Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Yantai Changyu Pioneer Wine Co. Ltd.
2017 Semi-annual Report
Final 2017-03
August, 2017
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Contents
I、Important Notice, Contents and Definition ............................................................................... 3II、Brief Introduction for the Company and Main Financial Indicators .................................. 5III、Summary of theCompany’s Businesses ................................................................................ 9IV、Management Discussion and Analysis ................................................................................. 11V、Major issues ............................................................................................................................. 24VI、Changes in Shares and theShareholders’ Situation .......................................................... 34VII、Related Situation of Preferred Shares ............................................................................... 39VIII、 Situation for Directors, Supervisors, Senior Management Staffs .................................. 40IX、 Related Situation of Corporation Bonds ........................................................................... 41X、 Financial Report ...................................................................................................................... 42XI、Reference Document ............................................................................................................. 138
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report I. Important Notice, Contents and Definition
The Board ofDirectors，the Board ofSupervisors，directors, supervisors& senior management staffs of the Company collectively and individually accept full responsibility for thetruthfulness，accuracy and completeness of the information contained in this report and confirm that to the best of their knowledge and belief there are no unfaithful facts, significant omissions or misleading statements.
Mr. Sun Liqiang (Chairman of the Company), Mr. Leng Bin (Chief Financial Officer) and Mr. Jiang Jianxun (Financial Director) assure the truthfulness, accuracy and completeness of the financial report in the annual report.
Expect the following directors, other directors have personally attended the Board of
Directors‘ meeting for deliberating this Semi-annual report.
|||||
|-|-|-|-|
|Director name withnon-present in person|Director post withnon-present in person|Reason fornon-present in person|Mandatary Name|
|Liu Yan|Independent director|Business trip|Luo Fei|
|Wei Anning|Director|Business trip|Qu Weimin|

About significant risks that may be faced in production and operation process, please referto―10. Risks the Company faces andmeasures‖ in chapter four―Management Discussion andAnalysis‖ of this report. We advise investors to read carefully and pay attention to the investment risks.
The business plan and target in the report do not represent the earnings forecast of the listed company to 2017. Whether the Company could achieve that or not depends on several factors including the changes of market conditions and the effort extent of managing team etc. with a great uncertainty, so the investors should be in a special attention.
In the first half year, the Company has no plan to distribute cash dividends and bonus shares; capital reserve will not be transferred to equity.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Definition
||||
|-|-|-|
|Definition Item|Refers to|Definition Content|
|Company/The Company/The|Refers to||
|||Yantai Changyu Pioneer Wine Co. Ltd.|
|Group|||
|Changyu Group/Controlling|Refers to||
|||Yantai Changyu Group Co. Ltd.|
|Shareholder|||
|CSRC|Refers to|China Securities Regulatory Commission|
|SSE|Refers to|Shenzhen Stock Exchange|
||Refers to|Deloitte Hua Yong Certified Public Accountants|
|Deloitte Hua Yong|||
|||Co., LTD (special general partnership)|
|CNY|Refers to|C hinese Yuan|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual ReportII、Brief Introduction for the Company and Main Financial Indicators 1.Company’s information
|||||
|-|-|-|-|
|Abbreviation of the Shares:|Changyu A、Changyu B|Code number of the Shares|000869、200869|
|Abbreviation of the Shares||||
||-|||
|after alteration||||
|Place of listing of the Shares|Shenzhen Stock Exchange|||
|Legal Name in Chinese|烟台张裕葡萄酿酒股份有限公司|||
|Abbreviation of Chinese name|张裕|||
|Legal Name in English|YANTAI CHANGYU PIONEER WINE COMPANY LIMITED|||
|Abbreviation of English name|CHANGYU|||
|Legal Representative|Mr. Sun Liqiang|||

2. Contact person and information
||||
|-|-|-|
|||Authorized Representative of the Securities|
||Secretary to the Board of Directors||
|||Affairs|
|Name|Mr. Qu Weimin|Mr. Li Tingguo|
|Address|56 Dama Road, Yantai, Shandong, China|56 Dama Road, Yantai, Shandong, China|
|Tel|0086-535-6633656|0086-535-6633656|
|Fax|0086-535-6633639|0086-535-6633639|
|E-mail|quwm@changyu.com.cn|stock@changyu.com.cn|

3. Other information
1)、TheCompany’s contact information
Whether there is any change for theCompany‘s registered address, office address, post code, website and e-mail address during the report period.
□Available Not available
There is no any change for theCompany‘s office address, post code, website and e-mail address during the report period, please see 2016 annual report for more details.
2)、Information disclosure and filling location
Whether there is any change for the information disclosure and filling location during the report period.
□Available Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report There is no any change for the newspapers in which theCompany‘s information is disclosed, website assigned by CSRC to carry the semi-annual report and the filling location during the report period, please see 2016 annual report for more details.
4. Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previous fiscal years.
□ No
|||||
|-|-|-|-|
|||In the same period of last|More or less than last|
||In the report period|||
|||year|year (%)|
|Business revenue (CNY)|2,767,098,197|2,753,032,799|0.51%|
|Net profit attributed to the|670,069,054|695,021,847||
|shareholders of the listed|||-3.59%|
|company (CNY)||||
|Net profit attributed to the||678,478,321||
|shareholders of the listed||||
|company after deducting the|652,906,375||-3.77%|
|irregular profit and loss||||
|(CNY)||||
|Net cash flows from the|420,360,319|682,748,369||
||||-38.43%|
|operating activities (CNY)||||
|Basic earnings per share|0.98|1.01||
||||-2.97%|
|(CNY/share)||||
|Diluted earnings per share|0.98|1.01||
||||-2.97%|
|(CNY/share)||||
|Weighted average for earning||8.78%||
||7.84%||-0.94%|
|rate of the net assets||||
||The end of the report||More or less than last|
|||The end of last year||
||period||year (%)|
|Total assets (CNY)|12,273,978,471|11,528,077,971|6.47%|
|Net Assets attributed to the|8,880,538,852|8,209,010,989||
|shareholders of the listed|||8.18%|
|company (CNY)||||

5. Differences in accounting data under PRC accounting standards and international
accounting standards
1)、Differences of net profit and net asset in the financial report disclosed according to both international accounting standards and PRC accounting standards
Available □Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Unit: CNY
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Net profit belonged to shareholders of||||Net asset belonged to shareholders of|||
||||listed company||||listed company|||
||||Amount in current||Amount in last||Amount at the end||Amount at the|
||||period||period||of this period||beginning of this|
||||||||||period|
||Based on Chinese|670,069,054||695,021,847||8,880,538,852||8,209,010,989||
||accounting standard|||||||||
||Items and amount adjusted based on international accounting standard|||||||||
|i|Based on|670,069,054||695,021,847||8,880,538,852||8,209,010,989||
||nternational|||||||||
||accounting standard|||||||||

2)、Differences of net profit and net asset in the financial report disclosed according to both foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences of net profit and net asset in the financial report disclosed according to both foreign accounting standards and PRC accounting standards during the report period.
3)、Explanation of difference in accounting data based on Chinese and international
accounting standards
□Available Not available
6. Item and amount of irregular profit and loss
Available □Not available
Unit：CNY
||||
|-|-|-|
|Item|Amount|Explanation|
|Gain on disposal of non-current assets, including the reversal of|-495,071||
|accrued impairment provision|||
|Tax return, deduction and exemption with unauthorized approval|12,737,950||
|or no official document of approval|||
|Government grants credited in profit and loss (except for those|6,997,254||
|recurring government grants that are closely related to the entity's|||
|operation, in line with related regulations and have proper basis|||
|of calculation)|||
|Other non-operating expense and income|3,225,833||
|Less: Income tax effect|5,303,287||
|Total|17,162,679|-|

The reasons shall be made clear and definitely as to the irregular profit and loss that the Company
has defined by virtue of the Explanatory Notice on PublicCompany’s Information Disclosure No.1
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report - Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss as specified in the Explanatory Notice on PublicCompany’s Information Disclosure No.1 - Irregular Profit and Loss.
□Available Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and loss in accordance with the Explanatory Notice on PublicCompany’s Information Disclosure No.1 - Irregular Profit and Loss during the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report III. Summary of theCompany’s Businesses
1. Main businesses during the report period
Whether the Company needs to follow the disclosure requirement of special business?
No.
During the report period, theCompany‘s main business is to produce and operate wine and brandy, thus providing the domestic and foreign consumers with healthy and fashionable alcoholic drinks. The Company integrates the planting and procurement of grape, the procurement of raw and auxiliary material, the production and sales of products. Compared with earlier stage, there are no significant changes happened to theCompany‘s main businesses. The wine industry that the Company involved in is still in the growth stage, the whole domestic wine market is on the rising trend. The Company takes the dominant position in the domestic wine market. During the report period, the sales of wines with low price is slightly down; middle-and-high-level wines, such as Noble Dragon and chateau wine, remain stable; the sales amount of brandy and imported wines keeps the favorable growth momentum. All these make theCompany‘s business performance basically equal compared with the same period of last year.
2. Significant changes of main assets
1)、Significant changes of main assets
|||
|-|-|
|Main assets|Explanation of significant changes|
|Equity asset|No significant changes|
|Fixed asset|No significant changes|
|Intangible asset|No significant changes|
||Increasing by 26.07% compared with the end of last year, mainly|
|Construction in process||
||owing to increased investment in projects under construction|
||Increasing by 79.98% compared with the end of last year, mainly|
|Notes receivable|owing to increased amount of bank acceptance through selling|
||products to clients|
||Increasing by 1424.5% compared with the end of last year,|
|Interest receivable||
||mainly owing to increased interest of fixed deposit|
||Increasing by 73.01% compared with the end of last year, mainly|
|Other current assets||
||owing to increased tax prepaid|
||Increasing by 1832% compared with the end of last year, mainly|
||owing that the settlement about the acquisition of Bethwines by|
|Other non-current assets||
||the Company‘s subsidiary Indomita Wine Company Chile, SpA|
||is not finished|

2)、Main overseas assets condition
□Available Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 3. Analysis of core competitiveness
Whether the Company needs to follow the disclosure requirement of special business?
No.
Compared with the participants in the arena of the Chinese wine sector, we believe that the Company is provided with the following advantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years,―Changyu‖,―NobleDragon‖ and―AFIP‖ are Chinese famous trademarks that have strong influence and good reputation.
Secondly, the Company has set up a nationwide marketing network, formed a―three-level‖ marketing network system mainly composed of thecompany‘s salesmen and distributors, possessed the strong marketing ability and market exploitation ability.
Thirdly, the Company has already had strong research strength and a productR&D system, owned a one and only―State-level WineR&DCenter‖, made mastery of advanced winemaking technology and production processes, been powerful enough in product innovation and established a perfect quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases to meet its future development, having developed a great deal of vineyards in the most suitable areas for wine grape growing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Shanxi, whose scales and structures have generally met theCompany‘s needs for development.
Fifthly, the Company has a great variety of products composed of all grades, itswine，brandy and sparkling wine of over 100 sorts can meet differentconsumers‘ demands. The Company has taken the lead in the domestic wine sector through rapid development in the past 10-odd years and has possessed comparative superiority in the future competition.
Sixthly, the Company has a relatively respect motivation system. Most ofCompany‘s employees indirectly hold theCompany‘s equity through controlling shareholders. There are high consistency between employee benefits and shareholders benefits, in favor of motivating employees to create value for shareholders.
All in all, the Company has built up a strong core competitive edge and obtained and maintained a relatively dominant position in the long-term market competition.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report IV. Management Discussion and Analysis
1. Summarization
During the report period, influenced by the slowdown of domestic economic growth, the overall domestic wine industry is relatively stable. With the increased scale of domestic middle class, the effective demands for top-level products begin the slow recovery and the medium-and-low-level products suitable for mass consumption maintains a slight growth tendency. Influenced by the further decrease in product price resulting from the overwhelming flow of foreign wine into Chinese market, the competition in domestic wine market, especially for middle-and-low-level wines, is very fierce, plus the great impact brought by E-commerce and other new channels to traditional sales channels, resulting in bigger challenges for the Company to achieve sustained and steady growth. Facing quite a lot of external disadvantages, the Company insists to focus on the market, adjust the marketing tactics and product structure, strive to develop brandy and imported wine, optimize the market layout, perfect the marketing channels and assessment system, strive to promote product sales, achieving good results and realizing business income of CNY2767.09 million, an increase of0.51% compared with last year; but due to the impact of increase in operating cost, taxes and additional, sales expense and administrative expense, the Company realized net profit of CNY670.06 million belonging to the parentcompany‘s shareholders, an decrease of3.59% compared with last year.
During the report period, the Company mainly did following works:
Firstly, the Company focused on the market, strengthened the market adjustment and strived to promote the overall development of various products. During the report period, the Company insisted the strategy of―focusing on wine while fully developing variousproducts‖, further perfected the construction of sales system and performance assessment method for marketing personnel, integrated the sales structure of regional market, such as southwest, northwest and some coastal cities and so on, as well as that of sub channels, implemented―personnel reduction with salary increase, personnel reduction with efficiency increase‖, reorganized some exclusive shops, receiving favorable results; further perfect the team of key distributors and the team of professional sales personnel, consolidated the market position of middle-and-high-level products, such as chateau wine and Noble Dragon; quickened the layout of marketing network for brandy and reinforced the marketing of middle-level brandy, such as―ThreeStar‖,―FourStar‖ and―FiveStar‖ and so on, further increasing the profitability of brandy products; continued doing well the marketing work of overseas acquiredenterprise‘s products which behave well in international market and retain steady growth momentum in domestic market, providing new power for accelerating theCompany‘s development.
Secondly, the Company strengthened the financial management and made efforts to achieve energy-saving and cost-reducing to further reduce the operating cost. During the report period, the Company scientifically made the programme for financing structure, strengthened the capital allocation and management and accelerated the capital flow, favorably squeezing the capital cost; reinforced the monitoring for key expenses, such as advertising expense, freight, big repair charge and grape planting expense, etc, and strengthened the profit assessment of self-owned grape bases, reducing the operating cost and improving the capital use efficiency.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Thirdly, the Company continued implementing internationalization strategy and orderly proceeded the overseas acquisition work. During the report period, the Company decided to establish Indomita Wine Company Chile, SpA which acted as the platform to acquire ChileanBethwines‘s three subsidiaries with wine business, further perfecting theCompany‘s productivity layout and product structure and improving theCompany‘s market competition in imported products.
Fourthly, the Company intensified the project management to ensure that each construction project could be put into operation on schedule. During the report period, through reinforcing the project management, scientifically arranging schedule, strictly conforming to the budget requirement, making and implementing removal plan and doing well the connection between production and sales, the Company ensured that each construction project goes smoothly. At present, civil work of main invested projects have reached the ending phase and the production equipments are in the installation and commissioning phase.
In order to achieve the operation target set by the Company at the beginning of this year, the Company would do following work in the second half year of 2017:
Firstly, the Company would intensifying the brand construction and carding work, further clear brand positioning and optimize the product line. The Company would take thorough carding work to current brands and product lines, fully improve the packaging quality and level of products, further clear the market positioning of each brand and industriously compressing the quantity of categories in order for the Company to better carry out marketing work.
Secondly, the Company would continue paying attention to the construction of key distributor team and professional sales personnel team, conducting the tasting and promotion work of middle-and-high-level products, such as chateau wine, Noble Dragon,―ThreeStar‖ and above level brandy products, and striving to promote the sales of middle-and-high-level products; do the preparation work for the launch of new products, such as Koyac brandy, Chilean Indomita wines and small volume products, further perfect the product development and design of Grappie and put them on the market at the right time; continue promoting the sales work of acquired brands in domestic and foreign markets, such as Atrio, Mirefleurs, Donelli and Indomita and so on, further establish and perfect the domestic and foreign sales system, take full advantage of foreign sales network to enlarge the export scale of domestic wines; make the best of information technology, strengthen the ability to react to market conditions, change the production from plan-driven to order-driven, fully implement the strategy of utilizing the sales volume to decide the production, shorten the delivery time, strive to lower the inventory, reduce the fund occupation and increase the enterprise revenue; reinforce the training and reorganization work of marketing team, improve the assessment and incentive mechanism and further enhance the marketing capacity.
Thirdly, the Company would orderly proceed the construction of invested projects and focus on the connection between production and sales. The Company would manly focus on the ending work of mainbody‘s civil work in Yantai Changyu International Wine City (in other words Yantai Changyu Industry Park) as well as the equipment installation and commissioning work, weed out backward production capacity, achieve the seamless connection between old capacity and new capacity and timely satisfy the market needs.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Fourthly, the Company would optimize the layout of grape bases and comprehensively complete the procurement of grape materials. The Company would actively explore the new model of building overseas grape base, enlarge the area of overseas grape base, increase and improve the raw material supply channel, make effort to reduce raw material cost and improve raw material quality; keep optimizing the grape pricing mechanism, reasonably confirm grape procurement price and comprehensively complete the procurement work of raw material in order to ensure the material supply.
2. Analysis of main business
Refer to―1.Summarization‖ of―Management Discussion and Analysis
Period comparison of main financial data
Unit: CNY
||||||
|-|-|-|-|-|
||In the report|In the same period|||
||||More or less (%)|Reason for changes|
||period|of last year|||
|Operating revenue|2,767,098,197|2,753,032,799|0.51%|-|
|Operating cost|925,754,133|902,734,104|2.55%|-|
|Sales expense|668,735,726|650,737,234|2.77%|-|
||130,542,386|122,695,845|6.40%|Mainly attributed to the increase of employee‘s compensationand depreciation expense on year-on-year basis|
|Management expense|||||
||11,147,949|10,988,233|1.45%|Mainly attributed to the decrease of interest income from bankdeposits on year-on-year basis|
|Financial expense|||||
||228,752,790|238,715,481|-4.17%|Mainly attributed to the decreased of deferred income taxexpenses on year-on-year basis|
|Income tax expense|||||
|R&D investment|0|0|0%|-|
|Net amount of cash|420,360,319|682,748,369|-38.43%|Mainly attributed to the increase of bill receivable from goodsselling|
|flow generated in|||||
|operating activities|||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|Net amount of cash|-797,540,941|-397,659,283|-100.56%|Mainly attributed to the increase of cash generated by buildingof fixed assets, intangible assets and other long-term assets aswell as cash used for more than three months fixed deposit onyear-on-year basis|
|flow generated in|||||
|investment activities|||||
|Net amount of cash|353,878,706|259,718,424|36.25%|Mainly attributed to the decrease of cash used for debtrepayment on year-on-year basis|
|flow generated in|||||
|financing activities|||||
||-27,454,401|551,693,393|-104.98%|Mainly attributed to the decrease of cash received from goodsselling and labor service providing on year-on-year basis butthe increase of cash generated by building of fixed assets,intangible assets and other long-term assets on year-on-yearbasis|
|Net increased amount of|||||
|cash and cash|||||
|equivalents|||||

Whether there is any great change for theCompany‘s profit structure or profit source during the report period
□Available Not available
There is no great change for theCompany‘s profit structure or profit source during the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Structure of main businesses
Unit: CNY
||||||||
|-|-|-|-|-|-|-|
|||||Increase or decrease of|Increase or decrease of operating|Increase or decrease of gross|
||Operating|Operating|Gross profit||||
|||||operating revenue over the|cost over the same period of last|profit over the same period of|
||revenue|cost|(%)||||
|||||same period of last year (%)|year (%)|last year|
|Sector|||||||
|Wine and|||||||
|alcoholic|||||||
||2,767,098,197|925,754,133|66.54%|0.51%|2.55%|-0.67%|
|beverages|||||||
|Product|||||||
|Wine|2,151,123,903|704,020,080|67.27%|-1.21%|0.10%|-0.43%|
|Brandy|575,324,933|200,170,322|65.21%|6.47%|9.13%|-0.85%|
|Other|40,649,361|21,563,731|46.95%|15.35%|34.88%|-7.68%|
|Region|||||||
|Domestic|2,629,066,639|841,890,209|67.98%|0.16%|3.88%|-1.14%|
|Overseas|138,031,558|83,863,924|39.24%|7.60%|-9.09%|11.16%|

 3. Analysis to non-main business
□Available Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 4. Assets and liabilities situation
1)、Major changes of assets
Unit: CNY
||||||||
|-|-|-|-|-|-|-|
||The end of the report period||The end of the same period of last year||Proportion increase||
|||||||Explanation on major|
|||Proportion in the||Proportion in the|or decrease||
||Amount||Amount|||changes|
|||total assets (%)||total assets (%)|(%)||
|Monetary funds|1,550,067,781|12.63%|1,391,517,607|12.07%|0.56%|-|
|Receivables|167,152,509|1.36%|173,062,628|1.50%|-0.14%|-|
||2,024,302,929||2,248,609,740|||Mainly attributed to the|
|Inventory||16.49%||19.51%|-3.02%|decrease of amount of|
|||||||inventory goods selling|
|Investment real estate||0%||0%|0%|-|
|Long-term equity|||||||
|||0%||0%|0%|-|
|investments|||||||
||4,591,037,486||4,683,187,493|||Mainly attributed to the|
|Fixed assets||37.40%||40.62%|-3.22%|increase of accumulated|
|||||||depreciation|
||1,697,297,440||1,346,281,737|||Mainly attributed to the|
|||||||increase of investment on|
|Construction in progress||13.83%||11.68%|2.15%||
|||||||the construction in|
|||||||progress|
||846,881,075||662,388,882|||Mainly attributed to the|
|Short-term borrowings||6.90%||5.75%|1.15%|increase of short term|
|||||||loans acquired from banks|
||175,270,580||49,140,555|||Mainly attributed to the|
|Long-term borrowings||1.43%||0.43%|1%|increase of long term loans|
|||||||acquired from banks|

2)、 Measuring assets and liabilities at fair value
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report□Available Not available
3)、Assets rights restricted situation up to the end of report period
Assets rights restricted situation of the Company up to the end of report period, please refer to Notice on External Guarantee disclosed on the website (www.cninfo.com.cn) on December
22nd,
2016.
5. Investment situation analysis
1)、Overall situation
□Available Not available
2)、Situation of acquired main equity investments during the report period
Available □Not available
Unit: CNY
|||||||||||||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||||||||||||Investment|||||||
||Name of||||||||||||||||||Progress up|||||||||||
||||||||||||||||||||||||profit and||Whether|||||
||the||Main||Investment||Investment||Shareholding||Capital||||Investmen||Product||to the||Estimated||||||Disclosure||Disclosure|
||||||||||||||Partners||||||||||loss for||or not to|||||
||invested||businesses||mode||amount||ratio||source||||t horizon||type||balance||profit||||||date||index|
||||||||||||||||||||||||current||prosecute|||||
||company||||||||||||||||||sheet date|||||||||||
||||||||||||||||||||||||period|||||||
|IndomitaWineCompanyChile,SpA||Production andoperationof wineand otheralcoholicbeverages||Newlyestablished||280,502,100||85%||Self-owned||LAMBOSpA||50 years||Alcohol||Registrationalreadycompleted,now takingsettlementprocedure||50,000,000.||0||No||May 26th,2017||Notice onEstablishingJoint-VentureIndomitaWineCompany||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||Chile, SpAdisclosedon thewebsite(www.cninfo.com. cn)|
|Total|-|-|280,502,100|-|-|-|-|-|-|50,000,000.|0|-|-|-|

3)、Situation of main ongoing non-equity investments during the report period
Available □Not available
Unit: CNY
||||||||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||||||||Reasons|||||
||||||||||||Accumulated|||||||Accumulated|||||||
|||||||||||||||||||||for|||||
||||||Whether||||||actual|||||||realized|||||||
||||||||||Investment|||||||||||unreached|||||
||||||it belongs||||||investment||||Process|||profit up|||||||
||||Investment||||Involved||Amount||||Capital|||Estimated||||planning||Disclosure||Disclosure|
||Project name||||to fixed||||||amount up||||of|||to the end|||||||
||||mode||||sectors||during the||||source|||profit||||schedule||date||index|
||||||assets||||||to the end||||project|||of the|||||||
||||||||||report period|||||||||||and|||||
||||||investment||||||of the report|||||||report|||||||
|||||||||||||||||||||estimated profit|||||
||||||||||||period|||||||period|||||||
|YantaiChangyuInternationalWine CityBlending andCoolingCenter||Self-constructed||Yes||Liquor andalcoholicbeveragesector||172,000,000||1,195,130,000||Ownedfunds||98%|||0||Not completed orput into operation||2016.04.22||Notice onResolution ofthe SeventhSession BoardofDirectors’ 4thMeetingdisclosed on thewebsite (www.||
|YantaiChangyu||Self-constructed||Yes||Liquor andalcoholic||103,000,000||879,690,000||Ownedfunds||98%|||0||Not completed orput into operation||2016.04.22||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|InternationalWine CityBottlingCenter|||beveragesector||||||||cninfo. com. cn)|
|YantaiChangyuInternationalWine CityLogisticsCenter|Self-constructed|Yes|Liquor andalcoholicbeveragesector|4,700,000|403,592,000|Ownedfunds|100%|0|No direct earning|2016.04.22||
|Changyu Vineand WineResearchInstitute|Self-constructed|Yes|Liquor andalcoholicbeveragesector|2,000,000|107,760,000|Ownedfunds|60%|0|Not completed orput into operation|2016.04.22||
|TreasureWine Chateau|Self-constructed|Yes|Liquor andalcoholicbeveragesector|23,860,000|102,850,000|Ownedfunds|60%|0|Not completed orput into operation|2016.04.22||
|Koyac BrandyChateau|Self-constructed|Yes|Liquor andalcoholicbeveragesector|32,240,000|144,168,000|Ownedfunds|60%|0|Not completed orput into operation|2016.04.22||
|GreeningInvestment|Self-constructed|Yes|Liquor andalcoholicbeveragesector|12,200,000|37,500,000|Ownedfunds|100%|0|No direct earning|2016.04.22||
|CognacFransacchateau|Self-constructed|Yes|Liquor andalcoholicbeverage|0|0|—|0%|0|Not completed orput into operation|2016.04.22||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|renovationproject||||sector|||||||||||
||Total|—|—||—|350,000,000|2,870,690,000|—|—|0|0|--|--|--|

4)、Financial assets investment
(1) Security investment
□Available Not available
There is no security investment for the Company during the report period.
(2) Derivative investment
□Available Not available
There is no derivative investment for the Company during the report period.
6. Sale of major assets and equities
1)、 Sale of major assets
□Available Not available
There is no sale of major assets during the report period.
2)、 Sale of major equities
□Available Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7. Analysis to the major holding and joint stock companies
Available □Not available
Situation of main subsidiaries and joint stock companies affecting over10% of theCompany‘s net profit
Unit: CNY
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company|Company|Main business|Industry|Registered capital|Total asset|Net asset|Operation|Operation|Net Profit|
|name|type||||||revenue|profit||
|||To plant grape, produce and|Wine and alcoholic|||||||
|Xinjiang Tianzhu||||||||||
||Subsidiary|sell grape juice, bulk wine|beverages industry|CNY75million|171,307,123|123,857,826|115,904,168|26,750,711|22,453,715|
|Winery Co., Ltd.||||||||||
|||and fruit wine||||||||
|Yantai||To research, produce and|Wine and alcoholic|||||||
|Changyu-Chateau||sell wine and sparkling|beverages industry|||||||
||Subsidiary|||USD5million|246,486,329|79,644,461|20,668,538|1,138,003|-106,018|
|Changyu Castel Wine||wine as well as the tourism||||||||
|Co. Ltd.||service||||||||
|Langfang Castel-|Joint stock||Wine and alcoholic|||||||
|||To produce and sell wine||USD6.108818million|45,760,868|36,337,841|23,732,778|207,784|161,088|
|Changyu Wine Co. Ltd.|company||beverages industry|||||||
|Chateau Changyu AFIP||To research, produce and|Wine and alcoholic|||||||
||Subsidiary|||CNY110million|541,925,594|172,295,488|75,491,933|17,573,835|12,511,172|
|Global Wine Co. Ltd.||sell brandy and wine|beverages industry|||||||
|Chateau Liaoning|||Wine and alcoholic|||||||
|Changyu Ice Wine Co.,|Subsidiary|To produce ice wine|beverages industry|CNY26.30million|79,162,817|49,835,838|16,724,881|-2,046,303|-2,063,324|
|Ltd.||||||||||
|Hacienda Y Vinedos||To produce and operate o|Wine and alcoholic|||||||
||Subsidiary|||EUR2.385732million|435,592,862|124,144,131|131,223,890|-2,216,518|-233,187|
|Marques Del Atrio, SL||wine and other liquor|beverages industry|||||||

Acquisition and disposal of subsidiaries during the report period
□Available Not available
Information of main holding and joint stock companies
During the report period, Yantai Changyu-Castel Wine Chateau Co. Ltd. and Chateau Liaoning Changyu Ice Wine Co., Ltd. produced losses, which mainly attributed to the decrease of sales revenue of Yantai Changyu Pioneer Wine Sales Limited Company and other internal sales
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report organisations from the two sales companies. Hacienda Y Vinedos Marques Del Atrio, SL produced losses, which mainly attributed to the amortization of premium from initial
acquisition.
8. Main part situation of the special purpose being controlled by the Company
□ Not available
9. Forecast for the operation achievements from January to September of 2017
Caution and explanation for the prediction that the cumulative net profit from the beginning of the year to the end of next report period could be in a loss or there will be in a great change comparing with the same period of last year.
□ Not available
10. Risks the Company faces and measures
(1) Risks in price fluctuation of raw materials
Grapes are theCompany‘s main raw materials. Thegrape‘s yield and quality are affected to a certain extent by the natural factors such as drought, wind, rain, frost and snow. These force majeure factors greatly influence the quantity and price of the grapes in this Company orders and add the uncertainty to theCompany‘s production and operation. Therefore, the Company will lower the risks that are likely to affect grape quality and result in price fluctuation by means of expanding the self-run vineyards, strengthening the vineyard management and optimizing the layout of vineyards.
(2) Risks in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development, the Company has input more and more capital in the market and the sales expense has taken up a higher percentage point in the business revenue. The input-output ratio will affect theCompany‘s operating results to a great extent and the risk that some investments may not reach the expectations is likely to occur. Therefore, the Company will strengthen market research and analysis, enhance market forecast accuracy and continue to perfect the input-output evaluation system to ensure the investments in market to be satisfactory as expected.
(3) Risks in product transport
TheCompany‘s products are fragile and sent to different places all over the world, mostly by sea, railway and expressway. The peak season of sales is usually in cold winter and close to the spring festival when market has a great demand. At that time, the natural and human factors such as serious shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as well as traffic accidents make the transport departments difficult to send products to markets in time and safely. As a result, it makes this Company have to face the risks of missing the peak season of sales. Therefore, the Company will adopt all methods possible like making precise sales prediction and well designed connection of production and sales, reasonably arranging production and transport means and making use of more available warehouses in different places to lower these kinds of risks.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (4) Risks in investment faults
According to the plan, currently the Company has finished the production layout at home, and the next step is to pay more attention to the overseas merge and acquisition in the same industry. Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park) has those features such as the big investment amount, long-term construction period and many uncertain factors; more unforeseeable factors for the overseas merge and acquisition projects in the progress ofM&A, it is difficult to make sure the fair and reasonable transaction price, the integration and management afterM&A is also hard. Under the influence of uncertain factors for individual projects, it leads to have the risks of facing with the investment amount out of budget or hardly taking back the expected investment earnings. The Company will take an adequate argument and scientific decision-making for investment projects, try hard to reduce and avoid investment risks.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report V. Major issues
1. Information for theshareholders’ meeting and temporaryshareholders’ meeting held during the report period
1)、Information for theshareholders’ meeting during the report period
|||||||
|-|-|-|-|-|-|
|||Participation ratio||||
|Session|Meeting type||Convening date|Disclosure date|Disclosure Index|
|||of investors||||
||Annual||||http://www.cninfo.com.cn|
|2016 Annual Shareholders‘||||||
||shareholders‘|61.86%|2017.06.15|2017.06.16|Notice on Resolution of 2016|
|Meeting||||||
||meeting||||Annual Shareholders’ Meeting|

2)、Request for convening temporaryshareholders’ meeting by priority shareholders owing recovered voting right
□Available Not available
2. TheCompany’s preliminary scheme of profit distribution and preliminary scheme of increasing equity with capital reserve□Available Not available
There are no schemes of paying cash dividend, bonus share and increasing equity with capital during the semi-annual period.
3. Commitments that theCompany’s actual controllers, shareholders, related parties, acquirers and the Company and other related commitment parties have implemented during the report period and have not implemented up to the end of the report periodAvailable □Not available
||||||||
|-|-|-|-|-|-|-|
|Commitments|Commitment party|Commitment type|Commitment content|Commitment time|Commitment period|Implementation|
|Commitments|||||||
|at share reform|||||||
|Commitments|||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|made in|||||||
|acquisition|||||||
|report or equity|||||||
|changes report|||||||
|Commitments|||||||
|at asset|||||||
|restructuring|||||||
||Yantai Changyu|Solve horizontal|Non-horizontal|||Has been|
|||||1997.05.18|Forever||
||Group Co. Ltd.|competition|competition|||performing strictly|
||||According to||||
||||Trademark License||||
||||Contract, the Company||||
||||will pay trademark||||
||||royalty for the||||
|Commitments|||‗‗Changyu‘‘||||
|at the initial|||products of Yantai||||
|public offering|Yantai Changyu|Clear the purpose|Changyu Group Co.,|||Has been|
|||||1997.05.18|Forever||
|or refinancing|Group Co. Ltd.|of brand royalty|Ltd every year, Yantai|||performing strictly|
||||Changyu Group Co.,||||
||||Ltd will use trademark||||
||||royalty to advertise||||
||||‗‗Changyu‘‘ trademarks||||
||||and Contracted||||
||||products in this||||
||||contract.||||
|Equity|||||||
|incentive|||||||
|commitments|||||||
|Commitments|||||||
|at middle and|||||||
|small|||||||
|shareholders of|||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||
|-|-|
|the Company||
|Commitment||
|under timely||
||Yes|
|implementatio||
|n or not||
|Whether or not||
|to have||
|specific||
|reasons of the|No|
|unimplemented||
|commitment||
|and next steps||

4. The appointment and dismissal of certified public accountants
Whether the semi-annual report has been audited
□ Yes No
The semi-annual report has not been audited.
5. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available Not available
6. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available Not available
7. Bankruptcy reorganization
□Available Not available
There are no related issues of bankruptcy reorganization happened during the report period and until the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 8. Litigation Issue
Material litigation and arbitration
□Available Not available
There are no material litigation and arbitration during the report period.
Other Litigation Issue
□Available Not available
9. Penalty and rectification
□Available Not available
There are no penalties or rectifications during the report period.
10. Credit of the Company, holding shareholders and actual controllers
□Available Not available
11. Implementation of theCompany’s equity inventive plan, employee stock ownership plan or other employee incentive measures
□Available Not available
There are no implementation of theCompany‘s equity inventive plan, employee stock
ownership plan and other employee incentive measures.
12. Significant related transactions
1)、 Related transactions in relation to routine operations
□Available Not available
There are no related transactions in relation to routine operations during the report period.2)、 Related transactions in relation to acquisition and sales of assets or equity
□Available Not available
There are no related transactions in relation to acquisition or sales of assets or equity during the report period.
3)、 Related transactions in relation to common foreign investment
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report□Available Not available
There are no related transactions in relation to common foreign investment during the report period.
4)、 Related current credit and debt
Available □Not available
Whether or not to exist non-operating related credit and debt
□Yes No
There are no non-operating related credit and debt during the report period.
5)、 Other major related transactions
Available □Not available
Detailed information about routine related transactions, please refer to Notes XI "Related party and Related Transaction" in the Financial Statement of the report in detail, or could also look up theCompany‘s related temporary announcement according to the following index.
Disclosure website of major relatedtransactions‘ temporary reports for related query
||||
|-|-|-|
|Name of|Disclosure date of|Website of disclosure of|
|Temporary announcement|temporary announcement|temporary announcement|
|Notice on 2017 Annual Routine||Cninf|
||2017.04.22||
|Related Transaction||(http://www.cninfo.com.cn)|

13. Non-business capital occupying of listed company by controlling shareholder and its related parties
□Available Not available
There are no non-business capitals occupying of listed company by controlling shareholder and its related parties during the report period.
14. Major and important contracts and execution results
1)、Trusteeship, contract and leasehold issues
(1) Trusteeship situation
□Available Not available
There is no trusteeship situation during the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (2) Contract situation
Available □Not available
Contract situation description
During the report period, about theCompany‘s contract operation situation, please see‗‗1. Equity in thesubsidiaries‘‘ in Annex 9‗‗Rights and interests of othersubjects‘‘ in the
financial report of this report.
Project in gains and losses for the Company to achieve more than10% of the total profit
□Available Not available
There are no contract projects in gains and losses for the Company to achieve more than10% of the total profit during the report period.
(3) Leasehold situation
Available □Not available
Leasehold situation description
During the report period, the Company renewed the Space Lease Agreement with the controlling shareholder Changyu Group, the Company leased the space with 57749.77 square meters located at 174 Shihuiyao Road, Zhifu District,Yantai City and the space with 3038 square meters located at 56 Dama Road, Zhifu District, Yantai City, which are all under the name of controlling shareholder. The rent of the above spaces per year is CNY 5.858 million with a period of 5 years from January
1st,
2016 to December
31st,
2021.
Project in gains and losses for the Company to achieve more than10% of the total profit
□Available Not available
There are no leasehold projects in gains and losses for the Company to achieve more than10% of the total profit during the report period.
2)、Major guarantee
Available □Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (1) Guarantee situation
Unit:CNY‘0000
||||||||||
|-|-|-|-|-|-|-|-|-|
|External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）|||||||||
||Disclosure date of||||||Whether or not||
|Guarantee object||Guarantee|Actual date of occurrence|||Guarantee||Whether or not belong to|
||related announcement|||Actual guarantee amount|Guarantee type||complete||
|name||quota|(date of agreement)|||Period||related-party guarantee|
||about guarantee quota||||||implement||
|Yantai Economic|||||||||
|and Technological|||||||||
|Development Zone|2016.12.22|34,160|2016.12.21|34,160|Mortgage; Pledge|10 years|No|No|
|Management|||||||||
|Council.|||||||||
|Total of the external guarantee quota||||Total of the actual external guarantee amount|||||
|||0||||0|||
|approved during the report period (A1)||||during the report period (A2)|||||
|Total of the external guarantee quota||||Balance of the actual external guarantee by the|||||
|||34,160||||34,160|||
|approved by the end of the report period (A3)||||end of the report period (A4)|||||
|Guarantee between the Company and subsidiaries|||||||||
||Disclosure date of||||||Whether or not|Whether or not belong to|
|Guarantee object||Guarantee|Actual date of occurrence|||Guarantee|||
||related announcement|||Actual guarantee amount|Guarantee type||complete|related-party guarantee|
|name||quota|(date of agreement)|||Period|||
||about guarantee quota||||||implement||
|Yantai Changyu|||||||||
||||||Joint liability||||
|Pioneer Wine Sales|2016.10.31|10,000|2016.11.05|10,000||2years|No|Yes|
||||||assurance||||
|Company Limited|||||||||
|Yantai Changyu|||||||||
|Pioneer Wine|2016.12.22|11,984|2016.12.21|11,984|Mortgage; Pledge|10years|No|Yes|
|Company Limited|||||||||
|Yantai Changyu|||||||||
|Wine Research and|||||Joint liability||||
||2016.12.22|72,176|2016.12.21|72,176||10years|No|No|
|Development|||||assurance; Mortgage||||
|Company Limited|||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Total of the guarantee quota approved to||||Total of the actual guarantee amount for||||||||
|||0||||||0||||
|subsidiaries during the report period (B1)||||subsidiaries during the report period (B2)||||||||
|Total of the guarantee quota approved to||||||||||||
|||||Balance of the actual guarantee for subsidiaries||||||||
|subsidiaries by the end of the report period||82,176||||||82,176||||
|||||by the end of the report period (B4)||||||||
|(B3)||||||||||||
|Guarantee between subsidiaries||||||||||||
||Disclosure date of||||||||Whether or not|||
|Guarantee object||Guarantee|Actual date of occurrence|||||Guarantee||Whether or not belong to||
||related announcement|||Actual guarantee amount|||Guarantee type||complete|||
|name||quota|(date of agreement)|||||Period||related-party guarantee||
||about guarantee quota||||||||implement|||
|-|-|-|-|-|||-|-|-|-||
|Total of the guarantee quota approved to||||Total of the actual guarantee amount for||||||||
|||0||||||0||||
|subsidiaries during the report period (C1)||||subsidiaries during the report period (C2)||||||||
|Total of the guarantee quota approved to||||||||||||
|||||Balance of the actual guarantee for subsidiaries||||||||
|subsidiaries by the end of the report period||0||||||0||||
|||||by the end of the report period (C4)||||||||
|(C3)||||||||||||
|Total of the Company‘s guarantee amount（Total of above three major items）||||||||||||
|Total of the approved guarantee quota during the report period（A1+B1+C1）|||||0|Total of the actual guarantee amount during the report period（A2+B2+C2）|||||0|
|Total of the approved guarantee quota by the end of the report period（A3+B3+C3）|||||116,336|Balance of the actual guarantee by the end of the report period（A4+B4+C4）|||||116,336|
|The proportion of Actual total guarantee amount (A4+B4+C4) in the Company‘s net asset||||||13.10%||||||
|Among :||||||||||||
|The amount of guarantee for shareholders, actual controllers and their related parties（D）||||||||0||||
|The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70% directly or indirectly（E）||||||||0||||
|Total amount of guarantee that exceeds 50% of net assets（F）||||||||0||||
|Total amount of the above-mentioned three items（D+E+F）||||||||0||||
|Explanation for undue guarantees that have happened warranty liability or may take joint payback liabilities during the report period||||||||No||||
|Explanation for violating due process to provide external guarantee||||||||No||||

Specific explanation on adopting complex guarantee type
No
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (2) Illegal external guarantee
□Available Not available
There is no illegal guarantee situation during the report period.
3)、Other important contracts
□Available Not available
There are no other important contracts during the report peri
15. Situation for Social Responsibility
1)、Situation for carrying out social responsibility of precise poverty
There is not carried out precise poverty, no-plan for Subsequent precise poverty during the Semi-annual report period.
2)、Major environmental situation
The listed company and its subsidiaries are whether or not to belong to the heavy pollution industry stipulated by the state environmental protection department.
□Yes No
16. Other Major issues
□Available Not available
There are no other major issues need to be explained during the report period.
17. Major issues ofCompany’s subsidiaries
Available □Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Information of newly established subsidiaries during this report period is as follows:
|||||||
|-|-|-|-|-|-|
|Full name of investedunit|Incorporation dateand place|Corporate representative|Business Character|Registered capital|Contribution amount|
|Yantai ChangyuPioneer Wine SalesCompany Limited|2017.01.18Yantai, Shandongprovince, China|Wang Hongshan|Sales|CNY 5,000,000|CNY 5,000,000|
|Indomita WineCompany Chile, SpA|2017.04.06Santiago, Chile|WILFRED CHARLESLEIGH NIELSEN|Manufacturingindustry|USD 1,000,000|USD 40,110,000|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report VI. Changes in Shares and theShareholders’ Situation
1. Changes in shares
1)、Changes in shares
Unit: share
Amount after this change
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount before this change||Change (+, -)|||||Amount after this change||
||||||Transfer|||||
|||Percentage|Allot|Distribute|other||||Percentage|
||Amount||new||capital to|others|Sub total|Amount||
|||%||bonus share|||||%|
||||share||share|||||
||||||capital|||||
|1、Unrestricted shares||||||||||
||685,464,000|100%||||||685,464,000|100%|
|(1)、A shares||||||||||
||453,460,800|66.15%||||||453,460,800|66.15%|
|(2)、B shares||||||||||
||232,003,200|33.85%||||||232,003,200|33.85%|
|2、Total shares||||||||||
||685,464,000|100%||||||685,464,000|100%|

 Cause of share change
□Available Not available
Approval of share change
□Available Not available
Transfer of changed shares
□Available Not available
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the latest period, net asset per share belonging to theCompany‘s common shareholders, etc.
□Available Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available Not available
2)、Changes in restricted shares
□Available Not available
2. Securities issuance and listing situation
□Available Not available
3. Situation for shareholders and the actual controllers
Unit：share
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Total number of preferred|||||||
|Total common shareholders at the||43,009 (23,475 of Stock A and|||shareholder recovering|||||||
|||||||||0||||
|end of report period||19,534 of Stock B)|||voting power at the end of report|||||||
||||||period|||||||
|Shareholders holding more than 5% or the top 10 shareholders holding situation||||||||||||
|||||||Changes|Number||Number of|Pledged or frozen||
|Name of|||Percentag|||||||||
|||||Shares held until the||||||||
||Character of shareholders||e|||during the|of||unrestricted|Share||
|Shareholders||||end of the report period|||||||Amount|
||||(%)|||report|restricte||shares|status||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||period|d||
||||||shares||
|YANTAICHANGYU GROUPCO. LTD.|Domestic non-state-ownedlegal person|50.40%|345,473,856|0||345,473,856|
|GAOLINGFUND,L.P.|Foreign legal person|3.11%|21,300,919|0||21,300,919|
|CHINA|State-owned legal person|2.32%|15,924,155|0||15,924,155|
|SECURITIES|||||||
|FINANCE CORP|||||||
|BBH BOS S/AFIDELITY FD -CHINA FOCUS FD|Foreign legal person|2.22%|15,241,826|0||15,241,826|
|TIANANPROPERTYINSURANCE CO.,LTD—BAOYINGNO.1|Domestic non-state-ownedlegal person|1.43%|9,774,689|1,835,523||9,774,689|
|GUOTAI JUNANSECURITIES(HONGKONG) LIMITED|Foreign legal person|0.96%|6,582,957|1,261,479||6,582,957|
|FIDELITYPURITAN TRUST:FIDELITY SERIESINTRINSICOPPORTUNITIESFUND|Foreign legal person|0.88%|6,000,851|3,700,858||6,000,851|
|CENTRAL HUIJINASSET|State-owned legal person|0.69%|4,761,200|2,461,207||4,761,200|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|MANAGEMENTLTD.||||||||||
|BBH A/CVANGUARDEMERGINGMARKETS STOCKINDEX FUND|Foreign legal person|0.55%||3,788,487||0||3,788,487||
|FIDELITY CHINASPECIALSITUATIONS PLC|Foreign legal person|0.55%||3,779,202||0||3,779,202||
|Strategic investors or legal result of the placement of new||||||||||
||||No|||||||
|shares to become a top 10 shareholders(if have)(see note 3)||||||||||
||||Among the top 10 shareholders, Yantai Changyu Group Company Limited has no|||||||
|The explanation for the associated relationship and||||||||||
||||associated relationship or accordant action relationship with the other 9 listed|||||||
|accordant action||||||||||
||||shareholders, and the relationship among the other shareholders is unknown.|||||||
|The top 10 shareholders with unrestricted shares||||||||||
||||||Number of unrestricted||Type of share|||
|Name of Shareholders|||||shares held until the end of|||||
||||||||Type of share||Amount|
||||||the year|||||
|YANTAI CHANGYU GROUP CO. LTD.|||||345,473,856||A||345,473,856|
|GAOLING FUND,L.P.|||||21,300,919||B||21,300,919|
|CHINA SECURITIES FINANCE CORP|||||15,924,155||A||15,924,155|
|BBH BOS S/A FIDELITY FD - CHINA FOCUS FD|||||15,241,826||B||15,241,826|
|TIANAN PROPERTY INSURANCE CO., LTD—BAOYING NO.1|||||9,774,689||A||9,774,689|
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED|||||6,582,957||B||6,582,957|
|FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSICOPPORTUNITIES FUND|||||6,000,851||B||6,000,851|
|CENTRAL HUIJIN ASSET MANAGEMENT LTD.|||||4,761,200||A||4,761,200|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND|3,788,487|B|3,788,487|
|FIDELITY CHINA SPECIAL SITUATIONS PLC|3,779,202|B|3,779,202|
|The explanation for the associated relationship and accordant action of the top 10|Among the top 10 shareholders, Yantai Changyu Group|||
|shareholders with unrestricted shares, the the associated relationship and|Company Limited has no associated relationship or accordant|||
|accordant action between the top 10 shareholders with unrestricted shares and the|action relationship with the other 9 listed shareholders, and the|||
|top 10 shareholders|relationship among the other shareholders is unknown.|||
|Explanation for the top 10 shareholders who involved in financing activities and|The top 10 shareholders do not involve in financing activities and|||
|stock trading business (if have)(see note 4)|stock trade business.|||

Whether or not theCompany‘s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the report period
□Yes No
There is no agreed repurchase trading taken by theCompany‘s top 10 common shareholders and shareholders with unrestricted shares during the report period.
4. Changes of controlling shareholders or the actual controllers situation
Changes of the controlling shareholders during the report period
□Available Not available
There is no any change of the controlling shareholders during the report period.
Changes of the actual controllers during the report period
□Available Not available
There is no any change of the actual controllers during the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report VII. Related Situation of Preferred Shares
□Available Not available
There are no preferred shares during the report period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report VIII. Situation for Directors, Supervisors, Senior Management Staffs 1. Changes in shareholdings of directors, supervisors and senior management staffs
□Available Not available
There are no any changes in shareholdings of directors, supervisors and senior management staffs during the report period, details see 2016 annual report
2. Personnel changes in Company's directors, supervisors and senior management
Available □Not available
||||||
|-|-|-|-|-|
|Name|Positions held|Type|Date|Reason|
|Dai Hui|Director|Leave aftertenure|2017.06.15|-|
|Wei Anning|Director|Elected|2017.06.15||
|Zhou Hongjiang|General manager|Appointed|2017.04.20|-|
|Leng Bin|Vice-general manager|Appointed|2017.04.20||
|Qu Weimin|Vice-general manager|Leave aftertenure|2017.04.20|-|
|Yang Ming|Vice-general manager|Appointed|2017.04.20||
|Li Jiming|Chief engineer|Appointed|2017.04.20||
|Jiang Hua|Vice-general manager|Appointed|2017.04.20||
|Sun Jian|Vice-general manager|Appointed|2017.04.20||
|Jiang Jianxun|Finance manager|Appointed|2017.04.20|-|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report IX. Related Situation of Corporation Bonds
Whether or not the Company has the corporation bonds issued in public, listed in the stock exchange, not due on the Semi-annualreport‘s authorized issue date or failed to pay in full on the due date.
No.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report X. Financial Report
1. Audit report
Whether the semiannual report has been audited
□ Yes√ No
2. Financial statement
The unit in the statements of the financial annotations is RMB Yuan.
2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Current assets:||||
|Monetary fund|7.1|1,550,067,781|1,391,517,607|
|Settlement reserves||||
|Lending funds||||
|Financial assets measured at the fair value and the variation of which is||||
|recorded into the current profit and loss||||
|Derivative financial assets||||
|Bills receivable|7.2|378,804,230|210,470,027|
|Accounts receivable|7.3|167,152,509|173,062,628|
|Advance payment|7.4|2,114,086|2,175,606|
|Premium receivable||||
|Reinsurance accounts receivable||||
|Receivable reserves for reinsurance contract||||
|Interest receivable|7.5|368,928|24,200|
|Dividends receivable||||
|Other receivables|7.6|16,311,182|18,880,800|
|Buying back the sale of financial assets||||
|Inventories|7.7|2,024,302,929|2,248,609,740|
|Assets classified as holding and available for sale|7.8|2,000,197|2,000,197|
|Non-current assets due within one year||||
|Other current assets|7.9|293,294,297|169,522,242|
|Total current assets||4,434,416,139|4,216,263,047|
|Non-current assets:||||
|Offering loans and imprest||||
|Available-for-sale financial assets|7.10|463,800|340,263|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments||||
|Investment real estate||||
|Fixed assets|7.11|4,591,037,486|4,683,187,493|
|Construction in progress|7.12|1,697,297,440|1,346,281,737|
|Construction materials||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Disposal of fixed assets||||
|Productive biological assets|7.13|198,024,312|201,428,980|
|Oil and gas assets||||
|Intangible assets|7.14|479,362,173|483,815,080|
|Development expenditure||||
|Goodwill|7.15|121,265,866|121,265,866|
|Long-term prepaid expenses|7.16|157,020,911|162,206,229|
|Deferred tax assets|7.17|259,844,790|295,937,037|
|Other non-current assets|7.18|335,245,554|17,352,239|
|Total non-current assets||7,839,562,332|7,311,814,924|
|Total assets||12,273,978,471|11,528,077,971|
|Current liabilities:||||
|Short-term loans|7.19|846,881,075|662,388,882|
|Borrowings from the Central Bank||||
|Customer and interbank deposits||||
|Borrowing funds||||
|Financial liabilities measured at the fair value and the variation of which||||
|is recorded into the current profit and loss||||
|Derivative financial liabilities||||
|Bills payable|7.20|8,000,000|38,900,000|
|Accounts payable|7.21|399,318,487|545,231,319|
|Advances from customers|7.22|321,530,693|425,246,421|
|Financial assets sold for repurchase||||
|Handling fees and commissions payable||||
|Employee remunerations|7.23|158,977,820|206,431,734|
|Taxes payable|7.24|77,113,119|144,042,600|
|Interest payable|||563,613|
|Dividends payable|7.25|703,430||
|Other payables|7.26|653,190,411|546,305,310|
|Dividend payable for reinsurance||||
|Reserves for insurance contracts||||
|Acting trading securities||||
|Acting underwriting securities||||
|Liabilities classified as holding and available for sale||||
|Non-current liabilities due within one year|7.27|106,975,215|71,799,093|
|Other current liabilities|7.28|11,163,882|11,163,883|
|Total current liabilities||2,583,854,132|2,652,072,855|
|Non-current liabilities:||||
|Long-term borrowings|7.29|175,270,580|49,140,555|
|Bonds payable||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Long-term accounts payable|7.30|269,000,000|293,000,000|
|Long-term employee remunerations payable||||
|Special accounts payable||||
|Estimated liabilities||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Deferred income|7.31|97,348,319|101,775,243|
|Deferred tax liabilities|7.17|21,852,738|24,908,410|
|Other non-current liabilities|7.32|7,696,222|7,696,222|
|Total non-current liabilities||571,167,859|476,520,430|
|Total liabilities||3,155,021,991|3,128,593,285|
|Owner’s equity:||||
|Capital stock|7.33|685,464,000|685,464,000|
|Other equity instruments||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Capital surplus|7.34|565,955,441|565,955,441|
|Minus: Treasury stock||||
|Other comprehensive income|7.35|-3,800,205|-5,259,014|
|Special reserves||||
|Surplus reserves|7.36|342,732,000|342,732,000|
|General risk preparation||||
|Retained earnings|7.37|7,290,187,616|6,620,118,562|
|Total owner‘s equities attributable to the parent company||8,880,538,852|8,209,010,989|
|Minority equity||238,417,628|190,473,697|
|Total owner‘s equities||9,118,956,480|8,399,484,686|
|Total liabilities and owner‘s equities||12,273,978,471|11,528,077,971|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun 2.2 Balance sheet of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Current assets:||||
|Monetary fund||747,876,320|269,460,060|
|Financial assets measured at the fair value and the variation of which is||||
|recorded into the current profit and loss||||
|Derivative financial assets||||
|Bills receivable||107,090,401|1,114,200|
|Accounts receivable|15.1|1,838,244|3,326,683|
|Advance payment||1,172,079|702,647|
|Interest receivable||34,313|24,200|
|Dividends receivable||324,673,936|531,819,113|
|Other receivables|15.2|3,539,710,433|3,582,532,862|
|Inventories||506,836,398|792,732,418|
|Assets classified as holding and available for sale||2,000,197|2,000,197|
|Non-current assets due within one year||||
|Other current assets||58,168,826|20,085,058|
|Total current assets||5,289,401,147|5,203,797,438|
|Non-current assets:||||
|Available-for-sale financial assets||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments|15.3|2,108,589,655|1,834,341,541|
|Investment real estate||||
|Fixed assets||335,000,273|347,481,417|
|Construction in progress||268,929|500,000|
|Construction materials||||
|Disposal of fixed assets||||
|Productive biological assets||121,231,009|123,036,693|
|Oil and gas assets||||
|Intangible assets||70,812,796|72,002,372|
|Development expenditure||||
|Goodwill||||
|Long-term prepaid expenses||||
|Deferred tax assets||25,477,622|26,985,252|
|Other non-current assets||2,747,906,376|2,617,457,460|
|Total non-current assets||5,409,286,660|5,021,804,735|
|Total assets||10,698,687,807|10,225,602,173|
|Current liabilities:||||
|Short-term loans||700,000,000|500,000,000|
|Financial liabilities measured at the fair value and the variation of which||||
|is recorded into the current profit and loss||||
|Derivative financial liabilities||||
|Bills payable||||
|Accounts payable||61,360,245|247,568,857|
|Advances from customers||6,000,000|6,000,000|
|Employee remunerations||55,455,887|70,812,761|
|Taxes payable||14,378,705|33,266,225|
|Interest payable||0|563,613|
|Dividends payable||0|0|
|Other payables||813,653,329|368,310,362|
|Liabilities classified as holding and available for sale||0|0|
|Non-current liabilities due within one year||15,499,200|29,227,200|
|Other current liabilities||1,767,054|1,767,054|
|Total current liabilities||1,668,114,420|1,257,516,072|
|Non-current liabilities:||||
|Long-term borrowings||||
|Bonds payable||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Long-term accounts payable||||
|Long-term employee remuneration payable||||
|Special accounts payable||||
|Estimated liabilities||||
|Deferred income||18,986,990|19,933,699|
|Deferred tax liabilities||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Other non-current liabilities||2,499,403|2,499,403|
|Total non-current liabilities||21,486,393|22,433,102|
|Total liabilities||1,689,600,813|1,279,949,174|
|Owner’s equity:||||
|Capital stock||685,464,000|685,464,000|
|Other equity instruments||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Capital surplus||557,222,454|557,222,454|
|Minus: Treasury stock||||
|Other comprehensive income||||
|Special reserves||||
|Surplus reserves||342,732,000|342,732,000|
|Retained earnings||7,423,668,540|7,360,234,545|
|Total owner‘s equities||9,009,086,994|8,945,652,999|
|Total liabilities and owner‘s equities||10,698,687,807|10,225,602,173|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun 2.3 Consolidated profit statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|1. Total operating income||2,767,098,197|2,753,032,799|
|Including: Operating income|7.38|2,767,098,197|2,753,032,799|
|Interest income||||
|Earned premium||||
|Handling fee and commission income||||
|2. Total operating costs||1,890,800,616|1,840,237,208|
|Including: Operating costs|7.38|925,754,133|902,734,104|
|Interest expenditure||||
|Handling fees and commission expenditure||||
|Premium rebate||||
|Net amount of indemnity expenditure||||
|Net amount of the withdrawn reserve fund for||||
|insurance contract||||
|Policy bonus payment||||
|Amortized reinsurance expenditures||||
|Taxes and surcharges|7.39|160,473,998|153,081,792|
|Selling expenses|7.40|668,735,726|650,737,234|
|Administrative expenses|7.41|130,542,386|122,695,845|
|Financial expenses|7.42|11,147,949|10,988,233|
|Loss on impairment of assets|7.43|-5,853,576|0|
|Plus: Fair value change profit (loss is listed with "-")||||
|Investment profit (loss is listed with "-")||||
|Including: Investment profit for joint-run business and joint||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|venture||||
|Exchange income (loss is listed with "-")||||
|Other income||||
|3. Operating profit (loss is listed with "-")||876,297,581|912,795,591|
|Plus: Non-operating income|7.44|23,304,205|21,933,526|
|Including: Gains on disposal of non-current assets||156,600|94,567|
|Minus: Non-operating expenses|7.45|838,239|343,776|
|Including: Losses on disposal of non-current assets||651,671|110,052|
|4. Total profits (total loss is listed with "-")||898,763,547|934,385,341|
|Minus: Income tax expenses|7.46|228,752,790|238,715,481|
|5. Net profit (net loss is listed with "-")||670,010,757|695,669,860|
|Net profit attributable to owner of the parent company||670,069,054|695,021,847|
|Minority interest income||-58,297|648,013|
|6. Net after-tax amount of other comprehensive income|7.47|1,767,741|6,701,754|
|Net after-tax amount of other comprehensive income attributable to||||
|||1,458,809|6,249,919|
|owner of the parent company||||
|6.1 Other comprehensive income not to be reclassified into profit and||||
|loss later||||
|6.1.1 Net liabilities or net assets change after remeasuring and||||
|resetting the benefit plans||||
|6.1.2 Share enjoyed in other comprehensive income not to be||||
|reclassified into profit and loss in invested unit under equity law||||
|6.2 Other comprehensive income to be reclassified into profit and||||
|||1,458,809|6,249,919|
|loss later||||
|6.2.1 Share enjoyed in other comprehensive income to be reclassified||||
|into profit and loss in invested unit under equity law||||
|6.2.2 Profit and loss from changes in fair value of financial assets for||||
|sale||||
|6.2.3 Profit and loss from reclassification of held-to-maturity||||
|investment into fair value of financial assets for sale||||
|6.2.4 Effective part of profit and loss of cash-flow hedge||||
|6.2.5 Difference in translation of Foreign Currency Financial||||
|||1,458,809|6,249,919|
|Statement||||
|6.2.6 Other||||
|Net after-tax amount of other comprehensive income attributable to||||
|||308,932|451,835|
|minority shareholders||||
|7. Total comprehensive income||671,778,498|702,371,614|
|(1) Attributable to owner of the parent company||671,527,863|701,271,766|
|(2) Attributable to minority shareholders||250,635|1,099,848|
|8. Earnings per share||||
|(1) Basic earnings per share||0.98|1.01|
|(2) Diluted earnings per share||0.98|1.01|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun 2.4 Profit statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|1. Operating income|15.4|831,820,503|655,299,000|
|Minus: Operating costs|15.4|737,950,378|501,312,599|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|Taxes and surcharges||48,865,790|73,401,856|
|Selling expenses||||
|Administrative expenses||40,078,068|55,027,172|
|Financial expenses||9,292,969|18,250,416|
|Loss on impairment of assets||||
|Plus: Fair value change profit (loss is listed with "-")||||
|Investment profit (loss is listed with "-")|15.5|66,127,980|683,891,453|
|Including: Investment profit for joint-run business and joint||||
|venture||||
|Other income||||
|2. Operating profit (loss is listed with "-")||61,761,278|691,198,410|
|Plus: Non-operating income||1,134,756|1,141,128|
|Including: Gains on disposal of non-current assets||133,233|94,567|
|Minus: Non-operating expenses||143,042|36,839|
|Including: losses on disposal of non-current assets||122,785|21,839|
|3. Total profits (total loss is listed with "-")||62,752,992|692,302,699|
|Minus: Income tax expenses||-681,003|2,102,811|
|4. Net profit (net loss is listed with "-")||63,433,995|690,199,888|
|5. Net after-tax amount of other comprehensive income||||
|5.1 Other comprehensive income not to be reclassified into profit and||||
|loss later||||
|5.1.1 Net liabilities or net assets change after remeasuring and||||
|resetting the benefit plans||||
|5.1.2 Share enjoyed in other comprehensive income not to be||||
|reclassified into profit and loss in invested unit under equity law||||
|5.2 Other comprehensive income to be reclassified into profit and||||
|loss later||||
|5.2.1 Share enjoyed in other comprehensive income to be reclassified||||
|into profit and loss in invested unit under equity law||||
|5.2.2 Profit and loss from changes in fair value of financial assets for||||
|sale||||
|5.2.3 Profit and loss from reclassification of held-to-maturity||||
|investment into fair value of financial assets for sale||||
|5.2.4 Effective part of profit and loss of cash-flow hedge||||
|5.2.5 Difference in translation of Foreign Currency Financial||||
|Statement||||
|5.2.6 Other||||
|6. Total comprehensive income||63,433,995|690,199,888|
|7. Earnings per share||||
|(1) Basic earnings per share||0.09|1.01|
|(2) Diluted earnings per share||0.09|1.01|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun 2.5 Consolidated cash flow statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|1. Cash flows from operating activities:|||
|Cash received from sales of goods and rending of services|2,524,565,138|2,706,821,883|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|Net increase in customer and interbank deposits|||
|Net increase in borrowings from central bank|||
|Net increase in borrowings from other financial institutions|||
|Cash received from receiving insurance premium of original|||
|insurance contract|||
|Net cash received from reinsurance business|||
|Net increase in policy holder deposits and investment funds|||
|Net increase after disposal of financial assets measured at the fair|||
|value and the variation of which is recorded into the current profit|||
|and loss|||
|Cash received from collecting interest, handling fees and commission|||
|Net increase in borrowings|||
|Net increase in repurchasement business funds|||
|Tax refund received|12,777,072|13,866,472|
|Other cash received related to operating activities|38,889,912|27,834,008|
|Subtotal of cash flows of operating activities|2,576,232,122|2,748,522,363|
|Cash paid for goods and services|640,732,974|635,982,569|
|Net increase in customer loans and advances|||
|Net increase in deposits in central bank and interbank deposits|||
|Cash paid to original insurance contract payments|||
|Cash paid to interest, handling fees and commission|||
|Cash paid to policy bonus|||
|Cash paid to and on behalf of employees|239,805,346|230,296,149|
|Cash paid for taxes and expenses|842,815,705|756,992,525|
|Other cash paid related to operating activities|432,517,778|442,502,751|
|Sub-total of cash outflows of operating activities|2,155,871,803|2,065,773,994|
|Net cash flow from operating activities|420,360,319|682,748,369|
|2. Cash flow from investing activities:|||
|Cash received from return of investment|||
|Fixed deposit with the term of over 3 months|3,000,000|8,000,000|
|Cash received from obtaining investment profit|25,550|28,483|
|Cash received from disposal of fixed assets, intangible assets and|||
|||233,355|
|other long-term assets|237,161||
|Net cash received from disposal of branch and other business unit|||
|Other cash received related to investing activities|||
|Subtotal of cash flows of investment activities|3,262,711|8,261,838|
|Cash paid to acquire fixed assets, intangible assets and other|||
|||398,151,685|
|long-term assets|282,149,010||
|Cash for investment|||
|Cash paid to buy fixed deposit with the term of over 3 months|201,000,000|7,007,000|
|Net increase in hypothecated loan|||
|Net cash paid to acquire branch and other business unit||762,436|
|Other cash paid related to investment activities|317,654,642||
|Subtotal of cash outflows of investment activities|800,803,652|405,921,121|
|Net cash flow from investing activities|-797,540,941|-397,659,283|
|3. Cash flow from financing activities|||
|Cash received from acquiring investment|48,396,726||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|Including: cash received from acquiring minority shareholders|||
|investment by branch|48,396,726||
|Cash received from acquiring loans|773,435,000|809,175,350|
|Cash received from issuing bonds|||
|Other cash received related to financing activities|1,303,473||
|Subtotal cash flows of financing activities|823,135,199|809,175,350|
|Cash paid to pay debts|451,386,980|512,516,014|
|Cash paid to distribute dividend, profit or pay interest|17,869,513|16,940,912|
|Including: dividend and profit paid to minority shareholders by|||
|branch|||
|Other cash paid related to financing activities||20,000,000|
|Subtotal of cash outflows of financing activities|469,256,493|549,456,926|
|Net cash flow from financing activities|353,878,706|259,718,424|
|4. Influences of exchange rate fluctuation on cash and cash|||
|||6,885,883|
|equivalents|-4,152,485||
|5. Net Increase in cash and cash equivalents|-27,454,401|551,693,393|
|Plus: balance at the beginning of the period of cash and cash|||
|equivalents|1,256,942,304|1,092,241,661|
|6. Balance at the end of the period of cash and cash equivalents|1,229,487,903|1,643,935,054|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun 2.6 Cash flow statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|1. Cash flows from operating activities:|||
|Cash received from sales of goods and rending of services|570,587,513|595,186,103|
|Tax refund received|||
|Other cash received related to operating activities|385,490,644|239,938|
|Subtotal of cash flows of operating activities|956,078,157|595,426,041|
|Cash paid for goods and services|269,148,068|324,226,720|
|Cash paid to and on behalf of employees|52,895,854|79,790,054|
|Cash paid for taxes and expenses|169,319,730|88,941,454|
|Other cash paid related to operating activities|62,494,076|846,691,535|
|Sub-total of cash outflows of operating activities|553,857,728|1,339,649,763|
|Net cash flow from operating activities|402,220,429|-744,223,722|
|2. Cash flow from investing activities:|||
|Cash received from return of investment|||
|Fixed deposit with the term of over 3 months|3,000,000|8,000,000|
|Cash received from obtaining investment profit|198,082,845|1,164,454,077|
|Net cash received from disposal of fixed assets, intangible assets and|||
||206,280|231,240|
|other long-term assets|||
|Net cash received from disposal of branch and other business unit|||
|Other cash received related to investing activities|||
|Subtotal of cash flows of investment activities|201,289,125|1,172,685,317|
|Cash paid to acquire fixed assets, intangible assets and other|||
||3,295,270|15,892,483|
|long-term assets|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|Cash for investment|329,440,824||
|Cash paid to buy fixed deposit with the term of over 3 months|105,000,000|7,007,000|
|Net cash paid to acquire branch and other business unit|||
|Other cash paid related to investment activities|||
|Subtotal of cash outflows of investment activities|437,736,094|22,899,483|
|Net cash flow from investing activities|-236,446,969|1,149,785,834|
|3. Cash flow from financing activities|||
|Cash received from acquiring investment|||
|Cash received from acquiring loans|700,000,000|400,000,000|
|Cash received from issuing bonds|||
|Other cash received related to financing activities|||
|Subtotal cash flows of financing activities|700,000,000|400,000,000|
|Cash paid to pay debts|514,667,600|420,114,492|
|Cash paid to distribute dividend, profit or pay interest|9,720,581|13,936,049|
|Other cash paid related to financing activities|||
|Subtotal of cash outflows of financing activities|524,388,181|434,050,541|
|Net cash flow from financing activities|175,611,819|-34,050,541|
|4. Influences of exchange rate fluctuation on cash and cash|||
|equivalents|||
|5. Net Increase in cash and cash equivalents|341,385,279|371,511,571|
|Plus: balance at the beginning of the period of cash and cash|||
||238,003,198|143,798,080|
|equivalents|||
|6. Balance at the end of the period of cash and cash equivalents|579,388,477|515,309,651|

 Legal Representative: Sun Liqiang Accounting Supervisor: Leng Bin Accounting Department Manager: Jiang Jianxun
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 2.7 Consolidatedowner’s equity changing list
Unit: Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||This period|||||||||||||
||Owners‘ equity of the parent company|||||||||||||
|||Other equity instruments||||||||||Minority||
|Item||||||Minus:|Other||||||Total owners‘|
||Capital stock|Preferred|Perpetual||Capitalreserves|Treasury|comprehensive|Specialreserves|Surplusreserves|General riskpreparation|Undistributedprofits|shareholders‘equity|equity|
|||stock|capitalsecurities|Other||stock|income|||||||
|1. Balance at the end of last||||||||||||||
||685,464,000||||565,955,441||-5,259,014||342,732,000||6,620,118,562|190,473,697|8,399,484,686|
|year||||||||||||||
|Plus: Accounting policies||||||||||||||
|changing||||||||||||||
|Previous error correction||||||||||||||
|Business combination under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|2. Balance at the beginning of||||||||||||||
||685,464,000||||565,955,441||-5,259,014||342,732,000||6,620,118,562|190,473,697|8,399,484,686|
|this year||||||||||||||
|3. Increased or decreased||||||||||||||
|amount in this period (reducing|||||||1,458,809||||670,069,054|47,943,931|719,471,794|
|amount is listed with "-")||||||||||||||
|3.1 Total comprehensive||||||||||||||
||||||||1,458,809||||670,069,054|250,635|671,778,498|
|income||||||||||||||
|3.2 Owners' invested and||||||||||||||
|||||||||||||48,396,726|48,396,726|
|reduced capital||||||||||||||
|3.2.1 Shareholders‘ invested||||||||||||||
|||||||||||||48,396,726|48,396,726|
|common stock||||||||||||||
|3.2.2 Other equity instrument||||||||||||||
|holders‘ invested capital||||||||||||||
|3.2.3 Amount of shares paid||||||||||||||
|and reckoned in owners' equity||||||||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|3.2.4 Other||||||||
|3.3 Profit distribution||||||-703,430|-703,430|
|3.3.1 Accrued surplus reserves||||||||
|3.3.2 Accrued general risk||||||||
|preparation||||||||
|3.3.3 Distribution to owners||||||||
|||||||-703,430|-703,430|
|(or shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Internal transfer of owners'||||||||
|equity||||||||
|3.4.1 Capital reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.2 Surplus reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.3 Surplus reserves covering||||||||
|deficit||||||||
|3.4.4 Other||||||||
|3.5 Special reserves||||||||
|3.5.1 Withdrawal in this period||||||||
|3.5.2 Usage in this period||||||||
|3.6 Other||||||||
|4. Balance at the end of this|||||||9,118,956,480|
||685,464,000|565,955,441|-3,800,205|342,732,000|7,290,187,616|238,417,628||
|period||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Unit: Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Prior period|||||||||||||
||Owners‘ equity of the parent company|||||||||||||
|||Other equity instruments||||||||||Minority||
|Item||||||Minus:|Other||||||Total owners‘|
||||Perpetual||Capital|||Special|Surplus|General risk|Undistributed|shareholders‘||
||Capital stock|Preferred||||Treasury|comprehensive||||||equity|
||||capital||reserves|||reserves|reserves|preparation|profits|equity||
|||stock||Other||stock|income|||||||
||||securities|||||||||||
|1. Balance at the end of last||||||||||||||
||685,464,000||||565,955,441||-10,442,512||342,732,000||5,980,390,074|192,459,023|7,756,558,026|
|year||||||||||||||
|Plus: Accounting policies||||||||||||||
|changing||||||||||||||
|Previous error correction||||||||||||||
|Business combination under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|2. Balance at the beginning of||||||||||||||
||685,464,000||||565,955,441||-10,442,512||342,732,000||5,980,390,074|192,459,023|7,756,558,026|
|this year||||||||||||||
|3. Increased or decreased||||||||||||||
|amount in this period (reducing|||||||5,183,498||||639,728,488|-1,985,326|642,926,660|
|amount is listed with "-")||||||||||||||
|3.1 Total comprehensive||||||||||||||
||||||||5,183,498||||982,460,488|-1,438,903|986,205,083|
|income||||||||||||||
|3.2 Owners' invested and||||||||||||||
|reduced capital||||||||||||||
|3.2.1 Shareholders‘ invested||||||||||||||
|common stock||||||||||||||
|3.2.2 Other equity instrument||||||||||||||
|holders‘ invested capital||||||||||||||
|3.2.3 Amount of shares paid||||||||||||||
|and reckoned in owners' equity||||||||||||||
|3.2.4 Other||||||||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|3.3 Profit distribution|||||-342,732,000|-546,423|-343,278,423|
|3.3.1 Drew surplus reserves||||||||
|3.3.2 Drew general risk||||||||
|preparation||||||||
|3.3.3 Distribution to owners (or||||||||
||||||-342,732,000|-546,423|-343,278,423|
|shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Internal transfer of owners'||||||||
|equity||||||||
|3.4.1 Capital reserves||||||||
|transferred and increased capital||||||||
|(or capital stock)||||||||
|3.4.2 Surplus reserves||||||||
|transferred and increased capital||||||||
|(or capital stock)||||||||
|3.4.3 Surplus reserves covering||||||||
|deficit||||||||
|3.4.4 Other||||||||
|3.5 Special reserves||||||||
|3.5.1 Accrual in this period||||||||
|3.5.2 Usage in this period||||||||
|3.6 Other||||||||
|4. Balance at the end of this|||||||8,399,484,686|
||685,464,000|565,955,441|-5,259,014|342,732,000|6,620,118,562|190,473,697||
|period||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 2.8Owner’s equity changing list of the parent company
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||This period|||||||||||
|||Other equity instruments||||Minus:|Other|||||
|Item|Capital||||Capital|||Special|Surplus|Undistributed|Total owners‘|
|||Preferred|Perpetual capital|||Treasury|comprehensive|||||
||stock|||Other|reserves|||reserves|reserves|profits|equity|
|||stock|securities|||stock|income|||||
|1. Balance at the end of last year|685,464,000||||557,222,454||||342,732,000|7,360,234,545|8,945,652,999|
|Plus: Accounting policies changing||||||||||||
|Previous error correction||||||||||||
|Other||||||||||||
|2. Balance at the beginning of this year|685,464,000||||557,222,454||||342,732,000|7,360,234,545|8,945,652,999|
|3. Increased or decreased amount in this||||||||||||
|||||||||||63,433,995|63,433,995|
|period (reducing amount is listed with "-")||||||||||||
|3.1 Total comprehensive income||||||||||63,433,995|63,433,995|
|3.2 Owners' invested and reduced capital||||||||||||
|3.2.1 Shareholders‘ invested common stock||||||||||||
|3.2.2 Other equity instrument holder‘||||||||||||
|invested capital||||||||||||
|3.2.3 Amount of shares paid and reckoned in||||||||||||
|owners' equity||||||||||||
|3.2.4 Other||||||||||||
|3.3 Profit distribution||||||||||||
|3.3.1 Drew surplus reserves||||||||||||
|3.3.2 Distribution to owners (or||||||||||||
|shareholders)||||||||||||
|3.3.3 Other||||||||||||
|3.4 Internal transfer of owners' equity||||||||||||
|3.4.1 Capital reserves transferred and||||||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||
|-|-|-|-|-|-|
|increased capital (or capital stock)||||||
|3.4.2 Surplus reserves transferred andincreased capital (or capital stock)||||||
|3.4.3 Surplus reserves covering deficit||||||
|3.4.4 Other||||||
|3.5 Special reserves||||||
|3.5.1 Accrual in this period||||||
|3.5.2 Usage in this period||||||
|3.6 Other||||||
|4. Balance at the end of this period|685,464,000|557,222,454|342,732,000|7,423,668,540|9,009,086,994|

 Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Prior period|||||||||||
|||Other equity instruments||||Minus:|Other|||||
|Item|Capital||||Capital|||Special|Surplus|Undistributed|Total owners‘|
|||Preferred|Perpetual capital|||Treasury|comprehensive|||||
||stock||||reserves|||reserves|reserves|profits|equity|
|||stock|securities|Other||stock|income|||||
|1. Balance at the end of last year|685,464,000||||557,222,454||||342,732,000|5,872,392,075|7,457,810,529|
|Plus: Accounting policies changing||||||||||||
|Previous error correction||||||||||||
|Other||||||||||||
|2. Balance at the beginning of this year|685,464,000||||557,222,454||||342,732,000|5,872,392,075|7,457,810,529|
|3. Increased or decreased amount in this||||||||||||
|||||||||||1,487,842,470|1,487,842,470|
|period (reducing amount is listed with "-")||||||||||||
|3.1 Total comprehensive income||||||||||1,830,574,470|1,830,574,470|
|3.2 Owners' invested and reduced capital||||||||||||
|3.2.1 Shareholders‘ invested common stock||||||||||||
|3.2.2 Other equity instrument holder‘||||||||||||
|invested capital||||||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||
|-|-|-|-|-|-|
|3.2.3 Amount of shares paid and reckoned in||||||
|owners' equity||||||
|3.2.4 Other||||||
|3.3 Profit distribution||||-342,732,000|-342,732,000|
|3.3.1 Drew surplus reserves||||||
|3.3.2 Distribution to owners (or shareholders)||||-342,732,000|-342,732,000|
|3.3.3 Other||||||
|3.4 Internal transfer of owners' equity||||||
|3.4.1 Capital reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.2 Surplus reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.3 Surplus reserves covering deficit||||||
|3.4.4 Other||||||
|3.5 Special reserves||||||
|3.5.1 Accrual in this period||||||
|3.5.2 Usage in this period||||||
|3.6 Other||||||
|4. Balance at the end of this period|685,464,000|557,222,454|342,732,000|7,360,234,545|8,945,652,999|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 3. Company profile
Yantai Changyu Pioneer Wine Co., Ltd. (the―Company‖ or the―Joint-stockCompany‖) was incorporated as a joint-stock limited company in accordance with the Company Law of thePeople‘s Republic of China (the―PRC‖) in the merger and reorganization carried out by Yantai Changyu Group Co., Ltd.(―Changyu GroupCompany‖) with its assets and liabilities in relation to wine business. The Company and its subsidiary companies (hereinafter collectively referred to as the―Group‖) are engaged in the production and sale of wine, brandy and champagne, planting and purchase of grapes, development of tourism resources, etc. The registered address of the Company is Yantai City, Shandong Province, and the office address of the headquarters is 56 Dama Road, Zhifu District, Yantai City, Shandong Province.
As at June 30, 2017, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.33 for the details.
The parent company of the Group is Changyu Group Company incorporated in China, which was ultimately and actually controlled by four parties, including Yantai Guofeng Investment Holding Co., Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and Yantai Yuhua Investment& Development Co., Ltd.
The financial statement and the consolidated financial statement of the Company were approved by the Board of Directors on August 25, 2017.
The scope of the consolidated financial statement in this period can be seen in Note 9―Equity in otherentities‖. The scope changes of the consolidated financial statement in this period can be seen in Note 8―Changes of the consolidatedscope‖.
4. Preparation basis of financial statement
4.1 Preparation basis
The Group implements the Accounting Standards for Business Enterprises (including the new and revised editions published in 2014)(―ASBE‖) published by the Ministry of Finance and relevant regulations thereof. In addition, the Group also discloses relevant financial information in accordance with Information Disclosure and Preparation Rules for Enterprises Publically Issuing Securities No.15 ---- General Rules for Financial Statement (Revised in 2014).
Note-accounting basis and pricing principle
The note-accounting basis of financial accounting adopted by the Group is accrual system and the measurement basis adopted by the Group in preparing its financial statement is historical cost. Subsequently, if the assets are impaired, impairment provisions are made in accordance with relevant accounting standards.
When the historical cost measurement is used, the assets are measured by the amount of cash or cash equivalent when the assets are purchased or the fair value of the consideration. The liabilities are measured by the actually received funds or assets for performing the current obligations, or the contract amount for performing the current obligations, or the amount of cash or cash equivalent paid for anticipated liabilities in the daily activities.
Fair value refers to a price received for selling an asset or paid for transferring a liability by the market participant in orderly transactions on the measurement date. No matter the fair value is observable or estimated by the valuation technique, the fair value measured and disclosed in this financial statement is recognized on this basis.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report The fair value measurement is divided into three levels based on the observable degree of the input fair value and the importance of this input value on the whole fair value measurement:
*The input value of the first level is the unadjusted price of the same assets or liabilities which can be acquired in an active market on the measurement date.
*The input value of the second level is the directly or indirectly observable input value of relevant assets or liabilities except that of the first level.
*The input value of the third level is the unobservable input value of relevant assets or liabilities. 4.2 Continuous operation
The Group has appraised the ability of continuous operation for 12 months from June 30, 2017, and no issues or situations causing major doubts to this ability are found. Therefore, this financial statement is prepared on the basis of the continuous operation assumption.
5. Main accounting policies and accounting estimates
5.1 Statement on compliance with ASBE
This financial statement fulfills the requirement of ASBE and gives a true and integrated view of the financial status and the consolidated financial status as at June 30, 2017, as well as the operating result, the consolidated operating result, the cash flow and the consolidated cash flow of the Company from January to June 2017.
5.2 Accounting period
The accounting period of the Group is from January 1 to December 31.
5.3 Operating cycle
The operating cycle refers to the period from the enterprise purchases the assets used for processing to the cash or cash equivalent is realized. The operating cycle of the Company is 12 months.
5.4 Recording currency
Since Renminbi (RMB) is the currency of the main economic environment in which the Company and the domestic subsidiary companies thereof are situated, the Company and the subsidiary companies thereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determine Euro and Peso as the recording currency according to the main economic environment in which they are situated. The currency in this financial statement prepared by the Group is RMB.
5.5 Accounting treatment method for business combination under common control and non-common control
5.5.1 Business combination and goodwill under non-common control
A business combination under non-common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed or the equity instruments issued by the acquirer in exchange for the control over the acquiree. The intermediary expenses such as audit, legal services and assessment consultation and other related management expenses paid by the acquirer for business combination are included in the current profit and loss when they occur.
The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in the business combination and meet the recognition conditions shall be measured on the acquisition
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report date according to the fair value thereof.
If the combination cost is larger than the fair value of the identifiable net assets obtained from the acquiree during the combination, the difference shall be recognized as business goodwill and initially measured according to the cost thereof.
The goodwill formed due to business combination shall be separately listed in the consolidated financial statement and measured on the basis of the cost minus the accumulative impairment provision.
5.6 Compiling methods of consolidated financial statement
The consolidation scope of the consolidated financial statement is determined on the basis of control. Control means that the investor holds the power in the invested party, obtains variable returns by participating in relevant activities of the invested party and has the ability to affect the amount of the returns by using the power on the invested party. Once any change of the relevant facts and situations results in any change of relevant elements of the above definition of Control, the Group will carry out reappraisal.
The merger of any subsidiary company starts from the date when the Group acquires the power to control this subsidiary company, while the termination of any subsidiary company ends in the date when the Group losses the power to control this subsidiary company.
As for any subsidiary company obtained in a business combination under non-common control, the business result and the cash flow thereof since the acquisition date (date of obtaining the control power) shall have been properly included in the consolidated income statement and the consolidated cash flow statement.
The principal accounting policies and accounting period adopted by the subsidiary companies shall be determined in accordance with the accounting policies and accounting period uniformly regulated by the Company.
The influence of the internal transaction between the Company and the subsidiary companies as well as among subsidiary companies on the consolidated financial statement shall be neutralized at the time of combination.
The shares in the owner's equity of the subsidiary companies, which do not belong to the parent company, shall be recognized as the minority equity and listed under the item of―minorityequity‖ of theowner‘s equity in the balance sheet. The shares in the current profit and loss of the subsidiary companies, which belong to the minority equity, shall be listed under the item of―minorityequity‖ of the net profit in the consolidated income statement.
If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of the owner's equity entitled therein by the minority shareholders at the beginning of the period, the difference shall be still credited against the minority equity.
The transaction of purchasing the minority interest of any subsidiary company or thatdoesn‘t lose the control power of this subsidiary company due to disposal of partial equity investment shall be recognized as equity transaction for business accounting, and the book value of the equity attributable to the owner of the parent company and the minority equity shall be adjusted to reflect the changes in the related rights and interests in the subsidiary company. The difference between the adjusted amount of the minority interest and the fair value of the paid/received consideration shall be adjusted as capital reserves. If the capital reserves are insufficient for offset, the retained income shall be adjusted accordingly.
5.7 Recognition standards of cash and cash equivalents
Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer to short-term highly liquid investments which are readily convertible into known amount of cash with an insignificant risk of changes in value.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 5.8 Foreign currency transaction and foreign currency statement translation
5.8.1 Foreign currency transaction
At the time of initial recognition of a foreign currency transaction, the amount of the foreign currency shall be translated into the amount of the recording currency at the spot exchange rate on the transaction date.
The monetary items of the foreign currency transaction shall be translated into RMB at the spot change rate on the balance sheet date. The currency translation difference generated by the difference between the spot change rate on the balance sheet date and the spot change rate at the initial recognition or on the previous balance sheet date shall be included in the current profit and loss, except:① the currency translation difference of the dedicated foreign currency loan that meets the capitalization condition shall be included in the cost of assets as capitalization during the capitalization period;② the currency translation difference of the arbitrage tool to avoid foreign exchange risk shall be treated according to the hedge accounting method;③ the currency translation difference of the available-for-sale monetary items generated by the book value other than the amortized cost shall be recognized as other comprehensive income and included in other comprehensive income.
The amount of the non-monetary items of the foreign currency transaction measured by historical cost shall be still translated into the amount in the recording currency at the spot exchange rate on the transaction date. The non-monetary items of the foreign currency transaction measured by the fair value shall be translated at the spot exchange rate on the fair value date, and the difference between the amount in the recording currency and the amount in original recording currency shall be treated as the change of the fair value (including exchange rate movement) and shall be included in the current profit and loss or recognized as other comprehensive income.
5.8.2 Translation of foreign currency financial statement
In order to compile a consolidated financial statement, the foreign currency financial statement of overseas business shall be translated into RMB financial statement in accordance with the following methods: all asset and liability items in the balance sheet shall be translated at the spot exchange rate on the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits", shall be translated at the spot exchange rate at the time when they occur; all items and the items reflecting the accrual profit distribution in the profit statement shall be translated at the exchange rate similar to the spot exchange rate at the time when they occur; the undistributed profits at the beginning of the year shall be the translated to the undistributed profits at the end of the previous year; the undistributed profits at the end of the year shall be calculated and listed as the translated profit distribution items; and the difference between the asset items and the sum of the liability items and theshareholders‘ equity items shall be recognized as other comprehensive income and included in the shareholder's equity.
The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall be translated at the exchange rate similar to the spot exchange rate at the time when they occur; the amount of the cash and cash equivalents impacted by the exchange rate movement shall be, as a reconciling item, separately listed under―impact of exchange rate movement on cash and cashequivalents‖ in the cash flow statement.
The balance at the beginning of the year and the actual amount of the previous year shall be listed as the amount translated according to the financial statement of the previous year.
5.9 Financial instruments
When becoming a party to a contract of financial instruments, the Group shall recognize a financial asset or financial liability. The financial assets and financial liabilities shall be measured at their
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report fair value at the time of initial recognition. For other categories of financial assets and financial liabilities, relevant transaction expenses thereof shall be included in the initially recognized amount.
5.9.1 Effective interest method
The effective interest method refers to the method by which the amortized cost and the interest income or expenditure of different installments are calculated in light of the effective interest rates of the financial assets or financial liabilities (including a group of financial assets or financial liabilities). The effective 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 book value of the financial asset or financial liability.
When the effective interest rate is calculated, the Group predicts the future cash flow (taking no account of the future credit loss) on the basis of considering all the contractual provisions concerning the financial assets or financial liabilities, as well as all kinds of charges, transaction expenses, discounts, premiums, etc. which are paid, charged, and included in the effective interest rate between the contracting parties of the financial assets or liabilities.
5.9.2 Classification, recognition and measurement of financial assets
Financial assets are classified into the following categories when they are initially recognized: the financial assets which are measured at the fair value and the variation of which is included in the current profit and loss, the investments which will be held to their maturity, loans, accounts receivable and available-for-sale financial assets. The financial assets purchased and sold through common modes shall be recognized and terminated from recognition according to the accounting on the transaction date. The financial assets held by the Group are loans, accounts receivable and available-for-sale financial assets.
Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no quoted price in an active market and of which the repo amount is fixed or determinable. The financial assets classified by the Group into loans and accounts receivable include monetary capital, bills receivable, accounts receivable, interest receivable, dividends receivable and other receivables.
The loans and accounts receivable shall be subsequently measured at amortized cost by adopting the effective interest rate method. The profits or losses that occur when such loans and accounts receivable are terminated from recognition, impaired or amortized shall be included in the current profit and loss.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale at the time of initial recognition and the financial assets other than those measured at their fair value and the variation of which is included in the current profit and loss, loans, accounts receivable and the investments which will be held to their maturity.
The equity instrument investment without quoted market price in an active market whose fair value cannot be reliably measured shall be measured by cost.
5.9.3 Impairment of financial assets
On each balance sheet date, the Group checks the book value of the financial assets. If there is any objective evidence indicating that a financial asset is impaired, the impairment provision is accrued. Objective evidence indicating the impairment of financial assets refers to those occurring after the initial recognition, have effect on the estimated future cash flow of the financial assets, and can be
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report measured reliably.
The objective evidence indicating the impairment of the financial assets includes the following observable matters:
① A serious financial difficulty occurs to the issuer or the debtor;
② The debtor breaches any of the contractual stipulations, such as, failure to pay or delay of the payment of interest or principal;
③ The Group makes any concession due to economic, legal factors or other factors to the debtor which is in financial difficulties;
④ The debtor will probably become bankrupt or carry out other financial reorganizations;⑤ The financial assets can no longer continue to be traded in an active market due to serious financial difficulties of the issuer;
⑥ It is impossible to identify whether the cash flow of a certain asset within a certain group of financial assets has decreased or not. But after making an overall appraisal according to the public data available, it is found that the estimated future cash flow of the said group of financial assets has indeed decreased since it was initially recognized and such decrease can be measured, including:
* The payment ability of the debtor of the said group of financial assets worsens gradually;* The country or economic region where the debtor is situated has the conditions that may cause the financial assets to be unpaid.
⑦ A serious unfavourable change occurs to the operating technology, market, economic environment, legal environment of the issuer of the equity instruments that causes the investor of the equity instrumentscan‘t recover the investment costs;
⑧ The fair value of the equity instrument investment has serious or permanent decline; and⑨ Other objective evidence showing the depreciation of the financial assets.
* Impairment of financial assets measured by amortized cost
Where a financial asset measured at amortized cost is impaired, the book value of the said financial asset shall be written down to the current value of the predicted future cash flow determined according to the capitalization of original effective exchange rate (excluding the loss of future credits not yet occurred), and the amount as written down shall be recognized as loss of the impairment of the asset and shall be included into the current profit and loss. If there is any objective evidence proving that the value of the said financial asset has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment losses originally recognized shall be reversed. However, the reversed book value shall not be any more than the amortized costs of the said financial asset on the day of reverse under the assumption that no provision is made for the impairment.
An impairment test shall be made by the Group independently on the individually significant financial assets; with regard to not individually significant financial assets, an independent impairment test may be carried out, or they may be included in a combination of financial assets with similar credit risk characteristics so as to carry out an impairment-related test. Where, upon independent test, the financial asset (including the individually significant financial assets and not individually significant financial assets) has not been impaired, it shall be included in a combination of financial assets with similar credit risk characteristics so as to conduct another impairment test. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized shall not be included in the combination of the financial assets with similar credit risk characteristics for impairment test.
* Impairment of available-for-sale financial assets measured by cost
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report When the equity instrument investment without quoted market price in an active market and the fair value of which cannot be reliably measured is impaired, the book value is decreased to the current value confirmed by the discounted future cash flow according to the current market return of the similar financial assets. The decreased amount is recognized as impairment loss and included in the current profit and loss. The impairment loss of this kind of financial assetscan‘t be transferred back upon confirmation.
5.9.4 Transfer of financial assets
Where a financial asset satisfies any of the following conditions, it shall be terminated from recognition:① Where the contractual rights for collecting the cash flow of the said financial asset are terminated;② Where the said financial asset has been transferred and all the risks and rewards of the financial asset have been substantially transferred to the receiver;③ Where the financial asset has been transferred, although the Group does not transfer or retain almost all the risks and rewards of the financial asset, the Group still waives the control over the financial asset.
Where the overall transfer of the financial asset satisfies the derecognition conditions, the difference between the book value of the transferred financial asset as well as the consideration received due to such transfer and the summation of the cumulative amount of the fair value of the asset that is originally included in other comprehensive income shall be included in the current profit and loss.
5.9.5 Classification, recognition and measurement of financial liabilities
The Group classifies the financial instruments or the components as financial liabilities or equity instruments at the time of initial recognition according to the contract terms of the issued financial instruments and the reflected economic essence rather than only the legal form, considering the definition of financial liabilities and equity instruments.
The financial liabilities are classified as the financial liabilities and other financial liabilities measured by fair value and the variation of which is included in the current profit and loss at the time of initial recognition. The financial liabilities of the Group are other financial liabilities, including short-term loans, bills payable, accounts payable, interest payable, other payables, non-current liabilities due within one year, long-term loans and long-term payables.
Other financial liabilities
Other financial liabilities are subsequently measured at amortized cost by adopting effective interest rate method, wherein the profits or losses that arise when such financial liabilities are terminated from recognition or amortized shall be included in the current profit and loss.
5.9.6 Terminated recognition of financial liabilities
When the prevailing obligations of a financial liability are relieved in all or in part, the recognition of the financial liability shall be terminated in all or in part.
Where the recognition of a financial liability is totally or partially terminated, the difference between the book value of the part which has been terminated from recognition and the consideration which has been paid (including the transferred non-cash assets and the assumed new financial liabilities) shall be included into the current profit and loss.
5.9.7 Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities and this right can be implemented at present, and when the Group plans to use net settlement or liquidate the financial assets and pay off the financial liabilities, the amount after the financial assets offset the financial liabilities is listed in the balance sheet. Besides, the financial assets and
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report the financial liabilities are respectively listed in the balance sheet without offset.
5.9.8 Equity instruments
The equity instruments mean the contracts by which to hold the residual equity in the assets of the Group after deducting all the liabilities. The issuing (including refinancing), counter purchase, sale or cancellation of the equity instruments by the Group shall be handled as changes of the equity. The Groupdoesn‘t recognize any change to the fair value of the equity instruments. The transaction expenses related to the equity transaction shall be deducted from the equity.
The distribution related to the equity instrument holder by the Group shall be considered as profit distribution, and the issued share dividendsdon‘t affect the total amount of theshareholders‘ equity.
5.10 Accounts receivable
5.10.1 Bad account provision of individually significant accounts receivable
|||
|-|-|
||The accounts receivable with the amount above RMB|
|Judgment reference or amount standard for individually||
||3,000,000 Yuan shall be recognized by the Group as the|
|significant accounts||
||individually significant accounts receivable.|
||An impairment test shall be made independently by the|
||Group on the individually significant financial assets.|
||Where, upon independent test, the financial asset has not|
||been impaired, it shall be included in a combination of|
||financial assets with similar risk characteristics so as to|
|Accruing method for individually significant accounts accrued for||
||conduct another impairment test. The accounts receivable|
|bad account provision individually||
||that are independently assessed for impairment and for|
||which an impairment loss is or continues to be recognized|
||shall not be included in the combination of accounts|
||receivable with similar credit risk characteristics for|
||impairment test.|

5.10.2 Individually insignificant accounts receivable accrued for bad account provision individually
|||
|-|-|
||If there is objective evidence that the Group can‘t call back the accounts|
|Reasons for accruing for bad account||
||according to original articles, the individually insignificant accounts receivable|
|provision individually||
||can be accrued for bad account provision individually.|
||The impairment losses are recognized according to the difference between the|
|Methods for accruing bad account||
||present value of future cash flow and the book value, and impairment provision|
|provision||
||is accrued.|

5.11 Inventories
5.11.1 Classification of inventories
Inventories of the Group comprise raw materials, goods in process and commodity stocks. The inventories are initially measured by cost. The inventory cost consists of purchase cost, processing cost and other expenditures to make inventories reach the current site and state.
5.11.2 Pricing methods for sending out inventories
Weighted average method is used to determine the actual cost for sending out inventories when sending them out.
The agricultural products after the harvest are handled in accordance with the ASBE 1- Inventories. 5.11.3 Recognition reference of the net realizable value of inventories
Inventories are stated at the lower of cost and net realizable value on the balance sheet date. If the
net realizable value is lower than the cost of inventories, the provision for the loss on decline in
value of inventories are made. The net realizable value refers to the amount: the estimated sale
price of inventories deducting the estimated cost to happen till completion, the estimated selling
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report expense and relevant taxes, in daily activities. Based on the acquired concrete evidence, the purpose for holding inventories and the impact of matters after balance sheet date shall be also considered during recognition of the net realizable value of inventories.
The inventories are accrued inventory depreciation provision according to the difference of single inventory item and its net realizable value.
After accruing inventory depreciation provision, if the previous influence factors writing down inventories value disappear resulting in the net realizable value of the inventories being higher than their book value, it shall be reversed from the originally accrued inventory depreciation provision amount and the reversed amount shall be included in the current profit and loss.
5.11.4 Inventory system for the inventories
Inventory system: Perpetual inventory system
5.11.5 Amortization method of low-priced and easily-worn articles and packages
Amortization method of packages and low-priced and easily-worn articles: One-off amortization method
5.12 Those divided into assets held for sale
When a non-current asset of the Group (excluding deferred income tax asset) meets the following conditions simultaneously, the Group shall recognize it as holding for sale: This non-current asset can be sold immediately at the current state only according to the usual terms for selling such non-current assets; a resolution has been passed related to the disposal of this non-current asset; an irrevocable transfer agreement has been signed with the transferee; and this transfer will be completed within one year. As for non-current assets held for sale, the Group shall not withdraw the depreciation or carry out amortization, and the book value or the net amount deducting the disposal expenses from the fair value, whichever is less, shall be used for calculation.
5.13 Long-term equity investments
5.13.1 Judgment standard of control, common control and significant impact
Control means that the investor holds the power in the invested party, obtains variable returns by participating in relevant activities of the invested party and has the ability to affect the amount of the returns by using the power on the invested party. Common control means a joint control over a certain arrangement according to relevant agreements and relevant activities of this arrangement must be decided upon unanimous consent of the participants sharing the control power. Significant impact refers to the right to participate in decision-making of theinvestor‘s financial and operating policies but not controlling or commonly controlling the formulation of these policies with other parties. When determining whether to control or exert significant influence on the invested unit, the potential voting power factors such as the current convertible company bonds and the current executable equity warrants held by the investor and other parties in the invested unit have been considered.
5.13.2 Recognition of initial investment cost
For long-term equity investments acquired from business combination under non-common control, the combination cost shall be regarded as the initial investment cost of the long-term equity investments on the acquisition date. For the business merger ultimately formed under non-common control with the stock rights of the purchased party step by step through several transactions, it shall be handled depending on whether it is a―packagedeal‖: If it belongs to a―packagedeal‖, each transaction shall be regarded as a transaction with the control power acquired for the accounting treatment.
The intermediary expenses such as audit, legal services and assessment consultation and other related management expenses paid by the acquirer for business combination are included in the current profit and loss when they occur.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report For long-term equity investments other than those formed by business combination, initial measurement shall be carried out according to the cost.
5.13.3 Subsequent measurement and recognition of loss and profit
Long-term equity investments by cost method
Long-term equity investments in the subsidiary companies are measured on cost method basis in the corporate financial statement. Subsidiary companies refer to the invested entities by which the Group has control.
When cost method is adopted, the long-term equity investments are measured at the initial investment cost. In case of additional or recovered investment, the cost of the long-term equity investments shall be adjusted accordingly. The current investment income shall be recognized according to the cash dividends or profits declared to issue by the invested unit.
5.13.4 Disposal of long-term equity investments
When the long-term equity investments are disposed, the difference between the book value and the actually acquired price is included in the current profit and loss.
5.14 Fixed assets
5.14.1 Recognition conditions
Fixed assets refer to the tangible assets held for producing goods, rendering services, leasing or operation management, with service life exceeding one accounting year. Fixed assets can only be confirmed that the economic benefits related to the fixed assets are likely to flow into the Group, and the cost of the fixed assets can be measured reliably. Initial measurement for fixed assets shall be carried out according to the cost. For the subsequent expenses related to the fixed asset, if the economic benefits related to the fixed asset are likely to flow into the Group and the cost thereby can be reliably measured, the subsequent expenses are included in fixed asset cost and the book value of the substituted part shall be terminated. Other subsequent expenses shall be included in the current profit and loss.
5.14.2 Depreciation methods
Depreciation is calculated by the straight-line depreciation within the service life from the month following having been put into operation. The estimated service life, residual value and annual depreciation rate are as follows:
||||||
|-|-|-|-|-|
|Classification|Depreciation method|Depreciation life|Residual value rate|Annual depreciation rate|
||Straight-line||||
|Houses and buildings||20-40 years|0-5%|2.4%-5.0%|
||depreciation||||
||Straight-line||||
|||5-20 years|0-5%|4.8%-20.0%|
|Machinery equipment|depreciation||||
||Straight-line||||
|||4-12 years|0-5%|7.9%-25.0%|
|Transportation tools|depreciation||||

The estimated residual value refers to the amount that the Group obtains from disposal of the assets at present after deducting the predicted disposition expenses at an estimated state on the assumption that the predicted service life of the fixed assets has expired.
5.14.3 Other description
When the fixed assets are under disposal state or cannot generate any economic benefits through use or disposal as expected, the fixed assets shall be derecognized. The selling, transfer, scrapping or damage disposal income shall be included in the current profit and loss after deducting the book
value and relevant taxes.
The Group reviews the service life, expected net residual value, and the depreciation method of the
fixed assets at least at the end of each year, and in case of any change, the change will be disposed
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report as accounting estimate change.
5.15 Construction in progress
Construction in progress is measured by actual costs, and the actual costs include all costs of the engineering during the period of construction, capitalized borrowing costs before the engineering reaches the planned serviceable condition and other related costs. The construction in progress is not depreciated. The construction in progress is transferred to fixed assets after reaching the planned serviceable condition.
5.16 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset shall be capitalized after expenditure to acquire happens, borrowing costs happen, acquisition, construction or production essential for making the assets ready for their intended use or sales. Capitalization of borrowing costs shall cease when all the activities necessary to prepare the qualifying asset for its intended use of sale are substantially complete. If the acquisition, construction or production of a qualifying asset is abnormally interrupted, and the interruption period exceeds three months, the capitalization of borrowing costs shall be temporarily ceased, until the construction or production resumes. Other borrowing costs are recognized as expenses when occur. The amount after deducting the interest income of the borrowing funds that have not yet been used which are deposited in bank or the investment income from temporary investment from the interest expenses actually incurred in the current period of special borrowings shall be capitalized.
5.17 Biological assets
The biological assets of the Group are productive biological assets.
Productive biological assets refer to the biological assets held for the purposes of producing agricultural products, rendering services or leasing, etc. The productive biological assets of the Group are vines that produce grapes. Initial measurement for the productive biological assets is carried out according to the cost. For the occurred cost of the self-breeding productive biological asset before achieving the intended production and operation purposes can be directly attributable to the necessary expenses of the asset, including the borrowing cost conforming to capitalization. The productive biological assets are not accrued depreciation until reaching the intended production and operation purposes. After reaching the intended production and operation purposes, the productive biological assets are accrued depreciation within the service life straight-line depreciation. The service life, estimated net residual value rate and annual depreciation rate of different productive biological assets are as follows:
Category of assets Service life Estimated residual value rate(%) Annual depreciation rate Vines 20 years 5%
The service life of the productive biological assets of the Group and the estimated residual value are confirmed by the normal service life cycle of the biological assets.
The Group reviews the service life, expected net residual value, and the depreciation method of the productive biological assets at least at the end of each year. In case of any change, the change will be disposed as accounting estimate change.
At the time of sale, loss, death, damage or destroy of a productive biological asset, the difference after deducting the book value and relevant taxes from the disposal income are included in the current profit and loss.
5.18 Intangible assets
5.18.1 Pricing method, service life and impairment test
Intangible assets include land use right, software, etc.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Initial measurement for intangible assets is carried out according to the cost. For the intangible assets with finite lives, since they are available, the amount after the original value deducts expected net residual value and the accrued accumulative amount of provision for impairment is amortized evenly based on straight line method. The intangible assets with indefinite service life are not amortized. The amortization method, service life and estimated residual value of all kinds of intangible assets are shown as follows:
|||||
|-|-|-|-|
|Category of assets|Service life|Estimated net residual value rate|Annual amortization rate|
|Land use right|40-50 years|-|2-2.5%|
|Software|5-10 years|-|10-20%|
|Trademark|10 years|-|10%|

At the end of the period, the service life and amortization method of the intangible assets with finite service life shall be reviewed and adjusted if necessary.
5.19 Impairment of long-term assets
On each balance sheet date, the Group and the Company check the long-term equity investments, fixed assets, construction in progress, productive biological assets and intangible assets with finite service life to determine whether there is a sign indicating any impairment. If there is such a sign, the recoverable amount shall be estimated.
The estimated recoverable amount of the asset is based on the single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount is determined based on the asset group which the asset is in. The recoverable amount is the higher one between the net amount after the disposition expenses are deducted from the fair value of the asset or the asset group and the current value of the estimated future cash flow.
If the recoverable amount of the asset is lower than its book value, the impairment provision of the asset is accrued based on the difference and included in the current profit and loss.
Impairment test is carried out for goodwill at least at the end of each year. The impairment test of goodwill shall be carried out in combination with the related asset group or asset combination. That is to say, the book value of the goodwill is amortized to the asset group or asset combination benefiting from the synergistic effect of the business combination according to the reasonable methods from the acquisition date. If the recoverable amount of the asset group or asset combination which includes the amortized goodwill is lower than the book value, the corresponding impairment loss is recognized. The amount of impairment loss shall firstly offset the book value of the goodwill amortized to the asset group or asset combination and then offset the book value of other assets in proportion according to the proportion in the book value of other assets in the asset group or asset combination except for the goodwill.
After the impairment loss of assets has been recognized, it is not be reversed in the future accounting periods.
5.20 Long-term unamortized expenses
Amortization period of different long-term unamortized expenses of the Group are listed as follows: Amortization period
Land requisition fee 50 years
Land leasing fee 50 years
Afforestation fee 5-20 years
Decoration fee 3-5 years
Other 3 years
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 5.21 Employee remunerations
5.21.1 Accounting treatment method of short-term remunerations
During the accounting period that the employees provide services for the Group, the actual short-term remunerations are recognized as liabilities and included in the current profit and loss or relevant asset costs. The welfare expenses of the employees in the Group are included in the current profit and loss or relevant asset costs when occur based on the actual amount. The non-monetary welfare expenses of the employees are measured by the fair value.
During the accounting period that the employees provide services for the Group, the corresponding employee remunerations and the corresponding liabilities are recognized and included in the current profit and loss or relevant asset costs after the social insurance premiums including medical insurance premium, industrial injury insurance premium and birth insurance premium as well as housing provident funds are paid by the Group for the employees, and labor union dues and employee education funds are withdrawn by the Group according to the regulated withdrawing base and proportion.
5.21.2 Accounting treatment method of welfare after resignation
The Group makes the contribution plan for the welfare after resignation.
During the accounting period that the employees provide services for the Group, the amount to be deposited which is calculated in accordance with the contribution plan is recognized as liabilities and included in the current profit and loss or relevant asset costs.
5.21.3 Accounting treatment method of welfare after dismission
If the Group provides dismission welfare to the employees, the employee remuneration liabilities caused by the dismission welfare shall be recognized and included in the current profit and loss on the following date which is earlier: The Groupcan‘t unilaterally withdraw the dismission welfare due to termination of labor relation plan or redundancy suggestion; or the Group confirms the costs or expenses related to the reorganization involving the payment of the dismission welfare.
5.22 Revenue
5.22.1 Revenues from sale of goods
When the significant risks and rewards of ownership of goods have been transferred to the buyer, provided that the Group maintains neither continuous management right involvement to the degree usually associated with ownership, nor effective control over the goods sold, and cost of sales can be measured reliably. When the relevant economic benefits are likely to flow into the enterprise and the relevant incurred cost or cost to be incurred can be measured reliably, the realization of the revenue from sale of goods can be recognized.
5.22.2 Rendering of services
When income amount of rendering of services can be measured reliably, the relevant economic benefits are likely to flow into the Group, the stage of completion of the transaction can be measured reliably, and the incurred cost or cost to be incurred in the transaction can be measured reliably, then the income realization of rendering of services can be recognized. The Group confirmed the income of the rendered services according to percentage-of-completion method on the balance sheet date. The percentage-of-completion of the service transaction is determined according to the proportion of the rendered service accounting for the total services that shall be rendered.
If the outcome of rendering of service transaction cannot be reliably estimated, the income of the rendered services are determined according to the render cost amount that is incurred and is expected to be compensated, and the incurred service cost shall be the period charge. If the incurred service cost is expected to be unable to be compensated, the income will not be determined.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 5.23 Governmental subsidies
5.23.1 Judgment standard and accounting treatment method of governmental subsidies related to assets
Governmental subsidies refer to monetary or non-monetary assets received by the Group from the government. According to the nature of the granted object clearly stipulated in relevant government documents, governmental subsidies include those related to assets and those related to income. Governmental subsidies are recognized where there is a reasonable assurance that the allowances will be received and all attaching conditions will be complied with. Monetary allowances are measured on the basis of the amount received or the amount receivable.
Governmental subsidies related to assets are recognized as deferred income and are distributed equally in the current profit and loss within the useful lives of the relevant assets.
5.23.2 Judgment standard and accounting treatment method of governmental subsidies related to revenues
The governmental subsidies related to revenues to be used as compensation for future expenses or losses are recognized as deferred income and are included in the profit and loss statement for the period where the relevant expenses are recognized; or those to be used as compensation for relevant expenses or losses already occurred are recorded directly in the current profit and loss. 5.24 Deferred income tax assets/deferred income tax liabilities
The income tax expenses include the current income tax and deferred income tax.
5.24.1 Current income tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current period and the prior periods are measured according to the predicted payable (refundable) income tax amount as stipulated by tax law.
5.24.2 Deferred income tax assets and deferred income tax liabilities
The balance sheet liability method is used for recognizing deferred income tax assets and deferred income tax liabilities for the difference between certain assets, book value of liability items and their tax base, and the temporary differences arising from the book value of items (that are not recognized as assets and liabilities but can be recognized the tax bases as stipulated by tax law) and tax bases.
Normally all temporary differences are recognized the relevant deferred income taxes. However, for the deductible temporary differences, the Group recognized the relevant deferred income tax assets taking the taxable income that is likely to be obtained for deducting deductible temporary differences as the limit. In addition, the temporary differences relevant to initial recognition of goodwill and relevant to the initial recognition of assets or liabilities arising from transaction not of business combination, and not influencing accounting profit and taxable income (or deductible loss) are not recognized for the relevant deferred income tax assets or liabilities.
For the deductible losses and tax credits that can be transferred during subsequent years, the corresponding deferred income tax assets shall be recognized by taking the future taxable income that is likely to be used to deduct deductible losses and tax credits as the limit.
The Group recognized the deferred income tax liabilities arising from the taxable temporary differences relevant to the subsidiary companies, except for that the Group can control the time of the reverse of the temporary differences which are unlikely to be reversed in the foreseeable future. For the deductible temporary differences relevant to the subsidiary companies, the Group will recognize the deferred income tax assets only when the temporary differences are likely to be reversed in the foreseeable future and the taxable income for deducting deductible temporary differences is likely to be achieved in the future.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured according to the applicable tax rate during the period of expecting to repossess the relevant assets or pay off relevant liabilities as stipulated by tax law.
Except for the current income taxes and deferred income taxes (relevant to transaction and matter that are directly included in other comprehensive income or stockholder's equity) that are included in other comprehensive income or stockholder's equity and the deferred income taxes arising from business combination that adjusts the book value of the goodwill, the expenses or revenues of other current income taxes and deferred income taxes are included in the current profit and loss.
On the balance sheet date, the Group shall review the book value of deferred income tax assets and shall write down the book value of deferred income tax assets if sufficient taxable income is unlikely to be obtained in the future to deduct the benefits of deferred income tax assets. The amount written down shall be reversed when it is likely to obtain sufficient taxable income.
5.24.3 Offset of income tax
When there is the legal right of netting or intention of netting or carrying out obtaining assets and paying off liabilities at the same time, the current income tax asset and current income tax liability of the Group are reported according to the net amount after offset.
When there is the legal right of netting the current income tax asset and current income tax liability and the deferred income tax assets and deferred income tax liabilities are relevant to the income tax collected by same tax collection and management department on the same taxpayer or different taxpayers, however, the involved tax payers intend to net the current income tax assets and liabilities or obtain assets and pay off liabilities at the same time during every period of reverse of each significant deferred income tax assets and liabilities in the future, deferred income tax assets and deferred income tax liabilities of the Group are reported according to the net amount after offset.
5.25 Lease
The term―financinglease‖ refers to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. Other leases except for financing lease are the operating lease.
5.25.1 Accounting treatment method of operating lease
The Group records the operating lease business as a lessee.
Rental expenses under the operating lease are credited to related costs of the assets or the current profit and loss on the straight line basis over the lease terms. The initial direct expenses are included in the current profit and loss.
5.26 Changes in main accounting policies and accounting estimates
5.26.1 Changes in main accounting policies
Nil
5.26.2 Changes in main accounting estimates
Nil
5.27 Other
Critical assumptions and uncertain factors adopted for important judgements and accounting estimates during the application of the accounting policies
During the application of the accounting policies of this Financial Report IV, the Group needs to judge, estimate and assume the book value of the report items that are unable to be accurately measured due to the inherent uncertainties of business activities, in which the judgment, estimation and assumption are made based on the previous historical experience of the management level of
the Group and considering other relevant factors. The actual results may have differences from the
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report estimation of the Group.
The Group regularly reviews the above-mentioned judgment, estimation and assumption based on the continuous operation, and the change of accounting estimate only affects the current period of change, of which the influence number will be recognized at the current period of change; in case of influencing both current period and future period of change, the influence number will be recognized at the current period and future period of change.
Critical assumptions and uncertain factors adopted for accounting estimates
On the balance sheet date, the main critical assumptions and uncertainties in accounting estimates that are likely to result in significant adjustments in assets and book value of liabilities in the future period include:
Deferred income tax assets
Within the limit of the likeliness that there is sufficient taxable income to deduct deductible losses, the deferred income tax assets shall be recognized according to all deductible losses that have not been utilized, which requires the management level to use a lot of judgments to estimate the occurred time and amount of taxable income to be obtained in the future, and combine with tax planning strategy to decide the amount of deferred income tax assets that shall be recognized.
Depreciation
The Group uses straight line method for provision for depreciation within the expected service life after considering the residual value of the fixed assets. The Group regularly reviewed the expected service life to decide the amount of depreciation expense that will be included in every report period. The expected service life is recognized by the Group according to the previous experience on similar assets and in combination with the expected technical changes. The depreciation expense shall be adjusted if there are significant changes in the previous estimate.
Service life of intangible assets
The expected service life of intangible assets are estimated based on actual service life of the previous intangible assets of similar natures and functions and according to historical experience and in consideration of the duration of the contractual rights or other legal rights applicable to the intangible assets.
In case that the service life of the intangible assets shortens or extends, the amortization period will be adjusted in the future period for intangible assets with finite life.
Impairment of long-term assets
The Group carries out impairment assessment on long-term assets to determine if the recoverable amount of assets drops to the amount lower than their book value. If the situation shows that the book value of the long-term assets may not be fully recovered, the relevant assets will be deemed as having been impaired and the impairment loss shall be correspondingly recognized.
The recoverable amount is the higher in: the net amount of fair value of an asset (or asset group) minus disposal expense, and the present value of the estimated future cash flow of the asset (or asset group). It is difficult for the Group to accurately estimate the fair value of an asset because of difficulty in obtaining the open market price of the asset (or asset group). It needs to make significant judgments on the output, selling price, relevant operating cost of the asset (or asset group) and the discount rate used for calculating present value when estimating the present value of future cash flow. The Group will use all easily available materials in estimating the recoverable amount, including the forecast relevant to output, selling price and relevant operating cost according to the reasonable and supportable assumption.
Bad account provision for accounts receivable
Bad account provision for accounts receivable shall be recognized by the management level according to the objective evidences (e.g. the possibility of bankruptcy or severe financial difficulty
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report of the debtor) that can affect the recovery of the accounts receivable. The management level will reevaluate bad account provision in the end of every year.
Inventory depreciation provision accrued based on net realizable value
According to the inventory accounting policy, the Group carries out price decrease provision for obsolete and unsalable inventories with higher cost than the net realizable value measurement according to the lower of the cost and net realizable value. The Group will reevaluate if the inventories are obsolete and unsalable, and if the net realizable value is lower than inventory cost in the end of every year.
6. Taxes
6.1 Main taxes and tax rate
||||
|-|-|-|
|Taxes|Tax basis|Tax rate|
||VAT is levied by the output tax calculated by the taxable revenue as|17%, 6% (China), 19.6%|
|Value added tax|||
||the tax base after deduction of eligible input VAT in this period.|(France) and 21% (Spain)|
||The consumption tax is levied by the taxable revenue as the tax||
|Consumption tax||10%-20% (China)|
||base.||
|Business tax|The business tax is levied by the taxable revenue as the tax base.|5% (China)|
|Urban maintenance and|The urban maintenance and construction tax is levied by the actually||
|||7% (China)|
|construction tax|paid turnover tax as the tax base.||
||The corporate income tax is levied by the taxable income as the tax|25% (China), 33% (France)|
|Corporate income tax|||
||base.|and 28% (Spain)|

6.2 Tax incentives
Ningxia Changyu Grape Growing Co., Ltd.(―NingxiaGrowing‖), a subsidiary of the Company, whose principal activity is grape growing, is incorporated in Yongning County, Ningxia Hui Autonomous Region. According to Article 27 of PRC Corporate Income Tax and Article 86 of PRC Corporate Income Tax Measures for Implementation, it enjoys an exemption of corporate income tax related to grape growing.
Xinjiang Tianzhu Wine Co., Ltd.(―XinjiangTianzhu‖) and Xinjiang Chateau Changyu Baron Balboa Co., Ltd.(―ShiheziChateau‖), the subsidiaries of the Company, are enterprises engaged in the production and sales of bulk wine incorporated in Shihezi City, Xinjiang Uygur Autonomous Region. In accordance with relevant regulations of the Notice on Relevant Issues of Taxes Policies for Deeply Implementing the Western Development Strategy (Cai Shui[2011] No. 58), such enterprises enjoy the preferential policy for the corporate income tax, and the preferential tax rate of the corporate income tax is15% from 2015 to 2020.
7. Notes to consolidated financial statement
7.1 Monetary capital
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Cash on hand|112,832|117,507|
|Bank deposit|1,433,123,482|1,240,607,797|
|Other monetary capital|116,831,467|150,792,303|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Total|1,550,067,781|1,391,517,607|
|Including: Total amount of funds|||
||17,223,253|16,080,618|
|deposited abroad|||

As at June 30, 2017, the restricted bank deposit details are listed as follows:
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Housing fund of the unit|2,748,410|2,711,926|
|Total|2,748,410|2,711,926|

 As at June 30, 2017, the details of other monetary funds are listed as follows:
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge of fixed deposits by Yantai|||
|Changyu Wine Research,|||
||46,100,000|46,100,000|
|Development and Manufacture Co.,|||
|Ltd. (―R&D Company‖)|||
|Refundable deposits of bills payable|8,000,000|38,900,000|
|Refundable deposits of the letter of|||
||60,580,850|25,694,735|
|credit|||
|Account balance of Alipay|1,992,035|40,047,367|
|Guaranty money for the unit card|158,582|50,201|
|Total|116,831,467|150,792,303|

 As at June 30, 2017, the frozen amount in the account balance of Alipay was RMB 1,992,035 Yuan (December 31, 2016: RMB 18,118,441 Yuan).
As at June 30, 2017, the monetary capital deposited abroad by the Group was RMB 17,223,253 Yuan (December 31, 2016: RMB 16,080,618 Yuan).
As at June 30, 2017, the bank deposits of the Group including short-term fixed deposits ranging from 3 months to 1 year amounted to RMB 201,000,000 Yuan (December 31, 2016: RMB 3,000,000 Yuan), with the interest rates ranging from1.3%-1.95%.
7.2 Bills receivable
7.2.1 Classification of bills receivable
Unit: Yuan
||||
|-|-|-|
|Type|Ending balance|Beginning balance|
|Bank acceptance|378,804,230|210,470,027|
|Trade acceptance|||
|Total|378,804,230|210,470,027|

 7.2.2 Bills receivable pledged by the Company at the end of period
Nil
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.2.3 Bills receivable endorsed or discounted by the Company at the end of period but not yet matured as of the balance sheet date
Unit: Yuan
||||
|-|-|-|
||Amount terminating recognition at the end|Amount not terminating recognition|
|Item|||
||of period|at the end of period|
|Bank acceptance|138,552,83||
|Trade acceptance|||
|Total|138,552,83||

7.2.4 Bills receivable reclassified as accounts receivable by the Company due to the default of drawer at the end of period
Nil
7.3 Accounts receivable
7.3.1 Accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||||Bad debt||||||||
||Book balance|||||Book balance||Bad debt provision|||
|Type|||provision||||||||
||||||Book value|||||Book value|
||Amount|Proportion|A mount|Accrued||Amount|Proportion|Amount|Accrued||
|||||proportion|||||proportion||
|Accounts|||||||||||
|receivable of|||||||||||
|significant|||||||||||
|single amount|||||||||||
||70,335,893|42.1%|||70,335,893|75,230,493|43.5%|||75,230,493|
|and single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Accounts|||||||||||
|receivable|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision by|||||||||||
|credit risk|||||||||||
|features|||||||||||
|Accounts|||||||||||
|receivable of|||||||||||
|insignificant|||||||||||
|single amount|||||||||||
||96,816,616|57.9%|||96,816,616|97,832,135|56.5%|||97,832,135|
|and single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Total|167,152,509|100%|||167,152,509|173,062,628|100%|||173,062,628|

 The credit term of accounts receivable is normally one month. Major customers can be granted a credit
term up to three months. The accounts receivable are free from interest.
As at June 30, 2017, the accounts receivable with ownership restrictions were RMB 29,248,895 Yuan
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (December 31, 2016: RMB 30,732,944 Yuan). Please refer to Note 7.19 for the details.
7.3.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or received in this period was RMB 0 Yuan.
7.3.3 Accounts receivable actually cancelled after verification in this period
Nil
7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the ending balance
||||||
|-|-|-|-|-|
||Relationship with the|||Percentage in total|
|Unit||Amount|Period||
||Company|||accounts receivable|
|Nonggongshang|||||
|Supermarket (Group) Co.,|Third party|11,144,490|Within 1 year|6.7%|
|Ltd.|||||
|Distribuidora|||||
||Third party|9,926,131|Within 1 year|5.9%|
|Internacional ( DIA)|||||
|Wal-mart (China)|||||
||Third party|8,649,179|Within 1 year|5.2%|
|Investment Co., Ltd.|||||
|Lianhua Supermarket|||||
||Third party|8,599,554|Within 1 year|5.1%|
|Holdings Co., Ltd.|||||
|Suguo Supermarket Co., Ltd.|Third party|8,406,322|Within 1 year|5.0%|
|||46,725,676||28.0%|
|Total|--||--||

7.3.5 Accounts receivable terminating recognition due to transfer of financial assets
Nil
7.3.6 Accounts receivable transferred and included in assets and liabilities
Nil
7.4 Advance payment
7.4.1 Advance payment listed by age
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending balance||Beginning sum||
|Age|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|2,114,086|100%|2,175,606|100%|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|1-2 years|||||
|2-3 years|||||
|More than 3 years|||||
|Total|2,114,086|--|2,175,606|--|

7.4.2 Advance payment collected by the prepaid parties of top 5 units ranked by the ending balance
|||||||
|-|-|-|-|-|-|
||||||Percentage|
||Relationship with||||in the total|
|Unit||Amount|Age|Reason for unsettlement||
||the Group||||advance|
||||||payment%|
||||Within 1|||
|Chongqing Hoson Glass Co., Ltd.|Third party|508,873||Failure to receive the goods|24.1%|
||||year|||
|Shandong Electric Power Group||||||
||||Within 1|Prepaid electricity||
|Company Yantai Power Supply|Third party|484,514|||22.9%|
||||year|purchasing fund||
|Company||||||
|Jiangsu Dibang Construction|||Within 1|||
||Third party|421,357||Prepaid repair charges|19.9%|
|Engineering Co., Ltd.|||year|||
|Yantai Yanlai Electromechanical||||||
||||Within 1|||
|Equipment Production, Maintenance|Third party|100,000||Prepaid repair charges|4.7%|
||||year|||
|and Supply Center||||||
||||Within 1|||
|Yantai Refrigeration Equipment Plant|Third party|54,544||Prepaid repair charges|2.6%|
||||year|||
|||1,569,288|||74.2%|
|Total|--||--|--||

7.5 Interest receivable
7.5.1 Classification of interest receivable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Fixed deposit|368,928|24,200|
|Entrusted loan|||
|Bond investment|||
|Total|368,928|24,200|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.6 Other accounts receivable
7.6.1 Other accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||||||||
||Amount|Proportion|Amount|Accrued|Book value|Amount|Proportion|Amount|Accrued|Book value|
|||||proportion|||||proportion||
|Other|||||||||||
|accounts|||||||||||
|receivable of|||||||||||
|significant|||||||||||
|single|||||||||||
||5,460,380|33.5%|||5,460,380|7,417,220|39.3%|||7,417,220|
|amount and|||||||||||
|single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Other|||||||||||
|accounts|||||||||||
|receivable|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision by|||||||||||
|credit risk|||||||||||
|features|||||||||||
|Other|||||||||||
|accounts|||||||||||
|receivable of|||||||||||
|insignificant|||||||||||
|single|||||||||||
||10,850,802|66.5%|||10,850,802|11,463,580|60.7%|||11,463,580|
|amount and|||||||||||
|single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Total|16,311,182|100%|||16,311,182|18,880,800|100%|||18,880,800|

 7.6.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or received in this period was RMB 0 Yuan.
7.6.3 Other accounts receivable actually cancelled after verification in this period
Nil
7.6.4 Other accounts listed by nature
Unit: Yuan
||||
|-|-|-|
|Nature|Ending book balance|Beginning book balance|
|Deposit and guaranty money receivable|11,867,142|13,191,851|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Nature|Ending book balance|Beginning book balance|
|Imprest receivable|1,787,865|2,934,424|
|Consumption tax rebate|483,021|573,586|
|Other|2,173,154|2,180,939|
|Total|16,311,182|18,880,800|

 7.6.5 Other accounts receivable collected by the borrowers of top 5 units ranked by the ending balance
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||||Percentage in total||
|||Ending|||Ending balance of|
|Unit|Nature||Age|ending balance of other||
|||balance|||bad debt provision|
|||||accounts receivable||
||Construction|||||
|YEDA Finance Bureau||5,460,380|Within 2 years|33.4%||
||guarantee|||||
|YEDA Construction Industry|Construction||More than 3|||
|||2,151,300||13.2%||
|Association|guarantee||years|||
||Foreign|||||
|Canada Oros Icewine Co., Ltd.|investment|2,050,000|1-2 years|12.6%||
||receivable|||||
|Shandong Electric Power Group||||||
||Power supply||More than 3|||
|Company Yantai Power Supply||1,206,853||7.4%||
||guarantee||years|||
|Company||||||
|YEDA Thermochemistry Co.,||||||
||Deposit|500,000|Within 1 year|3.1%||
|Ltd.||||||
|Total|--|11,368,533|--|69.7%||

7.6.6 Other accounts receivable terminating recognition due to transfer of financial assets
Nil
7.6.7 Other accounts receivable transferred and included in assets and liabilities
Nil
7.7 Inventories
7.7.1 Inventory classification
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Raw materials|40,739,604||40,739,604|72,011,633||72,011,633|
|Goods in process|1,453,452,930||1,453,452,930|1,253,218,347||1,253,218,347|
|Commodity stocks|545,683,575|15,573,180|530,110,395|944,806,516|21,426,756|923,379,760|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|Total|2,039,876,109|15,573,180|2,024,302,929|2,270,036,496|21,426,756|2,248,609,740|

 7.7.2 Inventory depreciation provision
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase in this period||Decrease in this period|||
||Beginning||||||
|Item||||Transfer back or||Ending balance|
||balance|Accrual|Other||Other||
|||||write-off|||
|Raw materials|||||||
|Goods in process|||||||
|Commodity stocks|21,426,756|||5,853,575.63||15,573,180|
|Total|21,426,756|||5,853,575.63||1 5 , 5 7 3 ,1 8 0|

 7.8 Those divided into assets held for sale
Unit: Yuan
||||||
|-|-|-|-|-|
||||Estimated disposalexpenses||
|Item|Ending book value|Fair value||Estimated disposal time|
|Zhenshantun collective|||||
||2,000,197|16,282,224|3,878,560||
|apartment|||||
|Total|2,000,197|16,282,224|3,878,560|--|

The Company has signed an irrevocable agreement for disposing the fixed assets, and the contract amount is RMB 16,282,224 Yuan. The disposal is predicted to be completed in 2017. 7.9 Other current assets
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Prepaid corporate income tax|68,535,748|26,238,092|
|Deductible input tax|218,239,811|135,316,274|
|Rent to be amortized|6,518,738|7,967,876|
|Total|293,294,297|169,522,242|

 7.10 Available-for-sale financial assets
7.10.1 Particulars of available-for-sale financial assets
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item|Book|Impairment|Book|Book|Impairment|Book|
||balance|provision|value|balance|provision|value|
|Available-for-sale financial|||||||
|instruments:|||||||
|Available-for-sale equity|10,463,800|10,000,000|463,800|10,340,263|10,000,000|340,263|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|instruments:|||||||
|Fair value measurement|||||||
|Cost measurement|10,463,800|10,000,000|463,800|10,340,263|10,000,000|340,263|
|Total|10,463,800|10,000,000|463,800|10,340,263|10,000,000|340,263|

 7.10.2 Available-for-sale financial assets by cost measurement at the end of period
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision|||||Cash|
||||||||||Shareholding||
|Invested unit||Increase|Decrease|||Increase|Decrease||ratio in the|dividend|
||Beginning|in this|in this|Ending|Beginning|in this|in this|Ending|invested unit|in this|
|||period|period|||period|period|||period|
|Yantai|||||||||||
|Dingtao|||||||||||
|Construction|||||||||||
|and|10,000,000|||10,000,000|10,000,000|||10,000,000|18%||
|Development|||||||||||
|Co., Ltd.|||||||||||
|(Note 1)|||||||||||
|Other (Note|||||||||Less than||
||340,263|123,537||463,800|||||||
|2)|||||||||1%||
|Total|10,340,263|123,537||10,463,800|10,000,000|||10,000,000|--||

Note 1: The book balance of the equity investment made by the Company in Yantai Dingtao Construction and Development Co., Ltd. was RMB 10,000,000 Yuan, and the provision for impairment of RMB 10,000,000 Yuan has been withdrawn. The invested entity is an unlisted company and its fair valuecan‘t be measured reliably, so the Company shall measure such available-for-sale financial assets by cost method.
Note 2: The Group holds less than1% of the shares in such invested entities. These invested entities are all unlisted companies and their fair valuecan‘t be measured reliably, so the Group shall measure such available-for-sale financial assets by cost method.
7.10.3 Changes of impairment of available-for-sale financial assets in the report period Unit: Yuan
|||||
|-|-|-|-|
|Classification of available-for-sale|Available-for-sale equity|Available-for-sale debt||
||||Total|
|financial assets|instruments|instruments||
|Accrued impairment balance at the||||
||10,000,000||10,000,000|
|beginning of period||||
|Accrued amount of this period||||
|Including: Transferred in from other||||
|comprehensive income||||
|Decrease in this period||||
|Including: Fair value recovered and||||
|transferred back after date||||
|Accrued impairment balance at the||||
||10,000,000||10,000,000|
|end of period||||

7.11 Fixed assets
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.11.1 Particulars of fixed assets
Unit: Yuan
||||||
|-|-|-|-|-|
||Houses and||||
|Item||Machinery equipment|Transportation tools|Total|
||buildings||||
|Ⅰ Original book value:|||||
|1. Beginning balance|3,956,177,208|1,969,135,575|29,329,141|5,954,641,924|
|2. Increase in this period|13,905,309|20,067,704|540,959|34,513,972|
|2.1 Acquisition|4,259,361|19,480,245|540,959|24,280,565|
|2.2 Transfer in from|||||
||9,645,948|587,459||10,233,407|
|construction in progress|||||
|2.3 Business merger|||||
|increase|||||
|2.4 Other|||||
|3. Decrease in this period|517,494|10,793,669|2,193,612|13,504,775|
|3.1 Disposal or|||||
||517,494|10,793,669|2,193,612|13,504,775|
|retirement|||||
|3.2 Other|||||
|4. Ending balance|3,969,565,023|1,978,409,610|27,676,488|5,975,651,121|
|Ⅱ Accumulated depreciation|||||
|1. Beginning balance|410,161,600|840,158,129|21,134,702|1,271,454,431|
|2. Increase in this period|58,767,044|65,753,010|1,248,414|125,768,468|
|2.1 Accrual|58,767,044|65,753,010|1,248,414|125,768,468|
|2.2 Business merger|||||
|increase|||||
|2.3 Other|||||
|3. Decrease in this period|502,888|10,039,409|2,066,967|12,609,264|
|3.1 Disposal or|||||
||502,888|10,039,409|2,066,967|12,609,264|
|retirement|||||
|3.2 Other|||||
|4. Ending balance|468,425,756|895,871,730|20,316,149|1,384,613,635|
|Ⅲ Impairment provision|||||
|1. Beginning balance|||||
|2. Increase|||||
|2.1 Accrual|||||
|2.2 Other|||||
|3. Decrease|||||
|3.1 Disposal or|||||
|retirement|||||
|3.2 Other|||||
|4. Ending balance|||||
|Ⅳ Book value|||||
|1. Ending book value|3,501,139,267|1,082,537,880|7,360,339|4,591,037,486|
|2. Beginning book value|3,546,015,608|1,128,977,446|8,194,439|4,683,187,493|

 As at June 30, 2017, the net value of the fixed assets with ownership restrictions was RMB
69,535,906 Yuan. Please refer to Note 7.50 for the details.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.11.2 Temporarily idle fixed assets
Nil
7.11.3 Fixed assets under finance leases
Nil
7.11.4 Fixed assets under operating lease
Nil
7.11.5 Fixed assets without property certificates
Unit: Yuan
||||
|-|-|-|
|||Reason for not receiving the property|
|Item|Book value||
|||certificate|
|Industrial Production Center of the R&D Company|1,196,449,426|Under transaction|
|Dormitory Building, Main Building and Reception Building of|||
||262,115,218|Under transaction|
|Chang‘an Chateau|||
|Workshop and Plant of Xinjiang Shihezi Chateau|253,470,055|Under transaction|
|European Town, Main Building and Service Building of Beijing|||
||217,419,173|Under transaction|
|Chateau|||
|Main Building of Yantai Changyu Tinlot Chateau|89,315,962|Under transaction|
|Provincial Office of Sales Company|21,537,995|Under transaction|
|Fermentation Workshop and Storage Workshop of Xinjiang Tianzhu|18,788,139|Under transaction|
|Office Building and Packaging Workshop of Icewine Chateau|9,660,096|Under transaction|
|Wine-making Workshop of Changyu (Jingyang)|4,244,130|Under transaction|
|Office Building, Laboratory Building and Workshop of|||
||3,913,797|Under transaction|
|Fermentation Center|||
|Finished Goods Warehouse and Workshop of Kylin Packaging|2,532,867|Under transaction|

7.12 Construction in progress
7.12.1 Particulars of construction in progress
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Impairmentprovision|||Impairment||
||Book balance||Book value|Book balance||Book value|
||||||provision||
|Construction Project of Research,|||||||
|Development & Manufacture Center|1,480,406,758||1,480,406,758|1,227,968,480||1,227,968,480|
|(―Changyu Wine City Complex‖)|||||||
|Construction Project of Ningxia|||||||
||57,067,866||57,067,866|36,717,169||36,717,169|
|Chateau|||||||
|Construction Project of Shihezi|||||||
||29,704,077||29,704,077|30,600,684||30,600,684|
|Chateau|||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|Construction Project of Sales Company|39,933,379|39,933,379|26,011,600|26,011,600|
|Construction Project of Chang‘an|||||
||42,579,064|42,579,064|10,346,598|10,346,598|
|Chateau|||||
|Construction Project of Tinlot Chateau|33,752,441|33,752,441|4,871,422|4,871,422|
|Reconstruction Project of AFIP|||||
||5,273,600|5,273,600|3,713,945|3,713,945|
|Tourism Plaza|||||
|Reconstruction Project of Jingyang|||||
||2,931,559|2,931,559|2,331,559|2,331,559|
|Fermentation Workshop|||||
|Plant Construction Project of Huanren|||||
||1,707,004|1,707,004|920,596|920,596|
|Winery|||||
|Construction and Reconstruction|||||
||268,929|268,929|500,000|500,000|
|Project of Joint-stock Company|||||
|Construction Projects of Other|||||
||3,672,763|3,672,763|2,299,684|2,299,684|
|Companies|||||
|Total|1,697,297,440|1,697,297,440|1,346,281,737|1,346,281,737|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.12.2 Changes of major construction in progress in this period
Unit: Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proportion of||Accumulative|Including:|||
|||||Transferred|||||||Capitalization||
|||Beginning|||Other|Ending|accumulative|Construction|capitalization|capitalization|||
|Item|Budget||Increase|to fixed|||||||ratio of interest|Capital source|
|||balance|||decrease|balance|project input in|progress|amount of|amount of interest|||
|||||assets|||||||in this period||
||||||||budget||interest|in this period|||
|Construction Project of|||||||||||||
|Research, Development &||||||||||||Loans form financial|
|Manufacture Center|4,505,780,000|1,227,968,480|252,438,278|||1,480,406,758|67.8%||4,107,701|1,817,978|1.2%|institutions and|
|―Changyu Wine City||||||||||||self-raised funds|
|Complex‖)|||||||||||||
|Construction Project of|||||||||||||
||620,740,000|10,346,598|46,721,268|||57,067,866|102.5%|||||Self-raised funds|
|Chang‘an Chateau|||||||||||||
|Construction Project of Sales|||||||||||||
||161,350,000|26,011,600|4,808,231|1,115,754||29,704,077|93.0%|||||Self-raised funds|
|Company|||||||||||||
|Construction Project of|||||||||||||
||780,000,000|30,600,684|14,724,227|5,391,532||39,933,379|89.8%|||||Self-raised funds|
|Shihezi Chateau|||||||||||||
|Construction Project of|||||||||||||
||414,150,000|36,717,169|10,018,016|4,156,121||42,579,064|97.4%|||||Self-raised funds|
|Ningxia Chateau|||||||||||||
|Construction Project of Tinlot|||||||||||||
||192,400,000|4,871,422|28,881,019|||33,752,441|110.7%|||||Self-raised funds|
|Chateau|||||||||||||
|Plant Construction Project of|||||||||||||
||31,000,000|920,596|786,408|||1,707,004|97.5%|||||Self-raised funds|
|Huanren Winery|||||||||||||
|Total|6,705,420,000|1,337,436,549|358,377,447|10,663,407||1,685,150,589|--|--|4,107,701|1,817,978||--|

 As at June 30, 2017, there was no indication for impairment of construction in process of the Group, so no provision was made.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.13 Productive biological assets
7.13.1 Productive biological assets by cost measurement
Unit: Yuan
|||||
|-|-|-|-|
|Item|Plantation||Total|
||Immature|Mature||
|Ⅰ Original book value||||
|1. Beginning balance|77,841,960|141,208,504|219,050,464|
|2. Increase in this period|-65,331,472|69,081,966|3,750,494|
|2.1 Outsourcing|||0|
|2.2 Self cultivation|2,987,011|763,483|3,750,494|
|2.3 The immature turn to the mature|-68,318,483|68,318,483||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance|12,510,488|210,290,470|222,800,958|
|Ⅱ Accumulated depreciation|12,510,488|210,290,470||
|1. Beginning balance||17,621,484|17,621,484|
|2. Increase in this period||7,155,162|7,155,162|
|2.1 Accrual||7,155,162|7,155,162|
|2.2 Other||||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance||24,776,646|24,776,646|
|Ⅲ Impairment provision||||
|1. Beginning balance||||
|2. Increase in this period||||
|2.1 Accrual||||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance||||
|Ⅳ Book value||||
|1. Ending book value|12,510,488|185,513,824|198,024,312|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||
|-|-|-|-|
|2. Beginning book value|77,841,960|123,587,020|201,428,980|

 As at June 30, 2017, no ownership of the biological assets was restricted.
As at June 30, 2017, there was no indication that biological assets may be impaired, so no provision was made.
7.14 Intangible assets
7.14.1 Particulars of intangible assets
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Land use right|Software use right|Trademark|Total|
|Ⅰ Original book value|||||
|1. Beginning balance|491,490,069|52,435,669|15,442,065|559,367,803|
|2. Increase in this|4,140,000|895,888|99,552|5,135,440|
|2.p1e Ariocdq uisition|4,140,000|895,888||5,035,888|
|2.2 Internal R&D|||||
|2.3 Business merger|||||
|increase|||||
|2.4 Other|||99,552|99,552|
|3. Decrease in this|||||
|3.p1e rDioisdp osal|||-|-|
|4. Ending balance|495,630,069|53,331,557|15,541,617-|564,503,243|
|Ⅱ Accumulated amortization|||||
|1. Beginning balance|56,803,430|12,548,283|6,201,010|75,552,723|
|2. Increase in this period|5,292,764|2,057,478|2,238,105|9,588,347|
|2.1 Accrual|5,292,764|2,057,478|2,238,105|9,588,347|
|2.2 Business merger|||||
|increase|||||
|3. Decrease in this|||||
|3.p1e rDioisdp osal||||-|
|4. Ending balance|62,096,194|14,605,761|8,439,115-|85,141,070-|
|Ⅲ Impairment provision|||||
|1. Beginning balance|||-|-|
|2. Increase in this period|||||
|2.1 Accrual||||-|
|3. Decrease in this||||-|

period - -
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|3.1 Disposal|||||
|4. Ending balance|||||
|Ⅳ Book value||||-|
|3. Ending book value|433,533,875|38,725,796|-7,102,502|-479,362,173|
|4. Beginning book value|434,686,639|39,887,386|9,241,055|483,815,080|

 As at June 30, 2017, the net value of the intangible assets with ownership restrictions was RMB 143,892,516 Yuan. Please refer to Note 7.50 for the details.
7.14.2 Land use right of that not receiving the property certificate
Unit: Yuan
||||
|-|-|-|
|Item|Book value|Reason for not receiving the property certificate|
|A-49 Residential Area, YEDA|23,216,200|Under transaction|

7.15 Goodwill
7.15.1 Original book value of goodwill
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the invested||Increase in this period||Decrease in this period|||
||Beginning||||||
|unit or matter forming||Formed by business||||Ending balance|
||balance||Other|Disposal|Other||
|goodwill||merger|||||
|Etablissements Roullet|||||||
||13,112,525|||||13,112,525|
|Fransac|||||||
|Dicot Partners, S.L|92,391,901|||||92,391,901|
|Societe Civile|||||||
|Argricole Du Chateau|15,761,440|||||15,761,440|
|De Mirefleurs|||||||
|Total|121,265,866|||||121,265,866|

 7.16 Long-term unamortized expenses
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in this|Amortization in this|||
|Item|Beginning balance|||Other decrease|Ending balance|
|||period|period|||
|Land lease fees|57,846,986||719,453||57,127,533|
|Land acquisition||||||
||45,192,900||569,651||44,623,249|
|fees||||||
|Afforestation fees|54,460,971||2,564,214||51,896,757|
|Renovation costs|1,091,579||109,158||982,421|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|Other|3,613,793|36,571|1,259,413|2,390,951|
|Total|162,206,229|36,571|5,221,889|157,020,911|

 7.17 Deferred income tax assets/liabilities
7.17.1 Un-offset deferred income tax assets
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending Balance||Beginning Balance||
||Deductible||Deductible||
|Item||Deferred income||Deferred income|
||temporary||temporary||
|||tax assets||tax assets|
||difference||difference||
|Asset impairment provision|25,573,180|6,393,295|31,426,756|7,856,689|
|Unrealized profits from inter-company|||||
||581,720,137|145,430,034|676,375,006|169,093,751|
|transactions|||||
|Deductible loss|201,373,978|50,343,495|176,273,380|44,068,345|
|Unpaid bonus|121,373,855|30,343,464|154,895,784|38,723,946|
|Dismission welfare|12,102,449|3,025,612|13,115,948|3,278,987|
|Deferred income|108,512,201|24,308,890|112,939,126|25,230,521|
|Dealer‘s rebate withdrawn in advance|||30,739,192|7,684,798|
|Total|1,050,655,800|259,844,790|1,195,765,192|295,937,037|

 7.17.2 Un-offset deferred income tax liabilities
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending Balance||Beginning Balance||
||Taxable||Taxable||
|Item||Deferred income||Deferred income|
||temporary||temporary||
|||tax liabilities||tax liabilities|
||difference||difference||
|Assets appraisal appreciation in business|||||
||79,944,206|21,852,738|90,877,162|24,908,410|
|merger under non-common control|||||
|Changes in fair value of available-for-sale|||||
|financial assets|||||
|Total|79,944,206|21,852,738|90,877,162|24,908,410|

 7.17.3 Details of unconfirmed deferred income tax assets
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Deductible loss|163,790,074|135,957,252|
|Total|163,790,074|135,957,252|

 7.17.4 Deductible losses of unconfirmed deferred income tax assets will expire in:
Unit: Yuan
|||||
|-|-|-|-|
|Year|Ending sum|Beginning sum|Remark|
|2019|7,311,273|7,311,273||
|2020|45,960,766|45,960,766||
|2021|82,685,213|82,685,213||
|2022|27,832,822|||
|Total|163,790,074|135,957,252|--|

7.18 Other non-current assets
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Accounts receivable due to transfer of|||
||17,590,912|17,352,239|
|biological assets|||
|Prepaid investments|317,654,642||
|Total|335,245,554|17,352,239|

 7.19 Short-term loans
7.19.1 Classification of short-term loans
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge loan|||
|Mortgage loan|29,248,895|30,732,944|
|Guaranteed loan|||
|Fiduciary loan|817,632,180|631,655,938|
|Total|846,881,075|662,388,882|

 As at June 30, 2017, the pledge loan referred to the factoring business for accounts receivable of EUR 3,783,558 (equivalent to RMB 29,248,895 Yuan) that Hacienda y Vinedos Marques
del Atrio, S.L.U.(―Marques delAtrio‖) transacted in such banks as Banco de Sabadell, S.A.
(December 31, 2016: RMB 30,732,944 Yuan). There was no loan borrowed by pledge of
fixed assets (December 31, 2016: RMB 0 Yuan).
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.20 Bills payable
Unit: Yuan
||||
|-|-|-|
|Type|Ending balance|Beginning balance|
|Trade acceptance|||
|Bank acceptance|8,000,000|38,900,000|
|Total|8,000,000|38,900,000|

 7.21 Accounts payable
7.21.1 List of accounts payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Within one year|396,891,500|544,128,280|
|From one year to two years|2,426,987|1,103,039|
|From two years to three years|||
|Over three years|||
|Total|399,318,487|545,231,319|

 7.21.2 Significant accounts payable aged more than one year
As at June 30, 2017, there were no significant accounts payable aged more than one year. 7.22 Advances from customers
7.22.1 List of advances from customers
Unit: Yuan
||||
|-|-|-|
|Item|Ending sum|Beginning sum|
|Within one year|312,184,976|419,382,071|
|From one year to two years|3,496,490|2,046,166|
|From two years to three years|2,031,043|108,748|
|Over three years|3,818,184|3,709,436|
|Total|321,530,693|425,246,421|

 7.22.2 Advances from customers of significant amount aged more than one year
As at June 30, 2017, the Company had no advances from customers of significant amount
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report aged more than one year.
7.23 Employee remunerations payable
7.23.1 List of employee remunerations payable
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in this|Decrease in this||
|Item|Beginning balance|||Ending balance|
|||period|period||
|1. Short-term remuneration|193,300,619|168,650,584|215,863,664|146,087,539|
|2. Post-employment welfare – defined|||||
||15,167|23,191,201|22,418,536|787,832|
|contribution plan|||||
|3. Dismission welfare|13,115,948|509,648|1,523,147|12,102,449|
|4.Other welfare due within one year|||||
|Total|206,431,734|192,351,433|239,805,347|158,977,820|

 7.23.2 List of short-term remunerations
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in this|Decrease in this||
|Item|Beginning balance|||Ending balance|
|||period|period||
|1. Salaries, bonuses, allowances|||||
||197,486,176|145,975,433|192,297,973|151,163,636|
|and subsidies|||||
|2. Staff welfare|622,735|8,323,393|8,728,238|217,890|
|3. Social insurance charges|257,249|7,150,754|7,349,717|58,286|
|Including: Medical insurance|257,249|6,051,156|6,250,119|58,286|
|Injury insurance||731,205|731,205||
|Maternity insurance||368,393|368,393||
|4. Housing fund|37,672|5,527,361|5,551,521|13,512|
|5. Union fee and staff education|||||
||2,593,009|1,673,643|1,936,215|2,330,437|
|fee|||||
|6. Short-term compensated|||||
|absences|||||
|7. Short-term profit-sharing plan|||||
|8. Those divided into non-current|||||
||-7,696,222|||-7,696,222|
|liabilities|||||
|Total|193,300,619|168,650,584|215,863,664|146,087,539|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.23.3 List of defined contribution plan
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Basic endowment insurance|14,978|22,637,707|21,865,042|787,643|
|2. Unemployment insurance|189|553,494|553,494|189|
|3. Enterprise annuity payment|||||
|Total|15,167|23,191,201|22,418,536|787,832|

 7.23.4 Dismission welfare
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Compensation for server of labor|||||
|relation|||||
|2. Compensation for early retirement|13,115,948|509,648|1,523,147|12,102,449|
|Total|13,115,948|509,648|1,523,147|12,102,449|

 7.24 Taxes payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Value added tax|22,378,198|23,496,328|
|Consumption tax|14,378,343|30,361,471|
|Corporate income tax|26,129,549|69,388,730|
|Individual income tax|6,598,508|7,811,301|
|Urban maintenance and construction tax|2,503,846|4,248,115|
|Property tax|435,805|1,071,223|
|Urban land use tax|2,488,965|2,651,262|
|Other|2,199,905|5,014,170|
|Total|77,113,119|144,042,600|

 7.25 Dividends payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Ordinary stock dividends|||
|Preferred stock dividends/sustainable debt dividends|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||
|-|-|
|divided into equity instruments||
|Other|703,430|
|Total|703,430|

7.26 Other payables
7.26.1 Other payables listed by nature
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Distributor‘s deposit payable|157,985,200|128,539,352|
|Equipment purchase and construction costspayable|||
||101,721,932|77,261,072|
|Transportation charges payable|12,110,825|36,690,764|
|Trademark use fees payable for Changyu GroupCompany|||
||44,428,033|78,572,540|
|Advertising expenses payable|221,724,475|79,414,075|
|Dealer‘s rebate withdrawn in advance||30,739,192|
|Increased capital of minority shareholders(Note)|||
||29,847,320|29,847,320|
|Employee cash deposit|19,226,564|16,296,186|
|Supplier‘s deposit payable|11,517,176|2,206,379|
|Contracting fees payable|37,079,817|31,011,929|
|Other|17,549,069|35,726,501|
|Total|653,190,411|546,305,310|

 7.26.2 Other significant accounts payable aged more than one year
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Cause of unpayment or carry-over|
|Beijing Qinglang Ecological Agriculture|23,983,072|The procedures for capital increase|
|Technology Development Co., Ltd.||haven‘t been completed|
|Beijing Qinglang Ecological Agriculture|13,766,549||
|||The contracting fess haven‘t been settled|
|Technology Development Co., Ltd.|||
|||The procedures for capital increase|
|Yantai De‘an Investment Co., Ltd.|5,864,248||
|||haven‘t been completed|
|Yantai De‘an Investment Co., Ltd.|5,716,524|The contracting fess haven‘t been settled|
|Total|49,330,393|--|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.27 Non-current liabilities due within one year
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Long-term loans due within one|||
||70,975,215|59,799,093|
|year|||
|Long-term accounts payable due|||
||36,000,000|12,000,000|
|within one year|||
|Total|106,975,215|71,799,093|

 7.28 Other current liabilities
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Deferred income|11,163,882|11,163,883|
|Total|11,163,882|11,163,883|

 7.29 Long-term loans
7.29.1 Classification of long-term loans
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge loan|||
|Mortgage loan|7,995,615|8,835,744|
|Guaranteed loan|||
|Fiduciary loan|167,274,965|40,304,811|
|Total|175,270,580|49,140,555|

 Description of the classification of long-term loans:
|||||
|-|-|-|-|
|Item|Ending balance|Long-term loan due within one|Long-term loan due over one|
|||year|year|
|Pledge loan||||
|Mortgage loan|10,778,415|2,782,800|7,995,615|
|Guaranteed loan||||
|Fiduciary loan|235,467,380|68,192,415|167,274,965|
|Total|246,245,795|70,975,215|175,270,580|

As at June 30, 2017, the mortgage loan referred to the loan of EUR 1,394,361.55 (equivalent
to RMB 10,778,415 Yuan) borrowed from PopularEspañol by Marques del Atrio which
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report mortgaged its fixed assets of EUR 3,812,130.38 (equivalent to RMB 29,467,767 Yuan) (December 31, 2016: RMB 11,466,192 Yuan).
7.30 Long-term accounts payable
7.30.1 Long-term accounts payable listed by nature
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|China Agricultural Development Key Construction Fund|269,000,000|293,000,000|

In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in theR&D Company, accounting for37.9% of the registered capital. According to the investment agreement, it is agreed that Agricultural Development Fund will take back the investment fund in ten years and obtain fixed income according to year, which is1.2% of the remaining principal. Except for the above fixed income, the Agricultural Development Fund shall not enjoy other profits of theR&D Company or bear the losses of theR&D Company. Accordingly, the investment of the Agricultural Development Fund in theR&D Company is equity investment nominally, which is debt investment in deed. This Company shall include the investment of the Agricultural Development Fund in long-term accounts payable measured by amortized cost.
7.31 Deferred income
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in this|Decrease in this|||
|Item|Beginning balance|||Ending balance|Forming reason|
|||period|period|||
|Governmental||||||
||112,939,126|1,300,000|5,726,925|108,512,201||
|subsidy||||||
|Minus: Those|11,163,883|||11,163,882||
|included in current|||||--|
|liabilities||||||
|Non-current|101,775,243|||97,348,319||
||||||--|
|liabilities||||||

Projects related to governmental subsidy
Unit: Yuan
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||Amount|||||
||||Amount||||
|||of subsidy|||||
||||included in||||
||Beginning|newly||Other|Ending||
|Item of liabilities|||non-operating|||Related to assets/income|
||balance|increased||changes|balance||
||||revenue in||||
|||in this|||||
||||this period||||
|||period|||||
|Transferred fund of|||||||
|Propaganda Department,|1,777,890||444,473||1,333,417|Related to assets|
|Miyun County Committee|||||||
|Grape bulk wine brewing|||||||
||6,174,300||717,942||5,456,358|Related to assets|
|project|||||||
|Reward of investment in fixed|||||||
||11,556,600||1,140,000||10,416,600|Related to assets|
|assets|||||||
|Industrial revitalization and|||||||
|technical transformation|18,486,000||711,000||17,775,000|Related to assets|
|project in Xinjiang|||||||
|Industrial revitalization and|||||||
|technical transformation|4,381,000||1,647,500||2,733,500|Related to assets|
|project in Ningxia|||||||
|Subsidy payment for wine|||||||
||376,000||||376,000|Related to income|
|grapes|||||||
|Modern agriculture-produced|||||||
||259,200||||259,200|Related to income|
|grape development subsidy|||||||
|Tourism development fund|||||||
|||500,000|||500,000|Related to assets|
|subsidy|||||||
|Infrastructure construction|||||||
||1,468,750|500,000|62,500||1,906,250|Related to assets|
|fund|||||||
|Construction project of|||||||
|Liaonong Changyu (Huanren)|||||||
|Pioneer Wine Co., Ltd. with|4,000,000||||4,000,000|Related to assets|
|the annual output of 10,000|||||||
|tons of wine|||||||
|Fund for water pollution|||||||
||133,733|300,000|56,801||376,932|Related to income|
|treatment project|||||||
|Supporting fund for industrial|||||||
||41,000,000||||41,000,000|Related to assets|
|development|||||||
|Subsidy for economic and|||||||
|energy-saving technical|1,283,000||||1,283,000|Related to assets|
|transformation project|||||||
|Electronic traceability system|||||||
||3,859,365||333,527||3,525,838|Related to assets|
|project of wine|||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||Amount|||||
||||Amount||||
|||of subsidy|||||
||||included in||||
||Beginning|newly||Other|Ending||
|Item of liabilities|||non-operating|||Related to assets/income|
||balance|increased||changes|balance||
||||revenue in||||
|||in this|||||
||||this period||||
|||period|||||
|Wine industry development|||||||
||930,000||||930,000|Related to assets|
|project|||||||
|Peninsula blue economic zone|||||||
||10,000,000||||10,000,000|Related to assets|
|construction project|||||||
|Scientific research fund|||||||
||343,090||||343,090|Related to income|
|subsidy of National 863 Plan|||||||
|Technical transformation|||||||
|project of information-based|||||||
||4,060,000||290,000||3,770,000|Related to assets|
|system construction|||||||
|engineering|||||||
|Subsidy for project integrating|||||||
|IT application with|28,800||||28,800|Related to income|
|industrialization|||||||
|Cross-border e-commerce|||||||
||1,485,797||63,182||1,422,615|Related to income|
|project|||||||
|Auxiliary coloration research|||||||
|project of red wine phenolic|295,601||||295,601|Related to income|
|substances|||||||
|Grape base construction|||||||
||1,040,000||260,000||780,000|Related to assets|
|project|||||||
|Total|112,939,126|1,300,000|5,726,925||108,512,201|--|
|Minus: Those included in|11,163,883||||11,163,882||
|current liabilities|||||||
|Non-current liabilities|101,775,243||||97,348,319||

7.32 Other non-current liabilities
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Employee remunerations payable|7,696,222|7,696,222|
|Total|7,696,222|7,696,222|

 As at June 30, 2017, the employee remunerations payable referred to the job security deposit
deducted from the year-end bonus of the employees higher than sales manager of the
Company in proportion, which will be paid from 2018 to 2020 as predicted.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.33 Share capital
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase or decrease (+,-) in this period||||||
|||||Sharetransferredfromaccumulationfund||||
||Beginning||||||Ending|
|||Newly issued|Allocated|||||
||balance||||Other|Subtotal|balance|
|||shares|shares|||||
|Total shares|685,464,000||||||685,464,000|

 7.34 Capital reserves
Unit: Yuan
||||||
|-|-|-|-|-|
||||Decrease in this||
|Item|Beginning balance|Increase in this period||Ending balance|
||||period||
|Capital premium (Share|||||
||560,038,853|||560,038,853|
|capital premium)|||||
|Other capital reserves|5,916,588|||5,916,588|
|Total|565,955,441|||565,955,441|

 7.35 Other comprehensive income
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount incurred in this period||||||
||||Minus: profit|||||
|||Amount||||||
||||or loss in this|||||
|||incurred||Minus:|Attributable|Attributable||
||Beginning||||||Ending|
||||period|||||
|Item||||||||
|||before||income|to parent|to minority||
||balance||transferred||||balance|
|||income tax||tax|company|shareholders||
||||from other|||||
|||in this||expenses|after tax|after tax||
||||comprehensive|||||
|||period||||||
||||income before|||||
|1. Other comprehensive income||||||||
|not to be reclassified into profit||||||||
|and loss later||||||||
|Including: change in net liabilities||||||||
|and net assets from recalculated||||||||
|defined benefit plan||||||||
|Share enjoyed in other||||||||
|comprehensive income not to be||||||||
|reclassified into profit and loss in||||||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount incurred in this period||||||
||||Minus: profit|||||
|||Amount||||||
||||or loss in this|||||
|||incurred||Minus:|Attributable|Attributable||
||Beginning||||||Ending|
||||period|||||
|Item||||||||
|||before||income|to parent|to minority||
||balance||transferred||||balance|
|||income tax||tax|company|shareholders||
||||from other|||||
|||in this||expenses|after tax|after tax||
||||comprehensive|||||
|||period||||||
||||income before|||||
|invested unit under equity law||||||||
|2. Other comprehensive income to|||||1,458,809|||
|be reclassified into profit and loss|-5,259,014|1,767,741||||308,932|-3,800,205|
|later||||||||
|Including: share enjoyed in other||||||||
|comprehensive income to be||||||||
|reclassified into profit and loss in||||||||
|invested unit under equity law||||||||
|Profit and loss from||||||||
|changes in fair value of financial||||||||
|assets for sale||||||||
|Profit and loss from||||||||
|reclassification of||||||||
|held-to-maturity investment into||||||||
|fair value of financial assets for||||||||
|sale||||||||
|Effective part of profit and||||||||
|loss of cash-flow hedge||||||||
|Difference in translation of|||||1,458,809|||
|Foreign Currency Financial|-5,259,014|1,767,741||||308,932|-3,800,205|
|Statement||||||||
|Total other comprehensive income|-5,259,014|1,767,741|||1,458,809|308,932|-3,800,205|

 7.36 Surplus reserves
Unit: Yuan
||||||
|-|-|-|-|-|
||||Decrease in this||
|Item|Beginning balance|Increase in this period||Ending balance|
||||period||
|Legal surplus reserves|342,732,000|||342,732,000|
|Free surplus reserves|||||
|Reserve fund|||||
|Enterprise expansion fund|||||
|Other|||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Total|342,732,000|342,732,000|

 7.37 Undistributed profit
Unit: Yuan
||||
|-|-|-|
|Item|This period|Prior period|
|Undistributed profit at the end of prior period before adjustment|6,620,118,562|5,980,390,074|
|Total Undistributed profit at the beginning of the period before adjustment|||
|(increase listed with+ , and decrease listed with -)|||
|Undistributed profit at the beginning of the period after adjustment|6,620,118,562|5,980,390,074|
|Plus: Net profit for owner of the parent company|670,069,054|982,460,488|
|Minus: Drawn legal surplus|||
|Drawn free surplus|||
|Drawn common risk provision|||
|Common dividend payable||342,732,000|
|Common dividend transferred to share capital|||
|Undistributed profit at the end of period|7,290,187,616|6,620,118,562|

 7.38 Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in this period||Amount incurred in prior period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|2,761,797,479|921,629,225|2,748,285,416|899,973,878|
|Other business|5,300,718|4,124,908|4,747,383|2,760,226|
|Total|2,767,098,197|925,754,133|2,753,032,799|902,734,104|

 7.39 Taxes and surcharges
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Consumption tax|87,580,364|105,763,800|
|Urban maintenance and construction tax|30,288,028|24,721,309|
|Education surcharges|21,968,359|18,089,897|
|Building tax|9,993,265||
|Land use tax|5,092,473||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Stamp duty|1,970,707||
|Business Tax||1,175,187|
|Other|3,580,802|3,331,599|
|Total|160,473,998|153,081,792|

 7.40 Selling expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Advertising promotion expenses|353,792,438|332,116,022|
|Employee remunerations|115,463,193|104,719,946|
|Transportation expenses|64,053,872|66,063,407|
|Trademark use fees|44,428,033|46,273,367|
|Storage and lease expenses|27,357,293|39,026,546|
|Depreciation expenses|19,740,726|18,364,965|
|Service charges|6,734,393|5,651,106|
|Travel expenses|10,036,717|11,904,193|
|Water, electricity and gas charges|3,572,499|3,929,596|
|Office & postage costs|2,479,541|2,485,039|
|Packing expenses|3,140,528|3,114,989|
|Public security & clean-keeping|||
||2,532,418|1,883,752|
|expenses|||
|Business entertainment expenses|1,190,071|761,988|
|Afforestation fees|1,342,117|1,571,035|
|Property management expenses|1,348,857|1,129,106|
|Other|11,523,030|11,742,177|
|Total|668,735,726|650,737,234|

 7.41 Management expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Employee remunerations|45,732,792|42,548,604|
|Depreciation expenses|28,996,760|21,005,970|
|Contracting expenses|10,086,436|9,241,885|
|Repair expenses|5,768,634|5,623,236|
|Office expenses|8,693,956|8,197,736|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Amortization expenses|9,569,693|7,782,091|
|Afforestation fees|3,893,103|3,636,852|
|Rental expenses|5,095,023|4,259,474|
|Business entertainment expenses|2,562,180|2,639,867|
|Public security & clean-keeping|||
||2,787,735|2,574,552|
|expenses|||
|Travel expenses|2,650,716|2,312,625|
|Other|4,705,358|12,872,953|
|Total|130,542,386|122,695,845|

 7.42 Financial expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Interest expenditure|15,042,038|15,830,699|
|Minus: Interest income|4,849,166|7,189,121|
|Plus: Commission charges|754,300|859,954|
|Exchange gain or loss|200,777|1,486,701|
|Total|11,147,949|10,988,233|

 7.43 Loss on impairment of assets
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|1. Loss on bad debts|||
|2. Inventory falling price loss|-5,853,576||
|3. Loss on impairment of available-for-sale|||
|financial assets|||
|4. Loss on impairment of held-to maturity|||
|investment|||
|5. Loss on impairment of long-term equity|||
|investment|||
|6. Loss on impairment of investment real estate|||
|7. Loss on impairment of fixed assets|||
|8. Loss on impairment of engineering materials|||
|9. Loss on impairment of construction in progress|||
|10. Loss on impairment of productive biological|||
|assets|||
|11. Loss on impairment of oil and gas assets|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|12. Loss on impairment of intangible assets|||
|13. Loss on impairment of goodwill|||
|14. Other|||
|Total|-5,853,576|0|

 7.44 Non-operating income
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in|Amount included in the current|
|Item||||
||this period|prior period|non-recurring profits/losses|
|Total gains on disposal of non-current|156,600|94,567||
||||156,600|
|assets||||
|Including: Gains on disposal of fixed||||
||156,600|94,567|156,600|
|assets||||
|Gains on disposal of intangible||||
|assets||||
|Gains on debt recombination||||
|Gains on exchange of non-monetary||||
|assets||||
|Grains on donations||||
|Governmental subsidy|19,735,204|18,145,874|19,735,204|
|Other|3,412,401|3,693,085|3,412,401|
|Total|23,304,205|21,933,526|23,304,205|

 Governmental subsidies included in the current profit/loss:
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in||
|Item of subsidy|||Related to assets/income|
||this period|prior period||
|Funds to support major projects|3,520,914|3,567,401|Related to assets|
|Funds to support small and medium-sized||||
||2,086,027|1,832,402|Related to assets|
|Enterprises||||
|Tax returns|12,737,950|12,116,257|Related to income|
|Other|1,390,313|629,814|Related to income|
|Total|19,735,204|18,145,874|--|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.45 Non-operating expenses
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in|Amount included in the current|
|Item||||
||this period|prior period|non-recurring profits/losses|
|Total loss on disposal of|651,671|110,052|651,671|
|non-current assetsIncluding: Loss on disposal of||||
||651,671|110,052|651,671|
|fixed assets||||
|Loss on disposal of intangible||||
|assets||||
|Loss on debt recombination||||
|Loss on exchange of||||
|non-monetary assets||||
|Donation||15,000||
|Fine, penalty and overdue fine||||
||170,997|165,589|170,997|
|paid due to violation of laws and||||
|administrative regulationsOther|15,571|53,135|15,571|
|Total|838,239|343,776|838,239|

 7.46 Income tax expenses
7.46.1 List of income tax expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior|
|Current income tax expenses|195,716,215|period196,893,915|
|Deferred income tax expenses|33,036,575|41,821,566|
|Total|228,752,790|238,715,481|

 7.46.2 Adjustment process of accounting profit and income tax expenses
Unit: Yuan
|||
|-|-|
|Item|Amount incurred in this|
|Total profit|period8 98,763,547|
|Income tax expenses calculated according to the legal/applicable tax rate|224,690,887|
|Influence of different tax rates applicable to subsidiary|-4,533,247|
|Influence of income tax in the term before adjustment||
|Influence of nontaxable income||
|Influence of non-deductible costs, expenses and losses|1,636,945|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
|||
|-|-|
|Influence of deductible loss from use of unconfirmed deferred income tax assets in prior||
|period||
|Influence of deductible temporary difference or deductible loss of unconfirmed deferred||
||6,958,205|
|income tax assets in this period||
|Income tax expense|228,752,790|

 7.47 Other comprehensive income
See details in Note 7.35.
7.48 Items of cash flow statement
7.48.1 Other cash received related to operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Governmental subsidy income|1,570,329|506,015|
|Withdrawal of cash deposit for bills payable|30,900,000|21,870,000|
|Other|6,419,583|5,457,993|
|Total|38,889,912|27,834,008|

 7.48.2 Other cash paid related to operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Selling expenses|352,845,674|403,264,891|
|Administrative expenses|43,700,254|37,642,759|
|Refundable deposits|35,030,980||
|Other|940,870|1,595,101|
|Total|432,517,778|442,502,751|

 7.48.3 Other cash paid related to investment activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Prepaid investment fund|317,654,642||
|Total|317,654,642||

7.48.4 Other cash received related to financial activities
Unit: Yuan
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Government subsidies received related|||
||1,000,000.00||
|to assets|||
|Interest income from pledge of fixed|||
||303,473.00||
|deposits by the R&D Company|||
|Total|1,303,473.00||

7.48.5 Other cash paid related to financial activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|R&D Company‘ long-term loans pledged by|||
|||20,000,000|
|fixed-term deposits|||
|Total||20,000,000|

 7.49 Supplementary information to cash flow statement
7.49.1 Supplementary information to cash flow statement
Unit: Yuan
||||
|-|-|-|
|Supplementary materials|Amount incurred in this period|Amount incurred in prior period|
|1. Cash flows from operating activities calculated by|||
||--|--|
|adjusting the net profit:|||
|Net profit|670,010,757|695,669,860|
|Plus: Provision for impairment of assets|-5,853,576||
|Depreciation of fixed assets, oil-and-gas assets and|||
||132,923,630|93,458,092|
|productive biological assets|||
|Intangible assets amortization|9,588,347|6,945,803|
|Amortization of long term prepaid expenses|5,221,889|11,179,121|
|Losses on disposal of fixed assets, intangible assets and|||
||495,071|15,486|
|other long-term assets (profit listed with ―－‖)|||
|Losses on retirement of fixed assets (profit listed with|||
|―－‖)|||
|Losses on fair value change (profit listed with ―－‖)|||
|Financial costs (profit listed with ―－‖)|15,086,410|11,808,339|
|Investment losses (profit listed with ―－‖)|||
|Decrease in deferred income tax assets (increase listed|||
||36,092,247|42,610,501|
|with ―-‖)|||
|Increase of deferred income tax liabilities (decrease|-3,055,672|-788,935|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Supplementary materials|Amount incurred in this period|Amount incurred in prior period|
|listed with ―－‖)|||
|Decrease in inventories (increase listed with ―-‖)|230,160,387|413,879,818|
|Decrease in operating receivables (increase listed with|||
||-345,259,383|-395,702,109|
|―-‖)|||
|Increase in operating payable (decrease listed with ―-‖)|-325,049,788|-196,327,607|
|Other|||
|Net cash flows from operating activities|420,360,319|682,748,369|
|2. Significant investment and financing activities not|||
||--|--|
|involving cash deposit and withdrawal:|||
|Debt transferred into assets|||
|Convertible corporate bond due within 1 year|||
|Fixed assets under financing lease|||
|3. Net changes of cash and cash equivalent:|--|--|
|Ending balance of cash|1,229,487,903|1,643,935,054|
|Minus: Beginning balance of cash|1,256,942,304|1,092,241,661|
|Plus: Ending balance of cash equivalent|||
|Minus: Beginning balance of cash equivalent|||
|Net increase amount of cash and cash equivalent|-27,454,401|551,693,393|

 7.49.2 Composition of cash and cash equivalents
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|1. Cash|1,229,487,903|1,643,935,054|
|Including: Cash on hand|112,832|189,184|
|Bank deposits on demand|1,229,375,071|1,643,745,870|
|Other monetary capital on demand|||
|Due from central bank available for payment|||
|Due from the industry|||
|Inter-bank lending|||
|2. Cash equivalents|||
|Including: Bond investment due within three months|||
|3. Balance of cash and cash equivalents at the end of|1,229,487,903|1,643,935,054|
|period|||
|Including: Restricted use of parent company or|||
|subsidiaries in the group|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 7.50 Assets with ownership or use right restrictions
Unit: Yuan
||||
|-|-|-|
|Item|Ending book value|Reason for restriction|
|||Loan deposit, bill deposit, L/C deposit, frozen balanceof Alipay, housing fund and guaranty money fordeposit in unit card|
|Monetary capital|119,579,877||
|Accounts receivable|29,248,895|Pledge of short-term loans|
|||Pledge of long-term loans and long-term accountspayable|
|Fixed assets|69,535,906||
|Intangible assets|143,892,516|Pledge of long-term accounts payable|
|Total|362,257,194|--|

7.51 Foreign currency monetary items
7.51.1 Foreign currency monetary items
Unit: Yuan
|||||
|-|-|-|-|
|Item|Ending foreign currency balance|Translation exchange rate|Ending converted RMB balance|
|Monetary capital|--|--|7,606,956|
|Including: USD|675,534|6.7744|4,576,338|
|EUR|249,323|7.7496|1,932,154|
|HKD|1,265,657|0.8679|1,098,464|
|Long-term loans due||||
||--|--|15,499,200|
|within one year||||
|Including: USD||||
|EUR|2,000,000|7.7496|15,499,200|
|HKD||||

7.51.2 Overseas operational entities
The currency adopted by the overseas subsidiaries of the Company according to the main economic environment where the operation is located shall be chosen as the recording currency. Atrio Group and Francs Champs Participations SAS(―FrancsChamps‖) both use euro as the recording currency, and Indomita Chile uses peso as the recording currency. Atrio Group, Francs Champs and Indomita Chiledidn‘t have foreign currency assets and liabilities at the end of this period.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 8. Changes in scope of consolidation
8.1 Changes in scope of consolidation due to other reasons
The new subsidiary company established in this period is listed as follows:
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Full name of||Registration and|||||||||
||||||Legal||Business||||Investment|
||the invested||establishment date||||||Registered capital|||
||||||representative||nature||||amount|
||unit||and place|||||||||
|YantaiChangyu WineSales Co., Ltd.||January 18, 2017Yantai City,Shandong Province,China||Zhou Hongjiang||Sales||RMB 5,000,000 Yuan||||
|Indomita WineCompanyChile, SpA||April 6, 2017Santiago, Chile||WILFREDCHARLES LEIGHNIELSEN||Manufacturingindustry||USD 1,000,000||USD40,110,000||

9. Equity in other entities
9.1 Equity in the subsidiaries
9.1.1 Constitution of enterprise group
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|||||||Acquired from a|
||Shihezi City, Xinjiang||||||
|||Shihezi City, Xinjiang Uygur|Manufacturing|||business combination|
|Xinjiang Tianzhu (a)|Uygur Autonomous Region,|||60%|||
|||Autonomous Region, China|industry|||under non-common|
||China||||||
|||||||control|
|||||||Acquired from a|
|Francs Champs||||||business combination|
||Cognac, France|Cognac, France|Trading||100%||
|Participations||||||under non-common|
|||||||control|
|||||||Acquired from a|
|||||||business combination|
|Mirefleurs|Bordeaux, France|Bordeaux, France|Trading||100%||
|||||||under non-common|
|||||||control|
|||||||Acquired from a|
|||||||business combination|
|Marques del Atrio (b)|Navarra, Spain|Navarra, Spain|Sales|75%|||
|||||||under non-common|
|||||||control|
|Beijing Changyu Wine||||||Acquired by|
||Beijing City, China|Beijing City, China|Sales|100%|||
|Marketing Co., Ltd.||||||establishment or|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|(―Beijing Marketing‖)||||||investment|
|Yantai Kylin Packaging||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|Co., Ltd. (―Kylin||||100%||establishment or|
||Province, China|Province, China|industry||||
|Packaging‖)||||||investment|
|Yantai Chateau||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|Changyu-Castel Co., Ltd.||||70%||establishment or|
||Province, China|Province, China|industry||||
|(―Chateau Changyu‖) (c)||||||investment|
|Changyu (Jingyang)||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|Manufacturing||||
|Pioneer Wine Co., Ltd.||||90%|10%|establishment or|
||Province, China|Province, China|industry||||
|(―Jingyang Wine‖)||||||investment|
|Yantai Changyu Pioneer||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|Wine Sales Co., Ltd.|||Sales|100%||establishment or|
||Province, China|Province, China|||||
|(―Sales Company‖)||||||investment|
|Langfang Development|||||||
|||||||Acquired by|
|Zone Castel-Changyu Wine|Langfang City, Hebei|Langfang City, Hebei|Manufacturing||||
|||||39%|10%|establishment or|
|Co., Ltd. (―Langfang|Province, China|Province, China|industry||||
|||||||investment|
|Castel‖) (d)|||||||
|Changyu (Jingyang)||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Pioneer Wine Sales Co.,|||Sales|10%|90%|establishment or|
||Province, China|Province, China|||||
|Ltd. (―Jingyang Sales‖)||||||investment|
|Langfang Changyu Pioneer||||||Acquired by|
||Langfang City, Hebei|Langfang City, Hebei|||||
|Wine Sales Co., Ltd.|||Sales|10%|90%|establishment or|
||Province, China|Province, China|||||
|(―Langfang Sales‖)||||||investment|
|Shanghai Changyu Wine||||||Acquired by|
|Marketing Co., Ltd.|Shanghai City, China|Shanghai City, China|Sales|30%|70%|establishment or|
|(―Shanghai Marketing‖)||||||investment|
|Beijing Changyu AFIP|||||||
|Eco-agriculture||||||Acquired by|
||Miyun County, Beijing City,|Miyun County, Beijing City,|||||
|Development Co., Ltd.|||Sales||100%|establishment or|
||China|China|||||
|(―Eco-agriculture||||||investment|
|Development‖)|||||||
|Beijing Changyu AFIP||||||Acquired by|
||||Manufacturing||||
|Wine Chateau Co., Ltd.|Beijing City, China|Beijing City, China||70%||establishment or|
||||industry||||
|(―Beijing Chateau‖) (e)||||||investment|
|||||||Acquired by|
|Yantai Changyu Wine Sales|Yantai City, Shandong|Yantai City, Shandong|||||
||||Sales|90%|10%|establishment or|
|Co., Ltd. ( ―Wine Sales‖)|Province, China|Province, China|||||
|||||||investment|
|Yantai Changyu Pioneer|Yantai City, Shandong|Yantai City, Shandong|Sales|70%|30%|Acquired by|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|International Wine Co.,|Province, China|Province, China||||establishment or|
|Ltd. (―Pioneer||||||investment|
|International‖)|||||||
|Hangzhou Changyu Wine||||||Acquired by|
||Hangzhou City, Zhejiang|Hangzhou City, Zhejiang|||||
|Sales Co., Ltd. (―Hangzhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Changyu‖)||||||investment|
|||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Planting||||
|Ningxia Growing||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|||||||investment|
|Huanren Changyu National||||||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|||||
|Wine Sales Co., Ltd.|||Sales|100%||establishment or|
||Province, China|China|||||
|(―National Wine‖)||||||investment|
|Liaoning Changyu Icewine||||||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|Manufacturing||||
|Chateau Co., Ltd.||||51%||establishment or|
||Province, China|China|industry||||
|(―Icewine Chateau‖) (f)||||||investment|
|Yantai Development Zone|||||||
|||||||Acquired by|
|Changyu Trading Co., Ltd.|Yantai City, Shandong|Yantai City, Shandong|||||
||||Sales||100%|establishment or|
|(―Development Zone|Province, China|Province, China|||||
|||||||investment|
|Trading‖)|||||||
|Shenzhen Changyu Wine||||||Acquired by|
||Shenzhen City, Guangdong|Shenzhen City, Guangdong|||||
|Marketing Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Shenzhen Marketing‖)||||||investment|
|Yantai Fushan District||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|Changyu Trading Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Fushan Trading‖)||||||investment|
|Beijing Changyu AFIP|||||||
|||||||Acquired by|
|International Conference|Miyun County, Beijing City,|Miyun County, Beijing City,|Service||||
||||||100%|establishment or|
|Center Co., Ltd.|China|China|industry||||
|||||||investment|
|(―Conference Center‖)|||||||
|Beijing Changyu AFIP||||||Acquired by|
||Miyun County, Beijing City,|Miyun County, Beijing City,|Tourist||||
|Tourism and Culture Co.,|||||100%|establishment or|
||China|China|industry||||
|Ltd. (―AFIP Tourism‖)||||||investment|
|Changyu (Ningxia) Pioneer||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Manufacturing||||
|Wine Co., Ltd. (―Ningxia||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|Wine‖)||||||investment|
|Yantai Changyu Tinlot||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Wholesale and||||
|Chateau Co., Ltd. (―Tinlot||||65%||establishment or|
||Province, China|Province, China|retail||||
|Chateau‖)||||||investment|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Changyu (Qingtongxia)|Qingtongxia City, Ningxia|||||Acquired by|
|||Qingtongxia City, Ningxia Hui|||||
|Wine Sales Co., Ltd.|Hui Autonomous Region,||Sales||35%|establishment or|
|||Autonomous Region, China|||||
|(―Qingtongxia Sales‖)|China|||||investment|
||Shihezi City, Xinjiang|||||Acquired by|
|||Shihezi City, Xinjiang Uygur|Manufacturing||||
|Shihezi Chateau|Uygur Autonomous Region,||||100%|establishment or|
|||Autonomous Region, China|industry||||
||China|||||investment|
|Chateau Changyu Moser||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Manufacturing||||
|XV Ningxia Co., Ltd.||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|(―Ningxia Chateau‖)||||||investment|
|Chateau Changyu Rena||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|Manufacturing||||
|Shaanxi Co., Ltd.||||100%||establishment or|
||Province, China|Province, China|industry||||
|(―Chang‘an Chateau‖)||||||investment|
|||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|R&D Company (g)||||100%||establishment or|
||Province, China|Province, China|industry||||
|||||||investment|
|Changyu (Huanren)||||||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|||||
|Pioneer Wine Co., Ltd.|||Wine making|62%||establishment or|
||Province, China|China|||||
|(―Huanren Wine‖)||||||investment|
|Xinjiang Changyu Wine|Shihezi City, Xinjiang|||||Acquired by|
|||Shihezi City, Xinjiang Uygur|||||
|Sales Co., Ltd. (―Xinjiang|Uygur Autonomous Region,||Sales|100%||establishment or|
|||Autonomous Region, China|||||
|Sales‖)|China|||||investment|
|Xinjiang Changyu Pioneer|Shihezi City, Xinjiang||||||
|||Shihezi City, Xinjiang Uygur|Manufacturing||||
|Wine Co., Ltd. (―Xinjiang|Uygur Autonomous Region,||||100%||
|||Autonomous Region, China|industry||||
|Wine‖)|China||||||
|Ningxia Changyu Trading||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|||||
|Co., Ltd. (―Ningxia|||Sales||100%|establishment or|
||Autonomous Region, China|Autonomous Region, China|||||
|Trading‖)||||||investment|
|Shaanxi Changyu Rena||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Shaanxi Sales‖)||||||investment|
|Penglai Changyu Wine||||||Acquired by|
||Penglai City, Shandong|Penglai City, Shandong|||||
|Sales Co., Ltd. (―Penglai|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Wine‖)||||||investment|
|Laizhou Changyu Wine||||||Acquired by|
||Laizhou City, Shandong|Laizhou City, Shandong|||||
|Sales Co., Ltd. (―Laizhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Sales‖)||||||investment|
|Francs Champs|||Investment||||
||Cognac, France|Cognac, France|||100%||
|Participations SAS|||trade||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Lanzhou Changyu Wine||||||Acquired by|
||Lanzhou City, Gansu|Lanzhou City, Gansu Province,|||||
|Marketing Co., Ltd.|||Sales|100%||establishment or|
||Province, China|China|||||
|(―Lanzhou Marketing‖)||||||investment|
|Beijing Changyu Trading||||||Acquired by|
|Co., Ltd. (―Beijing|Beijing City, China|Beijing City, China|Sales||100%|establishment or|
|Trading‖)||||||investment|
|Tianjin Changyu Pioneer||||||Acquired by|
|Wine Sales Co., Ltd.|Tianjin City, China|Tianjin City, China|Sales||100%|establishment or|
|(―Tianjin Pioneer‖)||||||investment|
|Fuzhou Changyu Pioneer||||||Acquired by|
||Fuzhou City, Fujian|Fuzhou City, Fujian Province,|||||
|Wine Co., Ltd. (―Fuzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Nanjing Changyu Pioneer||||||Acquired by|
||Nanjing City, Jiangsu|Nanjing City, Jiangsu|||||
|Wine Co., Ltd. (―Nanjing|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|Xianyang Changyu Pioneer||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Xianyang Pioneer‖)||||||investment|
|Shenyang Changyu Pioneer||||||Acquired by|
||Shenyang City, Liaoning|Shenyang City, Liaoning|||||
|Wine Co., Ltd. (―Shenyang|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|Jinan Changyu Pioneer||||||Acquired by|
||Jinan City, Shandong|Jinan City, Shandong Province,|||||
|Wine Co., Ltd. (―Jinan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Shanghai Changyu Pioneer||||||Acquired by|
|Wine Co., Ltd. (―Shanghai|Shanghai City, China|Shanghai City, China|Sales||100%|establishment or|
|Pioneer‖)||||||investment|
|Fuzhou Changyu Pioneer||||||Acquired by|
||Fuzhou City, Jiangxi|Fuzhou City, Jiangxi Province,|||||
|Wine Co., Ltd. (―Fuzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Shijiazhuang Changyu|||||||
|||||||Acquired by|
|Pioneer Wine Sales Co.,|Shijiazhuang City, Hebei|Shijiazhuang City, Hebei|||||
||||Sales||100%|establishment or|
|Ltd. (―Shijiazhuang|Province, China|Province, China|||||
|||||||investment|
|Pioneer‖)|||||||
|Hangzhou Yuzefeng||||||Acquired by|
||Hangzhou City, Zhejiang|Hangzhou City, Zhejiang|||||
|Trading Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Hangzhou Yuzefeng‖)||||||investment|
|Jilin Changyu Pioneer Wine|Changchun City, Jilin|Changchun City, Jilin|Sales||100%|Acquired by|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Co., Ltd. (―Jilin Pioneer‖)|Province, China|Province, China||||establishment or|
|||||||investment|
|Beijing Changyu Pioneer||||||Acquired by|
|Wine Sales Co., Ltd.|Beijing City, China|Beijing City, China|Sales||100%|establishment or|
|(―Beijing Pioneer‖)||||||investment|
|Harbin Changyu Pioneer||||||Acquired by|
||Harbin City, Heilongjiang|Harbin City, Heilongjiang|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Harbin Pioneer‖)||||||investment|
|Hunan Changyu Pioneer||||||Acquired by|
||Changsha City, Hunan|Changsha City, Hunan|||||
|Wine Co., Ltd. (―Hunan|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|Yinchuan Changyu Pioneer||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|||||
|Wine Co., Ltd. (―Yinchuan|||Sales||100%|establishment or|
||Autonomous Region, China|Autonomous Region, China|||||
|Pioneer‖)||||||investment|
|Kunming Changyu Pioneer||||||Acquired by|
||Kunming City, Yunnan|Kunming City, Yunnan|||||
|Wine Co., Ltd. (―Kunming|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|Chongqing Changyu||||||Acquired by|
|Pioneer Wine Sales Co.,|Chongqing City, China|Chongqing City, China|Sales||100%|establishment or|
|Ltd. (―Chongqing Pioneer‖)||||||investment|
|Zhengzhou Changyu||||||Acquired by|
||Zhengzhou City, Henan|Zhengzhou City, Henan|||||
|Pioneer Wine Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(―Zhengzhou Pioneer‖)||||||investment|
|Wuhan Changyu Pioneer||||||Acquired by|
||Wuhan City, Hubei|Wuhan City, Hubei Province,|||||
|Wine Co., Ltd. (―Wuhan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Taiyuan Changyu Pioneer||||||Acquired by|
||Taiyuan City, Shanxi|Taiyuan City, Shanxi Province,|||||
|Wine Co., Ltd. (―Taiyuan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Hohhot Changyu Pioneer|Hohhot City, Inner|||||Acquired by|
|||Hohhot City, Inner Mongolia|||||
|Wine Co., Ltd. (―Hohhot|Mongolia Autonomous||Sales||100%|establishment or|
|||Autonomous Region , China|||||
|Pioneer‖)|Region , China|||||investment|
|Chengdu Changyu Pioneer||||||Acquired by|
||Chengdu City, Sichuan|Chengdu City, Sichuan|||||
|Wine Co., Ltd. (―Chengdu|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|Nanning Changyu Pioneer|Nanning City, Guangxi|||||Acquired by|
|||Nanning City, Guangxi Zhuang|||||
|Wine Co., Ltd. (―Nanning|Zhuang Autonomous||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|Pioneer‖)|Region, China|||||investment|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Lanzhou Changyu Pioneer||||||Acquired by|
||Lanzhou City, Gansu|Lanzhou City, Gansu Province,|||||
|Wine Co., Ltd. (―Lanzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer‖)||||||investment|
|Yantai Roullet-Fransac|||||||
|||||||Acquired by|
|Imported Wine Sales Co.,|Yantai City, Shandong|Yantai City, Shandong|||||
||||Sales||100%|establishment or|
|Ltd. (―Yantai|Province, China|Province, China|||||
|||||||investment|
|Roullet-Fransac‖)|||||||
|Hefei Changyu Pioneer||||||Acquired by|
||Hefei City, Anhui Province,|Hefei City, Anhui Province,|||||
|Wine Co., Ltd. (―Hefei|||Sales||100%|establishment or|
||China|China|||||
|Pioneer‖)||||||investment|
|Urumchi Changyu Pioneer|Urumchi City, Xinjiang|||||Acquired by|
|||Urumchi City, Xinjiang Uygur|||||
|Wine Co., Ltd. (―Urumchi|Uygur Autonomous Region,||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|Pioneer‖)|China|||||investment|
|Guizhou Changyu Pioneer||||||Acquired by|
||Guiyang City, Guizhou|Guiyang City, Guizhou|||||
|Wine Co., Ltd. (―Guizhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer‖)||||||investment|
|||||||Acquired by|
||Guangzhou City,|Guangzhou City, Guangdong|||||
|Guangzhou Pioneer|||Sales||100%|establishment or|
||Guangdong Province, China|Province, China|||||
|||||||investment|
|||||||Acquired by|
|Yantai Changyu Wine Sales|Yantai City, Shandong|Yantai City, Shandong|||||
||||Sales|100%||establishment or|
|Co., Ltd.|Province, China|Province, China|||||
|||||||investment|
|Indomita Wine Company||||||Acquired by|
||||Manufacturing||||
|Chile, SpA (―Indomita|Santiago, Chile|Santiago, Chile||85%||establishment or|
||||industry||||
|Chile‖)||||||investment|

Explanation for difference between the proportion of shareholding and proportion of voting power in the subsidiaries:
(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition, whose60% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement.
(b) On September 12, 2016, Atrio Group completed the internal reorganization, and Marques del Atrio absorbed and merged Atrio Group and its subsidiaries Enotec S.L., Hostaler I S.L., and Faustino Rivero Ulecia S.L. After the reorganization was completed, Marques del Atrio
becomes the only existing company.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report (c) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, whose70% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Changyu Chateau by contract arrangement. The contract arrangement will expire on December 31, 2022.
(d) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreign investor, whose49% of the shares are held by the Company and its subsidiaries. The Company exercises full control over the operation, investment and financing policies of Langfang Castel by contract arrangement. The contract arrangement will expire on December 31, 2022.
(e) Beijing Chateau is a limited liability company established by the Company and a domestic investor, whose70% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Beijing Chateau by contract arrangement. The contract arrangement will expire on September 2, 2019.
(f) Icewine Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, whose51% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Icewine Chateau by contract arrangement. The contract arrangement will expire on December 31, 2021.
(g) TheR&D Company is a joint venture established by the Company and Agricultural Development Fund, whose62% of the shares were held by the Company on December 31, 2016. As stated in Note 6.29, Agricultural Development Fund invested RMB 305,000,000 Yuan in theR&D Company in 2016, accounting for37.9% of the registered capital. According to the investment agreement, it is agreed that Agricultural Development Fund will take back the investment fund in ten years and obtain fixed income according to year, which is1.2% of the remaining principal. Except for the above fixed income, the Agricultural Development Fund shall not enjoy other profits of theR&D Company or bear the losses of theR&D Company. Accordingly, the investment of the Agricultural Development Fund in theR&D Company is equity investment nominally, which is debt investment in deed. This Company shall include the investment of the Agricultural Development Fund in long-term accounts payable measured by amortized cost. The Company exercises full control over the operation, investment and financing policies of theR&D Company by contract arrangement. The contract arrangement will expire on May 22, 2026.
9.1.2 Important non-wholly-owned subsidiaries
Unit: Yuan
||||||
|-|-|-|-|-|
||||Dividend declared to be||
||Shareholding|Profit/loss attributable||Balance of minority|
||||distributed to minority||
|Name of subsidiary|proportion of minority|to minority shareholders||shareholder‘s interest at|
||||shareholders in this||
||shareholders|in this period||the end of period|
||||period||
|Xinjiang Tianzhu|40%|||56,093,912|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
||||Dividend declared to be||
||Shareholding|Profit/loss attributable||Balance of minority|
||||distributed to minority||
|Name of subsidiary|proportion of minority|to minority shareholders||shareholder‘s interest at|
||||shareholders in this||
||shareholders|in this period||the end of period|
||||period||
|Marques del Atrio|25%|999,164|703,430|30,995,051|
|Changyu Chateau|30%|||12,365,016|
|Langfang Castel|51%|||22,702,522|
|Beijing Chateau|30%|||35,293,868|
|Icewine Chateau|49%|||33,319,062|

 Explanation for difference between the proportion of shareholding and proportion of voting power of the minority shareholders in the subsidiaries:
See details in Note 9.1.
9.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance||||||
|Name of|||||||
|||Non-current|||Non-current||
|subsidiary|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||liabilities||
|Xinjiang|||||||
||97,483,520|73,823,603|171,307,123|42,113,184|5,336,114|47,449,297|
|Tianzhu|||||||
|Changyu|||||||
||131,258,800|115,227,528|246,486,329|166,841,868||166,841,868|
|Chateau|||||||
|Langfang|||||||
||26,252,091|19,508,777|45,760,868|9,423,027||9,423,027|
|Castel|||||||
|Beijing|||||||
||48,208,788|493,716,806|541,925,594|369,185,634|444,473|369,630,106|
|Chateau|||||||
|Icewine|||||||
||52,324,870|26,837,947|79,162,817|29,226,979|100,000|29,326,979|
|Chateau|||||||
|Marques del|||||||
||310,540,839|125,052,023|435,592,862|212,482,019|98,966,712|311,448,731|
|Atrio|||||||

Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Beginning balance||||||
|Name of|||||||
|||Non-current|||Non-current||
|subsidiary|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||liabilities||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
||Beginning balanceNon-current Non-currentCurrent assets Total assets Current liabilities Total liabilitiesassets liabilities||||||
|Name of|||||||
|||Non-current|||Non-currentliabilities||
|subsidiary|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||||
|Xinjiang|80,126,247||||||
|||77,008,886|157,135,133|23,266,974|5,336,114|28,603,088|
|Tianzhu|||||||
|Changyu|173,934,285||||||
|||116,396,690|290,330,975|210,904,481||210,904,481|
|Chateau|||||||
|Langfang|26,528,622||||||
|||19,890,293|46,418,915|10,233,932||10,233,932|
|Castel|||||||
|Beijing|88,294,417||||||
|||502,368,404|590,662,821|431,222,472|888,945|432,111,417|
|Chateau|||||||
|Icewine|38,239,653||||||
|||27,545,615|65,785,268|13,756,944|100,000|13,856,944|
|Chateau|||||||
|Marques del|333,455,551||||||
|||131,921,130|465,376,681|272,843,155|69,572,335|342,415,490|
|Atrio|||||||

Unit: Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount incurred in this period||||Amount incurred in prior period||||
|Name ofsubsidiary|||Total||||Total||
||Operating|||Operating|Operating|||Operatingcash flow|
|||Net profit|comprehensive|||Net profit|comprehensive||
||income|||cash flow|income||||
||||income||||income||
|XinjiangTianzhu|||||||||
||115,904,168|22,453,715|22,453,715|-7,275,404|71,414,395|8,855,720|8,855,720|10,345,022|
|ChangyuChateau|||||||||
||20,668,538|-106,018|-106,018|12,978,276|25,120,685|-1,835,054|-1,835,054|16,363,694|
|LangfangCastel|||||||||
||23,732,778|161,088|161,088|-137,422|23,893,566|1,141,604|1,141,604|8,003,926|
|BeijingChateau|||||||||
||75,491,933|12,511,172|12,511,172|-37,040,335|96,780,881|22,140,264|22,140,264|19,711,484|
|IcewineChateau|||||||||
||16,724,881|-2,063,324|-2,063,324|-1,416,775|16,400,216|-3,220,773|-3,220,773|-2,213,030|
|Marquesdel Atrio|||||||||
||131,223,890|-233,187|3,996,659|-31,616,566|138,454,701|2,677,035|4,336,228|-10,296,603|

10. Risks related to financial instruments
The main financial instruments of the Group include monetary capital, bills receivable,
accounts receivable, interest receivable, other receivables, available-for-sale financial assets, other
non-current assets, short-term loans, bills payable, accounts payable, other payables, interest payable,
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report long-term accounts payable and long-term loans. Please refer to Note 6 of each financial instrument for the details. The risks related to these financial instruments and risk management policies adopted by the Group to reduce these risks are shown as follows. The management of the Group manages and monitors these risk exposures to ensure that the above-mentioned risks are controlled within a defined scope.
The Group adopts sensitivity analysis techniques to analyze the possible influence of possible reasonable changes of risk variables on the current profit and loss andshareholders‘ equity. Since any risk variable merely changes independently and the final influence of relevance between variables on the change of certain risk variable will exert a great effect, the following content is carried out under the hypothesis that each variable changes independently.
10.1 Risk management objective and policy
The risk management objective of the Group is to achieve proper balance between risks and benefits, to minimize the negative influence of the risks on the business performance of the Group and to maximize theshareholders‘ benefit. Based on this risk management objective, the basic risk management strategy of the Group is to determine and analyze various risks faced by the Group, to set up proper risk tolerance bottom line and to carry out risk management, and to supervise various risks timely and reliably to control the risks within a defined scope.
10.1.1 Market risk
① Foreign exchange risk
Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreign exchange risk borne by the Group is mainly relevant to EUR, HKD and USD. Except that the overseas subsidiaries of the Group purchase and sale in EUR and except for loans of domestic subsidiaries in EUR, other main business activities of the Group are priced and settled in RMB. As at June 30, 2017, except that the assets and liabilities mentioned in the table below were the balance shown in EUR, HKD and USD, other assets and liabilities of the Group were all the balance shown in RMB. The foreign exchange risk caused by the assets and liabilities of such foreign currency balance may exert an influence on the business performance of the Group.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Monetary capital (EUR)|1,932,154|566,182|
|Monetary capital (HKD)|1,098,464|192|
|Monetary capital (USD)|4,576,338||
|Long-term loans due within one year (EUR)|15,499,200|29,227,200|

 The Group pays close attention to the influence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has not taken any measures to avoid the foreign exchange risk at present.
Sensitivity analysis of foreign exchange risk
With the other variables unchanged, the pre-tax influence of possible reasonable exchange rate fluctuation on current profit and loss andshareholders‘ equity is shown as follows:
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||This period|||
||Item||Exchange rate fluctuation|||||
||||||Influence on profit of this period||Influence on shareholders‘ equity|
|HKD||5% appreciation against RMB||54,923||54,923||
|HKD||5% depreciation against RMB||-54,923||-54,923||
|EUR||5% appreciation against RMB||-678,352||-678,352||
|EUR||5% depreciation against RMB||678,352||678,352||
|USD||5% appreciation against RMB||228,817||228,817||
|USD||5% depreciation against RMB||-228,817||-228,817||

② Interest rate risk– risk of change in cash flow
The risk of change in cash flow of financial instruments caused by interest rate change of the Group is mainly relevant to the monetary capital and long-term loan at floating interest rate. The policy of the Group is to maintain the floating interest rate of these loans to eliminate the risk of change in fair
value of the interest rate.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the hypothesis that the change in market interest rate influences the interest income or expense of financial instruments at variable rate.
The management of the Group thinks that the interest rate risk of deposit in bank borne by the Group is not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is not disclosed here.
On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-tax influence of possible reasonable exchange rate fluctuation on current profit and loss andshareholders‘ equity is as follows:
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||This period|||
||Item||Interest rate change|||||
||||||Influence on profit of this period||Influence on shareholders‘ equity|
|Bank loan||Increase by 50 BP||-755,415||-755,415||
|Bank loan||Decrease by 50 BP||755,415||755,415||

 10.1.2 Credit risk
As at June 30, 2017, the largest credit risk exposure possibly causing the financial loss of the Group was mainly caused by the loss generated by the financial assets of the Group due to failure of another party of the contract in fulfilling obligations.
To lower the credit risk, the Group only trades with the recognized and reputable third party. In accordance with the policy of the Group, credit check shall be carried out for all customers requiring to adopt form of credit to trade. In addition, the Group conducts continuous monitoring on the balance of accounts receivable to ensure that the Group will not face major risk of bad debts. For transactions not settled with recording currency of relevant business
units, unless the credit control department of the Group specially approves, the Group will
not provide credit trade terms. In addition, the Group audits the collection of each single
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report significant account receivable on each date of balance sheet to ensure that sufficient bad-debt provision is accrued for accounts unable to be collected. Therefore, the management of the Group thinks the credit risk borne by the Group is greatly reduced.
Since the Group only trades with the recognized and reputable third party, no collateral is required. The credit risk is managed centrally according to the customer/counter-party, geographic area and industry. As at June 30, 2017,28.0% of accounts receivable of the Group came from top five borrowers in accounts receivable of the Group (December 31, 2016:26.3%). The Group holds no collateral or other credit enhancement for the balance of accounts receivable.
10.1.3 Liquidity risk
When managing the liquidity risk, the Group reserves and monitors the cash and cash equivalents the management considers sufficient to satisfy the operation need of the Group and reduce the influence of fluctuation in cash flow. The management of the Group monitors the use of bank loans and ensures to abide by the loan agreement.
10.1.4 Disclosure of fair value– fair value of financial assets and liabilities not measured by fair value
The management of the Group thinks that, as at June 30, 2017, the book value of financial assets and liabilities measured by amortized cost was close to the fair value thereof.
11. Related parties and related transactions
11.1 Particulars of the parent company of the Company
|||||||
|-|-|-|-|-|-|
|||||Proportion of|Proportion of|
|Name of parent||||shareholding of the|voting powers of|
||Registration place|Business nature|Registered capital|||
|company||||parent company in|the parent company|
|||||the Company|in the Company|
|Changyu Group||Manufacturing||||
||Yantai City||50,000,000|50.40%|50.40%|
|Company||industry||||

From January to June 2017, there was no fluctuation in the registered capital of the parent
company and its share in equity interest and voting right.
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 11.2 Particulars of the subsidiaries of the Company
See particulars of the subsidiaries of the Company in Note 9.
11.3 Particulars of other related parties
|||
|-|-|
|Name of other related parties|Relationship between other related parties and the Company|
|Yantai Changyu Wine Culture Museum Co., Ltd. (―Wine||
||A company controlled by the same parent company|
|Culture Museum‖)||
|Yantai Changyu Window of International Wine City Co. Ltd.||
||A company controlled by the same parent company|
|(―Window of Wine City‖)||
|Yantai God Horse Packing Co., Ltd. (―God Horse Packing‖)|A company controlled by the same parent company|
|Yantai Zhongya Medical Health Wine Co., Ltd. (―Zhongya||
||A company controlled by the same parent company|
|Medical‖)||

11.4 Related transactions
11.4.1 Related transactions of purchasing and selling goods and providing and receiving services
List of purchasing goods/receiving services
Unit: Yuan
|||||
|-|-|-|-|
|||Amount incurred in this||
|Related parties|Related transactions||Amount incurred in prior period|
|||period||
|God Horse Packing|Purchasing goods|64,896,342|71,912,485|
|Zhongya Medical|Purchasing goods|10,700,788|5,550,205|
|Wine Culture Museum|Purchasing goods|6,319,776|4,636,495|
|Window of Wine City|Purchasing goods|231,879|296,652|

 List of selling goods/providing services
Unit: Yuan
|||||
|-|-|-|-|
|||Amount incurred in this||
|Related parties|Related transactions||Amount incurred in prior period|
|||period||
|Wine Culture Museum|Selling goods|4,252,962|7,663,340|
|Window of Wine City|Selling goods|5,642,914|5,002,597|
|Zhongya Medical|Selling goods|1,956,658|2,057,616|
|God Horse Packing|Selling goods|829,977|772,037|

 The price of transactions between the Group and the related parties are based on the
negotiated price.
11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing
Nil
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 11.4.3 Leasing with related parties
The Company as a leasee:
Unit: Yuan
|||||
|-|-|-|-|
||||Rent recognized in prior|
|Name of the lessor|Type of leased assets|Rent recognized in this period||
||||period|
|Changyu Group Company|Warehouse and office building|3,775,362|2,929,000|

 Pursuant to a lease contract dated January 1, 2017 signed between the Company and Changyu Group Company, starting from January 1, 2017, the Company rents properties to Changyu Group Company for operation purposes at a basic annual rental of RMB 1,464,500 Yuan, and the expired date of the contract is December 31, 2021. From January to June 2017, the rental expenses recognized by the Company to Changyu Group Company amounted to RMB 732,250 Yuan.
Pursuant to a lease contract dated January 1, 2017 signed between the Group and Changyu Group Company, starting from January 1, 2017, the Company rents properties to Changyu Group Company for operation purposes at a basic annual rental of RMB 4,393,500 Yuan, and the expired date of the contract is December 31, 2021. From January to June 2017, the rental expenses recognized by the Group to Changyu Group Company amounted to RMB 2,196,750 Yuan.
Pursuant to a lease contract dated January 1, 2016 signed between the Group and Changyu Group Company, starting from January 1, 2016, the Group rents properties to Changyu Group Company for operation purposes at a basic annual rental of RMB 1,692,724 Yuan, and the expired date of the contract is December 31, 2020. From January to June 2017, the rental expenses recognized by the Group to Changyu Group Company amounted to RMB 846,362 Yuan.
11.4.4 Guarantee with related parties
Nil
11.4.5 Inter-bank borrowing and lending of related parties
Nil
11.4.6 Asset transfer and debt recombination of related parties
Nil
11.4.7 Other related transactions
|||||
|-|-|-|-|
|Item|Note|Amount incurred in this period|Amount incurred in prior period|
|Trademark usefee|(a)|44,428,033|46,273,367|
|Patent fee|(b)|25,000|25,000|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report The price of transactions between the Group and the related parties is based on the negotiated price.
(a) Trademark royalty contract
Pursuant to a trademark royalty contract dated May 18, 1997 signed between the Company and Changyu Group Company, starting from September 18, 1997, the Company may use certain trademark of Changyu Group Company, which has been registered with the PRC Trademark Office. An annual royalty fee at2% of theCompany‘s annual specific sales is payable to Changyu Group Company by the Company. The contract is effective until the expiry of the registration of the trademark. From January to June 2017, the trademark royalty fee paid to related parties by the Group accounted for100% of the trademark royalty fee in the Group.
(b) Patent implementation license contract
Pursuant to a patent implementation license contract dated May 18, 1997 signed between the Company and Changyu Group Company, starting from September 18, 1997, the Company may use the patented technologies of Changyu Group Company. The annual patent usage fee payable by the Company to Changyu Group Company was RMB 50,000 Yuan. The contract was expired on December 20, 2005. After the patent implementation license contract signed on August 20, 2006 expires, the Company renewed the contract on August 20, 2016 for 10 year, which should pay the patent royalty of RMB 50,000 Yuan to Changyu Group Company annually as before. From January to June 2017, the patent royalty payable by the Company to Changyu Group Company amounted to RMB 25,000 Yuan.
From January to June 2017, the patent fees paid to related parties by the Group accounted for100% of the patent fees in the Group.
11.5 Accounts receivable and payable of the related parties
11.5.1 Accounts receivable
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Ending balance||Beginning balance||
|Item|Related parties|Book|Bad debt||Bad debt|
|||||Book balance||
|||balance|provision||provision|
|Accounts receivable|Zhongya Medical|4,719,638||3,913,997||
|Accounts receivable|God Horse Packing|292,284||50,700||
|Accounts receivable|Window of Wine City|908,898.20||1,833,273||
|Accounts receivable|Wine Culture Museum|218,054||876,724||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 11.5.2 Accounts payable
Unit: Yuan
|||||
|-|-|-|-|
|Item|Related parties|Ending book balance|Beginning book balance|
|Accounts payable|God Horse Packing|26,294,501|59,058,023|
|Accounts payable|Zhongya Medical|3,614,343|4,328,184|
|Accounts payable|Wine Culture Museum|2,011,234|3,038,520|
|Accounts payable|Window of Wine City|131,531|619,578|
|Other accounts payable|Changyu Group Company|42,324,395|78,572,540|

 12. Commitment and contingency
12.1 Significant commitment
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Capital commitment|1,134,630,000|1,508,310,000|

12.2 Contingency
By the balance sheet date, the Group and the Companydidn‘t have any undisclosed contingency to be disclosed.
13. Matters after balance sheet
13.1 Important non-adjusting events
Nil
13.2 Profit distribution
Unit: Yuan
|||
|-|-|
|Profits or dividends to be distributed|342,732,000|
|Allocated profits or dividends approved to declare upon||
||342,732,000|
|discussion||

According to the decision of theShareholders‘ Meeting dated June 15, 2017, based on the issued capital stock of 685,464,000 shares in 2016, the Company allocated RMB 5 Yuan in cash (including tax) for every 10 shares to all shareholders with the total cash dividends of RMB 342,732,000 Yuan. Such cash dividends were distributed on July 11, 2017.
14. Other important matters
Nil
15. Notes on major items in financial statements of the parent company
15.1 Accounts receivable
15.1.1 Accounts receivable disclosed by type
Unit: Yuan
||||
|-|-|-|
|Type|Ending balance|Beginning balance|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Accrued|Book value||||Accrued|Book value|
||Amount|Proportion|Amount|||Amount|Proportion|Amount|||
|||||proportion|||||proportion||
|Accounts receivable of|||||||||||
|significant single amount|||||||||||
|and single accrued bad|||||||||||
|debt provision|||||||||||
|Accounts receivable|||||||||||
|accrued bad debt|||||||||||
|provision by credit risk|||||||||||
|features|||||||||||
|Accounts receivable of|||||||||||
|insignificant single|||||||||||
|amount and single|1,838,244|100%|||1,838,244|3,326,683|100%|||3,326,683|
|accrued bad debt|||||||||||
|provision|||||||||||
|Total|1,838,244|100%|||1,838,244|3,326,683|100%|||3,326,683|

 15.1.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or transferred back in this period was RMB 0 Yuan.
15.1.3 Accounts receivable actually canceled after verification in this period
Nil
15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the ending balance
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|Unit||||||Percentage in|
||Relationship with||||||
||||Amount|Age||total accounts|
||the Company||||||
|||||||receivable (%)|
|Yantai Zhongya Medical Health WineCo., Ltd. (merged)|Other related partyof the Company|1,516,026|||82.5%||
|Yantai Huibao Artware ManufacturingCo., Ltd.|Third party|322,218|||17.5%||
|Total||1,838,244|||100.0%||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 15.1.6 Accounts receivable transferred and included in assets and liabilities
Nil
15.2 Other accounts receivable
15.2.1 Other accounts receivable disclosed by type
|||||||||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Ending balance||||||||||||Beginning balance||||||||||||
|||Book balance||||B|ad debt provisio||||n||Book value|Book balance||||B|ad debt provisio||||n||Book value|
|T|ype|||||||||||||||||||||||||
||||||||||pr|Accrue|don||||||||||pr|Accrue|don|||
|||Amount|Pr|oporti|on|A|moun|t||||||Amount|Pr|oporti|on|A|moun|t||||||
|||||||||||oporti||||||||||||oporti||||
|Oresiaacpr|ther accounts|||||||||||||||||||||||||
||ceivable of|||||||||||||||||||||||||
||gnificant single|||||||||||||||||||||||||
|||3,529,544,186||99.7%|||||||||3,529,544,186|3,572,802,092||99.7%|||||||||3,572,802,092|
||mount and single|||||||||||||||||||||||||
||crued bad debt|||||||||||||||||||||||||
||ovision|||||||||||||||||||||||||
|Orebbfe|ther accounts|||||||||||||||||||||||||
||ceivable accrued|||||||||||||||||||||||||
||ad debt provision|||||||||||||||||||||||||
||y credit risk|||||||||||||||||||||||||
||atures|||||||||||||||||||||||||
|Oreinaacpr|ther accounts|||||||||||||||||||||||||
||ceivable of|||||||||||||||||||||||||
||significant single|||||||||||||||||||||||||
|||10,166,247||0.3%|||||||||10,166,247|9,730,770||0.3%|||||||||9,730,770|
||mount and single|||||||||||||||||||||||||
||crued bad debt|||||||||||||||||||||||||
||ovision|||||||||||||||||||||||||
|T|otal|3,539,710,433||100%||||||||3,539,710,433||3,582,532,862||100%||||||||3,582,532,862||

 15.2.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or transferred back in this period was RMB 0 Yuan.
15.2.3 Other accounts receivable classified by nature
Unit: Yuan
||||
|-|-|-|
|Nature of fund|Ending book balance|Beginning book balance|
|Accounts receivable of subsidiaries|3,538,441,877|3,580,805,532|
|Deposit and guaranty money receivable||8,000|
|Other|1,268,556|1,719,330|
|Total|3,539,710,433|3,582,532,862|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 15.2.4 Other accounts receivable collected by the borrower of top 5 units ranked by the ending balance
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||||Percentage in the||
||||||Ending balance|
||Nature of|||total ending||
|Unit||Ending balance|Age||of bad debt|
||fund|||balance of other||
||||||provision|
|||||accounts receivable||
||Internal|||||
|Chang‘an Chateau|incomings|755,392,258|Within 2 years|21.3%||
||and outgoings|||||
||Internal|||||
|Sales Company|incomings|618,992,851|Within 2 years|17.5%||
||and outgoings|||||
||Internal|||||
|Ningxia Chateau|incomings|439,733,913|Within 2 years|12.4%||
||and outgoings|||||
||Internal|||||
|R&D Company|incomings|418,182,216|Within 2 years|11.8%||
||and outgoings|||||
||Internal|||||
|Beijing Chateau|incomings|300,371,955|Within 2 years|8.5%||
||and outgoings|||||
|||2,532,673,193||71.5%||
|Total|--||--|||

15.2.5 Accounts receivable related to governmental subsidy
Nil
15.2.6 Other accounts receivable derecognized due to transfer of financial assets
Nil
15.2.7 Other accounts receivable transferred and included in assets and liabilities
Nil
15.3 Long-term equity investment
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Investment in|||||||
||2,108,589,655||2,108,589,655|1,834,341,541||1,834,341,541|
|subsidiaries|||||||
|Investment in associated|||||||
|enterprises and joint|||||||
|ventures|||||||
|Total|2,108,589,655||2,108,589,655|1,834,341,541||1,834,341,541|

15.3.1 Investment in subsidiaries
Unit: Yuan
Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Ending balance|
||Beginning|Increase in this|Decrease in this||||
|Invested unit||||Ending balance|impairment in|of impairment|
||balance|period|period||||
||||||this period|provision|
|Xinjiang Tianzhu|||||||
||60,000,000|||60,000,000|||
|(a)|||||||
|Kylin Packaging|23,176,063|||23,176,063|||
|Changyu Chateau|||||||
||28,968,100|||28,968,100|||
|(a)|||||||
|Pioneer|||||||
||3,500,000|||3,500,000|||
|International (b)|||||||
|Ningxia Growing|1,000,000|||1,000,000|||
|National Wine|2,000,000|||2,000,000|||
|Icewine Chateau (a)|30,440,500|||30,440,500|||
|Beijing Chateau (a)|77,000,000|||77,000,000|||
|Sales Company|7,200,000|||7,200,000|||
|Langfang Sales (b)|100,000|||100,000|||
|Langfang Castel (a)|19,835,730|||19,835,730|||
|Wine Sales|4,500,000|||4,500,000|||
|Shanghai Marketing|||||||
||300,000|||300,000|||
|(b)|||||||
|Beijing Marketing|850,000|||850,000|||
|Jingyang Sales (b)|100,000|||100,000|||
|Jingyang Wine (b)|900,000|||900,000|||
|Ningxia Wine|1,000,000|||1,000,000|||
|Ningxia Chateau|2,000,000|||2,000,000|||
|Tinlot Chateau (b)|80,000,000|||80,000,000|||
|Shihezi Chateau|550,000,000|||550,000,000|||
|Chang‘an Chateau|20,000,000|||20,000,000|||
|R&D Company (a)|500,000,000|||500,000,000|||
|Huanren Wine|11,000,000|||11,000,000|||
|Francs Champs|220,320,604|||220,320,604|||
|Marques del Atrio|190,150,544|||190,150,544|||
|Indomita Chile||274,248,114||274,248,114|||
|Total|1,834,341,541|274,248,114||2,108,589,655|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 15.4 Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in this period||Amount incurred in prior period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|445,339,324|387,600,176|648,652,597|495,598,413|
|Other business|386,481,179|350,350,202|6,646,403|5,714,186|
|Total|831,820,503|737,950,378|655,299,000|501,312,599|

 15.5 Investment income
Unit: Yuan
||||
|-|-|-|
||Amount incurred in this|Amount incurred in prior|
|Item|||
||period|period|
|Income from long-term equity investment by cost method|66,127,980|683,891,453|
|Income from long-term equity investment by equity method|||
|Investment income from disposal of long-term equity|||
|investment|||
|Investment income of the financial assets measured at their|||
|fair values and the variation of which is recorded into the|||
|current profit and loss during the holding period|||
|Investment income gained from disposal of the financial|||
|assets measured at their fair values and the variation of which|||
|is recorded into the current profit and loss|||
|Investment income of held-to-maturity investment during the|||
|holding period|||
|Investment income of financial assets held for sale during the|||
|holding period|||
|Investment income gained from disposal of financial assets|||
|held for sale|||
|Gains generated from the remaining equity remeasured as per|||
|fair value after the loss of control|||
|Total|66,127,980|683,891,453|

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report 16. Supplementary materials
16.1 List of non-current profits/losses in this period
Unit: Yuan
||||
|-|-|-|
|Item|Amount|Remark|
|Profits/losses on disposal of non-current assets|-495,071||
|Tax return, deduction and exemption approved beyond the|||
||12,737,950||
|authority or without formal approval document|||
|Governmental subsidy included in the current profits/losses|||
|(excluding those closely related to the enterprise business and|||
||6,997,254||
|enjoyed in accordance with the unified standard quota or|||
|ration of the state)|||
|Payment for use of funds by non-financial enterprises included|||
|in the current profits/losses|||
|Income obtained when the investment cost obtained by the|||
|enterprise from subsidiaries, joint-run business and joint|||
|venture is less than the fair value of the net identifiable assets|||
|obtained from the invested units when the investment is made|||
|Profits/losses on exchange of non-monetary assets|||
|Profits/losses on entrusting other people to make investment|||
|or manage assets|||
|Asset impairment provision accrued due to force majeure such|||
|as natural disaster|||
|Profits/losses on debt restructuring|||
|Enterprise reorganization expenses such as staffing|||
|expenditure and integration expenses, etc.|||
|Profits/losses on those beyond the fair value generated from|||
|transactions with unfair transaction price|||
|Current net profits/losses on subsidiaries acquired from a|||
|business combination under common control from the|||
|beginning to the consolidation date|||
|Profits/losses on contingencies irrelated to the normal business|||
|of the Company|||
|Profits/losses on changes of fair value of financial assets and|||
|liabilities held for trading, and investment income from|||
|disposal of financial assets and liabilities held for trading and|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||
|-|-|-|
|Item|Amount|Remark|
|financial assets held for sale, excluding effective hedging|||
|operations relevant to the normal business of the Company|||
|Returns of provision for impairment of accounts receivable|||
|with single impairment test|||
|Profits/losses on external entrusted loans|||
|Profits/losses on fair value changes of investment real estate|||
|with fair value mode for follow-up measurement|||
|Influence of the one-time adjustment of the current|||
|profits/losses in accordance with tax and accounting laws and|||
|regulations on the current profits/losses|||
|Trustee fee income from entrusted operation|||
|Other non-operating income and expenditure besides the|||
||3,225,833||
|above items|||
|Other profits/losses conforming to the definition of|||
|non-current profits/losses|||
|Minus: Influenced amount of income tax|5,303,287||
|Influenced amount of minority shareholders‘ equity|||
|Total|17,162,679|--|

16.2 Return on net assets and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
||Weighted average return on|||
|Profit incurred in this period||Basic EPS|Diluted EPS|
||net assets|||
|||(Yuan/Share)|(Yuan/Share)|
|Net profit attributable to common||0.98|0.98|
||7.84%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company deducting|7.64%|0.95|0.95|
|non-incidental profits/losses||||

16.3 Accounting data difference under domestic and foreign accounting standard
16.3.1 Net profits& net assets difference disclosed in the financial report according to the international accounting standard and Chinese accounting standard
Unit: Yuan
|||||
|-|-|-|-|
|Net profits||Net assets||
|Amount incurred in|Amount incurred in prior|Ending balance||
||||Beginning balance|
|this period|period|||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report
||||||
|-|-|-|-|-|
|In accordance with the|670,069,054|695,021,847|8,880,538,852|8,209,010,989|
|Chinese accounting standard|||||
|Item & amount adjusted in accordance with the international accounting standard:|||||
|In accordance with the|||||
|international accounting|670,069,054|695,021,847|8,880,538,852|8,209,010,989|
|standard|||||

Yantai Changyu Pioneer Wine Co. Ltd. 2017 Semi-annual Report XI. Reference Documents
(1)The original of 2017 Semi-annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman, chief accountant and accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997; The Prospectus and TheShares’ Change& Public Offering Announcement for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public during the report period in the newspapers designated by China Securities Regulatory Commission. Yantai Changyu Pioneer Wine Co. Ltd. Board of Directors 29th
August, 2017