ANHUI GUJING DISTILLERY COMPANY LIMITED
SEMI-ANNUAL FINANCIAL REPORT 2017
August 2017
I.Auditor’s Report
Whetherthesemi-annualreporthasbeenaudited?
□Yes√No
Thesemi-annualreportoftheCompanyhasnotbeenaudited.
II. FinancialStatements
Theunitofthefinancialstatementsattached:RMB
1.ConsolidatedBalanceSheet
PreparedbyAnhuiGujingDistilleryCompanyLimited
June30,2017
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Currentassets:|||
|Monetaryfunds|688,690,424.44|532,909,026.07|
|Settlementreserve|||
|Interbanklendings|||
|Financial assets at fair valuethroughprofit/loss|101,573.76|429,190.68|
|Derivativefinancialassets|||
|Notesreceivable|1,182,682,094.60|534,386,586.59|
|Accountsreceivable|14,701,820.59|12,287,262.88|
|Accountspaidinadvance|76,821,426.20|74,784,221.59|
|Premiumsreceivable|||
|Reinsurancepremiumsreceivable|||
|Receivable reinsurance contractreserve|||
|Interestreceivable|8,363,178.08|2,843,178.08|
|Dividendsreceivable|||
|Otheraccountsreceivable|14,673,103.80|10,765,397.03|
|Financial assets purchased underagreementstoresell|||
|Inventories|1,846,271,997.98|1,786,433,036.50|
|Assetsheldforsale|||
|Non-current assets due within oneyear|||

||||
|-|-|-|
|Othercurrentassets|1,605,443,182.91|1,750,278,829.24|
|Totalcurrentassets|5,437,748,802.36|4,705,116,728.66|
|Non-currentassets:|||
|Loansandadvancestocustomers|||
|Available-for-salefinancialassets|498,964,610.81|404,029,552.27|
|Held-to-maturityinvestments|||
|Long-termaccountsreceivable|||
|Long-termequityinvestments|||
|Investmentproperty|8,160,298.60|8,402,944.74|
|Fixedassets|1,785,781,644.39|1,865,691,585.06|
|Constructioninprogress|77,471,004.70|71,771,324.26|
|Engineeringmaterials|||
|Disposaloffixedassets|||
|Productivelivingassets|||
|Oil-gasassets|||
|Intangibleassets|694,861,087.12|700,684,529.08|
|R&Dexpenses|||
|Goodwill|478,283,495.29|478,283,495.29|
|Long-termdeferredexpense|77,934,606.11|93,588,397.35|
|Deferredincometaxassets|224,774,690.99|107,654,597.15|
|Othernon-currentassets|314,785,612.34|300,982,000.00|
|Totalnon-currentassets|4,161,017,050.35|4,031,088,425.20|
|Totalassets|9,598,765,852.71|8,736,205,153.86|
|Currentliabilities:|||
|Short-termborrowings|||
|BorrowingsfromtheCentralBank|||
|Money deposits accepted andinter-bankdeposits|||
|Interbankborrowings|||
|Financial liabilities at fair valuethroughprofit/loss|||
|Derivativefinancialliabilities|||
|Notespayable|13,128,583.00|11,298,583.00|
|Accountspayable|496,426,124.62|340,972,366.21|
|Accountsreceivedinadvance|735,440,901.02|623,990,614.91|

||||
|-|-|-|
|Financial assets sold forrepurchase|||
|Feesandcommissionspayable|||
|Payrollpayable|228,782,300.86|288,027,136.09|
|Taxespayable|322,159,779.82|486,959,651.85|
|Interestpayable|||
|Dividendspayable|||
|Otheraccountspayable|1,059,628,766.11|641,472,271.53|
|Reinsurancepremiumspayable|||
|Insurancecontractreserve|||
|Payables for acting trading ofsecurities|||
|Payables for acting underwritingofsecurities|||
|Liabilitiesheldforsale|||
|Non-current liabilities due withinoneyear|||
|Othercurrentliabilities|398,585,802.29|241,487,812.54|
|Totalcurrentliabilities|3,254,152,257.72|2,634,208,436.13|
|Non-currentliabilities:|||
|Long-termborrowings|||
|Bondspayable|||
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Long-termaccountspayable|||
|Long-termpayrollpayable|||
|Specialpayables|||
|Provisions|||
|Deferredincome|43,254,768.06|43,978,795.45|
|Deferredincometaxliabilities|110,569,452.31|117,287,002.52|
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|153,824,220.37|161,265,797.97|
|Totalliabilities|3,407,976,478.09|2,795,474,234.10|
|Owners’equity:|||
|Sharecapital|503,600,000.00|503,600,000.00|
|Otherequityinstruments|||

||||
|-|-|-|
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Capitalreserve|1,295,405,592.25|1,295,405,592.25|
|Less:Treasuryshares|||
|Othercomprehensiveincome|16,248,005.87|36,144,477.95|
|Specialreserve|||
|Surplusreserve|256,902,260.27|256,902,260.27|
|Provisionsforgeneralrisks|||
|Retainedearnings|3,749,798,945.14|3,503,069,053.49|
|Equity attributable to owners of theCompany|5,821,954,803.53|5,595,121,383.96|
|Minorityinterests|368,834,571.09|345,609,535.80|
|Totalowners’equity|6,190,789,374.62|5,940,730,919.76|
|Totalliabilitiesandowners’equity|9,598,765,852.71|8,736,205,153.86|

 Legalrepresentative:LiangJinhui Person-in-chargeoftheaccountingwork:YeChangqing
Chiefoftheaccountingdivision:ZhuJiafeng
2.BalanceSheetoftheCompany
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Currentassets:|||
|Monetaryfunds|528,305,431.80|225,792,686.26|
|Financial assets at fair valuethroughprofit/loss|101,573.76|429,190.68|
|Derivativefinancialassets|||
|Notesreceivable|1,125,205,190.32|449,016,169.03|
|Accountsreceivable|4,832,609.01|6,377,346.00|
|Accountspaidinadvance|26,996,010.91|11,815,064.19|
|Interestreceivable|||
|Dividendsreceivable|||
|Otheraccountsreceivable|107,964,845.62|105,514,906.34|
|Inventories|1,619,239,408.03|1,549,397,565.11|
|Assetsheldforsale|||
|Non-current assets due within one|||

||||
|-|-|-|
|year|||
|Othercurrentassets|1,529,472,614.54|1,750,000,000.00|
|Totalcurrentassets|4,942,117,683.99|4,098,342,927.61|
|Non-currentassets:|||
|Available-for-salefinancialassets|498,446,610.81|403,547,952.27|
|Held-to-maturityinvestments|||
|Long-termaccountsreceivable|||
|Long-termequityinvestments|1,155,089,408.32|1,155,089,408.32|
|Investmentproperty|29,928,735.32|30,846,736.84|
|Fixedassets|1,316,145,605.30|1,375,089,823.91|
|Constructioninprogress|66,999,423.58|68,022,146.66|
|Engineeringmaterials|||
|Disposaloffixedassets|||
|Productivelivingassets|||
|Oil-gasassets|||
|Intangibleassets|184,585,242.77|186,370,081.28|
|R&Dexpenses|||
|Goodwill|||
|Long-termdeferredexpense|74,967,676.17|92,695,064.02|
|Deferredincometaxassets|36,778,706.50|36,366,330.90|
|Othernon-currentassets|13,094,812.34|982,000.00|
|Totalnon-currentassets|3,376,036,221.11|3,349,009,544.20|
|Totalassets|8,318,153,905.10|7,447,352,471.81|
|Currentliabilities:|||
|Short-termborrowings|||
|Financial liabilities at fair valuethroughprofit/loss|||
|Derivativefinancialliabilities|||
|Notespayable|28,583.00|28,583.00|
|Accountspayable|443,272,755.49|307,649,868.02|
|Accountsreceivedinadvance|1,896,379,847.78|1,003,521,896.65|
|Payrollpayable|68,388,606.08|90,742,908.53|
|Taxespayable|133,731,895.75|320,037,309.94|
|Interestpayable|||
|Dividendspayable|||

||||
|-|-|-|
|Otheraccountspayable|285,105,712.08|282,570,379.80|
|Liabilitiesheldforsale|||
|Non-current liabilities due withinoneyear|||
|Othercurrentliabilities|41,291,780.61|37,589,367.67|
|Totalcurrentliabilities|2,868,199,180.79|2,042,140,313.61|
|Non-currentliabilities:|||
|Long-termborrowings|||
|Bondspayable|||
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Long-termpayables|||
|Long-termpayrollpayable|||
|Specialpayables|||
|Provisions|||
|Deferredincome|42,121,087.21|42,745,851.74|
|Deferredincometaxliabilities|9,297,654.96|15,385,289.84|
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|51,418,742.17|58,131,141.58|
|Totalliabilities|2,919,617,922.96|2,100,271,455.19|
|Owners’equity:|||
|Sharecapital|503,600,000.00|503,600,000.00|
|Otherequityinstruments|||
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Capitalreserve|1,247,162,107.35|1,247,162,107.35|
|Less:Treasuryshares|||
|Othercomprehensiveincome|17,391,783.56|37,315,555.64|
|Specialreserve|||
|Surplusreserve|251,800,000.00|251,800,000.00|
|Retainedearnings|3,378,582,091.23|3,307,203,353.63|
|Totalowners’equity|5,398,535,982.14|5,347,081,016.62|
|Totalliabilitiesandowners’equity|8,318,153,905.10|7,447,352,471.81|

3.ConsolidatedIncomeStatement
Unit:RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Operatingrevenues|3,670,127,764.59|3,045,034,706.73|
|Including:Salesincome|3,670,127,764.59|3,045,034,706.73|
|Interestincome|||
|Premiumincome|||
|Feeandcommissionincome|||
|2.Operatingcosts|3,012,871,713.47|2,512,805,683.52|
|Including:Costofsales|913,179,198.91|780,394,434.66|
|Interestexpenses|||
|Feeandcommissionexpenses|||
|Surrenders|||
|Netclaimspaid|||
|Net amount provided asinsurancecontractreserve|||
|Expenditure on policydividends|||
|Reinsurancepremium|||
|Taxesandsurtaxes|606,131,354.51|471,239,184.35|
|Sellingexpenses|1,249,688,761.13|1,013,923,133.24|
|Administrativeexpenses|263,421,695.43|257,077,455.72|
|Financecosts|-17,264,642.65|-9,764,161.14|
|Assetimpairmentloss|-2,284,653.86|-64,363.31|
|Add: Profit on fair value changes (“-”meansloss)|-119,656.35|2,080,010.18|
|Investment income (“-” meansloss)|81,017,484.47|44,324,855.36|
|Including: Share of profit/loss ofassociatesandjointventures|||
|Exchangegains(“-”meansloss)|||
|Othergains|||
|3.Operatingprofit(“-”meansloss)|738,153,879.24|578,633,888.75|
|Add:Non-operatingincome|39,166,602.83|8,139,697.17|
|Including: Profitondisposalofnon-currentassets|487,886.67|5,477.22|

||||
|-|-|-|
|Less:Non-operatingexpense|2,189,022.01|5,088,602.48|
|Including: Loss on disposal ofnon-currentassets|1,193,100.98|4,324,035.29|
|4.Totalprofit(“-”meansloss)|775,131,460.06|581,684,983.44|
|Less:Corporateincometax|203,016,533.12|144,981,768.68|
|5.Netprofit(“-”meansloss)|572,114,926.94|436,703,214.76|
|Net profit attributable to ownersoftheCompany|548,889,891.65|431,055,462.62|
|Minorityinterests’income|23,225,035.29|5,647,752.14|
|6. Other comprehensive income net oftax|-19,896,472.08|-18,119,909.34|
|Other comprehensive income netof tax attributable to owners of theCompany|-19,896,472.08|-18,119,909.34|
|6.1 Other comprehensiveincome that will not be reclassifiedintoprofit/loss|||
|6.1.1 Changes in netliabilities or assets with a definedbenefitplanuponre-measurement|||
|6.1.2 Share of othercomprehensive income of investeesthat cannot be reclassified intoprofit/lossundertheequitymethod|||
|6.2 Other comprehensiveincome tobe subsequently reclassifiedintoprofit/loss|-19,896,472.08|-18,119,909.34|
|6.2.1 Share of othercomprehensive income of investeesthatwillbereclassified intoprofit/lossundertheequitymethod|||
|6.2.2Profit/lossonfairvaluechanges of available-for-sale financialassets|-19,896,472.08|-18,119,909.34|
|6.2.3 Profit/loss onreclassifying held-to-maturityinvestments into available-for-salefinancialassets|||
|6.2.4 Effective profit/loss oncashflowhedges|||
|6.2.5 Currency translationdifferences|||

||||
|-|-|-|
|6.2.6Other|||
|Other comprehensive income netoftaxattributabletominorityinterests|||
|7.Totalcomprehensiveincome|552,218,454.86|418,583,305.42|
|Attributable to owners of theCompany|528,993,419.57|412,935,553.28|
|Attributabletominorityinterests|23,225,035.29|5,647,752.14|
|8.Earningspershare|||
|8.1Basicearningspershare|1.09|0.86|
|8.2Dilutedearningspershare|1.09|0.86|

 Legalrepresentative:LiangJinhui Person-in-chargeoftheaccountingwork:YeChangqing
Chiefoftheaccountingdivision:ZhuJiafeng
4.IncomeStatementoftheCompany
Unit:RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Operatingrevenues|2,032,050,832.48|1,738,703,915.32|
|Less:Operatingcosts|808,157,556.90|766,632,166.44|
|Taxesandsurtaxes|521,153,270.11|438,712,029.21|
|Sellingexpenses|119,601,430.10|106,464,016.98|
|Administrativeexpenses|180,104,417.79|185,132,665.41|
|Financecosts|-8,358,356.49|-8,383,165.64|
|Assetimpairmentloss|-1,943,865.48|-170,676.54|
|Add: profit on fair value changes(“-”meansloss)|-119,656.35|2,038,778.28|
|Investment income (“-” meansloss)|74,940,152.97|43,379,375.36|
|Including:Shareofprofit/lossofassociatesandjointventures|||
|Othergains|||
|2.Operatingprofit(“-”meansloss)|488,156,876.17|295,735,033.10|
|Add:Non-operatingincome|23,115,601.27|8,735,915.53|
|Including: Profit on disposal ofnon-currentassets|117,524.82|0.00|
|Less:Non-operatingexpense|798,234.93|4,318,076.25|
|Including: Loss on disposal of|47,678.15|4,318,076.25|

||||
|-|-|-|
|non-currentassets|||
|3.Totalprofit(“-”meansloss)|510,474,242.51|300,152,872.38|
|Less:Corporateincometax|136,935,504.91|74,329,610.21|
|4.Netprofit(“-”meansloss)|373,538,737.60|225,823,262.17|
|5. Other comprehensive income netoftax|-19,923,772.08|-17,718,890.00|
|5.1 Other comprehensive incomethatwillnotbereclassifiedintoprofitandloss|||
|5.1.1 Changes in net liabilitiesor assets with a defined benefit planuponre-measurement|||
|5.1.2 Share of othercomprehensive income of investeesthat cannot be reclassified intoprofit/lossundertheequitymethod|||
|5.2 Other comprehensive incometo be subsequently reclassified intoprofit/loss|-19,923,772.08|-17,718,890.00|
|5.2.1 Share of othercomprehensive income of investeesthat will be reclassified intoprofit/lossundertheequitymethod|||
|5.2.2 Profit/loss on fair valuechanges of available-for-salefinancialassets|-19,923,772.08|-17,718,890.00|
|5.2.3Profit/lossonreclassifyingheld-to-maturity investments intoavailable-for-salefinancialassets|||
|5.2.4 Effective profit/loss oncashflowhedges|||
|5.2.5 Currency translationdifferences|||
|5.2.6Other|||
|6.Totalcomprehensiveincome|353,614,965.52|208,104,372.17|
|7.Earningspershare|||
|7.1Basicearningspershare|0.74|0.450|
|7.2Dilutedearningspershare|0.74|0.450|

5.ConsolidatedCashFlowStatement
Unit:RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1. Cash flows associated withoperatingactivities:|||
|Cash received from sale ofcommoditiesandrenderingofservice|3,555,497,838.84|2,839,999,383.84|
|Net increase in money depositsfrom customers and interbankplacements|||
|Net increase in loans from theCentralBank|||
|Net increase in funds borrowedfromotherfinancialinstitutions|||
|Cash received from premium oforiginalinsurancecontracts|||
|Net cash received fromreinsurancebusiness|||
|Net increase in deposits of policyholdersandinvestmentfund|||
|Net increase in disposal offinancial assets at fair value throughprofit/loss|||
|Interest, fees and commissionsreceived|||
|Net increase in interbankborrowings|||
|Netincreaseinfundsinrepurchasebusiness|||
|Taxrefundsreceived|14,260,319.10|368,270.62|
|Cash generated by other operatingactivities|163,681,861.39|274,445,609.43|
|Subtotal of cash generated byoperatingactivities|3,733,440,019.33|3,114,813,263.89|
|Cashpaidforgoodsandservices|519,208,246.66|517,398,554.95|
|Netincreaseinloansandadvancestocustomers|||
|Net increase in funds deposited inthe Central Bank and interbankplacements|||
|Cash paid for claims of originalinsurancecontracts|||
|Interest, fees and commissionspaid|||

||||
|-|-|-|
|Cashpaidaspolicydividends|||
|Cashpaidtoandforemployees|664,176,293.14|540,282,959.39|
|Taxespaid|1,695,407,866.03|1,174,821,006.32|
|Cash used in other operatingactivities|429,282,389.42|556,198,130.24|
|Subtotal of cash used in operatingactivities|3,308,074,795.25|2,788,700,650.90|
|Net cash generated by operatingactivities|425,365,224.08|326,112,612.99|
|2. Cash flows associated withinvestingactivities:|||
|Cash received from retraction ofinvestments|2,122,314,171.98|2,233,652,050.58|
|Cash received as investmentincome|79,384,831.47|44,324,855.36|
|Netcashreceivedfromdisposaloffixed assets, intangible assets andotherlong-termassets|412,563.04|500,379.86|
|Netcashreceivedfromdisposalofsubsidiariesorotherbusinessunits|||
|Cash generated by otherinvestingactivities|1,646,000.00|0.00|
|Subtotal of cash generated byinvestingactivities|2,203,757,566.49|2,278,477,285.80|
|Cash paid to acquire fixed assets,intangible assets and other long-termassets|74,306,031.33|75,351,512.67|
|Cashpaidforinvestment|2,096,875,360.87|1,632,621,071.61|
|Netincreaseinpledgedloans|||
|Net cash paid to acquiresubsidiariesandotherbusinessunits|0.00|795,770,032.45|
|Cash used in other investingactivities|||
|Subtotal of cash used in investingactivities|2,171,181,392.20|2,503,742,616.73|
|Net cash generated by investingactivities|32,576,174.29|-225,265,330.93|
|3. Cash flows associated withfinancingactivities:|||
|Cash received from capitalcontributions|||
|Including: Cash received from|||

||||
|-|-|-|
|minority shareholder investments bysubsidiaries|||
|Cashreceivedasborrowings|||
|Cash received from issuance ofbonds|||
|Cash generated by otherfinancingactivities|||
|Subtotal of cash generated byfinancingactivities|||
|Repaymentofborrowings|||
|Cash paid for interest expensesanddistributionofdividendsorprofit|302,160,000.00|50,360,000.00|
|Including: dividends or profitpaid by subsidiaries to minorityinterests|||
|Cash used in other financingactivities|||
|Sub-total of cash used in financingactivities|302,160,000.00|50,360,000.00|
|Net cash generated by financingactivities|-302,160,000.00|-50,360,000.00|
|4. Effect of foreign exchange ratechangesoncashandcashequivalents|||
|5. Net increase in cash and cashequivalents|155,781,398.37|50,487,282.06|
|Add: Opening balance of cashandcashequivalents|527,849,026.07|1,040,373,733.07|
|6. Closing balance of cash and cashequivalents|683,630,424.44|1,090,861,015.13|

6.CashFlowStatementoftheCompany
Unit:RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1. Cash flows associated withoperatingactivities:|||
|Cash received from sale ofcommoditiesandrenderingofservice|2,364,605,355.19|1,644,591,743.75|
|Taxrefundsreceived|13,013,817.25|0.00|
|Cash generated by other operatingactivities|79,147,317.52|220,264,244.15|
|Subtotal of cash generated by|2,456,766,489.96|1,864,855,987.90|

||||
|-|-|-|
|operatingactivities|||
|Cashpaidforgoodsandservices|451,629,264.08|433,945,983.66|
|Cashpaidtoandforemployees|280,790,376.47|261,484,424.76|
|Taxespaid|1,125,948,368.08|785,049,481.14|
|Cash used in other operatingactivities|114,239,605.20|230,121,472.77|
|Subtotal of cash used in operatingactivities|1,972,607,613.83|1,710,601,362.33|
|Net cash generated by operatingactivities|484,158,876.13|154,254,625.57|
|2. Cash flows associated withinvestingactivities:|||
|Cash received from retraction ofinvestments|2,069,314,171.98|2,233,318,095.80|
|Cash received as investmentincome|78,831,554.77|43,379,375.36|
|Netcashreceivedfromdisposaloffixed assets, intangible assets andotherlong-termassets|0.00|409,000.00|
|Netcashreceivedfromdisposalofsubsidiariesorotherbusinessunits|||
|Cash generated by other investingactivities|1,646,000.00|0.00|
|Subtotal of cash generated byinvestingactivities|2,149,791,726.75|2,277,106,471.16|
|Cash paid to acquire fixed assets,intangible assets and other long-termassets|59,402,496.47|68,357,442.76|
|Cashpaidforinvestment|1,969,875,360.87|2,418,298,049.74|
|Net cash paid to acquiresubsidiariesandotherbusinessunits|||
|Cash used in other investingactivities|||
|Subtotal of cash used in investingactivities|2,029,277,857.34|2,486,655,492.50|
|Net cash generated by investingactivities|120,513,869.41|-209,549,021.34|
|3. Cash flows associated withfinancingactivities:|||
|Cash received from capitalcontributions|||
|Cashreceivedasborrowings|||

||||
|-|-|-|
|Cash received from issuance ofbonds|||
|Cash generated by otherfinancingactivities|||
|Subtotal of cash generated byfinancingactivities|||
|Repaymentofborrowings|||
|Cash paid for interest expensesanddistributionofdividendsorprofit|302,160,000.00|50,360,000.00|
|Cash used in other financingactivities|||
|Sub-total of cash used in financingactivities|302,160,000.00|50,360,000.00|
|Net cash generated by financingactivities|-302,160,000.00|-50,360,000.00|
|4. Effect of foreign exchange ratechangesoncashandcashequivalents|||
|5. Net increase in cash and cashequivalents|302,512,745.54|-105,654,395.77|
|Add: Opening balance of cashandcashequivalents|225,792,686.26|548,650,832.84|
|6. Closing balance of cash and cashequivalents|528,305,431.80|442,996,437.07|

7.ConsolidatedStatementofChangesinOwners’Equity
January-June2017
Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2017|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Retainedearnings|||
|||Preferenceshares|Perpetualbonds|Other||||||||||
|1. Balance at theend of the prioryear|503,600,000.00||||1,295,405,592.25||36,144,477.95||256,902,260.27||3,503,069,053.49|345,609,535.80|5,940,730,919.76|
|Add: Changesin accountingpolicies||||||||||||||
|Correctionoferrors in priorperiods||||||||||||||
|Businessmergers under thesamecontrol||||||||||||||
|Other||||||||||||||
|2. Balance at thebeginning of the|503,600,000.00||||1,295,405,592.25||36,144,477.95||256,902,260.27||3,503,069,053.49|345,609,535.80|5,940,730,919.76|

||||||
|-|-|-|-|-|
|year|||||
|3. Increase/decrease in theperiod (“-” meansdecrease)|-19,896,472.08|246,729,891.65|23,225,035.29|250,058,454.86|
|3.1 Totalcomprehensiveincome|-19,896,472.08|548,889,891.65|23,225,035.29|552,218,454.86|
|3.2 Capitalincreased andreduced byowners|||||
|3.2.1Ordinarysharesincreasedbyshareholders|||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity|||||

||||
|-|-|-|
|3.2.4Other|||
|3.3 Profitdistribution|-302,160,000.00|-302,160,000.00|
|3.3.1Appropriation tosurplusreserve|||
|3.3.2Appropriation togeneral riskprovisions|||
|3.3.3Appropriation toowners (orshareholders)|-302,160,000.00|-302,160,000.00|
|3.3.4Other|||
|3.4 Internalcarry-forward ofowners’equity|||
|3.4.1 Newincreaseofcapital(or share capital)from capitalreserve|||
|3.4.2 Newincreaseofcapital|||

||||||||
|-|-|-|-|-|-|-|
|(or share capital)from surplusreserve|||||||
|3.4.3Surplusreserve formakinguploss|||||||
|3.4.4Other|||||||
|3.5 Specialreserve|||||||
|3.5.1Withdrawnfortheperiod|||||||
|3.5.2Usedintheperiod|||||||
|3.6Other|||||||
|4. Closingbalance|503,600,000.00|1,295,405,592.25|16,248,005.87|256,902,260.27|3,749,798,945.14|368,834,571.09|

January-June2016
Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2016|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Retainedearnings|||
|||Preferenceshares|Perpetualbonds|Other||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|1. Balance at theend of the prioryear|503,600,000.00|1,294,938,493.19|54,481,886.51|256,902,260.27|2,723,798,990.11||4,833,721,630.08|
|Add: Changesin accountingpolicies||||||||
|Correctionoferrors in priorperiods||||||||
|Businessmergers under thesamecontrol||||||||
|Other||||||||
|2. Balance at thebeginning of theyear|503,600,000.00|1,294,938,493.19|54,481,886.51|256,902,260.27|2,723,798,990.11||4,833,721,630.08|
|3. Increase/decrease in theperiod (“-” meansdecrease)||467,099.06|-18,337,408.56||779,270,063.38|345,609,535.80|1,107,009,289.68|
|3.1 Totalcomprehensiveincome|||-18,337,408.56||829,630,063.38|20,688,034.14|831,980,688.96|
|3.2 Capitalincreased and||||||||

||||
|-|-|-|
|reduced byowners|||
|3.2.1Ordinarysharesincreasedbyshareholders|||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity|||
|3.2.4Other|||
|3.3 Profitdistribution|-50,360,000.00|-50,360,000.00|
|3.3.1Appropriation tosurplusreserve|||
|3.3.2Appropriation togeneral riskprovisions|||

||||
|-|-|-|
|3.3.3Appropriation toowners (orshareholders)|-50,360,000.00|-50,360,000.00|
|3.3.4Other|||
|3.4 Internalcarry-forward ofowners’equity|||
|3.4.1 Newincreaseofcapital(or share capital)from capitalreserve|||
|3.4.2 Newincreaseofcapital(or share capital)from surplusreserve|||
|3.4.3Surplusreserve formakinguploss|||
|3.4.4Other|||
|3.5 Specialreserve|||
|3.5.1|||

|||||||||
|-|-|-|-|-|-|-|-|
|Withdrawnfortheperiod||||||||
|3.5.2Usedintheperiod||||||||
|3.6Other||467,099.06||||324,921,501.66|325,388,600.72|
|4. Closingbalance|503,600,000.00|1,295,405,592.25|36,144,477.95|256,902,260.27|3,503,069,053.49|345,609,535.80|5,940,730,919.76|

8.StatementofChangesinOwners’EquityoftheCompany
January-June2017
Unit:RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2017|||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Retainedearnings|Totalowners’equity|
|||Preferenceshares|Perpetualbonds|Other||||||||
|1. Balance at the end oftheprioryear|503,600,000.00||||1,247,162,107.35||37,315,555.64||251,800,000.00|3,307,203,353.63|5,347,081,016.62|
|Add: Changes inaccountingpolicies||||||||||||
|Correction of errorsinpriorperiods||||||||||||
|Other||||||||||||
|2. Balance at the|503,600,000.00||||1,247,162,107.35||37,315,555.64||251,800,000.00|3,307,203,353.63|5,347,081,016.62|

|||||
|-|-|-|-|
|beginningoftheyear||||
|3. Increase/ decrease inthe period (“-” meansdecrease)|-19,923,772.08|71,378,737.60|51,454,965.52|
|3.1 Totalcomprehensiveincome|-19,923,772.08|373,538,737.60|353,614,965.52|
|3.2 Capital increasedandreducedbyowners||||
|3.2.1Ordinarysharesincreasedbyshareholders||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments||||
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity||||
|3.2.4Other||||
|3.3Profitdistribution||-302,160,000.00|-302,160,000.00|
|3.3.1 Appropriationtosurplusreserve||||
|3.3.2 Appropriationto owners (orshareholders)||-302,160,000.00|-302,160,000.00|
|3.3.3Other||||
|3.4 Internal||||

|||||||
|-|-|-|-|-|-|
|carry-forward of owners’equity||||||
|3.4.1 New increaseof capital (or sharecapital) from capitalreserve||||||
|3.4.2 New increaseof capital (or sharecapital) from surplusreserve||||||
|3.4.3 Surplus reserveformakinguploss||||||
|3.4.4Other||||||
|3.5Specialreserve||||||
|3.5.1 Withdrawn fortheperiod||||||
|3.5.2 Used in theperiod||||||
|3.6Other||||||
|4.Closingbalance|503,600,000.00|1,247,162,107.35|17,391,783.56|251,800,000.00|3,378,582,091.23|

 January-June2016
Unit:RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2016|||||||||
||Sharecapital|Otherequityinstruments|Capitalreserve|Less:|Other|Special|Surplusreserve|Retained|Totalowners’|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Preferenceshares|Perpetualbonds|Other||Treasuryshares|comprehensiveincome|reserve||earnings|equity|
|1. Balance at the end oftheprioryear|503,600,000.00||||1,247,162,107.35||54,481,886.51||251,800,000.00|2,587,051,422.29|4,644,095,416.15|
|Add: Changes inaccountingpolicies||||||||||||
|Correction of errorsinpriorperiods||||||||||||
|Other||||||||||||
|2. Balance at thebeginningoftheyear|503,600,000.00||||1,247,162,107.35||54,481,886.51||251,800,000.00|2,587,051,422.29|4,644,095,416.15|
|3. Increase/ decrease inthe period (“-” meansdecrease)|||||||-17,166,330.87|||720,151,931.34|702,985,600.47|
|3.1 Totalcomprehensiveincome|||||||-17,166,330.87|||770,511,931.34|753,345,600.47|
|3.2 Capital increasedandreducedbyowners||||||||||||
|3.2.1Ordinarysharesincreasedbyshareholders||||||||||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments||||||||||||
|3.2.3Amountsofshare-basedpayments||||||||||||

||||
|-|-|-|
|chargedtoowners’equity|||
|3.2.4Other|||
|3.3Profitdistribution|-50,360,000.00|-50,360,000.00|
|3.3.1 Appropriationtosurplusreserve|||
|3.3.2 Appropriationto owners (orshareholders)|-50,360,000.00|-50,360,000.00|
|3.3.3Other|||
|3.4 Internalcarry-forward of owners’equity|||
|3.4.1 New increaseof capital (or sharecapital) from capitalreserve|||
|3.4.2 New increaseof capital (or sharecapital) from surplusreserve|||
|3.4.3 Surplus reserveformakinguploss|||
|3.4.4Other|||
|3.5Specialreserve|||

||||||||
|-|-|-|-|-|-|-|
|3.5.1 Withdrawn fortheperiod|||||||
|3.5.2 Used in theperiod|||||||
|3.6Other|||||||
|4.Closingbalance|503,600,000.00|1,247,162,107.35|37,315,555.64|251,800,000.00|3,307,203,353.63|5,347,081,016.62|

Anhui Gujing Distillery Company Limited
Notes to Semi-Annual Financial Statements 2017
(CurrencyUnitIs RMB Unless OtherwiseStated)
I.Companyhistory
Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property, Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company with net assets of RMB377,167,700 and state-owned shares of 155,000,000 shares and considered Anhui Gujing Company as the only promoter. The registration place was Bozhou Anhui China. The Company was established on March 5, 1996 by document of WZM (1996) No.42 of AnhuiPeople’s Government. The Company set up plenarysessiononMay28,1996andregisteredinAnhuionMay30,1996withbusinesslicenseof14897271-1. The Company has been issued 60,000,000 domestic listed foreign shares (“B” shares) in June 1996 and 20,000,000 ordinary shares (“Ashares) on September 1996, ordinary shares are listed in national and par value is RMB1.00pershare.ThoseAsharesandBsharesarelistedinShenzhenStockexchange.
HeadquarteroftheCompanyislocatedinGujingBozhouAnhui.TheCompanyanditssubsidiaries(theCompany) specializeinproducingandsellingwhitespirit.
Registered capitals of the Company were RMB235,000,000 with stocks of 235,000,000, of which 155,000,000 shares were issued in China, B shares of 60,000,000 shares andAshares of 20,000,000 shares.The bookvalue of thestocksoftheCompanywasofRMB1Yuanpershare.
OnMay29,2006,ashareholdermeetingwasheldtodiscussandapprovalaprogramofequitydivisionofAshare, the program was implement in June 2006.After implementation, all shares are outstanding share, which include 147,000,000 shares with restrict condition on disposal, represent62.55% of total equity, and 88,000,000 shareswithoutrestrictconditionondisposal,represent37.45%oftotalequity.
TheCompanyissued<Announcementofrelease restriction sharesbyAnhuiGujingDistilleryCompanyLimited> on June 27, 2007, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on June29,2007.Uptothatday,outstandingshareswith restrictconditionondisposalare135,250,000,representing57.55%oftotalequity,thesharewithoutrestrictconditionare99,750,000,representing42.45%oftotalequity. TheCompanyissued<Announcementofrelease restriction sharesbyAnhuiGujingDistilleryCompanyLimited> on July 17, 2008, 11,750,000 outstanding shares with restrict condition on disposal are listed in stock market on July 18,2008. Upto thatday,outstanding shareswith restrict condition on disposalare 123,500,000, representing52.55%oftotalequity,thesharewithoutrestrictconditionare111,500,000,representing47.45%oftotalequity. TheCompanyissued<Announcementofrelease restriction sharesbyAnhuiGujingDistilleryCompanyLimited> on July 24, 2009, 123,500,000 outstanding shares with restrict condition on disposal are listed in stock market onJuly29,2009.Uptothatday,theCompany’sallsharesarealltradable.
As approved by the CSRC Document Zheng-Jian-Xu-Ke[2011] No. 943, the Company privately offered 16,800,000 ordinary shares (A-shares) to special investors on July 15, 2011, with a par value of RMB1 and the price of RMB75.00 per share, raising RMB1,260,000,000.00 in total, the net amount of raised funds stood at RMB1,227,499,450.27 after deducting RMB32,500,549.73 of various issuance expenses. Certified Public Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi[2011]No.1065.Afterprivateissuance,thesharecapitaloftheCompanyincreasedtoRMB251.8million. Pursuantto thedecisionofannualshareholdersmeetingin 2012,theCompanythatconsidered251,800,000shares as base number on December 31, 2013 transferred capital reserve into share capital at a rate of “10 shares for per 10 shares” accounting for 251,800,000 shares and implemented in the year of 2012. Upon the transference, the registeredcapitalsincreasedtoRMB503,600,000.
InApril 2016, the company entered a strategic cooperation agreement with WuhanTianlongYellow CraneTower Co., Ltd., creating a new age for cooperation related to Chinese famous spirit.As the only Chinese famous spirit in Hubei Province, it features unique mellow taste, elegant appearance and tempting smell. Moreover, Yellow Crane Tower White Spirit won the Golden Prize respectively in 1984 and 1989 National White Spirit Appraisal Competition as one of the business card representing HubeiProvince’s economy. At present, the company has established three major bases in Wuhan, Xianning and Suizhou, of which, Xianning Base has integrated modernism, ecologism and high technology as a new spirit-making base, known as “the most beautiful chateauin China”.In2016,YellowCraneTowerSpiritwon“2015Top10StarProductinHubeiProvince”.
ByJune30,2017,theCompanyissued503,600,000shares.
ThecompanyisregisteredatGujingTown,BozhouCity,AnhuiProvince.
The approved business of the Company including procurement of grain (operating with business license), manufacture of distilled spirits, wine distilling facilities, packaging material, bottles, alcohol, grease (limited to byproducts from wine manufacture), and research and development of high-tech, biotechnology development, agriculturalandsidelineproductsdeepprocessing,aswellassaleofself-manufacturingproducts.
TheCompanyandthefinalparentcompanyisAnhuiGujingCompanyCo.,LtdinChina.
FinancialstatementoftheCompanywillbereleasedonAugust25,2017bytheBoardofDirectors.
On June 30, 2017, there were 23subsidiaries included in the consolidation scope. Please refer to Note 8 “Rights and Interests in other Entities” for details.At the end ofthis period, 2 subsidiary was addedinto the consolidation scope when compared to that at the beginning. Please refer to Note 7 “Change of the Consolidation Scope” for details.
II.Basisforthepreparationoffinancialstatements
1.Basisforthepreparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Company prepared financial statements in accordance with theASBE-Basic Standard (No. 33 issued decreed
by Ministry of Finance and No. 76 revised decreed by Ministry of Finance), the 41 specific standards of Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 Feb 2006 and revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the Accounting Standards for Business Enterprises”, “ChinaAccounting Standards” or “CAS”), Rules for Preparation ConventionofDisclosureofPublicOfferingCompaniesNo.15–GeneralRegulationsforFinancialReporting(revisedin2014) byChinaSecuritiesRegulatoryCommission.
In line with relevant rules of ASBE, financial accounting of the Company is based on accrual system. Except financial instruments and instrument real estate, the financial statement is calculated on the basis of history costs. Available-for-sale non-current assets are calculated by the lower one of fair value deducting estimated costs and original costs meeting the standard of available-for-sale. If assets confront impairment, it shall be withdrawn provisionforimpairmentinlinewithrelevantstipulations.
1. Continuousoperation
The managementof theCompanyexecutedthe assessmentonthecontinuationability andhadnotdiscoveredany eventor situation causedsignificantsuspiciononthe continuationability. Thus, thefinancialstatements compiled basedonthehypothesisofthecontinuation.
III.Declarationofcompliancewiththeenterpriseaccountingstandards
The financial statements of the Company have been prepared in accordance with the Enterprise Accounting Standards to present truly and completely the financial position of the Company on June 30, 2016, operating results, cash flow from January to June in 2017 and other relevant information. The financial statement of the Company met the relevant disclosure requirements of financial statement and notes of “Compiling stipulations of publicinformationdisclosureNo.15---generalrulesoffinancialstatement”(revisedin2014).
IV.Mainaccountingpoliciesandaccountingestimates
Thecompanyandvarious subsidiariesaremainlyspecializedin manufacturingandsellingwhite spirit.According to the actual production& operation and related ASBE provisions, this company and various subsidiaries have formulatedsome specificaccountingpoliciesandestimationsrelatedto varioustransactionsandmatters including revenue recognition. Please refer to Note IV. 23 “Revenues” for details. For any description of major accounting judgment and estimations made by thecompany’s management, please refer to Note IV. 28 “Major Accounting JudgmentandEstimations”fordetails.
1.Accountingyear
Accounting year is divided to annual term and medium term. Accounting medium refers to reporting period shorterthanacompleteaccountingperiod.TheCompanyemploysaperiodofcalendardaysfrom1Jan.to31Dec. eachyearasaccountingyear.
2.Operatingcycle
Normal operating cycle refers to the period from the Company purchases the assets for processing to realize the cash or cash equivalents. The Company regards 12 months as an operating cycle and regards which as the partitioncriterionofthemobilityoftheassetsandliabilities.
3.Bookkeepingbasecurrency
Renminbi is the dominant currency used in the economic circumstances where the Company and its domestic subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use Renminbi as their bookkeeping base currency. And the Company adopted Renminbi as the bookkeeping base currency when preparingthefinancialstatementsforthereportingperiod.
4.Accountingtreatment methodsforbusinesscombinationsunderthesame controlandthose notunderthe samecontrol
The term “business combinations” refers to a transaction or event bringing together two or more separate enterprises into one reporting entity. Business combinations are classified into the business combinations under thesamecontrolandthebusinesscombinationsnotunderthesamecontrol.
(1)Accountingtreatmentofthebusinesscombinationthatisunderthesamecontrol
Abusinesscombinationinvolving enterprisesundercommon controlisabusinesscombination inwhichallof the combining enterprises are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to share premium in the capital reserve. If the balance of share premium is insufficient, any excess is adjusted to retained earnings. Other direct expenses occur when the Company conducting business combinations is recognized in current profit and loss. The combination date is the dateonwhichonecombiningenterpriseeffectivelyobtainscontroloftheothercombiningenterprises.
Thoseassetsandliabilities obtainedbytheCompanyduringthebusinesscombinationshouldberecognizedinthe carrying value of the equity of the merged party on the merger date. The difference between the carrying amount of the net assets obtained and carrying amount of the merger consideration (or total par value of issued shares) paid shallbe adjustedto capitalreserve. If the capitalreserve is notsufficient to absorbthe difference, anyexcess shallbeadjustedagainstretainedearnings.
Directcostsofabusinesscombinationshallbereckonedintocurrentgainsandlosses.
(2)Accountingtreatmentofthebusinesscombinationthatisnotunderthesamecontrol
Abusinesscombinationinvolvingentitiesnotundercommoncontrolisabusinesscombinationinwhichallofthe combining entities are not ultimately controlled by the same party or parties both before and after the business combination. In business combination not under the same control, acquirer refers to party obtaining control of
other combining corporations in the date of acquisition and acquiree refers to corporation participating in combination.Dateofacquirereferstothedatetheacquireractuallyobtainingcontroloftheacquiree.
As for combination not under the same control, costs of combination includes assets that acquirers occur in the date of combination in order to obtain control of acqirees, loans, fair value of issued equity securities, intermediarycostssuchasaudit,legalservicesandevaluationconsultation,andotheradministrativefeesoccurred in the reporting period.As for trading costs that acquirers as combination consideration issue equity securities or debt securities, it shall be reckoned into initial accounts of equity securities or debt securities. As for business combination realized by several exchanges and trades, in the combined financial statement of the Company, the Company shall recalculate the stock right obtained by acquirees before the date of acquisition in line with fair value of the stock right in the date of acquisition.When the Company acts as the combination party,the cost of a business combination paid by the acquirer is the aggregate of the fair value at the acquisition date of assets given (including share equity of the acquiree held before the combination date), liabilities incurred or assumed, and equity securities issued by the acquirer. Any excess of the cost of a business combination over theacquirer’s interest inthe fair value oftheacquiree’sidentifiable netassets is recognized as goodwill, while anyexcess oftheacquirer’s interest in thefair value of theacquiree’s identifiable netassets over the costofa businesscombination is recognized in profit or loss. The cost of equity securities or liability securities as on combination consideration offering is recognized in initial recording capital on equity securities or liability securities. Other direct expenses occur when the Company conducting business combinations is recognized in current profit and loss. The difference between the fair value and the carrying amount of the assets given is recognized in profit or loss. The Company, at the acquisition date, recognized theacquiree’s identifiable asset, liabilities and contingent liabilities at their fair value at that date.The acquisition date is the date on which the acquirer effectively obtains controlof theacquiree.
As for deductible temporarydifference ofacquirers obtainedby acquirerswhichcan’t beconfirmed dueto failure of meeting the confirmation requirements of deferred income tax assets, if there is newly information proving the existenceofrelevantsituationinthedateofacquisitioninayearaftertheacquisitiondateandfinancialbenefitsof deductible temporary difference of acquirers in the date of acquisition are estimated to be realized, deferred income tax assets shall be confirmed. At the same time, goodwill shall be decreased. If goodwill is insufficient, the difference shall be reckoned into current gains and losses; except the above circumstance, reliable deferred incometaxassetsrelevanttotheCompanyshallbereckonedintocurrentgainsandlosses.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance ofAccountingStandardsInterpretationNo.5”(CaiKuai[2012]No.19)onthe“packagedeal”criterion(seeNoteIV. 5 (2)), to judge the multiple exchange transactions whether they are the “package deal”. If it belongs to the “package deal” in reference to the preceding paragraphs of this section and the Notes described in Note IV. 13
“long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individualfinancialstatementsandtheconsolidatedfinancialstatementsrelatedtotheaccountingtreatment: In the individual financial statements, the sum of the book value and new investment cost of the Company holds in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related comprehensivegainsinrelationtotheequityintereststhattheCompanyholdsintheacquireebeforetheacquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shallbetransferredintocurrentinvestmentgains).
In theCompany’s consolidated financial statements, as for the equity interests that the Company holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests thattheCompanyholdsintheacquireebeforetheacquiringdateshallbetreatedonthesamebasisastheacquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gainsontheacquiringdate).
5.Methodsforpreparingconsolidatedfinancialstatements
(1)Principlefordeterminingtheconsolidationscope
The consolidation scope for financial statements is determined on the basis of control. The term “control” is the poweroftheCompanyuponaninvestee,with whichitcantake partinrelevant activities oftheinvesteetoobtain variable returns andis able to influencethe amountofreturns.The consolidatedfinancialstatements comprise the financial statements of the Company and its subsidiaries.Asubsidiary is an enterprise or entity controlled by the Company.
The Company would reassess it if the involved relevant factors of above control definitions changed, which was causedbychangesofrelevantfactsandsituations.
(2)Methodsforpreparingtheconsolidatedfinancialstatements
The Company begins to include subsidiaries into consolidation scope from the date obtaining net assets of subsidiaries and actual control of production and operation and terminates to include subsidiaries into consolidation scope from the date losing actual control of subsidiaries. As for the disposal of subsidiaries, operating results and cashflow are included in consolidated income statement and consolidated statementof cash flow before the date of the disposal; as for current disposal of subsidiaries, opening balance of the consolidated balance sheet shall not be adjusted.As for subsidiaries increased in the combination not under the same control,
operatingresults andcashflow after thedate oftheacquisitionare includedin consolidatedincomestatementand consolidated statement of cash flow, in addition, opening balance of the consolidated balance sheet shall not be adjusted. As for subsidiaries increased in the combination under the same control and combined parties under acquisition, operating results and cash flow from the beginning of combination to the date of combination are included in consolidated income statement and consolidated statement of cash flow, in addition, opening balance oftheconsolidatedbalancesheetshallbeadjusted.
Where a subsidiary was acquired during the reporting period, through a business combination involving entities under common control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at the date that common control was established. Therefore the opening balances and the comparative figures of the consolidated financial statements are restated. In the preparationoftheconsolidatedfinancialstatements,thesubsidiary’sassets,liabilities andresultsof operationsare included in the consolidated balance sheet based on their carrying amounts; while results of operations are includedintheconsolidatedincomestatement,fromthedatethatcommoncontrolwasestablished.
All the significant inter-company balances, trading and unrealized profits shall be offset when preparing the consolidatedfinancialstatement.
If current loss shoulder by minority shareholders of a subsidy over the proportion enjoyed by minorityshareholdersinasubsidyatowners’equityatperiod-begin,itsbalancestilloffsetminorityshareholders’equity. When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Companymakes necessaryadjustments to the financialstatements of the subsidiary basedontheCompany’s own accounting period or accounting policies. Intra-Company balances and transactions, and any unrealized profit or loss arising from intra-Company transactions, are eliminated in preparing the consolidated financial statements. Unrealized losses resulting from intra-Company transactions are eliminated in the same way as unrealized gains butonlytotheextentthatthereisnoevidenceofimpairment.
When losing control right of subsidiaries because of the disposal of stock right investment or other reasons, the Companyshallrecalculateresidualstockrightinaccordancetothefairvalueinthedateoflosingcontrolright.As for remaining equity investment after disposal, the Company will re-account it according to the fair value at the date the control was lost. Any profit or loss occurred shall be recorded into the investment income during the periodoflosingcontrolright.Thenfollow-upmeasurementofremainingequityshallbearrangedinlinewith“No.2—Long-term Equity Investment” or “No.22—Affirmation and Calculation of Financial Instrument”. More detailspleaserefertoNoteIV,13“Long-termEquityInvestment”orNoteIV,9“FinancialInstrument”.
The companythrough multiple transactions stepdeals with disposalofthesubsidiary's equity investmentuntilthe loss of control;need todistinguish between equityuntil the disposalof a subsidiary's loss ofcontrol over whether thetransactionispackagedeal.Termsofthetransactiondispositionofequityinvestmentinasubsidiary,subjectto the following conditions and the economic impact of one or more of cases, usually indicates that several transactions should be accounted for as a package deal:① these transactions are considered simultaneously, or in
thecaseofmutualinfluencemade,②thesetransactionsasawholeinordertoachieveacompletebusinessresults;③ the occurrence of a transaction depends onoccurs atleastone other transaction;④ a transaction look aloneis not economical, but when considered together with other transaction is economical. If they do not belong to the package deal,eachofthemseparately,asthecaseofatransactioninaccordancewith“withoutlosingcontrolover the disposal of a subsidiary part of long-term equity investments” (see Note IV. 13. (2)④)) and “due to the disposal of certain equity investments or other reasons lost control of a subsidiary of the original” (see previous paragraph) principles applicable accounting treatment. Until the disposal of the equity investment loss of control of a subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing control of the price of each disposal entitled to share in the net assets of the subsidiary's investment corresponding to the difference between the disposals,recognizedintheconsolidatedfinancialstatementsasothercomprehensive income,lossofcontrolover thetransferredtogetherwiththelossofcontrolorlossintheperiod.
6.Classificationofjointarrangementsandaccountingtreatmentofjointoperations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The Company classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the Company enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Company is only entitledtothenetassetsofthearrangement.
TheCompany’s investments in joint ventures are measured at the equity method according to the accountingpoliciesmentionedinNoteIV.13(2)②“Long-termequityinvestmentsmeasuredattheequitymethod”.
For a joint operation, the Company, as a joint operator,recognizes the assets and liabilities that it holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to theCompany’s stake in the joint operation; recognizes the income from sale of theCompany’s share in the output of the joint operation; recognizes the income from sale of the jointoperation’s outputs according to theCompany’s stake in it; and recognizes the expense solely incurred to the Company and the expense incurred to the jointoperationaccordingtotheCompany’sstakeinit.
When the Company, as a joint operator, transfers or sells assets (the assets not constituting business, the same below)tothejointoperation,orpurchasesassetsfromthejointoperation,beforetheassetsaresoldtoathirdparty, the Company only recognizes the share of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in<The Accounting Standard No. 8 for BusinessEnterprises—AssetImpairment>, the Company shall fully recognizes the loss for a transfer or sale of assets to a joint operation; and shall recognize the loss according to its stake in the joint operation for a purchase of assets fromthejointoperation.
7.Recognitionstandardforcashandcashequivalents
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having shortholdingterm (normally will bedue within three months fromthe dayof purchase), with strongliquidity and easytobeexchangedintocertainamountofcashthatcanbemeasuredreliablyandhavelowrisksofchange. 8.Foreigncurrencybusinessesandtranslationofforeigncurrencyfinancialstatements
(1)Accountingtreatmentsfortranslationofforeigncurrencytransactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying[the spot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchange rateonthedateoftransaction].The exchangeof foreign currencyandtransactionsrelated totheforeign exchange aretranslatedatthespotexchangerate.
(2)Accountingtreatmentsfortranslationofforeigncurrencymonetaryitemsandnon-monetaryitems At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for① those relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing costs,② hedging accounting, the exchange difference related to hedging instruments for the purpose of net oversea operating investment is recorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period; exchange difference from changes of other account balance of foreign currency monetary items,③available-for-tradeisrecordedintoprofitorlossexceptforamortizedcost.
Non-monetary foreign currency items measured at historical cost shallstill be translated atthe spot exchange rate prevailing on the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at thedatewhenthefairvaluesaredetermined.Theexchangedifferencethusresultedarerecognizedinprofitorloss forthecurrentperiodorascapitalreserve.
9.Financialinstruments
The Companyrecognizes afinancialassetor liabilitywhenitbecomes apartyofthe relevantfinancialinstrument contract. Financial assets and liabilities aremeasured atfair value in initial recognition.As for the financialassets and liabilities measured at fair value of which changes are recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains and losses; and the dealing expenses on other kinds of financial assetsandliabilitiesareincludedintheamountsinitiallyrecognized.
(1)Determinationofthefairvalueofmainfinancialassetsandfinancialliabilities
Fair value referstothe pricethatamarketparticipantshallreceive for sellinganassetorshallpayfor transferring a liability in an orderly transaction on the measurement date.As for the financial assets or financial liabilities for which there is an active market, the quoted prices in the active market shall be used to determine the fair values
thereof. The quoted prices in the active market refers to the prices available from stock exchange,broker’s agencies, guilds, pricing organization and etc., which represent the actual trading price under equal transaction. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc., to determine its fairvalue.
(2)Classification,recognitionandmeasurementoffinancialassets
Thepurchaseandsaleoffinancialassetsunderthenormalways shallberecognizedandstoppedtoberecognized respectively at the price of transaction date. Financial assets shall be classified into the following four categories whentheyareinitiallyrecognized:(a)thefinancialassetswhicharemeasuredattheir fairvaluesandthevariation of which is recorded into the profits and losses of the current period, (b) the investments which will be held to theirmaturity;(c)loansandtheaccountreceivables;and(d)financialassetsavailableforsale.
① The financial assets which are measured at their fair values and the variation of which is recorded into the profitsandlossesofthecurrentperiod
Including transactional financial assets and the financial assets which are designated to be measured at their fair value when they are initially recognized and of which the variation is recorded into the profits and losses of the currentperiod;
Thefinancialassetsmeetinganyofthefollowingrequirementsshallbeclassifiedastransactionalfinancialassets： A.The purpose to acquire thesaid financialassets is mainly for selling them inthe nearfuture;B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there areobjective evidencesproving thatthe enterprisemay manage thecombination by wayof short-term profit making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering thesaidequityinstruments.
The financial assets meeting any of the following requirements shall be designated as financial assets which are measuredattheirfairvalues andthevariationofwhichisrecordedintotheprofits andlossesofthecurrentperiod for initial recognition:A. the designation caneliminate orsignificantly reducethe differenceof relevantgains and losses between recognition and measurement causing from differentbases for measurement offinancial assets; B. Theofficialwrittendocumentsfor riskmanagementandinvestmentstrategies ofthe enterprisehaveclearly stated that it shall, manage, evaluate and report to important management personnel based on the fair value, about thefinancialassetsCompanyortheCompanyoffinancialassets&liabilitieswhichthefinancialassetsarebelongto.
For the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period shall continue to be measured by fair value, gains and losses of change in fair value, dividends and interest related with these financial assets should be recorded into gains and losses of currentperiod.
② Held-to-maturityinvestment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise isabletoholduntilitsmaturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the post-amortization costs, the profits and losses that arise when such financial assets or financial liabilities are terminated from recognition, or are impaired or amortized, shall be recorded into the profits and losses of the currentperiod.
The actualinterestrate methodrefers to themethodbywhichthe post-amortizationcostsandthe interestincomes of different installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities (including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the current carrying amount of the financial assetorfinancialliability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of taking into account all the contractual provisions concerning the financial asset or financial liability (the future credit losses shall not be taken into account).and also the various fee charges, trading expenses, premiums or reduced values, etc., which are paid or collected by the parties to a financial asset or financial liability contract and which form a partoftheactualinterestrate.
③ Loansandtheaccountsreceivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the activemarket, withfixedrecoverycostorrecognizable.Financialassetsthataredefinedasloansandtheaccounts receivables by the Company including notes receivables, accounts receivables, interest receivable, dividends receivableandotherreceivablesetc..
Loans and the accounts receivables are made follow-up measurement on the basis of post-amortization costs employing the effective interest method. Gains or loss arising from the termination recognition, impairment occursoramortizationshallberecordedintotheprofitsandlossesofthecurrentperiod.
④ Assetsavailableforsales
Assets available for sales including non-derivative financial asset that has been assigned as assets available for
sales on the initial recognition and financial assets excluded those measured at fair value and of which the variation into profits and losses of the current period, they are some financial assets, loans and accounts receivables,held-to-maturityinvestment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed according to its amortized cost method, that is the initially recognized amount which deduct the principal that had been repaid, to plus or minus the accumulative amortization amount formed by the amortization between the difference of the initiallyrecognizedamountandtheamountontheduedatethatadoptedtheactualinterestratemethod,andatthe same time deduct the amount after the impairment loss happened. The cost at the period-end of the available-for-saleliabilitiesinstrumentsisitsinitialcost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensiveincome，and be carried forward when the said financialassets stoppedrecognition, thenit shallberecordedinto the profits and lossesof the currentperiod.But, the equity instrument investment which neither have quotation in the active market nor its fair value could not be reliable measured,aswellasthederivative financialassetsthatconcernwith theequityinstrumentsandshouldbe settled through handing over to its equity instruments, should take the follow-up measurement according to the cost.
Interestreceive duringtheholdingofassetsavailableforsalesandcashdividendswithdistributionannouncement byinvestedcompanies,itshallberecordedintotheprofitsandlossesofthecurrentperiod.
(3)Impairmentoffinancialassets
The Company assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired,aprovisionisprovidedfortheimpairment.
The Company carries out a separate impairment test for every financialasset which is individually significant.As for a financial asset which is individually insignificant, an impairment test is carried out separately or in the financial asset Company with similar credit risk. Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is included in the financial asset CompanywithsimilarcreditriskandtestedagainontheCompanybasis.Wheretheimpairmentlossisrecognized for an individual financial asset, it is not included in the financial asset Company with similar credit risk for an impairmenttest.
① Impairmentonheld-tomaturityinvestment,loansandreceivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow.The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery ofvalue of financialassets after impairment, andit is related with subsequentevent after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after
impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairmentlossonthereservingdate.
② Impairmentofavailable-for-salefinancialassets
Whenitjudged thatthedecreaseoffair value oftheavailable-for-sale equityinstrumentinvestmentis seriousand not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the “non-temporary decline” refers to the consecutive decline time of the fairvalueover12months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fairvalueofthecapitalreservewhichisdirectlyincludedaretransferredoutandrecordedintheprofitsandlosses for the currentperiod.Theaccumulative lossestransferred outare the balanceobtainedfrom theinitially obtained cost of the said financial asset after deducting the principals as taken back, the amortized amount, the currentfair valueandtheimpairmentlossoriginallyrecordedintheprofitsandlosses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter, there is any objective evidence proving that the value of the said financial asset has been restoredandtherestorationisobjectivelyrelatedtotheeventsthatoccuraftertheimpairmentlosswasrecognized, the originally recognized impairment loss is reversed. The impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument investment and which must be settled by delivering the said equity investment,isnotreversed.
(4)Recognitionandmeasurementoffinancialassettransfers
Where a financial asset satisfies any of the following requirements, the recognition of it is terminated:① The contractual rights for collecting the cash flow of the said financial asset are terminated;② The said financial asset has been transferred and nearly all of the risks and rewards related to the ownership of the financial asset to thetransferee;or③ Thesaidfinancialassethasbeentransferred.AndtheCompanyhasceasedits controlonthe said financial asset though it neither transfers nor retains nearly all of the risks and rewards related to the ownershipofthefinancialasset.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financialasset,anditdoesnotceaseitscontrolonthesaidfinancialasset,itrecognizestherelevantfinancialasset and liability accordingly according to the extent of its continuous involvement in the transferred financial asset.
The term "continuous involvement in the transferred financial asset" refers to the risk level that the enterprise facesresultingfromthechangeofthevalueofthefinancialasset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between theamountsofthefollowing2itemsisrecordedintheprofitsandlossesofthecurrentperiod:(1)Thebookvalue of the transferred financial asset; and (2) The sum of consideration received from the transfer, and the accumulativeamountofthechangesofthefairvalueoriginallyrecordedinothercomprehensiveincomes. If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the transferred financial asset is apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped according to their respective relative fair value, and the difference between the amounts of the following 2 items is included into the profits and losses of the currentperiod:(1)The summation of the considerationreceived from thetransfer andthe portion of the accumulative amountof changes in the fair value originally recorded in other comprehensive incomes which corresponds to the portion whose recognitionhasbeenstopped;and(2)Theamortizedcarryingamountsoftheaforesaidamounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Company needs to determine whether almost all of the risks and rewards of the financial asset ownership are transferred. If almost all of the risks andrewards ofthe financialassetownership hadbeentransferred to the transferee,derecognize the financial assets. For almost all of the risks and rewards of the financial asset ownership retained, do not end to recognize the financial assets. For which neither transfer or retain almost all of the risks and rewards of the financial asset ownership, continuously judge whether the Company retain the control of the assets, and conduct accounting treatmentaccordingtotheprincipleofmentionedinthepreviousparagraphs.
(5)Classificationandmeasurementoffinancialliabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are recorded in current gains and losses and other financial liabilities. Financial liabilities are initially recognized at their fair values.As for a financial liability measured at fair value and whose changes are recorded in current gains and losses, the relevant trading expense is directly recorded in the profits and losses for the current period. As for other financial liabilities, the relevant trading expenses are recorded in the initially recognizedamounts.
① Financialliabilitiesmeasuredatfairvaluesandwhosechangesarerecordedincurrentgainsandlosses Such financial liabilities are divided into transactional financial liabilities and financialliabilities designated to be measuredatfair valuesandwhosechanges arerecordedincurrentgainsandlossesintheinitialrecognitionunder the same conditions where such financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are
subsequently measured at their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are recorded in the profits and losses for thecurrentperiod.
② Otherfinancialliabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an activemarketandwhosefairvaluecannotbereliablymeasuredandwhichmustbesettledbydeliveringtheequity instrument, itis subsequentlymeasuredonthe basisofcosts. Otherfinancialliabilities aresubsequently measured according to the amortized cost using the actual interest rate method. Gains or losses arising from de-recognition oramortizationofthesaidfinancialliabilitiesisrecordedintheprofitsandlossesforthecurrentperiod.
③ Financialguaranteecontractandloancommitment
Forthefinancialguaranteecontractswhicharenotdesignatedasafinancialliabilitymeasuredatitsfair valueand the variation thereof is recorded into the profits andlosses ofthe currentperiod, or the loan commitment which is notdesignated as a financialliability measured atits fair value andthe variation thereof is recordedinto the gains andlosses thatwill beloanedlower thanthe marketinterestrate, whichshallbe initiallyrecognized byfairvalue, and the subsequent measurement shall be made after they are initially recognized according to the higher one of the following: a. the amount as determined according to the Accounting Standards for Enterprises No. 13– Contingencies; b. the surplus after accumulative amortization as determined according to the principles of the AccountingStandardsforEnterprisesNo.14-Revenuesissubtractedfromtheinitiallyrecognizedamount. (6)De-recognitionoffinancialliabilities
Onlywhentheprevailingobligationsofafinancialliabilityarerelievedinallorinpartmaytherecognitionofthe financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability, and at the same time recognizesthenewfinancialliability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated fromrecognition andthe considerationsit haspaid(includingthenon-cash assetsithas transferredout andthenewfinancialliabilitiesithasassumed)
(7)Derivativesandembeddedderivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is recognizedinprofitorloss.
Anembeddedderivativeis separatedfromthehybrid instrument, wherethehybridinstrumentisnotdesignatedas afinancialassetorfinancialliabilityatfairvaluethoughprofitorloss,andthetreatedasastandalonederivativeif (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivativewouldmeetthedefinitionofaderivative.IftheCompanyisunabletomeasuretheembeddedderivative separatelyeitheratacquisitionoratasubsequentbalancesheetdate,itdesignatestheentirehybridinstrumentasa financialassetorfinancialliabilityatfairvaluethroughprofitorloss.
(8)Offsettingfinancialassetsandfinancialliabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall bepresentedseparatelyinthebalancesheetandshallnotbeoffset.
(9)Equityinstruments
AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheCompanyafterdeducting all of its liabilities. The Company issues (including refinancing), re-purchases, sells or written-offs the equity instrument as the disposing of the changes of the equity. The Company not recognized the changes of the fair value of the equity instrument.The transaction expenses related to the equity transaction would be deducted from theequity.
Alltypesofdistribution(excludingstockdividends)madebytheCompanytoholdersofequityinstrumentsaredeductedfromshareholders’equity.TheCompanydoesnotrecognizeanychangesinthefairvalueofequity instruments.
10.Receivables
ThereceivablesbytheCompanyincludeaccountreceivables,andotherreceivables.
(1)Criteriaforrecognitionofbaddebts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving thatthereceivableshavebeenimpaired,animpairmentprovisionshallbemade:
1)Aseriousfinancialdifficultyoccurstotheissuerordebtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interestsortheprincipal,etc.;
3)Thedebtorwillprobablybecomebankruptorcarryoutotherfinancialreorganizations;
4)Otherobjectiveevidencesshowingtheimpairmentofthereceivables.
(2)Methodforbaddebtsprovision
① Provisionsofbaddebtsinaccountreceivablesthatisindividuallysignificant.
The Company recognized the accounts receivables which amounted to more than 2 million as the account receivablesthatisindividualsignificant.
For an account receivable that is individually significant, the asset is individually assessed for impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount,andprovisionismadeaccordingly.
② Provisions of bad debts in account receivables that individually insignificant item with similar credit risk characteristicsthathavesignificantrisk:
A.Evidenceofcreditriskcharacteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow expectedtobederivedfromtheassets.
Evidenceofportfolios:
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|-|-|
|Item|Basis|

Ageportfolios Age
Relatedpartyportfolios CompanieswithinthecombinationscopeoftheCompany
B.Provisionbycreditriskcharacteristics
During the Company impairment test, the amount of bad debts provisions is determined by the assessed result from the experience of historical loss and current economic status and the existing loss in the estimated account receivablesaccordingtothesetofaccountreceivablesandcreditriskcharacteristic.
Provisionfordifferentportfolios:
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|Item|Provision|

Ageportfolios Ageanalysismethod
Don’twithdrawthebaddebtsprovisionunlesstherelated-partylosttherepaying Relatedpartyportfolios
capability
a. Portfoliobyage analysis
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|-|-|-|
|Category|Proportionforaccountsreceivable(%)|Proportionforotherreceivable(%)|
||1.00||

||||
|-|-|-|
|Category|Proportionforaccountsreceivable(%)|Proportionforotherreceivable(%)|
||5.00||
||10.00||
||50.00||
||100.00||

③Accountsreceivablewithinsignificantamountbutbeingindividuallywithdrawnbaddebtsprovision
Whenmakingindividualimpairmenttestonaccountsreceivablewithinsignificantamountbuthighcreditrisk,the impairment loss shall be recognized based on the difference of the book values higher than the present value of future cash flows, then withdraw the bad debts provision. For example, accounts receivable of related parties; accounts receivable involving dispute or litigation, arbitration; accounts receivable having clear signs to indicate thatdebtorprobablycannotimplementobligationsofpayment.
(3)Reversalofprovisionforbaddebt
If there is any provident demonstrating recovery of the value of the accounts receivable and objectively correlating to the issues after the confirmation of the losses, the original confirmed losses would be reversed and recorded into current gains and losses. However, the reserved book value shall not exceed the amortized costs of theaccountsreceivableundernon-withdrawingimpairmentcircumstance.
11.Inventory
(1)Categoryofinventory
Inventory mainly includes raw materials, packing materials, self-made semi-manufactured products, goods in processandfinishedgoods,etc.
(2)Pricingmethodforoutgoinginventories
Inventory is priced by actual costs when it is obtained. Inventory costs include procurement costs, processing costsandothercosts.Weightedaveragemethodisusedtopriceinventorywhenitisreceivedanddelivered. (3)Recognitionbasisofnetrealizablevalueandwithdrawalmethodoffallingpriceprovisionforinventories Net realizable value in daily activity, it is referred to the estimated selling price minus the estimated selling expenses and related tax and fees in normal operating process. When confirming the net realizable value of inventories, the Company shall take the intention of inventories into consideration and influence of issues after balancesheetdate.
On the balance sheetdate, the evaluation criteria should base on the lower value between costs and net realizable
value. When net realizable value is lower than costs, falling price provision of inventories shall be made. Under
normal circumstances, the Company withdraws the falling price provision in according to individual inventory
items, but for large quantity and low-unit-price inventories, falling price provision of inventories shall be made based on the category of inventories; for those inventories that relating to the same product line that have similar purposes or end uses, are produced and marketed in the same geographical area, and cannot be practicably evaluated separately from other items in that product line, their falling price provision of inventories shall be consolidated.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any write-down of the inventories, have disappeared, the amount of write-down shall be recovered and reversed from the original amount of depreciation reserve for inventories. The reversed amount shall be included in the profits and losses of thecurrentperiod.
(4)Inventorysystemforinventoriesisperpetualinventorysystem
(5)Amortizationmethodofthelow-valueconsumptiongoodsandpackingarticles
Low-valueconsumptiongoods:one-offamortizationmethod
Packingarticles:one-offamortizationmethod
12.Dividedasassetsheldforsale
If a non-current assets could be immediately sold only according to the usual terms of selling this kind of assets under current situation, and the Group has made a decision on disposing a non-current asset, entered into an irreversible transfer agreement with the transferee and the transfer is likely to be completed within one year, the non-current asset is measured as a non-current asset held for sale, which shall not be depreciated or amortized since the date held for sale but shall be measured at the lower one of the net amounts of the book value and the fair value after deducting the disposal expense. Non-current assets held for sale include single-item assets and disposal groups. Where a disposal group is an asset group and the goodwill obtained in the business combination is apportioned to the asset group according to the “Accounting Standard No. 8 for BusinessEnterprises—Asset Impairment”, or a disposal group is an operation in such an asset group, the disposal group shall include the goodwillinthebusinesscombination.
The non-current assets of single amount and the assets among the disposing group that both be divided as assets held for sale, should be listed alone of the current assets on the balance sheet; liabilities related to the assets transfer among the disposing group which be divided as assets held for sale, should be listed alone of the current assetsonthebalancesheet.
An asset or an disposal group was classified as held for sale before, but if itcouldn’t meet the recognition conditions for held-for-sale non-current asset later, the Company shall cease to classify it as held for sale, and measure it by the lower amount of the followings: (1) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or impairment before the asset (or disposal group) being classified as held for sale; or (2) its recoverable amount on the date of the subsequent
decisionnottosell.
13.Long-termequityinvestments
The long-term equity investments of this part refer to the long-term equity investments that the Company has control, joint control or significant influence over the investees. The long-term equity investment that the Company does not have control, joint control or significant influence over the investees, should be recognized as available-for-sale financial assets or be measured by fair value with the changes should be included in the financialassetsaccountingofthecurrentgains andlosses,andpleasereferthedetailsoftheaccountingpoliciesto NotesIV.9“Financialinstrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the relevant activities of the arrangement should be decided only after the participants which share thecontrolrightmakeconsensus.SignificantinfluencereferstothepoweroftheCompanywhichcouldanticipate inthefinanceandtheoperationpolicesoftheinvestees,butcouldnotcontrolorjointly controltheformulationof thepolicieswiththeotherparties.
(1)Recognitionofinvestmentcosts
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the share of the book value of theowner’s equity of the merged enterprise, on the date of merger, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging partyshalloffsetagainst thecapitalreserve. If thecapitalreserve is insufficienttodilute, theretained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference between the initial investment cost of the long-term equity investment and sum of the book value of the long-term equity investment before the combination and the book value of the consideration of the new payment that further required on the combination date, should adjust the
capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income confirmed for the available-for-sale financial assets, should not have any accounting disposalforthemoment.
For the long-term investment required from the business combination under different control, the initial investmentcostregardedaslong-termequityinvestmentonthepurchasingdateaccordingtothecombinationcost, the combination costs shall be the sum ofthe fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company. The equities of the acquirees which respectively acquired through multipletransactionthatultimatelyformintothecombinationoftheenterprisesunderthedifferentcontrol,should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, the sum of the book value of the original held equity investment of the acquirees and the newly added investment cost should be regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. If the original held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the moment. If the original held equityinvestmentis thefinancialassetsavailableforsale,its differencebetweenthefair valueandthebookvalue as well as the accumulative changes of the fair value that include in the other comprehensive income, should transferintothecurrentgainsandlosses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the business combination by the combining party orthe purchase party,shall be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amountofequitysecuritiesandbondssecurities.
Besidesthelong-termequityinvestmentsformedbybusinesscombination,theotherlong-termequityinvestments shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Company, the fair value of equity securities issued by the Company, the agreed value of the investment contract or agreement, the fair value or original carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses, taxes andothernecessaryexpendituresdirectlyrelatedwithgainingthelong-termequityinvestmentsshallalsobe recordedinto investmentcost.Thelong-term equityinvestmentcostfor thosecouldexecute significantinfluences on the investees because of appending the investment or could execute joint control but not form as control, should be as the sum of the fair value ofthe original held equity investment and the newly added investment cost recognized according to the No.22 of Accounting Standards for BusinessEnterprises—Recognition and MeasurementofFinancialInstrument.
(2)Subsequentmeasurementandrecognitionofgainsorlosses
A long-term equity investment where the investing enterprise has joint control (except for which forms into common operators) or significant influence over the investors should be measured by equity method. Moreover, long-term equity investment adopting the cost method in the financial statements, and which the Company has controloninvestedentity.
① Long-termequityinvestmentmeasuredbyadoptingcostmethod
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity investment. The return on investment at current period shall be recognized in accordance with the cash dividend or profit announcedto distribute by the invested entity,except the announced butnot distributed cash dividend or profitincludedintheactualpaymentorconsiderationupongainingtheinvestment.
②Long-termequityinvestmentmeasuredbyadoptingequitymethod
If the initial cost of a long-term equity investment is more than theCompany’s attributable share of the fair valueoftheinvestedentity’sidentifiablenetassetsfortheinvestment,theinitialcostofthelong-termequityinvestment may not be adjusted. If the initial cost of a long-term equity investment is less than theCompany’s attributable share of the fair value of the investedentity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; correspondingreducethe bookvalue ofthe long-term equityinvestmentaccordingtoprofits whichbedeclaredto distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’equity except for theprofits distributionoftheinvestees,shouldadjustthebookvalueofthelong-termequityinvestmentaswellas include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after itadjusts the netprofits ofthe invested entity.If the accountingpolicies adopted bytheinvesteesisnotaccordwiththatoftheCompany,shouldbeadjustedaccordingtotheaccountingpoliciesof the Company and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. For the transaction happened between the Company and associated enterprises as well as joint ventures, if the assets launched or sold not form into business, the portion of the unrealized gains and losses of the internaltransaction, which belongs to the Company according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the
basis. But the losses of the unrealized internal transaction happened between the Company and the investees whichbelongstotheimpairmentlossesofthetransferredassets,shouldnotbeneutralized.Theassetslaunchedby the Company to the associated enterprises or the joint ventures if could form into business, the long-term equity investment without control right which acquired by the investors, should regard the fair value of the launched business as the initial investment cost the newly added long-term equity investment, and for the difference between the initial investment cost and the book value of the launched business, should be included into the current gains and losses with full amount. The assets sold by the Company to the associated enterprises or the jointventuresifcouldformintobusiness,thedifferencebetweentheacquiredconsiderationandthebookvalueof the business should be included in the current gains and losses with full amount. The assets purchased by the Company to the associated enterprises or the joint ventures if could form into business, should be accountingdisposedaccordingtotheregulationsofNo.20ofASBE—BusinessCombination,andshouldberecognizedgains orlossesrelatedtothetransactionwithfullamount.
TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseuntilthebookvalue ofthelong-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However,if the Company has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investmentlossesatcurrentperiod.Iftheinvestedentityrealizesanynetprofitslater,theCompanyshall,afterthe amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizingitsattributableshareofprofits.
For the long-term equity investment held by the Company before the first execution of the new accounting criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is debit difference of the equity investmentrelatedtotheinvestment,shouldbeincludedinthecurrentgainsandlossesaccordingtotheamountof thestraight-lineamortizationduringtheoriginalremainedperiod.
③ Acquiringsharesofminorityinterest
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if thecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted.
④ Disposaloflong-termequityinvestment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be recorded intoowners’ equity; where the Company losses the controlling right by disposing part of long-term equity investment on such subsidiaries, it shall treated in accordance with the relevant accounting policies in Note IV. 5 (2) “Method on
preparationofcombinedfinancialstatements”.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equityanditsactualpaymentgainedshallberecordedintocurrentprofitsandlosses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded intoowners’ equity should adoptthe same basis of the accounting disposalof the relevant assets or liabilities directly disposed by theinvestees accordingtothecorrespondingproportion.Theowners’equity recognized owning tothe changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distributionoftheinvestees,shouldbetransferredintothecurrentgainsandlossesaccordingtotheproportion. For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforeacquiringthecontrolof the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the current gains and losses according to the proportion; the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the netassets ofthe investees which recognized by adopting the equity methodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion. For those the Company lost the control of the investees by disposing part of the equity investment as well as the remainedequityafterdisposalcouldexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchange to measure by equity method when compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees, should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of financial instrument, and its difference between the fair value and book value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the recognition and measurement standards of financial instrument before the Companyacquiredthecontroloftheinvestees,shouldexecutetheaccountingdisposalbyadoptingthesamebasis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control of them, while the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the disposed remained equity which adopted the equity method for measurement, the other comprehensive income and the otherowners’equity should be carried forward according totheproportion;forthedisposedremainedequitywhichchangedtoexecutetheaccountingdisposalaccordingto
therecognition andmeasurementstandardsoffinancialinstrument, theothercomprehensive incomeandtheotherowners’equityshouldbecarriedforwardinfullamount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed remained equity should change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair value and book value on the date lose the control right should be included in the currentgains and losses. For the other comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the equity method for measurement, while for theowners’ equity recognized owning to the changes of the otherowner’s equity except for the netgains andlosses, other comprehensive income and the profits distribution of the investees, should be transferred into the current investment income with full amount when terminate adopting the equitymethod.
The Company respectively disposes the equity investment of the subsidiaries through multiple transactions until lose the control right, if the above transactions belongs to the package deal, should execute the accounting disposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until lose the control right, while the difference between each expenses of the disposal and the book value of the long-term equity investment in accord with the disposed equity before losing the control right, should firstly be recognized as other comprehensive income then be transferred into the current gains and losses of losing the control right alonguntilthetimewhenloseit.
14.Investmentproperty
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes leased or ready to transfer after capital appreciation land use rights and leased buildings. Besides, for the idle constructions held by the Company for operation and lease, if the Board of Directors (or the similar institutions) made the written resolutions which affirmatively disclosed to use which for operation andlease with the intention wouldnotchangeintheshortterm,shouldalsobepresentedastheinvestmentproperty.
Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate are likelytoflowabouttheeconomicbenefitsoftheassetanditscostcanbemeasuredreliably,isincludedinthecost of investmentrealestate. Other subsequentexpenditures ofgains orlosses should berecordedin the currentgains andlosseswhenoccurred.
The Company uses the cost model for subsequent measurement of investment property, and in accordance with thedepreciationoramortizationofbuildingsorlanduserightspolicy.
InvestmentpropertyimpairmenttestmethodandimpairmentaccrualmethoddescribedinNoteIV.20“Long-term assetsimpairment”.
Occupiedrealestateforinvestmentpropertyorinvestmentpropertyistransferredto owner-occupiedrealestateor
stockconversionastherecordedvalueaftertheconversion,accordingtothebookvaluebeforetheconversion. Fromthedateoftransference,investmentpropertiesshallbetransferredintofixedassetsorintangibleassetswhen investment properties transfer into self-owned properties. From the date of transference, fixed assets or intangible assets shall be transferred into investment properties when the intention of self-owned properties changes to be earning rents. Upon transference, investment properties using cost modeling shall use its book value before transference as the entry value after transference; investment properties using fair value shall use its fair value in thedateoftransferenceastheentryvalueaftertransference.
As for investment property disposed or perpetually out of use, and estimated without economic benefits from the disposal, confirmation shall be terminated. Disposal consideration of the investment property after sale, transference, discard or damage deducting its book value and relating taxes shall be recorded into current gains andlosses.
15.Fixedassets
(1)Recognizedstandardoffixedassets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of producing commodities, rendering labor service, renting or business management; and their usefullifeisinexcessofonefiscalyear.
(2)Depreciationmethodsoffixedassets
The initial measurement of a fixed asset shall be made at its cost after considering the effect of expected discard expenses.TheGroupshallwithdrawthedepreciationoffixedassetsbyadoptingthestraight-linemethodsincethe second month of its useful life. Useful life, expected net salvage value (refers to the expected amount that the Group may obtain from the current disposal of a fixed asset after deducting the expected disposal expenses at the expirationofitsexpectedusefullife)andannualdepreciationrateofeachfixedassetsareasbelow:
||||||
|-|-|-|-|-|
|Category of fixedassets|Method|Usefullife(Y)|Expected net salvagevalue(%)|Annual deprecation(%)|
||Averagemethodofusefullife|8.00-35.00|3.00-5.00||
||Averagemethodofusefullife|5.00-10.00|3.00-5.00||
||Averagemethodofusefullife|4.00|3.00||
||Averagemethodofusefullife|3.00|3.00||

Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of
theassetlesstheestimatedcostsofdisposalamount, assumingtheassetisoutofusefullife andstatetheexpected
servicelifeintheend.
(3)Measurementandrecognitionoffixedassetsimpairment
ImpairmentandprovisionsoffixedassetsaredisclosedonNoteIV.20“Long-termassetsimpairment”.
(4)FixedAssetsunderfinanceleases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Titlemayormaynoteventuallybetransferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixedassetsownedbytheCompany.Ifitcanbereasonablydeterminedthattheownershipoftheleasedassetscan be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the leasedassetsaredepreciatedovertheshorteroftheleasetermsandtheusefullivesoftheleasedassets.
(5)Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Companyandthecostoftheassetcanbemeasuredreliably.Subsequentexpenditureincurredforafixedassetthat meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be recognizedinprofitorlossintheperiodinwhichtheyareincurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction ofcarryingvalueandrelatedtax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixedassetatleastonanannualbase.Anychangeisregardedaschangeinaccountingestimates.
16.Constructioninprogress
Construction in progress is measured at its actual cost.The actual costs include various construction expenditures during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs.Constructioninprogressistransferredtoafixedassetwhenitisreadyforintendeduse.
Testing method for provision impairment of construction in progress and accrued method for provision impairmentpleaserefertoNoteIV.20“Long-termassetsimpairment”.
17.Borrowingcosts
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as an expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment property and inventories, etc.) that necessarily take a substantial period of time for acquisition, construction or production
togetreadyfortheirintendeduseorsale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed fundsbeforebeingusedontheassetoranyinvestmentincomeonthetemporaryinvestmentofthosefunds.Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determined by applying a weighted average interest rate to the weighted average of the excess amounts of accumulatedexpenditureontheassetoverandabovetheamountsofspecific-purposeborrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognizedinprofitorlossintheperiodinwhichtheyareincurred.
Assetsqualifiedforcapitalizationarethefixedassets,investmentpropertiesorinventorieswhichneedalongtime ofconstructionorproductionactivitiesbeforereadyforintendedusedorsale.
Capitalizationofborrowingcostsis suspendedduringperiodsinwhichtheacquisition,constructionorproduction of a qualifying assetis interrupted by activities other thanthose necessary to prepare the assetfor its intendeduse or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the current period until the acquisition, construction or production is resumed.
18.Intangibleassets
(1)Intangibleasset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or controlledbyenterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked in theprofitorlosswhentheyoccur.
Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such as plants that are developed and constructed by the Company, and relevant land use rights and buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased are allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the land userightsandbuildingsshouldaccountedforasfixedassets.
Whenanintangible assetwith a definiteusefullife is available for use,its originalcostless netresidualvalueand any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. An intangibleassetwithanindefiniteusefullifeisnotamortized.
For anintangible assetwith adefinite usefullife, theCompanyreviews theusefullife andamortizationmethodat the end of the period, and makes adjustment when necessary.An additional review is also carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize accordingtothepolicyofintangibleassetswithdefiniteusefullife.
(2)Researchanddevelopmentcost
Costofresearchanddevelopmentisdistinguishedintotheresearchphaseandthedevelopmentphases.
Costoftheresearchphaseisrecognizedintheprofitorlossintheperiodinwhichitisincurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in theperiodinwhichitisincurred:
① itistechnicallyfeasibletocompletetheintangibleassetsoastouseitorsellit;
② itisclearlyinventedtocompletetheintangibleassetinordertouseitorsellit;
③ it is probable that the intangible assetis capable ofgenerating future economic benefit, suchas the market for the product produced by the intangible asset or the intangible asset itself, it is objectively evidential that the intangibleassetiseconomicallyusableifitisgoingtobeusedinternally;
④ therearesufficienttechnical,financialandotherresourcesto completetheintangible assetandtouseitorsell it;
⑤ thecostofthedevelopmentoftheintangiblecanbemeasuredreliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit orlossfortheperiodinwhichitisincurred.
(3)Impairmentofintangibleassets
ImpairmentandprovisionsofintangibleassetsaredisclosedonNoteIV.20“Long-termassetsimpairment”. 19.Long-termdeferredexpenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a periodduringwhichanexpenseisexpectedtobringeconomicbenefitstoanentity) whichis longerthanoneyear and which includes at least part of the reporting period during which the expense was incurred and subsequent reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense incurredandallocatedineachmonthofthebeneficialperiodusingthestraightlinemethod.
20.Long-termassetsimpairment
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with definite useful lives, investment properties measured by cost methods and long-term equity investment on subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all non-financialassetsatthebalancesheetdate,andimpairmenttestiscarriedoutandrecoverablevalueisestimated
if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets notreadyforuse,aretestedforimpairmentannuallyregardlessofindicatorsofimpairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is lower than the book value. The recoverable value is the higher of estimated present value of the future expected cashflowsfromtheassetandnetfairvalueoftheassetlessdisposedcost.Thefairvalueofassetisdeterminedbythesalesagreementpricewithinanarm’slengthtransaction.Incasethereisnosalesagreement,butthereisactive marketofassets,thefairvaluecanbedeterminedbythesellingprice.Ifthereisneithersalesagreementnoractive market, the fair value of the asset can be estimated based on the best information obtained. Disposal expenses include expenses related to the legislation, taxes, transportations and the direct expense for the asset to be ready for sale. When calculating the present value of expected future cash flows from an asset or asset Group, the management shall estimate the expected future cash flows from the asset or asset Group and choose a suitable discountrateinordertocalculatethepresentvalueofthosecashflows.
Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of individual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subject assetbelongs.AssetGroupisthesmallestsetofassetsthatcanhavecashflowinindependently.
The Company determines whether goodwill is impaired at leaston anannual basis.This requires an estimation of the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected futurecashflowsfromtheassetGroupsorsetsofassetGroupsandalsochooseasuitablediscountrateinorderto calculate the present value of those cash flows. Once the loss from above asset impairment is recognized, the recoverablepartcannotbereservedinthesubsequentperiods.
21.Payroll
The payroll of the Company mainly includes the short-term employee compensation, welfare after demission, demissionwelfareandotherlong-termemployeebenefits.Ofwhich:
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Groupshouldberecognized as liabilities andis included inthe currentgains andlosses orrelevant assets cost.Of whichthenon-monetarybenefitsshouldbemeasuredaccordingtothefairvalue.
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includes basic endowmentinsurance,unemployment insuranceandannuity etc, andthecorresponding payable anddeposit amountshouldbeincludedintotherelevantassetscostorthecurrentgainsandlosseswhenhappen.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor
contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan orlayoffproposalowningtorelievethelaborrelationshipandthedatetheGrouprecognizesthecostrelatedtothe reorganizationofthepaymentofthedemissionwelfare andatthesame timeincludeswhichinto thecurrentgains and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report within12months,shouldbedisposedaccordingtootherlong-termpayrollpayment.
The insideemployee retirementplanis treated byadoptingthesame principlewith the abovedismiss ionwelfare. The group would recorded the salary and the social security insurance fees paid and so on from theemployee’s service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the conditionthattheymeettherecognitionconditionsofestimatedliabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be accounting disposed according to the setting drawing plan, while the rest should be disposed according to the settingrevenueplan.
22.Estimatedliabilities
Recognitionofaccruedliabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee on quality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, and meet the follow condition simultaneously would determined as liabilities: (1)This obligation is currentobligation oftheCompany;and,(2)Theperformanceofthisobligationwillprobablycauseeconomicbenefitsoutflowofthe Company;and,(3)Theamountofthisobligationcanbereliablymeasured.
On balance sheet date the Company performed relate obligation that consider risk, incertitude, time value of currency of contingency factor. According to the best estimate of the expenditure required to settle the present obligationforestimatedliabilitiesmeasured.
If the expenditure required to settle the liability is expected to be fully or partly compensated by a third party, to determine the amount of compensation will be received at the basic, separately recognized as an asset, and is recognizedintheamountofcompensationdoesnotexceedthecarryingvalueofestimatedliabilities.
23.Revenues
(1)Commoditysalesrevenues
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the
relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measuredinareliableway.
In theCompany’s daily accounting practices, as for the domestic sales, when the products had shipped out of the library and had handed over to the buyers, and the major risk as well as the reward on the ownership of the products had transferred to them, without keeping any continued management right which commonly related to theownershipnorcarryingoutanyeffectivecontroloftheproductswhichhadbeensold,andatthesametimethe amounts received could be calculated reliably,and the relevant economic interest may flow into the enterprise, as well as the relevant costs which had occurred or is going to occur could be calculated reliably, should recognize the implementation of the commodity sales revenues. As for the overseas sales, should recognize the implementationoftherevenueswhenthegoodshadmadeshipmentandgainedthecustomsexportdeclaration. (2)Revenuesfromprovidinglaborservices
Ifanenterprisecanreliablyestimatetheoutcomeofatransactionconcerningthelaborservicesitprovides,itshall recognize the revenue from providing services employing the percentage-of-completion method on the balance sheet date. The percentage-of-completion is determined by the proportion of the costs incurred against the estimatedtotalcosts.
Theoutcome ofatransactionconcerningtheprovidingoflaborservicescanbemeasuredinareliableway,means that the following conditions shall be met simultaneously:① The amount of revenue can be measured in a reliable way;② The relevant economic benefits are likely to flow into the enterprise;③ The schedule of completion under the transaction can be confirmed in a reliable way;④ The costs incurred or to be incurred in thetransactioncanbemeasuredinareliableway.
If theCompanycannotmeasuretheresultof atransactionconcerningtheproviding of laborservices in areliable way, it shall be conducted in accordance with the following circumstances, respectively: If the cost of labor services incurred is expected to be compensated, the compensation amount for the cost of labor services shall be recognized as the revenue from providing labor service, and the cost of labor service incurred shall be as the currentcost;ifthecostoflaborservicesincurredisnotexpectedtocompensate,norevenuefromtheprovidingof laborservicesmayberecognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing of labor services, if the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as selling goods.
(3)Royaltyrevenue
Inaccordancewithrelevantcontractoragreement,theamountofroyaltyrevenueshouldberecognizedasrevenue
onaccrualbasis.IntheCompany’sdailyaccountingpractices,itshouldbecalculatedandrecognizedaccordingto thechargeabletimeandmethodsinaccordancewiththerelevantcontractoragreement.
(4)Interestrevenue
InaccordancewiththetimethatothersusetheGroup’smonetarycapitalandtheactualrate.
24.Governmentsubsidies
Governmentgrants are transferofmonetaryassets andnon-monetaryassets fromthe governmentto theCompany at no consideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grant related to the assets and grants related to the income. The government grants which were acquired by the Company will be used to purchase or otherwise form become long-term assets will be defined as grant related to the assets; the others will be defined as grants related to the income. If the files have not clearly defined government grants objects, it will be divided in the following manner compartmentalize the grants into rant related to the assets and grants related to the income: (1) government documents defined specific projects targets, according to the relative proportion of the budgets of specific items included the expenditure of to form assets and the expenditure will be charged into expense to be divided, the division ratio required at each balance sheet date for review and make changes if necessary; (2) government documents to make a general presentation purposesonly,doesnotspecifyaparticularproject,asgrantsrelatedtotheincome.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a nominalamountisrecognizedimmediatelyinprofitorlossfortheperiod.
When received the government grants actually, recognized and measured them by the actual amount received. However, there is strong evidence that the end of fiscal support policies able to meet the conditions specified in the relevant funds are expected to be able to receive financial support, measured at the amount receivable. Government grants are measured according to the amount receivable shall also comply with the following conditions: (1) grants receivable of government departments issued a document entitled have been confirmed, or could reasonably estimated in accordance with the relevant provisions of its own official release of financial resources management approach,and the expected amount ofa materialuncertainty which doesnotexist; (2) it is based on the local financial sector to be officially released and financial support for the project and its financial fundmanagementapproachvoluntarilydisclosedinaccordancewiththeprovisionsof“RegulationsonDisclosure Government Information”, and the management approach should be (inclusive of any compliance business conditionsmayapply), andnotspecificallyformulatedforspecificbusinesses;(3)relatedgrants approvalhasbeen clearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that will be received within the prescribed period with the a reasonable assurance; (4) according to the specific circumstancesoftheCompanyandthesubsidymatter,shouldsatisfytheotherconditions(ifany).
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss
over the useful life of the related asset. For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurredin subsequent period,the grant is recognized as deferredincome, and recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a compensation for related expenses or losses alreadyincurred, the grantis recognized immediately in profitorloss fortheperiod.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the period. If there is no related deferred income, the repayment is recognized immediately in profit or loss for the period.
25.Deferredtaxassetsanddeferredtaxliabilities
(1)Incometaxforthecurrentperiod
At the balance sheetdate, current income tax liabilities or assets for the current and prior periods are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for income tax expenses in the current period is based on the taxable income according to the related tax laws after adjustmenttotheaccountingprofitofthereportingperiod.
(2)Deferredincometaxassetsandliabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance sheetliabilitymethod.
For temporarydifferences associatedwith the initialrecognition ofgoodwill andthe initial recognition ofanasset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) atthe time of transaction, no deferred tax asset or liability is recognized. For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax liability related is recognized except where the Company is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. All deferred income tax liabilities arising from taxable temporary differences except the onesmentionedabovearerecognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a transaction(notabusinesscombination)thataffectsneithertheaccountingprofitnortaxableprofits(ordeductible losses) atthetimeoftransaction,nodeferredtaxassetis recognized.For taxable temporarydeductible differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, orit is not probable to obtain taxable income which can be used for the deduction of the temporary difference in the future. Except mentioned above, the Company recognizes other deferred income tax assets that can deduct
temporary differences to the extent that it is probable that taxable profits will be available against which the deductibletemporarydifferencescanbeutilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary differences are recognized to the extent that it is probable that taxable profits will be available against which the deductibletemporarydifferencescanbeutilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws, whichareexpectedtoapplyintheperiodinwhichtheassetisrealizedortheliabilityissettled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax assets to be used, the Company reduces the carrying amount of deferred tax assets.The amount of such reduction isreversedwhenitbecomesprobablethatsufficienttaxableprofitwillbeavailable.
(3)Incometaxexpenses
Incometaxexpensesconsistofcurrentincometaxanddeferredincometax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or loss in current accounting period, except expense for income tax of the current period and deferred income tax that booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose from businesscombination.
(4)Incometaxoffset
When we have the legal right, and have intended to, to make settlement with net amount or through the asset acquisition and liability fulfillment simultaneously, the Company shall present the net value from the offset betweencurrentincometaxassetandcurrentincometaxliabilityinthefinancialstatement.
When the Company hasthe legal right to make a settlement with the currentincome tax assetand currentincome tax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxable subjectunderthesametaxpayer,orrelatedtodifferenttaxablesubject,buttheintensionofnetvaluesettlementin regard of the current income tax asset and current income tax liability, the Company shall present net value after theoffsetofdeferredincometaxassetanddeferredincometaxliability.
26.Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Titlemayormaynoteventuallybetransferred.Anoperatingleaseisaleaseotherthanafinancelease.
(1)TheCompanyasLesseeunderoperatingLease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, andeitherincludedinthecostoftherelatedassetorchargedtoprofitorlossforthecurrentperiod.Thecontingent rentsshallberecordedintheprofitorlossoftheperiodinwhichtheyactuallyarise.
(2)TheCompanyasLeaserunderoperatingLease
Lease income from operating leases shallbe recognized by the leaser in profitor loss on a straight-line basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is moresystematicandrational,thatbasismaybeused.Contingentrentsarecreditedtoprofitorlossintheperiodin whichtheyactuallyarise.
(3)TheCompanyasLesseeunderfinancingLease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the long-term payables;the difference betweenthe recorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the lease agreement shall be added to the amount recognized for the leased asset. The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into long-term liabilities and long-term liability withinoneyearforpresentation.
Unrecognizedfinancechargeshallbecomputedbytheeffectiveinterestmethodduringtheleaseterm.Contingent rentshallbebookedintoprofitorlosswhenactuallyincurred.
(4)Inthecaseofthelessorofafinancinglease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception oftheleaseandtheinitialdirectcostsis recordedasafinanceleasereceivable,andunguaranteedresidualvalueis recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance income, which is amortized using the effective interest rate method over each period during the lease term. Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term liabilitywithinoneyearforpresentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent rentshallbecreditedintoprofitorlossinwhichactuallyincurred.
27.Changesinmainaccountingpoliciesandestimates
(1)Changeofaccountingpolicies
Therewasnoanychangeofaccountingpolicies
(2)Changeofmainaccountingestimates
Therewasnoanychangeofmainaccountingestimates.
28.Significantaccountjudgmentandestimates
The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in thefinancialstatementsthatcannotbemeasuredaccurately,duetotheinternaluncertaintiesofoperationactivities. These judgments, estimates and assumptions are based on historical experiences of theCompany’s management
as wellas otherfactors thatareconsideredto berelevant.These judgments,estimates andassumptionsmay affect value of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency at the balance sheet date. However, the result derived from those uncertainties in estimates may lead significant adjustmentstothecarryingamountsoftheassetsorliabilitiesaffectedinthefuture.
The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern. Wherethechangesinaccountingestimatesonlyaffecttheperiodwhenchangesoccurred,andtheyarerecognized within the same period. Where the changes in accounting estimates affect both current period and future period, thechangesarerecognizedwithintheperiodofchangeandfutureperiod.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment, estimatesandassumptionsoverthevalueofitemsinthefinancialstatements:
(1)Classificationoflease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the Accounting Standard for Business Enterprises No.21—Leasing. The management shall make analysis and judgmentonwhethertherisks andrewards relatedtothetitle ofleasedassetshasbeentransferredtotheleaser,or whethertheCompanyhassubstantiallyheldtherisksandrewardsrelatedtotheownershipofleasedassets. (2)Allowanceforbaddebt
According to the relevant accounting policies of the Company in receivables, allowance method is used for baddebt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of receivables. Assurance of receivable impairment needs judgments and estimations from the management. The difference between actual results and original estimates shall have impact on the carrying amount of receivables andreceivablebaddebtprovisionsorthereverseduringthechangeofestimation.
(3)Impairmentofinventories
The Company measures inventories by the lower of cost and realizable net value according to the accounting policies in regard of inventories and provisions for decline in value of inventories are made if the cost is higher than their net realizable value and obsolete and slow-movement inventories. Inventories decline in value to net realizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness.Netrealizablevalueisdetermined onthebasisofclearevidenceobtained,andtakes intoconsiderationthepurposesofholdinginventoriesandeffect of post balance sheetevents.The differencebetween the actualresult and the originalestimates shall have impact on reverse of the carrying amount of the inventories and their decline in value or provisions during the period of change.
(4)Thefairvalueoffinancialinstruments
For a financial instrument which has no active market, the Company establishes fair value by using various valuationmethods,includingofdiscountedcashflowanalysis model.TheCompanyneedstoestimate future cash flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such assumptionshaveuncertaintiesandtheirchangesshallhaveimpactonthefairvalueoffinancialinstruments.
(5)Impairmentoffinancialassetsavailable-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions of management,todeterminewhetherimpairmentlossis recognizedintheincomestatement.Theprocessofmaking the judgments and assumptions, the Company is required to assess the extent and duration of the fair value of the investment below cost, as well as investment financial position and short-term business outlook, including industryconditions,technologicalchange,thecreditrating,defaultratesandcounterpartyrisk.
(6)Impairmentofnon-financial,non-currentassets
The Company assesses whether there are any indicators of impairment for all non-current assets other than financial assets at the balance sheet date. For an intangible asset that has indefinite useful life, impairment test is made in addition to the annual impairment test if there is any indication of impairment. For non-current assets otherthanfinancialassets,impairmenttestismadewhenthereisanyindicationthatitsaccountbalancecannotbe recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and presentvalueofthefuturecashflowsexpectedtobederivedfromtheasset.
Net value between the difference of fair value and disposal cost is determined by reference of the price of similar product in a sale agreement in anarm’s length transaction or an observable market price less the additional cost directlyattributabletothedisposaloftheasset.
Whenestimatingthepresentvalueoffuturecashflow,significantjudgmentsaremadeovertheasset’sproduction, selling price and relevant operating expenses, and discount rate used to calculate present value. All available materials that are considered to be relevant shall be used in the estimation of recoverable value. These materials include estimations of production, selling price and operating expenses based on reasonable and supportable assumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of present value of future cash flow of the assets or assets group where goodwill has been allocated. The Company shall makes estimation on the future cash flow derived from assets or assets group and determine an appropriate discount rate for the presentvalue of future cash flow when the estimation of present value of future cash flow is made.
(7)Depreciationandamortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line method over their useful lives after taking into account residual value. The useful lives are regularly reviewed to determine the depreciation and amortization costs charged in each reporting period. The useful lives are determined based on historical experience of similar assets and the estimated technical changes. If there is an indication thattherehasbeenachange inthefactorusedtodetermine thedepreciationor amortization,therate of depreciationoramortizationisrevised.
(8)Deferredtaxassets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This requires the management of the Company make a lot of judgments over the estimation of time period, value and taxplanningstrategieswhenfuturetaxableprofitincurssothatthevalueofdeferredtaxassetscanbedetermined. (9)Incometax
There are some transactions where ultimate tax treatments and calculations have uncertainties in theCompany’s everyday operation. If it is possible for any item to make expenditure before tax that needs to be approved from competent tax authorities. If there is any difference between finalized determination value and their initial estimations value, the difference shall have the impact on the income tax and deferred income tax of the current periodduringthefinaldetermination.
(10)Accruedliabilities
According with the terms of the contract, the existing knowledge and historical experience, product quality assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized as accrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likely to lead to the outflow of economic benefits of the Company, the Company or the best estimate of the current obligation expenditure required recognized as a accrued liabilities. Recognition and measurement of accrued liabilities is dependent on the judgment of management. In the processing of judgment the company needed to appraisetherelatedrisks,uncertaintiesandtimevalueofmoneyandotherfactors.
V.Taxation
1.Maintaxesandtaxrate
|||
|-|-|
|Categoryoftaxes|Particularsaboutspecifictaxrate|
|VAT||
|Consumptiontax||
|Urbanmaintenanceandconstructiontax||
|Educationexpensessurcharge||
|Localeducationsurcharge||
|Enterpriseincometax||

Tableofincometaxrateofdifferententities:
|||
|-|-|
|Nameoftheentities|Incometaxrate|

AnhuiLongruiGlassCo.,Ltd 15%
|||
|-|-|
|Nameoftheentities|Incometaxrate|

AnhuiRuisiweierTechnologyCo.,Ltd 15% BozhouGujinRubbishRecyclingCo.,Ltd 10% AnhuiGujingDistilleryCompanyLimitedanditsother
25% subsidiaries
2.TaxPreferenceandApproval
(1) OnDecember 5,2016,thecompany’ssubsidiaryAnhuiLongruiGlass Co.,Ltd. was attestedtobequalifiedas ahi-techenterpriseandobtainedHi-techEnterprise Certificate(NO.:GR201634001204)whichshallbevalidin3years.Correspondingcorporateincometaxwasalsopaidattherateof15%fromJanuarytoJunein2017. (2) On October 21, 2016, thecompany’s subsidiary Anhui Swisse Will Science& Technology Co., Ltd. was attestedtobequalifiedasahi-techenterpriseandobtainedHi-techEnterpriseCertificate(NO.:GR201634000832)whichshallbevalidin3years.Correspondingcorporateincometaxwasalsopaidattherateof15%fromJanuary toJunein2017.
VI.NotesonmajoritemsinconsolidatedfinancialstatementsoftheCompany
The following notes (including notes on major items in consolidated financial statements of the Company), unless otherwise noted, the opening period was January 1, 2017, the closing period was June30,2017.
1. Monetaryfunds
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||286,750.06||
||683,334,584.32||
||5,069,090.06||
|Total|688,690,424.44||
||0.00||

 Note: At the end of this period, the amount of other monetary fund frozen for property preservation due to any litigation was RMB5,060,000.00;there’s no limitation and restriction on the usage and remittance of funds depositedabroadduetopledgeandmortgageetc.
2.Financialassetsmeasuredbyfairvalueandthechangesbeincludedinthecurrentgainsandlosses
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||101,573.76||

||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||101,573.76||
|Total|101,573.76||

 3.Notesreceivable
(1)Notesreceivablelistedbycategory
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||1,182,682,094.60||
|Total|1,182,682,094.60||

 (2)Notesreceivablepledgedattheperiod-end
|||
|-|-|
|Item|Amount|

Bankacceptancebill 30,050,000.00 Total 30,050,000.00 (3) Notesreceivable whichhadendorsedbytheCompanyorhaddiscountedandhadnotdueonthebalancesheet dateattheperiod-end
||||
|-|-|-|
|Item|Amountofrecognitionterminationattheperiod-end|Amountofnotterminatedrecognitionattheperiod-end|
||214,635,061.84||
|Total|214,635,061.84||

 4.Accountsreceivable
(1)Accountsreceivableclassifiedbycategory
|||||||
|-|-|-|-|-|-|
|Category|Closingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
||16,185,223.12|100.00|1,483,402.53|9.17||

|||||||
|-|-|-|-|-|-|
|Category|Closingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|Total|16,185,223.12|100.00|1,483,402.53|9.17||

 (Continued)
|||||||
|-|-|-|-|-|-|
|Category|Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
||14,155,948.37|100.00|1,868,685.49|13.20||
|Total|14,155,948.37|100.00|1,868,685.49|13.20||

 Inthegroups,accountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Accountreceivable|Baddebtprovision|Withdrawalproportion(%)|
||14,366,274.57|186,545.01||

|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Accountreceivable|Baddebtprovision|Withdrawalproportion(%)|
||13,294,218.03|132,942.18||
||1,072,056.54|53,602.83||
||254,712.64|25,471.26||
||585,699.30|292,849.65||
||978,536.61|978,536.61||
|Total|16,185,223.12|1,483,402.53||

 (2)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingPeriod
ThereversedamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB385,282.96. (3)ParticularsoftheActualVerificationofAccountsReceivableduringtheReportingPeriod
TherewasnoactualverificationofaccountsreceivableduringtheReportingPeriod
(4)Top5oftheClosingBalanceoftheAccountsReceivableCollectedAccordingtotheArrearsParty The total amount of top five of account receivable of closing balance collected by arrears party was RMB5,932,674.70,36.65% of total closing balance of account receivable, the relevant closing balance of baddebtprovisionwithdrawnwasRMB95,286.24.
5.Prepayment
(1)ListbyAgingAnalysis
||||||
|-|-|-|-|-|
||Closingbalance||Openingbalance||
||Amount|Proportion|Amount|Proportion|
||74,630,643.30|97.15|73,928,796.23||
||1,365,299.40|1.78|853,434.06||
||824,998.50|1.07|1,991.30||
||485.00|0.00|0.00||
|Total|76,821,426.20|100.00|74,784,221.59||

 (2)Top5oftheclosingbalanceoftheprepaymentcollectedaccordingtotheprepaymenttarget
The total amount of top five of account receivable of closing balance collected by arrears party wasRMB37,469,605.21,48.77%oftotalclosingbalanceofaccountreceivable.
6.InterestReceivable
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|

||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||8,363,178.08||
|Total|8,363,178.08||

 7.OtherAccountsReceivable
(1)OtherAccountsReceivableDisclosedbyCategory
|||||||
|-|-|-|-|-|-|
|Category|Closingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
||41,342,938.53|72.61|41,342,938.53|100.00||
||15,596,422.43|27.39|923,318.63|5.92||
||0.00|0.00|0.00|0.00||
|Total|56,939,360.96|100.00|42,266,257.16|74.23||

（Continued）
|||||||
|-|-|-|-|-|-|
|Category|Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
||41,342,938.53|78.14|41,342,938.53|100.00||
||11,564,231.44|21.86|798,834.41|6.91||
||0.00|0.00|0.00|0.00||

|||||||
|-|-|-|-|-|-|
|Category|Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|Total|52,907,169.97|100.00|42,141,772.94|79.65||

①Otherreceivablewithsinglesignificantamountandwithdrawalbaddebtprovisionseparatelyatendofperiod
||||||
|-|-|-|-|-|
|Otheraccountsreceivable(unit)|Closingbalance||||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|Withdrawalreason|
||11,840,500.00|11,840,500.00|100.00||
||29,502,438.53|29,502,438.53|100.00||
|Total|41,342,938.53|41,342,938.53|100.00|--|

②Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|
||14,303,346.78|169,982.80||
||13,629,613.55|136,296.14||
||673,733.23|33,686.66||
||93,034.55|9,303.46||
||912,017.45|456,008.72||
||288,023.65|288,023.65||
|Total|15,596,422.43|923,318.63||

 (2)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingPeriod
ThewithdrawnbaddebtprovisionofReportingPeriodwasofRMB124,484.22.
(3)ParticularsoftheActualVerificationofOtherAccountsReceivableduringtheReportingPeriod
TherewasnoactualverificationofotheraccountsreceivableduringtheReportingPeriod
(4)OtherAccountReceivableClassifiedbyAccountNature
||||
|-|-|-|
|Nature|Closingbookbalance|Opening bookbalance|
||41,342,938.53||
||2,623,695.72||
||998,466.05||
||5,268,699.65||
||6,705,561.01||
|Total|56,939,360.96||

 (5)Top5oftheClosingBalanceoftheOtherAccountsReceivableCollectedAccordingtotheArrearsParty
|||||||
|-|-|-|-|-|-|
|Nameoftheentity|Nature|Closingbalance|Aging|Proportion(%)|BaddebtprovisionClosingbalance|
||Securitiesinvestment|29,502,438.53|Over 3 years|51.81||
||Securitiesinvestment|11,840,500.00|Over 3 years|20.79||
||Prepaymentofoilfee|3,843,881.68|Within 6 months|6.75||
||Cashdepositofcontract|500,000.00|7-12months|0.88||
||Prepaymentofoilfee|309,680.72|Within 6 months|0.54||
|Total|--|45,996,500.93|--|80.77||

 8.Inventory
(1)CategoryofInventory
|||||
|-|-|-|-|
|Item|Closingbalance|||
||Bookbalance|Fallingpricereserves|Bookvalue|
||95,155,492.84|8,897,753.50||
||1,594,846,413.08|0.00||
||171,527,201.36|6,359,355.80||
|Total|1,861,529,107.28|15,257,109.30||

（Continued）
|||||
|-|-|-|-|
|Item|Openingbalance|||
||Bookbalance|Fallingpricereserves|Bookvalue|
||122,173,639.41|8,897,753.50||
||1,426,282,016.97|0.00||
||255,258,344.54|8,383,210.92||
|Total|1,803,714,000.92|17,280,964.42||

 (2)FallingPriceReservesofInventory
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increase||Decrease||Closingbalance|
|||Withdrawal|Others|Reverseorwrite-off|Others||
||8,897,753.50|0.00|0.00|0.00|0.00||
||8,383,210.92|0.00|0.00|2,023,855.12|0.00||
|Total|17,280,964.42|0.00|0.00|2,023,855.12|0.00||

 (3) Withdrawal Provision Basis of the Falling Price of the Inventory and the Reasons of the Reserve or Write-off
|||||
|-|-|-|-|
|Item|Specificbasisofwithdrawaloffallingpricereservesofinventory|Reasonsforreversal|Reasonsforwrite-off|
||The realizable net value was lowerthanthecost|||
||The realizable net value was lowerthanthecost|||

9.OtherCurrentAssets
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||1,469,242,152.73||
||2,201,030.18||
||134,000,000.00||

||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Total|1,605,443,182.91||

 10.Available-for-saleFinancialAssets
(1)ListofAvailable-for-saleFinancialAssets
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
||498,964,610.81|0.00|498,964,610.81|404,029,552.27|0.00||
||498,964,610.81|0.00|498,964,610.81|404,029,552.27|0.00||
||0.00|0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00|0.00||
|Total|498,964,610.81|0.00|498,964,610.81|404,029,552.27|0.00||

 (2)Available-for-saleFinancialAssetsMeasuredbyFairValueatthePeriod-end
|||||
|-|-|-|-|
|Category|Available-for-saleequityinstruments|Available-for-saledebtinstruments|Total|
||477,300,602.98|0.00||
||498,964,610.81|0.00||
||21,664,007.83|0.00||
||0.00|0.00||

 11.InvestmentProperty
|||||
|-|-|-|-|
|Item|Housesandbuildings|Landuseright|Total|
||12,952,376.16|2,644,592.00||
||0.00|0.00||
||369,880.00|0.00||
||0.00|0.00||
||369,880.00|0.00||

|||||
|-|-|-|-|
|Item|Housesandbuildings|Landuseright|Total|
||12,582,496.16|2,644,592.00||
||6,637,952.24|556,071.18||
||239,083.87|3,562.27||
||239,083.87|3,562.27||
||369,880.00|0.00||
||0.00|0.00||
||369,880.00|0.00||
||6,507,156.11|559,633.45||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||6,075,340.05|2,084,958.55||
||6,314,423.92|2,088,520.82||

 12.FixedAssets
(1)ListofFixedAssets
|||||||
|-|-|-|-|-|-|
|Item|Housesandbuildings|Machineryequipment|Transportationequipment|Officeequipmentandother|Total|
||1,955,039,777.18|843,041,079.32|59,543,178.48|119,895,314.76||

|||||||
|-|-|-|-|-|-|
|Item|Housesandbuildings|Machineryequipment|Transportationequipment|Officeequipmentandother|Total|
||2,671,781.61|6,293,537.65|5,907,513.21|3,045,268.70||
||0.00|3,598,288.61|5,907,513.21|2,080,268.70||
||2,301,901.61|2,695,249.04|0.00|965,000.00||
||369,880.00|0.00|0.00|0.00||
||878,509.19|19,393,755.40|1,824,192.02|245,292.36||
||878,509.19|16,414,520.10|1,824,192.02|245,292.36||
||0.00|2,979,235.30|0.00|0.00||
||1,956,833,049.60|829,940,861.57|63,626,499.67|122,695,291.10||
||593,976,445.86|377,613,615.97|48,351,168.56|85,841,214.33||
||36,740,869.90|45,234,413.88|2,632,345.43|10,935,682.90||
||36,370,989.90|45,234,413.88|2,632,345.43|10,935,682.90||
||369,880.00|0.00|0.00|0.00||
||936,222.10|17,162,930.54|1,747,045.97|204,785.43||
||936,222.10|15,081,164.61|1,747,045.97|204,785.43||
||0.00|2,081,765.93|0.00|0.00||

|||||||
|-|-|-|-|-|-|
|Item|Housesandbuildings|Machineryequipment|Transportationequipment|Officeequipmentandother|Total|
||629,781,093.66|405,685,099.31|49,236,468.02|96,572,111.80||
||4,192,270.86|1,265,656.39|7,047.07|580,345.64||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||0.00|6,035.20|0.00|0.00||
||0.00|6,035.20|0.00|0.00||
||4,192,270.86|1,259,621.19|7,047.07|580,345.64||
||1,322,859,685.08|422,996,141.07|14,382,984.58|25,542,833.66||
||1,356,871,060.46|464,161,806.96|11,184,962.85|33,473,754.79||

 (2)ListofTemporarilyIdleFixedAssets
|||||||
|-|-|-|-|-|-|
|Item|Originalbookvalue|Accumulativedepreciation|Impairmentprovision|Bookvalue|Notes|
||15,969,525.54|11,633,943.26|4,192,270.86|143,311.42||
||8,018,961.47|6,707,454.28|1,259,621.19|51,886.00||
||58,119.66|49,329.00|7,047.07|1,743.59||
||873,232.11|266,689.51|580,345.64|26,196.96||
|Total|24,919,838.78|18,657,416.05|6,039,284.76|223,137.97||

 (3)DetailsofFixedAssetsFailedtoAccomplishCertificationofProperty
||||
|-|-|-|
|Item|Bookvalue|Reason|
||808,602,900.81||
|Total|808,602,900.81|--|

13.ConstructioninProgress
(1)ListofConstructioninProgress
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
||903,846.31|0.00|903,846.31|903,846.31|0.00||
||4,547,393.16|0.00|4,547,393.16|4,932,008.56|0.00||
||2,828,626.03|0.00|2,828,626.03|2,828,626.03|0.00||
||49,371,816.86|0.00|49,371,816.86|47,819,516.27|0.00||
||0.00|0.00|0.00|4,449,398.37|0.00||
||2,710,605.68|0.00|2,710,605.68|1,785,629.19|0.00||
||0.00|0.00|0.00|2,822,179.84|0.00||
||2,324,518.70|0.00|2,324,518.70|1,133,754.23|0.00||
||152,830.19|0.00|152,830.19|0.00|0.00||
||3,634,231.28|0.00|3,634,231.28|0.00|0.00||
||609,719.65|0.00|609,719.65|0.00|0.00||
||1,011,215.90|0.00|1,011,215.90|0.00|0.00||
||565,753.86|0.00|565,753.86|0.00|0.00||

||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
||8,810,447.08|0.00|8,810,447.08|5,096,365.46|0.00||
|Total|77,471,004.70|0.00|77,471,004.70|71,771,324.26|0.00||

 (2)ChangesofSignificantConstructioninProgress
||||||||
|-|-|-|-|-|-|-|
|Nameofitem|Estimatednumber|Openingbalance|IncreaseAmount|Amountthattransferredtofixedassetsoftheperiod|Otherdecreasedamountoftheperiod|Closingbalance|
||800,000,000.00|903,846.31|0.00|0.00|0.00||
||8,350,000.00|4,932,008.56|384,615.36|0.00|769,230.76||
||6,000,000.00|2,828,626.03|0.00|0.00|0.00||
||193,407,581.00|47,819,516.27|1,552,300.59|0.00|0.00||
||6,900,000.00|4,449,398.37|144,988.15|4,594,386.52|0.00||
||5,000,000.00|1,785,629.19|924,976.49|0.00|0.00||
||9,000,000.00|2,822,179.84|148,535.78|0.00|2,970,715.62||
||4,388,251.25|1,133,754.23|1,190,764.47|0.00|0.00||

|||||||
|-|-|-|-|-|-|
||50,000,000.00|0.00|152,830.19|0.00|0.00|
||8,500,000.00|0.00|3,634,231.28|0.00|0.00|
||3,810,000.00|0.00|609,719.65|0.00|0.00|
||2,300,000.00|0.00|1,011,215.90|0.00|0.00|
||2,090,000.00|0.00|565,753.86|0.00|0.00|
||48,147,771.50|5,096,365.46|8,221,709.73|1,367,764.13|3,139,863.98|
|Total|1,147,893,603.75|71,771,324.26|18,541,641.45|5,962,150.65|6,879,810.36|

 (Continued)
||||||||
|-|-|-|-|-|-|-|
|Projectname|Proportionestimatedoftheprojectaccumulativeinput(%)|ProjectProgress(%)|Accumulativeamountofcapitalizedinterests|Ofwhich:theamountofthecapitalizedinterestsoftheperiod|Capitalizationrateoftheinterestsoftheperiod(%)|Capitalresources|
||92.73|100.00|0.00|0.00|0.00||
||66.16|97.00|0.00|0.00|0.00||
||55.15|98.00|0.00|0.00|0.00||
||57.04|95.00|0.00|0.00|0.00||
||66.52|100.00|0.00|0.00|0.00||
||50.00|90.00|0.00|0.00|0.00||
||33.00|100.00|0.00|0.00|0.00||

||||||||
|-|-|-|-|-|-|-|
|Projectname|Proportionestimatedoftheprojectaccumulativeinput(%)|ProjectProgress(%)|Accumulativeamountofcapitalizedinterests|Ofwhich:theamountofthecapitalizedinterestsoftheperiod|Capitalizationrateoftheinterestsoftheperiod(%)|Capitalresources|
||52.97|90.00|0.00|0.00|0.00||
||5.00|5.00|0.00|0.00|0.00||
||60.00|90.00|0.00|0.00|0.00||
||18.72|40.00|0.00|0.00|0.00||
||50.95|60.00|0.00|0.00|0.00||
||31.67|95.00|0.00|0.00|0.00||
||30.56|58.97|0.00|0.00|0.00||
|Total|--|--|0.00|0.00|0.00|--|

 14.IntangibleAssets
|||||||
|-|-|-|-|-|-|
|Item|Landuseright|Patentright|Software|Trademark|Total|
||628,279,302.56|45,866,942.63|10,058,954.96|169,116,600.00||
||0.00|0.00|1,971,254.62|0.00||
||0.00|0.00|735,042.72|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|1,236,211.90|0.00||

|||||||
|-|-|-|-|-|-|
|Item|Landuseright|Patentright|Software|Trademark|Total|
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||628,279,302.56|45,866,942.63|12,030,209.58|169,116,600.00||
||102,006,461.48|45,714,910.47|4,915,899.12|0.00||
||6,679,324.47|20,284.98|1,095,087.13|0.00||
||6,679,324.47|20,284.98|1,095,087.13|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||108,685,785.95|45,735,195.45|6,010,986.25|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||0.00|0.00|0.00|0.00||
||519,593,516.61|131,747.18|6,019,223.33|169,116,600.00||
||526,272,841.08|152,032.16|5,143,055.84|169,116,600.00||

15.Goodwill
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increase||Decrease||Closingbalance|
|||Generatedfromenterprisemerger|Other|disposal|Disposal||
||478,283,495.29|0.00|0.00|0.00|0.00||
|Total|478,283,495.29|0.00|0.00|0.00|0.00||

 16.Long-termUnamortizedExpenses
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increasedamount|Amortizationamount|Decrease|Closingbalance|Otherreasonsfordecrease|
||1,395,010.07|0.00|741,496.60|0.00|653,513.47||
||3,583,860.08|0.00|1,860,700.86|0.00|1,723,159.22||
||845,341.88|0.00|281,780.64|0.00|563,561.24||
||4,552,189.86|0.00|2,914,480.92|0.00|1,637,708.94||
||19,757,703.37|0.00|1,235,278.98|0.00|18,522,424.39||
||10,125,000.00|0.00|750,000.00|0.00|9,375,000.00||
||15,060,486.86|0.00|2,203,971.00|0.00|12,856,515.86||
||610,434.11|0.00|215,453.76|0.00|394,980.35||
||4,250,000.00|0.00|300,000.00|0.00|3,950,000.00||
||11,761,161.10|292,045.37|7,900,324.24|0.00|4,152,882.23||
||2,417,801.09|0.00|805,933.74|0.00|1,611,867.35||
||4,885,049.82|0.00|666,143.16|0.00|4,218,906.66||
||2,458,879.09|0.00|669,237.36|0.00|1,789,641.73||
||2,831,715.21|151,140.52|507,663.45|0.00|2,475,192.28||

||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increasedamount|Amortizationamount|Decrease|Closingbalance|Otherreasonsfordecrease|
||4,679,367.54|21,315.78|262,808.36|0.00|4,437,874.96||
||4,374,397.27|0.00|749,896.68|0.00|3,624,500.59||
||0.00|1,218,582.48|169,247.55|0.00|1,049,334.93||
||0.00|2,970,715.62|412,599.40|0.00|2,558,116.22||
||0.00|249,829.06|0.00|0.00|249,829.06||
||0.00|181,316.25|90,658.14|0.00|90,658.11||
||0.00|101,147.57|2,809.65|0.00|98,337.92||
||0.00|300,000.00|0.00|0.00|300,000.00||
||0.00|1,000,000.00|0.00|0.00|1,000,000.00||
||0.00|720,720.72|120,120.12|0.00|600,600.60||
||93,588,397.35|7,206,813.37|22,860,604.61|0.00|77,934,606.11||

15.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities
(1)ListofDeferredIncomeTaxAssets
||||||
|-|-|-|-|-|
|Item|Closingbalance||Openingbalance||
||DeductibletemporaryDDifferences|eferredincometaxassets|DeductibletemporaryDifferences|Deferredincometaxassets|
||43,749,659.69|10,937,414.92|44,010,458.43||
||15,257,109.30|3,814,277.33|17,280,964.42||
||6,011,287.30|1,502,617.50|6,017,322.50||
||43,254,768.06|10,813,692.01|43,978,795.45||
||64,286,355.76|16,071,588.94|74,310,846.55||
||6,230,047.55|1,557,511.89|3,886,999.22||

|||||
|-|-|-|-|
||720,310,353.62|180,077,588.40|241,487,812.54|
|Total|899,099,581.28|224,774,690.99|430,973,199.11|

 (2)ListsofDeferredIncomeTaxLiabilities
||||||
|-|-|-|-|-|
|Item|Closingbalance||Openingbalance||
||Deductibletemporarydifferences|Deferredincometaxliabilities|Deductibletemporarydifferences|Deferredincometaxliabilities|
||37,983.63|9,495.91|157,639.98||
||21,664,007.83|5,416,001.96|48,192,637.29||
||15,538,949.80|3,884,737.45|11,629,445.21||
||405,036,867.97|101,259,216.99|409,168,287.60||
|Total|442,277,809.23|110,569,452.31|469,148,010.08||

 (3)ListofUnrecognizedDeferredIncomeTaxAssets
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||27,997.46||
||3,935,808.39||
|Total|3,963,805.85||

 18.OtherNon-currentAssets
|||||
|-|-|-|-|
|Item|Content|Closingbalance|Openingbalance|
||Certificateofdeposit|300,000,000.00||
||Prepaymentofprojectsandequipment|14,785,612.34||
|Total|--|314,785,612.34||

 19.NotesPayable
||||
|-|-|-|
|Category|Closingbalance|Openingbalance|
||13,100,000.00||
||28,583.00||

||||
|-|-|-|
|Category|Closingbalance|Openingbalance|
|Total|13,128,583.00||

 Notes: the total amount of overdue notes payable is RMB28,583.00 in the reporting period, which is generatedfromthefailureofpayingofsupplierswhennotesaredue.
20.AccountsPayable
(1)ListofAccountsPayable
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||437,987,948.66||
||58,438,175.96||
|Total|496,426,124.62||

 (2)SignificantAccountsPayableAgingoverOneYear
||||
|-|-|-|
|Item|Closingbalance|Unpaid/Un-carry-overreason|
||7,589,380.47||
||7,454,526.71||
||3,253,820.58||
||2,377,538.64||
||1,994,174.95||
|Total|22,669,441.35|--|

21.AdvancefromCustomers
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||735,440,901.02||
|Total|735,440,901.02||

 22.PayrollPayable
(1)ListofPayrollPayable
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
||287,527,410.11|545,922,623.32|604,702,047.33||
||499,725.98|59,729,825.37|60,195,236.59||
||0.00|0.00|0.00||

|||||
|-|-|-|-|
||0.00|0.00|0.00|
|Total|288,027,136.09|605,652,448.69|664,897,283.92|

 (2)ListofShort-termSalary
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
||231,921,133.46|475,151,669.68|545,990,982.07||
||0.00|8,431,420.00|8,431,420.00||
||67,054.59|21,936,962.01|21,637,960.33||
||53,976.40|19,779,652.21|19,474,634.30||
||6,704.27|1,210,534.78|1,215,207.91||
||6,373.92|946,775.02|948,118.12||
||8,380,962.40|24,906,231.62|24,029,014.46||
||47,158,259.66|15,496,340.01|4,612,670.47||
||0.00|0.00|0.00||
||0.00|0.00|0.00||
|Total|287,527,410.11|545,922,623.32|604,702,047.33||

 (3)ListofDrawingScheme
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
||471,096.94|56,936,688.35|57,400,464.27||
||28,629.04|2,793,137.02|2,794,772.32||
|Total|499,725.98|59,729,825.37|60,195,236.59||

 23.TaxesPayable
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||53,804,152.68||
||73,980,267.41||
||156,146,559.16||

||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||14,478,942.52||
||6,705,700.80||
||540,051.48||
||6,263,567.19||
||10,240,538.58||
|Total|322,159,779.82||

 24.OtherAccountsPayable
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||644,292,495.89||
||1,910,227.09||
||40,981,539.06||
||9,258,179.56||
||41,461,773.18||
||321,724,551.33||
|Total|1,059,628,766.11||

 Other payables increased at the end of this period, mainly due to an increase in the amount of non clearing discountsmadebydealers.
25.OtherCurrentLiabilities
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||398,585,802.29||
|Total|398,585,802.29||

 26.DeferredRevenue
|||||||
|-|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|Formedreason|
||43,978,795.45|1,646,000.00|2,370,027.39|43,254,768.06||
|Total|43,978,795.45|1,646,000.00|2,370,027.39|43,254,768.06|--|

Ofwhich,itemsinvolvedingovernmentsubsidies:
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeinreportperiod|Otherchanges|Closingbalance|Relatedtoassets/relatedincome|
||380,208.35|0.00|31,249.98|0.00|348,958.37||
||1,433,250.00|0.00|110,250.00|0.00|1,323,000.00||
||213,541.65|0.00|15,625.02|0.00|197,916.63||
||1,673,170.76|0.00|146,341.44|0.00|1,526,829.32||
||4,139,755.00|0.00|365,272.50|0.00|3,774,482.50||
||318,750.00|0.00|76,500.00|0.00|242,250.00||
||180,000.00|0.00|30,000.00|0.00|150,000.00||
||1,232,943.71|0.00|99,262.86|0.00|1,133,680.85||
||997,580.45|0.00|265,811.76|0.00|731,768.69||
||1,484,373.94|0.00|267,110.76|0.00|1,217,263.18||

||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeinreportperiod|Otherchanges|Closingbalance|Relatedtoassets/relatedincome|
||112,500.00|0.00|15,000.00|0.00|97,500.00||
||5,197,500.00|0.00|556,875.00|0.00|4,640,625.00||
||24,213,446.47|0.00|275,103.09|0.00|23,938,343.38||
||687,500.12|0.00|68,749.98|0.00|618,750.14||
||546,875.00|0.00|46,875.00|0.00|500,000.00||
||217,400.00|346,000.00|0.00|0.00|563,400.00||
||950,000.00|0.00|0.00|0.00|950,000.00||
||0.00|300,000.00|0.00|0.00|300,000.00||
||0.00|1,000,000.00|0.00|0.00|1,000,000.00||
|Total|43,978,795.45|1,646,000.00|2,370,027.39|0.00|43,254,768.06|--|

27.ShareCapital
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingbalance|Increase/decreaseinReportingPeriod(+,-)|||||Closingbalance|
|||Newlyissueshare|Bonusshares|Capitalizationofpublicreserves|Others|Subtotal||
||503,600,000.00|0.00|0.00|0.00|0.00|0.00||

 28.CapitalSurplus
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
||1,262,552,456.05|0.00|0.00||
||32,853,136.20|0.00|0.00||
|Total|1,295,405,592.25|0.00|0.00||

 29.OtherComprehensiveIncome
|||||||||
|-|-|-|-|-|-|-|-|
|Item|OpeningperiodBalance|ReportingPeriod|||||ClosingperiodBalance|
|||ReportingPeriodAmountbeforeincometax|Less:recordedinothercomprehensiveincomeinpriorperiodandtransferredtoprofitorlossincurrentperiod|Less:Incometaxexpense|AttributabletoownersoftheCompanyaftertax|Attributabletominorityshareholdersaftertax||
||0.00|0.00|0.00|0.00|0.00|0.00||
||36,144,477.95|22,845,859.36|37,030,866.60|5,711,464.84|-19,896,472.08|0.00||
||36,144,477.95|22,845,859.36|37,030,866.60|5,711,464.84|-19,896,472.08|0.00||

|||||||||
|-|-|-|-|-|-|-|-|
|Item|OpeningperiodBalance|ReportingPeriod|||||ClosingperiodBalance|
|||ReportingPeriodAmountbeforeincometax|Less:recordedinothercomprehensiveincomeinpriorperiodandtransferredtoprofitorlossincurrentperiod|Less:Incometaxexpense|AttributabletoownersoftheCompanyaftertax|Attributabletominorityshareholdersaftertax||
||36,144,477.95|22,845,859.36|37,030,866.60|5,711,464.84|-19,896,472.08|0.00||

 30.SurplusReserves
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
||256,902,260.27|0.00|0.00||
|Total|256,902,260.27|0.00|0.00||

 Notes: Based on the regulations of the Corporation Law and Article of Association, the Company shouldwithdraw10%ofthestatutorysurplusreservesaccordingtothenetprofits.If theaccumulatedamount ofthestatutorysurplusreservesexceededthe50%oftheregisteredcapital,theCompanycouldnomorewithdraw. 31.RetainedProfits
||||
|-|-|-|
|Item|ReportingPeriod|Lastperiod|
||3,503,069,053.49||
||0.00||
||3,503,069,053.49||
||548,889,891.65||
||0.00||
||0.00||
||0.00||
||302,160,000.00||
||0.00||
||3,749,798,945.14||

32.OperatingRevenuesandCosts
||||||
|-|-|-|-|-|
|Item|ReportingPeriod||Sameperiodoflastyear||
||Salesrevenue|Costofsales|Salesrevenue|Costofsales|
||3,640,782,146.34|891,178,513.56|3,024,521,955.55||
||29,345,618.25|22,000,685.35|20,512,751.18||
|Total|3,670,127,764.59|913,179,198.91|3,045,034,706.73||

 33.BusinessTaxesandSurcharges
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||477,359,578.63||
||0.00||
||107,125,009.74||
||6,268,387.32||
||8,038,252.32||
||3,894,182.32||
||3,445,944.18||
|Total|606,131,354.51||

 Notes:themeasurementstandardsofbusinesstaxandsurchargesseeNotesV.Tax
34.SalesExpenses
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||123,985,954.16||
||47,121,726.34||
||185,979,223.96||
||23,693,930.48||
||556,575,629.94||
||113,260,666.41||
||157,857,846.03||
||41,213,783.81||
|Total|1,249,688,761.13||

35.AdministrationExpenses
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||138,467,339.94||
||6,842,426.24||
||0.00||
||29,106,759.72||
||28,961,402.74||
||7,794,696.58||
||11,408,909.28||
||6,132,749.56||
||847,155.37||
||5,009,938.09||
||28,850,317.91||
|Total|263,421,695.43||

 36.FinancialExpenses
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||0.00||
||17,954,811.63||
||0.00||
||409,322.34||
||0.00||
||280,846.64||
|Total|-17,264,642.65||

 37.AssetImpairmentLoss
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||-260,798.74||
||-2,023,855.12||
|Total|-2,284,653.86||

38.GainsandLossesfromChangesinFairValue
||||
|-|-|-|
|Sources|ReportingPeriod|Sameperiodoflastyear|
||-119,656.35||
||0.00||
|Total|-119,656.35||

 39.InvestmentIncome
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||0.00||
||2,329,585.99||
||22,622,635.21||
||49,254,878.84||
||6,810,384.43||
|Investment income received from financial assets measured by fair value and thechangesbeincludedinthecurrentprofitsandlossesduringholdingperiod|81,017,484.47||

40.Non-operatingGains
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Recordedintheamountofthenon-recurringgainsandlosses|
||487,886.67|5,477.22||
||487,886.67|5,477.22||
||24,316,926.49|3,899,636.68||
||7,861,891.12|335,651.90||
||3,475,474.77|2,712,008.98||
||3,024,423.78|1,186,922.39||

|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Recordedintheamountofthenon-recurringgainsandlosses|
|Total|39,166,602.83|8,139,697.17||

 Ofwhich,governmentsubsidiesrecordedintothecurrentgainsandlosses:
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Relatedtotheassets/income|
||5,000.00|0.00||
||200,000.00|0.00||
||13,013,817.25|368,270.62||
||76,080.00|0.00||
||50,500.00|337,268.00||
||200,000.00|0.00||
||300,000.00|0.00||
||55,000.00|600,000.00||
||100,000.00|0.00||
||0.00|100,000.00||
||20,000.00|0.00||

|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Relatedtotheassets/income|
||2,500,000.00|0.00||
||1,246,501.85|0.00||
||2,370,027.39|2,274,098.06||
||20,000.00|0.00||
||600,000.00|0.00||
||200,000.00|220,000.00||
||3,360,000.00|0.00||
|Total|24,316,926.49|3,899,636.68|--|

41.Non-operatingExpenses
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Recordedintheamountofthenon-recurringgainsandlosses|
||1,193,100.98|4,324,035.29||
||1,193,100.98|4,324,035.29||
||995,921.03|764,567.19||
|Total|2,189,022.01|5,088,602.48||

42.IncomeTaxExpense
(1)ListofIncomeTaxExpense
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||320,222,019.81||
||-117,205,486.69||
|Total|203,016,533.12||

 43.OtherComprehensiveIncome
SeeNoteVI.29
44.CashFlowStatement
(1)OtherCashReceivedRelevanttoOperatingActivities
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||126,884,726.25||
||7,686,580.00||
||17,954,811.63||
||0.00||
||11,155,743.51||
|Total|163,681,861.39||

 (2)OtherCashPaidRelevanttoOperatingActivities
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||414,549,277.31||
||0.00||
||14,733,112.11||
|Total|429,282,389.42||

 (3)OtherCashReceivedRelevanttoInvestmentActivities
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||1,646,000.00||
|Total|1,646,000.00||

45.SupplementalInformationforCashFlowStatement
(1)SupplementalInformationforCashFlowStatement
||||
|-|-|-|
|Supplementalinformation|ReportingPeriod|Sameperiodoflastyear|
||572,114,926.94||
||-2,284,653.86||
||95,173,432.11||
||242,646.14||
||7,794,696.58||
||22,860,604.61||
||705,214.31||
||119,656.35||
||409,322.34||
||-81,017,484.47||
||-117,120,093.84||
||-7,892,851.83||
||-59,838,961.48||
||-656,394,178.36||
||652,862,975.93||
||-2,370,027.39||
||425,365,224.08||

||||
|-|-|-|
|Supplementalinformation|ReportingPeriod|Sameperiodoflastyear|
||683,630,424.44||
||527,849,026.07||
||155,781,398.37||

 (2)CashandCashEquivalents
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
||683,630,424.44||
||286,750.06||
||683,334,584.32||
||9,090.06||
||0.00||
||0.00||
||683,630,424.44||

 46.TheAssetswiththeOwnershiporUseRightRestricted
||||
|-|-|-|
|Item|Closingbookvalue|Restrictedreason|
||5,060,000.00||
||30,050,000.00||
|Total|35,110,000.00|--|

VII.ChangesofMergeScope
During the reporting period, the Company set up the new subsidiary Anhui RunAnXinKe Testing
Technology Co.,Ltd、SuizhouJunHe TradingCo.,Ltd.For more details, please see NoteVIII 1. Equityin Subsidiary.
VIII.EquityinOtherEntities
1.EquityinSubsidiary
TheStructureoftheEnterpriseGroup
||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Wayofgaining|
|||||Directly|Indirectly||
||Bozhou,Anhui|Bozhou,Anhui|Businesstrading|100.00|||
||Bozhou,Anhui|Bozhou,Anhui|Transportation|99.00|1.00||
||Bozhou,Anhui|Bozhou,Anhui|Production|99.00|1.00||
||Bozhou,Anhui|Bozhou,Anhui|Wastecycled||100.00||
||HefeiAnhui|HefeiAnhui|Adsmarketing||100.00||
||Bozhou,Anhui|Bozhou,Anhui|Technologyresearch|100.00|||
||Bozhou,Anhui|Bozhou,Anhui|Production|100.00|||
||Shanghai|Shanghai|Hotelmanagement|100.00|||
||Bozhou,Anhui|Bozhou,Anhui|Hoteloperating|100.00|||
||Bozhou,Anhui|Bozhou,Anhui|SewageTreatment|100.00|||
||Hefei,Anhui|Hefei,Anhui|E-commerce|100.00|||
||Bozhou,Anhui|Bozhou,Anhui|Engineeringconstruction|100.00|||

||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Wayofgaining|
|||||Directly|Indirectly||
||Bozhou,Anhui|Bozhou,Anhui|Commercialtrade||100.00||
||Bozhou,Anhui|Bozhou,Anhui|Technicaldetection||100.00||
||Wuhan,Hubei|Wuhan,Hubei|Production|51.00|||
||Xianning,Hubei|Xianning,Hubei|Production||51.00||
||Suizhou,Hubei|Suizhou,Hubei|Production||51.00||
||Wuhan,Hubei|Wuhan,Hubei|Commercialtrade||51.00||
||Xianning,Hubei|Xianning,Hubei|Commercialtrade||51.00||
||Wuhan,Hubei|Wuhan,Hubei|Adsmarketing||51.00||
||Wuhan,Hubei|Wuhan,Hubei|Technology||51.00||

||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Wayofgaining|
|||||Directly|Indirectly||
||||development||||
||Wuhan,Hubei|Wuhan,Hubei|Commercialtrade||51.00||
||SuiZhou,Hubei|SuiZhou,Hubei|Commercialtrade||51.00||

IX.TheRiskRelatedFinancialInstruments
The main financial instruments of the Company are equity investment, financial product, trust investment, account receivables and account payables, etc, the specific explanation of each financial instrument are in relevant item of Note VI. Risk related to these financial instruments and the risk management policies the Company adopted to reduce the risk is as follows: the management of the Company monitors and manages theriskexposuretoensuretheaforesaidriskwithinthelimitscopeofcontrol.
(I)RiskManagementObjectivesandPolicies
The goals of the Company is to maintain a proper balance between the risk and the income, reduce the negative influenceof risktotheoperationperformanceoftheCompanytoa minimum, andmaximize profits of shareholders and other equity investors, basing on the risk management goal, the Company basis policies are to recognize and analyze each risk the Company faced, establish proper risk bottom line and conductriskmanagement,timelyandreliablysuperviseeachrisk,controltheriskswithinthelimitscope. 1.MarketRisk
(1)ForeignExchangeRisk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. Foreign exchange risk is referred to the risk of loss from the change of exchange rate. The main operation of the Company is withinthe territoryof China, mainlysettledby RMB,onlysmall amount of export business and theinfluenceoftheproportioninthetotalincomeisrathersmall;theexchangerateriskisverylittle. (2)InterestRateRisk-CashFlowChangeRisk
The operation capital of the Company is sufficient, there is no external borrowing in the Company; the interestrateriskisverylittle.
(3)OtherPriceRisk
What the Company held are classified as available financial assets and tradable financial assets measured at
fair value on balance sheetdate. Thus, the Company bares the risk change of securities market. The
Companyadoptvarietyofequitygrouptoreducethepriceriskinequitysecurityinvestment.
2.CreditRisk
OnJune30,2017,thelargestcreditriskexposurewhatmayleadtothefinanciallosseswastheotherpartyof the contract failed to fulfill the obligations and causes loss of theCompany’s financial assets and financial guarantee,whichincluding:bookvalueoffinancialassetsrecognizedinconsolidatedbalancesheet;asforthe financial instruments measured at fair value, the book value reflect its risk exposure, but not the largest one, thelargestriskexposurewillchangewhenthefuturefairvaluechanged.
The Company only trade with the third party authorized with good credit and large scale. In line with the policies of the Company and the items of sale contracts, the Company gives priority to first payment shipment, only small amount of credit transactions and examines and verifies the credit of the client who tradingwithbycreditway.
The Company's working capital was in bank with higher credit rating, so credit risk of working capital was low.
3.LiquidityRisk
When managing liquidity risk, the Company maintained themanagement’s believe that supervising the sufficient cash and cash equivalents to meet the operating demand of the Company and reduce the influence ofthefluctuationofcashflow.
X.TheDisclosureoftheFairValue
1.ClosingFairValueofAssetsandLiabilitiesCalculatedbyFairValue
||||||
|-|-|-|-|-|
|Item|Closingfairvalue||||
||Fairvaluemeasurementitemsatlevel1|Fairvaluemeasurementitemsatlevel2|Fairvaluemeasurementitemsatlevel3|Total|
||101,573.76||||
||101,573.76||||
||101,573.76||||
||498,964,610.81||||
||498,964,610.81||||

||||||
|-|-|-|-|-|
|Item|Closingfairvalue||||
||Fairvaluemeasurementitemsatlevel1|Fairvaluemeasurementitemsatlevel2|Fairvaluemeasurementitemsatlevel3|Total|
|Total assets of consistent fair valuemeasurement|499,066,184.57||||

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level1
The consistent fair value measurement items were the share public trade on Shanghai Stock Exchange or Shenzhen Stock Exchange, the market price recognition basis was the closing price of the share on balance sheet date.When the shares held were in the restricted period,the price shall be determined according totherelevantvaluationmethodsmentionedinSFC[2007]No.21.
XI.RelatedPartyandRelatedTransaction
1.InformationofParentCompany
|||||||
|-|-|-|-|-|-|
|Nameofparentcompany|Registrationplace|Natureofbusiness|Registeredcapital|ProportionofshareheldbyparentcompanyagainsttheCompany(%)|ProportionofvotingrightsownedbyparentcompanyagainsttheCompany(%)|
||Anhui|Beverage,Constructionmaterials, and plasticproductionsmanufacture|1,000,000,000.00|53.89||

Notes:ThefinialcontroloftheCompanywasPeople’sGovernmentofBozhou,Anhui
2.InformationofSubsidiaryoftheCompany
Formoredetails,pleaserefertoNoteVIII,1.EquityinSubsidiary
3.InformationofOtherRelatedPartyoftheCompany
|||
|-|-|
|Name|Relationship|

AnhuiRuifuxiangFoodCo.,Ltd Affiliatedenterpriseofcontrollingshareholderandactualcontroller
AnhuiRuijingRestaurantManagementCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller
AnhuiHaochidianCateringCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller
|||
|-|-|
|Name|Relationship|

ShanghaiRuiyaoHotelManagementCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller ShanghaiBeihaiRestaurantCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiRuijingTradeTravel(Group)Co.,Ltd Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouHotelCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiGujingRealEstatesGroupCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller East Ruijing Enterprise Investment Development Co.,
Affiliatedenterpriseofcontrollingshareholderandactualcontroller Ltd
AnhuiHengxinPawnCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouRuinengThermoelectricityCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller HolidayInnHefei Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouRufuxiangHigh-proteinFeedCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiGujingHotelDevelopmentCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiRuixinPawnCo.,Ltd Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiZhongxinFinancialLeasingCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiHuixinFinanceInvestmentGroupCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller HefeiLongxinFinancialManagementConsultingCo.,
Affiliatedenterpriseofcontrollingshareholderandactualcontroller Ltd.
BozhouAnxinMicrocreditCo.,Ltd Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiGujingEcologicalIndustrialParkManagement Affiliatedenterpriseofcontrollingshareholderandactualcontroller LargeCentralPlainWineValleyCultureTourism Affiliatedenterpriseofcontrollingshareholderandactualcontroller DevelopmentCo.,Ltd.
AnhuiXinyuanGovernmentLandscapeEngineering Affiliatedenterpriseofcontrollingshareholderandactualcontroller Co.,Ltd.
BozhouGujingHotelCo.,Ltd Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiYouxinFinancingGuaranteeCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiAoxin RealEstateDevelopmentCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller
AnhuiLixinE-CommerceCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller
AnhuiXinxinPropertyManagementCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller
|||
|-|-|
|Name|Relationship|

BozhouHuishengBuildingCateringCompany Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouGujingJunlaiHotelManagementCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouGujingRealEstatesManagementCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller BozhouGujingRealEstatesDevelopmentCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiShenglongTradingCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller AnhuiGujingInternationalTravelCo.,Ltd. Affiliatedenterpriseofcontrollingshareholderandactualcontroller 4.ListofRelatedPartyTransactions
(1)InformationonAcquisitionofGoodsandReceptionofLaborService(Unit:TenThousandYuan)①Informationonacquisitionofgoodsandreceptionoflaborservice
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||Purchase of rawmaterial|15,810.48||
||Accepting food andaccommodationservices|807,692.59||
||Accepting cateringservices|89,759.00||
||Afforestationfees|589,278.15||
||Purchaseofgoods|35,451.28||
||Accepting food andaccommodationservices|70,699.06||
||Acceptinglaborservice|3,413.21||
||Purchaseofmaterials|7,245.28||
||Acceptingfoodand|149,579.79||

|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||accommodationservices|||
||Accepting food andaccommodationservices|26,285.00||
||Accepting food andaccommodationservices|1,592,452.00||
||Acceptingfoodandaccommodationservices|4,800.00||
||Acceptinglaborservice|12,240.00||
||Purchaseofproperty|11,900,000.00||
|Total|--|15,304,705.84||

②Informationofsalesofgoodsandprovisionoflaborservice
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||Salesofwhitespirit|6,176.78||
||Salesofsmallsizedmaterials|62,464.38||
||Providinglaborservice|9,897.94||
||Providingcateringandaccommodationservices|102,811.00||
||Salesofwhitespirit|17,000.00||
||Salesofwhite|61,965.81||

|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||spirit|||
||Salesofwhitespirit|2,498,463.23||
||Providingcateringandaccommodationservices|599.99||
||Salesofwhitespirit|339,877.92||
||Salesofwhitespirit|14,683.36||
||Salesofwhitespirit|14,529.91||
||Salesofwhitespirit|9,854.52||
||Providinglaborservice|456,621.63||
||Salesofwhitespirit|20,033.69||
||Providingcateringandaccommodationservices|600.00||
||Salesofwhitespirit|128,848.87||
||Salesofwhitespirit|20,332.81||
||Salesofwhitespirit|6,099.86||
||Salesofwhitespirit|7,435.83||

|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||Salesofwhitespirit|5,499.01||
||Salesofwhitespirit|21,703.08||
||Salesofwhitespirit|3,089.68||
||Salesofwhitespirit|6,102.42||
||Salesofwhitespirit|5,800.72||
||Salesofwhitespirit|24,100.26||
||Salesofwhitespirit|4,307.69||
||Salesofwhitespirit|38,442.24||
||Salesofwhitespirit|0.00||
||Salesofwhitespirit|0.00||
||Providinglaborservice|5,485.98||
||Utilities|94,630.14||
||Providingcateringandaccommodationservices|20,896.00||
||Salesofsmallsizedmaterials|5,101.65||
||Salesofwhite|337,678.77||

|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
||spirit|||
||Salesofwhitespirit|182,598.15||
||Providingcateringandaccommodationservices|400.00||
||Salesofsmallsizedmaterials|8,507.41||
||Providingcateringandaccommodationservices|3,960.00||
||Providinglaborservice|201,390.13||
||Salesofwhitespirit|7,902.56||
|Total|--|4,755,893.42||

 (2)InformationofRelatedLease
TheCompanyservesastheleasee
|||||
|-|-|-|-|
|Nameoflessor|Typeofleasedassets|Rentalexpenseconfirmedinthereportperiod|Rentalexpenseconfirmedinthesameperiodoflastyear|
||Housesandbuildings|1,095,238.10||

 TheCompanyservesasthelessor
|||||
|-|-|-|-|
|Nameofleasee|Typeofleasedassets|RentalincomeconfirmedintheReportperiod|Rentalincomeconfirmedinthesameperiodoflastyear|
||Housesandbuildings|246,190.49||

 5.ReceivablesandPayablesofRelatedParty
(1)Receivables
||||
|-|-|-|
|Nameofitem|Closingbalance|Openingbalance|

||||
|-|-|-|
|Nameofitem|Closingbalance|Openingbalance|
||156,600.00||
||6,418.60||
||48,555.00||
||8,273.00||
|Total|219,846.60||
||39,160.45||
||9,085.28||
||25,342.50||
||73,083.36||
|Total|146,671.59||

 (2)Payables
||||
|-|-|-|
|Nameofitem|Closingbalance|Openingbalance|
||769,894.01||
||20,130.00||
||18,540.00||
||17,000.00||
||9,900.00||
||9,492.00||
||16,020.00||
||5,400.00||
||5,040.00||
||3,840.02||
||184.58||
||0.00||

||||
|-|-|-|
|Nameofitem|Closingbalance|Openingbalance|
||0.00||
||0.00||
||0.00||
|Total|875,440.61||
||10,500.00||
||33,637.70||
|Total|44,137.70||

 XII.CommitmentsandContingencies
1.SignificantCommitments
OperatingLeaseCommitments
As of the end of balance sheet date, the irrevocable operating lease commitments that the Company signed wereasfollowed:
||||
|-|-|-|
|Item|Closingbalance|Opening balance|
||2,300,000.00||
||2,300,000.00||
||2,300,000.00||
||22,808,333.33||
|Total|29,708,333.33||

 XIII.EventsafterBalanceSheetDate
AsofJune30,2017,therewasnoothersignificanteventafterbalancesheetdate.
XIV.OtherSignificantEvents
SegmentInformation
There was no segment information based on operating segments to disclose, since the Companydidn’t
determine operating segments in accordance with internal organizational structure, management requirements
andinternalreportsystems.
XV.NotesofMainItemsintheFinancialStatementsoftheCompany
1.AccountsReceivable
(1)AccountsReceivableClassifiedbyCategory
|||||||
|-|-|-|-|-|-|
|Category|Closingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Proportion(%)||
||0.00|0.00|0.00|0.00||
||5,490,940.95|100|658,331.94|11.99||
||0.00|0.00|0.00|0.00||
|Total|5,490,940.95|100|658,331.94|11.99||

（Continued）
|||||||
|-|-|-|-|-|-|
|Category|Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Proportion(%)||
||0.00|0.00|0.00|0.00||
||6,979,229.19|100.00|601,883.19|8.62||
||0.00|0.00|0.00|0.00||
|Total|6,979,229.19|100|601,883.19|8.62||

①Inthegroups,accountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision
|||
|-|-|
|Aging|Closingbalance|

|||||
|-|-|-|-|
||Accountreceivable|Baddebtprovision|Withdrawalproportion(%)|
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||0.00|0.00||
||141,121.87|70,560.94||
||587,771.00|587,771.00||
|Total|728,892.87|658,331.94||

②Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision
|||||
|-|-|-|-|
|Nameofthegroup|Closingbalance|||
||Accountreceivable|Baddebtprovision|Withdrawalproportion(%)|
||4,762,048.08|0.00||
|Total|4,762,048.08|0.00||

 (2)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingPeriod
ThewithdrawnbaddebtprovisionofReportingPeriodwasofRMB56,448.75.
(3)ParticularsoftheActualVerificationofAccountsReceivableduringtheReportingPeriod
TherewasnoactualverificationofaccountsreceivableduringtheReportingPeriod.
(4)TopFive ofAccount Receivable ofClosingBalance Collected byArrears Party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB5,244,757.08,95.52% of total closing balance of account receivable, the relevant closing balance of baddebtprovisionwithdrawnwasRMB492,545.00.
2.OtherAccountsReceivable
(1)OtherAccountReceivableClassifiedbyCategory
|||||||
|-|-|-|-|-|-|
|Category|Closingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Proportion(%)||

||||||
|-|-|-|-|-|
||41,342,938.53|27.61|41,342,938.53|100.00|
||108,399,180.03|72.39|434,334.41|0.40|
||0.00|0.00|0.00|0.00|
|Total|149,742,118.56|100.00|41,777,272.94|27.90|

（Continued）
|||||||
|-|-|-|-|-|-|
|Category|Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Proportion(%)||
||41,342,938.53|28.07|41,342,938.53|100.00||
||105,925,699.86|71.93|410,793.52|0.39||
||0.00|0.00|0.00|0.00||
|Total|147,268,638.39|100.00|41,753,732.05|28.35||

①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
||||||
|-|-|-|-|-|
|Otheraccountsreceivable(unit）|Closingbalance||||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|Withdrawalreason|
||11,840,500.00|11,840,500.00|100.00||

||||||
|-|-|-|-|-|
|Otheraccountsreceivable(unit）|Closingbalance||||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|Withdrawalreason|
||29,502,438.53|29,502,438.53|100.00||
|Total|41,342,938.53|41,342,938.53|--|--|

②Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|
||3,497,858.54|35,446.52||
||3,486,160.17|34,861.60||
||11,698.37|584.92||
||23,379.90|2,337.99||
||704,466.79|352,233.40||
||44,316.50|44,316.50||
|Total|4,270,021.73|434,334.41||

③Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision
|||||
|-|-|-|-|
|Nameofthegroup|Closingbalance|||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion(%)|
||104,129,158.30|0.00||
|Total|104,129,158.30|0.00||

 (2)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingperiod
ThewithdrawnbaddebtprovisionofReportingPeriodwasofRMB23,540.89
(3)ParticularsoftheActualVerificationofOtherAccountsReceivableduringtheReportingPeriod
TherewasnoactualverificationofotheraccountsreceivableduringtheReportingPeriod
(4)OtherAccountReceivableClassifiedbyAccountNature
||||
|-|-|-|
|Nature|Closingbookbalance|Opening bookbalance|
||104,129,158.30||

|||
|-|-|
||41,342,938.53|
||1,209,658.09|
||248,508.07|
||482,547.98|
||2,329,307.59|
|Total|149,742,118.56|

 (5) Top 5 of the Closing Balance of the Other Accounts Receivable Collected According to the Arrears Party
||||||||
|-|-|-|-|-|-|-|
|Nameoftheentity|Relationship|Nature|Closingbalance|Aging|Proportion(%)|BaddebtprovisionClosingbalance|
||TheCompany’ssubsidiary|Intercoursefundsbetweenentitieswithincombinationscope|78,335,000.00|Within3years|52.31||
||Non-relatedparty|Securitiesinvestment|29,502,438.53|Over3years|19.70||
||TheCompany’ssubsidiary|Intercoursefundsbetweenentitieswithincombinationscope|24,517,794.79|Within2years|16.37||
||Non-relatedparty|Securitiesinvestment|11,840,500.00|Over3years|7.91||
||TheCompany’ssubsidiary|Intercoursefundsbetweenentitieswithincombination|927,219.44|Within6months|0.62||

||||||||
|-|-|-|-|-|-|-|
|Nameoftheentity|Relationship|Nature|Closingbalance|Aging|Proportion(%)|BaddebtprovisionClosingbalance|
|||scope|||||
|Total|--|--|145,122,952.76|--|96.91||

 3.Long-termEquityInvestment
(1)ListofLong-termEquityInvestmentClassifiedbyCategory
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
||1,155,089,408.32|0.00|1,155,089,408.32|1,155,089,408.32|0.00||
|Total|1,155,089,408.32|0.00|1,155,089,408.32|1,155,089,408.32|0.00||

 (2)InvestmenttotheSubsidiaries
||||||||
|-|-|-|-|-|-|-|
|Investee|Openingbalance|Increase|Decrease|Closingbalance|WithdrawnimpairmentprovisionintheReportingPeriod|Closingbalanceofimpairmentprovision|
||84,864,497.89|0.00|0.00|84,864,497.89|0.00||
||85,793,666.00|0.00|0.00|85,793,666.00|0.00||
||49,906,854.63|0.00|0.00|49,906,854.63|0.00||
||648,646.80|0.00|0.00|648,646.80|0.00||

||||||||
|-|-|-|-|-|-|-|
|Investee|Openingbalance|Increase|Decrease|Closingbalance|WithdrawnimpairmentprovisionintheReportingPeriod|Closingbalanceofimpairmentprovision|
||6,875,743.00|0.00|0.00|6,875,743.00|0.00||
||50,000,000.00|0.00|0.00|50,000,000.00|0.00||
||30,000,000.00|0.00|0.00|30,000,000.00|0.00||
||16,000,000.00|0.00|0.00|16,000,000.00|0.00||
||5,000,000.00|0.00|0.00|5,000,000.00|0.00||
||10,000,000.00|0.00|0.00|10,000,000.00|0.00||
||816,000,000.00|0.00|0.00|816,000,000.00|0.00||

||||||||
|-|-|-|-|-|-|-|
|Investee|Openingbalance|Increase|Decrease|Closingbalance|WithdrawnimpairmentprovisionintheReportingPeriod|Closingbalanceofimpairmentprovision|
|Total|1,155,089,408.32|0.00|0.00|1,155,089,408.32|0.00||

 4.RevenuesandCostsofOperation
||||||
|-|-|-|-|-|
|Item|ReportingPeriod||Sameperiodoflastyear||
||Salesrevenue|Costofsales|Salesrevenue|Costofsales|
||1,996,798,133.21|787,209,683.22|1,713,016,802.41||
||35,252,699.27|20,947,873.68|25,687,112.91||
|Total|2,032,050,832.48|808,157,556.90|1,738,703,915.32||

 5.InvestmentIncome
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
||0.00||
||2,329,585.99||
||22,065,303.71||
||49,254,878.84||
||1,290,384.43||
|Total|74,940,152.97||

 XVI.SupplementaryMaterials
1.ItemsandAmountsofExtraordinaryGainsandLosses
||||
|-|-|-|
|Item|Amount|Explanation|

||||
|-|-|-|
|Item|Amount|Explanation|
||-705,214.31||
||0.00||
||24,316,926.49||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||0.00||
||51,524,808.48||
||0.00||
||0.00||
||0.00||
||0.00||

||||
|-|-|-|
|Item|Amount|Explanation|
||0.00||
||13,365,868.64||
||0.00||
|Subtotal|88,502,389.30||
||21,884,672.27||
||1,682,839.50||
|Total|64,934,877.53||

Notes: the number“+” among the non-current gains and losses items refers to profits and revenues, while “-”referredtolossesorexpenditure.
Therecognitionofthenon-currentgainsandlossesitemswasexecutedaccordingtotheregulationsofNo.1ofthe Information Disclosure Explanatory Notice of the Companies Public Offering Securities-Non-current Gains andlosses(Z-J-H-Announcement[2008]No.43).
2.ReturnonNetEquityandEarningsPerShare
|||||
|-|-|-|-|
|ProfitasofReportingPeriod|WeightedaverageROE(%)|EPS(Yuan/share)||
|||BasicEPS|DilutedEPS|
||9.86|1.09||
||8.69|0.96||