*ST古井B(200596)2005年年度报告（英文版）
唇齿相依 上传于 2006-02-28 06:02
ANHUI GUJING DISTILLERY COMPANY LIMITED
ANNUAL REPORT 2005
(B SHARE)
February 2006
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Important Notices
Board of Directors, Board of Supervisors and directors, supervisors, and senior
managers of the company ensure that there is neither untrue presentation, seriously
misleading statements, nor omission of material facts contained in the information herein
and shall severally and jointly bear responsibility for the authenticity, accuracy and
completeness of the information contained in this annual report.
Board Chairman Mr. Wang Feng, General Accountant Mr. Li Bin and Principal of the
Accounting Department ensure the correctness and completeness of the accounting report
in this Annual Report.
The Report is compiled in Chinese and English. Should any conflict between the two
versions, the Chinese version shall prevail.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Content
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter I Basic Information of Company
1. Statutory name of the Company
In Chinese: 安徽古井贡酒股份有限公司
In English: ANHUI GUJING DISTILLERY COMPANY LIMITED
2. Legal representative: Wang Feng
3. Secretary of Board of Directors: Li Bin
Contact address: Gujing Town, Bozhou City, Anhui Province
Tel: (0558) 5710057
Fax: (0558) 5317706
Email: gjglb@gujing.com.cn
Authorized representative for securities: Ma Junwei
Contact address: Gujing Town, Bozhou City, Anhui Province
Tel: (0558) 5317057
Fax: (0558) 5317706
Email: jwma@ gujing.com.cn
4. Registered address: Gujing Town, Bozhou City, Anhui Province
Office address: Gujing Town, Bozhou City, Anhui Province
Post code: 236820
Website: http://www.gujing.com
Email: gujing@mail.ahbbptt.com.cn
5. Selected Newspapers for information disclosure are as follows: China Securities Daily, Shanghai
Securities Daily, Hong Kong Wen Wei Po Daily
Website for publishing Annual Report of the Company: http://www.cninfo.com.cn
Place of the Annual Report filed: office of Secretary of BOD of the Company
6. Place where the company shares are listed: Shenzhen Securities Exchange
Short form of Stock Name: Gujing Distillery A Securities Code: 000596
Short form of Stock Name: Gujing Distillery B Securities Code: 200596
7. Other information:
1) Initial registration date of the Company: May 30, 1996
Updated alteration registration date: December 15, 2004
Registration authority: Anhui Provincial Administration for Industry and Commerce
2) Registration number of business license: QGWZZ No. 001745
Tax registration number: 341600151940008
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ANHUI GUJING DISTILLERY COMPANY LIMITED
3) Names and addresses of accountants’ offices appointed by the Company
Domestic: Reanda Certified Public Accountants
Address: No. 2008, East District, Bldg. 1, Zhubang 2000, No.100 Balizhuang Xili, Chaoyang
District, Beijing, PRC.
Abroad: BDO Reanda Certified Public Accountants Gold
Address: No. 2008, East District, Bldg. 1, Zhubang 2000, No.100 Balizhuang Xili, Chaoyang
District, Beijing, PRC.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter II Summary of Accounting and Operational Data
I. Accounting data of 2005
Unit: RMB thousand Yuan
Items Amount
Total profit 16,707
Net profit 5,219
Profit from main business 145,983
Operating profits 23,210
Investment gains 1,448
Subsidy incomes 5,000
Net cash flow from operating activities
30,295
Increase or Decrease of cash and cash equivalents (19,159)
II. The differences in net profits and net assets calculated in accordance with Chinese accounting
standards and international accounting standards
Unit: RMB thousand Yuan
Net profit of the report Net assets at end of this
period report period
Amount calculated in accordance
5,088 808,121
with Chinese accounting standard
Items & amount adjustment in
accordance with international 131 131
accounting standards
Amortization of Longterm equity
investment balance in accordance 218 218
with Chinese accounting standard
Depreciable balance in accordance with
(72) (72)
fair value
Accrued intangible assets (15) (15)
amortization balance in accordance
with fair value
Amount calculated in accordance
with international accounting 5,219 808,252
standards
II. Main accounting data and financial indexes over the last three years
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Unit: RMB thousand Yuan
Items 2005 年 2004 年 2003 年
Income from main business 653,662 601,746 504,825
Net profit 5,219 (255,927) (62,489)
Total assets 1,335,857 1,349,385 1,518,954
Shareholders’ equity 808,252 803,033 1,058,960
Earnings per share 0.02 (1.09) (0.26)
Net assets per share 3.44 3.42 4.51
Net assets per share after adjustment
3.44 3.42 4.51
Net cash flows per share from
operating activities 0.129 0.04 0.309
V. Particulars about changes of shareholders’ equity
Unit: RMB thousand yuan
Statutory Total
Share Capital Surplus Undistributed
Item public shareholder’s
Capital reserve reserve profit
welfare equity
At beginning 803,033
of the period 235,000 521,647 69,644 69,645 (92,903)
Increase in this 5,219
period 0 0 0 0 5,219
Decrease in 0
this period 0 0 0 0 0
At end of this 808,252
period 235,000 521,647 69,644 69,645 (87,684)
Chapter III Particulars about the Changes of Share Capital & Shareholders
I. Particulars about changes of share capital
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ANHUI GUJING DISTILLERY COMPANY LIMITED
1. Table of Shares Change
Unit: share
Before this Increase or decrease of this change（+、） After this
change change
Rationed Shares Public Issued Other Sub
shares grant reserve new total
converted shares
into
shares
A. Nonnegotiable
shares
1. Founder’s shares 155,000,0 155,000,000
00
Including:
Stateowned shares 155,000,0 155,000,000
Domestic corporate 00
shares
Overseas corporate
shares
Others
2. Raised corporate
shares
3. Internal 24,500 - - 22,000
employees’ shares 2,50 2,50
0 0
4. Preferred shares
or others
Subtotal of 155,024,5 - - 155,022,000
nonnegotiable 00 2,50 2,50
shares
B. Listed and 0 0
negotiable shares
1. RMB ordinary 19,975,50 19,975,500
shares 0
2. Foreign capital 60,000,00 60,000,000
shares listed locally 0
3. Foreign capital
shares listed
overseas
4. Others
Subtotal of listed 79,975,50 +2,5 +2,5 79,978,000
and negotiable 0 00 00
shares
C. Total shares 235,000,0 235,000,000
00
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Note: the nonnegotiable 22,000 internal employees’ shares are the shares held by the directors,
supervisors and senior executives of the company.
2. Particulars about issuance and public offer
(1) Particulars about stock issuance and public offer in the past three years
In the three years before the report period, the Company did not issue stocks or any derivative
securities.
(2)Change of capital stock structure within the report period
By the end of the report period, there is no change in the total number of shares of the Company.
(3)Issuance of shares held by employees
Two million shares held by employees were subscribed at the par value of RMB 8.48 yuan per
share when the Company listed its A shares in September 1996, were entrusted to the No. 1
Division of Shenzhen Gousen Securities Co., Ltd. in September 27, 1996. Except for 22,000 shares
held by the existing directors, supervisors and senior executives, the rest shares held by employees
have already been listed.
II. Brief introduction to shareholders
1. Total number of shareholders and particulars about the shares held by top
shareholders
The Company has 19,637 shareholders, including 1 holder of state
owned corporate share, 2 holders who are directors, supervisors and
Total number of shareholders
senior executives of the Company, 10,175 shareholders who hold
locallylisted foreigncapital shares and 9,462 public shareholders.
Particulars about the shares held by top ten shareholders
Shares
Numbers of
Names of Character of Total number quantity
Proportion nonnegotiable
shareholders equity of shares under pledge
shares
or freezing
ANHUI
GUJING
Stateowned
GROUP 65.96% 155,000,000 155,000,000 0
corporate shares
COMPANY
LIMITED
Huang 0
B shares 1.76% 4,138,144 Unknown
Yingbin
He Bin B shares 0.73% 1,727,152 0 Unknown
Cai Yingying B shares 0.32% 743,740 0 Unknown
Wang 0
B shares 0.26% 610,491 Unknown
Chuncheng
GSI S/A GOLDEN 0
CHINA MASTER B shares 0.25% 586,756 Unknown
FUND
Xiao Juanyun B shares 0.22% 516,300 0 Unknown
Huang 0
B shares 0.19% 441,602 Unknown
Peiling
Zhao Zhanyue B shares 0.17% 397,000 0 Unknown
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Zhou 0
B shares 0.16% 376,200 Unknown
Zhengzhong
Particulars about ten top shareholders of negotiable shares of the Company
Name of shareholders Numbers of negotiable Character of equity
shares
Huang Yingbin 4,138,144 B shares
He Bin 1,727,152 B shares
Cai Yingying 743,740 B shares
Wang Chuncheng 610,491 B shares
GSI S/A GOLDEN CHINA MASTER
586,756 B shares
FUND
Xiao Juanyun 516,300 B shares
Huang Peiling 441,602 B shares
Zhao Zhanyue 397,000 B shares
Zhou Zhengzhong 376,200 B shares
CHEN KAM TONG 364,400 B shares
There is no any association between the first shareholder and other
Explanation on the association
shareholders， and they do not belong to the concerted actors specified in
and concerted action of the
the Measures for the Administration of Disclosure of Shareholder Equity
above shareholders
Changes of Listed Companies
3. Introduction to the biggest shareholder of the Company:
The biggest shareholder of the Company is ANHUI GUJING GROUP COMPANY LIMITED
which is the stateowned sole proprietorship established on Jan. 16, 1995, with the registered
capital Rmb353,380,000; its legal representative is Mr. Wang Xiaojin. Its business scope:
beverage, construction materials, plastic products, shareholding and operation of stateowned
assets in the authorized scope by the State.
There has no any change in controlling shareholders in the report period.
Property right relationship and control relationship between the company and actual controller.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
The People’s Government of Bozhou
100%
ANHUI GUJING GROUP COMPANY
LIMITED
65.96%
This Company
4. The company has not corporate shareholders holding more than 10% (including 10%) of total shares
of the Company.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter IV Particulars about Directors, Supervisors, Senior Executives &
Employees of the Company
I. Particulars about directors, supervisors and senior executives
1. Basic information
Shares held
Shares held
Name Position Gender Age Duty term at year
at year end
beginning
Wang
Board Chairman M 41 2005.7-2008.5 0 0
Feng
Wang
Director M 57 2005.7-2008.5 3,500 3,500
Xiaojin
Liu
Director M 43 2005.7-2008.5 0 0
Junde
Li
Director M 33 2005.7-2008.5 0 0
Peihui
Wang Director, General
M 44 2005.7-2008.5 0 0
Dejie Manager
Zhu Director, Executive
M 40 2005.7-2008.5 0 0
Renwang Vice General Manager
Liu
Independent director M 52 2005.7-2008.5 0 0
Youpeng
Zhuo
Independent director M 68 2005.7-2008.5 0 0
Wenyan
Li Hao Independent director M 55 2005.7-2008.5 0 0
Yuan
Chief supervisor F 58 2005.7-2008.5 1,500 1,500
Qinghua
Zhang
Supervisor M 52 2005.7-2008.5 0 0
Jialiang
Liang
Supervisor M 42 2005.7-2008.5 0 0
Jinghui
Lu Vice General
M 44 2005.7-2008.5 0 0
Jianchun Manager
Zhang Vice General
M 43 2005.7-2008.5 0 0
Jianlin Manager
Secretary of BOD/General
Li Bin M 30 2005.7-2008.5 0 0
Accountant
Notes: Particulars about directors and supervisors of the Company working in shareholding companies
1) Director, Mr. Wang Xiaojin acts as the board chairman in ANHUI GUJING GROUP CO., LTD., as
the controlling shareholders of this company from January 1995, and also acts as the president from
August 2004.
2) Director, Mr. Liu Junde acts as the vice president of ANHUI GUJING GROUP CO.,
LTD. from August 2004.
3) Director, Li Peihui acts as the general finance supervisor of ANHUI GUJING GROUP CO., LTD.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
from July 2005.
4) Supervisor, Ms. Yuan Qinghua acts as the director of Party Committee Office and the secretary of
Discipline Inspection in ANHUI GUJING GROUP CO., LTD. from May 2000.
2. Main work experience of incumbent directors, supervisors and senior executives in last five years:
1) Mr. Wang Feng, incumbent board chairman of the company, had ever acted as the manager of Assets
Management Department, member of the second board of directors, secretary of the board of director,
general manager, member of the third board of directors, and board chairman.
2) Mr. Wang Xiaojin, incumbent director of this company and board chairman and president of ANHUI
GUJING GROUP CO., LTD. had ever acted as the factory director of Bozhou Gujing Wine Factory,
member, board chairman and general manager of the second and third board of directors.
3) Mr. Liu Junde, incumbent director of the company and the vice president of ANHUI GUJING
GROUP CO., LTD., had acted as general accountant of the company and member and board chairman
of the third board of directors of this company.
4) Mr. Li Peihui, incumbent director of the Company and the general accountant of ANHUI GUJING
GROUP CO., LTD., had acted as Finance Department Manager, Second chief accountant, member of
the third board of directors, secretary of board, and general accountant.
5) Mr. Wang Dejie, incumbent director and general manager, had acted as the general manager of
Alcohol Subsidiary of the Company, vice general manager and general manager of the company.
6) Mr. Zhu Renwang, incumbent director of the company, vice executive general manger of this
company mainly responsible for the sales work, had ever acted as vice section chief, section chief, vice
manger and general manger of subsidiary Gujing Sales Company of this company and vice executive
general manger of this company.
7) Mr. Zhuo Wenyan, incumbent independent director of board of directors of this company, had acted
as assistant, lecturer, associate professor, professor and department head of accounting department of
Anhui University of Finance & Trade, now acts as accounting professor and tutor of Ph. D. in Anhui
University of Finance & Trade, director of China Accounting Society, vice chairman of Anhui
Accounting Society , vice chairman of Business Finance & Accounting Seminar of China academy of
finance & economics, and member of the third board of directors.
8) Mr. Liu Youpeng, incumbent independent director of board of directors of this company and
professor of Shanghai Institute of Commercial Education, had acted as director of the Enrollment
Office of Higher Education Institutions of Anhui Provincial education committee and adjunct professor
of Anhui Institute of Education and the independent director of the third board of directors.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
9) Mr. Li Hao, incumbent independent director of this company and superintendent of modern Institute
of Justice of Law School of Nanjing Normal University, Tutor for doctorial students, lawyer of Anhui
Zhongding Law Firm and vice chairman of Chinese Procedural Law Seminar, had ever acted as deputy
director of Teaching and
Research of Law of Party School of Anhui Province Party Committee, adjunct professor of Anhui
University and counselor of Anhui Technology Publishing House, etc. and member of the third board
of directors.
10) Mr. Yuan Qinghua, incumbent director of party committee office of ANHUI GUJING GROUP CO.,
LTD. secretary of Commission for Discipline Inspection, committeeman of party committee and
supervisor of the third board of supervisors of this company, had ever acted as vice general manager of
Anhui Bozhou Gujing Hotel Co., Ltd. supervision manager of the company, supervisor of the first and
second board of supervisors of this company, office director of ANHUI GUJING GROUP CO., LTD.
vice secretary of Commission for Discipline Inspection and the first vicechairman of labor union and
the chief supervisor of the third board of supervisors.
11) Mr. Zhang Jialiang, incumbent human resource manager and supervisor of the board of supervisors,
had acted as personnel vice manager and deputy director of party committee office, director, and
supervisor of the second and third board of supervisors of the company.
12) Mr. Liang Jinhui, incumbent market director and supervisor of the board of supervisors of this
company, had ever acted as vice manager of market development department of the company,
supervisor of the second and third board of supervisors and manager of market development
department and director of market research and supervision center.
13) Mr. Lu Jianchun, incumbent vice general manager of the company mainly responsible for quality
management, had ever acted as vice quality manager and manager.
14) Mr. Zhang Jianlin, incumbent vice general manger mainly responsible for the production work of
the company, had ever acted as factory director and production manager of Wine Brewery Branch of
the company.
15) Mr. Li Bin, incumbent the secretary of board of directors and general accountant, had acted as the
accounting accountant of the financial department, secretary of Finance Department of the company,
the Manager of Enterprise Programming and Management Department of ANHUI GUJING GROUP
CO., LTD, the second chief accountant of the company and manager and chief accountant of Finance
Department of the company.
3. Annual remuneration
A complete compensation and reward and performance evaluation system has been established in the
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Company. And a yearly salary scheme has been devised for directors, supervisors and senior executives.
The allowance of independent directors shall be decided by the shareholders’ general meeting in
accordance with the stipulation in the Articles of Association of the Company. A yearly evaluation shall
be carried out by the special performance evaluation department of the company for the senior
executives. The Board of Supervisors shall supervise their production operation work. And meanwhile
they shall also be reviewed and managed by human resource department of the Company.
Particulars about the annual remuneration for incumbent directors, supervisors and senior executives
of the company:
Remuneration amount Remarks
Name
（ten thousand Yuan）
Wang Feng 15 The traveling expense by three
independent directors for
Wang Dejie 12
attending the board meeting
Zhu Renwang 10 and general meeting of
Zhuo Wenyan 5 shareholders will be imbursed
by the company as execution
Liu Youpeng 5 fees in accordance with
Li Hao 5 Articles of Association.
Zhang Jialiang 6
Liang Jinhui 8
Lu Jianchun 9
Zhang Jianlin 9
Li Bin 9
Total 93
Director Mr. Wang Xiaojin, Mr. Liu Junde, Mr. Li Peihui, and the chief supervisor, Ms. Yuan Qinghua
do not collect the remuneration in the company, but in ANHUI GUJING GROUP CO., LTD.
4. Particulars about changes of directors, supervisors and senior executives during the report period.
On July 30, 2005, 2004 General Meeting of Shareholders was convened. At the meeting, election at
expiration of office terms of the Board of Directors and Board of Supervisors was made; as a result,
the fourth Board of Directors and Board of Supervisors come into being. At the last day of the General
Meeting, the 1st Meeting of the Fourth Board of Directors and the 1st Meeting of the Fourth Board of
Supervisors were convened respectively to elect and employ new senior executives for the Company.
For detail information, please refer to the declaration text revealed on China Securities Daily, Shanghai
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Securities Daily and Hong Kong Wen Wei Po Daily and http://www.cninfo.com.cn on August 2, 2005.
III. Particulars about employees
Up to December 31, 2005, the Company has 6,915 employees in the payroll and 3 retirees to bear the
expenses, and the composition of employees in active service is listed as below:
Classification Employee (p Proportion
ersons)
University graduate and above 198 2.86
College degree 440 6.36
Secondary education 750 10.85
Per education
Senior high school education 535 7.74
Junior high school education 4992 72.19
Total 6915 100
Operator 5598 80.95
Technical personnel 515 7.45
Per position Financial personnel 126 1.82
Sales personnel 370 5.35
Administrative personnel 306 4.43
(excusive of sales and financial
personnel)
Total 6915 100
Chapter V Corporate Governance Structure
I． Particulars about actual governance state of the Company
The Company constantly perfects corporate governance structure and standardizes its management
strictly in accordance with the Company Law, Securities Law as well as Standard for Governance of
Listed Companies. At present, the governance status of the Company basically complies with the
requirements of Standards for Governance of Listed Companies regulated by China Securities
Regulatory Commission.
The company has established quite perfect inner control system, including Articles of Association,
rules of procedure of shareholders’ general meeting, rules of procedure of board of directors, rules of
procedure of board of directors, detailed work rules of general manager, work system of independent
directors and corresponding detailed rules of implementation for strategy committee, audit committee,
nomination committee and remuneration and review committee of the board of directors. At the end of
the report period, according to relevant regulations of the supervision department and combining the
actual circumstances of the company, we organized all directors, supervisors, and senior executives to
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ANHUI GUJING DISTILLERY COMPANY LIMITED
study newly published Company Law and Securities Law and preliminarily revised the Articles of
Association and further perfected the inner control system of the company to achieve more scientific
corporate governance structure.
Corporate governance structure chart of the company:
1) Shareholders’ general meeting
2) Board of supervisors
3) Board of directors
4) Strategy committee
5) Audit committee
6) Nomination committee
7) Remuneration and review committee
8）Operation management
II. Particulars about independent directors’ performances
(1) Independent directors’ attendance to the board of directors of the Company.
Name Number of Times Number of Number of Number of Times Number of
Times of Time of of Voting by Times of
Personal Voting on Communication Absence
Attendance Commission
Zhuo 7 5 0 2 0
Wenyan
Liu 7 5 0 2 0
Youpeng
Li Hao 7 4 1 2 0
（2）Particulars about independent directors’ performances
The three independent directors credibly and diligently performed their duties strictly in accordance
with the stipulations and regulations of Guidance on Setting up Independent Directors System for
Listed Company, Stipulations on Emphasizing Public Shareholder’s Interests Protection , and Articles
of Association, and punctually attended the board of directors of the Company and actively supplied
independent suggestions for a series of matters such as production and operation, senior executives’
employment and interoperate transaction, etc. in respect of finance, laws and corporate governance, etc.
which helps board of directors make more scientific and objective decisions and really maintain the
legal rights and interests of the company and shareholders of negotiable shares.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
III. Particulars about five independences in business, personnel, assets, organizations and
financial affairs between this company and controlling shareholders.
The company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five
independences in business, personnel, assets, organizations and financial affairs, with separate
independent calculation, independent and complete business, independent operation ability, and
independent responsibilities and risks. Major shareholders can not surpass the shareholders’ general
meeting to directly or indirectly interfere with the company’s decisions and legal production and
operation activities, and there is no the same trade competition state of the same products between the
company and major shareholders.
IV. Particulars about assessment and incentive mechanism to senior executives during the report
period
Target yearly remuneration system for the senior executives of the company with considerably rational
performance assessment and incentive mechanism has been established in the Company. The decisions
management adopts the assessment and incentive measures in combination with the yearly
remuneration and economic indexes and management achievement. For healthy development of the
company as well as attracting more talents and keeping the stability of the senior executives, annually
establish the assessment index at the beginning of the year and sign a written responsibility of business
objective, decide the remuneration proportion at the yearend according to personal work performance
of the senior executives and completion of benefit target of the Company.
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter VI Highlights of the General Meeting
During the report period, the company convened two shareholders’ General Meeting. The particulars
are as below.
Meeting Convening Date Newspapers for Publishing Date
Publishing Meeting
Resolution
2004 General July 30, 2005 China Securities August 2, 2005
Meeting of Daily, Shanghai
Shareholders Securities Daily,
Hong Kong Wen
Wei Po Daily
2005 1st Provisional October 22, 2005 China Securities October 25, 2005
Shareholders’ Daily, Shanghai
Meeting Securities Daily,
Hong Kong Wen
Wei Po Daily
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ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter VII. Report of the Board of Directors
I. Discussion and analysis by management
In 2005, there are lots of troubles for the Company. Facing the disadvantages and serious market
competition, our company with all staff’s efforts actively overcame all difficulties with confidence, as
a result, we get rid of troubles, come out of the red, clear up stock risk of our company. During the
report period, the major business income reaches up 653 million Yuan, increasing by 8.6% than that of
the same period of the last year, and our net profit is up 5.22 million Yuan.
During the report period, our company adopts the following operation measures to realize our target:
1. Further adjust product structure to make our production line clearer. To supply a gap of super high
pricing wine, the company makes full use of its four glorifications honor to have brought forth
Honorable Spirit significant to distilled spirit field, forming Gujinggong Honorable Spirit,
Gujinggong Longterm Storage Spirit, Refined Gujinggong Spirit, and Longyun Gujinggong Spirit
series.
2. Strictly carry out our quality policy, put more attention to processing quality control, deepen
technology revolution, try to dissolve practical problem and improve quality management to ensure
our product’s quality.
3. Emphasize overall budget management and budget consciousness. With research on basic budget,
we will strengthen process management and research communication, and regularly check and
analyze the budget executions of all departments of the company, forming regular followup
supervision system and feedback system, strengthening all staff’s budget management
consciousness and promoting budget management.
4. Emphasize economic action to accelerate our lowcost operation and work out and strictly carry
out 2005 Economy Performance Opinion of Anhui Gujing Distillery Co., Ltd., organize different
departments to enact economy performance planning, and continually correct deflective operations
by followup survey and achieve good results.
Fames gained in 2005:
1. Safe and creditable brand on wine product quality for Gujinggong tenyear longterm spirit by
China Brewing Industry Association
2. Safe and creditable recommended brand on wine product quality for Longyun Gujinggong
spirit by China Brewing Industry Association
3. National Three Greens Project Bestselling Brand for 2005 on Gujinggong spirit by Office of
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ANHUI GUJING DISTILLERY COMPANY LIMITED
National Three Greens Project
4. Marker Plate of Grain Solid State fermentation Spirit by Liquor Committee of China Food
Industry Association
5. Gujingong brand was honored as “ Top 100 Most Valuable Famous Brands” ranking 30th , and
the first among the brands from Anhui province.
(I) Review on operation particulars during the report period
(1) Major business data variation
Unit: ,0000.00Yuan
Item 2005 2004 Range of
variation
Major business 65,366.26 60,174.63 8.63%
income
Major business 14,598.34 18,361.91 -20.50%
profit
Net profit 522 -26,262.09 －
Analysis: The net profit of major business profit reduces by 20.50%, resulting from the unexpected
serious increase of major business tax and additional tax during the report period.
(2) Major business scope and operation particulars
Primary scope of business of the Company includes the production and sales of Gujing wine,
Gujinggong wine, Laobada and Yetaiyang series alcoholic products including two fragrant
types of aroma and faint scent, and the company owns very complete product system with
spirit content from 60 to 30 degree at the high, medium and low price. Our major products
include Gu Jing Gong Honorable Spirit, Gujing Distillery Longterm Storage Spirit, Refined
Gujing Distillery Spirit, and Longyun Gujing Distillery Spirit.
(A) Table of Subindustries and subproducts of main business
Unit: Yuan(in RMB)
Subindustries of Main Business
Increase Increase Increase
Subindustry Rate of or or or
Main business Main business
or Sub gross profit Decrease Decrease Decrease
income profits
products (%) of Main of Main of Rate of
Business I business p gross prof
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ANHUI GUJING DISTILLERY COMPANY LIMITED
ncome rofits over
it over the
over the the
previous
previous previous
year (%)
year (%) year (%)
Wine 589,446,694.56 253,756,757.77 43.05% 8.22% 7.21% -0.41%
Others 64,215,940.19 12,431,888.31 19.36% 12.47% 66.81% 6.31%
Subproducts of Main Business
High grade 389,198,850.59 207,526,392.91 53.32% -4.74% 0.18% 2.62%
wine/spirit
Medium grade 165,317,096.36 48,158,326.36 29.37% 42.12% 69.06% -0.65%
wine/spirit
Low grade 34,930,747.65 -2,327,961.50 -6.66% -15.60% -384.33% -8.69%
wine/spirit
(B) Subdistricts of main business
Increase/decrease of main business income
Subdistrict Main business income
over the previous year
North China 135,459,218.74 7.29%
South China 106,370,374.14 -8.44%
Central China 347,617,101.68 15.02%
(C) Main suppliers and customers
During the report period, the total purchase amount of the first five suppliers of the company is RMB92.02 million,
accounting for 36% of the total purchase amount;
During the report period, the total sales income of the first five customers of the company is
RMB97.27 million, accounting for 14.8% of the total main business income of the company.
（3）Company’s assets particular during the report period and major accounting data analysis
(A) Assets particular
Item Proportion in total Increase/decrease compared
assets with the previous year
Accounts receivable 2.16% -0.4%
Inventory 41.94% -0.87%
Long-term equity 2.62% 0.01%
investment
Fixed assets 33.81% 4.42%
On the stocks project 1.61% -0.32%
23
ANHUI GUJING DISTILLERY COMPANY LIMITED
Short-term loan 1.5% -3.69%
Long-term loan 5.25% 3.17%
(B) Major financing data Unit：RMB ten thousand
Item 2005 2004 Change
Operation expenses 5,230.86 8,044.57 -34.98%
Management 7,708.26 14,583.51 -47.14%
expenses
Financing expenses 506.73 476.85 6.27%
Income tax 1,157.17 7,466.07 -84.50%
Major business tax 12,020.53 6,052.80 98.59%
and additions
(4) Cash flow analysis
（ A ） Particulars of cash flow composition caused by operation activities
Unit：Yuan (in RMB)
Item 2005 2004 Change Reason
Cash from 766,166,211.89 738,068,666 3.81%
commodity
distribution and
supplied service
Cash from other 18,531,677.72 13,117,390 41.28% Increase of
activities deposit from
relating to customers
operation
Cash paid for 389,729,662.37 416,687,395 -6.47%
purchasing
commodities and
accepting labor
Cash paid for 89,093,074.27 75,884,576 17.41% Increase of
employees employees’
insurance
expense
Cash paid for 174,728,776.71 149,850,757 16.60% Parent
various taxes company’s
sales tax
increase
caused by
adjusting
distribution
system
Cash paid for 92,900,426.13 93,228,119 -0.35%
other activities r
24
ANHUI GUJING DISTILLERY COMPANY LIMITED
elating to
operation
（ B ） Particulars of cash flow composition caused by investment
Unit：Yuan (in RMB)
Item 2005 2004 Change Reasons
Cash from withdrawal 24,000,000 8,486,212 182.81% Withdrawal
of investment capital from
national debt
investment
Net cash from 4,294,647.66 1,931,846 122.31% Disposal income
disposing fixed of wasted
assets, intangible assets
assets and other
long term assets
Cash from other 6,452,360.15 12,285,257 -47.48% Balance from
activities relating withdrawal
to investment assets exchange
Cash paid for 83,260,735.91 74,100,354 12.36%
purchasing and
building fixed
assets, intangible
assets, and other
assets
（ C ） Particulars of cash flow composition caused by financing activities
Unit：Yuan (In RMB)
Item 2005 2004 Change Reasons
Cash from loan 95,000,000 150,000,000 -36.67% Refund
of due
loan
Cash paid for refund 95,900,000 100,000,000 -4.10% Loan
increase
in the
report
period
Cash paid for 7,991,468.19 5,588,181 43.01%
distributing dividends,
profits, or payment of
interest
(5) Operation and Performance Analysis of Major Controlling Companies and Equity Participated Companies
(A) Bozhou Gujing Sales Company
25
ANHUI GUJING DISTILLERY COMPANY LIMITED
Bozhou Gujing Sales Company has RMB84,864,400 of registered capital and the Company holds 99% of total shares,
which is mainly engaged in the sales of liquor and trade service.
At the end of the report period, Bozhou Gujing Sales Company has total assets of RMB420,618,300 and main
business income of RMB491,415,900 and realized net profits of RMB7,101,600.
(B) Bozhou Gujing Motor Transport Company
Bozhou Gujing Motor Transport Company has registered capital of RMB6,945,000and the Company holds 99% of
total shares, which mainly provides transport service.
At the end of the report period, Bozhou Gujing Motor Transport Company has total assets of RMB10,455,100 and
main business income of RMB1,744,000 and realized net profits of RMB22,700 during the report period.
(C) Bozhou Gujing Glass Product Co., Ltd.
Bozhou Gujing Glass Product Co., Ltd. has registered capital of RMB66,460,000 and the Company holds 99% of
total shares, which is mainly engaged in production and sales of glass products.
At the end of the report period, Bozhou Gujing Glass Product Co., Ltd. has total assets of
RMB 73,503,400 and main business income of RMB48,615,600 and realized net profits of RMB981,100.
(D) Bozhou Gujing Printing Co., Ltd.
Bozhou Gujing Printing Co., Ltd. has registered capital RMB27.26 million and the Company holds 99.96% of total
shares, which is mainly engaged in printing and sales of packing products.
At the end of the report period, Bozhou Gujing Printing Co., Ltd. has total assets of RMB31,682,400 and main
business income of RMB19,616,600 and realized net profits of RMB452,400.
(E) Anhui Laobada Distillery Co., Ltd.
Anhui Laobada Distillery Co., Ltd. has registered capital of RMB30 million and the Company holds 93% of total
shares, which is mainly engaged in sales of Laobada series alcoholic products.
At the end of the report period, Anhui Laobada Distillery Co., Ltd. has total assets of RMB30,693,700 and main
business income of RMB3,292,200 and realized net profits of RMB156,800.
(F) Bozhou Gujing Package Material Co., Ltd.
Bozhou Gujing Package Material Co., Ltd. has registered capital of RMB19,168,800, mainly dealing with the
production and sales of package material, and the Company holds 99.48% of total shares.
At the end of the report period, Bozhou Gujing Package Material Co., Ltd. has total assets of 22,533,300 and main
business income of RMB1,851,300 and realized net profits of RMB15,500.
(G)Anhui Gujing Yetaiyang Distillery Sales Co., Ltd.
Anhui Gujing Yetaiyang Distillery Sales Co., Ltd. has registered capital of RMB3.6 million and the Company holds
92% of total shares, which is mainly engaged in sales of Yetaiyang series alcohol products.
At the end of the report period, Anhui Gujing Yetaiyang Distillery Sales Co., Ltd. has total assets of RMB2,758,400
and main business income of RMB1,957,300 and loss of RMB891,100.
(H)Bozhou Gujing Vegetable Oil Co., Ltd.
Bozhou Gujing Vegetable Oil Co., Ltd. has registered capital of RMB.500,000 and the Company holds 80% of total
shares, which is mainly engaged in manufacturing and sales of Gujing Vegetable Oil.
At the end of the report period, Bozhou Gujing Vegetable Oil Co., Ltd. has total assets of RMB1,325,500 and main
business income of RMB1,841,200 and realized net profits of RMB264,400.
(I)Hua’an Securities Co., Ltd.
Hua’an Securities Co., Ltd. has registered capital of RMB1,705,000,000 and the Company holds 5.87% of total
shares, which is mainly engaged in securities investment and investment bank business, etc.
II. Prospect
1. Alcohol industry development trend and market competition pattern are shown as follows:
(1) Brand operation will take the lead.
(2) The invasion of overseas brand and capital will increase.
(3) Local middle grade and low grade spirit will burst in.
Market competition:
(1) Consumption group reducing and consumption philosophy change.
(2) Spirit competition will focus on the terminal and localized operation has attacked on spirit.
(3) Local protectionism and block is still serious and the fake spirit seriously harms the top spirit enterprises
26
ANHUI GUJING DISTILLERY COMPANY LIMITED
and consumers.
(4) Marketing order is out of control, disorder circulation is very serious, and the market
standardization is in need.
2. Development strategy
To cater for competition, our company has made the following strategies to speed up development
and strive for more market share.
(1) Insist on optimization development and development optimization, accelerate the process of
“adjustment, promotion, alteration, and transferring”, optimize talent structure, improve our
product quality, solidify and increase backbone industry and steadily improve contribution
ability of accessory industry;
(2) Insist on overall perform innovation strategy, improve initiative innovation ability, combine
technology innovation and management innovation, system innovation, and concept
innovation, accelerate the construction of enterprise informationization, realize optimized
distribution of resources and information share for cooperation effects;
(3) Insist on the combination of brand drive and product promotion, build different and
characteristic brand, overall improve brand image, enhance brand driving effect, emphasize
market construction and product distribution, realize the breakthrough of key products and
major market, and promote enterprise’s economic benefit.
3. Operation plan for the new year
(1) In the coming year, the company will still insist on marketing adjustment, carry out the policy
of combination of brand driving and product promotion, well dispose the relationship between
market and profit, enhance brand building, strengthen quality management, and improve
enterprise’s gaining ability.
(2) Well control overall budget management, emphasize process control, ensure execution effect, and strengthen
various works and management;
(3) Further enhance the development and management of human resources, perfect pressure transferring system,
emphasize check execution, improve staff’s quality, optimize talent structure, and build a harmonious team;
and
(4) With the advantage of the reform of enterprise’s property system, standardize enterprise operation, activate
enterprise system, enhance crisis management, further promote the marketing operation in legal and
democratic way.
4. Particulars of the need, application plan, and source for development fund.
The need for development fund mainly lie in daily operation demands and investment for subsidiary; and the
27
ANHUI GUJING DISTILLERY COMPANY LIMITED
capital mainly sources from our capital in hand and bank loan.
5. Possible risks against company’s development
(1) Taxation risk:
Spirit industry always plays an important part in taxation and the taxation proportion is a little higher, so our
country may adjust spirit industry policy. In 2005, the taxation trouble has increased burdened us seriously, so if
spirit taxation still increase, our company’s development will be seriously affected.
(2) Market competition risk.
It is confronted with most top alcohol enterprises. The disorder development, unreasonable product structure,
product supply exceeding demand, low industry concentration, larger number of small sized enterprises, and out
ofdate equipment and technology result in disorder and more fierce competition, so market pressure may attack
our company at any time.
(3) Cost increase risk.
With the opening of grain market, grain price is changable; at the same time, our state will incline to agriculture,
so it’s impossible that grain price will be increased in large degree; and international energy supply becomes
more and more serious, so the grain and energy supply may possibly result in the risks of our cost increasing.
But, our company will actively adjust industry structure, and bring forth a series of salable products with
powerful gaining ability; at the same time, we will further exploit our market and increase our market share with
active and flexible marketing strategy, and prevent the above risks with all efforts.
III. Investment during the report period
(1) Raised funds investment
No raised fund has been put into investment in this report period.
(2)Nonraised fund investment in the report period
Please refer to Chapter 11 Financing Report, Accounting Statement Footnote (6) Accounting Statement, Major
Project Annotation, Item 17, Work in Process for Nonraised fund investment.
IV. Routine Work of the Board of Directors
1. Meetings of the Board of Directors
(1) 16th Session of the Third Board of Directors
Date of meeting: April 11, 2005
Resolution:
(a) Approved that the total amount of the state debt investment being conducted by Minfa Securities Co., Ltd and
Jianqiao Securities Co., Ltd. reserved for bad debts provision;
(b) Approved the Subsidiary, Bozhou Gujing Sales Company, to supplement 2004 payable income tax; and
(c) Approved the preparation of reducing the amortization amount for merchandise inventory and package;
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and Hong
Kong Wen Wei Po on April 13, 2005.
(2) Special Meeting of the Third Board of Directors
Date: April 28, 2005
Resolution: Examined and adopted that the Publication of 2004 Annual Report and 2005 First Quarter Report
were delayed to June 30, 2005.
28
ANHUI GUJING DISTILLERY COMPANY LIMITED
(3) 17th Session of the Third Board of Directors
Date: June 27, 2005
Resolutions:
(a) Examined and adopted the Protocol on Investigation and Adjustment of the Important Accounting
Mistakes in 2002 and 2003;
(b) Examined and adopted 2004 Annual Report and Annual Report Summary (Including the Report of the
Board of Directors);
(c) Examined and adopted 2004 Finance Settlement Report;
(d) Examined and adopted the Protocol on 2004 Profit Distribution and on addition of equity shares;
(e) Examined and adopted the First Quarter Report of 2005
(f) Examined and adopted the Protocol on Revising Articles of Association;
(g) Examined and adopted the Protocol on General Election and the Candidate Nomination for the Fourth
Board of Directors;
(h) Examined and adopted the Protocol on Change the General Accountant of the Company;
(i) Examined and adopted the Protocol on Changing the Securities Representative of the Company;
(j) Examined and adopted the Special Explanation on the CPA’s Failure to Show Advisable Auditing Report
on the Financing Report of the Company;
(k) Examined and adopted the Protocol on the Special Disposal About Application Company Stock; and
(l) Examined and adopted the Protocol on Convening 2004 General Meeting of Shareholders.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and
Hong Kong Wen Wei Po on June 30, 2005.
(4) 18th Session of the Third Board of Directors
Date: July 12, 2005
Resolutions:
(a) Examined and adopted the Protocol on Adjusting the Allowance for Independent Director; and
(b) Examined and adopted the Protocol on the Daily Associated Transaction between the Company and
Bozhou Gujing Power Co., Ltd.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily
and Hong Kong Wen Wei Po on July 13, 2005.
(5) 1st Session of the Fourth Board of Directors
Date: July 30, 2005
Resolutions:
(a) Examined and adopted the Protocol on Electing the Fourth Board Chairman of the Company;
(b) Examined and adopted the Protocol on Electing Special Committee of the Board of Directors;
(c) Examined and adopted the Protocol on Employing the General Manager and the Secretary of the Board of
Directors; and
(d) Examined and adopted the Protocol on Employing Senior Executives and General Accountant.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and Hong
29
ANHUI GUJING DISTILLERY COMPANY LIMITED
Kong Wen Wei Po on August 2, 2005.
(6) 2nd Session of the Fourth Board of Directors
Date: August 24, 2005
Resolutions:
(a) Examined and adopted the Resolution Investigation and Adjustment of the Important Accounting Mistakes
in 2004;
(b) Examined and adopted the Resolutions on Half Year Annual Report of 2005 and the Summary of Half Year
Annual Report of 2005.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and
Hong Kong Wen Wei Po on August 27, 2005.
(7) 3rd Session of the Fourth Board of Directors
Date: September 20, 2005
Resolutions:
(a) Examined and adopted the Protocol on Resigning and Employing Auditing Institute;
(b) Examined and adopted the Associated Transactions Between the Company and Anhui Gujing Group Co.,
Ltd; and
(c) Examined and adopted the Protocol on Convening 2005 First Special General Meeting of Shareholders.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and
Hong Kong Wen Wei Po on September 21, 2005.
(8) The 4th session of the Fourth Board of Directors
Date: October 21, 2005
Resolutions:
(1) Examined and adopted the Third Quarter Report of 2005;
(2) Examined and adopted the Protocol on Establishing Bozhou Gujing Package Material Co., Ltd.
Resolution disclosing: The resolutions were published in China Securities Daily, Shanghai Securities Daily and
Hong Kong Wen Wei Po on October 22, 2005
2. Execution of Resolutions of Shareholders’ General Meetings by the Board of Directors
During the reporting period, the Board of Directors of the Company passed the following resolutions strictly in
accordance with the Company Law, Securities Law, and the Articles of Association of the Company and in accordance
with the resolution and authorization:
(1) Conducted general election of Board of Directors of the Company;
(2) Carefully carried out various daily associated transactions with associated partners; and
(3) Dealt with the matters concerning the resign and employment of Auditing Institute.
V. Profit Distribution Plan or Plan for Transfer of Capital Reserve to Increase Capitalization
According to the audit in 2005 by Reanda Certified Public Accountants, the accountant of the Company, the
Company achieved net profit 5,088,349.68 Yuan in 2004, plus RMB 100,306,480.47 Yuan of undistributed profit
of the previous year, the profit for distribution for the year is RMB 95,218,130.79 Yuan; according to the audit by
BDO Reanda Certified Public Accountants Gold, an international accountant, the Company achieved net profit
RMB5,219,403.32 in 2005 plus RMB92,903,000 Yuan of undistributed profit at the beginning of the previous year,
30
ANHUI GUJING DISTILLERY COMPANY LIMITED
the profit for distribution for the year is RMB87,683,596.68 Yuan. In accordance with the stipulation of Articles of
Association, when the results of two auditing report are not coincident, the result with less undistributed profit shall
be regarded as the standard of dividend distribution, so the profit for distribution for this year is RMB 95,218,130.79
Yuan.
Considering that the Company gets a big loss in previous years, the 5th session of 4th Board of Directors observed and
proposed that the net profit of this year shall be used to make up the losses of the previous years and that the company
shall have no profit distribution and the capitalization of public reserves this year.
The distribution plan is subject to the observing and approval of the General Meeting of 2005.
Chapter VIII Report of the Board of Supervisors
(I) Meetings and resolutions of the Board of Supervisors
All members of the Board of Supervisors of Anhui Gujing Distillery strictly followed the Company Law of the
People’s Republic of China, the regulations on IPO, the Articles of Association, the Procedural Rules of the Board of
Supervisors, and executed its responsibilities as stated in the Articles of Association based on the principle of honest
and credit to actively protect the interests of the company and all the shareholders.
During the report period, the Board has held four meetings, and the meeting notices, convening and solutions comply
with the legal procedures. The details are shown as below:
(1) The 9th session of the 3rd Board of Supervisors
Resolutions:
1. Having approved the Company to withdraw the bad debts reserves from the total amount of the national
debts investment with RMB90.53 million of book value in Minfa Securities Co., Ltd. Hengxin Securities
Co., Ltd. and Capital Bridge Securities Co., Ltd. ended Dec. 31, 2004;
2. Having approved Bozhou Gujing Sales Co., Ltd. as the holding subsidiary to make up income tax payable
of RMB54,336,413.66 in 2004.
3. Having approved the Company to withdraw a larger amount of depreciation reserves for the stock goods
and packages.
(2) The 10th session of the 3rd Board of Supervisors
Meeting resolutions:
1. Having examined and adopted the report of the Board of Supervisors up to 2004;
2. Having examined and adopted the Annual Report and its Summary of 2004;
3. Having examined and adopted the planning of no annual profit distribution and conversion of surplus reserve
into share capital in 2004;
4. Having examined and adopted the special notes of the Board of Supervisors concerning the audit report
issued by the certified accountants showing their incapability of giving their opinions on the Annual Report of
2004;
5. Having examined and adopted the proposal concerning the election of the Board of Supervisors and the
nomination of the candidates of the 4th Board of Supervisors.
(3) The first session of the 4th Board of Supervisors
Resolutions:
Having examined and adopted the proposal of electing Ms. Yuan Qinghua as the supervisor general of the 4th
Board of Supervisors.
(4) The 2nd session of the 4th Board of Supervisors
31
ANHUI GUJING DISTILLERY COMPANY LIMITED
Resolutions:
1. Having examined and adopted the proposal of tracing and adjustment of accounting errors of 2004;
2. Having examined and adopted the Annual Report and Halfyear report summary for the year 2005.
（II）Independent Opinions Expressed by the Board of Supervisors on Related
Matters
1. Legal Management of the Company
Except that the failure of punctual disclosure of the Annual Report of 2004 breaches the relevant laws and
regulations, the Company is legally managed strictly in accordance with Company Law, Securities Law and Code of
Corporate Governance for Listed Companies. The Company has legal internal decisionmaking procedures and has
established more perfect internal control system. During the report period, the directors and senior managers of the
Company earnestly performed their duties and neither did damage to the interests of the Company and shareholders
nor breached the national laws and regulations and the Articles of Association.
2. Audit of Financial Status of the Company
In 2005, the standard Financial Audit Report 2005 of ANHUI GUJING DISTILLERY COMPANY LIMITED
without any reserved opinions issued by Reanda Certified Public Accountants and BDO Renda Certified Public
Accountants Gold truly reflected the Company’s financial status ended Dec. 31, 2005 and business results of
2005, and the financial receipts and expenditure accounts are clear, and the accounting and accounts
management is in accordance with the relevant regulations.
3. Audit of Utilization of Raised Fund
The company did not raise any fund during the report period, all of the fund raised in the previous time has been
used up in the previous fiscal year and there is no raised fund left over this period.
4. The acquisition and sales of assets
During the report period, the pricing for acquisition and sales of assets are reasonable, no inside transaction or
acts are found impairing the interests of the shareholders or causing the assets loss.
(5) Associated transactions
The associated transactions incurred in the Company are mostly the daily associated transactions between the
Company and controlling shareholders and their subsidiaries, the pricing was fair and reasonable and is in
conformity with related laws, regulations and Articles of Association of the Company The company performed
the obligation in information disclosure according to the requirements of Shenzhen Stock Exchange and the
Articles of Association of the Company.
Chapter IX Substantial Matters
I. Substantial lawsuits or arbitration matters
Bozhou Gujing Waste Reclamation Co., Ltd. (hereinafter referred to as “Gujing Reclamation”), which is the holding
subsidiary company of this comany, utilized its own fund RMB50 million to purchase national debt via the securities
sales department located in Caodong branch road, Shanghai, subordinate to Capital Bridge Securities Company
Limited (hereinafter referred to as “Capital Bridge Securities”) on Oct. 21, 2003. On April 12, 2004, the Capital
Bridge Securities paid Gujing Reclamation RMB10 million as the deposit of the national debt. Thereafter, Due to the
internal cause of Capital Bridge Securities, Gujing Reclamation could not give its orders to operate RMB 40 million
of deposit of the national debt in its account, therefore, Gujing Reclamation negotiated with Capital Bridge Securities
for many times with a view of exercising the operation rights to the account of the deposit of the national debt and
was refused by Capital Bridge Securities. On Jan. 20, 2005, Gujing Reclamation took action with Anhui Bozhou
Intermediate People’s Court (hereinafter referred to as “Bozhou Intermediate Court” ) to request Capital Bridge
Securities to refund RMB 40 million of deposit of the national debt and bear the legal cost of such case.
32
ANHUI GUJING DISTILLERY COMPANY LIMITED
On June 16, 2005, Bozhou Intermediate Court gave the (2005) BMECZ No.009 civil judgment which orders Capital
Bridge Securities to refund RMB 40 million of deposit of the national debt to Gujing Reclamation and bear the
acceptance fee RMB252,012 and the litigant preservation RMB200,520 within 5 days from the effective date of the
judgment.
For Capital Bridge Securities did not appeal in the time limit as stated by law after receiving (2005) BMECZ No.009
civil judgment, such civil judgment took effect. For Capital Bridge Securities did not perform its liabilities in the time
limit as stated in the judgment, Gujing Reclamation made an application for compulsory execution with Bozhou
Intermediate Court on July 28, 2005, and Bozhou Intermediate Court accepted such application.
In the course of enforcement, both parties reached a compromise agreement, Capital Bridge Securities agrees to
refund RMB24 million of national debt investment funds to Gujing Reclamation and bear RMB1 million of legal cost
and convert the surplus of RMB16 million into the shares of Capital Bridge Securities. At present, Gujing
Reclamation has received RMB24 million of national debt investment funds and the other compromise affairs are
being carried out.
The details of such lawsuit were disclosed in China Securities Daily, Shanghai Securities Daily and Hong Kong Wen
Wei Po on February 25, Mar. 29, July 5 and Aug. 10, 2005.
II. Assets purchase and sale and assets reorganization
In the report period, there is no assets purchase and sale and assets reorganization occurring in this Company.
III. Important associated transactions
(1) Daily associated transactions
Unit: RMBten thousand Yuan
Proportion Affect on
Associated Company Transaction Price of Price of Amount of among profit of the
content transaction market transaction similar Company
transactions
(average) (average) (%)
0.69/500g 0.69/500g null
Anhui Gujing Group Co., Purchase of 1,437 16.83％
Ltd. wheat
As the As the null
Bozhou Gujing Purchase of above above 6,398 74.93％
Comprehensive Service wheat
Co., Ltd.
0.41/Wh 0.41/Wh null
Bozhou Gujing Electricity for 1,662 73.96％
Thermoelectricity Co., production use
Ltd.
100/ton 120/ton null
Bozhou Gujing Gas for
Thermoelectricity Co., production use
Ltd.
The above associated transactions can ensure the timely and successive needs of raw materials for daily production
and operation of the Company and can as well offer certain supports by preferential price. The associated transactions
have not affected the independence of the company, and the company promises to purchase production material by
price to guarantee the profits of medium and small shareholders.
The difference between the production gas price and market price indicates that the price we get is lower than the
market price is because of our large comsumption, short distance from the gas source and low spoilage. ..
(2) The Company had no other important associated transactions
VI. Performance of Important Contracts
1. During the report period, the Company did not entrust, contract, lease other companies’ assets, and no assets of the
Company was entrusted, contracted, leased by other companies.
2. During the report period, the Company did not provide any guaranty to any other companies.
33
ANHUI GUJING DISTILLERY COMPANY LIMITED
3. During the report period, the Company did not entrust any other companies to manage its cash assets.
4. During the report period, the Company did not sign any other important contracts.
V. Comitments made by the Company and shareholders holding more than 5% (including 5%) of the shares of the
Company during the report period
1. Splitshare reform
After communication with the controlling shareholders, the company promises to strictly follow the arrangement of
Shenzhen Stock Exchange and the actual controller to start the splitshaere reform procedure by the expecting date of
May 31, 2006.
2. No other comitments made by the Company and shareholders holding more than 5% (including 5%) of the shares
of the Company.
VI. Appointment and dismissal of Certified Public Accountants
During the report period, because Shanghai Deloitte Touche Tohmatsu CPA Ltd. and Hong Kong Deloitte Touche
Tohmatsu CPA Ltd. (hereinafter referred to as “Deloitte Touche” gave no reply on the reappointment to the Company,
to not influence the audit work of 2005, the first temporary shareholders’ general meeting in 2005 held on Oct. 22,
2005 gave a resolution of appointing Reanda Certified Public Accountants and BDO Renda Certified Public
Accountants Gold as the domestic and foreign auditors of the Company in 2005 instead of Deloitte Touche. During
the report period, the Company paid a total amount of RMB500,000 as audit fee to Reanda Certified Public
Accountants and BDO Renda Certified Public Accountants Gold.
VII. Inspection and punishment by securities regulation authorities
For the company did not disclose the yearly report 2004 in the specified time, which violated the Rules of Shenzhen
Securities Exchange for Listed Companies, on May 26, 2005, the company and all members of the 3rd Board of
Directors are condemned in public by Shenzhen Securities Exchange.
For the company did not disclose the yearly report 2004 in the legal period, which was suspected of violating the
securities laws and regulations, China Securities Regulatory Commission determined to register and investigate for
the company on May 31, 2005.
The details were published in China Securities Daily, Shanghai Securities Daily and Hong Kong Wen Wei Po on
May 27 and June 1, 2005.
VIII. Other Substantial Events
During the report period, the Company had no other substantial events undisclosed.
34
ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter X Financial Report
I. Audit report
AUDITORS’ REPORT
BDO Reanda (2006) No.190B
TO THE SHAREHOLDERS OF
ANHUI GUJING DISTILLERY COMPANY LIMITED
安徽古井贡酒股份有限公司
(a joint stock limited company incorporated
in the People’s Republic of China)
We have audited the accompanying consolidated balance sheet of Anhui Gujing Distillery Company Limited, (“the
Group”) as at 31st December 2005 and the related consolidated statements of income, cash flows and changes in
equity for the year then ended. These financial statements are the responsibility of the Group’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, the evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements presents fairly, in all material aspects, the financial position of the Group as at
31st December 2005 and the results of its operations and its cash flows for the year then ended, in accordance with
International Financial Reporting Standards.
BDO Reanda
Certified Public Accountants
Beijing, China
25th, February 2006
35
ANHUI GUJING DISTILLERY COMPANY LIMITED
II. Accounting statement and its notes
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
NOTES 2005 2004
RMB'000 RMB'000
(Restated)
Revenue 5 653,662 601,746
Sales taxes (120,205)
(60,528)
Cost of sales (387,474)
(357,599) _________ ________
Gross profit 145,983 183,619
Other operating income 21,986 14,538
Distribution costs (52,309)
(80,446)
Administrative expenses (77,182)
(140,032)
Other operating expenses (16,716)
(14,830)
Income from investments 6 1,448 871
Impairment of investments
(65,851)
Impairment loss for investments held for trading _________ (74,652)
________
Profit from operations 7
23,210 (176,783)
Finance costs 8 (6,503)
(5,588)
Gain on disposal of a subsidiary _________ ________
Profit (Loss) before tax
16,707 (182,371)
Income tax expense 9 (11,572)
(74,661) _________ ________
Profit (Loss) for the year 5,135
(257,032) _________ ________
Attributable to:
Equity holders of the parent 5,219
(255,927)
Minority interest
(84) (1,105)
_________ ________
5,135
(257,032) _________ ________
Earnings per share 10 0.02
_________ (1.09)
________
36
ANHUI GUJING DISTILLERY COMPANY LIMITED
The accompanying notes form an integral part of the Financial Statements.
37
ANHUI GUJING DISTILLERY COMPANY LIMITED
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2005
NOTES 2005 2004
RMB'000 RMB'000
(Restated)
ASSETS
Noncurrent assets
Property, plant and equipment 11 474,577 423,220
Land use rights 12 45,724 46,379
Trademarks 13 1,878 5,633
Other investments 15 34,149
_________ 34,149
________
556,328
_________ 509,381
________
Current assets
Inventories 16 560,201 577,630
Trade and other receivables 116,540 109,951
Amounts due from related parties 26 120 6,596
Investments held for trading 17 500 24,500
Bank balances and cash 102,168
_________ 121,327
________
779,529
_________ 840,004
________
Total assets 1,335,857
_________ 1,349,385
________
_________
EQUITY AND LIABILITIES
Capital and reserves
Share capital 19 235,000 235,000
Reserves 20 573,252
_________ 568,033
________
Equity attributable to equity holders of the parent 808,252 803,033
Minority interests 2,217
_________ 2,301
________
Total equity 810,469
_________ 805,334
________
Longterm liabilities
Bank loans – due after one year 21 70,100
_________ 28,100
________
Current liabilities
Trade and other payables 194,861 229,407
Income tax liabilities 133,030 153,591
Other tax liabilities 23 81,183 45,655
Amounts due to related parties 26 3,214 1,398
Bank loans – within one year 21 43,000
_________ 85,900
________
Total liabilities 455,288
_________ 515,951
________
Total equity and liabilities 1,335,857
_________ 1,349,385
_________
The accompanying notes form an integral part of the Financial Statements.
38
ANHUI GUJING DISTILLERY COMPANY LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2005
Attributable to equity holders of the parent
Statutory Statutory
Share Capital surplus public welfare Retained Minority
capital surplus reserve reserve profits Total interest Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
YEAR ENDED 31
DECEMBER 2004
Balance at 1 January 2004
As originally stated 235,000 521,647 69,415 69,415 180,876 1,076,353 22,347 1,098,700
Prior year adjustment 229 230 (17,852) (17,393) (17,393)
As restated 235,000 521,647 69,644 69,645 163,024 1,058,960 22,347 1,081,307
Net Profit (loss) for the year (255,927) (255,927) (20,046) (275,973)
Balance at 31 December 2004 235,000 521,647 69,644 69,645 (92,903) 803,033 2,301 805,334
YEAR ENDED 31
DECEMBER 2005
Balance at 1 January 2005
As originally stated 235,000 521,647 69,415 69,415 8,134 903,611 2,301 905,912
Prior year adjustment 229 230 (101,037) (100,578) (100,578)
As restated 235,000 521,647 69,644 69,645 (92,903) 803,033 2,301 805,334
Net profit for the year 5,219 5,219 (84) 5,135
Balance at 31 December 2005 235,000 521,647 69,644 69,645 (87,684) 808,252 2,217 810,469
The accompanying notes form an integral part of the Financial Statements.
39
ANHUI GUJING DISTILLERY COMPANY LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
2005 2004
RMB'000 RMB'000
(Restated)
OPERATING ACTIVITIES
Profit (loss) from operations 23,210 (176,783)
Adjustments for:
Allowance for doubtful debts (2,063) 6,033
Provision for inventory 3,968 58,580
Interest received (1,448) (871)
Impairment of investment 65,851
Impairment loss for investments
held for trading 74,652
Depreciation of property, plant and equipment 45,858 42,057
Amortization of intangible assets 4,933 6,884
(Gain) loss on disposal of property, plant
and equipment (106) (421)
_________ ________
Operating cash flows before movements
in working capital 74,352 75,982
Increase in inventories 13,461 (52,287)
Decrease (increase) in trade and other receivables (10,978) 3,200
Decrease (increase) in amounts due from related parties 6,476 61
Increase in trade and other payables (51,724) 33,103
(Increase) decrease in other tax liabilities 35,528 (21,057)
Decrease (increase) in amounts due to related parties 1,816 (2,512)
_________ ________
Cash generated from operations 68,931 36,490
Income taxes paid (32,133) (21,825)
Interest paid (6,503) (5,588)
_________ ________
Net cash from operating activities 30,295 9,077
_________ ________
(Continued)
40
ANHUI GUJING DISTILLERY COMPANY LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005continued
2005 2004
RMB'000 RMB'000
INVESTING ACTIVITIES
Interest received 1,448 871
Purchase of property, plant and equipment (84,749)
(74,100)
Proceeds from disposal of property,
plant and equipment 4,295 1,931
Disposal of a subsidiary 6,452 12,285
Proceeds from the disposal of investment
held for trading 24,000 8,486
_________ ________
Net cash used in investing activities (48,554)
(50,527)
_________ ________
FINANCING ACTIVITIES
Repayments of borrowings (95,900)
(100,000)
New bank loans raised 95,000 150,000
Investments received from minority
shareholders of subsidiaries 478
_________ ________
Net cash from (used in) financing activities (900)
50,478
_________ ________
Net increase (decrease) in cash
and cash equivalents (19,159)
9,028
Cash and cash equivalents at
beginning of year 121,327 112,299
_________ ________
Cash and cash equivalents at
end of year
Bank balances and cash 102,168 121,327
_________ _________
41
ANHUI GUJING DISTILLERY COMPANY LIMITED
The accompanying notes form an integral part of the Financial Statements.
42
ANHUI GUJING DISTILLERY COMPANY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
1．GENERAL
Anhui Gujing Distillery Company Limited (the “Company”) was incorporated in the People’s
Republic of China (the “PRC”) on 30 May 1996 as a joint stock limited company. Its shares are
listed on the Shenzhen Stock Exchange. The principal activities of the Company and its
subsidiaries (the “Group”) are the manufacture and sale of distilled spirits, wine, distilling
facilities, packaging material, feeds, bottles and vegetable oil. The Company’s holding company
is Anhui Gujin Group Limited (“AGGL”).
2．PRESENTATION OF FINANCIAL STATEMENTS
The Company and its subsidiaries maintain their accounting records and prepare their statutory
financial statements in accordance with the enterprise accounting standards and regulations of the
PRC(“PRC GAAP”).
These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”). The accounting policies and bases adopted in the
preparation of the statutory financial statements differ in certain respects from IFRS. The
differences arising from the restatement of the results of operations and the net assets for
compliance with IFRS are adjusted in the consolidated financial statements but are not taken up in
the accounting records of the Group.
At the date of authorization of these financial statements, the following Standards and
Interpretations were in issue but not yet effective:
IFRS 6 Exploration for and Evaluation of Mineral Resources
IFRS 7 Financial Instruments Disclosure
IFRIC 3 Emission Rights
IFRIC 4 Determining whether an Arrangement contains a Lease
IFRIC 5 Right to Interests Arising from Decommissioning, Restoration and Environmental
Rehabilitation Funds
IFRIC 6 Liabilities Arising from Participating in a Specific Market – Waste Electrical and
Electronic Equipment
IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 8 Scope of IFRS 2
The directors anticipate that the adoption of these Standards and Interpretations in future periods
will have no material impact on the financial statements of the Group.
43
ANHUI GUJING DISTILLERY COMPANY LIMITED
These financial statements are presented in Renminbi (RMB) since that is the currency in which
majority of the Group’s transactions are dominated.
3．SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared on the historical cost basis. The principal accounting
policies adopted are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
enterprises controlled by the Company (its subsidiaries) made up to 31 December each year.
Control is achieved where the Company has the power to govern the financial and operating
policies of an invested enterprise so as to obtain benefits from its activities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
On acquisition, the assets and liabilities of the relevant subsidiaries are measured at their fair
values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the
identified net assets acquired is recognized as goodwill. The interest of minority shareholders is
stated at the minority’s proportion of the fair values of assets and liabilities recognized.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
income statement from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
When necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used in line with those used by other members of the Group.
All significant intercompany transactions and balances between group enterprises are eliminated
on consolidation.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s
interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of
acquisition.
44
ANHUI GUJING DISTILLERY COMPANY LIMITED
Goodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash
generating units expected to benefit from the synergies of the combination. Cashgenerating units
to which goodwill has been allocated are tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable amount of the cash
generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the
unit prorata on the basis of the carrying amount of each asset in the unit. An impairment loss
recognized for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
Revenue recognition
Sales of goods are recognized when goods are delivered and title has passed.
Interest income is accrued on a time basis by reference to the principal outstanding and at the
effective interest rate applicable.
Dividend income from investments is recognized when the shareholders’ rights to receive
payment have been established.
Subsidy income is recognized when the Group’s right to receive is established.
Operating leases
Rentals payable by the Group as lessee under operating leases are charged to income on a
straightline basis over the term of the relevant lease.
Foreign currencies
Transactions in currencies other than RMB are initially recorded at the rates of exchange
prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such
currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses
arising on exchange are included in net profit or loss for the period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Borrowing costs
45
ANHUI GUJING DISTILLERY COMPANY LIMITED
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in net profit or loss in the period in which they are
incurred.
Retirement benefit costs
The employees of the Group are members of statemanaged retirement benefit schemes.
Payments made to statemanaged retirement benefit schemes are dealt with as defined
contribution plans and are charged as expenses as they fall due.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net
profit as reported in the income statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amount of assets and liabilities in the financial statements and the corresponding tax basis used in
the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred
tax assets are recognized to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilized. Such assets and liabilities are
not recognized if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences arising on investments in
subsidiaries and associates, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
46
ANHUI GUJING DISTILLERY COMPANY LIMITED
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the
liability is settled or the asset realized. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation
authority and the Group intends to settle its current tax assets and liabilities on a net basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Property, plant and equipment
Construction in progress for production, rental or administrative purposes, or for purposes not yet
determined, are carried at cost, less any recognized impairment loss. Cost includes professional
fees and, for qualifying assets, borrowing costs capitalized in accordance with the Group’s
accounting policy. Depreciation of these assets, on the same basis as other property assets,
commences when the assets are ready for their intended use.
Other property, plant and equipment are stated at cost less accumulated depreciation and any
recognized impairment loss.
Depreciation is charged so as to write off the cost of property, plant and equipment, other than
construction in progress, over their estimated useful lives, using the straightline method, on the
following bases:
Buildings 835 years
Machinery 810 years
Motor vehicles 8 years
Other equipment 8 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sale proceeds and the carrying amount of the asset and is recognized in income.
47
ANHUI GUJING DISTILLERY COMPANY LIMITED
Land use rights
Land use rights are measured at cost and amortized on a straightline basis over their estimated
useful lives.
Trademarks and patents
Trademarks and patents are measured initially at purchase cost and are amortized on a straight
line basis over their estimated useful lives.
Impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible
assets excluding goodwill to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cashgenerating unit to which the asset belongs.
Recoverable amount is the greater of net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pretax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset.
If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cashgenerating unit) is reduced to its
recoverable amount. Impairment losses are recognized as an expense immediately, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognized for the asset (cashgenerating unit) in prior years. A
reversal of an impairment loss is recognized as income immediately, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
48
ANHUI GUJING DISTILLERY COMPANY LIMITED
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost comprises direct
materials and, where applicable, direct labor costs and those overheads that have been incurred in
bringing the inventories to their present location and condition. Cost is calculated using the
weighted average method. Net realizable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Financial instruments
Financial assets and financial liabilities are recognized on the Group’s balance sheet when the
Group becomes a party to the contractual provisions of the instrument.
Trade and other receivables
Trade and other receivables are stated at their nominal value as reduced by appropriate
allowances for estimated irrecoverable amounts.
Investments
Investments are recognized on a tradedate basis and are initially measured at cost, including
transaction costs.
At subsequent reporting dates, debt securities that the Group has the expressed intention and
ability to hold to maturity (heldtomaturity debt securities) are measured at amortized cost, less
any impairment loss recognized to reflect irrecoverable amounts. The annual amortization of
any discount or premium on the acquisition of a heldtomaturity security is aggregated with
other investment income receivable over the term of the instrument so that the revenue
recognized in each period represents a constant yield on the investment.
Investments other than heldtomaturity debt securities are classified as either heldfortrading or
availableforsale, and are measured at subsequent reporting dates at fair value except for any
financial assets that do not have a quoted market price in an active market and for which fair
value cannot be reliably measured. Where securities are held for trading purposes, gains and
losses arising from changes in fair value are included in net profit or loss for the period. For
availableforsale investments, gains and losses arising from changes in fair value are recognized
directly in equity, until the security is disposed of or is determined to be impaired, at which time
the cumulative gain or loss previously recognized in equity is included in the net profit or loss for
the period.
Bank borrowings
Interestbearing bank loans and overdrafts are recorded at the proceeds received, net of direct
issue costs. Finance charges are accounted for on an accrual basis.
49
ANHUI GUJING DISTILLERY COMPANY LIMITED
Trade and other payables
Trade and other payables are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct
issue costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other shortterm
highly liquid investments that are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
4. PRIOR PERIOD ERROR
(a) Nature
(1) Enterprise income tax (“EIT”), city construction tax and education additional tax
The Company had filed and paid the EIT by way of Consolidated Tax Filing with Bozhou Gujing
Sales Company (“the Sales Company”) before 2005. In March 2005 Anhui Commissioners’ Office
for Finance Supervision of Ministry of Finance inspected the implementation of Consolidated Tax
Filing and Payment during the period from years 2002 to 2004, according to the findings of such
inspection, the Consolidated Tax Filing and Payment do not comply with the relevant taxation
regulations. On 25 March 2005, the Group received notices, No.1005 and No.1006 (Bo Di) Shui
Zheng Guan Xian Zi [2005], from the Bozhou City Local Tax Authority, which required the Group
to pay EIT shortfall of approximately RMB42,250,000 and RMB63,947,000 respectively for years
2002 and 2003. In 2004, the Company has included a prior year adjustment to account for the total
EIT shortfall of approximately RMB164,700,000, including the EIT shortfall of approximately
RMB106,197,000 from year 2002 to 2003 was included retrospectively and that of approximately
RMB58,503,000 in 2004 was included in profit or loss for that period.
On 27 June 2005, the Group received an updated notice concerning the same EIT shortfall matter,
No.101 and No.102 (Bo Di) Shui Zheng Guan Jue Zi [2005], from Bozhou City Local Tax
Authority, which confirmed that the Sales Company paid EIT shortfalls of RMB39,960,000,
RMB59,250,000 and RMB55,122,000 respectively for the years 2002, 2003 and 2004 due to
50
ANHUI GUJING DISTILLERY COMPANY LIMITED
Consolidated Tax Filling and payment. Meanwhile, an EIT debit balance of approximately
RMB7,424,000 accumulated during previous years for the same reason is not recognized by the
tax authority. To comply with this updated notices, the Company account, retrospectively, for a
total EIT shortfall of approximately RMB161,756,000 for the years 2002 to 2004.
The Company performed retrospective adjustment concerning the above EIT shortfall based on the
updated notice on June 27, 2005, namely No. 101 and No.102 from the local tax authority.
The total increase in opening retained earning due to retrospective adjustment for EIT from years
2002 to 2004 is approximately RMB2,944,000, including opening undistributed profits and
reserves increase adjustment of approximately RMB2,486,000 and RMB458,000 (including
statutory surplus of RMB229,000 and public welfare surplus of RMB229,000)respectively.
According to the file (No.102 (Bo Di) Shui Zheng Guan Jue Zi [2005]), issued by Bozhou City
Local Tax Authority on 27 June 2005, there was a miscalculation in city construction tax and
education surcharge, resulted in excess payment of approximately RMB4,290,000 for the previous
year was included retrospectively in the current period.
The total increase in opening undistributed profits due to retrospective adjustment for city
construction tax and education additional tax of previous years is approximately RMB 4,290,000.
(2) Impairment of longterm investment
Huaan Securities co., Ltd (hereinafter referred to as Huaan Securities) is a joint stock company of
the Company (with a shareholdings of 5.87%). On 7 July 2005 Huaan Securities held its annual
meeting of shareholders and the annual report of year 2004 was discussed and passed.. The report
showed that the loss of Huaan Securities for year 2004 was approximately RMB1,168,467,000,
the net assets of Huaan Securities as at 31 December 2004 was approximately RMB581,763,000.
According to the stockholding proportion of the Company, on 31 December 2004 the value
should be RMB34,149,000, its initial carrying value was RMB100,000,000. Hence impairment is
approximately RMB65,851,000.
The total decrease in opening undistributed profits due to retrospective adjustment for Huaan
Securities is approximately RMB65,851,000.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
(3) Partial recovery of investment in debt securities
Bozhou Gujing Waste Reclamation Co., Ltd (hereinafter referred to as Waste Reclamation
Company) is a subsidiary of the Company. On 21 October 2003 Waste Reclamation Company
51
ANHUI GUJING DISTILLERY COMPANY LIMITED
utilized its own fund of RMB 50,000,000 to purchase debt securities via Jianqiao Securities co.,
Ltd (hereinafter referred to as Jianqiao Securities). On 12 April 2004 Jianqiao Securities repaid
Waste Reclamation Company RMB10,000,000 being the deposit of the debt securities. After this,
Waste Reclamation Company was not able to transact in the debt securities. Therefore, Waste
Reclamation Company negotiated with Jianqiao Securities and required its right on debt securities
account, but not to avail. On 20 January 2005 Waste Reclamation Company initiated legal action
against Jianqiao Securities at Bozhou Intermediate People’s Court (hereinafter referred to as
Intermediate Court)of Anhui province, and claimed the debt securities warranty money of
RMB40,000,000 and the cost. On 16 June 2005 a civil judgment, No.9 Bo Min Er Chu Zi [2005],
by Intermediate Court ruled that Jianqiao Securities shall return the debt securities warranty
money of RMB40,000,000 to Waste Reclamation Company together with the cost of
RMB453,000.
Subsequently both parties reached a compromise, Jianqiao Securities agreed with Waste
Reclamation Company to return debt securities investment fund of RMB24,000,000, and to bear
the cost of RMB 1,000,000 and convert the remaining balance of RMB16,000,000 into shares of
Jianqiao Securities. Waste Reclamation Company had already received RMB24,000,000 during
the current period, the other matters are in the process of implementation.
The impairment is provided assuming the recoverable amount of the RMB16,000,000 shares in
Jianqiao securities as RMB500,000 and the impairment of RMB24,500,000 on Jianqiao
Securities investment for the year 2004 was adjusted retrospectively to the opening retained
earnings in 2005.
(4) Impairment of packaging materials
According to the resolution of the sixteenth meeting of the third board of directors, the Company
proposed to write down large amounts of finished goods and containers in 2004. As the
Company spent a considerable amount of time and manpower cooperating with the all levels of
Tax Authority in tax inspection resulting in this matter not being finalized before the issue of
2004 report.
The total decrease in opening undistributed profits due to retrospective adjustment for impairment
of packaging materials is approximately RMB46,253,000.
(5) Change in revenue recognition accounting policies for consignment goods
During midautumn festival and spring festival, being the traditional sales peak seasons of
distilled spirit, the Company signed contract with dealers in order to assist the dealers to meet its
fund shortage and ensure enough products supply. Under the contract, the dealers could purchase
goods without payment and exchange or return the goods if there is no sale or oversupply. The
settlement will be made according to the sales billed by the Company until due date. In the
previous year, revenue from the goods sold without payment was recognized when the goods was
issued.
52
ANHUI GUJING DISTILLERY COMPANY LIMITED
Analysing of the substance of the above transactions, significant risks and rewards of ownership
of the goods has not been transferred to the dealers, and hence it does not comply with the
International Financial Reporting Standards.
Consignment goods of approximately RMB20,209,000 for the previous year was included
retrospectively in the current period according to change in revenue recognition accounting
policies for consignment goods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
(b) The effect of the prior period errors on the relevant items in the financial statements is
summarized as follows:
12.31.2004
12.31.2004
Items (Before Adjustment
(Restated)
Adjustment)
Balance sheet
Trade and other receivables 167,203 (57,252) 109,951
Inventories 602,061 (24,431) 577,630
Other investments 100,000 (65,851) 34,149
Investments held for trading 0 24,500 24,500
Other tax liabilities 63,462 17,807 45,655
Income tax liabilities 156,535 2,944 153,591
Trade and other payables 231,112 1,705 229,407
(100,578)
Reserves 668,611 (100,578) 568,033
Income statement
Profit attributable to equity holders
of the parent (172,742) 83,185 (255,927)
(c) The effects on retained profit, statutory surplus and public welfare reserves are summarized
53
ANHUI GUJING DISTILLERY COMPANY LIMITED
below:
Increase (decrease)
Retained Statutory surplus
Profits and public welfare
RMB’000 reserves
RMB’000
At 1 January 2004
As originally stated 180,876 138,830
Prior year adjustment
(1) EIT Shortfall retrospective adjustment 6,528 459
(2) Change of revenue recognition policy
for consignment goods (24,380)
As restated 163,024 139,289
At 31 December 2004
As originally stated 8,134 138,830
Prior year adjustment
(1) EIT Shortfall retrospective adjustment 2,486 459
City construction tax and education tax surcharge 4,290
(2) Investment impairment (65,850)
(3) Debt securities investment fund 24,500
(4) Impairment of Packaging Materials (46,254)
(5) Change of revenue recognition policy
for consignment goods (20,209)
As restated (92,903) 139,289
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
5. REVENUE
An analysis of the Group’s revenue is as follows:
2005 2004
RMB’000 RMB’000
(Restated)
Sales of distilled spirit 589,447 544,650
54
ANHUI GUJING DISTILLERY COMPANY LIMITED
Others 64,215 57,096
653,662 601,746
_________ ________
The Group conducts the majority of its business activities in China and operates the distilled spirit
and wine as one major business segment. All the assets are located in China.
6. INCOME (LOSS) FROM INVESTMENTS
2005 2004
RMB’000 RMB’000
(Restated)
Interest on bank deposits 1,448 871
_________ ________
7. PROFIT FROM OPERATIONS
Profit from operations has been arrived at
After charging:
2005 2004
RMB’000 RMB’000
Net foreign exchange losses 44
_________ ______
Staff costs 89,093 78,351
_________ ________
Depreciation and amortization
Property, plant and equipment 45,858 42,057
Land use rights 1,178 990
Goodwill 840
Trademarks and patents 3,755 5,054
_________ ________
50,791 48,941
_________ ________
Cost of inventories recognized as expenses 387,474 357,599
_________ ________
After crediting:
Subsidy income 5,000 268
_________ ________
55
ANHUI GUJING DISTILLERY COMPANY LIMITED
Except for property, plant and equipment, all depreciation and amortization are charged to
administrative expenses. Depreciation of property, plant and equipment charged to cost of
sales amounted to RMB29,340,000 (2004: RMB28,037,000) and administrative expenses
amounted to RMB6,330,000 (2004: RMB14,020,000).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
8. FINANCE COSTS
2005 2004
RMB’000 RMB’000
Interest on bank loans 6,503 5,588
_________ ________
_________ ________
9. INCOME TAX EXPENSE
2005 2004
RMB’000 RMB’000
(Restated)
Enterprise income tax
Income tax for the year 11,572 74,661
_________ ________
PRC enterprise income tax is calculated at 33% on the estimated assessable profit for the
year.
As the tax effect on temporary timing difference is insignificant, no deferred taxation is
provided.
The effective tax rate is higher than the statutory tax rate mainly due to losses of some
subsidiary cannot be offset against the profit of other profitable subsidiary and some
expenses not deductible for tax purpose.
10. EARNINGS PER SHARE
2005 2004 2004
(Before adjustment) (Restated)
Basic:
56
ANHUI GUJING DISTILLERY COMPANY LIMITED
Profit attribute to 5,219,000 (172,742,000) (255,927,000)
shareholders
Number of shares 235,000,000 235,000,000 235,000,000
Earnings per share 0.02 (0.74) (1.09)
The diluted loss per share figures have not been presented because no dilutive potential ordinary
shares existed in both years.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
11. PROPERTY, PLANT AND EQUIPMENT
Construction Motor Other
in progress Buildings Machinery vehicles equipment Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost
At 1 January 2005 26,234 388,513 216,818 20,184
55,254 707,003
Additions 87,284 1,158 2,669 2,741 7,762 101,614
Transferred from
construction in progress (90,906) 15,671 75,235
Disposals 569 9,410 2,204 570 12,753
______ _______ _______ ______ ______ _______
At 31 December 2005 22,612 404,773 285,312 20,721
62,446 795,864
______ _______ _______ ______ ______ _______
57
ANHUI GUJING DISTILLERY COMPANY LIMITED
Accumulated Deprecation
At 1 January 2005 170,574 88,173 9,223
15,813 283,783
Charge for the year 11,577 26,899 3,252 4,128 45,856
Disposals 107 6,371 1,613 261 8,352
______ _______ _______ ______ ______ _______
At 31 December 2005 182,044 108,701 10,862
19,680 321,287
______ _______ _______ ______ ______ _______
Carrying Amount
At 31 December 2005 22,612 222,729 176,611 9,859
42,766 474,577
______ _______ _______ ______ ______ _______
At 31 December 2004 26,234 217,939 128,645 10,961 39,441 423,220
______ _______ _______ ______ ______ _______
As at 31st December 2005, the construction in progress includes the capitalized interest
of RMB 1,488,000..
The company has not obtained the property ownership certificate for the building of
approximately RMB33,800,000 (2004: RMB20,274,000) by December 31, 2005 as the
application is still in process.
Due to government regulation, the Company have not signed agreement concerning land
transfer or applied for land use right from the government for one of its constructionin
progress worth RMB21,360,000 by December 31, 2005.
The management of the company are of the opinion that there is no material indication of
impairment on property, plant and equipment in current year.
12. LAND USE RIGHTS
2005 2004
RMB’000 RMB’000
Cost
At 1 January 53,656 44,470
Addition 523 9,186
_________ ________
At 31 December 54,179 53,656
_________ ________
Amortization
At 1 January 7,277 6,287
Charge for the year 1,178 990
_________ ________
At 31 December 8,455 7,277
_________ ________
Carrying Amount
At 31 December 45,724 46,379
_
The management of the company are of the opinion that there is no material indication of
impairment on land use rights in current year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
13. TRADEMARKS
2005 2004
RMB’000 RMB’000
58
ANHUI GUJING DISTILLERY COMPANY LIMITED
Cost
At 1 January 37,550 44,050
Disposal of a subsidiary
(6,500
)
_________ ________
At 31 December 37,550 37,550
_________ ________
Amortization
At 1 January 31,917 29,462
Charge for the year 3,755 5,055
Eliminated on disposal of a subsidiary
(2,600
)
_________ ________
At 31 December 35,672 31,917
_________ ________
Carrying Amount
At 31 December 1,878 5,633
_________ ________
_________ ________
Trademarks are amortized over their estimated useful lives, which are on average 10 years.
14. SUBSIDIARIES
Details of the Company’s subsidiaries at 31 December 2005 are as follows:
Place of Proportion of
registration ownership interest
Name of subsidiary and operation and voting power held Principal
activity
Bozhou Gujing Sales Company Anhui, PRC 100% Provision
of trading
services
to the Company
Bozhou Gujing Transportation Anhui, PRC 100% Provision
of transportation
Company services
to the Company
59
ANHUI GUJING DISTILLERY COMPANY LIMITED
Bozhou Gujing Glass Co., Ltd. Anhui, PRC 100%
Manufacture and sale
of
glass products
Bozhou Gujing Waste Anhui, PRC 100% Collect
and sale of
Reclamation Co., Ltd.
recycled bottle glasses
Anhui Old Big Eight Anhui, PRC 93% Sale of
wine and
Distillery Co., Ltd. other
products
Anhui Gujing Wild Sun Anhui, PRC 92% Sale of
wine and beverages
Sales Co., Ltd.
Bozhou Gujing Vegetable Anhui, PRC 100% Produce
and sale of
Oil Co., Ltd.
vegetable oil
Shanghai Kai Wei De Anhui, PRC 100% Sale of
general merchandise
Trade Co., Ltd dresses
and ironware
Bozhou Gujing Anhui, PRC 99.96%
Manufacture and sale
Printing Co., Ltd. of
printing products
Bozhou Gujing packaging Anhui, PRC 100% Print and
sale of packing materials
materials Co., Ltd
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Note: On November 23 2005, Bozhou Gujing Packaging Materials Co., Ltd. was
established jointly by the Company and the Sales Company, with capital injection of
RMB19,070,000 in assets and RMB100,000 in cash. The new establishment is
60
ANHUI GUJING DISTILLERY COMPANY LIMITED
100% held by this two shareholders and is included in the consolidated financial
statements.
15. OTHER INVESTMENTS
2005 2004
RMB’000 RMB’000
(Restated)
Cost 100,000 100,000
Impairment (65,851)
(65,851
)
34,149
34,149
Details of the Group’s other investments as of 31 December 2005 is as follows:
Place of registration Proportion of
Name of Company and operation ownership interest
Principal activity
Hua An Securities Co., Ltd. Anhui, PRC 5.87%
Brokerage and
trading of securities
Please refer to Note 4 (a) (2) for details.
16. INVENTORIES
2005 2004
RMB’000 RMB’000
(Restated)
Raw materials and packaging materials 161,892 187,243
Workinprocess and semifinished goods 335,062 326,897
Finished goods 63,247 63,490
________ ________
560,201 577,630
_________ ________
61
ANHUI GUJING DISTILLERY COMPANY LIMITED
________ ________
The above inventories are carried at net realizable value. The provision for inventories of
2005 is RMB 51,383,000(2004: RMB58,796,000).
17. INVESTMENTS HELD FOR TRADING
2005 2004
RMB’000 RMB’000
(Restated)
Investment 500 24,500
_________ ________
_________ ________
Please refer to Note 4 (a) (3) for details.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
18. OTHER FINANCIAL ASSETS
Trade and other receivables at the balance sheet date comprised amounts receivable from the sale
of goods of RMB120,502,000 (2004: RMB119,741,000).
The average credit period taken on sales of goods is 65 days. An allowance has been made for
estimated irrecoverable amounts from the sale of goods of RMB3,962,000 (2004: RMB9,790,000).
This allowance has been determined by reference to past default experience.
The directors consider that the carrying amount of trade and other receivables approximates their
fair value.
Bank balances and cash comprise cash and shortterm deposits held for treasury function. The
carrying amount of these assets approximates their fair value.
Credit risks
The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts
presented in the balance sheet are net of allowances for doubtful receivables, estimated by the
Group’s management based on prior experience and their assessment of the current economic
environment.
62
ANHUI GUJING DISTILLERY COMPANY LIMITED
The Group has no significant concentration of credit risk, with exposure spread over a large
number of counterparties and customers.
The credit risk on liquid funds is limited because the counterparties are approved banks and
financial institutes in the PRC.
19. SHARE CAPITAL
As of 31 December 2005, the details of share capital (par value of RMB1 each) are as follows:
2005 and 2004
Number of Amount
shares(’000) (RMB’000)
Registered, issued and fully paid:
Stateowned shares of RMB1 each 155,000 155,000
A shares of RMB1 each 20,000 20,000
B shares of RMB1 each 60,000 60,000
_________ ________
235,000 235,000
_________ ________
_________ ________
There were no movements in the share capital of the Company in either 2004 or 2005.
20. RESERVES
(a) Reserves of the Group include capital surplus, statutory surplus reserve, discretionary surplus
reserve and statutory public welfare reserve, which form part of shareholders’ equity.
Capital surplus
Capital surplus principally represents excess of the deemed cost of the net assets injected into the
Company on its formation in 1996 over nominal par value of issued capital received when the
Company issued state owned shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Statutory surplus reserve/discretionary surplus reserve
In accordance with relevant PRC company laws and regulations and the Company’s Articles of
63
ANHUI GUJING DISTILLERY COMPANY LIMITED
Association, the Company is required to appropriate 10% of its profit after tax reported in its
statutory financial statements prepared under the PRC GAAP to the statutory surplus reserve.
Allocation to a discretionary surplus reserve shall be approved by the shareholders in general
meeting.
The appropriation of statutory surplus reserve may cease to apply if the balance of the statutory
surplus reserve has reached 50% of the Company’s registered capital. Surplus reserve may be
used to make up losses or for conversion into share capital. The Company may, upon the
approval by a resolution made in the shareholders’ general meeting, convert its surplus reserve
into share capital by issuing new shares to existing shareholders in proportion to their original
shareholdings or by increasing the nominal value of each share. However, when converting the
Company’s statutory surplus reserve into share capital, the amount of such reserve remaining
unconverted must not be less than 25% of the registered capital.
Statutory public welfare reserve
In accordance with relevant PRC Company laws and regulations and the Company’s Articles of
Association, the Company is required to appropriate 5% to 10% of the profit after tax as reported
in its statutory financial statements prepared under the PRC GAAP to the statutory public welfare
reserve. The statutory public welfare reserve shall only apply to collective welfare of staff and
workers and welfare facilities remain as properties of the Group.
The statutory public welfare reserve is nondistributable. When the statutory public welfare
reserve is utilized, an amount equal to the cost of the assets acquired is transferred to
discretionary surplus reserve. On disposal of the relevant asset, the original transfers from the
reserve are reversed. There is no utilization during the year.
(b) Basis for profit distribution
In accordance with the Company’s Articles of Association, profit available for distribution to
shareholders should be based on the lower of the amount determined in accordance with the PRC
accounting standards and regulations and that determined under IFRS after deduction of the
current year’s appropriation to the statutory reserves.
21. BANK LOANS
2005 2004
RMB’000 RMB’000
Bank loans 113,100 114,000
_________ ________
_________ ________
The borrowings are repayable as follows:
64
ANHUI GUJING DISTILLERY COMPANY LIMITED
On demand or within one year 43,000 85,900
In the second year 23,000 16,000
In the third to fifth year inclusive 47,100 12,100
_________ ________
113,10
0
114,00
0
Less:
Amount due for settlement within 12
months (shown under current liabilities) 43,000 85,900
_________ ________
Amount due for settlement after 12 months 70,100 28,100
_________ ________
_________ ________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
The principal features of the bank loans are as follows:
2005 2004
RMB’000 RMB’000
Unsecured 48,000 70,000
Guaranteed (Note a) 65,100 44,000
_________ ________
113,100 114,000
_________ ________
_________ ________
The bank loans bear average interest rates of 5.727% (2004: 5.278%) per annum.
The directors consider that the carrying amount of the bank loans approximates their fair value.
Note a: The longterm bank loan of RMB65,000,000 (of which, RMB23,000,000 is due within
one year) is guaranteed by AGGL.
65
ANHUI GUJING DISTILLERY COMPANY LIMITED
22. OTHER FINANCIAL LIABILITIES
Trade and other payables comprise amounts outstanding for trade purchase and ongoing costs.
The directors consider that the carrying amount of trade and other payables approximates their fair
value.
23. OTHER TAX LIABILITIES
2005 2004
RMB’000 RMB’000
(Restated)
Consumption tax 70,437 49,063
Value added tax 12,014
(1,035
)
Business tax 14 8
City construction tax (1,282)
(2,386
)
Others 5
_________ ________
81,183 45,655
_________ ________
_________ ________
24. CAPITAL COMMITMENTS
2005 2004
RMB’000 RMB’000
Commitments for the acquisition of
property, plant and equipment, but not
provided in the financial statements 9,485 13,959
_________ ________
_________ ________
66
ANHUI GUJING DISTILLERY COMPANY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
25. RETIREMENT BENEFIT PLANS
Defined contribution plans
The employees of the Company are members of a statemanaged retirement benefit scheme
operated by the local government. The Company is required to contribute a specified percentage of
the payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the
Company with respect to the retirement benefit scheme is to make the specified contributions.
The total cost charged to income of RMB 4,342,000 (2004:RMB4,300,000) represents
contributions payable to these plans by the Group at rates specified in the rules of the plans. As
at 31 December 2005, contributions of RMB1,900,000 (2004:RMB30,420,000)due in respect of
the current reporting period had not been paid over to the plans.
26. RELATED PARTY TRANSACTIONS
(a) Name of related party and relationship
Name Relationship
AGGL Parent company
Anhui Gujing Service Company Ltd. Subsidiary of AGGL
Bozhou Zhenlihenbao Company Ltd. Subsidiary of AGGL
Gujing Tianshi Printing Company Ltd. Subsidiary of AGGL
Anhui Gujing Xuedi Beer Company Ltd. Subsidiary of AGGL
GuJing Group JiuFang Pharmacy Company Ltd. Subsidiary of AGGL
Bozhou Gujing thermoelectricity Company Ltd. Subsidiary of AGGL
(b) Significant transactions with related parties
Significant related party transactions are as follows:
2005 2004
RMB’000 RMB’000
Sales
Anhui Gujing Xuedi Beer Company Ltd. 1,685
Anhui Gujing Service Company Ltd. 222 542
67
ANHUI GUJING DISTILLERY COMPANY LIMITED
AGGL 117
Gujing Tianshi Printing Company Ltd. 536
_________ ________
758 2,344
_________ ________
_________ ________
Purchase
Anhui Gujing Service Company Ltd. 63,982 47,861
Gujing Tianshi Printing Company Ltd. 92 12,943
AGGL 14,366 7,231
Bozhou Zhenlihenbao Company Ltd. 16,617
_________ ________
95,057 68,035
_________ ________
_________ ________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
The transactions are conducted based on contract prices, which are determined by the
management according to the market prices.
As of 31 December 2005:
2005 2004
RMB’000 RMB’000
Amounts due from related parties
AGGL 6,452
Gujing Xuedi Beer Company Ltd. 144
GuJing Group JiuFang Pharmacy Company Ltd. 62
_________ ________
62 6,596
_________ ________
_________ ________
Amounts due to related parties
68
ANHUI GUJING DISTILLERY COMPANY LIMITED
Gujing Tianshi Printing Company Ltd. 1,100
Bozhou Zhenlihenbao Company Ltd. 275
Anhui Gujing Service Company Ltd. 23
Bozhou Gujing thermoelectricity Company Ltd. 3,214
_________ ________
3,214 1,398
_________ ________
_________ ________
(c) The remuneration of directors and other members of key management during the year
was as follows:
The remuneration of directors and key executives is determined by the remuneration
committee having regard to the performance of individuals and market trends. As at
December 31, 2005, there are fifteen directors and key executives (2004: sixteen) in the
Company and the total remuneration paid (exclude subsidies paid to independent directors;
RMB50,000/person/year) is RMB930,000 (2004: RMB844,800).
27. EVENTS AFTER BALANCE SHEET DATE
The Company and the Sales Company established Anhui Rui Fu Xiang Food Company Ltd.(the
Food Company), with the registered capital of RMB50,000,000. Of the total registered capital,
RMB49,500,000,the investment of wheat deepprocessed project, was paid by the Company and
RMB500,000 was paid by the Sales Company in cash. The Food Company had been being at the
stage of construction until the balance sheet date, and estimated to run regularly in the first quarter
of 2006.
69
ANHUI GUJING DISTILLERY COMPANY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005
28. RECONCILIATION FROM PRC GAAP TO IFRS
Profit attributable to
equity holders of the parent
Net Assets
2005 2004 2005
2004
RMB’000 RMB’000 RMB’000
RMB’000
(Restated)
Under PRC GAAP 5,088 (262,621) 808,121 803,033
Adjustments:
Written off of preoperating
expenditure of subsidiary 694
Exempted AGGL service fees 6,000
Amortization of longterm
share investment surplus 218
218
Differences on depreciation
of property, plant and equipment (72)
(72)
Differences on amortization
of intangible assets (15)
(15)
_______ ______ _________ _________
131 6,694 131
_______ ______ _________ _________
Under IFRS 5,219 (255,927) 808,252 803,033
_______ ______ _________ _________
_______ _______ _________ _________
29. APPROVAL OF THE FINANCIAL STATEMENTS
The financial statements were approved by the board of directors on 25 February
70
ANHUI GUJING DISTILLERY COMPANY LIMITED
2006.
71
ANHUI GUJING DISTILLERY COMPANY LIMITED
Chapter XI Documents for future reference
(1) Accounting statements with the signatures and seals of the legal
representatives, principals in charge of accounting work and principals of
accounting institutions.
(2) Originals of audit reports with the seal of the certified public accountants’
firm and signature and seal of the certified public accountants.
(3) Originals and all documents disclosed in the appointed newspapers by China
Securities Regulatory Commission and announced manuscripts during the
report period.
Anhui Gujing Distillery Co., Ltd.
Feb. 25, 2006
72
