) 4.Closingbalance 2,647,418,685 1,498,619,150 28,457,393 4,174,495,228__________ __________ ________ __________ II.Totalaccumulateddepreciation
1.Openingbalance 269,635,846 636,170,373 20,958,597 926,764,816 2.Increase
Additions 66,803,588 94,435,359 2,083,557 163,322,504 3.Decrease
Disposal ________-__ ____(4_,8_3_7,_27_7_) ______-__ ___(_4_,8_3_7,_27_7_) 4.Closingbalance 336,439,433 725,768,456 23,042,154 1,085,250,043__________ __________ ________ __________ III.Totalcarryingamount
1.Closingcarryingamount 2,310,979,252 772,850,694 5,415,239 3,089,245,185__________ __________ ________ __________ 2.Openingcarryingamount 1,790,062,522 737,803,727 4,816,106 2,532,682,355__________ __________ ________ __________ As at 31 December 2015, fixed assets with ownership restricted are RMB 18,405,000 (31 December2014:Nil),referringtoNoteVI 46.
As at 31 December 2015, there was no temporary idle fixed assets, no fixed assets leased under financeleases ,noleasedout underoperatingleasesandnoheldfor sale attheendof the period. (2) Fixedassetsofwhichcertificatesof title havenot beenobtained
As at31December2015,buildings withoutpropertycertificateareas follows:
Reasonswhycertificates Items Amount oftitlehavenotbeenobtained RMB
XinjiangShiheziChateaufactorybuilding 260,886,798 Processing BeijingChateauEuropeantown,main,servicebuilding 226,944,579 Processing ChanganChateauDormitorybuilding,mainbuilding 153,634,358 Processing NingxiaWineproductionfactoryandofficebuilding 149,892,083 Processing DingLuoTeChateaumainbuilding 93,911,036 Processing SalesCompanyofficebuildings 43,885,709 Processing XinjiangTianzhufermentationsandstoragewarehouse 19,701,916 Processing IceWineChateauofficebuildingandpackingworkshop 10,121,819 Processing Fermentationcentreoffice,experimentbuildingandworkshop 6,251,433 Processing Jingyangfactoryfermentationbuilding 4,679,099 Processing KylinPackagingfinishedgoodswarehouseandworkshop 2,668,884 Processing__________
972,577,714
__________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
11. Constructioninprogress
(1) Constructioninprogress
Closingbalance Openingbalance RMB RMBR&Dcentre (“ChangyuWine integrational
Construction”)Project 1,799,097,086 1,127,641,913 XianyangChateauConstructionProject 61,308,522 224,737,964 SalesCompanyconstructionproject 55,645,386 39,316,089 Huanrenfactoryconstructionproject 29,502,825 26,261,424 ShiheziChateauConstructionProject 28,105,618 75,812,215 NingxiaChateauConstructionProject 13,709,767 131,515,731 The Company's reconstructionproject 7,990,777 182,767 DingLuoTeChateauProject 5,000,221 73,517,357 AFIPplazareconstruction project 3,659,245 28,000 JingyangWinefermentationworkshop
reconstructionproject 997,645 794,385 Othercompaniesconstructionproject 973,216 658,655____________ ____________ 2,005,990,308 1,700,466,500____________ ____________ (2) Changesinsignificantconstructioninprogress
Accumulated
Opening Transferto Opening expenditure/b
Budget balance Addition PPE balance udget Status Financedby RMB RMB RMB RMB RMB %
Self-raisedR&Dcentre(“ChangyuWine
3,505,780,000 1,127,641,913 671,455,173 - 1,799,097,086 51.3 51.3 integrationalConstruction”)Project Self-raised XianyangChateauConstruction
620,740,000 224,737,964 63,730,354 (227,159,796) 61,308,522 99.5 99.5 Project Self-raised SalesCompanyconstructionproject 161,350,000 39,316,089 17,584,827 (1,255,530) 55,645,386 99.1 99.1 Self-raised ShiheziChateauConstructionProject 780,000,000 75,812,215 28,685,268 (76,391,865) 28,105,618 86.1 86.1 Self-raised NingxiaChateauConstructionProject 414,150,000 131,515,731 29,906,086 (147,712,050) 13,709,767 97.9 97.9 Self-raised DingLuoTeChateauproject 192,400,000 73,517,357 13,363,563 (81,880,699) 5,000,221 93.3 93.3 Self-raised Huanrenfactoryconstructionproject 31,000,000
26,261,424
3,241,401 - 29,502,825 95.2 95.2 Self-raised 1,698,802,693 827,966,672 (534,399,940) 1,992,369,425
There was nointerestcapitalizedinconstructioninprogressin2015.
(3) As at31December2015,there wasnoindicationof impairment,thereforenoprovision was made.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
12. Bearerbiologicalassets
Bearerbiologicalassetsmeasuredin costmethod
Planting RMB I.Total originalcarryingamount
1.Openingbalance 161,384,261 2.Increase
Self-cultivated 42,183,596__________ 3.Closingbalance 203,567,857__________ II.Total accumulateddepreciation
1.Openingbalance 9,661,020 2.Increase
Accrual 1,708,554__________ 3.Closingbalance 11,369,574__________ III.Total netcarryingamount
1.Closingnetcarryingamount 192,198,283__________ 2.Openingnetcarryingamount 151,723,241__________ As at31December2015,there is nobiological assetwithownershiprestricted.
As at 31 December 2015, biological assets of the Group include mature bearer biological assets of RMB 59,391,773 (2014: RMB 23,758,058) and immature bearer biological assets of RMB 132,806,510.(2014:RMB127,965,183)
As at 31 December 2015, there is no indication that biological assets may be impaired, and no provisionwas made.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
13. Intangible assets
(1) Intangible asset
Landuserights Softwareuserights Trademark Total RMB RMB RMB RMB I.Totaloriginalcarryingamount
1.Openingbalance 459,367,374 37,017,024 - 496,384,398 2.Increase
(1)Purchase 8,238,062 636,764 - 8,874,826 (2)Acquisitionincrease ________-__ ________-__ __1_5,_23_7_,6_5_3 ____1_5,_23_7_,6_5_3 3.Closingbalance ___4_6_7,_60_5_,4_3_6 ____37_,_65_3_,7_8_8 __15_,_23_7_,6_5_3 ___5_20_,_49_6_,8_7_7 II.Totalaccumulateddepreciation
1.Openingbalance 36,283,156 7,150,048 - 43,433,204 2.Increase
Additions ____1_0,_36_6_,5_5_6 _____2,_67_6_,1_4_3 ____12_1_,0_5_8 ____13_,_16_3_,7_5_7 3.Closingbalance ____4_6,_64_9_,7_1_2 _____9,_82_6_,1_9_1 ____12_1_,0_5_8 ____5_6,_59_6_,9_6_1 III.Totalcarryingamount
1.Closingcarryingamount 420,955,724 27,827,597 15,116,595 463,899,916__________ __________ ________ __________ 2.Openingcarryingamount 423,084,218 29,866,976 - 452,951,194__________ __________ ________ __________ As at31December2015,there wasnointangibleassetwithrestrictedownership.
14. Goodwill
Investee Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB EtablissementsRoullet
Fransac(“FransacSales”) 13,112,525 - - 13,112,525 DicotPartners,S.L
(“Dicot”) ______-___ _92_,_3_91_,_90_1_ ___-___ __9_2_,3_9_1_,9_0_1 Total 13,112,525 92,391,901 - 105,504,426_________ ________ ______ _________ As mentioned in VII 1, the Group acquired Dicot in September 2015. To determine the fair value of assets and liabilities of Dicot, the Company has brought in the assets appraisal agency to proceed the evaluation. At the reporting date for 2015 financial statement, due to the fair value assessment has not accomplished, a provisional estimate fair value is recognised as the fair value of Dicot at the acquisition date in consolidated financial statement. The assessment will be finished within 12 month from the acquisition date. Therefore, by the end of the acquisition date, theGrouphas recognisedprovisionalgoodwill for the acquisitionRMB92,391,901.
The Group recognised goodwill of RMB 13,112,525 in regard to the acquisition of Fransac Sales, and of RMB 92,391,901 in regard to Dicot. The goodwill has been allocated to relevant asset groupstoundertakeimpairment test.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
14. Goodwill- continued
The recoverable amount of an asset group is determined based on the present value of expected future cash flows. Future cash flow projections are made based on financial budgets approved by management covering a 5-year period (projecting period) and presume that cash flows after the projecting period (subsequent period) remain unchanged. According to the corporate financial structure and local corporate income tax rate, discount rate used in calculating Fransac Sales and Dicot recoverable amount are8.8% and7.5% respectively. One key assumption in projecting future cashflows is the growth rate in projecting period, which is computed based on the expected growth rate of the industry. Growth rate of sales in subsequent period is2%. Management of the Group believes that any reasonable changes in the above assumptions will not cause book value of thesubsidiaryexceedsitsrecoverable amount.
According to the assessment, the Group confirms that no impairment provision need to be made forgoodwill inthe reportingperiod.
15. Long-term prepaidexpenses
Openingbalance Increase Amortization Closingbalance RMB RMB RMB RMB Landleaseprepayments 60,810,188 - (1,481,601) 59,328,587 Landrequisitionfee 47,506,370 - (1,096,606) 46,409,764 Greeningfee 40,596,058 4,730,175 (11,096,456) 34,229,777 Leaseholdimprovement 36,733,685 - (12,776,295) 23,957,390 Others __1_6_,2_6_5_,3_0_4 ___5_3_2_,6_7_0 _(5_,_59_9_,3_2_5_) __1_1_,1_9_8_,6_4_9 201,911,605 5,262,845 (32,050,283) 175,124,167_________ ________ ________ _________ 16. Deferredtaxassets/liabilities
Deferredtaxassetsanddeferredtaxliabilities arenotrelatedtoincome taxofthesame tax authoritiesof thesame taxsubjects,thusnot presentedwiththenet amount afternetting. (1) Recogniseddeferredtaxassetsnotpresentedatthenet amountafteroffset：
Closingbalance Openingbalance Temporary Temporary
Items differences Deferredtaxassets differences Deferredtaxassets RMB RMB RMB RMB Unrealizedprofitfromintra
-companytransactions 691,741,084 172,935,271 632,127,732 158,031,933 Unpaidbonus 133,017,447 33,254,362 95,326,160 23,831,540 Retirementbenefit 16,147,369 4,036,842 15,936,065 3,984,016 Assetimpairmentprovision 35,347,011 8,836,753 32,523,896 8,130,974 Deductablelosses 265,793,269 66,448,318 176,375,554 44,093,889 Deferredincome 81,078,284 16,895,110 88,423,710 16,114,471 1,223,124,464 302,406,656 1,040,713,117 254,186,823
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
16. Deferredtaxassets/liabilities-continued
(2) Recogniseddeferredtaxliabilitiesnot presentedatthenetamountafteroffset：
Closingbalance Openingbalance Taxabletemporary Deferred Taxabletemporary Deferred Item difference taxliability difference taxliability RMB RMB RMB RMB Revaluationsurplusin
businesscombination
Notundercommoncontrol 117,475,753 34,350,349 18,262,543 4,565,636 (3) Deferredtaxassetsandliabilitiesnot recognized:
Closingbalance Openingbalance RMB RMB Deductablelosses 41,690,051 1,363,422_________ _________ (4) Deductablelossesnotrecognizedasdeferredtaxassetswill expirein:
Closingbalance Openingbalance RMB RMB 2015 - 1,363,422 2020 41,690,051 -_________ _________ 41,690,051 1,363,422_________ _________ 17. Othernon-currentassets
Closingbalance Openingbalance RMB RMB Prepaidinvestmentfund forSociété Cilile
AgricoleduChâteaude Mirefleurs(“Mirefleurs”) 28,096,895 - Receivablefrom transferof biologicalassets 17,137,746 15,751,605__________ _________ 45,234,641 15,751,605__________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
18. Short-term borrowings
Categoriesof short-termborrowings
Closingbalance Openingbalance RMB RMB Creditloans 640,290,788 300,000,000 Mortgagedloans 25,291,133 -__________ __________ 665,581,921 300,000,000__________ __________ As at31December2015,short-term borrowings detailis asfollows:
Loansamount Exchangerate RMB Natureof Interestrate interest % Creditloans(RMB) 498,000,000 1.0000 498,000,000 Floating 4.14%~5.40% Creditloans(EUR) 2,875,797 7.0952 20,404,354 Fixed 2.14%~4.00% Creditloans(EUR) 2,619,938 7.0952 18,588,987 Floating 1.55%~2.50% Creditloans(HKD) 123,296,070 0.8378 103,297,447 Floating 3MHIBOR+1.75% Mortgagedloans(EUR) 3,564,541 7.0952 _2_5_,2_9_1_,1_3_3 Fixed 6.14% 665,581,921
________
As at 31 December 2015, mortgaged loans are factoring of accounts receivables from Banco de Sabadell, S.A. etc. EUR 3,365,765 (translated as RMB 23,880,775), mortgage loans with fixed assets EUR 1,341,693 (translated as RMB 9,519,579), as collateral from Banco Sabadell, S.A. in EUR 198,776(translatedas RMB1,410,358) byDicot.
19. Notespayables
Closingbalance Openingbalance RMB RMB Bank acceptances 29,000,000 10,000,000_________ _________ As at31December2015,there wasnodue notespayable unpaid(31December2014: Nil).Notes payablesarealldue withinone year.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
20. Accountspayable
The aginganalysisof accountspayableareasfollows
Closingbalance Openingbalance RMB RMB Within1year 567,791,049 357,811,822 1to2years 1,487,319 -__________ __________ 569,278,368 357,811,822__________ __________ 21. Advancesfrom customers
The aginganalysisof advancesfrom customersareas follows
Closingbalance Openingbalance RMB RMB Within1year 229,993,684 208,769,108 1to2years 286,001 1,898,868 2to3years 530,799 4,459,622 Over3years 3,756,020 -__________ __________ 234,566,504 215,127,598__________ __________ 22. Employeebenefitpayable
(1) Employee benefitpayable
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Short-termpayroll 142,954,964 394,695,816 (363,588,874) 174,061,906 Post-demissionbenefits
-predeterminedprovisionplan 57,563 31,147,810 (31,175,197) 30,176 Terminationbenefits __1_5_,9_3_6_,0_6_5 ___5_,6_9_2_,5_1_8 __(5_,_48_1_,2_1_4_) __1_6_,1_4_7_,3_6_9 158,948,592 431,536,144 (400,245,285) 190,239,451_________ _________ _________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
22.Employee benefitpayable- continued
(2) Short-term payroll
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Salariesandbonus 139,917,954 357,468,679 (326,666,178) 170,720,455 Staffbenefit 5,968 11,858,825 (11,685,715) 179,078 Staffwelfare 161,489 13,284,150 (13,177,620) 268,019 Includes:
Medicalinsurance 158,487 11,154,228 (11,044,696) 268,019 Injuryinsurance 1,572 1,175,925 (1,177,497) - Maternityinsurance 1,430 953,997 (955,427) - Housingfund 70,236 8,855,073 (8,877,991) 47,318 Unionfeeandeducationfee ___2_,7_9_9_,3_1_7 ___3_,2_2_9_,0_8_9 __(3_,_18_1_,3_7_0_) ___2_,8_4_7_,0_3_6 142,954,964 394,695,816 (363,588,874) 174,061,906_________ _________ _________ _________ (3) Predeterminedprovision plan
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Pension 55,963 29,499,285 (29,525,253) 29,995 Unemploymentinsurance __1_,6_0_0 __1_,6_4_8_,5_2_5 _(1_,_64_9_,9_4_4_) ___1_8_1 57,563 31,147,810 (31,175,197) 30,176_____ ________ ________ _____ The Group participates in pension insurance and unemployment insurance plans established by government institution. According to those plans, the Group pays pension and unemployment insurance each month on the basis of14%-21% and1%-2% last period salary respectively. Apart from these monthly expenses, the Group does not bear any further payment obligation. This year the Group should pay RMB 29,499,285 and RMB 1,648,525 (2014: RMB 29,060,721 and RMB 1,549,044) respectively into pension insurance and unemployment insurance. As at 31 December 2015, the Group has unpaid pension and unemployment insurance of RMB 29,995 and RMB 181 respectively (31 December 2014: RMB 55,963 and RMB 1,600), which is due to the pension insurance and unemployment insurance plan at the end of the reporting period. These payments havebeenpaidafterthe endof thereportingperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
23. Taxespayable
Closingbalance Openingbalance RMB RMB Valueaddedtax (45,821,559) (62,755,555) Consumptiontax 18,638,837 18,849,955 Businesstax 509,491 1,005,135 Corporationincome tax 49,020,665 109,836,980 Urbanlandusetax 2,812,536 1,519,318 Individualincometax 6,587,254 6,644,281 Cityconstructiontax 4,197,401 4,831,936 Propertytax 855,668 898,914 Others 4,484,814 6,673,084__________ __________ 41,285,107 87,504,048__________ __________ 24. Deferredincome
Closingbalance Openingbalance RMB RMB Governmentgrants
Currentliabilities 11,241,873 12,398,718 Non-currentliabilities 69,836,411 76,024,992_________ _________ 81,078,284 88,423,710_________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
24.Deferredincome -continued
Governmentgrants
Recognizedin Relatedto Opening Addition non-operatingincome Closing Assets/Income RMB RMB RMB RMB
MiyunPropagandaDepartmenttransfer 3,555,780 - (888,945) 2,666,835 Assets Winebaseliquorbrewageproject 9,044,116 - (1,434,873) 7,609,243 Assets Shihezichateauprojectfunds 16,116,600 - (2,280,000) 13,836,600 Assets Industryrevitalizationandtechnology
reconstructionspecificfunds 21,330,000 - (1,422,000) 19,908,000 Assets Ningxiaindustryrevitalizationand
technologyreconstructionfunds 11,065,000 - (3,389,000) 7,676,000 Assets Winegrapesubsidies 470,000 - - 470,000 Income Modernagriculturegrapeproduction
developmentsubsidies 324,000 - - 324,000 Income WuYouYiXinindustrialclusterspecificfunds 120,000 - (60,000) 60,000 Assets Agriculturaltechnologysubsidies 632,400 312,000 (122,400) 822,000 Income (Huanren)wineproductionconstructionfunds - 4,000,000 - 4,000,000 Assets Wineelectronictrackingsystem
specificfunds 5,193,474 - (667,055) 4,526,419 Assets Wineindustryspecificfunds 930,000 - - 930,000 Assets ShandongPeninsulaBlueEconomic
Areaconstructionfunds 10,000,000 - - 10,000,000 Assets 863Programsubsidyfundsforscientificresearch 62,900 - (3,010) 59,890 Income Informationsystemconstruction
projecttechnologyfunds 5,220,000 - (580,000) 4,640,000 Assets Integrationprojectssubsidies 100,000 - (71,200) 28,800 Income Cross-bordere-Businessprojectssubsidies 2,179,440 143,600 (662,543) 1,660,497 Income Redwinephenolicsresearchprojectsfunds - 300,000 - 300,000 Income Grapebaseconstructionproject ___2,_08_0,_00_0 ____-__ ___(5_20_,0_0_0) ___1,_56_0,_00_0 Assets Total __8_8,_42_3,_71_0 __4,_75_5,_60_0 _(_12_,1_0_1,0_2_6) __8_1,_07_8,_28_4
Less:Non-currentliabilitiesduewithinoneyear __1_2,_39_8,_71_8 __1_1,_24_1,_87_3
Othernon-currentliabilities __7_6,_02_4,_99_2 __6_9,_83_6,_41_1
As at 31 December 2015, the Group recognise current liability for deferred income to be accountedin profit or loss within one year, and recognise non-current liability for deferred income tobe accountedinprofit or lossoverone year.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
25. Otherpayables
(1) Naturesofotherpayablesareasfollows
Closingbalance Openingbalance RMB RMB Depositfrom distributors 114,475,163 134,470,408 Payables forequipment andconstruction 92,580,929 90,857,839 Payables fortransportation 29,713,956 24,388,114 Royaltyfee 86,001,287 77,809,993 Advertisingcosts 76,818,144 43,488,770 Capitalincrementfrom minorityinterest(Note) 22,522,636 22,522,636 Employee deposit 16,078,904 10,005,000 Deposits from suppliers 5,644,909 2,263,984 Payables forcontractingfee 32,936,900 27,132,371 Others 32,453,567 36,865,202__________ __________ 509,226,395 469,804,317__________ __________ (2) Descriptionof significantotherpayables agedmore thanone year
Company Amount Reasons RMB
BeijingQinglangagriculturescienceandtechnology
developmentlimitedcompany 18,630,431 unfinishedcapitalincrement(Note) BeijingQinglangagriculturescienceandtechnology 12,092,414 Payablesforcontractingfee developmentlimitedcompany
YantaiDe'anInvestmentCompanyLimited 3,892,205 unfinishedcapitalincrement(Note) YantaiDe'anInvestmentCompanyLimited ____4,_53_3_,9_3_2 Payablesforcontractingfee 39,148,982
_________
Note: unfinished capital increment is the investment fund from minority shareholders for the subsidiary of the Company. As at 31 December 2015, capital increment procedures have not finished.
26. Non-currentliabilities duewithinone year
Closingbalance Openingbalance RMB RMB Long-term borrowings due withinoneyear 156,335,647 -__________ _________ As at31December2015,Long-term borrowingsdue withinoneyearrefers toNote IV27
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
27. Long-term borrowings
Categoriesof long-termborrowings
Closingbalance Openingbalance RMB RMB Creditloan 66,868,836 89,467,200 Mortgagedloan 4,817,793 - Securedloan - 119,912,800___________ ___________ 71,686,629 209,380,000___________ ___________ As at31December2015,loans detailisasfollows:
Loansamount Exchangerate RMB Nature Interestrate Duewithin Dueover ofinterest % oneyear oneyear Creditloans(EUR) 190,150 7.0952 1,349,156 Fixed 3.80% 1,064,090 285,066 Creditloans(EUR) 13,143,957 7.0952 93,259,001 Floating 1.75%~5.84% 26,675,231 66,583,770 Mortgagedloans(EUR) 855,299 7.0952 6,068,519 Fixed 4.50%~6.14% 1,250,726 4,817,793 Securedloan(HKD) 152,000,000 0.8378 _12_7,_34_5,_60_0 Floating3MHIBOR+1.95% __12_7_,34_5_,60_0_____-___22_8,_02_2,_27_6 __15_6_,3_35_,6_47__7_1,_68_6,_62_9 As at 31 December 2015, mortgaged loans are Dicot using fixed assets EUR 1,252,314 (translated as RMB 8,885,421) as collateral for loans from PopularEspañol, S.A. and Banco Cajamar in total EUR 855,299(translatedasRMB6,068,519).
As at 31 December 2015, secured loan is borrowed by the Company from Qingdao Branch of HSBC with the bank deposit of RMB 125,000,000 as custody. The borrowing amount is HKD 152,000,000(translated as RMB 127,345,600) with quarterly paid interest rate of the 3 month Hong Kong interbank offered rates plus 195 basis points and borrowing period from 4 July 2014 to3July2016.As at31December2015,theinterest rateof securedloanis2.35%.
28. Othernon-currentliabilities
Closingbalance Openingbalance RMB RMB Employee benefit 4,047,476 3,998,352_________ _________ As at31December2015,employeebenefit represents depositfrombonus accruedfor managersand above. Accordingtothebonus paymentscheduleof 2015,thebonus isexpectedtobepaidduring2017 to2019.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
29. Sharecapital
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Unrestrictedshares
Ashares 453,460,800 - - 453,460,800 Bshares _2_3_2_,0_0_3_,2_0_0 ___-___ ___-___ _2_3_2_,0_0_3_,2_0_0 Totalofunrestrictedshares
andtotalshares 685,464,000 - - 685,464,000_________ ______ ______ _________ 30. Capitalreserve
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Sharepremium 557,222,454 2,816,399 - 560,038,853 Other ___5_,9_1_6_,5_8_8 ___-___ ___-___ ___5_,9_1_6_,5_8_8 Total 563,139,042 2,816,399 - 565,955,441_________ ______ ______ _________ In April 2015, theCompany’s subsidiary, Beijing Changyu AFIP Wine Chateau Co., Ltd (“Beijing Chateau”) brought Beijing AFIP Tourism and Culture Company(“AFIP Tourism”)30% shareholding from Beijing Qinglang agriculture science and technology development Co., Ltd and Yantai De'an Investment Co., Ltd, with RMB 150,000 cash consideration. The difference between consideration and book value of non-controlling interest RMB 2,816,399 is recognised in capital reserve. After thepurchase,BeijingChateauholds100%shareholdingofAFIPTourism.
31. Othercomprehensive income
2015
Less:lastyearother Post-tax Post-tax
Before-tax comprehensiveincome Less: attributable attributable
Items Openingbalance amount inP/Lcurrentyear taxexpense toparent toNCI Closingbalance Othercomprehensive
incometobereclassified
toprofitandloss (2,803,271) (7,741,776) - - (7,639,241) (102,535) (10,442,512) Foreigncurrencystatement
translationdifference (2_,8_03_,2_71) (7_,7_4_1,7_7_6) __-__ __-__ (7_,6_3_9,2_4_1) (_10_2,_53_5) (10_,4_4_2,5_1_2) 32. Surplus reserve
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Statutorysurplusreserve _3_4_2_,7_3_2_,0_0_0 ___-___ ___-___ _3_4_2_,7_3_2_,0_0_0 342,732,000 - - 342,732,000_________ ______ ______ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
32.Surplus reserve - continued
In accordance with the Company Law of the People's Republic of China and the Articles of Association of the Company, the Company is required to appropriate10% of the net profit to the statutory surplus reserve until the accumulated balance of the statutory surplus reserve reaches50% of the registered share capital. The Company does not appropriate net profit to the surplus reservein2015.
The Company can appropriate discretionary surplus reserve after appropriation of the statutory surplus reserve. Discretionary surplus reserve can be utilized to offset the deficit or increase the sharecapitalafter approval.
33. Retainedearnings
Closingbalance Openingbalance RMB RMB Retainedearningsbroughtforward 5,251,920,374 4,616,944,663 Add: profit attributable toshareholders ofthe Company 1,030,073,860 977,707,711 Less:Dividendspaidinrespectprior year's profit (301,604,160) (342,732,000)____________ ____________ Retainedearningscarriedforward 5,980,390,074 5,251,920,374____________ ____________ (1) Appropriationtosurplus reservebysubsidiaries
As at 31 December 2015, the balance of the Group's unappropriated profits include appropriation to surplus reserve by subsidiaries amounting to RMB 54,946,701 (31 December 2014: RMB 49,484,644).
(2) Cashdividendsapprovedbygeneralmeeting
According to the annual general meeting on 22 May 2015, dividends distribution plan has been made. On the basis of 685,464,000 issued share capital, RMB 4.4 (including taxes) for every 10 shareswas distributedtoshareholders,intotal RMB301,604,160cashdividends.
(3) Profit distributiondecidedafter thebalance sheetdate
According to a proposal of the board of directors approved on 27 April 2016, on the basis of 685,464,000issued shares in 2015, cash dividends of RMB 5.0 (including taxes) for every 10 share will be distributed to all the shareholders. The aggregate amount of cash dividend is RMB 342,732,000. The above proposal regarding dividends distribution is yet to be approved in a shareholders'meeting.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
34. Operatingincome andcosts
Operatingincome is analysedasfollows:
2015 2014 RMB RMB Principaloperatingincome 4,589,025,348 4,113,169,270 Otheroperatingincome 60,697,020 43,558,255____________ ____________ 4,649,722,368 4,156,727,525____________ ____________ Operatingcostisanalysedas follows:
2015 2014 RMB RMB Principaloperatingcost 1,484,994,084 1,354,777,577 Otheroperatingcost 27,508,951 17,667,035____________ ____________ 1,512,503,035 1,372,444,612____________ ____________ The operatingincome for the Groupis mainlyfrom thesalesofwine,brandyandsparklingwine. In2015,Over98%(2014:over99%)of thesalesgeneratedinPRC.
35. Taxesandsurcharges
2015 2014 RMB RMB Consumptiontax 160,472,712 171,424,114 BusinessTax 3,613,680 2,853,114 Cityconstructiontax 50,491,173 51,051,930 Educationfeeandsurcharges 36,625,254 36,830,754 Others 6,810,705 7,286,862__________ __________ 258,013,524 269,446,774__________ __________ Fordetailstandardsoftaxrateplease refer toNotes V.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
36. Sellingexpenses
2015 2014 RMB RMB Advertisingcosts 547,276,390 466,868,778 Freight 124,662,391 120,998,488 Salaryandemployee benefit 237,132,890 183,841,797 Trademarkfee 83,734,976 77,809,993 Warehouseleasingexpenses 70,352,917 50,816,255 Travellingexpenses 25,946,093 20,986,441 Depreciationcost 18,866,370 9,123,380 Laborfee 25,367,133 22,283,617 Renovationcosts 19,140,522 1,835,863 Generalexpense 6,794,673 5,079,767 Logisticsservicecharge 6,644,156 7,033,039 Packingcost 5,090,563 2,430,519 Propertymanagementfee 4,487,152 3,421,047 Low-value consumable amortization 3,627,241 9,158,438 Securityandsanitationfee 3,617,320 1,482,628 Salescommissions 3,417,859 2,926,165 Others 24,968,517 19,913,149____________ ____________ 1,211,127,163 1,006,009,364____________ ____________ 37. Generalandadministrativeexpense
2015 2014 RMB RMB Salaryandemployee benefit 59,832,416 42,752,029 Depreciation 38,123,017 33,086,559 Insurancefee 30,645,834 28,953,319 Propertytax,stamp dutyandothertaxes 28,441,366 13,585,138 Contractingfee 19,144,698 16,539,989 Administrativeexpenses 16,772,528 14,472,830 Maintenancefee 15,686,214 16,559,436 Virescencefee 15,154,393 16,207,197 Servicefee 14,878,018 4,158,814 Amortization 12,129,490 10,961,304 Leasingexpenses 9,190,948 11,063,572 Cleaningfee 6,573,075 6,860,665 Entertainmentfee 5,660,174 3,786,968 Travellingexpenses 5,018,296 5,290,745 Technologydevelopmentfee 3,006,614 3,057,225 Others 33,711,328 29,644,228__________ __________ 313,968,409 256,980,018__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
38. Lossonimpairment of assets
2015 2014 RMB RMB Reversalof impairmentloss - (192,908) Inventoryimpairment 2,823,115 2,188,785_________ _________ 2,823,115 1,995,877_________ _________ 39. Financialincome
2015 2014 RMB RMB Interestincome (16,778,280) (23,614,179) Exchangeloss(gain) 4,349,534 (7,031,076) Less:Interestexpenses 21,957,762 12,298,953 Bankcharges 1,758,669 1,089,581__________ __________ 11,287,685 (17,256,721)__________ __________ 40. Non-operationincome
Recognizedin extraordinary 2015 2014 profitandloss RMB RMB RMB Gainsondisposal ofnon-current assets 192,945 121,113 192,945 Including:gainondisposal ofplant
propertyandequipment 192,945 121,113 192,945 Governmentgrants 38,952,919 40,545,714 38,952,919 Penaltyincome 7,246,157 637,531 7,246,157 Others 3,673,296 2,692,047 3,673,296_________ _________ _________ 50,065,317 43,996,405 50,065,317_________ _________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
40. Non-operationincome - continued
Governmentgrants recognizedintheincome statementisas follows:
Assets/income 2015 2014 related RMB RMB
Majorprojects supportfund 7,134,819 6,878,819 Assetsrelated Small andmedium enterprises
supportfund 4,107,054 5,010,153 Assetsrelated Taxrefund 17,833,465 18,259,690 Income related Others 9,877,581 10,397,052 Income related_________ _________
38,952,919 40,545,714
_________ _________
41. Non-operationexpenses
Recognizedin extraordinary 2015 2014 profitandloss RMB RMB RMB Lossondisposalof non-currentassets 56,884 5,207,658 56,884 Including:lossesfrom disposal
offixedassets 56,884 114,390 56,884 lossesfrom disposal
ofbiologicalassets - 5,093,268 - Compensationandpenaltyloss 1,102,893 705,333 1,102,893 Donation 288,009 434,352 288,009 Others 457,103 2,022,906 457,103_________ _________ _________ 1,904,889 8,370,249 1,904,889_________ _________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
42. Income tax
2015 2014 RMB RMB Currentincome tax 407,380,757 421,450,258 Deferredincome tax (49,496,522) (96,424,212)__________ __________ 357,884,235 325,026,046__________ __________ Reconciliationbetweenincome taxexpensesandprofits is asfollows:
2015 2014 RMB RMB Profit before tax 1,388,159,865 1,302,733,757 Incometaxexpenseatstatutorytaxrate25%(2014:25%) 347,039,966 325,683,439 Effect of different taxrates appliedbycertainsubsidiaries (3,509,042) (1,356,542) Unrecogniseddeductable loss 10,422,513 - Non-deductibleexpenses 3,930,798 699,149____________ ____________ Income taxexpensesattheGroup's effectivetaxrate 357,884,235 325,026,046____________ ____________ 43. Basicanddilutiveearnings pershare
The calculation of basic earnings per share is based on the consolidated profit attributable to ordinary shareholders of the Company during the year and the weighted average number of outstandingordinary shares.
2015 2014 RMB RMB Earnings
Consolidatedprofit attributable toordinary
shareholdersof the Company 1,030,073,860 977,707,711____________ ____________ Shares
Weightedaveragenumber ofoutstanding
ordinaryshares 685,464,000 685,464,000____________ ____________ Basicearnings pershare 1.50 1.43____________ ____________ The Companydoes not havepotentialdilutive ordinaryshares.
From thebalancesheetdatetothe dateof approvalofthisreport,there arenosubsequentevents whichwouldaffect thenumbers oftheweightedaveragenumberof outstandingof ordinary shares.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
44. Notestoconsolidatedcashflowstatement
(1) Cashreceivedrelatingtootheroperatingactivities:
2015 2014 RMB RMB Governmentgrants 9,774,028 22,286,024 Penaltyincome 7,246,157 637,531 Others 5,352,831 1,619,992_________ _________ 22,373,016 24,543,547_________ _________ (2) Cashpaidrelatingtoother operatingactivities:
2015 2014 RMB RMB Sellingexpenses 949,202,920 726,232,000 Generalandadministrativeexpenses 110,003,182 107,585,895 Notepayabledeposit 20,000,000 4,034,004 Others 4,181,035 7,096,689____________ ____________ 1,083,387,137 844,948,588____________ ____________ (3) Cashpaidfor the purchasesubsidiariesandotherequity:
2015 2014 RMB RMB Cashpaidfor acquisitionof Dicot 190,148,125 - Less:cashandcashequivalentsfor Dicot
atacquisitiondate 4,902,074 - Prepaidinvestment fund for Mirefleurs 28,096,895 -__________ __________ 213,342,946 -__________ __________ (4) Cashpaidrelatingtoother financingactivities:
2015 2014 RMB RMB Pledgedsecurityofshort-term borrowing - 125,000,000 DevelopmentZone Tradingpledgeddeposit 26,100,000 - CanadaOros investmentfundreturn 2,050,000 -__________ __________ 28,150,000 125,000,000__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
45. Supplementaryinformation toconsolidatedcashflowstatement
(1) Supplementaryinformation toconsolidatedcashflowstatement
2015 2014 RMB RMB Cashflows fromoperatingactivities
calculatedbyadjustingthenetprofit:
Netprofit 1,030,275,630 977,707,711 Add: Lossfor impairmentof assets 2,823,115 1,995,877 Depreciationof fixedassets 163,322,504 127,149,785 Amortizationof intangible assets 13,163,757 11,396,496 Amortizationof Biologicalassets 1,708,554 865,855 Amortizationof long-term prepaidexpenses 32,050,283 15,799,878 Loss/(gain)ondisposalof property
plantandequipment (136,061) 5,086,545 Financeexpense 6,516,142 (7,012,502) Increaseindeferredtaxassets (48,219,833) (95,653,733) Decreaseindeferredtaxliabilities (1,276,689) (770,479) Decreaseininventories 3,921,192 31,552,254 Decrease/(increase)inoperatingreceivables (175,316,875) 48,497,684 Increase/(decrease)inoperatingpayables 114,214,648 (46,532,075)____________ ____________ Netcashflows from operatingactivities 1,143,046,367 1,070,083,296____________ ____________ (2) Cashandcashequivalent
Closingbalance Openingbalance RMB RMB Closingbalanceof cashandbank 1,285,362,414 1,145,365,071 Less:
restrictedbankdeposits 2,643,181 2,643,519 restrictedothermonetaryfunds 181,477,572 135,004,018 depositwitha periodof overthree months 9,000,000 47,245,260____________ ____________ Closingbalanceof cashandcashequivalents 1,092,241,661 960,472,274____________ ____________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
45. Supplementaryinformation toconsolidatedcashflowstatement- continued
(2) Cashandcashequivalent-continued
Closingbalance Openingbalance RMB RMB Cash 1,092,241,661 960,472,274 Including:Cashonhand 179,488 101,660 Bankdepositsondemand 1,092,062,173 960,370,614___________ __________ Closingbalanceof cashandcashequivalents 1,092,241,661 960,472,274___________ __________ 46. Assetswithrestrictionof ownership
Closingbalance Openingbalance RMB RMB Cashandbank 184,120,753 137,647,537 Accountreceivables 23,880,775 - Fixedassets 18,405,000 -__________ __________ As at 31 December 2015, cash and bank balances with restriction of ownership include: security of RMB 125,000,000 pledged for a short-term borrowing from HSBC of HKD 152,000,000 (translated as RMB 127,345,600);R&D Centre pledged deposit of RMB 26,100,000; refundable deposit for notes payable of Shihezi Chateau of RMB20,000,000, Xinjiang Tianzhu of RMB 7,000,000; Xinjiang Trading of RMB 3,000,000; the Group's housing fund of RMB 2,643,519; depositof RMB370,000for letterof creditandcompanycardsdepositguaranteeof RMB7,572. As at 31 December 2015, the restricted accounts receivables is EUR 3,365,765(translated as RMB 23,880,775) that Dicot conducted its accounts receivables for factoring from Banco de Sabadell, S.A.etc.
As at 31 December 2015, the restricted fixed assets is Dicot mortgaged fixed assets for bank borrowings including fixed assets EUR 1,341,693 (translated as RMB 9,519,579) for short-term borrowings and EUR 1,252,314(translated as RMB 8,885,421) for long-term borrowings. Bank borrowings refers toNoteIV18andNoteIV 27
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VI. NOTESTO CONSOLIDATEDFINANCIALSTATEMENTS-continued
45. Foreign monetaryitems
(1) Foreign monetary items
The foreignmonetaryitems locatedwithinChina areasfollows:
Closingforeign Exchange Closingtranslated Items currencybalance rate RMBbalance Cashandbank
EUR 21,387,251 7.0952 151,746,825 HKD 115,513 0.8378 96,777__________ ______ __________ Short-term borrowings
HKD 123,296,070 0.8378 103,297,447__________ ______ __________ Long-term borrowings due withinoneyear
HKD 152,000,000 0.8378 127,345,600__________ ______ __________ Long-term borrowings
EUR 8,000,000 7.0952 56,761,600__________ ______ __________ (2) Overseasbusiness entities
TheCompany’soverseas subsidiariesdeterminebookkeepingcurrencybasedontheprimary economicenvironment.The bookkeepingbasecurrencyofDicotandFrancs Champs
ParticipationsSAS (“Francs Champs”) areallinEuro, andDicotandFrancsChamps haveno foreignmonetaryitems attheyearend.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VII. CHANGEINCONSOLIDATIONSCOPE
1. Business combinationunderdifferent control
(1) Businesscombinationunderdifferentcontrol incurrentperiod
Nameof Equity Equity Equity Revenuefrom Netprofitfrom Equity Acquisition Basisof
acquisition acquisition acquisition acquisition acquisitiondateto acquisitiondate acquisitiondate date acquisitiondate
company date ratio(%) method yearend toyearend EUR Finishpayment
Dicot 30Sept2015 75 Purchase 30Sept2015 RMB76,202,513 RMB807,079 26,250,000 andacquireequity
Otherdetailinformation:
According to the “Equity Transfer Agreement” signed between the Company and Comercial Gatar,S.L. (“CG S.L.”)Gestión Ganuza,S.L. (“GG S.L.”) at9 Jul2015. The company paidin consideration EUR 26,250,000(translated as RMB 190,148,125) to CG S.L. and GG S.L. for37.5%and37.5% shareholdingof Dicotrespectively.
The Company paid consideration in September 2015, acquired75% of Dicot, arranged directors into the board in accordance with thecompany’s article, and obtained the financial and operationalcontrol ofDicot.
(2) ConsiderationandGoodwill
Consideration
Dicot RMB Cash 190,148,125 Totalconsideration 190,148,125 Less:acquiredprovisional valueof netassets 97,756,224__________ Goodwill 92,391,901__________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VII. CHANGEINCONSOLIDATIONSCOPE - continued
1. Businesscombinationunderdifferent control -continued
(3) Recognisedassetsandliabilitiesof mergeeatacquisitiondate
Dicot
Provisional value Bookvalue atacquisitiondate atacquisition date
RMB RMB Assets
Cashandbank 4,902,074 4,902,074 Accountsreceivable 49,963,808 49,963,808 Otherreceivables 1,073,2471,073,247Inventories 180,220,873 176,311,076 Othercurrent assets 1,853,758 1,853,758 Available-for-salefinancialassets 428,062 428,062 Fixedassets 143,747,812 57,023,364 Intangible assets 15,237,653 2,333,891____________ ____________ Totalassets 397,427,287 293,889,280____________ ____________ Liabilities
Accountspayable 119,276,204 119,276,204 Otherpayables 9,118,934 9,118,934 Short-term borrowings 88,954,565 88,954,565 Long-term borrowings 18,674,550 18,674,550 Deferredtaxliabilities 31,061,402 -____________ ____________ Totalliabilities 267,085,655 236,024,253____________ ____________ Netassets 130,341,632 57,865,027Less：Non-controlling interests 32,585,408 14,466,257____________ ____________ Acquirednet assets 97,756,224 43,398,770____________ ____________ (4) Relevant explanation for unsettled fair value of recognised assets and liabilities of merge and consideration attheacquisitiondate andatthe yearend
To determine the fair value of assets and liabilities of Dicot, the Company has brought in the assets appraisal agency to proceed the evaluation. Because at the reporting date for 2015 financial statement, fair value assessment has not finished, a provisional estimate fair value is recognised as the fair value of Dicot at the acquisition date in consolidated financial statement. And provisional goodwill is recognised in RMB 92,391,901. The assessment will be finished within 12 month from the acquisition date. Assets and liabilities listed above will be adjust (if it is necessary) accordingtothe assessmentreport.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VII. CHANGEINCONSOLIDATIONSCOPE - continued
2. Change inconsolidationscopeduetootherreasons (newestablishedsubsidiaries)
Name Placeanddateofregistration Legalrepresentative Businessnature Registeredcapital Principalactivities IncorporatecodeSubsidiariesacquiredbyestablishment：
LanzhouChangyuPioneer 26March2015 Zhang,Pengfei Sales RMB500,000 Wholesaleofpre-packedfoods 32541076-1 SalesCo.Ltd(“LanzhouPioneer”) LanzhouGansu,China
YantaiFulangduoImportWineSales 22January2015 Zhou,Hongjiang Sales RMB1,000,000 Wholesaleandretail 32846634-9 Co.Ltd(“YantaiFulangduo”) YantaiShandong,China pre-packedfoods
HefeiChangyuPioneer 19August2014 Wang,Xiufeng Sales RMB500,000 Wholesaleandretail 39550778-8SalesCo.Ltd(“HefeiPioneer”)* Hefei,Anhui,China pre-packedandunpackedfoods UrumchiChangyuPioneer 15August2014 Zhao,Changchun Sales RMB500,000 Wholesaleofpre-packedfoods 31342623-XSalesCo.Ltd(“UrumchiPioneer”)* UrumchiXinjiang,China
GuizhouChangyuPioneer 2February2015 Sunxuefeng Sales RMB500,000 Wholesaleofpre-packedfoods 32213485-3 SalesCo.Ltd(“GuizhouPioneer”) GuiyangGuizhou,China
* As at31December2014,thesesubsidiarieshadcompletedregistrationbut paidshare capitalin2015,therefore theyareincludedinthe consolidationscopeof theGroupin 2015.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VIII. INTERESTSINOTHERENTITIES
1. Structureof theGroup
Equityinterestowned
bythecompany
Name Address Placeofregistration Nature Direct Indirect Acquisitionmethod XinjiangTianzhu(a) Shihezi,Xinjiang,China Shihezi,Xinjiang,China Manufacturing 60% - Subsidiaryacquiredinbusinesscombination undernon-commoncontrol FransacSales Cognac,France Cognac,France Trading - 100% Subsidiaryacquiredinbusinesscombination undernon-commoncontrol Dicot Navarra,Spain Navarra,Spain Sales 75% Subsidiaryacquiredinbusinesscombination undernon-commoncontrol BeijingChangyuSalesanddistributionCo.,Ltd Beijing,China Beijing,China Sales 100% - Subsidiariesacquiredbyestablishment ("BeijingSales")
YantaiKylinPackagingCo.,Ltd. Yantai,Shandong,China Yantai,Shandong,China Manufacturing100% - Subsidiariesacquiredbyestablishment ("KylinPackaging")
YantaiChangyu-CastelWineChateauCo.,Ltd Yantai,Shandong,China Yantai,Shandong,China Manufacturing 70% - Subsidiariesacquiredbyestablishment ("ChangyuChateau")(b)
Changyu(Jingyang)WineCo.,Ltd. Xianyang,Shanxi,China Xianyang,Shanxi,China Manufacturing 90% 10% Subsidiariesacquiredbyestablishment ("JingyangWine")
YantaiChangyuPioneerWineSalesCo.,Ltd. Yantai,Shandong,China Yantai,Shandong,China Sales 100% - Subsidiariesacquiredbyestablishment ("SalesCompany")
LangfangDevelopmentZoneCastel-ChangyuWine Lanfang,Hebei,China Lanfang,Hebei,China Manufacturing 39% 10% Subsidiariesacquiredbyestablishment Co.,Ltd("LangfangCastel")(c)
Changyu(Jingyang)WineSalesCo.,Ltd. Xianyang,Shanxi,China Xianyang,Shanxi,China Sales 10% 90% Subsidiariesacquiredbyestablishment ("JingyangSales”)
LangfangChangyuPioneerWineSalesCo.,Ltd Lanfang,Hebei,China Lanfang,Hebei,China Sales 10% 90% Subsidiariesacquiredbyestablishment ("LangfangSales")
ShanghaiChangyuSalesanddistributionCo., Shanghai,China Shanghai,China Sales 30% 70% Subsidiariesacquiredbyestablishment Ltd.("ShanghaiSales")
BeijingChangyuAFIPAgriculturedevelopment Miyun,Beijing,China Miyun,Beijing,China Sales - 100% Subsidiariesacquiredbyestablishment Co.,Ltd("AgricultureDevelopment")
BeijingChateau(d) Beijing,China Beijing,China Manufacturing 70% - Subsidiariesacquiredbyestablishment Yantai("BeijingChateau")ChangyuWineSales Yantai,Shandong,China Yantai,Shandong,China Sales 90% 10% Subsidiariesacquiredbyestablishment Co.,Ltd.("WinesSales")
YantaiChangyuPioneerInternationalCo.,Ltd. Yantai,Shandong,China Yantai,Shandong,China Sales 70% 30% Subsidiariesacquiredbyestablishment ("PioneerInternational")
HangzhouChangyuWineSalesCo.,Ltd. Hangzhou,Zhejiang,China Hangzhou,Zhejiang,China Sales - 100% Subsidiariesacquiredbyestablishment ("HangzhouChangyu")
NingxiaGrowing Yinchuang,Ningxia,China Yinchuang,Ningxia,China Planting 100% - Subsidiariesacquiredbyestablishment HuanrenChangyuNationalWinesSalesCo.,Ltd. Benxi,Liaoning,China Benxi,Liaoning,China Sales 100% - Subsidiariesacquiredbyestablishment ("NationalWines")
LiaoningChangyuIceWineChateauCo.,Ltd. Benxi,Liaoning,China Benxi,Liaoning,China Manufacturing 51% - Subsidiariesacquiredbyestablishment ("IceChateau") (e)
YantaiDevelopmentZoneChangyuTradingCo., Yantai,Shandong,China Yantai,Shandong,China Sales - 100% Subsidiariesacquiredbyestablishment Ltd("DevelopmentZoneTrading")
ShenzhenChangyuWineMarketingLtd. Shenzhen,Guangdong,China Shenzhen,Guangdong,China Sales - 100% Subsidiariesacquiredbyestablishment ("ShenzhenMarketing")
YantaiChangyuFushanTrading Yantai,Shandong,China Yantai,Shandong,China Sales - 100% Subsidiariesacquiredbyestablishment Company("FushanTrading")
BeijingAFIPMeetingCenter("MeetingCenter") Miyun,Beijing,China Miyun,Beijing,China Service - 100% Subsidiariesacquiredbyestablishment AFIPTourism Miyun,Beijing,China Miyun,Beijing,China Tourism - 100% Subsidiariesacquiredbyestablishment NingxiaWineCo.Ltd.("NingxiaWine"). Yinchuan,Ningxia,China Yinchuan,Ningxia,China Manufacturing100% - Subsidiariesacquiredbyestablishment YantaiChangyuDingLuoTeChateau. Yantai,ShandongChina Yantai,ShandongChina Retailand 65% 35% Subsidiariesacquiredbyestablishment ("DingLuoTeChateau") Sales
QingTongXiaChangyuWineMarketing QingTongXia,Ningxia,China QingTongXia,Ningxia,China Sales - 100% Subsidiariesacquiredbyestablishment Ltd("QingTongXiaSales")
ShiheziChateau Shihezi,Xinjiang,China Shihezi,Xinjiang,China Manufacturing100% - Subsidiariesacquiredbyestablishment NingxiaMoser15thChangyuWineChateauCo., Yinchuan,Ningxia,China Yinchuan,Ningxia,China Manufacturing100% - Subsidiariesacquiredbyestablishment Ltd.("NingxiaChateau")
ShanxiChangyuRinaCastleChateauCo.,Ltd. Xianyang,Shanxi,China Xianyang,Shanxi,China Manufacturing100% - Subsidiariesacquiredbyestablishment ("Chang'anChateau")
R&DCentre Yantai,ShandongChina Yantai,ShandongChina Manufacturing100% - Subsidiariesacquiredbyestablishment Changyu(HuanRen)WineCo.,Ltd BenxiLiaoNingChina BenxiLiaoNingChina Wineproduction100% - Subsidiariesacquiredbyestablishment ("HuanRenWine") Projecting
XinjiangSales ShiheziXinjiangChina ShiheziXinjiangChina Sales - 100% Subsidiariesacquiredbyestablishment XinjiangChangyuWineryCo.,Ltd ShiheziXinjiangChina ShiheziXinjiangChina Manufacturing - 100% Subsidiariesacquiredbyestablishment ("XinjiangWinery")
NingxiaChangyuTradingCo.,Ltd YinchuanNingxiaChina YinchuanNingxiaChina Sales - 100% Subsidiariesacquiredbyestablishment ("NingxiaTrading")
ShanxiChangyuRinaWineSalesCo.,Ltd XianyangShanxiChina XianyangShanxiChina Sales - 100% Subsidiariesacquiredbyestablishment ("ShanxiSales")
PenglaiChangyuWineSalesCo.,Ltd PenglaiShandongChina PenglaiShandongChina Sales - 100% Subsidiariesacquiredbyestablishment ("PenglaiSales")
LaizhouChangyuWineSalesCo.,Ltd LaizhouShandongChina LaizhouShandongChina Sales - 100% Subsidiariesacquiredbyestablishment ("LaizhouSales")
FrancsChamps Cognac,France Cognac,France Investmentand100% - Subsidiariesacquiredbyestablishment trading
LanzhouChangyuWineSalesCo.Ltd("Lanzhou LanzhouGansu,China LanzhouGansu,China Sales - 100% Subsidiariesacquiredbyestablishment Sales")
BeijingRetailingCo.Ltd("BeijingRetailing") Beijing,China Beijing,China Sales - 100% Subsidiariesacquiredbyestablishment TianjinChangyuPioneerSalesCo.Ltd(“Tianjin Tianjin,China Tianjin,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
FuzhouChangyuPioneerSalesCo.Ltd(“Fuzhou FuzhouFujian,China FuzhouFujian,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
NanjingChangyuPioneerSalesCo.Ltd Nanjing,Jiangsu,China Nanjing,Jiangsu,China Sales - 100% Subsidiariesacquiredbyestablishment (“NanjingPioneer”)
XianyangChangyuPioneerSalesCo.Ltd Xianyang,Shanxi,China Xianyang,Shanxi,China Sales - 100% Subsidiariesacquiredbyestablishment (“XianyangPioneer”)
ShenyangChangyuPioneerSalesCo.Ltd Shenyang,Liaoning,China Shenyang,Liaoning,China Sales - 100% Subsidiariesacquiredbyestablishment (“ShenyangPioneer”)
JinanChangyuPioneerSalesCo.Ltd(“Jinan Jinan,Shandong,China Jinan,Shandong,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
ShanghaiChangyuPioneerSalesCo.Ltd Shanghai,China Shanghai,China Sales - 100% Subsidiariesacquiredbyestablishment (“ShanghaiPioneer”)
FuzhouChangyuPioneerSalesCo.Ltd(“Fuzhou Fuzhou,Jiangxi,China Fuzhou,Jiangxi,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
ShijiazhuangChangyuPioneerSalesCo.Ltd Shijiazhuang,Hebei,China Shijiazhuang,Hebei,China Sales - 100% Subsidiariesacquiredbyestablishment (“ShijiazhuangPioneer”)
HangzhouYuzefengSalesCo.Ltd(“Hangzhou Hangzhou,Zhejiang,China Hangzhou,Zhejiang,China Sales - 100% Subsidiariesacquiredbyestablishment Yuzefeng”)
JilinChangyuPioneerSalesCo.Ltd("Jilin Changchun,Jilin,China Changchun,Jilin,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
BeijingChangyuPioneerSales Co.Ltd(“Beijing Beijing,China Beijing,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
HaerbinChangyuPioneerSalesCo.Ltd Haerbin,Heilongjiang,China Haerbin,Heilongjiang,China Sales - 100% Subsidiariesacquiredbyestablishment (“HaerbinPioneer”)
HunanChangyuPioneerSalesCo.Ltd(“Hunan Changsha,Hunan,China Changsha,Hunan,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer”)
YinchuanChangyuPioneerSalesCo.Ltd Yinchuan,Ningxia,China Yinchuan,Ningxia,China Sales - 100% Subsidiariesacquiredbyestablishment (“YinchuanPioneer”)
KunmingChangyuPioneerSalesCo.Ltd Kunming,Yunnan,China Kunming,Yunnan,China Sales - 100% Subsidiariesacquiredbyestablishment (“KunmingPioneer”)
ChongqingChangyuPioneerSalesCo.Ltd Chongqing,China Chongqing,China Sales - 100% Subsidiariesacquiredbyestablishment
(“ChongqingPioneer”)
ZhengzhouChangyuPioneerSalesCo.Ltd Zhengzhou,Henan,China Zhengzhou,Henan,China Sales - 100% Subsidiariesacquiredbyestablishment
(“ZhengzhouPioneer”)
WuhanChangyuPioneerSalesCo.Ltd("Wuhan Wuhan,Hubei,China Wuhan,Hubei,China Sales - 100% Subsidiariesacquiredbyestablishment
Pioneer")
VIII. CHANGEINCONSOLIDATIONSCOPE - continued
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 1. Structureof theGroup - continued
Equityinterestowned
bythecompany
Name Address Placeofregistration Nature Direct Indirect Acquisitionmethod WuhanChangyuPioneerSalesCo.Ltd("Wuhan Wuhan,Hubei,China Wuhan,Hubei,China Sales - 100% Subsidiariesacquiredbyestablishment Pioneer")
TaiyuanChangyuPioneerSalesCo.Ltd Taiyuan,Shanxi,China Taiyuan,Shanxi,China Sales - 100% Subsidiariesacquiredbyestablishment (“TaiyuanPioneer”)
HuhehaoteChangyuPioneerSalesCo.Ltd HuhehaoteInnerMongolia,China HuhehaoteInnerMongolia, Sales - 100% Subsidiariesacquiredbyestablishment (“HuhehaotePioneer”) China
ChengduChangyuPioneerSalesCo.Ltd Chengdu,Sichuan,China Chengdu,Sichuan,China Sales - 100% Subsidiariesacquiredbyestablishment (“ChengduPioneer”)
NanningChangyuPioneerSalesCo.Ltd Nanning,Guangxi,China Nanning,Guangxi,China Sales - 100% Subsidiariesacquiredbyestablishment (“NanningPioneer”)
LanzhouPioneer LanzhouGansu,China LanzhouGansu,China Sales - 100% Subsidiariesacquiredbyestablishment YantaiFulangduo YantaiShandong,China YantaiShandong,China Sales - 100% Subsidiariesacquiredbyestablishment HefeiPioneer Hefei,Anhui,China Hefei,Anhui,China Sales - 100% Subsidiariesacquiredbyestablishment UrumchiPioneer UrumchiXinjiang,China UrumchiXinjiang,China Sales - 100% Subsidiariesacquiredbyestablishment GuizhouPioneer GuiyangGuizhou,China GuiyangGuizhou,China Sales - 100% Subsidiariesacquiredbyestablishment Explanationindifferencebetweenholdinginterests andvotingrights insubsidiaries:
(a) Xinjiang Tianzhu was acquired by the Company, accounting for60% of Xinjiang Tianzhu's equity interest. Through agreement arrangement, the Company has the full power to control Xinjiang Tianzhu's strategic operating, investing and financing policies. The agreementarrangementwillbe terminatedon31December2018.
(b) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for70% of Changyu Chateau's equity interest. Through agreement arrangement, the Company has the full power to control Changyu Chateau's strategic operating, investing and financing policies. The agreement arrangement will be terminatedon31December2022.
(c) Langfang Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for49% of Langfang Chateau's equity interest by the Company and subsidiaries. Through agreement arrangement, the Company has the full power to control Langfang Chateau's strategic operating, investing and financing policies. The agreementarrangementwillbe terminatedon31December2022.
(d) Beijing Chateau is a limited liability company established by the Company and domestic investors, accounting for70% of Beijing Chateau's equity interest. Through agreement arrangement, the Company has the full power to control Beijing Chateau's strategic operating, investing and financing policies. The agreement arrangement will be terminatedon2September 2019.
(e) Ice Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for51% of Ice Chateau's equity interest. Through agreement arrangement, the Company has the full power to control Ice Chateau's strategic operating, investing and financing policies. The agreement arrangement will be terminated on 31 December2016.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. VIII. INTERESTSINOTHERENTITIES- continued
2. Non-whollyownedsubsidiaries
Minority Profit andloss belongs Closingbalanceof Name shareholderratio to minorityinterest minorityinterest XinjiangTianzhu 40% - 56,093,912 Dicot 25% 201,770 32,684,643 ChangyuChateau 30% - 12,365,016 LangfangCastel 51% - 22,702,522 BeijingChateau 30% - 35,293,868 IceChateau 49% - 33,319,062 Explanationindifferencebetweensharepercentage andvotingpower ofnon-controllinginterests: PleaseseeNote VIII -1.
3. Keyfinancialinformationofimportantnon-wholly ownedsubsidiaries
Closingbalance Openingbalance
Name C au sr sr ee tn st Non a- sc su er tr sent aT so seta tsl liC au br ilr ie tn iet
s
No lin a- bc iu lir tr ie en st liaT bo ilt ia tl
ies
C au sr sr ee tn st Non a- sc su er tr sent
Totalassets
liC au br ilr ie tn iet
s
No lin a- bc iu lir tr ie en st liT abo it la itl ies XinjiangTianzhu 101,018,712 81,709,715 182,728,427 15,554,068 5,336,114 20,890,182 86,541,666 89,469,815 176,011,481 7,165,015 5,336,114 12,501,129 ChangyuChateau 156,538,810 118,256,609 274,795,419 191,898,436 - 191,898,436 56,430,830 113,883,719 170,314,549 88,220,921 - 88,220,921 LangfangCastel 30,867,940 22,471,694 53,339,634 7,913,957 - 7,913,957 29,986,460 24,229,921 54,216,381 7,753,321 - 7,753,321 BeijingChateau 216,643,935 523,151,845 739,795,780 588,733,969 1,777,890 590,511,859 113,589,773 544,577,614 658,167,387 549,595,386 2,666,835 552,262,221 IceChateau 43,224,419 29,322,675 72,547,094 12,623,467 100,000 12,723,467 43,424,068 30,796,802 74,220,870 10,073,994 100,000 10,173,994 Dicot 277,879,914 157,297,623 435,177,537 259,625,473 44,813,493 304,438,966 N/A N/A N/A N/A N/A N/A 2015 2014
Name
Total
Operatingactivities
Total
Operatingactivities Revenue Netprofit(loss) comprehensive Revenue Netprofit(loss) comprehensive
cashflows cashflows income income
107,683,2
XinjiangTianzhu
30 (37,548) (37,548) 44,250,338 86,483,652 1,470,239 1,470,239 (5,590,904) 98,894,49
ChangyuChateau
9 7,573,641 7,573,641 22,609,230 110,684,738 1,887,415 1,887,415 30,351,075 51,602,89
LangfangCastel
7 862,103 862,103 1,995,967 50,335,802 (507,895) (507,895) (2,788,417) 170,037,6
BeijingChateau
11 25,424,015 25,424,015 72,629,545 160,547,230 20,881,532 20,881,532 29,246,144 51,657,54
IceChateau
3 (4,223,249) (4,223,249) 3,294,895 51,973,176 1,599,580 1,599,580 (9,712,584) 76,202,51 N/A N/A N/A N/A Dicot(Note)
3 807,079 396,939 (3,682,122)
Note:Thisisamountincurredintheperiodbetweenacquisitiondateand31December2015. IX. FINANCIALINSTRUMENTAND RISKMANAGEMENT
The Group's major financial instruments include cash and bank, notes receivable, accounts receivable, interest receivables, other receivables, available-for-sale financial assets, other non-current assets, short-term borrowings, notes payables, accounts payable, other payables, interest payables, and long-term borrowings. Details of these financial instruments are disclosed in Note VI. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensuretherisksaremonitoredata certainlevel.
The Group adopts sensitivity analysis technique to analyse how the profit and loss for the period and shareholders' equity would have been affected by reasonably possible changes in the relevant risk variables. As it is unlikely that risk variables will change in an isolated manner, and the interdependence among risk variables will have significant effect on the amount ultimately
influenced by the changes in a single risk variable, the following are based on the assumption that
thechangeineachrisk variableisona stand-alonebasis.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IX.FINANCIALINSTRUMENTAND RISKMANAGEMENT-continued
1. Riskmanagementobjectivesandpolicies
The Group's risk management objectives are to achieve a proper balance between risks and yield, minimise the adverse impacts of risks on the Group's operation performance, and maximise the benefits of the shareholders and other stakeholders. Based on these risk management objectives, the Group's basic risk management strategy is to identify and analyse the Group's exposure to various risks, establish an appropriate maximum tolerance to risk, implement risk management, and monitors regularly and effectively these exposures to ensure the risks are monitored at a certainlevel.
1.1 Marketrisk
1.1.1 Currencyrisk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The Group's exposure to the currency risk is primarily associated with EUR and HKD. Several of the Group's subsidiaries have purchases and sales denominated in EUR and HKD while the Group's other principal activities are denominated and settled in RMB. As at 31 December 2015, the balance of the Group's assets and liabilities are both denominated in RMB except that the assets and liabilities set out below are denominated in EUR and HKD. Currency risk arising from the assets and liabilities denominated in foreign currencies may have impact on the Group's performance.
Closingbalance Openingbalance RMB RMB Bankandcash (EUR) 151,746,825 344,061 Bankandcash(HKD) 96,777 - Short-term borrowings (HKD) 103,297,447 - Non-currentliabilities due withinone year(HKD) 127,345,600 - Long-term borrowings (EUR) 56,761,600 89,467,200 Long-term borrowings (HKD) - 119,912,800___________ ___________ The Group closely monitors the effects of changes in the foreign exchange rates on the Group's currency risk exposures. The Group currently does not take any measures to hedge currencyrisk exposures.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IX.FINANCIALINSTRUMENTAND RISKMANAGEMENT-continued
1. Riskmanagementobjectivesandpolicies - continued
1.1 Marketrisk-continued
1.1.1Currencyrisk - continued
Sensitivityanalysis oncurrencyrisk
Where all other variables are held constant, the reasonably possible changes in the foreign exchange rate may have the following pre-tax effect on the profit or loss for the period and shareholders'equity:
Currentyear Prioryear
Effecton Effecton shareholders' shareholders' Changeinexchangerate Effectonprofit equity Effectonprofit equity RMB RMB RMB RMB RMB HKD 5%increaseagainstRMB (11,527,314) (11,527,314) (5,995,640) (5,995,640) HKD 5%decreaseagainstRMB 11,527,314 11,527,314 5,995,640 5,995,640 EUR 5%increaseagainstRMB 4,749,261 4,749,261 (4,456,157) (4,456,157) EUR 5%decreaseagainstRMB (4,749,261) (4,749,261) 4,456,157 4,456,157________ ________ ________ ________ 1.1.2Interestrate risk - riskofchangesincashflows
The Group's cash flow interest rate risk of financial instruments relates primarily to variable-rate bank borrowings (see Note VI 1, Note VI 18 and Note VI 27 for details). It is the Group's policy tokeepits borrowingsatfloatingrate ofinterests soas toeliminate thefair valueinterest raterisk. The sensitivityanalysis on interestrate risk
The sensitivity analysis on interest rate risk is basedon the changes in the market interest rate may influencethe interestincomeor expense ofthe variable rate financialinstruments.
Management of the Group believes interest rate risk on bank deposit is not significant, therefore doesnot disclosesensitivityanalysisfor interest rate risk.
Where all other variables are held constant, the reasonably possible changes in the interest rate may havethe followingpre-taxeffect ontheprofit or lossfor the periodandshareholders'equity
Currentyear Prioryear
Effecton Effecton Items Changeininterestrate Effectonprofit owners'equity Effectonprofit owners'equity Bankborrowings 50%increase (2,528,430) (2,528,430) (1,044,435) (1,044,435) Bankborrowings 50%decrease 2,528,430 2,528,430 1,044,435 1,044,435
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IX.FINANCIALINSTRUMENTAND RISKMANAGEMENT-continued
1. Riskmanagementobjectivesandpolicies - continued
1.2 Creditrisk
As at 31 December 2015, the Group's maximum exposure to credit risk which will cause a financial losstotheGroupdue tofailure todischargeanobligationbythecounterparties
In order to minimise the credit risk, the Group has adopted a policy to ensure that all sales customers have good credit records. The Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of the Department of Credit Control in the Group. In addition, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the management of the Group considers that the Group's credit risk is significantlyreduced.
Since the Group trades only with recognized and creditworthy third parties, there is no requirement for collateral. Concentrations of credit risk are managed by customer/counterparty, by geographical region and by industry sector. As at 31 December 2015,28.4% of the Group trade receivables are due from top 5 customers (31 December 2014:33.6%). There is no collateral or other credit enhancement on thebalanceof the tradereceivables ofthe Group.
Analysisofindividuallyimpairedfinancialassets
As at 31 December 2015, the Group has provided full bad debts provision for the individually impairedaccountreceivableduefrom TiantongSecurityCo.,Ltd.,whichhas beenininsolvency. 1.3 Liquidityrisk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group's operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of bankborrowingsandensurescompliancewithloancovenants.
The following is the maturity analysis for financial assets and financial liabilities held by the Group whichis basedonundiscountedremainingcontractualobligations:
Non-derivativefinancial liabilities
Lessthanonemonth 1-3months 3-12months 1-5years Total RMB RMB RMB RMB RMB Short-termborrowings 5,241,848 153,757,762 527,166,145 - 686,165,755 Notespayables - 13,000,000 16,000,000 - 29,000,000 Accountpayables 174,469,862 348,939,723 45,868,783 - 569,278,368 Otherpayables 138,985,668 108,891,483 261,349,244 - 509,226,395 Interestpayables 749,357 227,947 - - 977,304 Non-currentliabilities
duewithinoneyear 298,377 5,138,599 154,467,154 - 159,904,130 Long-termborrowings___2_1_3_,4_6_2 ___4_4_5_,8_8_8 ___2_,1_9_7_,8_3_3 _7_4_,0_0_4,_0_7_0 _7_6_,_86_1_,2_5_3__
319,958,574 630,401,402 1,007,049,159 74,004,0702,031,413,205
________ ________ _________ ________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. IX.FINANCIALINSTRUMENTAND RISKMANAGEMENT-continued
1. Riskmanagementobjectivesandpolicies - continued
1.4 Fairvalue disclosure- Financialassetsandliabilities notmeasuredusingfair value As at 31 December 2015, management of the Group believes that book value of financial assets measuredunder amortisedcostmethod isapproximately equalto their fairvalue.
X. RELATEDPARTYAND RELATEDPARTYTRANSACTIONS
1. Parentcompany
Nameof Typeof Placeof Legal Scope Registered Percentage Percentage Incorporate parentcompany Relation enterprise registration representative ofbusiness capital ofshares ofvotingrights Code RMB % %
Controlling Limited
Company Company Yantai SunLiqiang Manufacturing 50,000,000 50.4 50.4 265645824 During the year ended 31 December 2015, there is no change in parent company's registered capital,sharesholdingor votingpower.
2. Subsidiaries:PleaserefertoNote VIII.
3. Otherrelatedparties
Name ofrelatedparities Nature ofrelatedparties Incorporate code YantaiChangyuWine CultureMuseum Company controlled 258258654 Co.,Ltd.("Wine Culture Museum") bythe same parent
YantaiChangyuInternationalWindowof the Companycontrolled 672208146 WineCityCo.,Ltd.("Window of the WineCity) bythe sameparent
YantaiShenMaPackingCo.,Ltd. Companycontrolled 553393350 ("ShenMa Packing") bythe sameparent
YantaiZhongya PharmaceuticalTonic Company controlled 726203923 WineCo.,Ltd.("Zhongya Pharmaceutical") bythe sameparent
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. X. RELATEDPARTYAND RELATEDPARTYTRANSACTIONS- continued
4. Significantrelatedpartytransactions
(1) Purchasesfrom andsalestorelatedparties
Purchasefromrelatedparties
The contentof related 2015 2014 partytransactions RMB RMB ShenMaPacking productpurchase 153,891,013 149,536,913 Zhongya Pharmaceutical productpurchase 9,856,685 5,205,207 WineCultureMuseum productpurchase 6,047,453 934,085 Windowof theWine City productpurchase 730,488 4,161,708__________ __________ 170,525,639 159,837,913__________ __________ Allrelatedpartytransactionsarebasedonthenegotiatedprice.
In2015,purchases from relatedpartiesaccountedfor10.5% ofthe Group's totalpurchase (2014:11.8%)
Salestorelatedparties
The contentof related 2015 2014 partytransactions RMB RMB WineCultureMuseum goods sales 7,371,180 10,111,288 Windowof theWine City goods sales 7,578,711 7,083,716 Zhongya Pharmaceutical goodssales 2,723,976 2,596,070 ShenMaPacking goodssales 1,820,232 1,684,486__________ __________ 19,494,099 21,475,560__________ __________ Allrelatedpartytransactionsarebasedonthenegotiatedprice.
In2015,sales torelatedpartiesaccountedforlessthan1%of theGroup's total sales(2014: lessthan1%).
(2) Propertyleasedfrom a relatedparty
The GroupasLessee
2015 Assetsleased Beginningdate Endingdate Rentalexpense ChangyuGroupCompany Warehouseandofficebuilding 2012/1/1 2016/12/31 5,858,000______ Pursuant to the lease agreement entered into between the Company and Changyu Group Company on 1 January 2012, starting from 1 January 2012, the Company rented properties from Changyu Group Company for operation purposes at a basic annual rental of RMB 5,858,000, and
till 31 December 2016. For the year ended 31 December 2015, the rental payable to Changyu
GroupCompanyamountedtoRMB5,858,000(2014:RMB5,858,000).
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. X. RELATEDPARTYAND RELATEDPARTYTRANSACTIONS- continued
4. Significantrelatedpartytransactions- continued
(3) Othersignificantrelatedpartytransactions
Note 2015 2014 RMB RMB Royaltyfee (a) 86,001,287 77,809,993 Patentsfee (b) 50,000 50,000_________ _________ Allrelatedpartytransactionsarebasedonthenegotiatedprice.
(a) Royaltyfee
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the Company may use certain trademarks of Changyu Group Company, which have been registered with the PRC Trademark Office. An annual royalty fee at2% of the Group's annual sales is payable to Changyu Group Company. The license is effective until the expiryofthe registrationof thetrademarks.
During 2015, royalty fee paid to related company accounted for100% of the Group (2014:100%).
(b) Patentsfee
Pursuant to a patents implementation license dated 18 May 1997, starting from 18 September 1997, the Company may use the patents of Changyu Group Company. The annual patents usage fee payable by the Company to Changyu Group Company was RMB 50,000. The contract was expired on 20 December 2005. The Company renewed the contract on 20 August 2006 for 10 years. The annual patents usage fee payable by the Company to Changyu Group Company remained RMB 50,000. For the year ended 31 December 2015, the patents usage fee payable to Changyu Group Company is amounted toRMB50,000(2014:RMB50,000).
During 2015, patent fee paid to related company accounted for100% of the Group (2014:100%).
(4) Remunerationof themanagement
2015 2014 RMB RMB Remunerationof themanagement 9,744,790 8,884,459_________ ________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. X. RELATEDPARTYAND RELATEDPARTYTRANSACTIONS- continued
5. Balancedue from/ torelatedparties
(1) Balancedue from relatedparties
Closingbalance Openingbalance Accountsreceivable Balance Provision Balance Provision RMB RMB RMB RMB ZhongyaPharmaceutical 2,240,282 - 1,378,843 - ShenMaPacking. 169,300 - 15,820 - WindowoftheWineCity ____7_,8_1_2 ___-__ ____-___ ___-__ 2,417,394 - 1,394,663 -_______ _____ _______ _____ The aboveamounts duefrom relatedparties areunsecured,interest-free andhavenofixedterms ofrepayment.
(2) Balancedue torelatedparties
Closingbalance Openingbalance RMB RMB Accountspayable
ShenMaPacking 53,735,915 53,027,076 Zhongya Pharmaceutical 7,272,656 6,550,051 WineCultureMuseum 1,928,504 1,043,208 Windowof theWine City 145,861 59,668_________ _________ Total 63,082,936 60,680,003_________ _________ Otherpayable
Royaltyfee payabletoparentcompany 86,001,287 77,809,993 ShenMaPacking - 200,000_________ _________ Total 86,001,287 78,009,993_________ _________ The aboveamounts duetorelatedpartiesare unsecured,interest-freeandhavenofixed terms of repayment.
XI. COMMITMENT
1. Importantcommitments
(1) Capitalcommitments
Closingbalance Openingbalance RMB'000 RMB'000 Capitalcommitment for
purchasingnon-currentassets 1,580,280 687,460
________ ________
XI. COMMITMENT-continued
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. 1. Importantcommitments -continued
(2) Operatinglease commitment
As lessee
Significantoperatinglease:Total future minimal leasepayments under non-cancelablecontract withlessor are asfollow:
Closingbalance Openingbalance RMB'000 RMB'000 Within1year 50,369 53,274 1 to2 years 35,100 37,256 2 to3 years 24,265 27,278 3 yearsandabove 44,466 40,402_________ ______ 154,200 158,210_________ ______ 2. Contingentliability
The Groupandthe Companydonot have anysignificantcontingentliabilities asat balancesheet date.
XII. POST BALANCESHEET DATEEVENT
According to the board of the director resolution raised on 27 April 2016, the Company proposed a cash dividend of RMB 5.0 (including taxes) for every 10 shares in respect of 2015 based on the issued shares of 685,464,000. The aggregate amount of cash dividend is RMB 342,732,000. The resolutionistobe approvedbytheannualgeneralmeeting.
XIII. OTHERSIGNIFICANT EVENTS
Segmentreport
The Group is principally engaged in the production and sales of wine, brandy, and champagne in China, France and Spain. In accordance with the Group's internal organization structure, management requirements and internal reporting system, the Group's operation is divided into three parts: China, France and Spain. The management periodically evaluates segment results, in order to allocate resources and evaluate performances. In 2015, more than98.4% revenue and more than99.9% profit derived from China, and more than93.8% assets are located in China. Thereforethe Groupdoes notneedtodiscloseadditionalsegmentreport information.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS
1. Cashandbank
Closingbalance Openingbalance RMB RMB Cash 10,804 5,847 Bankbalance 155,430,457 371,128,398 Othercurrencyfund 125,377,572 125,004,018____________ __________ Total 280,818,833 496,138,263____________ __________ As at 31 December 2015, the balance of restricted cash of the Company is RMB 2,643,181 (31 December2014:RMB2,643,519),whichistheGroup's housingfund.
As at 31 December 2015, other currency fund of the Company include: security of RMB 125,000,000 (31 December 2014: RMB 125,000,000) pledged for a short-term borrowing from HSBC of HKD 152,000,000(translated as RMB 127,345,600), deposit of RMB 370,000 for letter ofcreditandcompanycardsdeposit guaranteeofRMB7,572(31December2014:RMB 4,018). As at 31 December 2015, The Company's term deposits with original maturity from three months to six months when acquired is RMB 9,000,000 (31 December 2014: RMB 35,245,260 ) with interestrates rangingfrom1.38%-1.69%.
2. Notesreceivable
(1) Categoriesofnotesreceivable
Closingbalance Openingbalance RMB RMB Bank acceptances 38,429,319 98,158,251_________ _________ (2) Pledgednotesreceivable
As of31December2015,there was nopledgednotesreceivable(31December2014: Nil).
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
2. Notereceivable- continued
(3) Notesendorsed bytheGrouptootherpartieswhichare not yetdue attheendof theperiod Closingbalance Openingbalance RMB RMB Bank acceptances 59,952,558 52,895,804__________ _________ As at 31 December 2015, notes endorsed by the Company to other parties which are not yet due at the end of the period is RMB 59,952,558 (31 December 2014: RMB 52,895,804). It is for the payment to suppliers. The Company believes that due to bank good reputation, the risk of maturity cannot be cashed is very low, these notes receivable ownership of the risks and rewards have been transferred to the supplier, therefore confirm the termination of the endorsement note receivables. If bank is unable to settle the notes on maturity, according to the relevant laws and regulationsof China,the Groupwouldundertake limitedliabilityfor thenotes.
(4) Notesreceivablewere reclassifiedasaccountsreceivable duetothedefault of drawer
As at 31 December 2015, there was no notes receivable were reclassified as accounts receivable duetothedefaultof drawer(31December2014: Nil).
3. Accountsreceivable
(1) The aginganalysisisasfollows:
Closingbalance Openingbalance
Balance Baddebtsprovisions CarryingAmount Balance Baddebtsprovisions CarryingAmount Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB Accountsreceivable
thatareindividually
notsignificantand
forwhichbaddebt
provisionhasbeen
assessedindividually__2_,3_92_,87_0_10_0._0 __-____-_____2,3_92_,8_70__1_,5_16_,51_8_10_0._0 __-____-____1_,5_16_,51_8 The normal credit term of trade receivables is one month, which can be extended to one year for certainmajor customers. The trade receivablesareinterestfree.
There was no individually significant and for which bad debt provision has been assessed individuallyaccountreceivable.
The aginganalysisisasfollows:
Closingbalance Openingbalance RMB RMB Within1year 2,392,870 1,516,518_________ ________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
3. Accountsreceivable -continued
(2) Provision,reversalsandcollectionsduringthe currentperiod:
As at31December2015,there wasnoprovision providedfor trade receivables(31December 2014:Nil). The Companydidnotprovide,reverseor write off anyprovision during2015(31 December2014:Nil)
(3) Topthree entities withthelargestbalancesofaccountsreceivable
Relationship Proportionof withtheGroup Amount Aging totalreceivables RMB % ZhongyaPharmaceutical Otherrelatedparties 1,341,924 Within1year 56.1 YantaiHuibaoartsand
craftsManufacturingCo.,Ltd. Thirdparty __1_,0_5_0_,9_4_6 Within1year __43_._9 2,392,870 100.0________ ____ 4. Prepayments
(1) The aginganalysisisasfollows:
Closingbalance Openingbalance Amount Proportion Amount Proportion RMB % RMB % Within1year 445,619 100.0 1,710,787 100.0_______ ____ ________ ____ (2) Topthree entitieswiththelargestbalancesofprepayments
Reasonfor Percentageof Relationship being totaladvances withtheGroup Amount Aging outstanding tosuppliers RMB % ShandongElectricityCompany
Yantaibranch Thirdparty 423,749 Within1year electricfee 95.1 SinopecShandongYantai
OilProductsCompany Thirdparty 20,847 Within1year gasfee 4.7 ShandongTongyuanProject
CostConsultationCompany Thirdparty ____1_,0_2_3 Within1year consultingfee __0._2 445,619 100.0_______ ___
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
5. Interestreceivable
(1) Categoriesof interestreceivable
Closingbalance Openingbalance RMB RMB Interestsofbankdeposits 8,019,338 3,580,811________ ________ (2) Overdueinterest
Asat31December2015,there wasnooverdueinterestreceivable(31December2014:Nil). 6. Dividendreceivables
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Within1year
Including:SalesCompany 402,596,884 1,404,700,197 (1,083,037,892) 724,259,189 WinesSales - 65,465,163 (45,000,000) 20,465,163 ChangyuChateau - 6,770,286 (6,770,286) - LangfangSales - 1,000,000 (1,000,000) - JingyangSales - 21,000,000 (21,000,000) - NationalWines - 45,000,000 (45,000,000) - PioneerInternational ______-___ ___4_3_,3_6_7_,9_9_7 _______-___ __4_3_,3_6_7_,9_9_7 Total 402,596,884 1,587,303,643 (1,201,808,178) 788,092,349_________ __________ __________ _________ 7. Otherreceivables
(1) Disclosureofotherreceivablesbycategories:
Closingbalance Openingbalance
Balance Baddebtsprovisions CarryingAmount Balance Baddebtsprovisions CarryingAmount Amount Proportion Amount Proportion Amount Amount Proportion Amount Proportion Amount RMB (%) RMB (%) RMB RMB (%) RMB (%) RMB Otherreceivablesthatare
individuallysignificant
andforwhichbaddebt
provisionhasbeen
assessedindividually 5,727,534,401 99.8 (7,199,521) 0.1 5,720,334,880 4,701,016,368 99.7 (7,199,521) 0.2 4,693,816,847 Otherreceivablesthatare
notindividuallysignificant
andforwhichbaddebt
provisionhasbeen
assessedindividually
__1_4,1_21_,2_49__0._2 ____-___-___1_4,1_21_,2_49__1_5,0_19_,4_29__0._3 ____-_ __-___15_,01_9,_42_9 Total _5,_74_1,6_55_,6_50_10_0._0 _(7_,19_9,_52_1)__0._1_5,_73_4,4_56_,1_29_4,_71_6,0_35_,7_97_10_0._0 _(7_,19_9,_52_1) __0._2_4,_70_8,8_36_,2_76
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
7. Otherreceivables- continued
(1) Disclosureof otherreceivablesbycategories:- continued
Other receivables that are individually significant and for which bad debt provision has been assessedindividually:
As at 31 December 2015, other receivables that are individually significant at the end of the period butfor which baddebtprovisionhasbeen assessedindividually:
Baddebt
Balance provision Percentage Reasonforprovision RMB RMB %
Thedebtorisin
theprocessofliquidation TiantongSecurityCo.,Ltd. 7,199,521 7,199,521 100 Unabletorepay
_______ _______
The aginganalysisisasfollows:
Closingbalance Openingbalance
Baddebts Carrying Baddebts Carrying Balance provision amount Balance provision amount Amount Proportion Amount Amount Amount Proportion Amount Amount RMB % RMB RMB RMB % RMB RMB Within1year 4,849,743,585 84.5 - 4,849,743,585 4,708,620,670 99.8 - 4,708,620,670 1to2years 884,540,581 15.4 - 884,540,581 215,606 0.0 - 215,606 2to3years 171,963 0.0 - 171,963 - Over3years ___7_,1_9_9,_52_1___0_.1_(_7,_19_9_,5_21_)______-_____7_,1_9_9,_52_1___0_.2(_7,_19_9_,5_21_)______-___5,_7_41_,6_55_,6_5_0__10_0_.0_(_7,_19_9_,5_21_)_5,_7_34_,4_56_,1_2_9_4_,7_16_,0_35_,7_9_7__10_0_.0(_7,_19_9_,5_21_)_4,_70_8_,8_36_,2_7_6 (2) Accrual,reversalandwritten-off duringthecurrent period:
Nobaddebt accruedorreversedin2015(2014: baddebtwas reversedRMB192,908). (3) Otherreceivablewrittenoff currentyear
Nootherreceivablewrittenoff in2015.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
7. Otherreceivables- continued
(4) Disclosureof otherreceivablesbynature
Closingbalance Openingbalance RMB RMB Receivablefromsubsidiary 5,732,654,756 4,699,819,825 Investment fund 7,199,521 7,199,521 Consumptiontaxrefund - 1,924,913 Receivabledeposit 103,834 - Others 1,697,539 7,091,538____________ ____________ 5,741,655,650 4,716,035,797____________ ____________ (5) Top five entities withthelargestbalancesof otherreceivables
As at31December2015,the particularsoftopfive otherreceivables areas follows:
Proportionoftotal Nature Amount Aging prepayments RMB %R&DCentre Internalbalance 1,635,214,371 Within2year 28.5 ChanganChateau Internalbalance 772,647,858 Within1year 13.5 ShiheziChateau Internalbalance 661,131,888 Within1year 11.5 BeijingChateau Internalbalance 637,225,867 Within1year 11.1 NingxiaWine Internalbalance __5_2_8_,0_7_8_,9_5_8 Within1year _9_._2 4,234,298,942 73.8__________ ___ 8. Inventories
Closingbalance Openingbalance
Netcarrying Netcarrying Balance Provision amount Balance Provision amount RMB RMB RMB RMB RMB RMB Rawmaterial 5,200,748 - 5,200,748 8,061,194 - 8,061,194 Workinprogress 680,061,444 - 680,061,444 605,911,810 - 605,911,810 Finishedgoods __4_2_,9_1_0_,9_1_5 ___-__ __4_2_,9_1_0_,9_1_5 __6_7_,7_2_3_,7_7_0 ___-__ __6_7_,7_2_3_,7_7_0 728,173,107 - 728,173,107 681,696,774 - 681,696,774_________ _____ _________ _________ _____ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
9. Long-term equityinvestments
Movement CashDividends 2015 Cost Openingbalance fortheyear Closingbalance Shareholding Votingpower fortheyear RMB RMB RMB RMB % % RMB CostMethod
XinjiangTianzhu(a) 60,000,000 60,000,000 - 60,000,000 60 100 - KylinPackaging 23,176,063 23,176,063 - 23,176,063 100 100 - ChangyuChateau(a) 28,968,100 28,968,100 - 28,968,100 70 100 6,770,286 AFIPTourism(b) - 350,000 (350,000) - - 100 - PioneerInternational(c) 3,500,000 3,500,000 - 3,500,000 70 100 43,367,997 NingxiaGrowing 1,000,000 1,000,000 - 1,000,000 100 100 - NationalWines 2,000,000 2,000,000 - 2,000,000 100 100 45,000,000 IceChateau(a) 30,440,500 30,440,500 - 30,440,500 51 100 - BeijingChateau(a) 77,000,000 77,000,000 - 77,000,000 70 100 - SalesCompany 7,200,000 7,200,000 - 7,200,000 100 100 1,404,700,197 LangfangSales(c) 100,000 100,000 - 100,000 10 100 1,000,000 LangfangCastel(a) 19,835,730 19,835,730 - 19,835,730 39 100 - WineSales 4,500,000 4,500,000 - 4,500,000 90 100 65,465,163 ShanghaiSales(c) 300,000 300,000 - 300,000 30 100 - BeijingSales 850,000 850,000 - 850,000 100 100 - JingyangSales(c) 100,000 100,000 - 100,000 10 100 21,000,000 JingyangWine(c) 900,000 900,000 - 900,000 90 100 - NingxiaWine 1,000,000 1,000,000 - 1,000,000 100 100 - NingxiaChateau 2,000,000 2,000,000 - 2,000,000 100 100 - DingluoteChateau(c) 80,000,000 80,000,000 - 80,000,000 65 100 - ShiheziChateau 150,000,000 150,000,000 - 150,000,000 100 100 - ChanganChateau 20,000,000 20,000,000 - 20,000,000 100 100 -R&DCentre 500,000,000 500,000,000 - 500,000,000 100 100 - HuanrenWine 11,000,000 11,000,000 - 11,000,000 100 100 - FrancsChamps 209,706,634 69,216,634 140,490,000 209,706,634 100 100 - Dicot __19_0,_14_8,_12_5 _____-__ _19_0,_14_8,_12_5 __19_0,_14_8,_12_5 75 75 _____-___1,_42_3,_72_5,_15_2 _1,_09_3,_43_7,_02_7 _33_0,_28_8,_12_5 _1,_42_3,_72_5,_15_2 _1,_58_7,_30_3,_64_3 (a) The Company has100% voting power of those subsidiaries by the way of indirect controlling,referringtoNote VIII 1.
(b) In April 2015, the Company sold70% equity interest of AFIP Tourism to Beijing Chateau with cash consideration RMB 350,000; and Beijing Chateau acquired remaining30% equity interest from other shareholders, referring to Note VI 30. The Company indirectlyholds100% ofvotingsharesofAFIP TourismthroughBeijingChateau.
(c) The Company has100% voting power of these subsidiaries by the way of indirect controllingthroughwhollyownedsubsidiaries.
During 2015, there was no significant restriction on the remittance of fund from the investeestotheCompany.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
10. Fixedassets
(1) Fixedassets
Buildings Machinery Motorvehicles Total RMB RMB RMB RMB I.Totaloriginalcarryingamount
1.Openingbalance 303,890,821 592,474,281 13,102,597 909,467,699 2.Increase
Purchase 416,867 1,707,476 76,410 2,200,753 CIPtransfer 1,342,211 - - 1,342,211 3.Decrease
Disposal ______-___ __(1_,_47_9_,0_8_4_) ______-___ __(1_,_47_9_,0_8_4_) 4.Closingbalance _3_0_5_,6_4_9_,8_9_9 _5_9_2_,7_0_2_,6_7_3 __1_3_,1_7_9_,0_0_7 _9_1_1_,5_3_1_,5_7_9 II.Totalaccumulateddepreciation
1.Openingbalance 103,023,133 393,306,776 9,927,135 506,257,044 2.Increase
Accrual 10,197,419 26,299,551 676,770 37,173,740 3.Decrease
Disposal ______-___ __(1_,_40_5_,2_1_9_) ______-___ __(1_,_40_5_,2_1_9_) 4.Closingbalance _1_1_3_,2_2_0_,5_5_2 _4_1_8_,2_0_1_,1_0_8 __1_0_,6_0_3_,9_0_5 _5_4_2_,0_2_5_,5_6_5 III.Totalnetcarryingamount
1.Closingnetcarryingamount 192,429,347 174,501,565 2,575,102 369,506,014_________ _________ _________ _________ 2.Openingnetcarryingamount 200,867,688 199,167,505 3,175,462 403,210,655_________ _________ _________ _________ As at31December2015,there wasnofixedassetswithownershiprestricted.
As at 31 December 2015, the Company has no temporary idle fixed assets, fixed assets held for sale,fixedassetsleasedinunderfinance leases andfixedassetsleasedout underoperatingleases. (2) Fixedassetsofwhichcertificatesof title havenot beenobtained:
As at31December2015,buildings withoutpropertycertificateareasfollows：
Reasonswhy certificatesoftitlehave Items Amount not beenobtained RMB
Fermentationcenteroffice,
experimentbuildingandworkshop 6,251,433 Processing__________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
11. Constructioninprogress
(1) Constructioninprogress
Closingbalance Openingbalance RMB RMB Reconstructionofboilerheatingsystems 7,990,777 - The Company's reconstructionproject - 182,765__________ _______ (2) Currentyearmovement onimportantconstruction
Accumulated
Opening Transferto Closing expenditure/b Theprogressof
Budget balance Addition PPE balance udget construction Financedby RMB RMB RMB RMB RMB %
Reconstructionof
boilerheatingsystems
13,000,000 - 7,990,777 - 7,990,777
61.5 61.5 Self-raised There was nointerestcapitalizedinconstructioninprogressin2015.
(3) As at31December2015,there wasnoprovision was made for theconstructioninprocess. 12. Bearerbiologicalasset
Biologicalassetmeasuredat cost
Planting RMB I.Total originalcarryingamount
1.Openingbalance 90,669,532 2.Increase
Self-cultivated 27,916,372__________ 3.Closingbalance 118,585,904__________ II.Total accumulateddepreciation
1.Openingbalance 7,037,810 2.Increase
Accrual 586,905__________ 3.Closingbalance 7,624,715__________ III.Total netcarryingamount
1.Closingnetcarryingamount 110,961,189__________ 2.Openingnetcarryingamount 83,631,722__________
As at31December2015,there is nobiological assetwithownershiprestricted.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
12. Bearerbiologicalasset-continued
As at 31 December 2015, the Company's accumulated depreciation of biological assets is RMB 7,624,715(31December2014: RMB7,037,810).
As at 31 December 2015, biological assets of the Company include mature bearer biological assets of RMB 7,336,311 (31 December 2014: RMB 7,923,216) and immature bearer biological assetsofRMB103,624,878.(31December2014: RMB75,708,506)
As at 31 December 2015, there is no indication that biological assets may be impaired, and no provisionwas made.
13. Intangible assets
Intangible assets
Landuseright RMB I.Total originalcarryingamount
Openingandclosingbalance 96,594,766__________ II.Total accumulateddepreciation
1.Openingbalance 19,834,088 2.Increase
Accrual 2,379,153__________ 3.Closingbalance 22,213,241__________ III.Total netcarryingamount
1.Closingnetcarryingamount 74,381,525__________ 2.Openingnetcarryingamount 76,760,678__________ As at31December2015,there wasnointangibleassetswithrestricted ownership.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
14. Deferredtaxassetsandliabilities
Deferredtaxassetsanddeferredtaxliabilities thatarenot presentedatthenetamount after offset Recogniseddeferred taxassetsnotpresentedatthenet amountafter offset
Closingbalance Openingbalance
Deductible Deferred Deductible Deferred Item
temporarydifference taxassets temporarydifference taxassets RMB RMB RMB RMB Unrealizedprofitfromintra
companytransactions 9,159,340 2,289,835 9,000,404 2,250,101 Unpaidbonus 26,378,467 6,594,617 28,548,564 7,137,141 Retirementbenefit 12,914,345 3,228,586 11,514,647 2,878,662 Assetimpairmentprovision 17,199,521 4,299,880 17,199,521 4,299,880 Deductablelosses 62,511,688 15,627,922 16,185,336 4,046,334 Deferredincome 23,591,406 5,897,852 25,765,813 6,441,453 151,754,767 37,938,692 108,214,285 27,053,571 15. Trade payables
The aginganalysisisasfollows:
Closingbalance Openingbalance RMB RMB Within1year 271,603,863 228,052,722 1to2years 1,487,319 -__________ __________ 273,091,182 228,052,722__________ __________ 16. Employeebenefit
(1) Employee benefit
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Short-termsalariesandwelfare 58,718,604 133,680,530 (134,254,864) 58,144,270 Post-demissionbenefits
-predeterminedprovisionplan - 11,358,698 (11,358,698) - Terminationbenefit __1_1_,5_1_4_,6_4_7 ___5_,6_8_2_,3_0_8 __(4_,_28_2_,6_1_0_) __1_2_,9_1_4_,3_4_5 70,233,251 150,721,536 (149,896,172) 71,058,615_________ _________ _________ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
16.Employee benefit-continued
(2) Short-term salaries andwelfare
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Salariesandbonus 56,173,932 114,080,026 (114,744,741) 55,509,217 Staffbenefit 3,500 8,736,237 (8,737,217) 2,520 Staffwelfare - 5,922,208 (5,922,208) - Includes:
Medicalinsurance - 4,555,425 (4,555,425) - Injuryinsurance - 773,683 (773,683) - Maternityinsurance - 593,100 (593,100) - Housingfund - 3,806,689 (3,806,689) - Unionfeeandeducationfee ___2_,5_4_1_,1_7_2 ___1_,1_3_5_,3_7_0 __(1_,_04_4_,0_0_9_) ___2_,6_3_2_,5_3_3 58,718,604 133,680,530 (134,254,864) 58,144,270_________ _________ _________ _________ (3) Predeterminedprovision plan
Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Pension - 10,505,200 (10,505,200) - Unemploymentinsurance ___-__ ____8_5_3_,4_9_8 ___(_85_3_,4_9_8_) ___-__ - 11,358,698 (11,358,698) -_____ _________ _________ _____ The Company participates in pension insurance and unemployment insurance plans established by government institution. According to those plans, the Company pays pension and unemployment insurance each month on the basis of18% and1% last period salary respectively. Apart from these monthly expenses, the Company does not bear any further payment obligation. This year the Company should pay RMB 10,505,200 and RMB 853,498 (2014: RMB 9,325,372 and RMB 735,069) respectively into pension insurance and unemployment insurance. As at 31 December 2015, the Company does not have unpaid pension and unemployment insurance (31 December 2014: Nil) which is due to the pension insurance and unemployment insurance plan and not paid attheendofthe reportingperiod.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
17. Taxespayable
Closingbalance Openingbalance RMB RMB Valueaddedtax (2,238,737) (7,183,464) Consumptiontax 11,536,745 12,157,986 Corporationincome tax 651,459 3,034,692 Urbanlanduse tax 837,367 837,367 Individualincome tax 6,136,634 6,213,385 Cityconstructiontax 1,084,656 1,510,366 Propertytax 270,408 355,417 Others 1,052,779 1,279,375__________ _________ 19,331,311 18,205,124__________ _________ 18. Otherpayables
(1) Naturesofotherpayablesareasfollows
Closingbalance Openingbalance RMB RMB Payabletosubsidiaries 983,151,732 1,013,237,829 Payablesforequipment andconstruction 4,600,199 7,437,012 Payablesfortransportation 495,093 306,238 Depositsfrom suppliers 537,800 436,271 Others 6,036,457 9,187,469____________ ____________ 994,821,281 1,030,604,819____________ ____________ (2) As at31December2015,there were nosignificantoutstandingbalanceaged overthanoneyear. 19. Capitalreserve
2015 Openingbalance Increase Decrease Closingbalance RMB RMB RMB RMB Sharepremium 557,222,454 - - 557,222,454_________ ______ ______ _________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
20. Revenueandcostof sales
Revenueisasfollows:
2015 2014 RMB RMB Principaloperatingincome 1,383,184,483 1,647,825,652____________ ____________ Costofsalesisas follows:
2015 2014 RMB RMB Principaloperatingcost 1,154,834,509 1,406,987,744____________ ____________ 21. Taxandsurcharges
2015 2014 RMB RMB Consumptiontax 106,640,172 129,159,521 Cityconstructiontax 11,533,643 14,952,818 Educationfeeandsurcharges 8,306,059 10,672,202 Others 1,647,256 2,242,360__________ __________ 128,127,130 157,026,901__________ __________ 22. Generalandadministrativeexpense
2015 2014 RMB RMB Salaryandemployee benefit 36,006,578 31,119,420 Insurancefee 23,511,879 21,720,066 Leasingexpenses 6,575,996 7,569,488 Depreciation 4,423,980 3,860,257 Amortization 3,012,058 2,917,149 Administrativeexpenses 7,413,605 8,748,731 Travellingexpenses 3,441,134 2,704,509 Entertainmentfee 279,413 278,344 Propertytax,stamp dutyandothertaxes 6,105,794 5,331,881 Maintenancefee 9,276,965 9,685,094 Servicefee 12,329,601 4,047,362 Others 18,810,792 14,069,244__________ __________
131,187,795 112,051,545
__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
23. Lossonimpairment of assets
2015 2014 RMB RMB Reversalof impairmentloss - (192,908)________ ________ 24. FinancialExpense
2015 2014 RMB RMB Interestincome (11,868,515) (15,866,780) Exchangeloss(gain) 8,543,586 (6,093,361) Less:Interestexpenses 21,322,155 10,227,740 Bankcharges 855,471 678,848_________ _________ 18,852,697 (11,053,553)_________ _________ 25. Investmentincome
2015 2014 RMB RMB Long-term equityinvestmentincome accounted
forbyusingthe costmethod 1,587,303,643 1,164,089,666____________ ____________ Among the long-term equity investment income accounted for by using cost method, the investees with investment income accounting for more than5% of the Company's total profit before tax are asfollows:
Investees 2015 2014 RMB RMB SalesCompany 1,404,700,197 1,013,615,384____________ ____________ As at31December2015andat31December2014,there wasnosignificantrestrictiononthe remittanceof investmentincome tothe Company.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
26. Supplementtocashflow statement
2015 2014 RMB RMB Cashflows fromoperatingactivities
calculatedbyadjustingthenetprofit:
Netprofit 1,553,520,098 1,151,762,045 Add: Impairment/(reverse)provision - (192,908) Depreciationof fixedassets 37,173,740 37,892,938 Amortizationof intangible assets 2,379,153 2,379,153 Amortizationof biologicalassets 586,905 586,905 Losses/(gains)ondisposalof property,
plantandequipment (116,340) 5,076,491 Financeexpenses 7,609,550 (11,684,489) Investmentincome (1,587,303,643) (1,164,089,666) Increaseindeferredtaxassets (10,885,121) (4,096,824) Decrease/(increase)ininventories (46,476,333) 99,587,415 Decrease/(increase)intrade receivables (973,578,831) (1,057,576,001) Increase/(decrease)intrade payables 11,918,004 (525,631,084)____________ ____________ Netcashflows from operatingactivities (1,005,172,818) (1,465,986,025)____________ ____________ 27. Cashandcashequivalents
2015 2014 RMB RMB Closingbalanceof cashandbank 280,818,833 496,138,263 Less:
Restrictedbankdeposits 2,643,181 2,643,519 Restrictedothermonetaryassets 125,377,572 125,004,018 Depositwitha periodof over threemonths 9,000,000 35,245,260__________ __________ Closingbalanceof cashandcashequivalents 143,798,080 333,245,466__________ __________ 2015 2014 RMB RMB Cashandbank 143,798,080 333,245,466 Including:Cashonhand 10,804 5,847 Bankdepositsondemand 143,787,276 333,239,619__________ __________ Closingbalanceof cashandcashequivalents 143,798,080 333,245,466__________ __________
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
28. Relatedpartytransactions
(1) Purchase of materials
2015 2014 RMB RMB Subsidiaries 319,040,340 275,537,285 Otherrelatedparties 111,273,050 105,807,546__________ __________ 430,313,390 381,344,831__________ __________ (2) Salesof goods
2015 2014 RMB RMB Subsidiaries 1,374,745,130 1,640,615,167 Otherrelatedparties 8,439,353 7,210,485____________ ____________ 1,383,184,483 1,647,825,652____________ ____________ 29. Receivablesandpayablestorelatedparties
(1) Trade receivables
Trade receivables Closingbalance Openingbalance Balance Baddebtsprovision Balance Baddebtsprovision RMB RMB RMB RMB Otherrelatedparties 1,341,924 - 463,690 -_______ _______ _______ _______ Otherreceivables Closingbalance Openingbalance Balance Baddebtsprovision Balance Baddebtsprovision RMB RMB RMB RMB Subsidiaries 5,732,654,756 - 4,699,819,825 -__________ _______ __________ _______ The abovereceivablesdue from relatedpartiesare unsecured,havenointerestor fixeddateof repayment.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. XIV. NOTESTO COMPANYFINANCIALSTATEMENTS-continued
29. Receivablesandpayablestorelatedparties-continued
(2) Trade payables
Trade Payables Closingbalance Openingbalance RMB RMB Otherrelatedparties 36,377,928 29,592,060_________ _________ 36,377,928 29,592,060_________ _________ Otherpayables Closingbalance Openingbalance RMB RMB Subsidiaries 983,151,732 1,013,237,829 Otherrelatedparties - 200,000____________ ____________ 983,151,732 1,013,437,829____________ ____________ The abovepayablesdue torelatedpartiesareunsecured,have nointerestor fixeddate of repayment.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. APPENDIX I SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
YEAR ENDED31DECEMBER 2015
I. DETAILSOF EXTRAORDINARYPROFITANDLOSS
2015 RMB Losson disposalof non-currentassets,including
reversalof accruedimpairmentprovision 136,061 Governmentgrants creditedinprofitand loss
(exceptfor thoserecurringgovernmentgrants
thatarecloselyrelatedtotheGroup's operation,
inline withrelatedregulationsandhave properbasisof calculation) 38,952,919 Othernon-operatingincome andexpense 9,071,448 Corporateincome taxeffect (11,355,391)__________ 36,805,037____________________ The Company's extraordinary profit and loss items are recognized in accordance with the regulations of the "public offering of securities of the Company Disclosure ExplanatoryNotice No.1- non-recurringprofitandlosses"(SFC[2008] No.43).
All non-operation income and non-operation expenses are non-operating profit in 2015.Please refertoNote VI 40andVI 41.
II. RETRUNONEQUITY("ROE")AND EARNINGSPRE SHARE ("EPS")
The Company's ROE and EPS are calculated in accordance with the CSRC regulations of the "Information Preparing and Disclosure Rules of Public Company No.9- calculationanddisclosureof ROE andEPS" (Revised2010).
Weightedaverage
2015 ROE BasicEPS% RMB Netprofit attributable toshareholders ofthe Company 14.40 1.50 Netprofit attributable toshareholders
ofthe Companydeductingextraordinaryprofit andloss 13.89 1.45_____ _________ ____
The Companydidnothaveanypotentialdilutiveshares.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport. Weightedaverage
2014 ROE BasicEPS% RMB Netprofit attributable toshareholders ofthe Company 15.11 1.43 Netprofit attributable toshareholders
ofthe Companydeductingextraordinaryprofit andloss 14.69 1.39_____ _________ ____ The Companydidnothaveanypotentialdilutiveshares.
YantaiChangyuPioneerWineCo.Ltd.2015AnnualReport.XI、Reference Documents
(1)The original ofAnnualReportautographedbythechairman.
(2)The Financial Statements autographed and signed by the chairman, chief accountant and accountantsincharge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997, the Prospectus andTheShares’ Change& PublicOfferingAnnouncementfor StockAin2000.
(4) The originals of all documents and announcements that the Company made public during thereportperiodinthenewspapersdesignatedbyChinaSecuritiesRegulatoryCommission. Yantai Changyu PioneerWine Co.Ltd.
BoardofDirectors
28th April 2016