Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016 Stock code: 000596, 200596 Stock name: Gujing Distillery, Gujing Distillery B Announcement No.: 2017-003 ANHUI GUJING DISTILLERY COMPANY LIMITED
ABSTRACT OF ANNUAL REPORT 2016
I Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding of the operating results, financial condition and future development planning of the Company, investors are kindly reminded to read the full text carefully on the media designated by the China Securities Regulatory Commission (the “CSRC”).
This Annual Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Modifiedauditor’s opinion
□ Applicable√ Not applicable
Proposal for profit distribution to common shareholders or converting capital reserve into share capital for this Reporting Period, which has been considered and approved by the Board
√ Applicable□ Not applicable
Share capital increase from capital reserve
□ Yes√ No
The Board has considered and approved the following proposal for profit distribution to common shareholders: Based on the total shares of the Company on December 31, 2016, a cash dividend of RMB6.00 (tax inclusive) per 10 shares will be distributed to all shareholders of the Company. No bonus shares will be granted, nor will any capital reserve be converted into share capital.
Proposal for profit distribution to preference shareholders for this Reporting Period, which has been considered and approved by the Board
□ Applicable√ Not applicable
II Company profile
1. Stock profile
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||Gujing Distillery, GujingDistillery B|||
|Stock name||Stock code||
|Stock exchange|Shenzhen Stock Exchange|||
|Contact information|Board Secretary||Securities Representative|
|Name||||
|Office address||||

Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016
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|Fax|
|Tel.|
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2. Brief introduction to the main business or products in this Reporting Period
The Company specializes in the production and marketing of distilled spirits.
No changes have occurred to the main business of the Company in this Reporting Period. And the main products of the Company are the original Chinese spirits series, the traditional Gujing spirits series and the light Gujing spirits series.
As one ofChina’s traditional top eight liquor brands, the Company is committed to superior quality. Its spirits comes from quality grain and water adopting a unique technique and is well stored. With its spirits produced in Bozhou, known as “a city good for health”, the Company promotes a healthy drinking concept. It also introducesChina’s distilled spirits culture to the world through tours to New York and Milan.
3. Key financial results
(1) Key financial results for the past three years
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting policies or correction of accounting errors.
□ Yes√ No
Unit: RMB
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||2016|2015|+/-%|2014|
|Operating revenues|6,017,143,660.56 5,253,411,479.40829,630,063.38 715,578,369.68||14.54%|4,650,855,881.72|
|Net profit attributable to|||||
||||15.94%|597,041,887.34|
|shareholders of the Company|||||
|Net profit attributable to|||||
|shareholders of the Company before|792,534,098.54|682,760,794.86|16.08%|568,353,541.08|
|exceptional profit and loss|||||
|Net cash flows from operating|1,183,231,808.06 790,109,535.011.65 1.421.65 1.42||||
||||49.76%|387,494,289.89|
|activities|||||
|Basic earnings per share|||||
||||16.20%|1.19|
|(RMB/share)|||||
|Diluted earnings per share|||||
||||16.20%|1.19|
|(RMB/share)|||||
|Weighted average return on equity|||||
||15.88%|15.91%|-0.03%|15.05%|
|(%)|||||
||December 31, 2016|December 31, 2015|+/-%|December 31, 2014|
|Total assets|8,736,205,153.86 7,183,147,641.135,595,121,383.96 4,833,721,630.08||21.62%|6,413,518,166.03|
|Net assets attributable to|||||
||||15.75%|4,181,050,977.96|
|shareholders of the Company|||||

Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016 (2) Key financial results by quarter
Unit: RMB
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||1Q|2Q|3Q|4Q|
|Operating revenues|||||
|Net profit attributable to|||||
|shareholders of the Company|||||
|Net profit attributable to|||||
|shareholders of the Company before|||||
|exceptional profit and loss|||||
|Net cash flows from operating|||||
|activities|||||

Indicate by tick mark whether there are any material differences between the financial indicators above or their summations and those which have been disclosed in quarterly or semi-annual reports.
□ Yes√ No
4. Share capital and shareholders
(1) Numbers of common shareholders and preference shareholders with resumed voting rights as well as shareholdings of top ten shareholders
Unit: share
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|||Total numberof commonshareholdersat the priormonth-endbefore thedisclosure ofthis Report||||Total number of|||
|||||Total number|||||
|||||||preference|||
|||||of preference|||||
|||||||shareholders with|||
|||||shareholders|||||
|Total number of commonshareholders at the period-end||||||resumed voting|||
||21,272||16,875|with resumed|0|||0|
|||||||rights at the prior|||
|||||voting rights|||||
|||||||month-end before|||
|||||at the|||||
|||||||the disclosure of|||
|||||period-end|||||
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|Top 10 shareholders|||||||||
|||Shareholding|Total shares||||Pledged or frozen shares||
||Nature of|||Number of restricted shares|||||
|Name of shareholder|shareholder|percentage(%)|held at the|held|||Status|Number|
||||period-end||||||
||||||||Pledged|114,000,000|

Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016
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||Among the above shareholders, the Company's controlling shareholder, Anhui Gujing|
||Group Co., Ltd., has no relationship with other shareholders and does not belong to|
||the acting-in-concert stipulated in the Administrative Measures on Information|
|Related or acting-in-concert parties among the||
||Disclosure of Changes in Shareholding of Listed Companies. In addition, the|
|shareholders above||
||relationship between other shareholders is unknown, and it is unknown whether it|
||belongs to the acting-in-concert stipulated in the Administrative Measures on|
||Information Disclosure of Changes in Shareholding of Listed Companies.|
|Shareholders conducting securities margin||
||N/A|
|trading (if any)||

(2) Number of preference shareholders and shareholdings of top ten of them
□ Applicable√ Not applicable
No preference shareholders in this Reporting Period.
(3) Ownership and control relations between the actual controller and the Company
ThePeople’s Government of Bozhou
Anhui Gujing Group Company Limited
Anhui Gujing Distillery Company Limited
5. Corporate bonds
Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this Report or were due but could not be redeemed in full?
No.
Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016 III Performance discussion and analysis
1. Performance review for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
2016 marked the first year ofChina’s 13th Five-Year Plan for Economic and Social Development, as well as a year to carry through the supply-side structural reform. Consumers have attached more importance to quality. And along with the deep change and rebound in the distilled spirits industry, the fundamentals of famous distillers in China have kept improving. Under such circumstances, upholding the values of “Be Honest, Offer Quality Spirits, Be Stronger and Be Helpful to the Society” and following the “Distilled Spirits 5.0” strategy, the Company strengthened branding and quality improvement, as well as improved its operation by adopting a series of effective measures. As a result, the operating goals that the Board had set for the year were achieved.
For 2016, the Company achieved, on a consolidated basis, operating revenues of RMB6.017 billion, up14.54% compared with a year earlier; total profit of RMB1.15 billion, up19.09% from last year; net profit of RMB0.83 billion, representing a year-on-year growth of15.94%; earnings per share of RMB1.65,16.20% higher than last year; and net operating cash flows of RMB1.183 billion, representing a49.76% increase on a year-on-year basis. (I) Focusing on Strategy 5.0, and constantly enhancing the core competitiveness of the major business of liquor A. “Double brands” open up the new pattern. Faced with a complex economic environment in the reporting period, the Company has actively sought the extensional development, continued to deploy throughout the entire country and give play to the effect of synergy and integration.
B. Efforts in deep cultivation of market construction. In 2016, the Company continued to make efforts in “sinking organization, channels and personnel”, implement contact point management, split sales terminal units and stimulate dynamism; strengthened target budgeting, process KPI and performance appraisal, and constantly cultivated market construction.
C. Continuous optimization of the product system. The Original Chinese Spirits is granted with the title of “1985-2015 Chinese Liquor Historical Landmark Product” by China National Food Industry Association.37℃ Bo Ju liquor, the healthy new product, has been successfully launched, opening up a new pattern of thinking for developing the healthy liquors under Gujing Distillery; the Original Chinese Spirits G20, Gujing Distillery 1989 has been launched innovatively, continuously enriching product lines.
D. Constant enhancement of the brand value reputation. The brand construction has been vigorously promoted with a series of activities and promotion events organized. Gujing Distillery has entered the Middle and East Europe by grasping the strategic opportunity of “One Belt One Road”. The value of the brand Gujing Distillery has reached RMB49.259 billion during the reporting period.
(II) Innovating management tools and methods, activating management dynamism and improving scientific and technological innovation
A. Exploration of internal marketization and informationization of in-depth application. In the reporting period, the Company has implemented the appraisal mechanism for internal marketization, which activated the internal
Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016 dynamism and motivation; the projects such as Customer Relationship Management (CRM) and Unified Call Center have made phased progress.
B. Scientific and technological innovation has been intensified with a number of breakthroughs made. Two projects have been selected into the list of keyR&D projects under the 13th Five-Year Plan, one item of technological achievements have passed the provincial accreditation of scientific and technological achievements, four items of technological achievements have been converted and applied into production, and two items have passed the review based on the local standard at the provincial level. The academician workstation and the state-level post-doctoral research workstation have successfully passed the performance appraisal, Anhui Solid State Fermentation Engineering Technology Research Center has passed the quality acceptance, the state-level corporate technological center has been rated excellent in the annual appraisal, and the Company has won Anhui Quality Award.
(III) Optimizing the contents of appraisal, and improving the skill of the management staff
A. The company has optimized the contents of performance appraisal, intensified the strength of rewards and punishments, revised and improved the appraisal system, simplified the relevant indicators, highlighted the key points and publicized the results.
B. The company has applied the echelon construction of talents, carrying out the targeted nurture and development of core marketing staff, core technical staff and core management staff, which has achieved good results.
(IV) Continuing to promote the corporate brand image by centering around “Two learn one to do learning education” andGujing’s core values
In the reporting period, the Company has strengthened its educational guidance by vigorously conducting the educational activities themed with “three-strict and three-honest” and “four-consciousness”, and deepening the implementation of the series learning and discussion activities on “Two learn one to do learning education” and “aim at keeping up by acting”. The Company has combined its corporate values of “behaving decently, brewing good wines, cultivating moral character of employees and benefiting the society” with Party built companies, promoting the integration of Party governance and building a learning, innovative and appreciative company. (V) Pressure and weaknesses in the Company during the reporting period
A. Pressure of the regional competitions and increasing costs of the traditional manufacturing industry.
B. Insufficient motivation for staff growth and inflexible corporate mechanism.
C. Unthorough capillary management and existence of “laziness, tiredness, stubbornness and squeamishness” to different extents.
2. Significant changes in the main business in this Reporting Period
□ Yes√ No
3. Products contributing over10% of the main business revenue or profit
√ Applicable□ Not applicable
Unit: RMB
Gujing Distillery Original Chinese Spirits Abstract of Annual Report 2016
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|||||Operating|||
||Operating||Gross profit||Operating profit:|Gross profit|
|Product||Operating profit||revenue: YoY|||
||revenue||margin||YoY +/-%|margin: YoY +/-%|
|||||+/-%|||
|Distilled spirits|5,876,233,721.58|1,067,835,648.30|75.30%|14.80%|19.59%|3.76%|

 4. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes√ No
5. Significant YoY changes in the operating revenues, operating costs and net profit attributable to the common shareholders or their composition
□ Applicable√ Not applicable
6. Possibility of listing suspension or termination
□ Applicable√ Not applicable
7. Issues related to the financial report
(1) YoY changes in accounting policies, accounting estimations and measurement methods
□ Applicable√ Not applicable
No changes.
(2) Retroactive restatements due to correction of significant accounting errors in this Reporting Period□ Applicable√ Not applicable
No such cases.
(3) YoY changes in the scope of the consolidated financial statements
√ Applicable□ Not applicable
The Company obtained51% equities of Wuhan Tianlong Yellow Crane Tower Co., Ltd for the enterprise merger not under the same control during the Reporting Period, and newly established the subsidiaries Anhui Gujing Yunshang Electronic Commerce Co., Ltd and Anhui Zhenrui Contruction Project Co., Ltd.; The Company newly established sub-subsuaiaries Bozhou Gujing Distillery Marketing Co., Ltd, Wuhan Ya shibo Technology Co., Ltd, and Wuhan Junya Sales Co., Ltd; The Company liquidated its subsidiary Bozhou Gujing Packaging Co., Ltd in the current year.