The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2018 Annual Report
April 2019
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section I Important Statements, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management of
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (hereinafter referred to as the Company) hereby
guarantee that the information presented in this report is free of any false records, misleading
statements or material omissions, and shall individually and together be legally liable for truthfulness,
accuracy and completeness of its contents.
Mr. Wang Yao, responsible person for the Company, Mr. Cong Xuenian, responsible person for
accounting work and Mr. Yin Qiuming, responsible person for the Company’s financial affairs
(Accounting Supervisor) have warranted that the financial statements in this report are true and
complete.
All directors all attended the board meeting to deliberate this report.
The future plans and some other forward-looking statements mentioned in this report shall not be
considered as virtual promises of the Company to investors. Therefore investors are kindly reminded to
pay attention to possible investment risks.
In the annual report, the risks and countermeasures in the operation of the company are described in
detail (see 9.Outlook for the future development of the Company in Section IV Performance Discussion
and Analysis). Investors are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on 1,506,988,000 shares, a cash
dividend of CNY 32.00 will be distributed for every 10 existing shares held, 0 shares of bonus shares
(tax inclusive), and reserves would not be converted into share capital.
The company’s Chinese 2018 Annual Report was publicly disclosed on the Shenzhen
Stock Exchange and Juchao Info Net (www.cninfo .com.cn) on 30 April 2019. If there is
any variances between this English version and the Chinese one, please refer to the latter.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions ......................... 2
Section II Company Profile and Key Financial Results ............................... 5
Section III Business Profile .............................................................................. 9
Section IV Performance Discussion and Analysis ..................................... 12
Section V Significant Events.......................................................................... 28
Section VI Changes in Shares and Information about Shareholders ..... 58
Section VII Preference Shares ....................................................................... 66
Section VIII Profiles of Directors, Supervisory, Senior Management and
Employees .........................................................................................................67
Section IX Corporate Governance ................................................................ 77
Section X Information about Corporate Bond ............................................ 85
Section XI Financial Report............................................................................ 86
Section XII Documents Available for Preference ......................................220
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Definitions
Term Reference Definition
The Company, this Company, Yanghe Jiangsu Yanghe Brewery Joint-Stock Co.,
Refer to
Joint-Stock Ltd.
Yanghe Group, Controlling shareholder Refer to Jiangsu Yanghe Group Co.,Ltd.
The current year, In the reporting period Refer to 1 Jan. 2018 to 31 Dec. 2018
The report Refer to 2018 Annual Report
Yuan, Ten thousand yuan, A hundred CNY 0.00, CNY 10,000,CNY
Refer to
million yuan 10,000,000.00
The shareholders' general meeting, the
The shareholders' meeting, the board of
Refer to board of directors and the board of
directors, the board of supervisors
supervisors of the Company
Articles of incorporation of Jiangsu Yanghe
Articles of incorporation Refer to
Brewery Joint-Stock Co., Ltd.
SSE Refer to Shenzhen Stock Exchange
SRC,CSRC Refer to China Securities Regulatory Commission
State-owned Assets Supervision and
SASAC of Suqian Refer to
Administration Commission of Suqian
Jiangsu Suya, Suya Jincheng, Accounting
Refer to Jiangsu Suya Jincheng CPA LLP
firm
Blue Alliance Refer to Jiangsu Blue Alliance Joint-Stock Co., Ltd.
Jiangsu Yanghe Brewery Joint-Stock Co.,
Yanghe Branch of the Company Refer to
Ltd. Yanghe Branch
Jiangsu Yanghe Brewery Joint-Stock Co.,
Siyang Branch of the Company Refer to
Ltd. Siyang Branch
Jiangsu Shuanggou Distillery Stock
Shuanggou Distillery Refer to
Co.,Ltd.
Guijiu Company Refer to Guizhou Guijiu Co., Ltd.
Lihuacun Liquor Refer to Hubei Lihuacun Liquor Industry Co., Ltd.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation Yanghe Joint-Stock Stock code 002304
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
江苏洋河酒厂股份有限公司
in Chinese
Abbr. of the Company
洋河股份
name in Chinese
Name of the Company
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
in English (if any)
Abbr. of the Company
Yanghe
name in English (if any)
Legal representative Wang Yao
Registered address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code 223800
Business address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code 223800
Company website http://www.chinayanghe.com
E-mail yanghe002304@vip.163.com
2. Contact us
Company Secretary Representative for Securities Affairs
Name Cong Xuenian Lu Hongzhen, Sun Dali
Address No. 18, Feng Hui Avenue, Yuhua Economic Development Zone, Nanjing
Tel. 025-52489218 025-52489218
Fax 025-52489218 025-52489218
E-mail yanghe002304@vip.163.com yanghe002304@vip.163.com
3. Information disclosure and place where the annual report is kept
Newspaper designated by the Company Securities Times, Shanghai Securities Times, China Securit
for information disclosure ies Journal, Securities Daily
Website designated by CSRC for the
http://www. cninfo.com.cn
publication of the Annual Report
Place where the Annual Report of the shareholder reading room, No.118 Middle Avenue, Yanghe
Company is kept Town, Suqian City, Jiangsu Province
4. Company registration and alteration
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Organization code 9132000074557990XP
Changes in main business activities since
None
the Company was listed (if any)
Changes of controlling shareholders of the
None
Company (if any)
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm Jiangsu Suya Jincheng CPA LLP
22-23/F., Central International Plaza, NO.105-6 North
Business address of the accounting firm
Zhongshan Road, Nanjing.
Name of accountants for writing signature Xu Xuzhen, Kan Baoyong
Sponsors engaged by the Company to continuously perform its supervisory function during the
reporting period
Applicable √ N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the
reporting period
Applicable √ N/A
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data due to
changes of accounting policies and correction of accounting errors
Yes √ No
2018 2017 YoY 2016
Change
Operating revenues (CNY) 24,159,801,994.68 19,917,942,238.16 21.30% 17,183,109,620.08
Net profits attributable to
shareholders of the 8,115,189,794.69 6,627,169,959.16 22.45% 5,827,168,870.88
Company (CNY)
Net profits attributable to
share holders of the
Company before non- 7,369,331,605.77 6,136,386,923.71 20.09% 5,406,580,095.74
recurring gains and losses
(CNY)
Net cash flows from
9,056,748,816.28 6,883,169,799.31 31.58% 7,405,044,600.62
operating activities (CNY)
Basic earnings per share
5.3850 4.3976 22.45% 3.8668
(CNY/share)
Diluted earnings per share
5.3850 4.3976 22.45% 3.8668
(CNY/share)
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Weighted average ROE 25.95% 1.87%
24.08% 24.01%
YoY
At the end of 2018 At the end of 2017 At the end of 2016
Change
Total assets (CNY) 49,563,767,816.22 43,258,140,702.38 14.58% 38,804,062,249.63
Net assets attributable to
shareholders of the 33,644,530,266.23 29,515,040,285.72 13.99% 26,052,771,070.00
Company (CNY)
7. Differences in accounting data under domestic and overseas
accounting standards
7.1. Differences in the net profits and net assets disclosed in the financial reports
prepared under the international and China accounting standards
Applicable √ N/A
No such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the outbound and China accounting standards
Applicable √ N/A
No such differences for the reporting period.
8. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
Operating revenues 9,537,587,047.10 5,004,992,728.51 6,423,080,855.11 3,194,141,363.96
Net profits attributable to
shareholders of the 3,475,147,603.50 1,529,844,167.72 2,033,763,138.67 1,076,434,884.80
Company
Net profits attributable to
shareholders of the
3,333,849,279.90 1,351,770,013.96 1,853,153,948.51 830,558,363.40
Company before non-
recurring gains and losses
Net cash flows from
1,891,759,702.63 -232,993,935.52 4,215,706,857.52 3,182,276,191.65
operating activities
Whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports
Yes √ No
9. Non-recurring profits and losses
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
√ Applicable N/A
Unit: CNY
Item 2018 2017 2016 Note
Profit or loss from disposal of non-
current assets (including the write-off 22,203,572.96 -8,598,844.11 -5,823,628.96
portion of the impairment provision)
Government grants recorded in the
profit or loss for the current period
(except for the government grants
closely related to the business of the 59,870,221.67 44,745,640.94 29,064,221.47
Company and given at a fixed amount
or quantity in accordance with the
State's uniform standards)
Except for effectively hedging business
Profit
related to normal business operations of
from the
the company, profit or loss arising from
disposal
the change in the fair value of held-for-
of
trading financial assets and liabilities, as 56,995,537.28 90,627,738.02 128,763,897.76
available-
well as investment profit or loss
for-sale
produced from the disposal of held-for-
financial
trading financial assets and liabilities
assets
and available-for-sale financial assets
Impairment provision reversal of the
accounts receivable on which the 300,000.00 165,859.73
impairment test is carried out separately
Other non-operating income and
expenditure except above-mentioned 27,967,026.98 11,559,390.23 10,469,328.20
items
Other profit and loss items that conform
to the definition of non-recurring gains 827,837,138.81 516,824,879.08 398,923,011.53
and losses
Less: Corporate income tax 248,875,376.58 164,658,711.09 140,783,607.73
Minority interests (after tax) 139,932.20 17,057.62 190,306.86
Total 745,858,188.92 490,783,035.45 420,588,775.14 --
Explain the reasons if the Company classifies an item as a non-recurring profit and loss according to
the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public-Non-Recurring Profits and Losses, or classifies any non-recurring profit or
loss item mentioned in the said explanatory announcement as a recurring profit/loss item.
Applicable √ N/A
No such cases for the reporting period.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section III Business Profile
1. Business scope in the reporting period
Whether the Company needs to comply with the requirement disclosure of special industry.
No
The Company is mainly engaged in the production and sales of liquor. The production of liquor adopts
solid-state fermentation, mainly including qu-making, brewing, blending and stocking, packaging and so
on. The sales of liquor mainly adopt two modes, namely distribution and retailing. During the reporting
period, the Company's primary business and business mode had not changed. According to the
Guidelines for the Industry Classification of Listed Companies (2012 Revision) issued by CSRC, the
Company belongs to C15 Manufacturing industry of liquor, beverages and refined tea.
The Company is a national large-scale liquor production enterprise. Among the enterprises in the liquor
industry, the Company is the only one which has two Chinese time-honored brands, two famous
Chinese liquor, namely Yanghe and Shuanggou and six Chinese well-known trademarks. The leading
products of the Company are a series of mellow liquor including Dream Blue, Yanghe Spirit Classic,
Shuanggou Zhenbaofang, Yanghe Daqu, Shuanggou Daqu, which have high brand awareness and
reputation throughout the country.
During the reporting period, the development of liquor industry keeps growing in the fierce competition.
High-end and secondary high-end Liquor both show obvious development advantages. The
concentration and high-end orientation of the industry has accelerated significantly. According to the
disclosed liquor industry periodic report, the Company's revenue and profit scale ranked the third place
in the liquor industry.
2. Significant changes in the main assets
2.1 .Significant changes in the main assets
Main assets Reasons for any significant change
A decrease of 34.30% YoY was mainly due to construction in
Construction in progress progress reaching the intended use condition and carried forward to
fixed assets
An increase of 106.42% YoY was mainly due to the increase of sales
Cash and cash equivalents revenue in the current period and the increase of net cash flow
generated from operating activities.
Non-current assets due within An increase of 102.83% YoY was mainly due to the increase of trust
one year financial products due within one year by the end of this period.
Other current assets An increase of 30.29% YoY was mainly due to the increase of short-
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
term financial products by the end of this period.
2.2 .Main assets overseas
Applicable √ N/A
3. Analysis of core competitiveness
Whether the Company needs to comply with disclosure requirements of special industries
No
The Company has obvious advantages in natural environment, quality technology, brand influence,
marketing network and so on. It has formed the unique core competitiveness of the Company. The core
competitiveness of the Company has not changed during the reporting period.
3.1 Natural environment advantage
The Company is located in Suqian, the capital of liquor with three rivers, two lakes and one wetland’. It
is one of the three famous wetlands in the world, which enjoys equal popularity with the Scotch whisky
producing area and the French Cognac producing area. It is the only natural oxygen bar in Jiangsu
province without acid rain. The long history and unique ecological environment provide a good source
of water, soil and air for production of liquor and spirits. Especially the microorganism condition is
significantly beneficial to producing liquor and spirits. The Yanghe brewing originated in the Sui and
Tang Dynasties, flourished in the Ming and Qing Dynasties. It had been sold in Jianghuai area during
the period of Yong Zheng of Qing Dynasty. It has a good reputation that 'Dainty taste derived from
fortune spring and Liquor Ocean, which makes Yanghe rank first place in Jianghuai area'. Shuanggou
alongside Yanghe has been praised as the origin of Chinese natural liquor by domestic and overseas
experts due to the discovery of drunken ape fossils in Xiacaowan.
3.2 Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead in
breaking the traditional classification of liquor flavor. The Company classifies the liquor by taste and put
emphasis on taste value. The Company strengthens the mellowness of liquor, puts forward the new
style of the mellow liquor quality, and deeply meets the core demand of the target consumers. It
successfully establishes the system framework of new production technology and mellowness
mechanism of mellow liquor catering to market consumption. In June 2008, 'Mellowness' was first
written into the national standard in China Protected Geographical Indication Product- Yanghe Daqu
( Standard No. GB/T220406-2008).
3.3 Talent advantage
The Company has 31Masters of Chinese Liquor, including 2core members of National liquor jury, 69
Provincial Liquor Tasting Committee members and 1845 technicians. The Company also has a number
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
of national and provincial technical research and development platforms. The obvious advantage of
technical talents provides technical support for the continuous improvement of the quality. Dream Blue
and Mellow Sujiu, the representative products of mellow liquor, have won the national quality awards,
such as National Best Quality Award, Liquor and Spirits Design Award and National Liquor and Spirits
Sensory Quality Award. In 2018, in the national liquor taster contest sponsored by China Alcoholic
Drinks Association, Chen Li, a contestant from the Company, stood out from other contestants, ranked
the first place in the contest. It highlights the strong talent advantage of the Company again.
3.4 Brand advantage
The Company, as one of the old eight famous liquor enterprises, is the only one which has two Chinese
time-honored brands, the two famous Chinese liquor, namely Yanghe and Shuanggou, and the
Company has six Chinese well-known trademarks, including Yanghe, Shuanggou, Yanghe Spirit
Classic, Zhenbaofang, Dream Blue, and Su.The company ranked the third place in 2018Top 50 Most
Valuable Spirits Brands published by Brand Finance, a world-famous branded business valuation
consultancy, with a brand value of $7.795 billion. In 2018, with brand worth CNY45.615 billion, the
Company ranked the top 86 in China's 500 Most Valuable Brands released by World Brand Lab.
3.5 Marketing network advantage
The Company has a marketing team with the largest number of personnel, the latest concept and the
strongest executive force in the industry . The Company has cooperated with nearly 10,000 distributors,
has more than 30 thousand promotion employees, and continues to enhance the deep distribution
mode. At present, the Company has the most powerful marketing network platform in the Chinese
liquor industry. It has penetrated into every county and city throughout the country. High speed channel
has been basically completed, laying a solid foundation for market expansion and extension of the
category in the future. At the same time, as a traditional enterprise, the Company has also insisted on
exploring new marketing mode, and has made certain achievements in Internet application innovation.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section IV Performance Discussion and Analysis
1. Overview
In 2018, the Company insisted on Xi Jinping Thought on Socialism with Chinese
characteristics for a New Era as the guidance. The Company deepened the
implementation of the "Six good" strategic thinking, comprehensively promoted the
deployment of the “One Six Eight” Strategy, effectively implemented all decisions and
work, and promoted high-quality and sustainable development.
First, "Good industrial policy" leads the way and casts glory. In 2018, the Company
focused on "development and transformation" and "consumption upgrading",
comprehensively strengthened innovation and execution, and continuously improved
comprehensive competitiveness. The annual operating revenue was CNY 24.16 billion,
up 21.3% year on year. The net profit attributable to shareholders of the listed company
was CNY 8.115 billion, up 22.45% year on year. Dream Blue sales strongly climbed and
Dream Blue high-end brand image was further improved.
Second, "Good products” shows artisan skills. In 2018, the Company actively promoted
health, experience and other key technical changes, further accelerated the speed of
new technologies, new processes and application of new achievements. The base liquor
quality comprehensively outstripped the recorded levels with steady upgrade of the
leading products such as Celestial Blue and Oceanic Blue. It obtained recognition and
favor from consumers and industry experts. The Company was selected into"2018 Top
500 World Most Valuable Brands”, up 175 places from the previous year.
Third, "Good stories" spreads widely. In 2018, the Company promoted the
implementation of the "ten thousand people brand plan", focused on hot events and
theme activities, innovated brand communication forms. Brand stories deeply rooted in
the hearts of the people, which further enhanced the brand occupation; Dream Blue
brand appeared in the "Shanghai Cooperation Summit in Qingdao", walked into Olympic
Winter Games, and its fragrance filled in Buckingham Palace. It helped the third "Reading
China" international conference, and built a bridge of friendship with mellowness.
Fourth, "Good channels" sharpens the ambition. In 2018, the Company promoted the
perfection of distribution channels. Group purchasing and family banquets were
continuously expanded. “Dream gathering” and other activities were continuously
deepened. Meanwhile, price control and quota management were continuously
strengthened. Rigid implementation and efficient implementation were effectively
promoted. It helped the overall improvement of the market atmosphere.
Fifth, "Good self" firmly enhances self-confidence. In 2018, a group of marketing
representatives who have successfully cultivated the market and overcome difficulties,
young and promising technical representatives who are determined to succeed, and
altruistic brewers who have inherited the ingenuity stood out from the Company. In 2018,
in the national liquor taster contest, Chen Li won the champion and the Company's team
won the first place. The Company occupied four places in the Top Ten, which showed
the strong technical strength. The activities such as cellar opening festival and sealing
ceremony were highly praised by the guests inside and outside the industry, and
Shuanggou Distillery was awarded the title of "world famous wetland liquor".
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Sixth, "Good mechanism" stimulates vitality. In 2018, the Company realized the full
coverage of spontaneous work, steadily improved work efficiency and quality, and
significantly enhanced the employees' awareness of initiative. Annual perfection project
achieves cost reduction of CNY 22.32 million. The continuous improvement of all staff
realized financial income of CNY 43.58 million. The logistics system was accurately
operated to ensure continuous optimization, which fully achieved the goal of "no products
out of stock and no overstock".
2. Analysis of main business
2.1. Overview
Same with the contents presented in “1.Overview” of this section.
2.2. Revenues and cost of sales
2.2.1. Breakdown of operating revenues
Unit：CNY
2018 2017
As a percentage As a percentage YoY
Amount of operating Amount of operating Change
revenues revenues
24,159,801,994.6
Total
8 100% 19,917,942,238.16 100% 21.30%
By business segment
23,186,902,149.0
Liquor 95.97% 19,468,365,663.88 97.74% 19.10%
0
Others 972,899,845.68 4.03% 449,576,574.28 2.26% 116.40%
By product
22,913,294,724.7
Liquor 94.84% 19,183,149,960.51 96.31% 19.44%
6
Wine 273,607,424.24 1.13% 285,215,703.37 1.43% -4.07%
Others 972,899,845.68 4.03% 449,576,574.28 2.26% 116.40%
By geographical segment
12,326,360,162.7
Jiangsu 51.02% 10,630,640,220.89 53.37% 15.95%
3
Outside 11,833,441,831.9
48.98% 9,287,302,017.27 46.63% 27.42%
Jiangsu 5
2.2.2. Business segment, products or geographical segments
contributing over 10% of the operating revenues or profits
√ Applicable N/A
Whether the Company needs to comply with disclosure requirements of special industry
No
Unit：CNY
YoY change of YoY change
Operating Gross profit YoY change of
Cost of sales operating of gross
revenues margin cost of sales
revenue profit margin
By business segment
Liquor 23,186,902,149.00 5,527,417,445.92 76.16% 19.10% -12.06% 8.45%
By product
Liquor 22,913,294,724.76 5,392,639,632.08 76.47% 19.44% -12.35% 8.54%
By geographical segment
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Jiangsu 11,612,135,696.98 2,984,613,499.51 74.30% 13.52% -13.71% 8.11%
Outside
11,574,766,452.02 2,542,803,946.41 78.03% 25.28% -10.06% 8.63%
Jiangsu
Under the circumstances that the statistical standards for the Company’s main business
data adjusted in the reporting period, the Company’s main business data in the current
one year is calculated based on adjusted statistical standards at the end of the reporting
period
Applicable √ N/A
2.2.3. Whether revenue from physical sales is higher than service
revenue
√ Yes □ No
By business
Item Unit 2018 2017 YoY Change
segment
Sale volume ton 214,051.34 215,950.8 -0.88%
Liquor Output volume ton 211,606.75 220,136.14 -3.87%
Stock ton 24,863.94 27,308.53 -8.95%
Sale volume ton 5,288.96 5,212.34 1.47%
Wine Output volume ton 6,315.57 5,283.01 19.54%
Stock ton 1,360.62 334.01 307.36%
Reason for any over 30% YoY movements in the data above
√ Applicable N/A
The increase of 307.36% YoY in inventory of wine was mainly due to the wine imported
with original packaging and stock in advance by the end of this period.
2.2.4. Execution of significant sales contracts in the reporting period
Applicable √ N/A
2.2.5. Breakdown of cost of sales
By business and product segment
Unit：CNY
By 2018 2017
YoY
business Item As a percentage As a percentage
Amount Amount Change
segment of cost of sales of cost of sales
Liquor 5,527,417,445.92 87.00% 6,285,763,095.97 94.08% -12.06%
Unit：CNY
2018 2017
By As a
As a YoY
product Item percentage
Amount percentage of Amount Change
segment of cost of
cost of sales
sales
Liquor Raw materials 4,397,294,002.46 69.21% 4,243,329,762.51 63.51% 3.63%
Liquor Labor costs 597,717,848.21 9.41% 541,519,432.79 8.11% 10.38%
Fuels and
Liquor 246,871,521.50 3.89% 212,403,387.26 3.18% 16.23%
energy
manufacturing
Liquor 280,144,635.22 4.41% 263,652,646.09 3.95% 6.26%
overhead
Consumption
Liquor 5,389,438.53 0.08% 1,024,857,867.32 15.34% -99.47%
tax and
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
surcharges
Note:
The change of consumption tax paying method from withholding and remitting tax by
trustee to direct payment by the Company required by the government took effect from
September 1, 2017. In addition, the accounting method of consumption tax changed from
the cost of production of manufacturing consignment to the taxes and surcharges
generated from producing and selling liquor by the company. It results in that the
consumption tax and additional proportion of alcohol operating costs have been greatly
reduced in the reporting period.
2.2.6.Changes in the scope of the consolidated financial statements for
the reporting period
√ Yes No
The subsidiary newly consolidated in current year
Name Measure of acquisition
Jiangsu Yanghe Investment Management Co.,Ltd. Newly establishment
Su Wine Group Nanjing Operation Management Co.,Ltd. Newly establishment
Jiangsu Zhongshiji Wine Industry Co.,Ltd. Newly establishment
The subsidiary corporation no longer consolidated in current year
Name Reason
Sihong Shuangtai Package Co.,Ltd. Liquidation and cancellation
Nanjing Huiteng Media Technology Co.,Ltd. Merger and cancellation
2.2.7. Major changes in the business, products or services in the
reporting period
Applicable √ N/A
2.2.8. Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers（CNY） 1,026,614,241.91
Total sales from top five customers as a percentage of
4.24%
the total sales
Total sales from related parties among top five
0.00%
customers as a percentage of the total sales
Information on top five customers
As a percentage of the total
No. Customer Sales amount(CNY)
sales for the year
1 Customer A 372,603,918.77 1.54%
2 Customer B 278,972,563.82 1.15%
3 Customer C 147,781,342.09 0.61%
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
4 Customer D 114,297,391.06 0.47%
5 Customer E 112,959,026.17 0.47%
Total -- 1,026,614,241.91 4.24%
Other information on major customers
Applicable √ N/A
Major suppliers of the Company
Total purchase from top five suppliers（CNY） 1,359,969,302.30
Total purchase from top five suppliers as a percentage of the
32.37%
total sales
Total purchase from related parties among top five suppliers
0.00%
as a percentage of the total purchase
Information on top five suppliers
As a percentage of the total
No. Supplier Purchases(CNY)
purchase for the year
1 Supplier A 480,481,683.60 11.44%
2 Supplier B 266,134,208.40 6.33%
3 Supplier C 254,419,918.30 6.06%
4 Supplier D 196,368,731.20 4.67%
5 Supplier E 162,564,760.80 3.87%
Total -- 1,359,969,302.30 32.37%
Other information on major suppliers
Applicable √ N/A
2.3. Expense
Unit：CNY
Reason for any
2018 2017 YoY Change
significant change
Selling and
distribution 2,561,401,628.22 2,387,447,107.05 7.29%
expenses
General and
administrative 1,704,265,102.61 1,506,402,859.73 13.13%
expenses
Increased cash and
cash equivalents
leads to increased
Finance interest income on
-65,138,636.76 -33,912,331.47 -92.08%
expenses deposits in the
current period, which
makes finance
expenses decline.
R&D expenses 27,565,217.63 25,745,247.20 7.07%
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2.4. R&D input
√ Applicable N/A
During the reporting period, the Company established the microbiological database of
brewing microecology in Yanghe region, promoted the in-depth research on the healthy
substances of mellow liquor, optimized the production process parameters of raw liquor,
established the new selection method, and realized the great improvement of the liquor
body fullness and mellow thickness. At the same time, in the aspect of intelligent brewing,
the Company has made top-level design in advance and established six standard
process modules to promote the Company's transformation to intelligent manufacturing.
During the reporting period, the Company won 6 provincial science and technology
awards and 2 invention patents. Two scientific and technological achievements, such as
"Dream-blue handcraft class health effect research and application", have passed the
national appraisal, and the technical level has been highly evaluated by academicians
and experts, which is of great significance to the industry development and liquor health
research.
Information about R&D input
2018 2017 YoY Change
Number of R&D personnel 393 348 12.93%
R&D personnel as a
percentage in total 2.57% 2.32% 0.25%
employees
R&D input(CNY) 32,880,110.63 37,807,634.80 -13.03%
R&D input as a percentage
0.14% 0.19% -0.05%
in operating revenues
Capitalized R&D
5,314,893.00 12,062,387.60 -55.94%
input(CNY)
Capitalized R&D input (as
a) percentage in total R&D 16.16% 31.90% -15.74%
input
Reasons for any significant YoY change in the percentage of the R&D input in the
operating revenues
Applicable √ N/A
Reason for any sharp variation in the percentage of the capitalized R&D input and
rationale
Applicable √ N/A
2.5. Cash flows
Unit：CNY
Item 2018 2017 YoY Change
Subtotal of cash inflows
29,598,814,116.52 24,139,022,765.44 22.62%
from operating activities
17
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Subtotal of cash outflows
20,542,065,300.24 17,255,852,966.13 19.04%
from operating activities
Net cash flows from
9,056,748,816.28 6,883,169,799.31 31.58%
operating activities
Subtotal of cash inflows
35,262,332,061.45 30,970,188,282.84 13.86%
from investing activities
Subtotal of cash outflows
38,611,674,185.80 35,131,210,561.81 9.91%
from investing activities
Net cash flows from
-3,349,342,124.35 -4,161,022,278.97 19.51%
investing activities
Subtotal of cash inflows
1,500,000.00
from financing activities
Subtotal of cash outflows
3,842,859,037.00 3,417,116,090.61 12.46%
from financing activities
Net cash flows from
-3,841,359,037.00 -3,417,116,090.61 -12.42%
financing activities
Net increase in cash and
1,865,395,431.79 -706,674,482.79 363.97%
cash equivalents
Explanation of why the data above varied significantly
√ Applicable □ N/A
The increase of 31.58% YoY of net cash flows from operating activities was mainly due
to the increase of sales revenue in the current period which resulted in the increase of
cash inflows from operating activities is more than cash outflows from operating activities.
The increase of 363.97% YoY of net increase in cash and cash equivalent was mainly
due to the increase of sales revenue in the current period which resulted in the increase
of net cash flows from operating activities, and the decrease of net cash flows from
investing activities compared to last year.
Explanation of main reasons leading to the material difference between net cash flows
from operating activities during the reporting period and net profit for the year
Applicable √ N/A
3. Analysis of non-corebusiness
√ Applicable N/A
Unit：CNY
As a percentage
Amount Formation reasons Sustainability
of total profits
Mainly due to the
investment income
Investment
918,292,794.49 8.47% generated by financial No
income
management and the
investment income
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
generated by the
holding and disposal of
available-for-sale
financial assets
4.Assets and liabilities
4.1 Significant changes of asset items
Unit：CNY
As at the end of 2018 As at the end of 2017 Explanati
As a As a on about
Change in
percentage percentage any
Amount Amount percentage
of total of total significant
assets assets changes
Cash and cash
3,615,348,307.97 7.29% 1,751,452,876.18 4.05% 3.24%
equivalents
Accounts
5,419,314.60 0.01% 8,485,382.83 0.02% -0.01%
receivable
Inventories 13,892,118,587.74 28.03% 12,861,503,434.11 29.73% -1.70%
Long-term equity
9,423,328.82 0.02% 1,980,046.94 0.00% 0.02%
investments
Fixed assets 7,833,665,282.19 15.81% 8,249,559,468.26 19.07% -3.26%
Construction in
154,535,104.82 0.31% 235,219,521.41 0.54% -0.23%
progress
Long-term
109,088.00 0.00% 145,452.00 0.00% 0.00%
borrowings
4.2 Assets and liabilities measured at fair value
√Applicable □ N/A
Unit：CNY
Changes in Changes in the Provision
Amou
Opening fair value cumulative fair for Amount of Closing
Item nt of
balance recognized in value recorded impairme purchase balance
sale
profit or loss into equity nt
Financial
Asset
3.Available-
for-sale
0.00 -140,593,969.30 -140,593,969.30 425,350,132.53 284,756,163.23
financial
assets
Subtotal of
financial 0.00 -140,593,969.30 -140,593,969.30 425,350,132.53 284,756,163.23
assets
Total 0.00 -140,593,969.30 -140,593,969.30 425,350,132.53 284,756,163.23
Financial
0.00 0.00 0.00 0.00 0.00
liabilities
Whether measurement attribution of main assets changes significantly for the year
Applicable √ N/A
4.3 Restricted asset rights as of the end of this reporting period
No
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
5. Investment
5.1. Total investment
√ Applicable N/A
Investment made in the reporting Investment made in the prior
YoY Change
period(CNY) year(CNY)
1,035,447,337.86 636,340,416.13 62.72%
5.2. Significant equity investment made in the reporting period
Applicable √ N/A
20
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
5.3. Significant non-equity investment ongoing in the reporting period
Applicable √ N/A
5.4. Financial assets at a fair value
√Applicable N/A
Unit：CNY
Changes in the
Changes in fair Accumulated
Category of Initial investment cumulative fair Amount of
value recognized Amount of sale investment Closing g balance Capital source
securities cost value recorded purchase
in profit or loss income
into equity
Stock 425,350,132.53 -140,593,969.30 -140,593,969.30 425,350,132.53 0.00 16,308,806.79 284,756,163.23 Owned fund
Total 425,350,132.53 -140,593,969.30 -140,593,969.30 425,350,132.53 0.00 16,308,806.79 284,756,163.23 --
5.5. Use of fund-raising
Applicable √ N/A
No such cases in the reporting period
6. Sale of major assets and equity Interests
6.1. Sale of major Assets
Applicable √ N/A
No such cases in the reporting period
21
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
6.2. Sale of major equity Interests
Applicable √ N/A
7. Analysis of major subsidiaries
√ Applicable N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Registered
Company name Business scope Total assets Net assets Operating revenue Operating profit Net profit
type capital
Wholesaling and
Su Wine Trade Group
Subsidiary retailing of 334,400,000.00 20,919,000,581.47 6,304,466,480.18 23,255,391,278.03 7,162,512,056.56 5,451,435,460.35
Limited by Share Ltd
prepackaged food
Jiangsu Shuanggou Production and sales
Subsidiary 110,000,000.00 5,555,777,196.12 1,230,608,893.73 1,327,090,626.35 795,195,752.50 860,986,757.53
Distillery Stock Co.,Ltd. of liquor and spirit
Wholesaling and
Jiangsu Shuanggou Liquor
Subsidiary retailing of 5,000,000.00 3,936,234,566.37 996,006,490.09 2,989,316,863.12 1,310,202,119.41 982,914,861.88
Operation Co.,Ltd
prepackaged food
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ N/A
How subsidiary was acquired or disposed Impact on overall operation and
Subsidiary name
during the reporting period results(CNY)
Jiangsu Yanghe Investment Management Co.,Ltd. Establishment Tiny
Su Wine Group Nanjing Operation Management Co.,Ltd. Establishment Tiny
Jiangsu Zhongshiji Wine Industry Co.,Ltd. Establishment Tiny
Sihong Shuangtai Package Co.,Ltd. Liquidation and cancellation No
Nanjing Huiteng Media Technology Co.,Ltd. Merger and cancellation No
22
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
8. Structured entities controlled by the Company
Applicable √ N/A
23
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
9. Outlook for the future development of the Company
9.1. Analysis of industry situation
First, the liquor industry is developing well. In 2018, benefiting from the expansion and
upgrading of consumption and the structural transformation, the liquor industry has
shown a good development trend of steady increase in production and marketing with
improved efficiency and optimized structure. According to the statistics released by the
National Bureau of Statistics, the total output of liquor enterprises above designated size
was 8,712 thousand liters, up by 3.14% year on year. The accumulated sales revenue
reached CNY 536.3 billion, up 12.86% year on year. The cumulative profit reached CNY
125 billion, up 29.98% year on year. The liquor industry has entered a new stage of
steady growth and further optimized its structure.
Second, the pattern of liquor industry gradually formed. In 2018, the competition of liquor
industry market became more intensified. Famous liquor enterprises continuously
strengthened its competitive advantages in aspects of product, brand, channel and
market. Whether it is high-end, secondary high-end, middle-end or low-end, the
enterprises have gradually achieved nationalization, or formed the representative brands
in each mainstream of consumption level. The development of liquor industry structure
and competition situation is gradually formed, and it will be further strengthened in future
market competition.
Third, the trend of liquor industry concentration is increased obviously. In 2018, the
Matthew effect of liquor industry was highlighted, and leading liquor enterprises
continued to maintain rapid growth with the growth rate significantly higher than the
average level of the industry. The total operating revenue and profit of the top three
leading enterprises accounted for 25.70% and 64.22% of the total operating revenue and
profit of liquor enterprises above the designated size, which increased by 2.9% and
0.81% respectively in 2017. With the increasing concentration of liquor industry, leading
enterprises are expected to seize more shares in the future market competition.
9.2. Future development strategy and next business plan
(1)Future development strategy
In 2019, the Company will continue to adhere to the "Wu Du Wu Mi" strategy, aiming to
become the most knowledgeable, most brewing, most selling companies, the most
dedicated, the most professional and the most far-sighted liquor company in the industry
The more long-term development goal is to make the Company become a leader that
continuously crosses the life cycle and has a long-lasting satisfactory performance.
(2)2019 business plan
In 2019, facing the complex and changeable development situation, the Company's
overall working idea is to become more stable at the helm and to go far with full sail. It
fully implements the "1246 project", and promotes the high-quality, healthy and
sustainable development of the enterprise.
24
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The so-called "1246" project: "1" is to firmly establish a stand. The Company adheres to
the law of brand growth cycle, implements of various strategies with innovation, and
promotes better and faster development of the market.
"2"refers to going all out for two big goals. First, the Company aim to make a
revolutionary breakthrough in the mellowness of liquor. Focusing on the in-depth
application of mellowness mechanism, the Company comprehensively improves the
product personalization, specialization and post-drinking comfort, which leads the liquor
market consumption trend, and creates the touching and pleasure of consumers. The
second goal is to realize a 12%+ year on year increase in 2019 revenue.
"4" refers to the four cores of deliberate transformation. The first is consumption
upgrading. In line with the development trend of consumption upgrading, the Company
thinks deeply and studies the consumer psychology, and accurately grasps the direction
of consumption upgrading. The second is industry differentiation. The Company seizes
the opportunity of industry differentiation, grabs the terminal consumers, and further
improves the market share. Third, information overload. In view of the media
characteristics in the information flooding era, the Company conducts in-depth research
and improves the communication efficiency, and tells a good brand and quality story
comprehensively. Fourth high-dimensional competition. The Company finds and enters
the high-dimensional blue sea of competition by means of advantage reengineering,
pattern innovation and ecosphere construction.
"6" refers to the six powers of perseverance. One is to achieve the best product force.
The Company strives for improvement in quality, breakthroughs in technology, and
characteristic creation in image, coverage in layout. The Company promotes the
application of mellowness mechanism, and achieves continuous improvement in mellow
quality. Second is to form the deeply-rooted brand power. Focused on new brands, new
marketing, and new content, the Company optimizes the mode of communication and
uses of efficient media to create a deeply-rooted brand power, and helps the steady
development of marketing. Third is to shape both offensive and defensive channels
elaborately. The Company adheres to taking up more market share in the long run by
creating more incremental amount, and actively does a good job in the high-end
breakthrough. The Company promotes the transformation of channels and creates
comprehensive channel perfection. Fourth is to approve the strong and reliable
supporting forces continuously. The Company establishes a more scientific and
reasonable assessment system to promote accurate marketing assessment, deepens
long-term management, and improves basic management level comprehensively, so as
to provide strong guarantee for the front line of marketing; The fifth is to enhance
innovation ability to prepare the Company for the future. The Company adheres to a high
sense of crisis and advanced planning, with focusing on digital operations, strategic
research, capital management, supply chain management and other work. It creates a
new driving force for enterprise development. Sixth is to form high-spirited state of
cultural power elaborately. The Company strengthens the height of political stand,
adheres to the scientific and pragmatic attitude, and stimulates the spirit of striving for the
first. These works are done for the well-being of the staff, the interests of share holders,
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
the development of enterprises, making contributions to the society, and
comprehensively sublimating the cultural power of common prosperity and sharing.
(3)Possible risks
First is the risk of macroeconomic uncertainty. International economic environment is
unpredictable, and domestic economic downward pressure is still. Adjustment and
change of Liquor industry policy may affect the healthy growth of liquor enterprises.
Second is the risk of intensified market competition. The main competitive enterprises
pay more attentions to marketing work, increase investment intensity, strengthen channel
construction, further develop the terminal, which makes the market competition more
intense.
Third is the risk of new channel impact. At present, the liquor circulation enterprises
represented by 1919 and liquor convenience have developed rapidly, including the
development of new Internet retail, which brings uncertainty to the channel construction
of liquor enterprises.
Fourth is the risk of consumption concept change. Consumers pay more attention to the
concept of healthy life. At the same time, with the adjustment of the age structure of the
drinking population, the liquor consumption preference in daily life has decreased, and
the liquor consumption shows a trend of diversified development.
10. Visits paid to the Company for research, communication,
interview, etc.
10.1 Activity register in the reporting period
√ Applicable N/A
Date of visit Way of visit Type of visitor Index to main inquiry information
Log Sheet of Investor Relations
Activities for 30 January 2018 on
30 January 2018 Field survey Institution www.cninfo.com.cn（No：2018-
001）
Log Sheet of Investor Relations
Activities for 5 March 2018 on
5 March 2018 Field survey Institution www.cninfo.com.cn（No：2018-
002）
Log Sheet of Investor Relations
Activities for 2 May 2018 on
Telephone
2 May 2018 Institution www.cninfo.com.cn（No：2018-
communication
003）
Log Sheet of Investor Relations
7 May 2018 Other Other
Activities for 7 May 2018 on
26
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Date of visit Way of visit Type of visitor Index to main inquiry information
www.cninfo.com.cn（No：2018-
004）
Log Sheet of Investor Relations
Activities for 15 May 2018 on
Telephone
15 May 2018 Institution www.cninfo.com.cn（No：2018-
communication
005）
Log Sheet of Investor Relations
Activities for 23 May 2018 on
23 May 2018 Field survey Other www.cninfo.com.cn（No：2018-
006）
Log Sheet of Investor Relations
Activities for 19 July 2018 on
19 July 2018 Field survey Institution www.cninfo.com.cn（No：2018-
007）
Log Sheet of Investor Relations
Activities for 7 September 2018
7 September 2018 Field survey Institution on www.cninfo.com.cn（No：
2018-008）
Log Sheet of Investor Relations
Activities for 13 September 2018
13 September 2018 Field survey Institution on www.cninfo.com.cn（No：
2018-009）
Log Sheet of Investor Relations
Activities for 20 September 2018
20 September 2018 Field survey Institution on www.cninfo.com.cn（No：
2018-010）
Log Sheet of Investor Relations
Activities for 7 November 2018 on
7 November 2018 Field survey Institution www.cninfo.com.cn（No：2018-
011）
27
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section V Significant Events
1. Profit distribution and converting capital reserves into
share capital for common shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash
dividend policy, for common shareholders in the reporting period
√ Applicable N/A
On 23 May 2018, the Company held 2017 annual shareholders' meeting, and the plan for
profit distribution for 2017 was reviewed and approved by this meeting. Plan for profit
distribution: Based on its total of 1,506.988 million shares as on 31 December 2017, the
Company distributed a cash dividend of CNY25.5 (tax inclusive) per 10 shares to all
shareholders. The total cash dividend is CNY 3,842.8194 million (tax inclusive). The book
closure day was 21 June 2018 and the ex-right & ex-dividend day 22 June 2018.
A special statement of the policy of cash dividends
Whether it meets the requirements of the articles
of incorporation or the resolution of shareholders' Yes
meeting.
Whether the standard and proportion of dividends
Yes
are clear.
Whether the relevant decision-making process and
Yes
systems are complete.
Whether non-executive directors perform their
Yes
duties and play their due role.
Whether the minority shareholders have the
opportunity to fully express their opinions and
Yes
appeals and whether their legitimate rights and
interests have been adequately protected.
Whether the conditions and procedures are
The Company's cash dividend policy
compliant and transparent it the cash dividend
has not been adjusted or changed.
policy is adjusted or changed.
Plans (or preliminary plans) for profit distribution and converting capital reserves into
share capital for common shareholders for the recent three years (including the reporting
period) are as following:
Preliminary plan for profit distribution for 2018: Based on its total of 1,506.988 million
shares as at 31 December 2018, the Company is to distribute a cash dividend of CNY32
(tax inclusive) per 10 shares to all shareholders. The total cash dividend is
CNY4,822.3616 million (tax inclusive).
Plan for profit distribution for 2017: Based on its total of 1,506.988 million shares as at 31
December 2017, the Company is to distribute a cash dividend of CNY 25.5 (tax inclusive)
per 10 shares to all shareholders. The total cash dividend is CNY 3,842.8194 million (tax
inclusive).The book closure day was 6 June 2018 and the ex-right & ex-dividend day was
21 June 2018.
28
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Plan for profit distribution for 2016: Based on its total of 1,506.988 million shares as at 31
December 2016, the Company distributed a cash dividend of CNY 21 (tax inclusive) per
10 shares to all shareholders. The total cash dividend is CNY 3,164.6748 million (tax
inclusive). The book closure day was 15 June 2017 and the ex-right & ex-dividend day
was 16 June 2017.
Cash dividend distribution over the recent three years (including the reporting period)
Unit: CNY
Ratio to net
Net profit profit Ratio of
attributable to attributable Ratio of cash
Cash Total cash
Cash common to common cash dividends
dividends dividends
Year dividends (tax shareholders in shareholder in other dividends (including other (including
in other other
inclusive) the consolidated s in the forms forms)
forms forms)
statement in the consolidated
year statement in
the year
2018 4,822,361,600.00 8,115,189,794.69 59.42% 0.00 0.00% 4,822,361,600.00 59.42%
2017 3,842,819,400.00 6,627,169,959.16 57.99% 0.00 0.00% 3,842,819,400.00 57.99%
2016 3,164,674,800.00 5,827,168,870.88 54.31% 0.00 0.00% 3,164,674,800.00 54.31%
The Company made a profit in the reporting period and the profit distributed to common
shareholders of the Company was positive, but it did not put forward a preliminary plan
for cash dividend distribution to its common shareholders.
Applicable √ N/A
2. Preliminary plan for profit distribution and converting
capital reserves into share capital for the reporting period
√ Applicable N/A
Bonus shares for every 10 shares 0
(share)
Dividend for every 10 shares (CNY) (tax 32.00
included)
Additional shares converted from capital 0
reserves for every 10 shares (share)
Total shares as the basis for the
preliminary plan for profit distribution 1,506,988,000
(share)
Total cash dividends (CNY) (tax
4,822,361,600.00
inclusive)
Cash dividends in other forms (e.g.
0.00
repurchase share)
Total cash dividends (CNY) (including
4,822,361,600
other forms)
Distributable profit (CNY) 21,942,516,695.42
Percentage of cash dividends in the
total distributed profit (including other 100%
forms)
29
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Information of the cash dividends
The development stage of the Company is mature and the Company has no major fund
expenditure arrangement. When the profit distribution is carried out, the proportion of
cash dividends in this profit distribution should at least reach 80%.
Details about the preliminary plan for profit distribution and converting capital reserves
into share capital
As audited by Jiangsu Suya Jincheng CPA LLP, the Company realized a net profit of
CNY 7,047,875,821.74 for 2018 (consolidated statements attributable to shareholders of
the parent company net profit of CNY 8,115,189,794.69). It provided CNY 0 as statutory
surplus reserves. Plus undistributed profit at the beginning of the year of CNY
18,737,460,273.68 and minus the distributed profit of CNY 3,842,819,400, the actual
distributable profit would be CNY 21,942,516,695.42. In line with both the long-term
development needs of the Company and the principle of giving appropriate returns to
shareholders, based on its total of 150,6.99 million shares, the Company is to distribute
a cash dividend of CNY 32 (tax inclusive) per 10 shares to all shareholders. The total
cash dividend is CNY 17,120,155,095.42. Accounting for 59.42% of the net profit
attributable to the parent company's shareholders. The remaining undistributed profit of
CNY 17,120,155,095.42shall be carried forward for future distribution.
3. Performance of undertakings
3.1. Undertakings of the Company's actual controller, shareholders,
related parties and acquirer, as well as the company and other
commitment makers fulfilled in the reporting period or ongoing at the
period-end
√ Applicable N/A
Degree
Undertaking Type of Undertaki of
Undertaking Details of undertaking Term
giver undertaking ng date perfor
mance
Stock reform
undertaking
Undertaking made in
the report of acquisition
or change of interest
Undertaking made in
the reorganization of
assets
1. The commitment to
avoid horizontal competitio
n:
(1) At present, the company
has not engaged in the
Horizontal com business of competing with
Undertakings given in petition, related the joint stock company.
Jiangsu
transactions The company is committed Long- In
time of IPO or Yanghe Group 2009.08.26
and capital to maintaining the existing term progress
refinancing Co.,Ltd.
occupation business structure and does
not directly or indirectly
operate any business that
competes with the actual
operation of the joint stock
company or may constitute
a competition, or a
30
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Degree
Undertaking Type of Undertaki of
Undertaking Details of undertaking Term
giver undertaking ng date perfor
mance
subsidiary or subsidiary
enterprise that is engaged
in the above business.
(2) If the company violates
the above commitments,
the joint stock company has
the right to require the
company to immediately
terminate its business
competition and to
compensate for the
economic losses caused to
the joint stock company. At
the same time, the
company should pay
liquidated damages to the
joint stock company for
CNY 10 million.
(3) The company has
committed itself to the
legitimate rights and
interests of the
shareholders of joint-stock
companies, other
shareholders of joint-stock
companies and the
creditors of joint-stock
companies without the use
of their holding shareholder
status in the joint stock
company.
(4) This undertaking shall
enter into force on the date
of signing, and shall not be
revoked without the consent
of the stock company.
2. The commitment to
reduce the related
transactions: the company
will strictly follow the
requirements of the relevant
laws as Corporation Law,
Securities Law and Code of
Corporate Governance for
Listed Companies, and
further reduce and strictly
standardize the various
related transactions
between the company and
the joint stock companies,
so as to ensure that the
controlling shareholders
and the actual control are
not used. The status of
making a person damages
the interests of the
shareholders of a joint stock
company and other
shareholders and does not
occur in the case of new
share holding companies.
Jiangsu Blue Horizontal com The commitment to avoid In
Long-
Alliance Joint- petition, related horizontal competition: 2017.11.23 progress
term
Stock Co., Ltd. transactions 1. The company is mainly .
31
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Degree
Undertaking Type of Undertaki of
Undertaking Details of undertaking Term
giver undertaking ng date perfor
mance
and capital engaged in investment Blue
occupation management and does not Alliance
operate the same or merged
associated business with Blue Sky
the issuer. The company Trade
will not engage in the and Blue
business of the same or Ocean
associated business with Trade.
the issuer, without prejudice Blue
to the interests of the Alliance
issuer, nor from the issuer carries
for unfair interests. on
2. If the company violates relevant
the above commitment, the commitm
issuer has the right to claim ents
compensation for the
economic loss resulting
from the issuer, and to pay
a liquidated penalty of CNY
5 million, and the right to
purchase the business item
at the market price of the
business item or the
establishment of a cost
price (which is the principle
of the lowest value).3. This
undertaking shall enter into
force on the date of signing,
and shall not be revoked
without the consent of the
issuer.
In
progress
，Blue
Alliance
After a year of trading in the merged
stock exchange, the shares Blue Sky
of the issuer will not exceed Trade
Jiangsu Blue 25% of the total number of
Long- and Blue
Alliance Joint- Share reduction shares held by the issuer, 2017.11.23
term Ocean
Stock Co., Ltd. and the issuer's shares and Trade.
changes in the shares are Blue
declared to the issuer in a Alliance
timely manner. Carries
on
relevant
commitm
ents
Shareholders of Blue Sky
Trade,as directors,
supervisors and senior
managers, made the
commitment:
1. During the tenure of the
issuer, Blue Sky Trade
Feng Pantai, Other equity transferred annually Long- In
Cong Xuenian undertaking shall not exceed 25% of the 2017.11.23 term progress
total number of shares held
by Blue Sky Trade。
2. If I leave the issuer, I will
not transfer the shares of
Blue Sky Trade that I have
held within six months after
my departure.
32
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Degree
Undertaking Type of Undertaki of
Undertaking Details of undertaking Term
giver undertaking ng date perfor
mance
3. If I leave from the issuer,
the number of Blue Sky
transferred shares trade
within twelve months after
six months of departure
does not exceed 50% of the
total share of Blue Sky
Trade.
Shareholders of Blue
Ocean Trade,as directors,
supervisors and senior
managers, made the
commitment:
1. During the tenure of the
issuer, Blue Ocean Trade
equity transferred annually
shall not exceed 25% of the
total number of shares held
by Blue Ocean Trade
Other 2. If I leave the issuer, I will 2019. In
Zhong Yuye 2017.11.23
undertaking not transfer the shares of 03.23 progress
Blue Ocean Trade that I
have held within six months
after my departure.
3. If I leave from the issuer,
the number of Blue Ocean
transferred shares trade
within twelve months after
six months of departure
does not exceed 50% of the
total share of Blue Ocean
Trade.
Equity incentive
commitment
Other undertakings to
non-controlling
shareholders
Whether the undertaking
Yes
is fulfilled on time
Specific reasons for
failing to fulfill any
None
undertaking and plan for
the next step
3.2. Where any earnings forecast was made for any of the Company's
assets or projects and the reporting period is still within the forecast
period, the Company shall explain whether the performance of the asset
or project reaches the earnings forecast and why
Applicable √ N/A
4. Occupation of the company's capital by the controlling
shareholder or its related parties for non-operating purposes
Applicable √ N/A
No such cases in the reporting period.
33
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
5. Explanation of the board of directors, the supervisory
committee and non-executive directors (if any) regarding the
"non-standard audit opinion" for the reporting period
Applicable √ N/A
6. Reasons for changes in accounting policies, accounting
estimates and accounting methods as compared to the
financial report for the prior year
√ Applicable N/A
According to the notice of the ministry of finance on the Revision and Issuance of the
General Corporate Financial Statement Format for 2018 issued on June 15, 2018
(CaiKuai [2018] No. 15), the Company has revised the financial statement format as
follows:
1. Balance sheet: merge the original "notes receivables" and "accounts receivables"
items into "notes and accounts receivables";Merge the original items of "interest
receivables", "dividend receivables" and "other receivables" into "other
receivables";Merge the original "fixed assets" and "fixed assets liquidation" projects into
"fixed assets";Merge the original "project materials" and "construction in progress" into
"construction in progress";Merge the original "notes payable" and "accounts payable"
items into "notes and accounts payables";Merge the original "interest payable",
"dividends payable" and "other payables" into "other payables";Merge the original "long-
term payables" and "special payables" into "long-term payables".
2. Income statement: separate the "general and administrative expenses " project into
the "general and administrative expenses " and the "research and development
expenses";Add "interest expenses" and "interest income" under "financial expenses" in
the income statement.
3. Statement of changes in owners' equity: add the item "change in defined benefit plan
carried forward retained earnings".
The event of changes in Accounting Policies has been reviewed and approved by the
sixth meeting of the sixth board of directors.
Details of the affected items in the financial statements at the beginning and last period
(December 31, 2017 /2017 year) are as follows:
Before the adjustment After the adjustment
Item Amount (CNY) Item Amount (CNY)
Notes receivables 212,812,236.57 221,297,619.40
Notes and accounts receivables
accounts receivables 8,485,382.83
Construction in 234,431,457.83 235,219,521.41
progress Construction in progress
Project materials 788,063.58
Notes payables 8,200,000.00 1,119,603,574.47
Notes and accounts payables
Accounts payables 1,111,403,574.47
34
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Before the adjustment After the adjustment
Item Amount (CNY) Item Amount (CNY)
General and 1,532,148,106.93 General and administrative 1,506,402,859.73
administrative expenses
expenses Research and development 25,745,247.20
expenses
7. Reasons for retrospective restatement of major accounting
errors during the reporting period
Applicable √ N/A
No such cases in the reporting period
8. Reasons for changes in scope of the consolidated financial
statements as compared to the financial report for the prior
year
√ Applicable N/A
1. Establishment of subsidiaries
In June 2018, the Company and its owned subsidiary Su Wine Group Jiangsu Wealth
Management Co.,Ltd. respectively subscribed CNY 150,000 to set up Jiangsu Yanghe
Investment Management Co.,Ltd.. It will be included in the consolidated financial
statements from June 2018.
In May 2018, the owned subsidiary Su Wine Group Trade Co., Ltd. subscribed CNY
50,000 to set up Su Wine Group Nanjing Operation Management Co.,Ltd.. It will be
included in the consolidated financial statements from May 2018.
On 7 November 2018, the owned subsidiary Su Wine Group Trade Co., Ltd. subscribed
CNY 10 million to set up Jiangsu Zhongshiji Wine Industry Co.,Ltd.. As of December 31,
2018, it has not made any actual investment. It will be included in the consolidated
financial statements from November 2018.
2. Cancellation of subsidiaries
Sihong Shuangtai Package Co.,Ltd., the owned subsidiary in this period, conducted
liquidation and cancellation. On May 29, 2018, it obtained the notice of company
approval for cancellation registration issued by Sihong County Market Supervision and
Administration Bureau. It will no longer be included in the consolidated financial
statements from June 2018.
The owned subsidiary, Sue Wine Group Trade Co., Ltd. merged Nanjing Huiteng Media
Technology Co.,Ltd.. On November 7, 2018, it obtained the notice of company approval
35
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
for cancellation registration issued by Nanjing Jianye District Market Supervision and
Administration Bureau.
9. Engagement and disengagement of CPAs firm
CPAs firm at present
Name of the domestic CPAs firm Jiangsu Suyajincheng CPA LLP
The Company’s payment for the domestic 190.8
CPAs firm (CNY’0,000)
Consecutive years of the audit service 12
provided by the domestic CPAs firm
Names of the certified public accountants Xu Xuzhen, Kan Baoyong
from the domestic CPAs firm
Consecutive years of the audit service
provided by the certified public Xu Xuzhen (5 years), Kan Baoyong (2 years)
accountants
Whether the CPAs firm was changed in the current period
Yes √ No
Engagement of any CPAs firm for internal control audit, financial adviser or sponsor
Applicable √ N/A
10. Possibility of listing suspension and termination after
disclosure of this annual report
Applicable √ N/A
11. Bankruptcy and reorganization
Applicable √ N/A
No such cases in the reporting period.
12. Material litigation and arbitration
Applicable √ N/A
No such cases in the reporting period.
13. Punishments and rectifications
Applicable √ N/A
No such cases in the reporting period.
14. Credit conditions of the company as well as its controlling
shareholder and actual controller
Applicable √ N/A
36
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
15. Implementation of any equity incentive plan, employee
stock ownership plan or other incentive measures for
employees
Applicable √ N/A
16. Significant related-party transactions
16.1. Related-party transactions arising from routine operation
Applicable √ N/A
No such cases in the reporting period.
16.2. Related-party transactions regarding purchase or sales of assets
or equity interests
Applicable √ N/A
No such cases in the reporting period.
16.3. Related-party transactions arising from joint investments in
external parties
Applicable √ N/A
No such cases in the reporting period.
16.4. Credits and liabilities with related parties
√Applicable □N/A
Whether there are non-operational related creditor's rights and debt transactions
Applicable √ N/A
No such cases in the reporting period.
16.5. Other significant related-party transactions
Applicable √ N/A
No such cases in the reporting period.
17. Significant contracts and their execution
17.1. Trusteeship, contracting and leasing
17.1.1. Trusteeship
Applicable √ N/A
No such cases in the reporting period.
17.1.2. Contracting
Applicable √ N/A
No such cases in the reporting period.
37
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
17.1.3. Leasing
Applicable √ N/A
No such cases in the reporting period.
17.2. Major guarantees
Applicable √ N/A
No such cases in the reporting period.
17.3. Entrusted cash asset management
17.3.1. Entrust assets management
√ Applicable N/A
Entrust assets in the reporting period.
Unit：CNY10, 000
Undue amount Overdue
Source of
Product type Amount at the end of outstanding
entrusted assets
2017 amount
Bank finance Owned Fund 1,004,000 888,864.99 0
Trust finance Owned Fund 856,710.36 856,710.36 0
Broker finance Owned Fund 90,000 0 0
Other Owned Fund 45,000 45,000 0
Total 1,995,710.36 1,790,575.35 0
38
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Information about significant amount of individual entrust finance or high-risk entrust finance with principle nonguaranteed and poor liquidity.
√ Applicable N/A
Unit：CNY10,000
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Used for
Zhongrong Zhongrong -
subscribing
Internation Assistant 23 June 23 June
Trust 15,000 Owned fund financial Cash 7.40% 2,220 1,106.96 0 0 Yes Yes
al Trust Fund No.190 2017 2019
investment
Co.,Ltd. Trust
products
CNY
12.8282
million was
used for
gaining
49% equity
of
Dasheng
Group
Shandong
Zhongrong Property
Zhongrong
Trust-The Co., Ltd..
Internation 30 June 30 June
Trust Glory of the 10,000 Owned fund The Cash 7.60% 1,520 757.92 760 0 Yes Yes
al Trust 2017 2019
World No.26 surplus
Co.,Ltd.
Trust funds
deducting
related
expenses
and credit
insurance
fund
flowed into
project
company
as a
39
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
shareholde
r loan
Used for
Western
capital
Trust-
increase in
Evergrande
Western Evergrand
Enping Equity 5 October
Trust Trust 10,000 Owned fund 5 July 2017 e Real Cash 7.40% 1,666.52 737.97 716.59 0 Yes Yes
Investment 2019
Co.,Ltd. Estate
Collective
Group
Fund Trust
Enping
Plan
Co.,Ltd.
Used for
developme
nt and
constructio
n of
Qujiangxia
Western ngdu Block
Trust- C Project
Western Tiandiyuan 11 11 by Xi’an
Trust Trust (Phase V) 12,000 Owned fund September Septemb Tiandiyuan Cash 6.80% 1,632 813.76 797.55 0 Yes Yes
Co.,Ltd. Collective 2017 er 2019 Real
Fund Trust Estate
Plan Developme
nt Co., Ltd.
and
replaceme
nt of
external
financing
Shanxi Shanxi Used for
27 27
Internation International developme
Trust 10,000 Owned fund September Septemb Cash 7.60% 1,520 757.92 745.45 0 Yes Yes
al Trust TrustWuxi nt and
2017 er 2019
Co.,Ltd. Railway constructio
40
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Station North n of Tainyu
Square A Garden
Block Project Residential
Loan Project
Collective Phase I
Fund Trust and Phase
Plan II 3-7#
Building in
Wuxi
Railway
Station
North
Square A
Block in
Liangxi
Direct,
Wuxi City
by Wuxi
Shimao
Real
Estate
Developme
nt and
Constructio
n Co.,Ltd
Shanxi Used for
International working
TrustGreen capital
Shanxi
Source 31 supplemen
Internation 31 October
Trust Farmers 10,000 Owned fund October t of Cash 7.70% 1,540 767.89 373.33 0 Yes Yes
al Trust 2017
Market Trust 2019 offering
Co.,Ltd.
Loan trust loans
Collective to Green
Fund Trust Source
41
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Plan Farmers
Market
Co.,Ltd.
Used for
developme
nt and
constructio
Shanghai
n of Yunhai
Xintuo-
Shanghai Garden
Oceanwide
Internation 9 Project
Wuhan 9 May
al Xintuo Trust 10,000 Owned fund November (Block 24- Cash 6.50% 972.33 648.22 0 0 Yes Yes
Yunhai 2019
Trade 2017 1) by
Garden
Company Wuhan
Collective
CBD
Trust
Investment
&Develop
ment
Co.,Ltd.
Shanghai
Jiangnan
(Group)
Co., Ltd.
used the
funds to
Zhongrong repay
Zhongrong- 15 15
Internation existing
Trust Junzun No.1 15,000 Owned fund December Decembe Cash 8.00% 2,400 1,196.71 1176.99 0 Yes Yes
al Trust debts and
Trust 2017 r 2019
Co.,Ltd. acquire
equity
shares of
Sichuan
Tengdun
Technolog
y Co.,Ltd.
42
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
and its
operation
service
company
Used for
the
developme
nt and
constructio
n of the
Huarong -
"Lianyunga
Lianyungang
Huarong ng
Tongke 1
Internation 1 March Excellence
Trust Equity 2,000 Owned fund March202 Cash 9.00% 360.49 150.41 144.27 0 Yes Yes
al Trust 2018 Blue Coast
Investment 0
Co.,Ltd, " project of
Collective
Tianqian
Trust Plan
Real
Estate
Company
under
Tongke
Group
Used for
the Xiamen
Rongxin R
Western ongxinBow
Trust Rongxi an project
Western
n Bowan 27 27 June developme
Trust Trust 10,000 Owned fund Cash 8.80% 1,101.81 672.66 636.11 0 Yes Yes
Collection March2018 2019 nt of
Co.,Ltd.
Fund Trust rongxin
Plan new field
(Xiamen)
Real
Estate
43
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Developme
nt Co., Ltd.
Used for
stock
pledge of
Avic Trust
the
[2018]No.92C
outstandin
entury
Avic Trust 14 May 14 May g shares of
Trust Huatong 15,000 Owned fund Cash 8.40% 1,260 797.42 0 0 Yes Yes
Co.,Ltd. 2018 2019 Century
Stock Pledge
Huatong
Fund Trust
(SZ.
Plan
002602), a
listed
company.
Used for
the transfer
of the right
to specific
Shanxi assets of
International Qidong
Shanxi Trust-Qidong HengdaOff
Internation HengdaOffsh 25 May 25 May shore
Trust 15,000 Owned fund Cash 8.60% 1,290 777.53 738.66 0 Yes Yes
al Trust ore Venice 2018 2019 Venice 4-3
Co.,Ltd. Collection parcel
Fund Trust project
Plan legally held
by Qidong
Qinsheng
real estate
Co., Ltd.
Minmetals Minmetals Used for
Internation International 27 June 27 June the
Trust 15,000 Owned fund Cash 8.50% 1,275 614.79 614.79 0 Yes Yes
al Trust Trust-Unitrust 2018 2019 developme
Co.,Ltd. No.32 - nt and
44
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Changli constructio
Wenzeng n of
No.66 Nanjing
Collection Pukou
Fund trust Pujiang
Plan Street G24
plot under
the name
of Nanjing
Shirong
Real
Estate Co.,
Ltd.
To invest
in the
special
creditor's
rights of
Wuxi
Shanghai Huajun
Shanghai International Real
Internation Xintuo-Wuxi 27 26 Estate
al Xintuo Trust Huajun Bond 5,000 Owned fund September Septemb Developme Cash 7.20% 360 0 0 0 Yes Yes
Trade Investment 2018 er 2019 nt Co.,
Company Fund Trust Ltd., a
Plan subsidiary
of zhuhai
Huafa
Industrial
Co., Ltd.,
as the
debtor
Avic Trust Avic 28 27 Used for
Trust 10,000 Owned fund Cash 9.00% 900 204.66 204.66 0 Yes Yes
Co.,Ltd. Trust.Apocaly September Septemb granting
45
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
pse [2017] 2018 er 2019 trust loans
No.675 to Yunnan
Kunming Kaimou
Longxi Real
Huating Trust Estate
Loan Developme
Collection nt Co.,
Fund Trust Ltd.,
Plan specifically
for the
"Evergrand
e Longxi
Huating"
project in
the main
urban area
of Kunming
Used for
subscribing
financial
investment
products or
Avic other
Trust.Apocaly projects
pse 19 and
Avic Trust 19 June
Trust No.556Tianch 40,000 Owned fund December products Cash 7.80% 1,555.73 102.58 0 0 Yes Yes
Co.,Ltd. 2019
engjufu 2018 permitted
Investment by the laws
Fund and
regulations
such as
deposit in
bank,
money
46
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
market
fund and
corporate
bonds
Total -- 204,000 -- -- -- -- -- -- 21,573.88 10,107.40 -- 0 -- -- --
Entrust finance expected to be failed to recover principle or other situation leading to impairment
Applicable √ N/A
17.3.2 Entrust loans
Applicable √ N/A
No such cases in the reporting period.
17.4 Other significant contracts
Applicable √ N/A
No such cases in the reporting period.
18. Social responsibilities
18.1 Information about taking social responsibilities
The information about taking social responsibilities disclosed in 2018 Annual Social Responsibilities Report in detail on www.cninfo.com.cn on 30 April
2019.
18.2 Information about targeted poverty alleviation
18.2.1 Targeted poverty alleviation plan
According to the overall arrangement of the Suqian municipal party committee and the municipal government on poverty alleviation and building a
well-off society with the work of "guancun baohu" and "three into three help", the Company actively responded to the call and quickly implemented the
relevant requirements with practical actions to practice the spirit of enterprise and take bravely social responsibility.
47
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
In 2018, the Company earnestly implement the spirit of the 19th National Congress of the Communist Party of China with precision in poverty
alleviation and speeding up poverty as own duty, around support mission support plan carefully. The Company established village collective project -
cattle farm for Qiuzhaung village. On each quarter, the Company visited 200 farmers from Taiping village and Dagou village in depth so as to collect
information on the application called Sunny Poverty Alleviation and ensure that the "gucun baohu" work with high quality and efficiency. It promotes
the rural development, and enhances the farmers' income, strengthens the relationship between cadres and masses, and makes due contributions to
“liang ju yi gao” work.
48
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
18.2.2 Summary of annual targeted poverty alleviation
According to the requirements of the municipal poverty relief office and sunshine office,
the Company has done a good job in "guancun baohu" work. The Company has linked
up with Qiuzhuang village in Yanghe New District, and each branch is responsible for the
assistance work for 200 low-income households in Daguo village and Taiping village,
among which 99 households are in Taiping village and 101 in Daguo village. After three
consecutive years of assistance, by the end of 2018, the tasks of pairing assistance were
completed according to the schedule. The collective economic income of Qiuzhuang
village was CNY 240,000 in 2018, exceeding the annual task requirement. At the same
time, the Company organized and carried out special poverty alleviation activities, such
as "taking the grassroots level, emphasizing policies, adjusting structures, helping the
three summers", and consoling with party members in difficulties or being ill.
18.2.3 Poverty alleviation achievement
Indicator Unit Amount/Implementation Situation
A.Overall situation —— ——
Including：1.Fund CNY 10,000 479.5
2.Goods converted into
CNY 10,000 7.13
cash
3.Establishing card for
Person 201
archives of poor people out of poverty
B. Input by project —— ——
1.Industrial development —— ——
Including：1.1 Types of poverty
Poverty alleviation through
alleviation projects for industrial ——
agriculture and forestry
development
1.2Number of poverty
alleviation projects for industrial Item 1
development
1.3Amount invested in
poverty alleviation projects for CNY 10,000 15
industrial development
2.Transfer and employment —— ——
3.Removal and relocation —— ——
4.Educational poverty alleviation —— ——
5.Health poverty alleviation —— ——
6.Ecological protection —— ——
7.Basic guarantee —— ——
8.Social poverty alleviation —— ——
9.Other project —— ——
Including：9.1.Item Item 5
9.2.Input amount CNY 10,000 471.63
C. Awards（content and level） —— ——
49
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
18.2.4 Follow-up poverty alleviation plan
a. Key follow-up the guacun work. The project helps promote "hematopoietic" poverty
alleviation. It mainly follows up the collective economic assistance project of Qiuzhuang
village in the linked village -- the contracted operation project of cattle farm, and strives to
achieve the expected results. Taking "Party member activity day" and "National poverty
alleviation day" as the starting point, the Company gives full play to the leading role of
party members and cadres, and timely provides technical and operational support for the
cattle farm project. With the village committees, the Company will comb the village
economic development projects in new year, revitalize the existing village collective
assets, mobilize the enthusiasm of every villager. In addition, it plans to invest CNY
200,000 to help Qiuzhuang village transfer 200 mu of collective land, and establish
collective estate and create new collective economic growth point.
b. Carry out the “Baohu” work in depth. In 2019, the Company will continue to carry out
the pairing support work. In the process, the Company will strengthen organizational
leadership, clear work task, adhere to carrying out the task and taking the responsibility
with poverty alleviation funds, and seriously implement the support work. The Company
will mobilize the person in charge of each branch to conduct a detailed investigation into
basic information of pairing families, children of unemployment situation, their children to
school, the causes for the extremely poor farmers poverty and income situation through
holding seminars and visiting the masses, which helps solve their difficulties in production
and living.
c. Create profile and dynamic tracking. With the application called Sunny Poverty
Alleviation, the Company will establish a basic information database for helping and
supporting households, which forms a dynamic information feedback mechanism with
timely follow-up and upgrade. According to the dynamic tracking of information obtained
by each visiting such as basic information of pairing families, children of unemployment
situation, their children to school, the causes for the poverty of extremely poor farmers,
the Company deeply understands the number of difficult farmers, the cause for poverty,
difficulty level, farmers’ specialty and employment demand. According to the different
situation of each pair at different times, the Company makes more reasonable and
effective support measures in time, and timely implement relevant policies in supporting
these households.
d. Responsibility to person and long-term management. Pairing-in relationship is
relatively stable. In principle, the Company holds on straight to the end for poverty
alleviation. At the same time, the supervision, inspection and assessment of the person
responsible for helping the poor should be strengthened, and the poverty alleviation work
should be included in the company's "Gold party branch" assessment. Party members or
branches that have achieved remarkable results in helping the poor and can play an
exemplary role in the branch should be commended, so as to mobilize the enthusiasm of
the branch in helping the poor and ensure the high-quality and efficient "one-to-one help".
At the same time, "trace management" is implemented to help establish the work ledger.
It is required that the person responsible for the assistance should fill in the interview
record and other relevant information in the poverty alleviation manual and other relevant
materials for later inspection when they carry out the visit and investigation. The party
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
committee of the Company shall conduct random inspection on the visits of the persons
responsible for the assistance every quarter, collect and listen to the comments on the
persons in charge by poor villagers, and check the work ledger of the assistance.
e. Targeted policies and targeted poverty alleviation. According to difficulties of
overcoming poverty and urgent measures, the Company develops a feasible plan against
poverty and analyzes the poverty alleviation situation in the process. For "one-to-one"
assistance, the responsible persons for assistance are mobilized to conduct in-depth
communication in the homes of paired families to truly understand where poverty is
caused, and the responsible persons for assistance are urged to make targeted policies
according to the actual situation of the objects of assistance. In line with the principle of
"what youlack and what is supplied, what you need and what is helped", the Company
explores ways to address both symptoms and root causes, comprehensively develop
new approaches, broaden the thinking and provide accurate help.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
18.3 Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the environmental protection departments
Yes
Name of main
Amount of Distribution
Company pollutant and Discharge Emission Pollution discharge Approved total Excessive
discharge of discharge Total emission
name particular type concentration standard emission discharge
outlet outlet
pollutant
COD:107mg/L;Amm COD:260.72 ton; COD:293 ton per
COD:400mg/L;Amm
onia Ammonia year;Ammonia
Jiangsu COD onia
nitrogen:5.8mg/L;Tot nitrogen:15.38ton;T nitrogen:17.2 tons
Yanghe Ammonia nitrogen :30mg/L;Tot
al otal nitrogen:69.42 per year;Total
Brewery nitrogen Total Indirect discharge 1 Within site al No
nitrogen:24.3mg/L;T tons;Total nitrogen:78 tons per
Joint-Stock nitrogen Total nitrogen:50mg/L;Tot
phosphorus：5.76 year;Total
Co., Ltd. phosphorus otal phosphorus： al
phosphorus:6.62
2.1mg/L phosphorus:3mg/L tons（2018） tons per year
Jiangsu COD:67.34 tons; COD:540.61tons per
Shuanggou COD COD:400mg/L;Amm Ammonia
New and old COD:130mg/L;Amm year;Ammonia
Distillery Ammonia Indirect discharge 2 onia nitrogen :2.59 tons No
factory area onia nitrogen:5mg/L nitrogen:56.31tons
Stock nitrogen nitrogen:35mg/L
（2018） per year
Co.,ltd.
COD:118.2
Jiangsu COD:160mg/L;Amm COD:400mg/L;Amm tons;Ammonia
Yanghe COD onia onia nitrogen:12.56
COD:672 tons per
Brewery Ammonia nitrogen :9mg/L;Tota nitrogen :30mg/L;Tot tons;Total
year;Ammonia
Joint-Stock nitrogen Total Indirect discharge 1 Within site l al nitrogen:29.56 No
nitrogen:42 tons per
Co., Ltd. nitrogen Total nitrogen:35mg/L;Tot nitrogen:40mg/L;Tot tons;Total
year
Siyang phosphorus al al phosphorus：2.21
Branch phosphorus:1.5mg/L phosphorus:3mg/L
tons（2018）
COD COD;100mg/L;Amm COD:1.6 COD:2.06 tons per
Guizhou Direct discharge COD：
Ammonia onia tons;Ammonia year;Ammonia
Guijiu after treatment up 1 Within site 21mg/L;Ammonia No
nitrogen Sulfur nitrogen:15mg/L;Sulf nitrogen:0.05 nitrogen:0.31tons per
Co.,Ltd. to the standards nitrogen:0.64mg/L;S ur
dioxide tons ;Sulfur year;Sulfur
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Name of main
Amount of Distribution
Company pollutant and Discharge Emission Pollution discharge Approved total Excessive
discharge of discharge Total emission
name particular type concentration standard emission discharge
outlet outlet
pollutant
Nitrogen oxide ulfur dioxide :550mg/L;Nit dioxide :0.001tons; dioxide :52.5 tons per
dioxide:0.1mg/L;Nitr rogen Nitrogen oxide:3.28 year;Nitrogen
ogen oxide:400mg/L tons (2018） oxide:17.2 tons per
oxide:88.5mg/L year
Hubei COD:0.492 COD:14.2 ton per
Lihuacun COD COD:132mg/L;Amm COD:400mg/L;Amm ton;Ammonia
year;Ammonia
Liquor Ammonia Indirect discharge 1 Within site onia onia nitrogen:0.0525 ton No
nitrogen:1.42 tons
Industry nitrogen nitrogen:14.1mg/L nitrogen:30mg/L
（2018） per year
Co.,Ltd.
Construction and operation of pollution prevention and control facilities
a. The sewage treatment station’s designed capacity is 10,000 tons per day. The project total investment is CNY 96 million and it covers an area of
19,000 square meters. The sewage treatment adopts physical treatment method, chemical treatment method and anaerobic biological treatment
method, aerobic biological treatment method, good oxygen treatment method, which achieves the treatment of high-concentration waste water of 250
tons per hour. It implements the"Fermentation Alcohol and Liquor Industrial Pollutants Emission Standards CB27631-2011" Indirect Emissions
Standards. In 2018, the sewage treatment station implements efficient investment item upgrade project, mainly including anaerobic maintenance,
cooling of biochemical pool, upgrade of intelligent parameter monitoring and total nitrogen etc. The total investment is CNY 10.871 million. After the
implementation, the anaerobic treatment unit of the sewage treatment station can produce 4.417 million stere biogas per year. The steam production
can reach 60,900 tons. The annual economic benefit from steam production is CNY 12 million. The annual amount of biogas increased 36.82% year
on year and steam production increased 37.22% year on year.
b. The sewage treatment station in Shuanggou Distillery New Area was completed and put into use at the end of September 2013, with a total
investment of CNY 42.5 million and an annual operating cost of CNY 13 million. The sewage treatment station inlet COD and ammonia nitrogen
concentration are about 10000mg/l and 130mg/l respectively. The effluent COD and ammonia nitrogen concentration are about 130mg/l (the
discharge standard is 400mg/l) and 5mg/l (the discharge standard is 35mg/l), with implementation of "Shuanggou town sewage treatment plant
takeover standards". In the past three years, there have been no environmental pollution accidents or penalties by environmental protection
departments in Shuanggou Distillery. Shuanggou Distillery has set up a hazardous waste warehouse to collect hazardous waste generated in
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
production and living. The warehouse is divided into: waste battery, desulfurizer, solid waste agent, liquid waste agent, daylight lamp tube, desulfurizer
and other areas for classified storage so as to prevent cross-contamination. Shuanggou Distillery shall also declare the hazardous waste information
through the dynamic management system of hazardous waste in Jiangsu province, and regularly submit the hazardous waste to qualified companies
for legal disposal.
c. The sewage treatment station of Siyang Branch of the Company covers an area of about 15,000 square meters, with a total investment of CNY 50
million. The construction started in April 2014 and was completed in June 2015. On December 28, 2015, it was officially accepted by the
environmental protection department. The designed treatment capacity is 6000 tons per day. In terms of process treatment, EGSB+AAO+ deep
treatment technology is adopted. The high-concentration waste water can be treated up to 250 tons per hour. After treatment, all indicators reached
the indirect emission standard of "Fermented Alcohol and Liquor Industrial Pollutant Emission Standard CB27631-2011". In 2018, Siyang sewage
treatment station implements efficient investment item upgrade project, mainly including anaerobic maintenance, cooling of biochemical pool ,
upgrade of intelligent parameter monitoring and total nitrogen etc.. After the implementation, the anaerobic treatment unit of the sewage treatment
station can produce 4.67 million stere biogas per year. The steam production can reach 63,000 tons. The annual economic benefits from steam
production is CNY 12.7468 million. The annual amount of biogas increased 24.5% year on year and steam production increased 24.5% year on year.
d. The sewage treatment system of Guijiu Company has a treatment capacity of 250 tons per day. The discharge of waste water shall be in
accordance with the Discharge Standards for Water Pollutants in Fermented Alcohol and Liquor Industry GB27631-2011 Table 2 Emission Standards.
At the same time, an online detection system is installed and the facilities are in good condition. The boiler operates with natural gas, and the waste
gas is discharged directly. The exhaust gas emission shall be in accordance with the "Boiler Air Pollutant Emission Standard" (GB13271-2014) Table
2 Gas Boiler Limited Discharge Standard . The solid waste (distillers' grains) generated in the production is all processed by a third-party qualified
company, and the treatment method is integrated utilization for the production of fertilizer. Noise is mainly due to Quyao crusher, boiler room fan,
packaging workshop, power distribution. The equipment is installed with absorption treatment or sound insulation in the room to reduce the impact of
noise. At the same time, the planting around the high-noise buildings is strengthened to achieve the goal of noise reduction. The Company uses
anaerobic UASB /good oxygen (contact oxidation) to treat mixed sewage in production and living. At the same time, the Company installed COD,
ammonia nitrogen, PH, and flow meter automatic monitoring instrument, and prepared ledgers for all operating facilities and equipment; The
equipment is in good condition.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
e. The waste water of Lihuacun Liquor Industry is treated by combined process; Each workshop is equipped with mufflers and independent machine
room with the independent foundation and sound absorption material and sound insulation material for reducing the noise; Solid waste is treated by
comprehensive treatment method.
Environmental impact assessment of construction projects and other administrative permits for environmental protection
The Company and each subsidiary’s construction project environmental impact reports and "three at the same time" acceptance materials, pollutant
discharge permit and other materials are complete.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Emergency plan for environmental emergencies
The Company and its subsidiaries have made emergency plans for environmental
emergencies, among which the Company, Shuanggou Distillery and Siyang Branch of
the Company have filed with Jiangsu Province Environmental Protection Department.
The file numbers are 32000020140595, 32000020140604 and 32000020140594
respectively. The emergency plan of environmental emergencies of Guijiu Company shall
be put on record in the environmental supervision brigade of Xiuwen County and
managed by Guizhou Province Environmental Emergencies Center. Lihuacun Liquor
Industry has formulated the emergency plan for environmental pollution accidents, which
will be filed with Yunyang District Environmental Protection Bureau on September 2018.
Environmental self-monitoring programme
The Company, Shuanggou Distillery, Siyang Branch of the Company and Guijiu
Company have all developed their own environmental monitoring programs and filed
them with the competent authorities; Lihuacun Liquor Industry failed to meet the
minimum standards of the local environmental protection department (Yunyang District
Environmental Protection Bureau) in terms of the scale of water used for production, and
failed to develop an environmental self-monitoring plan.
Other environmental information that should be made public
N/A
Other environmental related information
a. Due to the online detection instrument failure of chemical oxygen demand (COD), the
Company has four excess COD data in the monitoring platform of the environmental
protection department, namely three on March 19, 2018 and one on May 5, 2018, which
have been reported to the Suqian Environmental Protection Bureau by the third-party
maintenance unit.
b. On November 15 2017, Jiangsu Province Environmental Protection Bureau inspected
the sludge disposal and transfer in Siyang Branch of the Company according to “The
production and use of industrial sludge disposal unit checklist (try out)". On February 23,
2018, the bureau released The situation of the province of hazardous waste
standardization management examination in 2017 bulletin (Su Huan Ban (2018) No. 58),
which mentioned the the problem of nonstandard parameter records of sludge in Siyang
Branch of the Company. The Environmental Protection Department of Jiangsu Province
required the local environmental protection department to urge the enterprises to make
rectification. The Siyang Branch of the Company quickly made the rectification plan and
completed the rectification on May 30 2018. The rectification situation was timely
reported to the Siyang County Environmental Protection Bureau, and the rectification
measures and results met the requirements of the bureau.
c. In January 2018, the Company and Jiangsu Shuanggou Distillery Stock Co.,Ltd. were
awarded the honorary title of Suqian Green Demonstration Enterprise. In December 2018,
the Company was awarded the title of “Jiangsu Province Water-Saving Enterprise” again.
19. Other significant events
√ Applicable N/A
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1. The Company indirectly held partnership share of Jiangsu Jiequan Emerging Industry
Development Fund (Limited Partnership) via Jiangsu Xinghe Investment Management
Co.,Ltd. and Nanjing Xingnahe Venture Capital Investment partnership (Limited
Partnership). Jiangsu Jiequan Emerging Industry Development Fund (Limited
Partnership) completed fund-raising and put in record in AMAC. The record numbers are
SCF515 and SCL005. It was disclosed in detail on the Announcement of cooperative
investment with professional investment institutions (No: 2017-021) on 30 December
2017 and the Announcement of progress of cooperative investment with professional
investment institutions (No: 2018-011) on 12 April 2018.
2. Su Wine Wealth Management Co., Ltd., a wholly-owned subsidiary of the Company,
has subscribed the partnership shares of Suzhou Danqing Phase II Innovative
Pharmaceutical Industry Investment Partnership (limited partnership). For details, please
refer to the Announcement on cooperation and investment with professional investment
institutions (Announcement No: 2018-021) and Announcement on cooperation and
investment with professional investment institutions (Announcement No: 2018-030)
disclosed by the Company on April 28 2018 and November 16 2018.
3. Jiangsu Yanghe Investment Management Co.,Ltd. will subscribed the partnership
shares of Panmao (Shanghai) Investment Center (limited partnership). For details,
please refer to the announcement on cooperation and investment with professional
investment institutions (Announcement No: 2018-025) disclosed by the Company on
June 22 2018.
20. Significant events of subsidiaries
Applicable √ N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section VI Changes in Shares and Information about Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year ( + , - ) After
Issuance of Bonus Capitalization of
Number Proportion Other Subtotal Number Proportion
new shares shares capital reserves
I.Restricted shares 264,793,987 17.57% 0 0 0 -6,291,811 -6,291,811 258,502,176 17.15%
1.Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%
2.Shares held by state-owned
0 0.00% 0 0 0 0 0 0 0.00%
corporations
3.Shares held by other domestic
264,793,987 17.57% 0 0 0 -6,291,811 -6,291,811 258,502,176 17.15%
investors
Among which:Shares held by
249,480,000 16.55% 0 0 0 0 0 249,480,000 16.55%
domestic corporations
Shares held by domestic individuals 15,313,987 1.02% 0 0 0 -6,291,811 -6,291,811 9,022,176 0.60%
4.Shares held by foreign investors 0 0.00% 0 0 0 0 0 0 0.00%
Among which: Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
corporations
Shares held by foreign individuals 0 0.00% 0 0 0 0 0 0 0.00%
II.Non-restricted shares 1,242,194,013 82.43% 0 0 0 6,291,811 6,291,811 1,248,485,824 82.85%
1.CNY common shares 1,242,194,013 82.43% 0 0 0 6,291,811 6,291,811 1,248,485,824 82.85%
2.Domestically listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
3.Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4.Others 0 0.00% 0 0 0 0 0 0 0.00%
III.Total shares 1,506,988,000 100.00% 0 0 0 0 0 1,506,988,000 100.00%
Reasons for the change in shares
√ Applicable N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The reasons for the change of the Company's shares are mainly caused by the unlocked shares held by the Company's directors who left and the lock
changes of shares held by some of current directors and executives during the reporting period after the reduction of their shares.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Approval of share changes
Applicable √N/A
Transfer of share ownership
Applicable √N/A
Implementation progress of share repurchases
Applicable √N/A
Implementation progress of share buyback reduction through centralized bidding
Applicable √N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share
attributable to common shareholders of the Company and other financial indexes over
the last year and the last reporting period
Applicable √N/A
Other contents that the Company considers necessary or is required by the securities
regulatory authorities to disclose
Applicable √N/A
2. Changes in restricted shares
√Applicable N/A
Unit：Share
Opening Increased Closing
Name of Unlocked in this Date of
restricted in this restricted Reason for change
shareholder period unlocking
shares period shares
Locked up due to
Zhou Xinhu 2,533,718 -375,000 0 2,158,718 N/A
current director position
Locked up due to
Zhen Bujun 53,550 -4,800 0 48,750 current senior N/A
management position
Unlocked due to
Zhong Yuye 5,912,011 -5,912,011 0 0 leavethe director 2018-8-9
position
Total 8,499,279 -6,291,811 0 2,207,468 -- --
2. Issuance and listing of securities
2.1 Securities（excluding preference shares） issued in the reporting
period
Applicable √N/A
2.2 Changes in total shares of the company and the shareholder
structure, as well as the asset and liability structure
Applicable √N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2.3 Existing staff-held shares
Applicable √N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit:share
Total number of
Total number of common preference
Total number of preference
shareholders at the prior shareholders
Total number of common shareholders at shareholders with resumed
36,382 month-end before the 33,267 0 with resumed 0
the end of the reporting period voting rights at the period-
disclosure date of the annual voting rights at
end(if any)(see note 8)
report the period-end(if
any)(see note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders
Increase/decr Pledged or frozen shares
Total shares Number of Number of
Shareholding ease during
Name of shareholder Nature of shareholder held at the restricted non-restricted Status of Number of
percentage the reporting
period-end shares held shares held shares shares
period
State-owned
Jiangsu Yanghe Group Co.,Ltd. 34.16% 514,858,939 0 0 514,858,939 Frozen 403,100
corporation
Domestic non-state-
Jiangsu Blue Alliance Joint-Stock Co., Ltd. 21.44% 323,138,626 0 249,480,000 73,658,626
owned corporation
Shanghai Haiyan Logistics Development State-owned
9.67% 145,708,137 0 0 145,708,137
Co.,Ltd. corporation
Hong Kong Securities Clearing Company
Outboundcorporation 6.51% 98,137,423 36,193,800 0 98,137,423
Ltd. (HKSCC)
Shanghai Jieqiang Tobacco Sugar State-owned
4.08% 61,455,475 -4,371,672 0 61,455,475
&Wine(Group)Co.,Ltd corporation
Domestic non-state-
China Securities Finance Corporation limited 0.92% 13,790,044 53,474 0 13,790,044
owned corporation
State-owned
Central Huijin Asset Management Co., Ltd. 0.85% 12,766,400 0 0 12,766,400
corporation
Xingyuan Asset Management Co.,Ltd.－
Outbound corporation 0.66% 9,966,102 -1,153,196 0 9,966,102
clients' capital
Bank of China Co.,Ltd. – Liquor index
Other 0.61% 9,234,299 2,489,116 0 9,234,299
classification securities investment fund by
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
China Merchants Fund
Platinum Investment Management Co.,Ltd. Outbound corporation 0.56% 8,419,532 -997,268 0 8,419,532
Strategic investors or general corporations becoming top-ten
N/A
shareholders due to placing of new shares(if any)(see note 3)
Related-parties or acting-in-concert N/A
Shareholdings of the top 10 non-restricted shareholders
Number of non-restricted shares held in Type of shares
Name of shareholder
the period end Type Number
Jiangsu Yanghe Group Co.,Ltd. 514,858,939 CNY common shares 514,858,939
Shanghai Haiyan Logistics Development Co.,Ltd. 145,708,137 CNY common shares 145,708,137
Hong Kong Securities Clearing Company Ltd. (HKSCC) 98,137,423 CNY common shares 98,137,423
Jiangsu Blue Alliance Joint-Stock Co., Ltd. 73,658,626 CNY common shares 73,658,626
Shanghai Jieqiang Tobacco Sugar & Wine(Group)Co.,Ltd 61,455,475 CNY common shares 61,455,475
China Securities Finance Corporation Limited 13,790,044 CNY common shares 13,790,044
Central Huijin Asset Management Co., Ltd. 12,766,400 CNY common shares 12,766,400
Xingyuan Asset Management Co.,Ltd.－clients' capital 9,966,102 CNY common shares 9,966,102
Bank of China Co.,Ltd. – Liquor index classification securities
9,234,299 CNY common shares 9,234,299
investment fund by China Merchants Fund
Platinum Investment Management Co.,Ltd. 8,419,532 CNY common shares 8,419,532
Strategic investors or general corporations becoming top-ten
N/A
shareholders due to placing of new shares(if any)(see notes 3)
Explanation on the top 10 common shareholders participating in the
N/A
securities margin trading(if any)(see notes 4)
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the Company conduct any promissory repurchase
during the reporting period.
Yes √ No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any promissory repurchase during the reporting
period.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of
representative/ Date of Credibility
controlling Main business scope
Company establishment code
shareholder
principal
Sales of brewing mechanical
equipment, Liquor Export, Import
of various raw and auxiliary
material used for production,
Jiangsu Yanghe 91321300142
Han Feng 1997-05-08 equipment and accessories,
Group Co.,Ltd. 334989Y
Industrial investment; municipal
public engineering, building
engineering, tourism cultural
industry investment.
Shareholdings of
the controlling
shareholder in
other controlled or
non-controlled N/A
listed companies at
home or abroad
during the
reporting period
Change of the controlling shareholder during the reporting period
Applicable √N/A
No such cases in the reporting period
3.3 Actual controller and its persons acting in concert
Nature of actual controller：Local State-owned Assets Supervision and Administration
Commission
Type of actual controller：Corporation
Legal
Name of actual representativ Date of
Credibility code Main business scope
controller e/Company establishment
principal
Execution of duty of state-
owned enterprise's investor on
State-owned Assets
behalf of the People's
Supervision and
Government of Suqian and
Administration Zhao Xiaoli 2005-10-22 N/A
implementation of Supervision
Commission of
and Administration of State-
Suqian
owned Assets and State-
owned Enterprises.
Share holdings of
the controlling
shareholder in other
N/A
controlled or non-
controlled listed
companies at home
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
or abroad during the
reporting period.
Change of the actual controller during the reporting period
Applicable √N/A
No such cases in the reporting period.
Ownership and control relations between the actual controller and the Company
State-owned Assets Supervision and Administration Commission of Suqian
100%
Jiangsu Yanghe Group Co.,Ltd.
34.16%
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The actual controller control the company via trust or other ways of assets management
Applicable √ N/A
3.4 Other corporate shareholders with a shareholding proportionover
10%
√Applicable N/A
Legal
representative/ Date of
Name of actual controller Registered capital Main business scope
Company establishment
principal
Sales of daily
products, research
and development of
biology technology,
furniture production,
Jiangsu Blue Alliance
Zhang Yubai 2016-07-28 CNY 105,600,000.00 Business
Joint-Stock Co., Ltd.
management
consulting service,
fruit tree planting,
Sales of
prepackaging food.
3.5 Limits on the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
Applicable √ N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section VII Preference Shares
Applicable √ N/A
No such cases in the reporting period
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section VIII Profiles of Directors, Supervisory, Senior Management and Employees
1. Change in shares owned by directors, members of supervisory committee, senior management and
employees
Shares
Shares Shares Other Shares
held at the
Incumbent Period of increased at the decreased at increase/ held at the
Name Office title Gender Age period-
/ Former service reporting period the reporting decrease period-end
begin
(share) period (share) (share) (share)
(share)
Wang Yao Chairman of the board Incumbent Male 54 2015.2.10-2021.1.29 30,002 0 0 0 30,002
Deputy chairman of the
Zhong Yu Incumbent Male 55 2015.2.10-2021.1.29 0 0 0 0 0
board,President
Han Feng Director Incumbent Male 57 2015.2.10-2021.1.29 0 0 0 0 0
Director,Vice
Cong
president,Secretary of Incumbent Male 53 2015.2.10-2021.1.29 3,378,291 0 600,000 0 2,778,291
Xuenian
the board,CFO
Director,Vice
Zhou Xinhu president,Chief Incumbent Male 57 2015.2.10-2021.1.29 2,878,291 0 0 0 2,878,291
engineer
Liu
Director Incumbent Male 49 2018.1.29-2021.1.29 0 0 0 0 0
Huashuang
Wang Kai Director Incumbent Male 42 2017.5.19-2021.1.29 0 0 0 0 0
Xu Zhijian Non-executivedirector Incumbent Male 55 2015.2.10-2021.1.29 0 0 0 0 0
Cai Yunqing Non-executivedirector Incumbent Female 67 2015.2.10-2021.1.29 0 0 0 0 0
Ji Xueqing Non-executivedirector Incumbent Male 48 2015.2.10-2021.1.29 0 0 0 0 0
Chen
Non-executivedirector Incumbent Male 53 2015.2.10-2021.1.29 0 0 0 0 0
Tongguang
Chairman of
Feng Pantai Incumbent Male 59 2015.2.10-2021.1.29 5,677,986 0 0 0 5,677,986
supervisory committee
Chen Yiqin Supervisor Former Male 58 2015.2.10-2019.4.11 0 0 0 0 0
Chen
Supervisor Incumbent Male 54 2015.2.10-2021.1.29 0 0 0 0 0
Taiqing
Chen
Supervisor Incumbent Male 51 2015.2.10-2021.1.29 0 0 0 0 0
Taisong
Zhou Wenqi Supervisor Incumbent Female 53 2015.2.10-2021.1.29 0 0 0 0 0
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Shares
Shares Shares Other Shares
held at the
Incumbent Period of increased at the decreased at increase/ held at the
Name Office title Gender Age period-
/ Former service reporting period the reporting decrease period-end
begin
(share) period (share) (share) (share)
(share)
Lin Qing Vice president Incumbent Female 44 2015.2.10-2021.1.29 0 0 0 0 0
Zhen Bujun Vice president Incumbent Male 52 2015.2.10-2021.1.29 65,000 0 5,000 0 60,000
Zhu Wei Vice president Incumbent Male 42 2015.2.10-2021.1.29 0 0 0 0 0
12,029,57
Total 0 605,000 0 11,424,570
0
2. Changes in directors,supervisors, senior management and employees
Applicable √ N/A
3. Employment information
Professional background, work experience and major duties of directors, supervisors and senior management
3.1 Directors
Mr. Wang Yao, born in December 1965, Master of Engineering of Jiangnan University, MBA of Nanjing University, Researcher-level Senior Engineer,
representative of the 19th National Congress of the Communist Party of China, craft master of Chinese liquor. He used to serve as secretary of the
party branch and Director of crushing and qu-making workshop of Jiangsu Yanghe Brewery, chairman of the board, general manager and secretary of
the party committee of Jiangsu Yanghe Group Color Printing Co.,Ltd., deputygeneral manager, deputysecretary of party committee, secretary of the
discipline inspection commission of Shuanggou Distillery, deputy general manager, vice secretary of party committee and president assistant of
Jiangsu Su Wine industry Co., Ltd., general manager and vice president of Shuanggou Distillery, chairman of the board and secretary of the the party
committee of Su Wine Trading Co., Ltd.. He is chairman of the board and secretary of the the party committee of the Company, chairman of the board
of Su Wine Trading Co., Ltd., Director of Blue Alliance currently.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Mr. Zhong Yu, born in May 1964, Master degree, Senior Engineer and Master of Chinese liquor. He was the director of technology and environmental
protection department inShuanggou Distillery; vice chief engineer, president assistant and director of production and technology center of Shuanggou
Distillery, deputygeneral manager of Yanghe Branch of the Company, brewing director, president assistant, vice president of the Company, general
manager of Siyang Branch of the Company. Currently, He is deputy chairman of the board, president, vice secretary of the the party committee of
Yanghe, general manager of Yanghe Branch of the Company and chairman of the board of Shuanggou Distillery.
Mr. Han Feng, born in October 1962, Master degree. He served as deputy head of Siyang County in Jiangsu province, member of the party committee,
member of standing committee of Siyang, chairman of the board of Yanghe Group, and Shuanggou Group. At present, he is director of the Company,
chairman of the board and secretary of the the party committee of Suqian Industry Development Group Co., Ltd., chairman of the board, general
manager of Yanghe Group and Shuanggou Group.
Mr. Wang Kai was born on August 1977, Bachelor Degree, Intermediate Economist. He was manager of brand department in marketing center of
Shanghai TobaccoGroup Co., Ltd., president assistant of Shanghai Haiyan Logistics Development Co., Ltd. He is director of the Company and
deputygeneral manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Cong Xuenian, born in January 1966, Master degree, Senior Economist. He served as chief accountant and finance director of Yanghe Brewery,
finance minister of Yanghe Group, secretary of the board, financial administrator, director and vice president of the Company. At present, he is
secretary of the board, financial administrator, Director, and Vice President of the Company, chairman of the board of Su Wine Fortune Management
Co., Ltd. and director of Blue Alliance.
Mr. Zhou Xinhu, born in August 1962, Master Degree, Senior Engineer, Member of the expert group of liquor professional committee of China Food
Industry Association, Chief liquor taster of China and Master of Chinese liquorcritic. He was technician of Yanghe Group, director of quality inspection
department and blending and storage department, deputygeneral manager of Yanghe Brewing, vice chief engineer, chief engineer and vice president
of Company. At present, he is director, vice president and chief engineer of Company.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Mr. Liu Huashuang, born in December 1970, MBA of Fudan University, Accountant. He was the director of marketing department and deputygeneral
manager of Yanghe Brewing, general manager of Yanghe Blue Classic, general manager of Yanghe Brewing, member of the standing party
committee of Company, deputy general manager and vice secretary of party committee of Jiangsu Su wine industrial Co., Ltd., vice chairman of the
board of Su Wine Trade Group. At present, he is the member of the standing party committee of the Company and director of strategic studies,
secretary of the party committee and vice chairman of Su Wine Trade Group.
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Mr. Xu Zhijian, born in March 1964, Master and Doctor degree, professor. He was
director of China Netherlands Business Administration Education Center of Nanjing
University, director of EMBA Program of Nanjing University& Cornell University, director
of International Business Administration Education Center of Nanjing University,
Assistant Dean of Business College of Nanjing University, Director of the Department of
Business Administration of Nanjing University. At present, he is non-executive director of
Yanghe, Nanjing Port Co., Ltd., Jiangsu Maysta Chemical Co., Ltd. and Glarun
Technology Co., Ltd., Professor of Business College of Nanjing University.
Ms. Cai Yunqing, born in December 1952, Doctor of Medicine, professor and doctoral
supervisor. She was director and station-master assistant of food health department of
sanitation and antiepidemic station of Jiangsu province, director of department of nutrition
and food hygiene, school of public health, Nanjing Medical University, director of Institute
of Nutrition and Food Science. At present, she is non-executive director of the Company,
supervisor of Chinese Nutrition Society, honorary president of Nutrition Society of
Jiangsu Province, vice president of Jiangsu Intelligent Aged Research Association and
health food evaluation expert of National Food and Drug Administration.
Mr. Ji Xueqing, born in July 1971, Master degree. He used to be the Project Manager of
China Chuangye Investment Group Limited, chairman of the board and president of
Nanjing Qinghe Investment Group Co., Ltd., executive director of Nanjing Shuijinshi
Investment Group Co., Ltd., senior vice president of Yonyou Network Technology Co.,
Ltd. At present, he is non-executive director of Yanghe, non-executive director of Nanjing
Balance Network Technology Co., Ltd., chairman of the board of Nanjing Suhe Venture
Capital Center, director of Nanjing Li Heng Investment Limited Partnership, supervisor of
Xuzhou Zm-Besta Heavy Steel Structure Co., Ltd., supervisor of Jiangsu Efful Science
and Technology Co.,Ltd.,partner of China soft Investment Group.
Mr. Chen Tongguang, born in April 1966, Bachelor degree. He was accountant of
Jiangsu Huaiyin Electric Company, vice director of finance department of Jiangsu
Agricultural College, vice director of Accounting Center and Finance department of
Yangzhou University, vice and general manager of Yangda company of Yangzhou
University Asset Operation Co., Ltd. At present, he is non-executive director of Yanghe,
general manager of Yangda company of Yangzhou University Asset Operation Co., Ltd.
and non-executive director of Yangzhou Yangjie Electronic Technology Co., Ltd.
3.2 Supervisors
Mr. Feng Pantai, born in October 1960, College degree, Senior Economist. He was
deputydirector of Sihong County Food Bureau, deputygeneral manager of Yanghe Group,
Director and vice president of Company. At present, he ischairman of the supervisory
committee, member of standing committee, chairman oflaborunion, director of Blue
Alliance.
Mr. Chen Taiqing, born in May 1965, Master degree, Senior Political Engineer, member
of communist party of China. He was member of the party committee of Yanghe Group,
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
director of executive office, member of the Company’s party committee, director of
human resource department, director of integrated department, president assistant,
deputygeneral manager of Yanghe Branch of the Company and secretary of discipline
inspection committee of Yanghe. At present, he is supervisor, vice secretary of the party
committee, general manager and secretary of the party committee of Shuanggou
Distillery.
Ms. Zhou Wenqi, born in April 1966, College degree, Senior Accountant. She was
financial director of Shanghai Jieqiang No.3 and No.4 distribution center, financial
assistant, deputy manager, manager of Shanghai Jieqiang Tobacco Sugar & Wine
(Group) Co., Ltd. She is Supervisor of Yanghe and CFO of Shanghai Jieqiang Tobacco
Sugar & Wine (Group) Co., Ltd. currently.
Mr. Chen Taisong, born in January 1968, Master degree. He was member, secretary of
Siyang Legal Bureau, and secretary,deputysection chief, section chief, director assistant,
deputydirector of Siyang Government Office, alcalde and secretary of the party
committee of Chuancheng Town in Siyang Country, vice secretary of the party committee
and secretary of discipline inspection commission and chairman of the supervisory
committee of Su Wine Industrial Co., Ltd., vice secretary of discipline inspection
committee of Yanghe. At present, he is supervisor, member of standing committee,
director of organization department of the Company, vice secretary of the party
committee and secretary of discipline inspection committee and chairman of the
supervisory committee of Su Wine Trade Group.
3.3 Senior management
Mr. Zhong Li, President of the Company, resume as above.
Mr. Cong Xuenian, vice president of the Company, resume as above.
Mr. Zhou Xinhu, vice president of the Company, resume as above.
Ms. Lin Qing, born in May 1975, Master degree, Senior Accountant, Certified Public
Accountant. She was deputy director of enterprise department of Suqian Finance Bureau,
director assistant of Suqian Price Bureau, member and vice director of the party
committee of National Development and Reform Commission, member of the standing
committee of Yanghe, vice president of the Company. At present, she is member of the
standing committee of Yanghe and vice president of the Company.
Mr. Zhen Bujun, born in January 1967, MBA, Senior Engineer. He was general Manager
of Yanghe Group, general manager of Suqian State-owned Investment Co., Ltd.,
deputygeneral manager of Shuanggou Distillery, logistics andpurchasing director and
president assistant of Yanghe. At present, he is vice president, member of the standing
committee of the Company, general manager and secretary of the party committee of
Siyang Branch of the Company.
Mr. Zhu Wei, born in May 1977, Master of Nanjing University. He was director of human
resource department of the Company, director of marketing department, chief marketing
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
officer and deputygeneral manager of Su Wine Trade Group, director of strategy studies,
deputygeneral manager of Su Wine Trade Group. At present, he is vice president of
Yanghe and general manager of Su Wine Trade Group.
Position in Shareholder-Holding Companies
√ Applicable N/A
Positionin Beginning Ending Date Anyremunerationsrec
Name of Shareholder-
Name ShareholderHoldin Date of of office eivedfromShareholder
Holding Companies
g Companies office term term -Holding Companies
Han Feng Jiangsu Yanghe Group Chairman of the 2012.03.08 NO
Co.,Ltd. board,general
manager
Zhou ShangHai jieqiang Tobacco CFO 2013.07.01 YES
Wenqi Sugar & Wine (Group)
Co.,Ltd.
Wang Kai Shanghai Haiyan Logistics Deputygeneral 2017.03.01 YES
Development Co.,Ltd. manager
Wang Jiangsu Blue Alliance Joint- Director 2016.07.26 NO
Yao Stock Co., Ltd.
Feng Jiangsu Blue Alliance Joint- Director 2016.07.26 NO
Pantai Stock Co., Ltd.
Cong Jiangsu Blue Alliance Joint- Director 2016.07.26 NO
Xuenian Stock Co., Ltd.
Position in Other Companies
√ Applicable N/A
Anyremunerations
Position in Other Beginning Ending
Name Name of Other Companies receivedfrom
Companies Date Date
Other Companies
Chairman of the board,
Han Suqian Industry Development
secretary of the the party 2011.09.05 YES
Feng Group Co.,Ltd.
committee
Han Jiangsu Yanghe Group Chairman of the
2012.03.08 NO
Feng Co.,Ltd. board,general manager
Han Jiangsu Shuanggou Group Chairman of the
2012.03.08 NO
Feng Co.,Ltd. board,General Manager
Xu
Nanjing University Professor 2003.11.11 YES
Zhijian
Xu
Nanjing Port Co., Ltd. Non-executivedirector 2016.03.30 YES
Zhijian
Xu Jiangsu Maysta Chemical Co.,
Non-executivedirector 2015.12.04 YES
Zhijian Ltd.
Xu
Glarun Technology Co.,Ltd. Non-executivedirector 2017.05.12 YES
Zhijian
Xu Yangzhou Rixing Bio-Tech
Non-executivedirector 2019.02.12 YES
Zhijian Co., Ltd.
Cai
Chinese Nutrition Society Supervisor 2017.05.01 NO
Yunqing
Cai Jiangsu Intelligent Aged
Vice president 2017.03.01 NO
Yunqing Research Association
Cai
Chinese Nutrition Society Honorary president 2015.04.01 NO
Yunqing
Cai State Food and Drug Evaluation experts of
2008.08.01 NO
Yunqing Administration health food
Ji Nanjing Suhe Venture Capital
Chairman of the board 2017.01.01 NO
Xueqing Center (Limited Partnership)
Ji Xuzhou Zm-Besta Heavy
Supervisor 2017.03.01 NO
Xueqing Steel Structure Co., Ltd
Ji
China Soft Investment Group Partner 2017.01.01 NO
Xueqing
Ji Nanjing Balance Network
Non-executivedirector 2017.10.01 YES
Xueqing Technology Co., Ltd.
Ji Nanjing Li Heng Investment Director 2017.01.01 NO
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Anyremunerations
Position in Other Beginning Ending
Name Name of Other Companies receivedfrom
Companies Date Date
Other Companies
Xueqing Limited Partnership
Ji Jiangsu Efful Science and
Supervisor 2018.03.01 NO
Xueqing Technology Co.,Ltd
China University Innovation
Ji
and Entrepreneurship Vice president 2018.07.01 NO
Xueqing
Incubator Alliance
Chen
Yangzhou University Yangda
Tonggua General manager 2013.10.01 YES
Branch
ng
Chen
Yangzhou Yangjie Electronic
Tonggua Non-executivedirector 2017.06.19 YES
Technology Co.,Ltd.
ng
Punishments imposed in the recent three years by the securities regulators on the
incumbent directors, supervisors and senior management as well as those who left in the
reporting period
Applicable √ N/A
4. Remuneration of directors, supervisors and senior
management
Thedecision-making procedures, decision basis and actual remuneration payment of
directors, supervisors and senior management.
Decision-making procedures: Implementation is based on the "Trial Implementation
Measures for the Annual Salary of General Manager (Revision)” approved by the 9th
meeting of the second board of directors on 29 December 2008 and "Trial
Implementation Measures for the Annual Salary of Chairman of the Board (Revision)”
approved by the first extraordinary general meeting of shareholders on 18 January 2009.
Decision basis: Based on the Company's operating conditions and considering the
standard of regional economic, industry and market.
Actual remuneration payment: Based on the performance and payment on time
according to the salary system.
Remuneration of directors, supervisors and senior management during the reporting
period
Unit: 0,000CNY
Total before-tax Remuneration
Incumbent/ remuneration from related
Name Position Gender Age
Former from the parties of the
Company Company
Wang Chairman of the
Male 54 Incumbent 142.62 No
Yao board
Deputy Chairman
Zhong
of the board, Male 55 Incumbent 145.89 No
Yu
president
Han
Director Male 57 Incumbent 0 Yes
Feng
Wang
Director Male 42 Incumbent 0 Yes
Kai
Cong Director,vice Male 53 Incumbent 109.52 No
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Total before-tax Remuneration
Incumbent/ remuneration from related
Name Position Gender Age
Former from the parties of the
Company Company
Xuenian president,secretary
of the board,CFO
Director,vice
Zhou
president,chief Male 57 Incumbent 109.36 No
Xinhu
engineer
Liu
Huashua director Male 49 Incumbent 110.52 No
ng
Xu Non-executive
Male 55 Incumbent 6 No
Zhijian director
Cai Non-executive
Female 67 Incumbent 6 No
Yunqing director
Ji Non-executive
Male 48 Incumbent 6 No
Xueqing director
Chen
Non-executive
Guangto Male 53 Incumbent 6 No
director
ng
Chairman of
Feng
supervisory Male 59 Incumbent 107.06 No
Pantai
committee
Chen
Supervisor Male 54 Incumbent 104.6 No
Taiqing
Chen
Supervisor Male 58 Former 0 Yes
Yiqin
Zhou
Supervisor Female 53 Incumbent 0 Yes
Wenqi
Chen
Supervisor Male 51 Incumbent 108.22 No
Taisong
Lin Qing Vice president Female 44 Incumbent 102.05 No
Zhen
Vice president Male 52 Incumbent 107.36 No
Bujun
Zhu Wei Vice president Male 42 Incumbent 109.54 No
Total 1,280.74
Share incentives for directors, supervisors and senior executives in the reporting period
√ Applicable N/A
5. Staff in the Company
5.1 Number, functions and educational backgrounds of the staff
Number of in-service staff of the Company 7,081
Number of in-service staff of main subsidiaries 8,209
Total number of in-service staff 15,290
Total number of staff with remuneration in the period 15,290
Number of retirees to whom the Company or its
0
main subsidiaries need to pay retirement pension
Functions
Function by category Number of staff
Production 5,957
Sales 5,259
R&D 1,861
Financial 221
Administrative 1,661
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Inner Retired 331
Total 15,290
Educational backgrounds
Educational background by category Number of staff
Master 260
Bachelor 3,605
Junior college 4,079
Senior high school 3,476
Junior high school and below 3,870
Total 15,290
5.2 Staff remuneration policy
The remuneration consists of basic payments, performance-related payments and benefit
float award. The Company implemented the mechanism of position self-promotion, and
prepared the Management Measures for Position Self-promotion. According to the the
positions and duties, major work of the department, andin respect of quantity, quality,
efficiency and economic value, the Company aimed to establish a quantified and
assessable quantitative and qualitative indicators. The compensation and welfare of
employees was adjusted in 2018 to further reflect the principles of "to each according to
his work" and "more pay for more work”. It encourages employees to be spontaneous
and to improve their work efficiency. It further improves the Company's management
level, and achieves a win-win situation between the Company and employees
5.3 Staff training plans
In 2018, the Company will lay a solid foundation for training from three aspects: lecturer,
curriculum and educational affairs. In terms of lecturers, dynamic management is realized.
On the basis of the original lecturers, 365 lecturers at all levels are employed through
assessment, selection, elimination and promotion; In terms of curriculum, curriculum
development and case extraction were used. 24 basic courses, 10 travel and study
courses, 14 professional technical courseswere developed throughout the year, and 80
excellent cases were selected, among which 24 cases won awards. In terms of
educational affairs, double teacher system teaching is actively promoted to facilitate
training effects.
Over the past year, the Company has successfully built a panoramic and immersive
teaching platform for business learning, which has enriched the Company's training
resources. Through this platform and external lecturers, the Company has implemented
strategic reserve talents program, hundreds of talents program, dealer training program
and so on. According to the annual training plan, subsidiary companies organize training
in marketing, production technology, functional management and other aspects to
improve the business skills and comprehensive quality of employees. Business
departments carry out professional training according to its business needs. 766 training
sessions were organized and 38,939 employees were trained all around the year.
5.4 Labor outsourcing
Applicable √ N/A
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section IX Corporate Governance
1. Basic situation of corporate governance
The Company constantly perfects corporate governance structure and internal control
system to enhance the corporate governance level strictly according to the Corporate
Law, the Securities Law, The Listed Company Governance Standards, Rules Governing
Listing of Stocks on Shenzhen Stock Exchange and Guidelines on Standard Operation of
SME Board Listed Companies on Shenzhen Stock Exchange and other relevant laws
and regulations. The Company operates normatively with sound corporate governance
and normative information disclosure. The situation of corporate governance of the
Company meets the requirements of authority files of listed company corporate
governance by CSRC.
1.1. Shareholders and shareholders’ general meeting
According to the regulations such as Articles of Incorporation, Company Rules of
Procedure of The Shareholders’ General Meeting,the Company convenes and holds the
shareholders’ general meeting and discusses business affairs in the meeting normatively.
The Company hires legal advisor to issue the legal opinion for the shareholders’ general
meeting; The Company can treat all shareholders equally, and especially makes minority
shareholders have equal status and fully exercise their own power. During the reporting
period, the Company held 2 shareholders’ general meeting and 10 proposals were
passed in the meeting. The board carried out all the decisions made by the annual
meeting of shareholders carefully.
1.2. Relationship between controlling shareholders and listed company
According to the requirement of the Company Law, the controlling shareholders take
duties of sponsor and undertake commitments. During the reporting period, controlling
shareholders have no priority beyond the rights of shareholders’ general meeting to
directly and indirectly affect the decision-marking and operation of the Company. There is
no situation that controlling shareholders damage the legal interests of other
shareholders. The Company and the controlling shareholders implement independent
accounting of personnel, assets, finance, organizations and business. They take
responsibilities and risks separately. There is no significant related party transaction
between the Company and the controlling shareholders. There is no situation that
controlling shareholders occupy the funds of the listed company and the listed company
tenders guarantee for controlling shareholders and the subsidiaries.
1.3. Directors and board of directors
The directors are elected seriously under the regulations of the Corporate Law and
Articles of Incorporation. The board of the Company consists of 11 directors including 4
non-executive directors. The structure of the board of directors satisfies the requirements
of laws and regulations. The board discusses business affairs according to Corporate
Law and Articles of Incorporation. All the directors are able to attend the meeting and
take responsibilities diligently according to the Discussion Rules of the Board of Directors,
The Working System of Non-executive Directors, and Behavior Guidelines of Directors of
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
SME Board Listed Companies. All the directors seriously consider proposals and make
scientific and reasonable decisions for significant events. They also protect the legal
interests of the Company and all shareholders. Strategy Committee, Nomination
Committee, Audit Committee, Remuneration and Appraisal Committee are 4 professional
committees set under the board. The Committees have clear division of work and
responsibilities and fully play professional role to offer scientific and professional
suggestions for the decision-making of the board.
1.4. Supervisors and board of supervisors
The supervisors are elected according to the Corporate Law and the Articles of
Incorporation. The board of supervisors of the Company consists of 5 supervisors,
including 2 staff representative supervisors. The structure of the board of supervisors
satisfies the requirements of laws and regulations. The board of supervisors discusses
business affairs according to corporate law and articles of incorporation. Supervisors can
attend the meeting according to the requirements of Rules of Discussion Rules of the
Board of Supervisors. They takes their own responsibilities seriously, supervises and
makes independent suggestions for the Company’s significant events, financial
conditions and the duties of directors and CEO, thereby, protecting legal interests of the
Company and shareholders.
1.5. Mechanism of evaluation and motivation
The Company keeps improving the mechanism of evaluation and motivation. The
appointment of directors, supervisor and senior managers is open and transparent, which
satisfies the requirements of relevant regulations and laws. The fair and transparent
evaluation mechanism of the management has been built. During the reporting period,
the management carried out the performance assessment according to the goal of
annual operation plan. The management takes their responsibilities seriously and fulfills
the duties and completed the operation management tasks arranged by the board of
directors.
1.6. Stakeholders
The Company fully respects and protects legal interests of stakeholders and fulfills the
duties of social responsibility. The Company strengthens the awareness of social
responsibility and achieves the interest balance among society, shareholders, company
and employees. The clients and suppliers can be treated honestly and every employee is
trained seriously. The Company adheres to principles of win-win of stakeholders and
pushes forward the harmonious and sound development.
1.7. Information disclosure and transparency
The information disclosure of the Company is implemented according to the
requirements of supervision departments. The Company seriously implements the rules
including Information Disclosure Management Rule and Investors Relationship
Management Rule. The Company enhances the management of information disclosure
affairs and takes responsibility of information disclosure legally and carefully, achieving
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
the accuracy, integrity, fairness, timeliness of information disclosure. The information can
be equally obtained by all shareholders. The media of public disclosure for the Company
are Securities Times, Shanghai Securities News, China Securities Journal, Securities
Daily, www.cninfo.com.cn.
1.8. Investors relationship management
The Company focuses on the management of investors relationship to protect legal rights
of investors. Except for the duties like diligence or honesty, the Chairman of the board,
the president, the board secretary have good communications and interactions with
investors through reception of investor investigation and participating in performance
explanation session and broker strategy meeting online. As the professional organization
for investor relationship management, the securities department strengthens the
communication with investors through telephone, email and irm.cninfo.com.cn. It fully
makes sure that investors have right to know and protects their legal interests.
1.9. Methods of improving internal control system construction
The Company keeps on enhancing the corporate governance and the internal control
system, which improves the management to a higher level. The Audit Committee fully
examines and supervises the financial condition,the efficiency of internal control,the
efficiency and rationality of corporate governance. The audit department of the Company,
as an internal audit unit, carries out regular and continuous examination on perfection
and implement situation of internal control system. It finds the Internal control defects and
improves deficiencies timely, thus the effectiveness of internal control can be guaranteed.
The operation management and anti-risk capacity are enhanced.
Any incompliance with the regulatory documents issued by the CSRC governing the
governance of listed companies
Yes√ No
There is no incompliance with the regulatory documents issued by the CSRC governing
the governance of listed companies
2. Independency of businesses, personnel, assets,
organizations and finance which are separate from the
controlling shareholder
2.1. In the aspect of business
The Company has independent and integrated business structure and the ability to
operate independently in the market. There is no horizontal competition between
controlling shareholders and the Company. Besides, there is no such kind of situation
that controlling shareholders intervene with operation of the Company directly or
indirectly.
2.2 In the aspect of personnel
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The Company has built independent personnel management system and salary
management system. Furthermore, the Company signed labor contracts with employees.
Chairman of the board, the president, vicepresident, the board secretary and the
responsible person for the Company’s financial affairs obtain compensation from the
Company rather than the controlling shareholders. The directors, senior managers and
supervisors do not have positions illegally in other companies that have the same or
similar business.
2.3 In the aspect of assets
There are clear property relations between the Company and controlling shareholders.
The Company owns the independent land usage right and ownership of buildings. The
Company independently registers and manages the properties with setting up accounts
and accounting treatment for them. There is no situation that the controlling shareholders
occupy and control the assets of the Company or intervene the operation management of
the assets.
2.4 In the aspect of organization
The Company has well-structured organization system, including the shareholders’
general meeting, the board of directors, supervisory committee, the management and
functional departments. Related internal management and control system is established
for clear division of function and interaction with each other. It forms an organic whole
that ensures the legal operation.There is no affiliation with functional departments of
controlling shareholders.
2.5 In the aspect of finance
Our company has completed and independent organization with professional financial
employees. Independent accounting system and financial management are established.
The Company sets bank accountants, pays taxes and makes financial decisions
separately. There is no situation that controlling shareholders affect the financial
management.
3. Horizontal competition
Applicable √N/A
4. Annual meeting of shareholders and special meetings of
shareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Investor
Disclosure
Meeting Type participation Convened date Disclosure Index
Date
ratio
2018 First Announcement No.
Extraordinary 30
Extraordinary 2018-005,
General Meeting 75.55% 29 January 2018 January
General Meeting disclosed on
of shareholders 2018
of shareholders www.cninfo.com.cn
2017 Annual General Meeting 77.43% 23 May 2018 24 Nay Announcement No.
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General Meeting of shareholders 2018 2018-022,
of shareholders disclosed on
www.cninfo.com.cn
4.2. Special meetings of shareholders convened at the request of
preference shareholders with resumed voting rights
Applicable √ N/A
5. Performance of non-executive directors during the
reporting period
5.1. Attendance of non-executive directors in board meeting and
meeting of shareholders
Attendance of non-executive directors in board meeting
Presence Presence
Presence Absence
due in the Presence by
Non-executive through a Absence(ti for two Presence(ti
reporting on telecommu
director proxy(times mes) consecutive mes)
period(time site(times) nication(tim
) times
s) es)
Xu Zhijian 6 4 1 1 0 No 2
Cai Yunqing 6 5 1 0 0 No 2
Ji Xueqing 6 5 1 0 0 No 2
Chen
6 5 1 0 0 No 2
Tongguang
Explanation of absence of non-executive directors in meetings of the board for twice
N/A
5.2. Objections from non-executive directors in related issues of the
company
Were there any objections on related issues of the Company from non-executive
directors?
Yes √ No
Non-executive director has no objection on related issues of the Company during the
reporting period.
5.3. Other details about the performance of duties by non-executive
directors
Were there any suggestions from non-executive directors adopted by the Company?
√ Yes No
Explanation about advice of non-executive directors is adopted by the Company or not
Company adopted the advice of non-executive directors.
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6. Performance of duties by special committees under the
broad during the reporting period
1).During the reporting period, the Strategic Committee held 1 meeting. It investigated
2017 the board work report in advance, made the 2018 annual work plan, offered
scientific and reasonable suggestions and fulfilled the duties.
2).During the reporting period, the Nominations Committee held 2 meeting. It examined
the qualification of Candidates nominatedfor directors at the general election of the board
of directors and persons nominated in charge of the internal audit institution. The
committee fulfilled the duties.
3).During the reporting period, the Audit Committee held 5 meetings. It reviewed the
affairs seriously including periodic reports, regular audit by internal audit department and
special audit. It knows about the financial and operational conditions in detail and
examines the execution of internal control system. It plays a effective role in guidance
and supervision. The committee fulfilled the duties.
4).During the reporting period, the Remuneration and Appraisal Committee held 1
meeting. It examines the salary of directors and senior managers in 2017.The information
disclosure of the Company about the salary of directors and senior managers is correct
and true and as the same as the examination.
7. Performance of duties by the supervisory committee
Were there any risks to the Company identified by Supervisory Committee when
performing its duties during the reporting period
Yes √ No
The Supervisory Committee has no objection during the reporting period.
8. Evaluation and motivation mechanism for the senior management
At the beginning of the establishment of the evaluation and motivation mechanism, it was
explicitly illustrated in Trial Implementation Measures for the Annual Salary of General
Manager (Revision). The evaluation and motivation of senior managers are mainly
reflected in annual salary system. The board of directors evaluates and motivates the
senior managers mainly according to the satisfaction of clients, safety index, quality index
and financial index. The management implements the annual salary system. The basic
part of annual salary is paid monthly on average and the remaining part will be paid at
the end of the year according to the results of evaluation. If it does not reach the
evaluation index, the remaining parts will not be paid. In 2018, the Remuneration and
Appraisal Committee examined the situation of the management’s performance in 2017.
In the opinion of the committee, during the reporting period, the management has
achieved the main purpose of sustainable development.
9. Internal control
9.1. Significant internal control deficiencies found in the reporting
period
Yes √ No
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9.2. Internal control self-assessment report
Disclosure date of the internal
2019-04-30
control self-assessment report
Disclosure index of the
For details, please refer to the internal control self-assessment report
internal control self-
disclosed on www.cninfo.com.cn on 30 April 2019
assessment report
Ratio of the total assets of the
appraised entitles to the 99.08%
consolidated total assets
Ratio of the operating
revenues of the appraised
99.52%
entitles to the consolidated
operating revenue
Defect identification standard
Type Financial-report related Non-financial-report related
(1) The indicators of significantdeficiencies
of financial report including ：i. Corrupt
transaction of directors,senior managers
and supervisors；ii. The management
If condition below appears, it
cannot figure out the significant can be considered as
misstatement during the operation process significantdeficiencies, others
of operation, but these misstatements are can be divided into material
found by others ；iii. Based on the results defect or general defect
of evaluation of internal control, the according to impact extent.：
significantdeficienciesare not rectified；iv. (1) The Company suffer from
Audit Committee and Internal Audit serious mistakes and major
Agency are not effective in supervising the property loss due to lake of
internal control.(2) The indicators democratic decision-making
procedures or unscientific
ofmaterialdeficiencies including：i.
Qualitative standard procedures；(2) Violate
Accounting policy has not been chosen or
used under the general accepted national regulations and laws
accounting principles；ii. The anti-fraud seriously；(3) Lake of
program and control measures have not important management
been built；iii. The controlling system or system or it doesn’t work；(4)
compensation system of accounting Significant or
treatment of irregular or special trade has materialdeficiencies of internal
control cannot be regulated in
not formed；iv. The control of the process
time；(5)Materialdeficiencies
of financial reporting at the period end
exist the situation that one or more of internal control appear
deficiencies are found and the veracity continuously or in quantity.
and accuracy cannot be proved.(3)
general control deficiencies refers to the
other control defects except for significant
defects and important defects above.
Significantdeficiencies:Misstatement> 3% Significantdeficiencies:ratio of
of total operating revenue;Misstatement > loss of total assets≥1%.
5% of gross profits;Misstatement > 2% of Materialdeficiencies:
total assets. 0.5%≤ratio of loss of total
Quantitative standard
Materialdeficiencies:1% of total operating assets＜1%
revenue < Misstatement≤3% of total
Generaldeficiencies:ratio of
operating revenue;3% of gross profits<
Misstatement≤5% of gross profits; 1% of loss of total assets＜0.5%
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total assets< Misstatement≤2% of total
assets.
Generaldeficiencies: Misstatement≤1% of
total operating revenue; Misstatement≤3%
of net profits;Misstatement≤1% of total
assets
Number of financial-report
0
significant defects
Number of non-financial-
0
report significant defects
Number of important financial-
0
report related defects
Number of important Non-
financial-report related 0
defects
10. Auditor’s report on internal control
N/A
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Section X Information about Corporate Bond
Whether there exists a public issue and listing of corporate bond that is not yet due or
failed to be redeemed at the date of the financial report authorized.
No
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Section XI Financial Report
I.Auditor’s report
Type of audit report Standard without reserved opinion
Signing date of auditor’s report 2019-04-29
Name of Audit Jiangsu Suya Jincheng Certified Public Accountants LLP
No. of auditor’s report Suya Audit [2019] No.783
Names of auditors Xu Xuzheng, Kan Baoyong
Auditor’s Report
To the shareholders of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.:
Opinion
We have audited the financial statements of Jiangsu Yanghe Brewery Joint-Stock Co.,
Ltd. (hereinafter referred to as the “Company”), which comprise the consolidated balance
sheet and balance sheet as at 31 December 2018, consolidated income statement and
income statement, consolidated cash flow statement and cash flow statement,
consolidated statement of changes in owners' equity and statement of changes in
owners' equity for the year then ended; and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with Accounting Standards for Business Enterprises and present fairly the
financial position of the company as at 31 December 2018 and its operating results and
cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for
Certified Public Accountants. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code
of professional ethics for Certified Public Accountants in China (“the Code”), and we have
fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole and, in forming our opinion thereon, and we do not provide a
separate opinion on these matters. Key audit matters identified in our audit are
summarized as follows:
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1.Recognition of revenue
Please refer to accounting policies in note 3 of Notes III.Significant accounting policies
and accounting estimates and Notes V. Notes to the Main Items of the Consolidated
Financial Statements 29
How our audit addressed the Key Audit
Key audit matters
Matter
The Company’s specific condition of Our procedures in relation to revenue
revenue recognition is that revenue is recognition included:
recognized after customer acceptance (1)Understood, tested and evaluated the
based on payment received or obtaining effectiveness of internal control of sales and
the rights of claiming payment for goods cash receipts cycle designed and executed by
according to signed sales contracts or the management.
agreements. In 2018, the Company’s (2)Judged whether there is an abnormal
annual operating revenue was CNY fluctuation of revenue in the reporting period
24.16 billion, up 21.30% from last year. It with the analytic review of revenue and gross
increased greatly andoperating revenue profit margin in combination with product
is an important component of income category.
statement. Therefore, we identified (3)Sampling inspection of supporting
operating revenue as a key audit matter. documents related to revenue recognition
including sales contracts or orders, invoices,
delivery lists or receiving reports, shipping lists
and bank slips.
(4)Implemented the external confirmation of
selected major franchisers and inspected the
payback of account receivables after the
reporting period in combination with audit of
accounts receivable.
(5)Sampling inspection of calculation and
accounting treatment of sales discount and
sales allowance
(6)Chose samples from sales revenue records
before and after the balance sheet date,
inspected related supporting documents and
evaluated whether the revenue recorded in the
appropriate accounting period.
2. Existence, valuation and allocation of inventories
Please refer to accounting policies in note 12 of Notes III.Significant accounting policies
and accounting estimates and Notes V. Notes to the Main Items of the Consolidated
Financial Statements 5
How our audit addressed the Key Audit
Key audit matters
Matter
As of December 31, 2018, the book value Our procedures in relation to existence,
of inventory is CNY 13.892 billion, valuation, allocation of inventories included:
accounting for 28.03% of the total assets (1)Understood and evaluated the effectiveness
and 38.72% of all current assets. The of management's design and implementation
book value of the inventories at year end of inventory-related internal control.
is relatively large and accounts for a (2)Carried out the inventory analysis review
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relatively large proportion of the total procedure.
assets at year end. Therefore, the (3)Implement stock-taking procedures at the
existence, valuation and apportionment end of the period.
of inventories are identified as a key audit (4)Sample check of production cost calculation
matter. table and other cost accounting data, and
conducted valuation test on inventory, and
evaluated the accuracy of closing balance of
inventory.
(5)Obtained the calculation table of inventory
depreciation reserve, conduct the inventory
impairment test, reviewed the inventory
impairment test process, and checked whether
the provision for inventory is made sufficiently.
Other information
The directors of the Company are responsible for the other information. The other
information comprises the information included in the annual report, but does not include
the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information; we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of directors and those charged with governance for the
financial statements
The directors of the Company are responsible for the preparation of the financial
statements that give a true and fair view in accordance with the disclosure requirements
of Accounting Standards for Business Enterprises, and designing, implementing and
maintaining internal control that is necessary to ensure the financial statements are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial
reporting process.
Auditor's responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance
with CSAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
(1)Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(2)Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
(3)Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
(4)Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
(5)Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6)Obtain sufficient and appropriate audit evidence regarding the financial information of
the entities or business activities within the Company to express an opinion on the
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
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From the matters communicated with the governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Jiangsu Suya Jincheng Certified Public Accountants LLP
Nanjing, China
Kan Baoyong
Certified Public Accountant of China
Xu Xuzheng,
Certified Public Accountant of China
29 April 2019
II.Financial statements
Prepared by: Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Consolidated balance sheet
As at December 31, 2018
Unit: CNY
Item Balance as at 31 December Balance as at 31 December
2018 2017
Current assets:
Cash and cash equivalents 3,615,348,307.97 1,751,452,876.18
Settlement reserves
Lending funds
Financial assets measured at fair value
through current profit or loss
Derivative financial assets
Notes and accounts receivables 247,961,412.36 221,297,619.40
Including: Notes receivables 242,542,097.76 212,812,236.57
Accounts receivables 5,419,314.60 8,485,382.83
Prepayment 18,984,169.54 86,661,808.28
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 47,908,184.37 57,084,601.83
Including:Interests receivable
Dividends receivable
Buying back the sale of financial assets
Inventories 13,892,118,587.74 12,861,503,434.11
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Balance as at 31 December Balance as at 31 December
2018 2017
Assets held for sale
Non-current assets due within one year 1,120,000,000.00 552,200,000.00
Other current assets 16,932,480,348.96 12,996,375,380.41
Total current assets 35,874,801,010.94 28,526,575,720.21
Non-current assets:
Disbursement of loans and advances
Available-for-sale financial assets 2,713,455,624.66 3,460,279,142.76
Held-to-maturity investments
Long-term receivables
Long-term equity investments 9,423,328.82 1,980,046.94
Investment property
Fixed assets 7,833,665,282.19 8,249,559,468.26
Construction in progress 154,535,104.82 235,219,521.41
Productive biological assets
Oil and gas assets
Intangible assets 1,781,961,687.10 1,653,546,427.07
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred expenses 907,636.00 1,091,644.16
Deferred tax assets 714,003,966.82 649,659,107.71
Other non-current assets 205,012,184.92 204,227,633.91
Total non-current assets 13,688,966,805.28 14,731,564,982.17
Total assets 49,563,767,816.22 43,258,140,702.38
Current liabilities:
Short-term loans
Borrowings from the central bank
Deposits from customers and inter-bank
Loans from other banks
Financial liabilities measured at fair value
through current profit or loss
Derivative financial liabilities
Notes and accounts payable 1,261,282,397.89 1,119,603,574.47
Advance from customer 4,468,409,150.75 4,199,846,323.30
Financial assets sold for repurchase
Handling charges and commissions
payable
Employee benefits payable 185,751,373.59 209,658,648.29
Taxes payable 3,255,458,759.72 2,289,562,127.67
Other payable 6,457,301,511.01 5,620,040,515.94
Including:Interests payable
Dividends payable
Reinsurance accounts payable
Insurance contract reserves
Customer brokerage deposits
Securities underwriting brokerage
deposits
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 15,628,203,192.96 13,438,711,189.67
Non-current liabilities:
Long-term loans 109,088.00 145,452.00
Bonds payable
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Balance as at 31 December Balance as at 31 December
2018 2017
Including: Preference shares
Perpetual bonds
Long-term payables 198,404,248.85 199,107,530.75
Long-term payroll payables
Accrued liabilities
Deferred income 98,513,500.00 107,349,666.67
Deferred tax liabilities 14,019,256.05 17,957,771.10
Other non-current liabilities
Total non-current liabilities 311,046,092.90 324,560,420.52
Total liabilities 15,939,249,285.86 13,763,271,610.19
Shareholders' equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 741,704,076.44 741,704,076.44
Less: treasury stock
Other comprehensive income -141,964,710.15 915,704.03
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 30,784,308,899.94 26,511,938,505.25
Total equity attributable to owners of
33,644,530,266.23 29,515,040,285.72
the parent company
Non-controlling interests -20,011,735.87 -20,171,193.53
Total owners' equity 33,624,518,530.36 29,494,869,092.19
Total liabilities and owners' equity 49,563,767,816.22 43,258,140,702.38
Legal representative: Wang Yao
Person in charge of accounting affairs: Cong Xuenian
Person in charge of accounting department: Yin Qiuming
Balance sheet of parent company
As at December 31, 2018
Unit: CNY
Item Balance as at 31 Balance as at 31
December2018 December2017
Current assets:
Cash and cash equivalents 1,849,574,170.07 1,109,561,846.20
Financial assets measured at fair value
through current profit or loss
Derivative financial assets
Notes and accounts receivables 840,733,649.03 7,689,657,390.04
Including:Notes receivables 143,456,446.32 162,947,960.82
Accounts receivables 697,277,202.71 7,526,709,429.22
Prepayment 250,592,759.90 2,635,654.78
Other receivables 949,089,213.52 3,765,791,270.10
Including:Interests receivable
Dividends receivable 713,143.77 2,605,425,138.06
Inventories 10,378,077,915.50 9,944,024,331.15
Assets held for sale
Non-current assets due within one year 700,000,000.00 150,000,000.00
Other current assets 12,338,796,250.84 8,803,227,424.95
Total current assets 27,306,863,958.86 31,464,897,917.22
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Item Balance as at 31 Balance as at 31
December2018 December2017
Non-current assets:
Available-for-sale financial assets 1,231,283,468.30 2,038,625,617.54
Held-to-maturity investments
Long-term receivables
Long-term equity investments 7,365,139,180.24 5,408,241,180.24
Investment property
Fixed assets 5,008,615,512.59 5,402,239,827.59
Construction in progress 92,262,796.92 50,756,425.20
Productive biological assets
Oil and gas assets
Intangible assets 1,252,482,032.31 1,275,763,366.60
Development expenses
Goodwill
Long-term deferred expenses
Deferred tax assets 5,734,535.64 6,093,941.15
Other non-current assets 179,613,182.42 165,885,624.34
Total non-current assets 15,135,130,708.42 14,347,605,982.66
Total assets 42,441,994,667.28 45,812,503,899.88
Current liabilities:
Short-term loans
Financial liabilities measured at fair value
through current profit or loss
Derivative financial liabilities
Notes and accounts payables 1,159,053,261.86 1,166,484,374.31
Advance from customer 14,339,833,591.92 21,608,300,346.42
Employee benefits payable
Taxes payable 1,069,550,625.85 383,026,142.73
Other payables 183,715,786.65 169,460,166.49
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 16,752,153,266.28 23,327,271,029.95
Non-current liabilities:
Long-term loans 109,088.00 145,452.00
Bonds payable
Including: Preference shares
Perpetual bonds
Long-term payables 145,105,136.65 145,437,496.65
Long-term payroll payables
Accrued liabilities
Deferred income 79,166.67
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 145,214,224.65 145,662,115.32
Total liabilities 16,897,367,490.93 23,472,933,145.27
Shareholders' equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 1,341,628,480.93 1,341,628,480.93
Less: treasury stock
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Balance as at 31 Balance as at 31
December2018 December2017
Other comprehensive income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Undistributed profits 21,942,516,695.42 18,737,460,273.68
Total owners' equity 25,544,627,176.35 22,339,570,754.61
Total liabilities and owners' equity 42,441,994,667.28 45,812,503,899.88
Consolidated income statement
Unit: CNY
Item Year 2018 Year 2017
1. Total operating revenue 24,159,801,994.68 19,917,942,238.16
Including:Operating revenue 24,159,801,994.68 19,917,942,238.16
Interest income
Earned premium
Fee and commission income
2. Total operating costs 14,352,364,432.50 11,741,569,054.09
Including:cost of sales 6,353,242,198.27 6,681,148,562.16
Interest expense
Handling charges and commission
expenses
Refunded premiums
Net payments for insurance
claims
Net provision for insurance
contracts
Bond insurance expense
Reinsurance expenses
Taxes and surcharges 3,769,929,974.08 1,151,869,831.30
Selling and distribution
2,561,401,628.22 2,387,447,107.05
expenses
General and administrative
1,704,265,102.61 1,506,402,859.73
expenses
Research and Development
27,565,217.63 25,745,247.20
expenses
Financial expenses -65,138,636.76 -33,912,331.47
Including:Interest expenses 3,273.00 3,927.00
Interest income 69,133,580.05 48,793,842.12
Impairment losses 1,098,948.45 22,867,778.12
Plus: Other income 63,352,983.06 44,745,640.94
Investment income ("-" for losses) 918,292,794.49 623,953,064.97
Including: income from investment in
1,819,591.30 -1,299,882.30
associates and joint ventures
Gains from the changes in fair
values(“-“ for losses)
Foreign exchange gains ("-"for
losses)
Gains from disposal of assets("-" for
24,568,477.22 -8,598,844.11
losses)
3. Operating profits ("-"for losses) 10,813,651,816.95 8,836,473,045.87
Plus: non-operating income 37,931,006.18 19,822,054.76
Less: non-operating expenses 12,397,034.29 8,340,532.81
4. Total profits before tax ("-"for total
10,839,185,788.84 8,847,954,567.82
losses)
Less: income tax expenses 2,723,855,894.34 2,229,168,424.15
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Year 2018 Year 2017
5. Net profit ("-"for net loss) 8,115,329,894.50 6,618,786,143.67
(1)Net profit from continuing operation ("-"
8,115,329,894.50 6,618,786,143.67
for losses)
(2) Net profit from discontinued operation
("-" for losses)
Attributable to owners of the parent
8,115,189,794.69 6,627,169,959.16
company
Attributable to non-controlling interests 140,099.81 -8,383,815.49
6.Net of tax from other comprehensive
-142,861,056.33 -226,957.05
income
Net of tax from other comprehensive
-142,880,414.18 -225,943.44
income to the owner of the parent company
(1)Other comprehensive income cannot
reclassified into the profit and loss:
Including: Remeasure the variation of net
indebtedness or net asset of defined
benefit plans
Share in other comprehensive income that
cannot be classified into profit and loss
under equity method
(2)Other comprehensive income that will be
-142,880,414.18 -225,943.44
reclassified into the profit and loss
Including: Share in other comprehensive
income that will be classified into profit and
loss under equity method
Changes in fair value of available-for-sale
-140,593,969.30
financial assets
Held-to-maturity investment reclassified
into available-for sale financial assets
Effective part of cash-flow hedge profit and
loss
Balance arising from the translation of
-2,286,444.88 -225,943.44
foreign currency financial statements
Others
Net of tax from other comprehensive
19,357.85 -1,013.61
income to non-controlling interests
7. Total comprehensive income 7,972,468,838.17 6,618,559,186.62
Total comprehensive income attributable to
7,972,309,380.51 6,626,944,015.72
owners of the parent company
Total comprehensive income attributable to
159,457.66 -8,384,829.10
non-controlling interests
8. Earnings per share
(1)Basic earnings per share 5.3850 4.3976
(2)Diluted earnings per share 5.3850 4.3976
Legal representative: Wang Yao
Person in charge of accounting affairs: Cong Xuenian
Person in charge of accounting department: Yin Qiuming
Income statement of parent company
Unit: CNY
Item Year 2018 Year 2017
1. Operating revenue 9,720,079,677.82 7,287,432,948.05
Less: Cost of sales 5,063,636,970.41 6,025,125,159.75
Taxes and surcharges 3,135,358,096.00 790,967,616.84
Selling and distribution expenses
95
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Year 2018 Year 2017
General and administrative expenses 925,750,206.21 790,164,204.69
Research and Development expenses 25,250,014.30 23,319,255.22
Financial expenses -39,822,309.22 -129,591,360.68
Including: Interest expenses 3,273.00 3,927.00
Interest income 40,645,696.27 136,991,923.30
Impairment losses 291,592.62 480,654.94
Plus: Other income 10,553,184.71 12,565,700.00
Investment income ("-" for losses) 6,719,750,712.77 5,917,308,205.89
Including: income from investment in associates
-2,074,635.42
and joint ventures
Gains from the changes in fair values(“-“ for
losses)
Gains from disposal of assets("-" for losses) 26,210,243.55 -547,317.20
2. Operating profits ("-"for losses) 7,366,129,248.53 5,716,294,005.98
Plus: non-operating income 4,826,890.48 2,466,263.97
Less: non-operating expenses 11,501,547.44 4,200,000.00
3. Total profits before tax ("-"for total losses) 7,359,454,591.57 5,714,560,269.95
Less: income tax expenses 311,578,769.83 28,288,566.97
4. Net profit ("-"for net loss) 7,047,875,821.74 5,686,271,702.98
(1)Net profit from continuing operation ("-" for losses) 7,047,875,821.74 5,686,271,702.98
(2)Net profit from discontinued operation ("-" for losses)
5.Net of tax from other comprehensive income
(1)Other comprehensive income cannot reclassified into
the profit and loss:
Including: Remeasure the variation of net indebtedness
or net asset of defined benefit plans
Share in other comprehensive income that cannot be
classified into profit and loss under equity method
(2)Other comprehensive income that will be reclassified
into the profit and loss
Including: Share in other comprehensive income that will
be classified into profit and loss under equity method
Changes in fair value of available-for-sale financial
assets
Held-to-maturity investment reclassified into available-for
sale financial assets
Effective part of cash-flow hedge profit and loss
Balance arising from the translation of foreign currency
financial statements
Others
6. Total comprehensive income 7,047,875,821.74 5,686,271,702.98
7. Earnings per share
(1)Basic earnings per share
(2)Diluted earnings per share
Consolidated Statement of Cash Flows
Unit: CNY
Item Year 2018 Year 2017
1. Cash flows from operating activities
Cash received from sale of goods and rendering of
28,105,243,671.54 23,711,590,313.33
services
Net increase in customer bank deposits and placement
from banks and other financial institutions
Net increase in loans from central bank
96
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Year 2018 Year 2017
Net increase in loans from other financial institutions
Premiums received from original insurance contracts
Net cash received from reinsurance business
Net increase in deposits and investments from
policyholders
Net increase for disposal of financial assets measured at
their fair values and of
which the changes are recorded into the current profits
and losses
Cash received from interest, handling charges and
commissions
Net increase in placements from other financial
institutions
Net capital increase in repurchase business
Refunds of taxes and surcharges
Cash received from other operating activities 1,493,570,444.98 427,432,452.11
Sub-total of cash inflows from operating activities 29,598,814,116.52 24,139,022,765.44
Cash paid for goods purchased and services received 7,042,490,432.34 6,973,376,753.35
Net increase in loans and advances to customers
Net increase in deposits in central bank and other banks
and financial institutions
Cash paid for original insurance contract claims
Cash paid for interests, handling charges and
commissions
Cash paid for policy dividends
Cash paid to and on behalf of employees 1,786,871,082.15 1,532,216,356.37
Cash paid for taxes and surcharges 8,525,778,929.78 6,535,601,442.87
Cash paid for other operating activities 3,186,924,855.97 2,214,658,413.54
Sub-total of cash outflows from operating activities 20,542,065,300.24 17,255,852,966.13
Net cash flows from operating activities 9,056,748,816.28 6,883,169,799.31
2. Cash flows from investing activities
Cash received from disposal of investments 34,357,728,481.60 30,400,345,558.70
Cash received from returns on investments 859,477,665.90 564,117,891.26
Net cash received from disposal of fixed assets,
45,125,913.95 608,832.88
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and
other business units
Cash received from other investing activities 5,116,000.00
Sub-total of cash inflows from investing activities 35,262,332,061.45 30,970,188,282.84
Cash paid to acquire and construct fixed assets,
471,045,188.55 325,345,429.44
intangible assets and other long-term assets
Cash paid for investments 38,140,628,997.25 34,805,329,229.53
Net increase in pledge loans
Net cash paid to acquire subsidiaries and other business
535,902.84
units
Cash paid for other investing activities
Sub-total of cash outflows from investing activities 38,611,674,185.80 35,131,210,561.81
Net cash flows from investing activities -3,349,342,124.35 -4,161,022,278.97
3. Cash flows from financing activities
Cash received from investors
Including: cash received by subsidiaries from
investments by minority shareholders
Cash received from borrowings
Cash received from bonds issue
Cash received from other financing activities 1,500,000.00
97
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Year 2018 Year 2017
Sub-total of cash inflows from financing activities 1,500,000.00
Cash paid for debt repayments 36,364.00 36,364.00
Cash paid for distribution of dividends and profits or
3,842,822,673.00 3,169,375,338.20
payment of interest
Including: dividends and profits paid to minority
4,696,611.20
shareholders by subsidiaries
Cash paid for other financing activities 247,704,388.41
Sub-total of cash outflows from financing activities 3,842,859,037.00 3,417,116,090.61
Net cash flows from financing activities -3,841,359,037.00 -3,417,116,090.61
4. Effect of fluctuation in exchange rate on cash and
-652,223.14 -11,705,912.52
cash equivalents
5. Net increase in cash and cash equivalents 1,865,395,431.79 -706,674,482.79
Plus: balance of cash and cash equivalents at the
1,749,952,876.18 2,456,627,358.97
beginning of the period
6. Balance of cash and cash equivalents at the end
3,615,348,307.97 1,749,952,876.18
of the period
Cash flow statements of parent company
Unit: CNY
Item Year 2018 Year 2017
1. Cash flows from operating activities
Cash received from sale of goods and rendering of
10,544,075,256.24 4,993,174,559.67
services
Refunds of taxes and surcharges
Cash received from other operating activities 3,092,072,776.21 9,395,953,342.76
Sub-total of cash inflows from operating
13,636,148,032.45 14,389,127,902.43
activities
Cash paid for goods purchased and services
5,540,860,474.37 6,084,319,424.50
received
Cash paid to and on behalf of employees 757,469,214.50 628,353,375.71
Cash paid for taxes and surcharges 3,502,337,711.58 1,959,696,424.05
Cash paid for other operating activities 622,232,077.34 153,591,847.77
Sub-total of cash outflows from operating
10,422,899,477.79 8,825,961,072.03
activities
Net cash flows from operating activities 3,213,248,554.66 5,563,166,830.40
2. Cash flows from investing activities
Cash received from disposal of investments 23,961,387,686.52 13,595,278,733.32
Cash received from returns on investments 6,665,894,034.18 8,423,249,140.68
Net cash received from disposal of fixed assets,
43,946,408.08 16,755,029.89
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
and other business units
Cash received from other investing activities
Sub-total of cash inflows from investing
30,671,228,128.78 22,035,282,903.89
activities
Cash paid to acquire and construct fixed assets,
217,004,834.57 325,294,764.78
intangible assets and other long-term assets
Cash paid for investments 29,083,948,000.00 24,564,483,908.37
Net cash paid to acquire subsidiaries and other
business units
Cash paid for other investing activities
Sub-total of cash outflows from investing
29,300,952,834.57 24,889,778,673.15
activities
Net cash flows from investing activities 1,370,275,294.21 -2,854,495,769.26
3. Cash flows from financing activities
98
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Item Year 2018 Year 2017
Cash received from investors
Cash received from loans
Cash received from bonds issue
Cash received from other financing activities
Sub-total of cash inflows from financing
activities
Cash paid for debt repayments 36,364.00 36,364.00
Cash paid for distribution of dividends and profits
3,842,822,673.00 3,164,678,727.00
or payment of interest
Cash paid for other financing activities
Sub-total of cash outflows from financing
3,842,859,037.00 3,164,715,091.00
activities
Net cash flows from financing activities -3,842,859,037.00 -3,164,715,091.00
4. Effect of fluctuation in exchange rate on
-652,488.00 -4,821,072.81
cash and cash equivalents
5. Net increase in cash and cash equivalents 740,012,323.87 -460,865,102.67
Plus: balance of cash and cash equivalents at the
1,109,561,846.20 1,570,426,948.87
beginning of the period
6. Balance of cash and cash equivalents at the
1,849,574,170.07 1,109,561,846.20
end of the period
99
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Consolidated statement of changes in shareholders' equity
For the year ended 31 December, 2018
Unit: CNY
Year 2018
Equity attributable to owners of the parent company
Other equity Less： Non- Total
Item instruments Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital risk
Preferre Perpetua reserve ry reserve reserve profit interests equity
Other ive Income reserve
d stock l bond stock
1. Balance
as at 31
December 1,506,988,000.00 741,704,076.44 915,704.03 753,494,000.00 26,511,938,505.25 -20,171,193.53 29,494,869,092.19
of last
year
Plus:
adjustment
s for
changes in
accounting
policies
Adjustmen
ts for
correction
of
accounting
errors in
prior year
Business
combinatio
ns under
common
control
100
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Equity attributable to owners of the parent company
Other equity Less： Non- Total
Item instruments Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital risk
Preferre Perpetua reserve ry reserve reserve profit interests equity
Other ive Income reserve
d stock l bond stock
Others
2. Balance
as at
January 1
1,506,988,000.00 741,704,076.44 915,704.03 753,494,000.00 26,511,938,505.25 -20,171,193.53 29,494,869,092.19
of the
current
year
3.Increase
s/decreas
es in the
current
-142,880,414.18 4,272,370,394.69 159,457.66 4,129,649,438.17
year (“-”
for
decreases
)
(1) Total
comprehe
-142,880,414.18 8,115,189,794.69 159,457.66 7,972,468,838.17
nsive
income
(2) Capital
contributed
or reduced
by owners
Capital
contributio
ns by
owners
101
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Equity attributable to owners of the parent company
Other equity Less： Non- Total
Item instruments Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital risk
Preferre Perpetua reserve ry reserve reserve profit interests equity
Other ive Income reserve
d stock l bond stock
Capital
contributio
ns by other
equity
instrument
s holders
Amounts
of share-
based
payments
recognized
in owners'
equity
Others
(3) Profit
-3,842,819,400.00 -3,842,819,400.00
distribution
Withdrawal
of surplus
reserves
Withdrawal
of general
risk
reserve
Profit
distributed
-3,842,819,400.00 -3,842,819,400.00
to owners
(or
102
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Equity attributable to owners of the parent company
Other equity Less： Non- Total
Item instruments Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital risk
Preferre Perpetua reserve ry reserve reserve profit interests equity
Other ive Income reserve
d stock l bond stock
shareholde
rs)
Others
(4) Internal
carry-
forward of
owners'
equity
Conversio
n of capital
reserves
into paid-in
capital
Conversio
n of
surplus
reserves
into paid-in
capital
Surplus
reserves
offsetting
losses
Carry-
forward of
retained
earnings
103
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Equity attributable to owners of the parent company
Other equity Less： Non- Total
Item instruments Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital risk
Preferre Perpetua reserve ry reserve reserve profit interests equity
Other ive Income reserve
d stock l bond stock
from
changes in
defined
benefit
plans
Others
(5) Special
reserves
Withdrawal
for the
period
Use for the
period
(6) Others
4. Balance
as at 31
December
1,506,988,000.00 741,704,076.44 -141,964,710.15 753,494,000.00 30,784,308,899.94 -20,011,735.87 33,624,518,530.36
of the
current
year
For the year ended 31 December, 2017
Unit: CNY
Year 2017
Item Equity attributable to owners of the parent company Non- Total
Share capital Other equity instruments Capital Less： Other Special Surplus General Undistributed controlling shareholders'
104
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
reserve Treasu Comprehens reserve reserve risk profit interests equity
Preferre Perpetua
Other ry ive Income reserve
d stock l bond
stock
1. Balance
as at 31
December 1,506,988,000.00 741,704,076.44 1,141,647.47 753,494,000.00 23,049,443,346.09 -15,785,202.54 26,036,985,867.46
of last
year
Plus:
adjustment
s for
changes in
accounting
policies
Adjustmen
ts for
correction
of
accounting
errors in
prior year
Business
combinatio
ns under
common
control
Others
2. Balance
as at
January 1
1,506,988,000.00 741,704,076.44 1,141,647.47 753,494,000.00 23,049,443,346.09 -15,785,202.54 26,036,985,867.46
of the
current
year
3.Increase -225,943.44 3,462,495,159.16 -4,385,990.99 3,457,883,224.73
105
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Equity attributable to owners of the parent company
Other equity instruments Less： Non- Total
Item Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital Preferre Perpetua risk
Other reserve ry reserve reserve profit interests equity
d stock l bond ive Income reserve
stock
s/decreas
es in the
current
year (“-”
for
decreases
)
(1) Total
comprehe
-225,943.44 6,627,169,959.16 -8,384,829.10 6,618,559,186.62
nsive
income
(2) Capital
contributed
3,998,838.11 3,998,838.11
or reduced
by owners
Capital
contributio
ns by
owners
Capital
contributio
ns by other
equity
instrument
s holders
Amounts
of share-
106
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Equity attributable to owners of the parent company
Other equity instruments Less： Non- Total
Item Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital Preferre Perpetua risk
Other reserve ry reserve reserve profit interests equity
d stock l bond ive Income reserve
stock
based
payments
recognized
in owners'
equity
Others 3,998,838.11 3,998,838.11
(3) Profit
-3,164,674,800.00 -3,164,674,800.00
distribution
Withdrawal
of surplus
reserves
Withdrawal
of general
risk
reserve
Profit
distributed
to owners
-3,164,674,800.00 -3,164,674,800.00
(or
shareholde
rs)
Others
(4) Internal
carry-
forward of
owners'
equity
107
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Equity attributable to owners of the parent company
Other equity instruments Less： Non- Total
Item Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital Preferre Perpetua risk
Other reserve ry reserve reserve profit interests equity
d stock l bond ive Income reserve
stock
Conversio
n of capital
reserves
into paid-in
capital
Conversio
n of
surplus
reserves
into paid-in
capital
Surplus
reserves
offsetting
losses
Carry-
forward of
retained
earnings
from
changes in
defined
benefit
plans
Others
(5) Special
reserves
108
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Equity attributable to owners of the parent company
Other equity instruments Less： Non- Total
Item Other General
Capital Treasu Comprehens Special Surplus Undistributed controlling shareholders'
Share capital Preferre Perpetua risk
Other reserve ry reserve reserve profit interests equity
d stock l bond ive Income reserve
stock
Withdrawal
for the
period
Use for the
period
(6) Others
4. Balance
as at 31
December
1,506,988,000.00 741,704,076.44 915,704.03 753,494,000.00 26,511,938,505.25 -20,171,193.53 29,494,869,092.19
of the
current
year
Statement of changes in shareholders' equity of parent company
For the year ended 31 December, 2018
Unit: CNY
Year 2018
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
1. Balance as
at 31 December 1,506,988,000.00 1,341,628,480.93 753,494,000.00 18,737,460,273.68 22,339,570,754.61
of last year
Plus:
109
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
adjustments for
changes in
accounting
policies
adjustments for
correction of
accounting
errors in prior
year
Others
2. Balance as
at January 1 of
1,506,988,000.00 1,341,628,480.93 753,494,000.00 18,737,460,273.68 22,339,570,754.61
the current
year
3.Increases/de
creases in the
current year (“- 3,205,056,421.74 3,205,056,421.74
” for
decreases)
(1) Net profit 7,047,875,821.74 7,047,875,821.74
(2)Capital
contributed or
reduced by
owners
Capital
contributions by
owners
Capital
contributions by
110
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
(3)Profit
-3,842,819,400.00 -3,842,819,400.00
distribution
Withdrawal of
surplus reserves
Profit distributed
to owners (or -3,842,819,400.00 -3,842,819,400.00
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
surplus reserves
into paid-in
capital
Surplus
111
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2018
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
reserves
offsetting losses
Carry-forward of
retained
earnings from
changes in
defined benefit
plans
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as
at 31 December
1,506,988,000.00 1,341,628,480.93 753,494,000.00 21,942,516,695.42 25,544,627,176.35
of the current
year
For the year ended 31 December, 2017
Unit: CNY
Year 2017
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
1. Balance as 1,506,988,000.00 1,341,628,480.93 753,494,000.00 16,215,863,370.70 19,817,973,851.63
112
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
at 31
December of
last year
Plus:
adjustments for
changes in
accounting
policies
adjustments for
correction of
accounting
errors in prior
year
Others
2. Balance as
at January 1 of
1,506,988,000.00 1,341,628,480.93 753,494,000.00 16,215,863,370.70 19,817,973,851.63
the current
year
3.Increases/de
creases in the
current year (“- 2,521,596,902.98 2,521,596,902.98
” for
decreases)
(1) Net profit 5,686,271,702.98 5,686,271,702.98
(2)Capital
contributed or
reduced by
owners
Capital
113
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
contributions by
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
(3)Profit
-3,164,674,800.00 -3,164,674,800.00
distribution
Withdrawal of
surplus
reserves
Profit distributed
to owners (or -3,164,674,800.00 -3,164,674,800.00
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
114
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Year 2017
Other equity instruments Less： Other Total
Item Capital Special Surplus Undistributed
Share capital Preferred Perpetual Treasury Comprehensive shareholders'
Other reserve reserve reserve profit
stock bond stock Income equity
Conversion of
surplus
reserves into
paid-in capital
Surplus
reserves
offsetting losses
Carry-forward of
retained
earnings from
changes in
defined benefit
plans
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as
at 31
December of 1,506,988,000.00 1,341,628,480.93 753,494,000.00 18,737,460,273.68 22,339,570,754.61
the current
year
115
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
III. Company profile
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.(hereinafter referred to as “the
Company”)was established on 26 December 2002, verified by the Government of
Jiangsu Province, details referred to Reply on The approval of Establishment of Jiangsu
Yanghe Brewery Joint-Stock Co., Ltd. by the provincial government (SuZhengFu
[2002]No.155), and it was a joint-stock company founded by Jiangsu Yanghe Group
Co.,Ltd., Shanghai Haiyan Logistics Development Co.,Ltd., Nantong Zongyi Investment
Co.,Ltd.,Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd., Jiangsu Venture
Capital Co.,Ltd., China National Research Institute of Food and Fermentation Industries
Co. Ltd., Nantong Shengfu Industrial Trade Co., Ltd. and Yang Yandong and other totally
14 nature persons. On 27 December, the Compamy obtained the unified social credit
code (91460000201357188U) issued by Jiangsu Provincial Administration for Industry
and Commerce. The registered capital was CNY 68 million and the share capital was
68,000,000 (CNY 1 per share). According to the documents verified by Jiangsu Provincial
Department of Finance (Su Cai Guo Zi [2002] No.178), all the fund capital converts into
share capital according to the ratio 1:0.65561,among which, Jiangsu Yanghe Group
Co.,Ltd contributed CNY 52,264,100 of evaluated physical assets and CNY 735,900 of
currency, covered into 34,747,330 shares, accounting for 51.099% of the total share
capital; Shanghai Haiyan Logistics Development Co.,Ltd contributed CNY 15,000,000 of
currency, convered into 9,834,150 shares, accounting for the 14.462% of the total share
capital; Nantong Zongyi Investment Co.,Ltd. contributed CNY 15,000,000 of currency,
converted into 9,834,150 shares, accounting for 14.462% of the total share capital;
ShangHai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd. contributed CNY 7,000,000
of currency converted into 4,589,270 shares, accounting for 6.749% of the total share
capital; Jiangsu Venture Capital Co.,Ltd. contributed CNY 3,000,000 of currency
concerted into 1,966,830 shares, accounting for 2.892% of the total share capital; China
National Research Institute of Food and Fermentation Industries Co. Ltd. contributed
CNY 1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of the
total share capital; Nantong Shengfu Industrial Trade Co., Ltd. contributed CNY
1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of the total
share capital; Yang Yandong and other totally 14 nature persons contributed CNY
8,720,200 of currency, converted into 5,717,050 shares, accounting for 8.408% of the
total share capital.
On 13 September 2009, the Company was verified by China Securities Regulatory
Commission, according to the document Reply on Approving Initial Public Offering of
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. （ Zheng Jian Approval [2009]
No.1077）.The Company announced the initial public offering of 45,000,000 common
shares on 27 February 2009 and was listed for transactions in SZSE since 6 November
2009.
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According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011,
based on the total capital of 450,000,000 shares on 31 December 2010, the capital
reserves per 10 shares were converted into 10 shares. After the conversion, the total
share capital of the Company was 900,000,000 as well as registered capital of CNY
900,000,000.
According to the decision of 2011 Shareholders’ General Meeting on 17 May 2012,
based on the total capital of 900,000,000 shares on 31 December 2011, the capital
reserves per 10 shares were converted into 2 shares. After the conversion, the total
share capital of the Company was 1,080,000,000 as well as registered capital of CNY
108,000,000.
According to the Proposal of Initial Share Repurchase of Public Shares approved by
2012 Shareholders’ General Meeting on 17 May 2013, the Company used owned funds
to repurchase public shares and the price of public shares was no more than CNY 70.00
per share, as well as the total amount of repurchase shares was no more than CNY 10
billion. The form of repurchase was centralized competitive bidding approved by SZSE.
Until May 2014, the amount of repurchase shares was 3,580,000 and the total amount of
payment CNY 157,793,218.58. The shares repurchased had been canceled according to
the law with the procedure of capital reduction. After the repurchase, the registered
capital became CNY 1,076,420,000 and the total share capital of the Company became
1,076,420,000.
According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015,
based on the total capital of 1,076,420,000 shares on 31 December 2011, the capital
reserves per 10 shares were converted into 4 shares. After the conversion, the total
share capital of the company was 1,506,988,000 as well as the registered capital of CNY
1,506,988,000.
Registered address of the Company: 118 Middle Avenue,Yanghe Town, Suqian City,
Jiangsu Province
Company type: Incorporated company (Listed)
Industry of the Company: Brewing food industry
Business scope of the Company:production and sale of liquor, wholesaling and retailing
of prepackaged food,grain purchase, self-operating and agency of import and export of
various types of merchandise and technology excluding merchandise and technology
limited or prohibited by the state for import and export, domestic trade, construction of e-
commerce platform and online sales.( Business activities of projects needed to be
approved by law must be approved according to related departments）
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Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.
The scope of the Company's consolidated financial statements is based on control, and
all subsidiaries are included in the consolidation scope of the consolidated financial
statements.
Changes of the scope of consolidation are as follows:
Subsidiaries that are newly incorporated into the scope of consolidation are
shown in the following table:
Name Measure of acquisition
Jiangsu Yanghe Investment Management Newly establishment
Co.,Ltd.
Su Wine Group Nanjing Operation Newly establishment
Management Co.,Ltd.
Jiangsu Zhongshiji Wine Industry Co.,Ltd. Newly establishment
Subsidiaries that are no longer incorporated into the scope of consolidation are
shown in the following table:
Name Reason
Sihong Shuangtai Package Co.,Ltd. Liquidation and cancellation
Nanjing Huiteng Media Technology Co.,Ltd. Merger and cancellation
Details of the subsidiaries incorporated into the consolidated financial statements show
on “9. Interests in subsidiaries”, Changes in the scope of consolidation show on “8.
change in consolidated scope”.
IV.Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, and
recognized and measured its accounting items in compliance with the Accounting
Standards for Business Enterprises—Basic Standards and various concrete accounting
standards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of the
reporting period. In addition, there is no significant event affecting going concern.
V. Significant accounting policies and accounting estimates
Whether the Company needs to comply with the requirement of special industry
No
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The notes of detailed accounting policies and accounting estimates:
See details in Note V. 27.Changes in significant accounting policies and accounting
estimates.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE,
and present truly and completely, the group’s financial position, the Company’s and
results of operations, and changes in shareholders' equity, cash flows and other related
information for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from
January 1st to December 31st.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5. The accounting treatment of business combinations involving
enterprises under common control and not under common control
(1) Accounting treatment method for business combination under common control
Business combination under common control is accounted for under pooling of
interest method.
Assets and liabilities obtained by the Company through business combination under
common control shall be measured at the book value as stated in the combine’s
accounting record on the combination date. The share of the book value of the
merged party’s owner’s equity in the consolidated financial statements is taken as
the initial investment cost of long-term equity investments in individual financial
statements. The capital reserve (stock premium or capital premium) is adjusted
according to the difference between the book value of net asset acquired through
combination and the book value of consideration paid for the combination (or total
par value of shares issued). If the capital reserve (stock premium or capital premium)
is insufficient to offset, the retained earnings shall be adjusted.
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(2) Accounting treatment method of business combination not under common control
The Company accounts for business combination not under common control under
purchase method.
a) All the net identifiable assets, liabilities or contingent liabilities obtained by the
Company through business combination not under common control shall be
measured at fair value. Assets paid, liabilities incurred or assumed and the equity
securities issued as consideration for combination are generally measured at fair
value on the acquisition date, and differences between their fair values and book
values shall be included in the current profit and loss.
b) The cost of acquisition shall be respectively determined for the following
conditions;
i.Business combination of a transaction implementation, the combination cost
shall be the sum of the fair value of the assets given, the liabilities incurred or
assumed and the equity securities issued by the Company in exchange for the
control on the acquisition date, and contingent considerations meeting the
recognition conditions. The combination cost is the initial investment costs of
long-term equity investments in individual financial statements.
ii.Business combination through multiple transactions step by step to realized,
the combination cost shall be the sum of the fair value measurement on the
acquisition of the equity investment that holding before the acquisition date and
cost of all the new investment on the acquisition date. Long-term equity
investment cost in individual financial statements shall be the sum of the book
value of the equity investment that holding before the acquisition date and cost
of all the new investment on the acquisition date. A package deal is excluded.
The Company, on the acquisition date, allocates the combination costs between the
identifiable assets and liabilities acquired
i.All assets of the acquiree obtained by the Company through business
combination(not limited to those that have been recognized by the acquiree),
other than intangible assets, shall be separately recognized and measured at
fair value when the future economic benefits arising thereafter are expected to
flow into the Company and the fair value can be reliably measured.
ii.Intangible assets of the acquiree obtained by the Company through business
combination shall be separately recognized and measured at fair value when
their fair values can be reliably measured.
iii. All liabilities of the acquiree obtained by the Company through business
combination, other than contingent liabilities, shall be separately recognized
and measured at fair value when fulfillment of relevant obligations are expected
to bring future economic benefits to the Company and the fair value can be
reliably measured.
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iv.Contingent liabilities of the acquiree obtained by the Company through
business combination shall be separately recognized as liabilities and
measured at fair value when their fair values can be reliably measured.
v.When the Company allocates the cost of business combination and
recognizes the identifiable assets and liabilities acquired through combination, it
shall not include any goodwill and deferred income taxes that have been
recognized by the acquiree before the business combination.
c) Treatment of the difference between the business combination costs and the fair
value of net identifiable asset acquired from the acquiree through combination
i.The Company shall recognize the difference of the combination costs in
excess of the fair value of the net identifiable asset acquired from the acquiree
through combination as goodwill.
ii.The Company shall recognize the difference of the combination costs in short
of the fair value of the net identifiable asset acquired from the acquiree through
combination according to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilities
and contingent liabilities acquired from the acquiree and the combination costs;
After the review, if the combination costs are still in short of the fair value of the
net identifiable asset acquired from the acquiree through combination, include
the difference in the current profit and loss.
(3)Treatment of relevant expenses arising from the Company’s business combination
a) Relevant expenses directly arising from the business combination of the
Company (including the expenses for audit, legal services, evaluation and
consultation or other intermediary costs for business combination) shall be included
in the current profit and loss when they are incurred.
b) Commissions, fees and other expenses paid on issuance of bonds and
undertaking of other debts for the business combination shall be included in the
initial measurement amount of debt securities.
i.Where the bonds are issued at discount or par value, that part of expenses will
increase the amount of the discount;
ii.Where the bonds are issued at premium, that part of expenses will decrease
the amount of the premium.
c) Fees, commissions, and other transaction expenses paid on issuance of equity
securities as combination consideration in the business combination shall be
included in the initial measurement amount of equity securities.
i.Where the equity securities are issued at premium, that part of expenses shall
be deducted from capital reserves (stock premium);
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ii.Where the equity securities are issued at par value or discount, that part of
expenses shall be deducted from the retained earnings.
6. Preparation of consolidated financial statements
(1) Consistency of accounting policies and accounting period
All the subsidiaries within the consolidation scope of consolidated financial statements
shall adopt the same accounting policies and accounting periods as those of the
Company. If the accounting policies or accounting periods of a subsidiary are different
from those of the Company, the financial statements of the subsidiary, upon preparation
of consolidated financial statements, shall be adjusted according to the accounting
policies and accounting periods of the Company.
(2) Preparation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the
Company and its subsidiaries, and are prepared by the parent company according to
other relevant information after the adjustment to long-term equity investments in
subsidiaries under the equity method and the elimination of effects of the internal
transactions between the Company and its subsidiaries and between the subsidiaries on
the consolidated financial statement.
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financial
statements
In the consolidated financial statements, where the current losses undertaken by the
parent company are in excess of its share of owners’ equity in the subsidiary at the
beginning of the period, the balance shall reduce the owners’ equity (retained earnings)
of the parent company; where the current losses undertaken by a subsidiary’s non-
controlling shareholders excess those non-controlling shareholders’ share of owners’
equity in the subsidiary at the beginning of the period, the balance shall reduce the non-
controlling interests.
(4) Changes in number of subsidiaries during the reporting period
a) Acquisition of subsidiaries during the reporting period
i. Treatment of acquiring subsidiaries from business combination under
common control during the reporting period
During the reporting period, if the Company acquires subsidiaries from the
business combination under common control, the opening balance in the
consolidated balance sheet shall be adjusted. The income, expenses and
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profits of the newly acquired subsidiaries from the beginning to the end of the
reporting period shall be included in the consolidated income statement. The
cash flows of the newly acquired subsidiaries from the beginning to the end of
the reporting period shall be included in the consolidated statement of cash
flows.
ii. Treatment of acquiring subsidiaries from business combination not under
common control during the reporting period
During the reporting period, if the Company acquires subsidiaries from the
business combination not under common control, the opening balance in the
consolidated balance sheet shall not be adjusted. The income, expenses and
profits of the newly acquired subsidiaries from the acquisition date to the end of
the reporting period shall be included in the consolidated income statement.
The cash flows of the newly acquired subsidiaries from the acquisition date to
the end of the reporting period shall be included in the consolidated statement
of cash flows.
b) Treatment of disposing subsidiaries during the reporting period
During the reporting period, if the Company disposes subsidiaries, the opening
balance in the consolidated balance sheet shall not be adjusted. The income,
expenses and profits of the newly disposed sub diaries from the beginning to the
disposal date shall be included in the consolidated income statement. The cash
flows from the beginning to the disposal date shall be included in the consolidated
statement of cash flows.
7. Classification of joint venture arrangements and the accounting
treatment method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A joint
operation is a joint arrangement whereby the joint operators have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint
arrangement whereby the joint ventures only have the rights to the net assets under this
arrangement.
A joint arrangement that is not structured through a separate vehicle shall be classified
as a joint operation. A separate vehicle refers to a separately identifiable financial
structure, including separate legal entities or entities without a legal personality but
recognized by statute.
A joint arrangement that is structured through a separate vehicle is usually classified as a
joint venture. However, when a joint arrangement provides clear evidence that it meets
any of the following requirements and complies with applicable laws and regulations as a
joint operation:
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a) The legal form of the joint arrangement indicates that the parties that have joint
control have rights to the assets, and obligations for the liabilities, relating to the
arrangement.
b) The terms of the joint arrangement specify that the parties that have joint control
have the rights to the assets, and the obligations for the liabilities, relating to the
arrangement.
c) Other facts and circumstances indicate that the parties that have joint control
have rights to the assets, and the obligations for the liabilities, relating to the
arrangement---for example, the parties that have joint control have rights to
substantially all of the output of the arrangement, and the arrangement depends on
the parties that have joint control on a continuous basis for settling the liabilities of
the arrangement.
(2) Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a joint
operation, and account for them in accordance with relevant accounting standards:
a) Its solely-held assets, and its share of any assets held jointly;
b) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
c) Its revenue from the sale of its share of the output arising from the joint operation;
d) Its share of the revenue from sale of the output by the joint operation; and
e) Its solely-incurred expenses and its share of any expenses incurred jointly.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.
Cash equivalents are the company’s short-term (due within 3 months from purchase
date), highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
9. Foreign currency transactions and translation of foreign currency
statements
(1) Accounting method of foreign currency transactions
a) Initial recognition of foreign currency transactions
For foreign currency transactions incurred, the Company converts the amount in
foreign currency into the amount in functional currency at the spot exchange rate
(middle rate) announced by the People’s Bank of China on the transaction date.
Among them, for foreign currency exchange occurred or transaction involving
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foreign currency exchange, the Company converts at the exchange rate actually
adopted on the transaction date.
b) Adjustment or settlement on the balance sheet date or settlement date
On the balance sheet date or the settlement date, the Company handles foreign
currency monetary items and foreign currency non-monetary items separately in
accordance with the following methods:
i. Accounting principles for handling foreign currency monetary items
For foreign currency monetary items, on the balance sheet date or the
settlement date, the Company converts them by using the spot exchange rate
(middle rate) prevailing on the balance sheet date or settlement date, and
adjusts the amount in functional currency of foreign currency monetary items in
respect of the difference arising from exchange rate fluctuations, which shall be
treated as exchange difference at the same time. Among them, the exchange
differences arising from foreign currency loans relating to the acquisition,
construction or production of assets eligible for capitalization shall be included
in the costs of assets eligible for capitalization; other exchange differences shall
be included in the current financial expenses.
ii. Accounting principles for handling foreign currency non-monetary items
For foreign currency non-monetary items measured at historical cost, the
Company shall convert them at the spot exchange rate (middle rate) prevailing
on the transaction date, with their amounts in functional currency remaining
unchanged and no exchange differences incurred.
For an inventory that is measured at the lower of its costs or its net realizable
values, if the net realizable value is determined in foreign currency, the
Company, when determining the value of the inventory at the end of the period,
shall firstly convert the net realizable value into functional currency and then
compare it with the inventory cost reflected in functional currency.
Non-monetary items measured at fair value that is reflected in foreign currency
at the end of the period, the Company shall firstly translate the foreign currency
into the amount in functional currency at the spot exchange rate on the date
when the fair value is determined, and then compare it with the original
functional currency amount. Difference between the translated functional
currency amount and the original functional currency amount is treated as profit
or loss from changes in fair value (including changes in exchange rate) and is
recognized in current profit and loss.
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(2) Accounting treatment method for translation of foreign currency statements
a)The Company shall translate the financial statements of foreign operations in
accordance with the following methods:
i. Assets and liabilities in the balance sheets shall be translated at the spot
exchange rates on balance sheet date. Shareholders’ equity items, except for
the item of "undistributed profits", are translated at the spot exchange rates on
the dates when the transactions occur.
ii. Revenue and expense items in the income statement are translated at the
spot exchange rates on the dates when the transactions occur or at the
exchange rate determined in a systematical and reasonable method and similar
to the spot exchange rate on the day when the transactions occur.
Differences arising from the above translations of foreign currency financial
statements are separately listed under ‘other comprehensive income’ in the
consolidated balance sheet.
The translation of comparative financial statements is handled by reference to
the above approach.
b) The Company shall translate the financial statements of foreign operations that
are in virulent inflation economy in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general
price index, and restates the items in the income statement by using the
changes in general price index, and then converts those items at the spot
exchange rate on the latest balance sheet date.
ii. Where the foreign operations are no longer in virulent inflation economy, the
Company ceases to restate the financial statements and converts the financial
statements restated according to the price level on such cease.
c) Where the Company disposes of an overseas business, it shall transfer the
foreign currency financial statements exchange difference, which relates to the
business disposed of and is presented under the items of the other comprehensive
income in the balance sheet, from the other comprehensive income item to the gain
or loss on disposal for the current period. If the overseas business is partly disposed
of, the foreign currency financial statements exchange difference shall be calculated
in proportion to the percentage of disposal and transferred to gain or loss on
disposal for the current period.
10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
(1) Classification of financial instruments
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a) Classification of financial assets
Based on business characteristics, investment strategies and risk management
requirements, the Company classifies the financial assets it has obtained into the
following four categories: (1) financial assets measured at fair value through current
profit and loss; (2) held-to-maturity investments; (3) loans and receivables; and (4)
available-for-sale financial assets.
Financial assets measured at fair value through current profit and loss include: (1)
financial assets held for trading ; (2)financial assets directly designated to be
measured at fair value through current profit and loss; (3)investments in subsidiaries
that shall not be consolidated by the investment entities ; (4)investments held by
venture capital organizations, mutual funds or similar entities.
The equity investment which hasn’t control , joint control or significant influence over
the investee, based on business characteristics, investment strategies and risk
management requirements, can be divided into the first kind of financial assets
measured at fair value through current profit and loss or the fourth kind of available-
for-sale financial assets. In some special cases, the equity investment can be
measured under the cost method.
b) Classification of financial liabilities
Based on business characteristics and risk management requirements, the
Company classifies the financial liabilities it undertakes into the following two
categories: (1) financial liabilities measured at fair value through current profit and
loss (including financial liabilities held for trading and financial liabilities directly
designated to be measured at fair value through current profit and loss); and (2)
other financial liabilities.
(2) Recognition basis and measurement method of financial instruments
a) Recognition basis of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a
financial asset or financial liability.
b) Measurement method of financial instruments
i. Financial assets or financial liabilities measured at fair value through current
profit and loss: they are initially measured at the amount of fair value upon
acquisition, and relevant transaction expenses are included in the current profit
and loss when incurred. For cash dividends declared but not distributed or bond
interest matured but not drawn that have been included in the actual price paid,
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they shall be separately recognized as dividends receivable or interest
receivable. Cash dividends or bond interest gained during the holding period
shall be recognized as investment income. On the balance sheet date, they
shall be measured at fair values and the changes in their fair values shall be
included in current profit or loss. When disposing of a financial asset held for
trading, the Company recognizes the difference between the payment actually
received (dividends receivable or interest receivable, if any, shall be deducted)
and the book value of the financial asset held for trading on the disposal date,
and transfers the accumulative amount previously included in profit or loss on
changes in fair value to the investment income.
ii. Held-to-maturity investments: they are initially measured at the total amount
of their fair values upon acquisition and related transaction expenses. For bond
interest matured but not drawn that is included in the actual price paid, they are
independently recognized as interest receivable. Interest income is calculated
and recognized during the holding period according to the amortized cost and
effective interest rates, and included in the investment income. The effective
interest rate is determined upon acquisition, and remains unchanged during the
expected duration or any applicable shorter period. On the balance sheet date,
they are measured at amortized costs. Upon disposal, the difference between
the actual proceeds (interest receivable, if any, shall be deducted) and the book
value of the held-to-maturity investment is recognized as investment income.
iii.Loans and receivables: mainly refer to the loans issued by financial
enterprises and creditor’s rights receivable arising from external sales of goods
or rendering of service by enterprises. It is measured based on amortized cost
by adopting effective interest method. The sum of principal and related trading
expenses of loans issued by financial enterprises according to current market
conditions is recognized as initial recognition amount. For creditor’s rights
receivable arising from external sales of goods or rendering of service by
enterprises, their initial recognition amounts shall be the contract price or
agreement price receivable from the purchaser. Receivables’ interest income is
recognized under the effective interest method. Upon recovery or disposal, the
difference between the price received and the book value of a receivable is
included in the current profit and loss.
iv. Available-for-sale financial assets: they are initially recognized at the sum of
fair value upon acquisition and relevant transaction expenses. For cash
dividends declared but not distributed or bond interest matured but not drawn
that has been included in the actual price paid, it shall be separately recognized
as dividends receivable or interest receivable. Cash dividends or bond interest
gained during the holding period shall be recognized as investment income. On
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the balance sheet date, the available-for-sale financial assets are measured at
fair values and the changes in their fair values are included in other
comprehensive income. Upon disposal, the difference between the payment
actually received (dividends receivable or interest receivable, if any, shall be
deducted) and the book value of an available-for-sale financial asset shall be
included in investment income; and meanwhile, the amount arising from the
accumulated changes in fair value, which have been previously included in
other comprehensive income, shall be transferred out and included in the
investment profit or loss.
v. Other financial liabilities: they are initially recognized at fair values at the time
of occurrence plus related transaction costs. Other financial liabilities, whose
interest expenses are recognized by using the effective interest method, are
measured at their amortized costs on the balance sheet date.
(3) Recognition basis and measurement method of transfer of financial assets
a) Derecognition criteria of financial assets
When transfer of financial assets occurs, if nearly all of the risks and rewards of
ownership of the financial assets have been transferred to the transferee, the
Company derecognizes the financial assets; if nearly all of the risks and rewards of
ownership of the financial assets are retained, the Company shall not derecognize
the financial assets.
When determining whether the transfer of a financial asset meets the above
derecognition criteria of financial assets, the Company adopts the principle of
substance over form.
b) Treatment of transfer of financial assets satisfying the criteria of derecognition
The Company classifies the transfer of a financial asset into the entire transfer and
the partial transfer of financial asset.
i. If the entire transfer of financial asset satisfies the criteria of derecognition, the
difference between the amounts of the following two items shall be included in
the current profit and loss:
a) The book value of the transferred financial asset;
b) The sum of the consideration received from the transfer and the accumulated
amount of the changes in fair value originally and directly included in other
comprehensive income (the situation where the financial asset transferred is an
available-for-sale financial asset is involved in).
ii. If the partial transfer of financial asset satisfies the criteria of derecognition,
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the entire book value of the transferred financial asset shall be divided between
the derecognized and recognized parts according to their respective fair values
and the difference between the amounts of the following two items shall be
included in the current profit and loss:
The book value of derecognized part;
The sum of the consideration for the derecognized part and the portion of
derecognition corresponding to the accumulated amount of the changes in fair
value originally and directly included in other comprehensive income (the
situation where the financial asset transferred is an available-for-sale financial
asset is involved in).
c) Treatment of transfer of financial assets not satisfying the criteria of derecognition
If the transfer of financial assets does not meet the derecognition criteria, the
financial assets shall continue to be recognized, and the consideration received will
be recognized as a financial liability.
(4) Derecognition criteria of financial liabilities
a) A financial liability shall be wholly or partly derecognized if its present obligations
are wholly or partly dissolved. Where the Company enters into an agreement with a
creditor so as to substitute the existing financial liabilities with any new financial
liability, and the new financial liability is substantially different from the contractual
stipulations regarding the existing financial liability, it shall derecognize the existing
financial liability, and recognize a new one at the same time.
b) Where substantial revisions are made to some or all of the contractual stipulations
of the existing financial liability, the Company shall derecognize the existing financial
liability wholly or partly, and at the same time recognize the financial liability with
revised contractual stipulations as a new financial liability.
c) Upon whole or partial derecognition of financial liabilities, the difference between
the book value of the financial liabilities derecognized and the consideration paid
(including non-cash assets surrendered or new financial liabilities assumed) shall be
included in the current profit and loss.
d) Where the Company repurchases part of its financial liabilities, it shall, on the
repurchase date, allocate the entire book value of financial liabilities according to the
comparative fair value of the part that continues to be recognized and derecognized
part. The difference between the book value allocated to the derecognized part and
the considerations paid (including non-cash assets surrendered and the new
financial liabilities assumed) shall be included in the current profit and loss.
(5) Method to determine the fair value of financial instrument
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a). The fair value of a financial asset or financial liability for which there is an active
market shall be determined in accordance with the quoted price in such active
market at the measurement date.
b).The fair value of a financial asset or financial liability for which there isn’t an active
market shall be using valuation techniques. The recognition of the specific principles
and methods are dealt with under “Accounting Standard for Business Enterprises
No.39—Fair Value Measurement”.
(6) Criteria to identify, way to test and method to provide for the impairment of financial
assets (excluding receivables)
On the balance sheet date, the Company shall check the book values of its financial
assets (excluding the financial assets measured at fair value through current profit
and loss), whether on an individual basis or on a combination basis, recognizes
impairment losses on the financial assets with objective evidence of impairment, and
provides reserves for the impairment. The objective evidence of impairment of a
financial asset includes the serious financial difficulties faced by the issuer or debtor,
potential bankruptcy or other financial reorganization incurred to the debtor, and the
incapability of the financial asset to be continuously traded in active market caused
by the serious financial difficulties incurred to the issuer, severe or prolonged decline
in the fair value of equity instrument investment and other adverse situations.
a) Methods to test and make provision for impairment of held-to-maturity investment
On the balance sheet date, if there is any objective evidence showing that any
impairment has occurred to a held-to-maturity investment, the impairment loss is
recognized at the difference between its book value and its present value of
estimated future cash flows.
i. For a held-to-maturity investment that is individually significant, the Company
conducts separate impairment test. If there is any objective evidence of
impairment, the Company recognizes the impairment losses at the difference of
its present value of estimated future cash flows in short of its book value, and
shall accordingly make the provision for such impairment.
ii. For held-to-maturity investments that are individually insignificant and held-to-
maturity investments that are individually significant but have no impairment
according to the separate test, they are divided into several groups according to
similar credit risk characteristics. The impairment losses and provisions for
impairment of these groups are calculated and determined based on certain
proportions of their balances on the balance sheet date.
b) Methods to test and make provision for impairment of available-for-sale financial
asset
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On the balance sheet date, if there is any objective evidence showing that an
available-for-sale financial asset is impaired, the impairment provision shall be
accrued and the impairment loss shall be recognized. For an equity instrument
investment, if significant or non-temporary decline in fair value of the available-for-
sale equity investment is found after giving comprehensive consideration to relevant
factors, it can be concluded that the available-for-sale equity investment is impaired.
The "significant decline" refers to a cumulative decline in the fair value exceeding
50% of the cost; and the "non-temporary decline" refers to a continuous decline in
the fair value of more than 12 months.
When making provision for the impairment of an available-for-sale financial asset,
the accumulated loss arising from the decline in fair value that is previously included
in other comprehensive income shall be transferred out and included in the current
profit and loss. The accumulated loss transferred out shall be balance of the
available-for-sale financial asset’s initial acquisition cost after deducting the principal
recovered and amortized amount, present fair value and impairment loss previously
recorded in profit or loss.
After the recognition of an impairment loss, if there is objective evidence showing
that the value of financial assets has been recovered and such recovery is
objectively related to the events occurring after the recognition of such loss, the
impairment loss previously recognized shall be reversed, the impairment loss of
available-for-sale equity investment shall be reversed and recognized as other
comprehensive income, and the impairment loss of available-for-sale debt
instrument shall be reversed and included in the current profit and loss.
For an equity instrument investment that has no quoted price in active market and
whose fair value cannot be reliably measured, or a derivative financial asset that is
linked to the equity instrument and settled through delivery of such equity instrument,
when they are impaired, the difference between the book value of the financial asset
and the present value of future cash flows discounted based on the prevailing
market rate of return for a similar financial asset shall be recognized as an
impairment loss and included in the current profit and loss. Once recognized, the
impairment loss shall not be reversed.
(7) Accounting treatment method of reclassifying the undue held-to-maturity investments
as available-for-sale financial assets
Where it is not suitable to classify one investment as a held-to-maturity investment any
more due to the change in intention or ability to hold the investment, the Company shall
reclassify such investment as available-for-sale financial assets; where the Company
partly disposes or reclassifies a held-to-maturity investment large in amount, and such
disposal or reclassification does not arise from any independent event that is not under
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the control of the Company, not expected to recur and difficult to reasonably anticipated,
the remaining portion of the investment shall also be classified as available-for-sale
financial asset.
11. Receivables
(1)Individually significant receivables whose provisions are made separately
Recognition criteria of individually Individually significant receivables refer to accounts receivable
significant receivables whose closing balances are over CNY5,000, 000.
On the balance sheet date, the Company separately conducts
impairment tests on those individually significant receivables. If
there is any objective evidence of impairment, an impairment loss
is recognized and a provision for bad debt is made, according to
the difference of the present value of estimated future cash flows in
short of the book value; Individually significant receivables that are
proved to be not impaired according to the tests shall be
incorporated into other individually insignificant receivables, and
Provision method of individually
their provisions for bad debts shall be made by using the aging
significant receivables
analysis method based on their closing balances.
Objective evidence of impairment incurred to receivables includes:
(1) the debtor has significant financial difficulty; (2) the debtor
violates contractual terms (such as the breach of contract or delay
in repaying interest or principal); (3) a concession is made to the
debtor in financial difficulty after considering economic or legal
reasons; (4) the debtor is likely to face bankruptcy or other debt
restructuring.
(2) Receivables whose bad debt provisions are made by portfolio
Portfolio name Provision method of bad debt
Aging Portfolios Aging analysis method
Other Portfolios Other method
Among portfolios, adopting aging analysis method：
√ Applicable N/A
Proportion of provision Proportion of provision for
Aging
for accounts receivable other receivables
Within 1 Year (Inclusive) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 Years 30.00% 30.00%
3-4 Years 50.00% 50.00%
4-5 Years 80.00% 80.00%
Over 5 Years 100.00% 100.00%
Among portfolios, adopting percentage of balance method:
Applicable √ N/A
Among portfolios, adopting other method:
Applicable √ N/A
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(3) Individually insignificant receivables whose provisions are made separately
Individually insignificant receivables refer to accounts
Reason for making provision for bad debt
receivable,itsclosing balances are less than CNY5,000,
separately
000.
The Company carries out separate impairment tests on
receivables that are individually insignificant but have
the following characteristics (such as receivables
involved in dispute or litigation with the debtor and
requiring arbitration; and receivables for which there are
clear indications that the debtor is unable to fulfill the
repayment obligations). If there is any objective
evidence of impairment, the Company shall recognize
Provision method of bad debt
the impairment loss and make the bad debt provision
according to the difference of the present value of
future cash flows in short of the book value. Meanwhile,
for receivables that are individually insignificant after
the bad debt provisions separately made are deducted,
their bad debt provisions shall be made according to
principles applied to portfolios of receivables with
similar credit risk characteristics by aging.
12. Inventory
Whether the Company needs to comply with the disclosure requirement of special
industry.
No
(1) Classification of inventory
Inventories are classified as: raw materials, semi-finished goods, stock commodities,
consigned processing materials, goods in progress and revolving materials (including
low-cost consumables), etc.
(2) Measurement method of dispatched inventories
Dispatched materials and stock commodities are accounted for by using the weighted
average method.
(3) Basis to determine net realizable values of inventories and method of provision for
stock obsolescence
a) Determination basis of net realizable values of inventories
i. In normal operation process, for merchandise inventories held directly for sale,
including stock commodities (finished goods) and materials for sale, their net
realizable values are determined at their estimated selling prices minus their
estimated selling expenses and relevant taxes and surcharges.
ii. In normal operation process, for material inventories that need further
processing, their net realizable values are determined at the estimated selling
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prices of finished goods minus estimated costs to completion, estimated selling
expenses and relevant taxes and surcharges.
iii. For inventories held to execute sales contract or service contract, their net
realizable values are calculated on the basis of contract price. If the quantities
of inventories specified in the sales contracts are less than the quantities held
by the Company, the net realizable value of the excess portion of inventories
shall be based on general selling prices.
iv. The materials held for production shall be measured at cost if the net
realizable value of the finished products is higher than the cost. If a decline in
the value of materials shows that the net realizable value of the finished
products is lower than the cost, the materials shall be measured at the net
realizable value.
b) Provision for stock obsolescence
Provisions for stock obsolescence are made at the lower of costs or net realizable
values on a single basis.
For inventories with large quantity and relatively low unit prices, the provision for
stock obsolescence shall be made on the ground of the categories of inventories.
(4) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts on
a regular basis.
(5) Amortization method of revolving materials
A.Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.
B.Amortization method of packaging materials
Packing materials are amortized in full at once when fetched for use by the Company.
13. Assets held for sale
(1) Scope of held for sale
Held for sale include individual asset and disposal group.
Disposal group is a group of assets that are disposed as a whole through sales or other
ways in one transaction and liabilities directly related to these assets delivered in the
transaction.
(2) Recognition criteria of held for sale
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The Company recognizes its component (or non-current asset) that satisfies the following
conditions as assets held for sale:
a)The assets (or disposal group) must be available for immediate sale in its present
condition subject only to terms that are usual and customary for sales of such assets
(or disposal groups);
b) Its sale must be highly probable. The Company has already made a decision to
dispose the component and has a commitment from the purchaser, the transfer will
be completed within one year. If it requires shareholders’ approval or supervisors’
approval according to regulations, it has already received approval from the general
meeting of stockholders or relative authority institution.
(3) Accounting treatment and. presentation of assets held-for-sale
a) The non-current asset (or disposal group) is first classified as held for sale, the
Company should measure the non-current assets or assets and liabilities made up
of disposal group in accordance with relevant accounting standards.
b) When the Company measure a non-current asset (or disposal group) held for sale
initially or re-measure at balance sheet date subsequently, the impairment loss
should be recognized if the book value is higher than fair value lee costs to sell at
the amount of the difference of these two in profit and loss, the provision for assets
held for sale need to be recognized at the same time. For the impairment of disposal
group, should write off goodwill if existing, and then write down the related assets
proportionally. Depreciation or amortization should cease for the non-current asset
held for sale.
c) No matter the asset is classified as individual asset held for sale or asset
belonging to disposal group, the asset is presented as current assets under “assets
held for sale” item; liabilities related to the asset transferred in the disposal group
held for sale is presented as current liabilities under “liabilities held for sale” item in
the balance sheet.
d) The company is committed to a sale plan involving loss of control of subsidiary
shall classify all the assets and liabilities of that subsidiary held for sale in
consolidated balance sheets when the above criteria are met, regardless of whether
the Company retain a non–controlling interests in its former subsidiary after the sale.
In the balance sheets of parent company the investment should be classified as held
for sale in full.
14. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investments
a) For long-term equity investments from business combinations, the initial
investment cost shall be recognized in accordance with the provisions mentioned in
Note 3.5, Accounting Method for Long-term Equity Investment from Business
Combinations under Common Control and Business Combination not under
Common Control.
b) Except for the long-term equity investments arising from business combinations,
those obtained by other means shall recognize their initial investment costs in
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accordance with the following provisions:
i.For the long-term equity investments obtained by cash paid, the Company
recognizes the actual purchase price as the initial investment costs. The initial
investment costs include directly related expense, taxes and other necessary
expenses of obtaining long-term equity investments.
ii.For the long-term equity investments acquired by the issue of equity securities
(equity instrument), the initial investment cost shall be the fair value of the
equity securities (equity instrument) issued. If the fair value of the long-term
equity investment obtained is more reliable than equity securities issued, the
initial investment cost shall be the fair value of the long-term equity investment
made by the investors. The cost directly attributable to the issue of equity
securities (equity instrument), including fees, commissions, etc., write-downs
premium price of the issue, if premium price of the issue is insufficient, write-
downs surplus reserve and undistributed profit in turn. For the long-term equity
investments acquired by the issue of debt securities (debt instrument) ,
reference through the issuance of equity securities (equity instrument).
iii. For long-term equity investments obtained by debt restructuring, the
Company recognizes the fair value of shares of debt-for-equity swap as the
initial investment costs.
iv.For long-term equity investments obtained by non-monetary assets exchange,
under the condition that an exchange of non-monetary assets is of commerce
nature and the fair value of assets exchanged can be reliably measured, non-
monetary assets traded in is initially stated at the fair value of the assets traded
out, unless there is conclusive evidence indicating that the fair value of the
assets traded in is more reliable; if the above conditions are not satisfied, initial
investment costs of long-term equity investments traded in shall be recognized
at the book value of the assets traded out and the relevant taxes and
surcharges payable.
Expenses, taxes and other necessary expenses incurred to the Company and
that are directly related to the obtainment of long-term equity investments shall
be recognized as the initial investment costs of long-term equity investments.
For long-term equity investments obtained by the Company by any means,
cash dividends or profits declared but not yet distributed in the actual payments
or the consideration actually paid for the investment shall be separately
accounted as dividends receivable and shall not constitute the costs of long-
term equity investments.
(2) Subsequent measurement and recognition of gains and losses of long-term equity
investments
a) If the Company can control an investee, namely investment in subsidiary, the
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long-term equity investment shall be measured under the cost method.
For long-term equity investments accounted at the cost method, except cash
dividends or profits declared but not yet distributed which are included in the actual
payments or the consideration actually paid for the investment, the cash dividends
or profits declared by the investee shall be recognized as the investment income
irrespective of net profits realized by the investee before investment or after
investment.
b) Long-term equity investments measured under the equity method
i. For the long-term equity investment which has joint control or significant
influence over the investee, the equity method is adopted for accounting.
ii.For long-term equity investments measured at the equity method, if the initial
investment costs are higher than the investor’s attributable share of the fair
value of the investee’s identifiable net assets, no adjustment will be made to the
initial costs of the long-term equity investments; if the initial investment costs
are lower than the investor’s attributable share of the fair value of the investee’s
identifiable net assets, the difference shall be recognized in current profit and
loss and at the same time the adjustment will be made to the initial costs of the
long-term equity investments.
iii.After obtaining the long-term equity investments, the Company shall,
according to the shares of net profits and other comprehensive income realized
by the investee that shall be enjoyed or borne by the Company, recognize the
profit and loss on the investments and adjust the book value of the long-term
equity investments. When recognizing the net profits and losses and other
comprehensive income of the investee that the Company shall enjoy or bear,
the Company shall make a recognition and calculation based on the net book
profits and losses of the investee after appropriate adjustments. However,
where the Company is unable to obtain the relevant information due to failure to
reasonably determine the fair value of the investee’s identifiable assets, minor
difference between the investee’s identifiable assets and the book value thereof
or other reasons, the profits or losses on the investments shall be directly
calculated and recognized based on the net book profits and losses of the
investee. The Company shall calculate the part distributed from cash dividends
or profits declared by the investee and correspondingly reduce the book value
of the long-term equity investments.
When recognizing the income from investments in associates and joint ventures,
the Company shall write off the part of incomes from internal unrealized
transactions between the Company and associates and joint ventures which are
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attributable to the Company and recognize the profit and loss on investments
on such basis. Where the losses on internal transactions between the Company
and the investee fall into the scope of losses on assets impairment, full amounts
of such losses shall be recognized. Profit and loss from internal unrealized
transactions between the Company’s subsidiaries included into the combination
scope and associates and joint ventures shall be written off according to the
above principles and the profit and loss on investments thereafter shall be
recognized on such basis.
When the share of net loss of the investee attributable to the Company is
recognized, it is treated in the following sequence: Firstly, write off the book
value of the long-term equity investments; where the book value of the long-
term equity investments is insufficient to cover the loss, investment losses are
recognized to the extent that book value of long-term equity which form net
investment in the investee in other substances and the book value of long-term
receivables shall be written off; after all the above treatments, if the Company
still assumes additional obligation according to investment contracts or
agreements, the obligation expected to be assumed should be recognized as
provision and included into the investment loss in the current period. If the
investee is profitable in subsequent accounting periods, the Company shall
treat the loss in reverse order against that described above after deducting
unrecognized share of loss: i.e. write down the book value of the recognized
provision, then restore the book value of long-term interests which substantially
form net investments in the investee, then restore the book value of long-term
investments, and recognize investment income at the same time.
(3) Basis for judgment of common control or significant influence over the investee
a).Basis for judgment of common control over investee
Common control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous
consent of the parties sharing control. Relevant activities of an arrangement usually
include selling and purchasing of goods or services, managing financial assets,
acquiring or disposing of assets, researching and developing activities and financing
activities. A joint venture is a joint arrangement whereby the joint ventures have
rights to the net assets of the arrangement. The parties have rights to the assets,
and obligations for the liabilities, relating to the arrangement, which is a joint
operation, but not a joint venture.
b).Basis for judgment of significant influence over investee
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The term “significant influence” refers to the power to participate in decision-making
on the financial and operating policies of the investee, but with no control or joint
control over the formulation of these policies. Where the Company is able to exert
significant influence over the investee, the investee is its associate.
15. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities,
providing services, renting or business management with useful life exceeding one
accounting year. Fixed assets are recognized when the following criteria are satisfied
simultaneously:
a) It is probable that the economic benefits relating to the fixed assets will flow into
the Company;
b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Estimated Estimated
Annual depreciation
Category Depreciation method useful life residual value
rate (%)
(Yr) rate (%)
Buildings
Straight-line method 20～25 5 3.80～4.75
andconstructions
Machinery equipments Straight-line method 10 5 9.50
Transportation
Straight-line method 10 5 9.50
equipments
Other equipments Straight-line method 8 5 11.88
a) Except for the fixed assets that have been fully depreciated but are still in use and
the land, the Company makes provisions for depreciation of all fixed assets.
b) Depreciation of fixed assets of the Company is provided for on a straight-line
basis from the month immediately following the month when they reach the working
condition for their intended use. The depreciation amount and depreciation rate shall
be calculated and recognized according to the category, estimated useful lives and
estimated net residual value rate of fixed assets and respectively included into the
costs of the relevant assets or the current profit and loss by purpose.
c) When making provision for impairment on fixed assets, the Company shall
recalculate the depreciation rate and depreciation amount according to the book
value, the estimated net residual value rate and useful lives of the fixed assets.
d) On the balance sheet date, the Company reviews the estimated useful life,
estimated net residual value rate and depreciation method of the fixed assets. If
there is any change, they shall be treated as changes in accounting estimate.
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e) Decoration expense of fixed assets that meet the condition of capitalization shall
be depreciated separately by adopting straight-line method within the short period
between twice decoration and useful life of the fixed assets.
(3) Recognition standard, valuation method and depreciation method for fixed assets
acquired under financing lease
a) At the inception of the lease, the Company recognizes the leased fixed assets
meeting the standards for financial leases as fixed assets acquired under financing
leases.
b) At the inception of the lease, the Company shall state the assets acquired under
financing lease at the lower of the fair value of the leased assets or the present
value of the minimum lease payments, as well as the initial and direct expenses
occurred, recognize a long-term payable at the amount of the minimum lease
payments, and shall charge the difference of the lower of the fair value of the leased
assets or the present value of the minimum lease payments and the minimum lease
payments to unrecognized finance expenses. Unrecognized finance expenses shall
be amortized at the effective interest rate method in each period during the lease
term.
c) Adapt the same depreciation method as the one used on other fixed assets
owned by the company. If there is reasonable assurance that the Company will
obtain the ownership of the leased assets when the lease term expires, the leased
assets should be depreciated over its useful life; if there is no reasonable assurance
that the Company will obtain the ownership of the leased assets when the lease
term expires, the leased assets should be depreciated over the shorter of the lease
term or the useful life of the leased assets.
16. Construction in progress
Whether the Company needs to comply with the disclosure requirement of special
industry.
No
(1) Categories of constructions in progress
Constructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixed
assets
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The book entry values of the fixed assets are stated at total expenditures incurred before
construction in progress reaches the working condition for their intended use. For self-
operating projects, total expenditures are measured according to the expenditures of
direct materials, direct labor, direct measurement mechanical construction costs and
other expenditures; for contracting projects, total expenditures are measured according
to project costs payable and other expenditures. Borrowing costs incurred before the
projects that are undertaking with borrowing costs reach working condition for their
intended use and meeting the condition for capitalization shall be capitalized and
included into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but for
which the completion of settlement has not been handled, it shall be transferred into fixed
assets at the estimated value according to the project budget, construction price or actual
cost, etc. from the date when it reaches the working condition for intended use and the
fixed assets shall be depreciated in accordance with the Company’s policy on fixed asset
depreciation; adjustment shall be made to the estimated value based on the actual cost
after the completion of settlement is handled, but depreciation already provided will not
be adjusted.
17. Borrowing costs
(1) Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts or
premiums, ancillary expenses and exchange differences incurred from foreign currency
loan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition
and construction or production of assets eligible for capitalization should be capitalized
and recorded into relevant asset costs; other borrowing costs should be recognized as
costs according to the amount incurred and be included into the current profit and loss.
Assets eligible for capitalization include fixed assets, investment properties, inventories
and other assets which may reach the working condition for their intended use or sale by
acquisition and construction or production activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costs
Borrowing costs may be capitalized when asset disbursements have already been
incurred, borrowing costs have already been incurred and the acquisition and
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construction or production activities which are necessary to prepare the assets for
their intended use or sale have already been started. Among which, asset
disbursements include those incurred by cash payment, the transfer of non-cash
assets or the undertaking of interest-bearing debts for acquiring and constructing or
producing assets eligible for capitalization.
b) Recognition of period of capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for
capitalization are interrupted abnormally and this condition lasts for more than three
months, the capitalization of borrowing costs should be suspended. The borrowing
costs incurred during interruption are charged to profit or loss for the current period,
and the capitalization of borrowing costs continues when the acquisition and
construction or production activities of the asset resume. If the interruption is
necessary for the acquisition and construction or production to prepare the assets
for their intended use or sale, the capitalization of borrowing costs should continue.
c) Recognition of period of capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed
or produced assets eligible for capitalization have reached the working condition for
their intended use or sale. Borrowing costs incurred after the assets eligible for
capitalization have reached the working condition for their intended use or sale
should be recognized as the current profit and loss when they incur.
If all parts of the acquired and constructed or produced assets are completed, each
part may be used or sold externally in the process of continuous construction of
other parts and the necessary acquisition or production activities have been
substantially completed to make the part of assets reach the working condition for
their intended use or sale, the capitalization of borrowing costs related to the part of
assets should be ceased; if all parts of the acquired and constructed or produced
assets are completed but the assets cannot be used or sold externally until overall
completion, the capitalization of borrowing costs should cease at the time of overall
completion of the said assets.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costs
During the period of capitalization, capitalized amount of the interest of each
accounting period (including amortization of discounts or premiums) shall be
recognized according to the following provisions:
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i.As for special loan borrowed for acquiring and constructing or producing
assets eligible for capitalization, borrowing costs of special loan actually
incurred in the current period less the interest income of the loans unused and
deposited in bank or return on temporary investment should be recognized as
the capitalization amount of borrowing costs.
ii.As for general loans used for acquiring and constructing or producing assets
eligible for capitalization, the interest of general loans to be capitalized should
be calculated by multiplying the weighted average of asset disbursements of
the part of accumulated asset disbursements in excess of special loans by the
capitalization rate of used general loans. The capitalization rate is calculated by
weighted average interest rate of general loans.
iii. Where there are discounts or premiums on loans, the amounts of interest for
each accounting period should be adjusted taking account of amortizable
discount or premium amounts for the period by effective interest method.
iv.During the period of capitalization, the capitalized amount of interest of each
accounting period shall not exceed the current actual interest of the relevant
loans.
b) Recognition of capitalized amounts of auxiliary expenses of loans
i.Auxiliary expenses incurred from special loans before the acquired or
constructed assets eligible for capitalization reach the working condition for their
intended use or sale should be capitalized when they incur and charged to the
costs of assets eligible for capitalization; those incurred after the acquired or
constructed assets eligible for capitalization reach the working condition for their
intended use or sale should be recognized as costs according to the amounts
incurred when they incur and charged to the current profit or loss.
ii. Auxiliary expenses incurred from general loans shall be recognized as costs
according to the amounts incurred when they occur and included in the current
profit and loss.
c) Recognition of capitalized amount of exchange differences
During the period of capitalization, exchange differences incurred from the principal
and interest of special foreign currency loans should be capitalized and included in
the costs of the assets eligible for capitalization.
18. Intangible assets
(1) Measurement, useful life and impairment test
Initial measurement of intangible assets
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Initial measurement of outsourcing intangible assets
Costs of outsourcing intangible assets shall be recognized according to the purchase
price, related taxes and other expenses directly attributed to reaching the working
condition for their intended use. The cost of intangible assets shall be recognized based
on present value of purchase price when deferred payment over normal credit conditions
with financial nature. The difference between actual payment and purchase price, expect
for capitalized amount, shall be included into the current profit and loss in the period of
credit.
Initial measurement of internally researched and developed intangible assets
Costs of internally researched and developed intangible assets shall be recognized
according to the total expenses during the period after the assets are eligible for
capitalization and before they reach the intended purpose and the expenses that have
been included in the previous periods shall no longer be adjusted.
Expenses on the research phase of internally researched and developed intangible
assets shall be included in the current profit and loss when they incur; those on the
development phase ineligible for capitalization shall be included in the current profit and
loss; those eligible for capitalization shall be recognized as intangible assets. If it is
unable to distinguish expenditure on the research phase and expenditure on
development phase, the research and development expenditures shall be all included in
the current profit and loss.
Subsequent measurement of intangible assets
The useful lives of intangible assets are analyzed on acquisition. Intangible assets
obtained by the Company are divided into intangible assets with limited useful lives and
intangible assets with indefinite useful lives.
Subsequent measurement of intangible assets with limited useful lives
The intangible assets with limited useful lives are amortized on a straight-line basis when
they reach intended use over their useful lives with no residual value reserved.
Amortizations of intangible assets are usually recorded into the current profit and loss;
where the economic benefits of an intangible asset are realized by the products or other
assets produced thereafter, the amortizations are recorded into the costs of the relevant
assets.
Category, estimated useful life, estimated net residual value rate and annual amortization
rate of intangible assets are shown below:
Category of intangible Estimated net residual Annual amortization
Estimated useful life (years)
assets value rate (%) rate (%)
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Land use right 50 0 2.00
Trademark 7-10 0 14.29-10.00
Computer software 10 0 10.00
The useful lives and amortization methods of intangible assets with limited useful lives on
the balance sheet date shall be reviewed.
Subsequent measurement of intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives are not amortized in the holding period, but
impairment tests are performed at the end of each year.
Estimates of useful lives of intangible assets
a) For intangible assets from any contractual right or other statutory rights, their
useful lives shall be recognized according to the period no more than that of the
contractual or other statutory rights; when the contractual right or other statutory
rights contract is extended due to renewal of contracts and there is evidence that the
renewal of the Company does not need large costs, the renewal period shall be
included into the useful lives.
b) Where the contract or the law fails to specify the useful lives, the Company
integrates situations in all aspects and determine the period of intangible assets that
can bring economic benefits for the Company by hiring the relevant experts to
demonstrate or comparing with the situation of the industry as well as referring to the
Company’s historical experience or otherwise.
c) If it is still unable to reasonably determine that intangible assets may bring
economic benefits for the Company according to the above methods, the intangible
assets are taken as intangible assets with indefinite useful lives.
(2) Accounting policies of internal research and development expenditure
According to the actual situation of the research and development, the Company
classifies the research and development project into that on the research phase and that
on the development phase.
a) Research stage
Research stage is the stage when creative and planned investigations and research
activities are conducted to acquire and understand new scientific or technological
knowledge.
b) Development stage
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Development stage is the stage when the research achievements or other knowledge are
applied to a plan or design, prior to the commercial production or use, so as to produce
any new or substantially improved material, device or product.
Expenditure of an internal research and development project on the research phase shall
be included in current profit and loss when it occurs.
Specific criteria for qualifying expenditure on the development phase for capitalization
Expenditure on the development phase of an internal research and development project
shall be recognized as intangible assets only when the following conditions are
simultaneously satisfied:
a) It is technically feasible to finish intangible assets for use or sale;
b) It is intended to finish and use or sell the intangible assets;
c)The usefulness of intangible assets to generate economic benefits shall be proved,
including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the
intangible assets themselves or the intangible assets will be used internally;
d) It is able to finish the development of the intangible assets, and able to use or sell
the intangible assets, with the support of sufficient technologies, financial resources
and other resources;
e) The expenditure attributable to the intangible asset during its development phase
can be measured reliably.
19.Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment property
measured at cost model, fixed assets, construction in progress, intangible assets with
indefinite useful lives and other long-term assets at balance sheet date, impairment test
should be performed. If the result of impairment test shows that recoverable amount is
less than its book value, the difference should be provided for impairment and recorded
into impairment loss. The recoverable amount is the higher of fair values less costs of
disposal and the present values of the future cash flows expected to be derived from the
asset. Provision for impairment is calculated and recognized on the basis of individual
asset. If recoverable amount of individual asset is difficult to be estimated, the Company
should recognize the recoverable amount of the asset group which the individual asset
belongs to. Asset group is the minimum asset group which can generate cash inflow
separately.
The Company should perform impairment test for goodwill and intangible assets with
indefinite life at least at each year end, no matter whether there is impairment indicator.
When the Company performs impairment test, book value of goodwill arising from
business combination should be amortized to relevant asset group using the reasonable
method from the date of purchase. If it is difficult to amortize it to relevant asset group,
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amortize it to relevant asset group portfolio. Apportion book value of goodwill to relevant
asset group or asset group portfolio according to the proportion of fair value of asset
group or asset group portfolio accounting for total amount of relevant asset group or
asset group portfolio. If fair value is difficult to be measured reliably, amortize according
to the proportion of book value of asset group or asset group portfolio accounting for total
amount of relevant asset group or asset group portfolio. When perform impairment test
for asset group or asset group portfolio including goodwill, if there is impairment indicator
of asset group or asset group portfolio relevant to goodwill, perform impairment test for
asset group or asset group portfolio without goodwill firstly, calculate its recoverable
amount, compare with relevant book value and recognize impairment loss. Then perform
impairment test for asset group or asset group portfolio including goodwill, compare book
value of the asset group or asset group portfolio (including proportional book value of
goodwill) and its recoverable amount, if recoverable amount of relevant asset group or
asset group portfolio is less than its book value, recognize impairment loss of goodwill.
Once impairment loss stated above is recognized, reversal is not allowed in the
subsequent accounting periods.
20. Long-term deferred expenses
(1) Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already
incurred but will be born in this period and in the future with an amortization period of
over 1 year (exclusive).
(2) Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs
incurred.
(3) Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over the
beneficial period.
21. Employee benefits
(1) Accounting treatment of short-term benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12
months after the reporting period in which the employee provided relevant services,
excluding the compensation for employment termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare,
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social securities including health insurance and work injury insurance; housing common
reserve fund; union expenditure and employee training expenditure; short-term paid
leave; short-term profit-sharing; non-monetary welfare and other short-term benefits.
Actual short term benefits will be recognized as liability during the accounting period in
which the employee is providing the relevant service to the Company. The liability will be
included in the current profits and losses or the cost relevant assets.
(2) Accounting treatment of post-employment benefits
The defined contribution plan of the Company include payments of basic pension,
unemployment insurance, annuity, etc. that accord to relevant provisions. The amount
which the Company deposit on balance sheet date in exchange for the service of the
employee during the accounting period will be recognized as employee benefits liability
and shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefits
Termination benefits are the benefits the Company provide to the employee when the
Company terminates the employment before labor contract expires or encourages
voluntary resignation. Employee benefits liabilities shall be recognized and included into
profit or loss for the current period on the earlier date of the two following circumstances:
A.When the Company is not able to withdraw the benefits from termination of
employment or resignation persuasion unilaterally;
B.When the Company recognizes costs and fees relevant to reforming the termination
benefits payment.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term
benefits, post-employment benefits and termination benefits. At the end of reporting
period, the company will recognize the employee benefits cost from other long-term
employee benefits as the following components:
a) Service cost;
b) Net amount of interest from other long-term employee benefits net liabilities or
assets;
c) Changes from recalculation of the net liabilities or assets from other long-term
employee benefits.
In order to simplify related accounting procedure, the net amount of the above subjects
shall be included into current profit or loss or the cost of relevant assets.
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22. Provisions
(1) Recognition principles of provision
When obligations related to external guarantees, pending actions or arbitration, product
quality assurance, onerous contracts, reorganization and contingencies satisfy the
following three conditions, they shall be recognized as provision:
a) This obligation is a present obligation of the Company;
b) The settlement of such obligation is likely to result in outflow of economic benefits
from the Company; and
c) The amount of the obligation can be measured reliably.
(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required for
contingencies.
a) If there is continuous range for the necessary expenses, and probabilities of
occurrence of all the outcomes within this range are equal, the best estimate shall
be determined at the median of the range.
b) The best estimate shall be accounted as follows in other cases:
i.If the contingency involves a single item, the best estimate shall be determined at
the most likely outcome.
ii.If the contingency involves two or more items, the best estimate should be
determined according to all the possible outcomes with their relevant probabilities.
23. Revenue
Whether the Company needs to comply with the requirement disclosure of special
industry
No
Operating revenue of the Company mainly includes revenue from sales of goods,
revenue from rendering of service and revenue from transfer of asset use right, for which
the recognition principles are as follows:
(1) Recognition principals of revenue from sales of goods
Revenue from sales of goods is recognized when the Company has transferred
significant risks and rewards of ownership of the goods to the purchaser; the Company
retains neither continuing managerial involvement usually related to the ownership nor
effective control over the sold goods; revenues can be measured reliably; the relevant
economic benefits are highly likely to flow into the Company; and the relevant costs
incurred or to be incurred can be measured reliably.
The Company’s specific condition of revenue recognition is that revenue is recognized
after customer acceptance based on receiving payment or obtaining the rights of claiming
payment for goods according to signed sales contracts or agreements.
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The Company offers a certain percentage discount to dealers according to marketing
policies and sales status of dealers of liquor products. The settlement with dealers is
made regularly or irregularly. The sales revenue is recognized based on (net) invoice
amount after discount when the discount is included to invoice. According to accrual
basis principle , the discount incurred but not yet settled shall be recognized in sales
revenue and included to other payables.
(2) Recognition principals of revenue from rendering of service
Recognition principals of revenue from rendering of service under the circumstance that
the outcome of service transactions can be estimated reliably
The Company recognizes revenue from rendering of service using the percentage-of-
completion method on the balance sheet date when the outcome of service transactions
can be estimated reliably.
When the amount of revenues can be measured reliably, related economic interests are
likely to flow into the company, schedule of completion of the transitions can be
measured reliably and the cost of transactions incurred or to be incurred can be
measured reliably, the outcome of service transactions can be estimated reliably.
Recognition principals of revenue from rendering of service under the circumstance that
the outcome of service transactions cannot be estimated reliably
If the outcome of rendering of services on the balance sheet date cannot be measured
reliably, the revenues from rendering of services shall be recognized according to the
following three conditions:
a) If the labor costs that have already incurred can be fully compensated, the
revenues from rendering of services are recognized at the amounts recovered or
expected to be recovered and the labor costs that have already incurred shall be
carried forward;
b) If the labor costs that have already incurred can be partially compensated, the
revenues from rendering of services are recognized at the recoverable amounts of
compensated labor costs and the labor costs that have already incurred shall be
carried forward;
c) If it is expected that all the labor costs that have already incurred cannot be
compensated, the labor costs that have already incurred are included into the
current profit and loss (costs of primary business) and the revenues from rendering
of services are not recognized.
(3) Recognition principals of revenue from transfer of asset use right
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When economic benefits related to transactions are highly likely to flow into the Company
and the amount of revenue can be reliably measured, the revenue from transfer of asset
use right is recognized.
24. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free of
charge by the Company from the government, including government grants related
to assets and government grants related to income.
Government grants related to assets are government grants that are acquired by the
Company and used for forming long-term assets through purchasing and
constructing or other ways.
Government grants related to income are government grants other than government
grants related to assets.
(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;
b) The Company can receive the grants.
(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light of
the received or receivable amount.
b) If a government grant is a non-monetary asset, it shall be measured at its fair
value; and if its fair value cannot be obtained in a reliable way, it shall be
measured at a nominal amount (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of
the related assets or recognized as deferred income at the actual entry amount
on acquisition. Government grants recognized as deferred income shall be
allocated evenly over the useful lives of the relevant assets, and included in the
current profit or loss. Government grants measured at the nominal amount shall
be directly included in current profit and loss.
b) Government grants related to income shall be separately handled according
to the following circumstances:
i.If government grants related to income are used to compensate the
Company’s relevant expenses or losses in future periods, such
government grants should be recognized as deferred income on
acquisition and be included into the current profit and loss or written off
of the related costs when the relevant expenses, losses are recognized.
ii.If government grants related to income are used to compensate the
Company’s relevant expenses or losses incurred, such government
grants are directly included into the current profit and loss on acquisition
or written off of the related costs.
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b) Government grants related to assets and related to income are received
together, shall be treated separately. If it is hard to separate, government grants
shall be treated as related to income as a whole.
c) Government grants related to daily operation shall be recoded in other
income or written off relevant expenses, costs. Government grants unrelated to
daily operation shall be recorded in non-operating income. Financial subsidy
funds directly allocated to the company shall be offset the relevant borrowing
costs.
d) Government grants already recognized required to be refunded shall be
handled according to the following circumstances:
i. If the grants have written down the book value of assets, the book value
shall be adjusted.
ii. If there is related deferred income, the book value of relevant deferred
income is written down and the exceeding part is recorded in the current
profit and loss.
iii. If there is no related deferred income, the exceeding part is directly
included in the current profit and loss.
25. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. On
the balance sheet date, the Company analyzes and compares the book value of the
assets and liabilities and the tax base. If there are temporary differences in book
value of the assets and liabilities and the tax base, under the circumstance that the
temporary differences incur in the current period and meet the recognition criteria,
the Company shall respectively recognize taxable temporary differences or
deductible temporary differences as deferred tax liability or deferred tax assets.
b) Recognition basis of deferred tax assets
i. Deferred tax assets incurred from deductible temporary differences are
recognized to the extent that they shall not exceed the taxable income probably
obtained in future periods to be against the deductible temporary difference. In
determining the taxable income probably obtained in future periods, including
the taxable income from normal production and operation activities in future
periods and the increase of taxable income due to the reversal of taxable
temporary differences during the period of reversal of deductible temporary
differences.
ii.For deductible losses and tax credits that can be carried forward to the next
years, the Company is likely to recognize the corresponding deferred tax assets
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to the extent that the assets shall not exceed the taxable income in the future
for deducting deductible losses and tax credits and that are probably obtained
by the Company.
iii. On the balance sheet date, the Company reviews the book value of deferred
tax assets. If it is probably unable to obtain sufficient taxable income in the
future period to offset the benefits of the deferred tax assets, the Company shall
write down the book value of the deferred tax assets; when it is probable to
obtain sufficient taxable income, the write-downs shall be reversed.
c) Recognition basis of deferred tax liabilities
The Company recognizes the current and previous taxable temporary differences
payable but unpaid as deferred tax liabilities. But they exclude temporary differences
arising from goodwill; transactions which are formed other than from business
combinations and neither affect the accounting profits nor affect taxable income at
the time of occurrence.
(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities are
measured at the applicable tax rate during the period of expected recovery of the
assets or liquidation of the liabilities in accordance with the provisions of the tax law.
b) Where the applicable tax rate changes, the Company remeasures deferred tax
assets and deferred tax liabilities recognized, except for those incurred in
transactions or events directly recognized in the owner’s equity, of which the effect
shall be included in the income tax expenses in the current period when the rate
changes.
c) When the Company measures the deferred tax assets and deferred tax liabilities,
the tax rate and tax base in consistent with the expected recovery of assets or
liquidation of liabilities shall be adopted.
d) Deferred tax assets and deferred tax liabilities of the Company shall not be
discounted.
26. Lease
(1) Accounting treatment method of operating lease
Lessee records rents of operating lease into cost of related assets or current profit or loss
using straight line method in each period of the lease term. Initial direct expenses
incurred are recorded into current profit or loss. Contingent rents are recorded into
current profit or loss when occur.
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Lessor includes assets used for operating lease in the related items of financial
statements. Rent of operating lease is recognized into current profit or loss using straight
line method in the various period of the lease term. Initial direct expenses are recorded
into current profit or loss. Depreciate fixed asset in the operating lease using depreciation
policy of the similar assets. Amortize other operating lease assets using systematic
reasonable method. Contingent rent is recorded into current profit or loss when occur.
(2) Accounting treatment method of financing lease
As the lessee, recognize the lower of fair value of lease asset and minimum lease
payment at the beginning day of the lease as the initial value of the asset leased in and
the minimum lease payment as long-term payable, the difference as unrealized finance
expense. Bank charges, lawyer fee, travel allowances, stamp taxes and other initial direct
expenses that can be attributable to lease project in the lease negotiation and signing the
lease contract are recorded into the asset leased in. Unrealized finance expense is
amortized in the period during the lease term and recognized as current finance
expenses using actual effective rate method. Contingent rent is recorded into current
profit or loss when actually occur.
As the lessor, recognize the total of minimum lease amount received and initial direct
expenses as the initial value of finance lease amount receivable and record the residual
amount not guaranteed at the same time. Recognize the difference between the total of
minimum lease amount received, initial direct expenses and residual amount not
guaranteed and present value of that as unrealized finance income. Amortize unrealized
finance income in the period during the lease term and use effective interest rate to
recognize current finance income. Contingent rent is recorded into current profit or loss
when actually occur.
27. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable N/A
Content and reason of changes in Procedure for
Notes
accounting policies examination and approval
According to the notice of the ministry of
finance on the Revision and Issuance of the
General Corporate Financial Statement Reviewed and approved
Format for 2018 issued on June 15, 2018 by the sixth meeting of the
(CaiKuai [2018] No. 15), the Company has sixth board of directors.
revised the financial statement format as
follows:
1. Balance sheet: merge the original "notes receivables" and "accounts receivables"
items into "notes and accounts receivables"; Merge the original items of "interest
receivables", "dividend receivables" and "other receivables" into "other receivables";
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Merge the original "fixed assets" and "fixed assets liquidation" projects into "fixed assets";
Merge the original "project materials" and "construction in progress" into "construction in
progress"; Merge the original "notes payable" and "accounts payable" items into "notes
and accounts payables"; Merge the original "interest payable", "dividends payable" and
"other payables" into "other payables"; Merge the original "long-term payables" and
"special payables" into "long-term payables".
2. Profit statement: separate the "general and administrative expenses " project into the
"general and administrative expenses " and the "research and development expenses";
Add "interest expenses" and "interest income" under "financial expenses" in the income
statement.
3. Statement of changes in owners' equity: add the item "change in defined benefit plan
carried forward retained earnings".
Details of the affected items in the financial statements at the beginning and last period
(December 31, 2017 /2017 year) are as follows:
Before the adjustment After the adjustment
Item Amount (CNY) Item Amount (CNY)
Notes receivables 212,812,236.57 Notes and accounts 221,297,619.40
accounts receivables 8,485,382.83 receivables
Construction in 234,431,457.83 Construction in 235,219,521.41
progress progress
Project materials 788,063.58
Notes payables 8,200,000.00 Notes and accounts 1,119,603,574.47
Accounts payables 1,111,403,574.47 payables
General and 1,532,148,106.93 General and 1,506,402,859.73
administrative administrative
expenses expenses
Research and 25,745,247.20
Development expenses
(2) Changes in significant accounting estimates
Applicable √ N/A
VI.Taxes
1. Major tax types and rates
Tax type Taxation basis Tax rate
17%、16%、13%、11%、
Value-added tax Output tax-deductible input tax
10%、6%、19%
Sales revenue or or composite
Consumption tax
assessable price
Urban maintenance and construction tax Applicable turnover tax amount 7%、5%
Applicable income tax rate
Corporate income tax 25%、16.5%、0%、27%
Taxable income
Disclosure statement if there are various taxpaying bodies with different corporate
income tax rates
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Company name Applicable tax rate
JSSJ Industry （HK） Holdings Co., Limited 16.50%
ZYG E-Commerce HK Limited 16.50%
Yanghe Chile SPA 27%
YangHe International Investment Ltd, ZYG Ltd 0
ZYG Technology Investment Ltd 0
2. Other information
[Note 1] Value-added tax is calculated and levied according to the difference between
output VAT and deductible input. The applicable tax rates are 17%,13%,11%,6% and
19%. According to Notice on trial implementation of the assessment of the deduction
method of VAT input tax of agricultural products in some industries (Cai Shui [2012]
No.38) issued by the Ministry of Finance and the State Administration of Taxation,
general VAT payers with purchasing agricultural products as raw material to produce and
sell liquid milk and dairy products, alcohol and alcohol, vegetable oil are involved into the
pilot scope of deduction of VAT input tax of agricultural products. Whether the purchased
agricultural products are used for production of above products or not, input VAT shall be
deducted according to Pilot implementation measures of assessment of the deduction of
VAT input tax of agricultural products. It is no longer deducted by VAT deduction
certificate. The input VAT of purchased goods, taxable labor service and taxable service
excluding agricultural products is deducted according to current related rules.
The Company adopted input-output method to calculate permitted deductible VAT input
of agricultural products according to consumed amount of outsourcing agricultural
products per sale based on national and industrial standards.The VAT rate of Yanghe
Chile SPA is 19%. JSSJ Industry （HK） Holdings Co., Limited,ZYG E-Commerce HK
Limited,ZYGLtd,Yanghe International Investment Ltd,ZYGTechnology Investment Ltd do
not pay VAT.
[Note 2] 1.Ad valorem taxation ：Consumption tax of liquor is calculated and levied
according to 20% of sales. For taxable liquor with manufacturing consignment, it is
calculated and levied according to sale price of trustees’ congeneric liquor. If there is no
sale price of congeneric liquor, it is calculated and levied according to composite
assessable price. Consumption tax of wine is calculated and levied according to 10% of
sales.According to Notice on further Strengthening the Collection and Management of
Liquor Consumption Tax (Guoshuihan [2017] No. 144) issued by the State Administration
of Taxation(SAT) issued, if a liquor manufacturing enterprise sets up muti-level sales
units selling liquor, the SAT should verify the lowest assessable price of the
manufacturing enterprise based on external sales price of final sales unit. Since 1 May
2017, the lowest assessable price of liquor consumption tax has been adjusted to 60%
uniformly from 50% to 70%. The tax payment of the Company’s liquor consumption tax
has been changed from withholding and remitting tax by trustee from direct payment by
the liquor manufacturing enterprise since 1 September 2017. The accounting method of
consumption tax was changed from manufacturing consignment reckoned in cost of
liquor production to self-production and self-sale reckoned in consumption taxes and
surcharges. The tax price of liquor consumption tax with ad valorem taxation has bee
changed from composite assessable price to the lowest assessable price of the
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manufacturing enterprise based on external sales price of final sales unit since 1 May
2017.
2.Volume-based taxation：Consumption tax of liquor is calculated and levied according
to CNY 0.50 per kg
[Note 3]Since 1 April 2018, Hong Kong has implemented a two-level system of profits tax.
Under the two-level system, the profits tax rate for the first USD 2 million of assessable
profits of corporations and non- corporations for the years of assessment commencing on
or after 1 April 2018 will be reduced to 8.25% and 7.5% respectively.Subsequent
assessable profits exceeding USD 2 million will continue to be taxed at 16.5% and 15%
of the standard rates respectively.
VII. Notes to the main items of the consolidated financial
statements (all currency unit is CNY, except other
statements)
1. Cash and cash equivalents
Item Closing Balance Opening Balance
Cash 24,103.07 4,883.33
Bank deposit 3,602,515,767.58 1,726,983,843.15
Other cash and cash equivalents 12,808,437.32 24,464,149.70
Total 3,615,348,307.97 1,751,452,876.18
Including: total deposit outbound 61,636,932.89 343,070,375.12
2. Notes and accounts receivables
Item Closing Balance Opening Balance
Notes receivable 242,542,097.76 212,812,236.57
Accounts receivable 5,419,314.60 8,485,382.83
Total 247,961,412.36 221,297,619.40
（1）Notes receivable
1）Classification of notes receivable
Item Closing Balance Opening Balance
Bank acceptance bill 242,542,097.76 212,812,236.57
Total 242,542,097.76 212,812,236.57
2) Notes receivable that have been endorsed to other parties by the Company but
have not expired at the end of year
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Not derecognition at period
Item Derecognition at period end
end
Bank acceptance bill 111,211,585.93
Total 111,211,585.93
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（2）Accounts receivable
1）Analysis by categories
Closing Balance Opening Balance
Book Balance Provision for bad debt Book Balance Provision for bad debt
Category
Proportio Book Value Proportio Book Value
Amount Proportion Amount Amount Amount Proportion
n n
Accounts receivable tested for
impairment on the portfolio with 7,711,012.90 100.00% 2,291,698.30 29.72% 5,419,314.60 10,833,555.19 100.00% 2,348,172.36 21.67% 8,485,382.83
characteristics of credit risk
Total 7,711,012.90 100.00% 2,291,698.30 29.72% 5,419,314.60 10,833,555.19 100.00% 2,348,172.36 21.67% 8,485,382.83
With amounts that are individually significant and that the related provision for bad debts is provided on the individual basis：
Applicable √ N/A
Accounts receivable that the related provision for bad debts is provided on grouping basis using the ageing analysis method：
√ Applicable N/A
Closing Balance
Aging
Account receivable Provision for bad debt Proportion of provision
Within 1 year by item
Subtotal within 1 year 4,530,444.83 226,522.25 5.00%
1-2 years 995,518.37 99,551.84 10.00%
2-3 years 123,378.21 37,013.46 30.00%
3-4 years 12,358.03 6,179.02 50.00%
4-5 years 634,408.63 507,526.90 80.00%
Over 5 years 1,414,904.83 1,414,904.83 100.00%
Total 7,711,012.90 2,291,698.30 29.72%
Explanation of the determination of the portfolio basis：
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Accounts receivable that the related provision for bad debts is based on the proportion of Closing Balance：
Applicable √ N/A
Accounts receivable that the related provision for bad debts is based on other methods：
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2) Provision and recovery for bad and doubtful other receivables in the current
period.
The provision allowance of current period is CNY 0.00. The recovery of current period is
CNY 56,474.06.
3) Top five entities with the largest balances of other receivables
Company name Closing Balance Proportion in the total (%) Provision amount
First 3,681,601.81 47.75 184,080.09
Second 600,000.00 7.78 480,000.00
Third 454,356.93 5.89 454,356.93
Fourth 118,052.00 1.53 118,052.00
Fifth 88,520.00 1.15 4,426.00
Total 4,942,530.74 64.10 1,240,915.02
3. Prepayment
（1）Aging analysis
Aging Closing Balance Opening Balance
Amount Proportion Amount Proportion
Within 1
14,556,402.45 76.68% 85,033,318.92 98.12%
year
1-2 years 3,978,336.29 20.95% 341,247.89 0.40%
2-3 years 1,197,641.47 1.38%
Over 3
449,430.80 2.37% 89,600.00 0.10%
years
Total 18,984,169.54 -- 86,661,808.28 --
Explanation of prepayment with age longer than 1 year:
There is no prepayment with age longer than 1 year.
（2）Top five entities with the largest balances of prepayments
Company name Closing Balance Proportion in the total
First 8,736,496.90 46.02
Second 2,310,000.00 12.17
Third 1,520,000.00 8.01
Fourth 1,500,000.00 7.90
Fifth 1,200,000.00 6.32
Total 15,266,496.90 80.42
4. Other receivables
Item Closing Balance Opening Balance
Other receivables 47,908,184.37 57,084,601.83
Total 47,908,184.37 57,084,601.83
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（1）Other receivables
1) Other receivables disclosed by categories
Closing Balance Opening Balance
Book Balance Provision for bad debt Book Balance Provision for bad debt
Category
Proportio Book Value Proporti Book Value
Amount Amount Proportion Amount Proportion Amount
n on
Other receivables with
significant single amount and
80,747,048.93 72.52% 47,839,924.27 59.25% 32,907,124.66 80,747,048.93 67.33% 47,839,924.27 59.25% 32,907,124.66
tested for impairment
individually
Other receivables tested for
impairment on the portfolio with 30,596,168.88 27.48% 15,595,109.17 50.97% 15,001,059.71 39,188,922.37 32.67% 15,011,445.20 38.31% 24,177,477.17
characteristics of credit risk
Total 111,343,217.81 100.00% 63,435,033.44 56.97% 47,908,184.37 119,935,971.30 100.00% 62,851,369.47 52.40% 57,084,601.83
Other receivables with significant single amount and tested for impairment individually
√ Applicable N/A
Closing Balance
Company Name
Book Balance Provision balance for bad debt Proportion of provision Reason
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang road branch. 42,907,124.66 10,000,000.00 23.31% Tort liability
Industrial Commercial Bank of China Ltd. Kaifeng Haode branch 22,839,924.27 22,839,924.27 100.00% Tort liability
Bankruptcy administrator ofJiangsu Juntai Properties Co.,Ltd., Suqian
15,000,000.00 15,000,000.00 100.00% Estimated uncollectible
Guotai Department Store Co.,Ltd.
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang road branch. 80,747,048.93 47,839,924.27 -- --
Analysis of provision under the aging analysis method:
√ Applicable N/A
Closing Balance
Aging
Other receivables Provision for bad debt Proportion of provision
Within 1 year by item
Subtotal within 1 year 5,600,638.03 280,031.91 5.00%
1-2 years 7,283,730.25 728,373.03 10.00%
2-3 years 1,345,777.77 403,733.33 30.00%
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3-4 years 2,485,592.52 1,242,796.26 50.00%
4-5 years 4,701,278.37 3,761,022.70 80.00%
Over 5 years 9,179,151.94 9,179,151.94 100.00%
Total 30,596,168.88 15,595,109.17 50.97%
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Explanation of the determination of the portfolio basis:
Other receivables that the related provision for bad debts is based on the proportion of
closing balance:
Applicable √ N/A
Other receivables that the related provision for bad debts is based on other methods：
Applicable √ N/A
2) Provision and recovery for bad and doubtful debt in the current period
The provision allowance of current period is CNY 1,155,422.51; Provision and recovery
for bad is CNY 0.00.
Items of recovery that are important in this term are as follows:
Company name Recovery amount Method
No
3) Other actual receivable write-off in this period
Item Written off amount
Amount of other receivables that are actually
571,758.54
written off
The important write off of accounts receivable are as follows:
Amount Whether the amount of
Company Reasons for Write off
Category of write money generated by the
Name Write off procedure
off related party transactions
None
4) Analysis of other receivables by categories
Category Closing Balance Opening Balance
Savings deposit (Infringement dispute
65,747,048.93 65,747,048.93
arrears)
Security deposit 16,812,560.00 23,738,248.46
Cooperation payment 3,910,000.00 3,910,000.00
Business loans, Petty cash and other. 24,873,608.88 26,540,673.91
Total 111,343,217.81 119,935,971.30
5) Top five entities with the largest balances of other receivables
Proportion
Company Closing in total Provisioning amount at
Category Aging
Name Balance receivables period end
(%)
Industrial
Commercial Savings deposit
Bank of China （Infringement
42,907,124.66 3-4 years 38.54% 10,000,000.00
Ltd. Zhengzhou
Jiefang road dispute arrears）
branch.
Industrial Savings deposit 22,839,924.27 3-4 years 20.51% 22,839,924.27
Commercial （Infringement
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Proportion
Company Closing in total Provisioning amount at
Category Aging
Name Balance receivables period end
(%)
Bank of China dispute arrears）
Ltd. Kaifeng
Haode branch
Bankruptcy
administrator of
Jiangsu Juntai
Properties
Security deposit 15,000,000.00 Over 5 years 13.47% 15,000,000.00
Co.,Ltd.,
Suqian Guotai
Department
Store Co.,Ltd.
Nanjing Peilong
sports culture Security deposit 3,910,000.00 Over 5 years 3.51% 3,910,000.00
Co., Ltd.
Advance
Advance money
money for 2,379,354.55 1-2 year 2.14% 237,935.46
for another
another
Total -- 87,036,403.48 -- 78.17% 51,987,859.73
5. Inventories
Does the company need to comply with the disclosure requirements of real estate
industry.
No
（1）Categories of Inventory
Closing Balance Opening Balance
Category Provision for Provision for
Book Balance stock Book Value Book Balance stock Book Value
obsolescence obsolescence
Raw
389,136,605.04 8,125,769.63 381,010,835.41 375,309,467.17 10,371,479.92 364,937,987.25
materials
Goods in
530,437,380.46 530,437,380.46 523,779,562.33 523,779,562.33
progress
Stock
commodi 1,637,109,450.86 1,637,109,450.86 1,512,612,958.86 720,789.05 1,511,892,169.81
ties
Revolving
7,316,606.29 2,270,576.29 5,046,030.00 7,316,606.29 2,270,576.29 5,046,030.00
materials
semi-
finished 11,338,514,891.01 11,338,514,891.01 10,455,847,684.72 10,455,847,684.72
goods
Total 13,902,514,933.66 10,396,345.92 13,892,118,587.74 12,874,866,279.37 13,362,845.26 12,861,503,434.11
Does the company need to comply with the disclosure requirements of “Shenzhen Stock
Exchange disclosure guide No. 4 - listed companies engaged in seed or planting
business”
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No
Does the company need to comply with the disclosure requirements of “Shenzhen Stock
Exchange disclosure guide No. 4 - listed companies engaged in jewelry business”
No
（2）Provision forstock obsolescence
Increase in the current period Decreases in current period
Reversal as
Category OpeningBalance Closing Balance
Amount Other increase of asset Other
value
Raw material 10,371,479.92 2,245,710.29 8,125,769.63
Finished goods 720,789.05 720,789.05
Revolving
2,270,576.29 2,270,576.29
material
Total 13,362,845.26 2,966,499.34 10,396,345.92
(3) Statements for borrowing cost capitalized and included in the closing balance
of inventory
(4) Closing conditions of assets completed but not settled through construction
contracts
6. Non-current assets due within one year
Item Closing Balance Opening Balance
Trust financial products 1,120,000,000.00 552,200,000.00
Total 1,120,000,000.00 552,200,000.00
7. Other current assets
Item Closing Balance Opening Balance
Short-term financial products 16,785,753,510.74 12,823,346,324.01
VAT to be deducted 116,379,452.59 152,076,035.38
Consumption tax to be deducted 21,568,108.81 7,950,860.87
Advance payment of income tax 8,779,276.82 13,002,160.15
Total 16,932,480,348.96 12,996,375,380.41
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8. Available-for-sale financial assets
（1）Details of available-for-sale financial assets
Closing Balance Opening Balance
Item Provision for Provision for
Book Balance Book Value Book Balance Book Value
impairment impairment
Available-for-sale equity instruments: 2,714,403,624.66 948,000.00 2,713,455,624.66 1,936,227,142.76 948,000.00 1,935,279,142.76
Measured by fair value 284,756,163.23 284,756,163.23
Measured by cost 2,429,647,461.43 948,000.00 2,428,699,461.43 1,936,227,142.76 948,000.00 1,935,279,142.76
Others 1,525,000,000.00 1,525,000,000.00
Total 2,714,403,624.66 948,000.00 2,713,455,624.66 3,461,227,142.76 948,000.00 3,460,279,142.76
（2）Available-for-sale financial assets measured at fair value at period end
Categories of available for sale financial assets Available for sale equity instruments Available for sale debt instruments Total
Cost of equity instruments/Amortized cost of debt instruments 425,350,132.53 425,350,132.53
Fair value 284,756,163.23 284,756,163.23
Cumulative fair value changes through other comprehensive income -140,593,969.30 -140,593,969.30
（3）Available-for-sale financial assets measured at cost at period end
Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
Jinagsu Siyang
Rural Commercial 7,987,200.00 7,987,200.00 7.02% 3,529,485.20
Bank
Suqian
Transportation 948,000.00 948,000.00 948,000.00 948,000.00 0.09%
Investment Co.,Ltd.
Zking Property 52,500,000.00 52,500,000.00 2.00%
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
&Casualty
Insurance Co.,Ltd.
Shanghai Finance
Development
Investment Funds 162,442,493.39 34,397,816.93 128,044,676.46 3.33% 2,695,985.71
(limited
Partnership)
Zhongjin Jiatai
(Tianjin) Equity
Funds 190,153,911.27 19,994,332.31 170,159,578.96 6.25% 3,830,553.37
Partnership( Limite
d Partnership)
BOC International
300,000,000.00 300,000,000.00 3.16% 6,315,789.44
(CHINA) Co.,Ltd.
Hangzhou Taiyi
Tianze Investment
Management 105,000,000.00 105,000,000.00 62.50%
Partnership(Limited
Partnership)
Suning
Consumption 30,000,000.00 30,000,000.00 5.00%
Finance Co.,Ltd.
Beijing Hutong
Equity Investment
30,000,000.00 5,828,599.13 24,171,400.87 28.20%
(Limited
Partnership)
Shanghai Jinpu
100,000,000.00 100,000,000.00 10.00%
Xincheng Mobile
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
Internet Equity
Investment Funds
Partnership
(Limited
Partnership)
CSIC Equity
52,654,366.05 25,404,473.81 11,753,661.72 66,305,178.14 1.50% 2,442,667.98
Investment Funds
Beijing Weijiu
Century Culture 5,000,000.00 5,000,000.00 5.00%
Media Co.,Ltd.
Shanghai Finance
Development
Pujiang Investment 542,012.88 542,012.88 3.33%
Funds (Limited
Partnership)
Jinpu Xincheng
Investment
102,271.50 102,271.50 6.82%
Management
Co.,Ltd.
Shanghai Shangshi
Hongzhang
Investment Center 15,000,000.00 15,000,000.00 774,375.95 29,225,624.05 5.42%
(Limited
Partnership)
Zhongjin Taijia
Phase II (Tianjin)
66,884,387.67 109,442,731.52 35,728,100.62 140,599,018.57 4.98%
Equity Investment
Funds
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
Partnership( Limite
d Partnership)
Jinagsu Yongda
Outdoor Media 1,507,500.00 1,507,500.00 5.00%
Co.,Ltd.
Jinagsu Yongda
High-speed
505,000.00 505,000.00 5.00%
Railway Media
Co.,Ltd.
Jiaxing Danqing
Investment
Partnership 70,000,000.00 30,000,000.00 100,000,000.00 10.00%
(Limited
Partnership)
Jinshi Kunxiang
Equity Investment
300,000,000.00 300,000,000.00 52.54%
Partnership(Limited
Partnership)
Suzhou Danqing
Phase II
Pharmaceutical
Innovation Industry
60,000,000.00 60,000,000.00 7.54%
Investment
Partnership
(Limited
Partnership)
LC Securities
330,000,000.00 330,000,000.00 12.83%
Co.,Ltd.
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
Nanjing Jiyan Food
15,000,000.00 15,000,000.00 4.76%
Co.,Ltd.
Jiangsu Saifu
Green Food
100,000,000.00 100,000,000.00 2.74%
Development
Co.,Ltd
Nanjing Xingnahe
Venture Capital
Partnership 200,000,000.00 2,950,000.00 197,050,000.00 45.45%
(Limited
Partnership)
Panmao
(Shanghai)
Investment Center 165,000,000.00 165,000,000.00 55.00%
(Limited
Partnership)
Shanghai Xintuo-
Road King
Creditors'
100,000,000.00 100,000,000.00
Investment
Collective Fund
Trust Plan
Zhongrong Trust－
Guarantee-
Assistant Fund 150,000,000.00 150,000,000.00
No.190Collective
Fund Trust Plan
Zhongrong Trust- 100,000,000.00 100,000,000.00
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
The Glory of the
World No.26
Collective Fund
Trust Plan
WesternTrust.
Sunshine City
150,000,000.00 150,000,000.00
Yujing Special
Asset Trust Plan
Shanghai Xintuo-
Oceanwide Wuhan
Yunhai Garden 100,000,000.00 100,000,000.00
Collective Trust
Plan
Zhongrong-Jundun
150,000,000.00 150,000,000.00
No.1Trust
WesternTrust-CAC
Group Creditors '
200,000,000.00 200,000,000.00
Collective Trust
Plant
Pingan Fortune-
Hongtai
70,000,000.00 70,000,000.00
No.189Collective
Fund Trust Plan
Western Trust-
Evergrande Enping
Equity Investment 100,000,000.00 100,000,000.00
Collective Fund
Trust Plan
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Book Balance Provision for impairment
Proportion
Investee of equity Current period
Increase in Decrease in held in cash dividends
Increase in Decrease in Opening Closing
Opening Balance Closing Balance current current investee
current period current period Balance Balance
period period
Western Trust-
Tiandiyuan (Phase
120,000,000.00 120,000,000.00
V) Collective Fund
Trust Plan
China Tourism
International
TrustZhixin No.358
85,000,000.00 85,000,000.00
Zhongtian Future
Ark Collective Fund
Trust Plan B
Shanxi International
TrustGreen Source
Farmers Market
100,000,000.00 100,000,000.00
Trust Loan
Collective Fund
Trust Plan
Shanxi International
TrustWuxi Railway
Station North
Square A Block 100,000,000.00 100,000,000.00
Project Loan
Collective Fund
Trust Plan
Total 3,461,227,142.76 604,847,205.33 1,636,426,886.66 2,429,647,461.43 948,000.00 948,000.00 -- 18,814,481.70
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（4）Changes in provision for the impairment of the available-for-sale assets during the reporting period
Classification of available-for-sale assets Equity instruments available for sale Debt instruments available for sale Total
Balance of the provision for impairment at the beginning of this period 948,000.00 948,000.00
Balance of the provision for impairment at the end of this period 948,000.00 948,000.00
9. Long-term equity investments
Changes in Current Period
Closing
Profit or loss Adjustments of Cash Provision
Opening Other Closing Balance of
Investee recognized other divided or for
Balance Increase Decrease changes in Other Balance provision for
under equity comprehensive profit impairme
equity impairment
method income declared nt
1.Joint Venture
2.Associated Enterprise
Jiangsu Su Wine
Culture Transmission 1,980,046.94 911,282.86 408,000.00 781,690.58 3,265,020.38
Co,Ltd.
Nanjing
Hesong
3,400,000.00 239,991.56 3,639,991.56
Culture Technology
Co.,Ltd.
Jiangsu Xinghe
Investment 1,850,000.00 668,316.88 2,518,316.88
Management Co.,Ltd.
-
Subtotal 1,980,046.94 5,250,000.00 1,819,591.30 781,690.58 9,423,328.82
408,000.00
-
Total 1,980,046.94 5,250,000.00 1,819,591.30 781,690.58 9,423,328.82
408,000.00
Other statements
Other changes of Jiangsu Su Wine Culture Transmission Co,Ltd. in the current period are long-term equity investments that have not realized sales
profit adjustment in downstream transactions.
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10. Fixed assets
Item Closing Balance Opening Balance
Fixed assets 7,833,665,282.19 8,249,559,468.26
Total 7,833,665,282.19 8,249,559,468.26
（1）Details of Fixed Assets
Buildings and Transportation
Item Machinery equipment Other equipment Total
constructions equipment
Original cost
of fixed assets
1.Opening
7,781,292,717.66 2,969,522,716.63 68,107,280.20 329,794,629.96 11,148,717,344.45
Balance
2.Increase in
101,855,482.83 151,251,840.47 7,987,937.98 50,527,425.12 311,622,686.40
current period
(1)External
14,515,922.81 4,810,149.36 7,915,544.81 50,271,440.28 77,513,057.26
purchase
(2)Transfer
from projects
87,339,560.02 146,441,691.11 72,393.17 255,984.84 234,109,629.14
under
construction
(3)Increase in
Corporate
merger
3.Decrease in
17,615,950.55 12,353,143.71 10,672,785.74 4,723,482.31 45,365,362.31
current period
(1)Elimination
17,615,950.55 12,353,143.71 10,672,785.74 4,723,482.31 45,365,362.31
and sell off
4.Closing
7,865,532,249.94 3,108,421,413.39 65,422,432.44 375,598,572.77 11,414,974,668.54
Balance
Accumulated
depreciation
1.Opening
1,533,929,641.94 1,109,582,470.15 48,535,906.55 207,109,857.55 2,899,157,876.19
Balance
2.Increase in
375,112,939.92 275,048,790.28 6,807,570.27 50,174,399.01 707,143,699.48
current period
(1)Provision 375,112,939.92 275,048,790.28 6,807,570.27 50,174,399.01 707,143,699.48
(2)Increase in
Corporate
merger
3.Decrease in
3,035,190.74 7,998,636.39 9,798,106.72 4,160,255.47 24,992,189.32
current period
(1)Disposal or
3,035,190.74 7,998,636.39 9,798,106.72 4,160,255.47 24,992,189.32
elimination
4.Closing
1,906,007,391.12 1,376,632,624.04 45,545,370.10 253,124,001.09 3,581,309,386.35
Balance
Provision for
fixed asset
impairment
1.Opening
Balance
2.Increase in
current period
(1)Provision
3.Decrease in
current period
(1)Disposal or
elimination
4.Closing
Balance
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Book Value
1.Closing
5,959,524,858.82 1,731,788,789.35 19,877,062.34 122,474,571.68 7,833,665,282.19
Book Value
2.Opening
6,247,363,075.72 1,859,940,246.48 19,571,373.65 122,684,772.41 8,249,559,468.26
Book Value
（2）Investment properties without certification of right
Reason for not having the
Item Book Value certification of right
Blue-collar workers apartment of Yanghe 151,840,844.16 In process
Siyang lai 'an base office building 20,181,257.95 In process
Yanghe workshop etc. 94,497,478.73 In process
Total 266,519,580.84
(2) Disposal of fixed assets
Item Closing Balance Opening Balance
11. Construction in progress
Item Closing Balance Opening Balance
Construction in progress 153,747,041.24 234,431,457.83
Construction materials 788,063.58 788,063.58
Total 154,535,104.82 235,219,521.41
（1）Construction in progress
Closing Balance Opening Balance
item Provision
Provision for
Book Balance Book Value Book Balance for Book Value
impairment
impairment
R&D Center
7,668,674.65 7,668,674.65 10,431,829.70 10,431,829.70
Building project
Shuanggou new
area bottle
storage and
91,252,560.31 91,252,560.31
packaging
relocation
project
Packaging
logistics project
of Shuanggou 12,080,019.36 12,080,019.36 33,759,459.32 33,759,459.32
Distillery
industry park
Shuanggou new
area brewing 13,132,641.22 13,132,641.22 16,950,999.28 16,950,999.28
project
Shuanggou new
area supporting 492,307.69 492,307.69 650,166.18 650,166.18
project
Shuanggou
packaging 10,610,699.88 10,610,699.88 10,610,699.88 10,610,699.88
production line
Hubei Lihuacun
Liquor Industry 1,542,699.41 1,542,699.41
filling project
Intelligent
11,167,656.92 11,167,656.92
brewing
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Closing Balance Opening Balance
item Provision
Provision for
Book Balance Book Value Book Balance for Book Value
impairment
impairment
(Mellowness
125 workshop)
project
Siyang Base
Three-
dimensional
Warehouse, 15,581,233.56 15,581,233.56
packaging
production line
project
Qu-making third
workshop
sesame qu 5,428,198.28 5,428,198.28
expansion
phase II project
Other projects 77,585,609.68 77,585,609.68 69,233,043.75 69,233,043.75
Total 153,747,041.24 153,747,041.24 234,431,457.83 234,431,457.83
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（2）Current changes of important construction in progress
Proportion of Capitalizati
Decrease Include:Capit
Increase in Transfer into fixed accumulative Capitalized on rate for Source
Item Budget Opening Balance in current Closing Balance Progress alized interest
current period assets project input in interest the period of funds
period for the period
budget (%)
R&D Center End stage
Building 260,510,000.00 10,431,829.70 1,749,525.77 4,512,680.82 7,668,674.65 196.09% of Other
project Engineering
Shuanggou
new area
bottle storage
and 640,270,000.00 91,252,560.31 15,937,440.68 107,190,000.99 123.76% Completed Other
packaging
relocation
project
Packaging
logistics
End stage
project of
495,000,000.00 33,759,459.32 8,948,384.94 30,627,824.90 12,080,019.36 206.68% of Other
Shuanggou Engineering
Distillery
industry park
Shuanggou
End stage
new area
528,180,000.00 16,950,999.28 1,854,694.33 5,673,052.39 13,132,641.22 162.55% of Other
brewing Engineering
project
Shuanggou
End stage
new area
70,000,000.00 650,166.18 575,025.37 732,883.86 492,307.69 173.17% of Other
supporting Engineering
project
Shuanggou
End stage
packaging
120,000,000.00 10,610,699.88 10,610,699.88 89.53% of Other
production Engineering
line
Hubei 80,000,000.00 1,542,699.41 4,194,297.64 5,736,997.05 132.78% Completed Other
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Proportion of Capitalizati
Decrease Include:Capit
Increase in Transfer into fixed accumulative Capitalized on rate for Source
Item Budget Opening Balance in current Closing Balance Progress alized interest
current period assets project input in interest the period of funds
period for the period
budget (%)
Lihuacun
Liquor
Industry filling
project
Intelligent
brewing
(Mellowness In the
31,000,000.00 11,167,656.92 11,167,656.92 36.02% Other
125 process
workshop)
project
Siyang Base
Three-
dimensional
In the
Warehouse, 41,000,000.00 16,822,612.96 1,241,379.40 15,581,233.56 41.03% Other
process
packaging
production
line project
Qu-making
third
workshop
In the
sesame qu 9,800,000.00 5,428,198.28 5,428,198.28 55.39% Other
process
expansion
phase II
project
Total 2,275,760,000.00 165,198,414.08 66,677,836.89 155,714,819.41 76,161,431.56 -- -- --
（3）Construction materials
Closing Balance Opening Balance
Item Provision for Provision for
Book Balance impairment Book Value Book Balance impairment Book Value
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Cable type 6,320.03 6,320.03 6,320.03 6,320.03
electric equipment 781,743.55 781,743.55 781,743.55 781,743.55
Total 788,063.58 788,063.58 788,063.58 788,063.58
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12. Intangible assets
（1）Details of intangible assets
No-patent right Computer
Item Land use right Patent right Trademark right Total
technology software
Original cost of
intangible assets
Opening Balance 1,782,806,638.06 396,741,375.76 93,491,180.46 2,273,039,194.28
Increase in current
163,260,000.00 3,110,089.67 12,163,487.32 178,533,576.99
period
Including: Acquired 163,260,000.00 3,110,089.67 12,163,487.32 178,533,576.99
Internally
developed
Business
combination
Decrease in current
period
Including: Disposal
Closing Balance 1,946,066,638.06 399,851,465.43 105,654,667.78 2,451,572,771.27
Accumulated
amortization of
intangible assets
Opening Balance 208,924,366.84 382,757,563.31 27,810,837.06 619,492,767.21
Increase in current
38,210,698.82 2,110,987.09 9,796,631.05 50,118,316.96
period
Including: Provision 38,210,698.82 2,110,987.09 9,796,631.05 50,118,316.96
Decrease in current
period
Including: Disposal
Closing Balance 247,135,065.66 384,868,550.40 37,607,468.11 669,611,084.17
Provision for
impairment
Opening Balance
Increase in current
period
Including: Provision
Decrease in current
period
Including: Disposal
Closing Balance
Book value of
intangible assets
Closing Book Value 1,698,931,572.40 14,982,915.03 68,047,199.67 1,781,961,687.10
Opening Book
1,573,882,271.22 13,983,812.45 65,680,343.40 1,653,546,427.07
Value
13. Goodwill
（1）Book value of goodwill
Investee’s name
or items Opening
Addition this period Elimination this period Closing Balance
resulting in Balance
goodwill
Jiangsu
Shuanggou
276,001,989.95 276,001,989.95
Distillery Stock
Co.,Ltd. [Note]
Jiangsu
Zhaiyougou E-
6,940,018.79 6,940,018.79
commerce
Co.,Ltd
Jiangsu
21,250,284.80 21,250,284.80
Zhaibianli E-
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Investee’s name
or items Opening
Addition this period Elimination this period Closing Balance
resulting in Balance
goodwill
commerce
Co.,Ltd
Guizhou Guijiu
18,826,210.01 18,826,210.01
Co.,Ltd.
ZYG
Technology 5,057,111.19 5,057,111.19
Investment Ltd
Guizhou
Welcome Drink 11,333,195.25 11,333,195.25
Stock Co.,Ltd
Dream Blue
Chuanhaihui
(Shiyan) Trade 3,405,542.42 3,405,542.42
Investment
Co.,Ltd.
Total 342,814,352.41 342,814,352.41
（2）Provision for impairment of goodwill
Investee’s name
or items Opening Closing Balance
Addition this period Elimination this period
resulting in Balance
goodwill
Jiangsu
Zhaiyougou E-
6,940,018.79 6,940,018.79
commerce
Co.,Ltd
Jiangsu
Zhaibianli E-
21,250,284.80 21,250,284.80
commerce
Co.,Ltd
Guizhou Guijiu
18,826,210.01 18,826,210.01
Co.,Ltd.
ZYG
Technology 5,057,111.19 5,057,111.19
Investment Ltd
Guizhou
Welcome Drink 11,333,195.25 11,333,195.25
Stock Co.,Ltd
Dream Blue
Chuanhaihui
(Shiyan) Trade 3,405,542.42 3,405,542.42
Investment
Co.,Ltd.
Total 66,812,362.46 66,812,362.46
Information about the asset group or combination of asset groups where the goodwill is
located
Explanation of the goodwill impairment test process, key parameters (such as the growth
rate in the forecast period, the growth rate in the stable period, the profit rate, the
discount rate, the forecast period, etc.) and the recognition method of goodwill
impairment loss:
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[Note] Goodwill impairment test according to the present value of the expected future
cash flow of the asset groups, group assets of nearly three years based on the actual
operation situation and the future operation of the expectations, the estimated future cash
flow of the asset group, and according to the pre-tax discount rate of 15.59% discount
after calculating the recoverable amount of an asset group. After the test, there is no
goodwill impairment resulting from the acquisition of Jiangsu Shuanggou Distillery Stock
Co., Ltd.
Goodwill impairment test
Other instructions
No
14. Long-term prepaid expenses
Opening Increase in the Amortization for the Other Closing
Item
Balance current period current period decreases Balance
Renovation costs
of the rented 1,091,644.16 184,008.16 907,636.00
house
Total 1,091,644.16 184,008.16 907,636.00
15. Deferred tax assets/liabilities
（1）Deferred tax assets before offset
Closing Balance Opening Balance
Item Deductible Deductible
Deferred Tax
Temporary Deferred Tax Assets Temporary
Assets
Differences Differences
Provision for asset
73,261,029.52 17,696,079.84 73,619,863.33 18,404,334.67
impairment
Unrealized profits
from internal 49,459,513.99 12,364,878.51 44,667,749.86 11,166,937.46
transactions
Deductible losses 298,587,033.87 74,646,758.47 9,122,967.34 2,280,741.83
The difference
between book
2,437,185,000.00 609,296,250.00 2,471,228,375.00 617,807,093.75
value of debt and
tax base
Total 2,858,492,577.38 714,003,966.82 2,598,638,955.53 649,659,107.71
（2）Deferred tax liabilities before offset
Closing Balance Opening Balance
Item Taxable
Taxable temporary
temporary Deferred tax liabilities Deferred tax liabilities
differences
differences
Valuation of
appreciation of
business
56,077,024.20 14,019,256.05 71,831,084.40 17,957,771.10
combination
assets not under
common control
Total 56,077,024.20 14,019,256.05 71,831,084.40 17,957,771.10
（3）Details of unrecognized deferred tax assets
Item Closing Balance Opening Balance
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Deductible temporary differences 6,280,624.43 5,890,523.76
Deductible losses 214,056,848.93 179,672,013.58
Total 220,337,473.36 185,562,537.34
（4）Deductible losses from unrecognized deferred tax assets will due on the
following years
Year Closing Balance Opening Balance Remark
2020 27,264,949.28 29,839,655.24
2021 82,161,059.93 82,161,059.93
2022 67,671,298.41 67,671,298.41
2023 36,959,541.31
Total 214,056,848.93 179,672,013.58 --
16. Other non-current assets
Item Closing Balance Opening Balance
Compensation for land
158,606,824.94 158,606,824.94
compensation
Prepaid construction
equipment expense and 46,405,359.98 45,620,808.97
purchase and house payment
Total 205,012,184.92 204,227,633.91
17. Notes and accounts payables
Item Closing Balance Opening Balance
Notes payable 8,200,000.00
Accounts payable 1,261,282,397.89 1,111,403,574.47
Total 1,261,282,397.89 1,119,603,574.47
（1）Notes payable by category
Category Closing Balance Opening Balance
Bank acceptances 8,200,000.00
Total 8,200,000.00
Total amount of notes payable overdue at the period end is CNY 0.00.
（2）Accounts payables by category
Category Closing Balance Opening Balance
Material purchase 1,159,829,383.04 949,161,768.88
Construction andequipment
101,453,014.85 162,241,805.59
payment
Total 1,261,282,397.89 1,111,403,574.47
（3）Description of significant accounts payable aged more than 1 year
Item Closing Balance Reason for not being settled
None
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18. Advance from customers
（1）Presentation of advances from customers
Item Closing Balance Opening Balance
Advance from customers 4,468,409,150.75 4,199,846,323.30
Total 4,468,409,150.75 4,199,846,323.30
（2）Description of significant advance from customers aged more than 1 year
Item Closing Balance Reason for not being settled
None
19. Employee benefits payable
（1）Employee benefits payable shown as follows:
Increase in Current Decrease in Current
Item Opening Balance Period Period Closing Balance
Short-term benefits 208,314,727.66 1,622,846,491.59 1,645,602,052.47 185,559,166.78
Post-employment
benefits-- defined 1,343,920.63 139,651,615.36 140,803,329.18 192,206.81
contribution plans
Termination benefits 465,700.50 465,700.50
Total 209,658,648.29 1,762,963,807.45 1,786,871,082.15 185,751,373.59
（2）Short-term employee benefits payable shown as follows:
Opening Increase in Decrease in Closing Balance
Item
Balance Current Period Current Period
Wages, bonuses, allowances
202,843,814.89 1,399,580,664.51 1,421,059,254.48 181,365,224.92
and grants
Employees’ welfare 83,457,766.16 83,457,766.16
Social insurance premiums 427,454.84 61,490,211.56 61,902,806.31 14,860.09
Including: Medical Insurance 372,876.50 52,615,361.80 52,980,266.30 7,972.00
Work-related injury insurance 38,668.84 3,029,305.12 3,061,098.62 6,875.34
Maternity insurance premium 15,909.50 5,845,544.64 5,861,441.39 12.75
Housing funds 884,823.00 66,107,122.80 65,842,765.00 1,149,180.80
Labor union expenditures and
4,158,634.93 12,210,726.56 13,339,460.52 3,029,900.97
employee education funds
Total 208,314,727.66 1,622,846,491.59 1,645,602,052.47 185,559,166.78
（3）Defined contribution plan shown as follows:
Opening Increase in Current Decrease in Current Closing
Item
Balance Period Period Balance
Basic endowment
1,266,707.40 136,051,273.34 137,126,658.01 191,322.73
insurance premium
Unemployment
77,213.23 3,600,342.02 3,676,671.17 884.08
insurance premium
Total 1,343,920.63 139,651,615.36 140,803,329.18 192,206.81
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20. Taxes payable
Item Closing Balance Opening Balance
Value-added tax 189,165,872.30 16,566,945.18
Consumption tax 718,733,315.03 301,944,997.98
Enterprise income tax 2,284,751,258.08 1,865,510,244.69
8,034,721.58 51,144,185.46
Individual Income Tax
Urban maintenance and 16,248,651.42 16,322,641.43
construction tax
15,946,560.04 16,034,117.97
Land use tax
13,930,499.24 4,946,210.32
Property tax
Education Surcharge and 5,044,392.51 13,262,451.18
Local Education Surcharge
1,271,183.78 1,787,929.52
Stamp tax
560.58 5,144.20
Integrated fund
2,331,745.16 2,037,259.74
Other tax
3,255,458,759.72 2,289,562,127.67
Total
21. Other payables
Item Closing Balance Opening Balance
Other payables 6,457,301,511.01 5,620,040,515.94
Total 6,457,301,511.01 5,620,040,515.94
（1）Other payables
1) Categories by nature
Item Closing Balance Opening Balance
Dealer unsettled discount 2,298,765,700.00 2,249,550,630.00
Dealer deposit 2,929,101,334.21 1,996,000,543.52
Dealer risk pledged capital 659,646,746.28 618,260,719.07
Accrued expenses 287,765,353.59 473,980,800.72
Quality guarantee deposit,
188,186,132.55 176,017,865.12
Performance bond
Other 93,836,244.38 106,229,957.51
Total 6,457,301,511.01 5,620,040,515.94
2) Other important payables aging more than 1 year
Reasons for Being Unpaid or
Item Closing Balance
Transferred
Dealer risk pledged capital, deposit 492,600,426.68 Risk pledged capital, deposit
Total 492,600,426.68 --
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22. Long-term loans
（1）Long-term loans by category
Item Closing Balance Opening Balance
Credit loans 109,088.00 145,452.00
Total 109,088.00 145,452.00
23. Long-term payables
Item Closing balance Opening balance
Long-term payables 198,404,248.85 199,107,530.75
Total 198,404,248.85 199,107,530.75
（1）Long-term payables
Increase in Decrease in
Item Opening Balance Closing Balance Reason
current period current period
Compensation for
replacement of 199,107,530.75 703,281.90 198,404,248.85
employee status
Total 199,107,530.75 703,281.90 198,404,248.85 --
24. Deferred Incomes
Opening Increase in Decrease in
Item Closing Balance Reason
Balance current period current period
Government grants 107,349,666.67 8,836,166.67 98,513,500.00
Total 107,349,666.67 8,836,166.67 98,513,500.00 --
Projects involving government grants:
Non-
Cost Relevant
Increase operating Other income
Opening reduction in Other Closing to Asset
Liability Item in current income in in current
Balance current changes Balance or
period current period
period Income
period
Special fund for
waste water
79,166.67 79,166.67 Asset
recycling and
reuse project
Hubei Lihuacun
liquor industry
liquor brewing,
filling project
34,567,600.00 4,257,000.00 30,310,600.00 Asset
supporting
facilities
construction
subsidies
Special fund for
packaging
logistics project 21,000,000.00 3,000,000.00 18,000,000.00 Asset
in Shuanggou
new area
Special fund for
Harbin Binzhou
brewery 41,202,900.00 41,202,900.00 Asset
construction
project
Shuanggou
sewage
10,500,000.00 1,500,000.00 9,000,000.00 Asset
treatment
project
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25. Share Capital
Increases/decreases in the current period (+, -)
Conversion of
Item Opening Balance Issuance of Share Closing Balance
reserves funds Others Subtotal
new shares donation
into shares
Total Number 1,506,988,000.0
1,506,988,000.00
of Shares 0
26. Capital reserves
Increase in Current Decrease in Current
Item Opening Balance Closing Balance
Period Period
Share premium 741,674,076.44 741,674,076.44
Other capital reserves 30,000.00 30,000.00
Total 741,704,076.44 741,704,076.44
27. Other Comprehensive Incomes
Current Period
Less:
Previously Amount
recognized in Amount attribute attribute to
Opening Amount in current Less:
Item other to parent non- Closing Balance
Balance period before income
comprehensive company after controlling
income tax tax
income tax shareholders
transferred to after tax
profit or loss
Other consolidate
incomes that will be
915,704.03 -142,861,056.33 -142,880,414.18 19,357.85 -141,964,710.15
reclassified into
profit and loss
Changes in fair
value of available for -140,593,969.30 -140,593,969.30 -140,593,969.30
sale financial assets
Difference from
conversion of
915,704.03 -2,267,087.03 -2,286,444.88 19,357.85 -1,370,740.85
financial statements
in foreign currency
Other comprehensive
915,704.03 -142,861,056.33 -142,880,414.18 19,357.85 -141,964,710.15
Income Total
28. Surplus reserves
Increase in Current Decrease in Current Closing
Item Opening Balance
Period Period Balance
Statutory surplus 753,494,000
753,494,000.00
reserves .00
753,494,000
Total 753,494,000.00
.00
Statements for surplus reserves include increase or decrease changes and change
reasons this period.
The legal surplus reserve has reached 50% of the registered capital. The legal surplus
reserve was not withdrawn in the current period
29. Undistributed profits
Item Current Period Previous Period
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Undistributed profit before adjustment at the
26,511,938,505.25 23,049,443,346.09
end of the last year
Undistributed profit after adjustment at the
26,511,938,505.25 23,049,443,346.09
beginning of year
Plus: net profit attributable to owners of the
8,115,189,794.69 6,627,169,959.16
parent company for the current period
Ordinary share dividends payable 3,842,819,400.00 3,164,674,800.00
Undistributed profits at the end of the period 30,784,308,899.94 26,511,938,505.25
Statements for adjusting undistributed profits at the beginning of the period:
Due to retrospective adjustment according to Accounting Standards for Business
Enterprises and related new rule, undistributed profit at the beginning
increases/decreases by CNY 0.00.
Due to changes of accounting policies, undistributed profit at the beginning
increases/decreases by CNY 0.00.
Due to correction of accounting errors, undistributed profit at the beginning
increases/decreases by CNY 0.00.
Due to other influences, undistributed profit at the beginning totally increases/decreases
by CNY 0.00.
30. Operating revenue and cost of sales
Current period amount Previous period amount
Item
Operating Revenue Cost of sales Operating Revenue Cost of sales
Primary business 23,186,902,149.00 5,527,417,445.92 19,468,365,663.88 6,285,763,095.97
Other business 972,899,845.68 825,824,752.35 449,576,574.28 395,385,466.19
Total 24,159,801,994.68 6,353,242,198.27 19,917,942,238.16 6,681,148,562.16
31. Taxes and surcharges
Item Current period amount Previous period amount
Consumption tax 3,052,824,791.60 719,619,698.60
Urban maintenance and construction
306,402,753.67 187,348,938.98
tax
Educational surcharge 304,586,562.85 158,110,821.96
Property tax 61,463,159.37 56,062,041.01
Land use tax 22,733,353.58 21,020,413.58
Stamp tax 10,995,368.32 9,705,637.17
Increment tax on land value 10,699,953.12
Environmental protection tax 224,031.57
Others 2,280.00
Total 3,769,929,974.08 1,151,869,831.30
Other statements：
According to Notice on further Strengthening the Collection and Management of Liquor
Consumption Tax (Guoshuihan [2017] No. 144) issued by the State Administration of
Taxation(SAT) issued, if a liquor manufacturing enterprise sets up muti-level sales units
selling liquor, the SAT should verify the lowest assessable price of the manufacturing
enterprise based on external sales price of final sales unit. Since 1 May 2017, the lowest
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assessable price of liquor consumption tax has been adjusted to 60% uniformly from
50% to 70%. The tax payment of the Company’s liquor consumption tax has been
changed from withholding and remitting tax by trustee from direct payment by the liquor
manufacturing enterprise since 1 September 2017. The accounting method of
consumption tax was changed from manufacturing consignment reckoned in cost of
liquor production to self-production and self-sale reckoned in consumption taxes and
surcharges. The tax price of liquor consumption tax with ad valorem taxation has bee
changed from composite assessable price to the lowest assessable price of the
manufacturing enterprise based on external sales price of final sales unit since 1 May
2017.
32. Selling and distribution expenses
Item Current Period Previous Period
Advertising promotion expense 1,492,333,124.96 1,210,783,150.98
Payroll 505,358,495.38 484,601,462.80
Shipping and handling
5,385,839.29 233,747,902.25
cost[Note]
Labor expense 94,353,482.05 112,430,439.21
Travel expense 371,943,599.53 275,629,936.19
Business entertainment
2,468,968.74 1,881,714.48
expense
Other expense 89,558,118.27 68,372,501.14
Total 2,561,401,628.22 2,387,447,107.05
Other statements:
The transportation cost of finished goods was previously borne by the Company, and it
was borne by the distributor in this period.
33. General and administrative expenses
Item Current Period Previous Period
Payroll 645,451,421.56 546,050,904.30
Travel expense 51,131,089.76 46,464,950.04
Office allowance 9,563,500.30 9,035,598.20
Wate, electric and steam expense 64,140,517.86 55,857,399.91
Business entertainment expense 17,889,974.15 13,876,207.36
Depreciation cost 473,056,556.54 409,604,948.24
Rental expense 9,114,114.28 12,784,133.46
Repair charge 42,487,322.35 45,643,052.23
Amortization of intangible assets 50,118,316.96 45,154,640.83
Vehicle use expense 19,765,733.87 15,547,860.17
Shipping and handling cost 43,220,136.60 52,448,446.71
Other expense 278,326,418.38 253,934,718.28
Total 1,704,265,102.61 1,506,402,859.73
34. Research and Development expenses
Item Current Period Previous Period
Materials expenses 5,487,765.94 7,595,141.60
Payroll 13,387,099.46 10,757,741.42
Other expense 8,690,352.23 7,392,364.18
Total 27,565,217.63 25,745,247.20
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35. Financial expenses
Item Current Period Previous Period
Interest expenses 3,273.00 3,927.00
Less: Interest income 69,133,580.05 48,793,842.12
Plus: Losses from currency exchange 652,223.14 11,705,912.52
Plus: Bank charges 3,339,447.15 3,171,671.13
Total -65,138,636.76 -33,912,331.47
36. Impairment losses
Item Current Period Previous Period
Bad debt loss 1,098,948.45 2,151,140.21
Inventory value loss 920,789.05
Goodwill impairment loss 19,795,848.86
Total 1,098,948.45 22,867,778.12
37. Other income
Sources of other income Current Period Previous Period
Government grants received 59,870,221.67 44,745,640.94
Withholding personal tax commission 3,482,761.39
Total 63,352,983.06 44,745,640.94
38. Investment income
Item Current Period Previous Period
Investment income from long-term equity
1,819,591.30 -1,299,882.30
investments under the equity method
Investment income gained during the
period of holding the available-for-sale 35,123,288.49 17,800,330.17
financial assets and others
Investment income from disposing
56,995,537.28 90,627,738.02
available-for-sale financial assets
Other investment income[Note] 824,354,377.42 516,824,879.08
Total 918,292,794.49 623,953,064.97
Other statements:
Other investment income is the investment income generated by the purchased financial products.
39. Gains from disposal of assets
Sources of gains from disposal of
Current Period Previous Period
assets
Gains from disposal of fixed assets 24,568,477.22 -8,598,844.11
40.Non-operating incomes
Current Period Previous Period The amount included in
Item
the extraordinary
Liquidated damages income 15,698,217.08 11,966,175.47 15,698,217.08
Withholding personal tax
2,400,925.65
commission
Compensation payment 10,840,761.81 4,244,301.19 10,840,761.81
Account payables that are
9,540,839.98 9,540,839.98
unable to pay
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Others 1,851,187.31 1,210,652.45 1,851,187.31
Total 37,931,006.18 19,822,054.76 37,931,006.18
41. Non-operating expenses
Current Period Previous Period The Amount Included in
Item
Extraordinary
Losses from retirement of
2,364,904.26 2,364,904.26
fixed asset
Donation expenses 8,890,000.00 4,255,000.00 8,890,000.00
Integrated fund 68,150.83 77,868.28
Reparations 227,180.00 441,197.00 227,180.00
Others 846,799.20 3,566,467.53 846,799.20
Total 12,397,034.29 8,340,532.81 12,328,883.46
42. Income tax expense
（1）Statement of income tax expense
Item Current Period Previous Period
Current Period Income Tax 2,792,139,209.45 2,316,822,437.89
Deferred Income Tax -68,283,315.11 -87,654,013.74
Total 2,723,855,894.34 2,229,168,424.15
（2）Adjustment for Accounting Profit and Income tax expense
Item Current Period Amount
Income Tax Expenses Determined by
10,839,185,788.84
Statutory/Applicable Tax Rate
Impact from Subsidiaries’ Different Tax Rates 2,709,796,447.21
Adjust for Impact from Income Tax Expense in
-1,107,326.22
Previous Period
Impact from Non-taxable Income 6,716,079.57
Non-Deductible Costs, Expenses and Losses -7,149,187.35
Deductible from Deferred Tax Assets in Previous
6,906,147.12
Period
Temporary Differences Due to Unrecognized
-643,676.49
Deferred tax Asset during Current Period
Others 9,337,410.50
Income Tax Expense 2,723,855,894.34
43. Other comprehensive income
Detailsin Notes VI. 27 “Other Comprehensive Incomes”
44. Notes to the cash flow statement
（1）Cash received from other operation activities
Item Current Period Previous Period
Risk deposit 41,386,027.21 47,312,595.70
Security deposit 1,078,922,221.42 153,130,574.87
Interest income 69,133,580.05 48,793,842.12
Liquidated damages income 15,698,217.08 16,210,476.66
Withholding personal tax 3,482,761.39 2,400,925.65
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
commission
Government grants 51,034,055.00 35,893,640.94
Others 233,913,582.83 123,690,396.17
Total 1,493,570,444.98 427,432,452.11
（2）Cash paid for other operating activities
Item Current Period Previous Period
Transportation fee 73,756,101.88 275,767,664.19
Advertising promotion expense 1,514,147,166.86 1,150,193,005.98
Rental expense 11,809,301.97 15,515,018.50
Repair charge 42,532,923.93 45,714,951.47
Travel expense 393,625,149.65 313,614,903.30
Entertainment expense 20,358,942.89 15,832,355.68
Insurance expenses 4,809,096.29 2,398,922.19
Labor expense 135,194,429.87 113,395,206.68
Others 990,691,742.63 282,226,385.55
Total 3,186,924,855.97 2,214,658,413.54
（3）Cash received for other financing activities
Item Current Period Previous Period
Letter of credit guarantee deposit 1,500,000.00
Total 1,500,000.00
（4）Cash paid for other financing activities
Item Current Period Previous Period
Payments for the loans to original
shareholders of a subsidiary
246,204,388.41
before the business combinations
not under common control
Letter of credit guarantee deposit 1,500,000.00
Total 247,704,388.41
45. Supplementary information to consolidated statement of cash flow
（1）Supplementary information to consolidated statement of cash flow
Item Current Period Previous Period
Reconciliation of net profit to cash
-- --
flow from operating activities
Net profit 8,115,329,894.50 6,618,786,143.67
Add: provision for asset impairment 1,098,948.45 22,867,778.12
Depreciation of fixed asset, oil
andgas assets and productive 707,143,699.48 644,638,788.64
biological assets
Amortization of intangible assets 50,118,316.96 45,154,640.83
Amortization of long-term deferred
184,008.16 1,101,434.65
expenses
Losses from disposal of fixed assets,
intangible assets and other long-term -24,568,477.22 8,598,844.11
assets
Losses on write-off of fixed assets 2,364,904.26
Financial expenses 655,496.14 11,709,839.52
Losses on investments -918,292,794.49 -623,953,064.97
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Item Current Period Previous Period
Decrease in deferred tax asset -64,344,859.11 -81,584,147.28
Increase in deferred tax liabilities -3,938,515.05 -541,555.63
Decrease in inventory -1,027,648,654.29 -634,118,034.37
Decrease in operation receivables 49,163,073.33 -20,895,686.14
Increase in operation payables 2,169,483,775.16 891,404,818.16
Net Cash Flow from Operating
9,056,748,816.28 6,883,169,799.31
Activities
Significant investing and
financing activities not involving -- --
cash flow
Net change in cash andcash
-- --
equivalents
Closing balance of cash 3,615,348,307.97 1,749,952,876.18
Less：opening balance of cash 1,749,952,876.18 2,456,627,358.97
Net change in cash and cash
1,865,395,431.79 -706,674,482.79
equivalents
（2）Composition of cash and cash equivalents
Item Closing Balance Opening Balance
Cash 3,615,348,307.97 1,749,952,876.18
Including：cash on hand 24,103.07 4,883.33
Unrestricted bank deposit 3,602,515,767.58 1,726,983,843.15
Other unrestricted cash & cash
12,808,437.32 22,964,149.70
equivalents
Closing balance of cash
3,615,348,307.97 1,749,952,876.18
andcash Equivalents
46. Foreign currency transactions
(1) Foreign currency balance
Closing Balance in
Item Exchange rate Closing Balance in CNY
foreign currency
Cash and cash equivalents -- -- 50,283,591.25
Including：USD 5,234,266.36 6.8632 35,923,816.88
EUR
HKD 1,153,729.70 0.8762 1,010,897.96
CLF 1,356,097,790.00 0.0098436 13,348,876.41
Other receivables 240,078.59
Including：HKD 273,999.76 0.8762 240,078.59
Accounts payable 3,392,242.64
Including：USD 494,265.45 6.8632 3,392,242.64
Other payables 3,005,704.13
Including：HKD 3,430,385.91 0.8762 3,005,704.13
Accounts receivables -- --
Including：USD
EUR
HKD
Long-term loans -- --
Including：USD
EUR
HKD
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(2) Description of the overseas business entity, including the important foreign
business entity, which shall disclose its main foreign business place, bookkeeping
standard currency and selection basis, and shall also disclose the reason for the
change of the bookkeeping standard currency.
√ Applicable N/A
Foreign business entities Operation Site Functional Currency Choosing Reason
JSSJ Industry （HK） Holdings Currency in the main
economic
Co., Limited Hong Kong, China HKD
environment of
business operations
ZYG E-Commerce HK Limited Currency in the main
economic
Hong Kong, China HKD
environment of
business operations
ZYG LTD Currency in the main
economic
Cayman Islands USD
environment of
business operations
Yanghe International Currency in the main
Investment Ltd economic
British Virgin Islands USD
environment of
business operations
ZYG Technology Investment Currency in the main
Ltd economic
British Virgin Islands USD
environment of
business operations
Yanghe Chile SPA Currency in the main
economic
Santiago, Chile PESO
environment of
business operations
47. Government grants
（1）Details of government grants
Amount included in
Item Amount Presentation
profit or loss
Funds for supporting local
9,081,955.00 Other income 9,081,955.00
industries
Guiding funds for the
development of local 23,845,100.00 Other income 23,845,100.00
industries
Funds for local industrial
4,000,000.00 Other income 4,000,000.00
development
Subsidy of pollution
3,000,000.00 Other income 3,000,000.00
discharge
2017 enterprise research
and development expense
1,000,000.00 Other income 1,000,000.00
provincial financial subsidy
funds
2017 Siyang county
industrial development 1,000,000.00 Other income 1,000,000.00
guidance funds
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Subsidies for the clean
renovation of coal-fired 3,800,000.00 Other income 3,800,000.00
boilers
2017 Provincial
supplementary funds for the
870,000.00 Other income 870,000.00
training of highly skilled
talents in short supply
The first batch of special
funds for 2017 talent
630,000.00 Other income 630,000.00
introduction needed for
development
Special funds for urgent
needed talents for the
610,000.00 Other income 610,000.00
development of north
Jiangsu
The first batch of 2017 award
and subsidy projects of
municipal industrial 513,000.00 Other income 513,000.00
development guidance fund
(industrial development)
Industrial tourism toilet
340,000.00 Other income 340,000.00
special guide fee
2018 Special fund for
provincial business
300,000.00 Other income 300,000.00
development (e-commerce
development project)
2018 Provincial key research
and development plan
(industrial foresight and 300,000.00 Other income 300,000.00
generic key technology)
project
Suqian guiding funds for
150,000.00 Other income 150,000.00
industrial development
2017 Siyang County Finance
80,000.00 Other income 80,000.00
Bureau tourism special funds
Others 1,514,000.00 Other income 1,514,000.00
Transfer from the deferred
8,836,166.67 Other income 8,836,166.67
income in the current period
Total 59,870,221.67 59,870,221.67
VIII. Changes in consolidated scope
1. Others
Establishment of subsidiaries
(1) On June 2018, the Company and its controlling subsidiary Su Wine Group Jiangsu
Wealth Management Co., Ltd. respectively subscribed CNY 150,000 to set up Jiangsu
Yanghe Investment Management Co., Ltd.. It is included in the consolidated financial
statements from June 2018.
(2) On May 2018, the controlling subsidiary Su Wine Group Trade Co., Ltd. subscribed
CNY 50,000 to set up Su Wine Group Nanjing Operation Management Co., Ltd. It is
included in the consolidated financial statements from May 2018.
(3) On November 7 2018, the controlling subsidiary Su Wine Group Trade Co., Ltd.
subscribed 10 million yuan to set up Jiangsu Zhongshiji Wine Industry Co., Ltd. As of
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
December 31 2018, it has not made any actual investment.It is included in the
consolidated financial statements from November 2018.
Cancellation of subsidiaries
(1) Sihong Shuangtai Package Co., Ltd., the controlling subsidiary in this period,
conducted liquidation and cancellation. On May 29, 2018, it obtained the notice of
company approval for cancellation registration issued by Sihong County Market
Supervision and Administration Bureau.It will no longer be included in the consolidated
financial statements from June 2018.
(2) The controlling subsidiary, Sue Wine Group Trade Co., Ltd. merged Nanjing Huiteng
Media Technology Co., Ltd. On November 7, 2018, it obtained the notice of company
approval for cancellation registration issued by Nanjing Jianye District Market
Supervision and Administration Bureau.
IX. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
Jiangsu Yanghe Suqian, Jiangsu Suqian, Jiangsu
Liquor package 100.00% Establishment
Package Co., Ltd. province province
Nanjing Yanghe Blue Nanjing, Jiangsu Nanjing, Jiangsu
Commerce 100.00% Establishment
Classic Co.,Ltd. province province
Beijing Yanghe
Commerce and Fengtai,Beijing Fengtai,Beijing Commerce 100.00% Establishment
Trade Co.,Ltd.
Jiangsu Huaqu Wine Nanjing, Jiangsu Nanjing, Jiangsu
Commerce 97.00% Establishment
Group Co.,Ltd. province province
Suqian
Suqian, Jiangsu Suqian, Jiangsu
TianhaiCommerce Commerce 100.00% Establishment
province province
and Trade Co.,Ltd.
HuaianHuaqu Wine
Huaian, Jiangsu Huaian, Jiangsu
Development Commerce 100.00% Establishment
province province
Co.,Ltd.
Suqian Yanghe Suqian, Jiangsu Suqian, Jiangsu
Hotel industry 100.00% Establishment
Guibinguan Co.,Ltd. province province
Jiangsu Huaqu Wine
Nanjing, Jiangsu Nanjing, Jiangsu
Group Nanjing Commerce 100.00% Establishment
province province
Co.,Ltd.
Su Wine Group Suqian, Jiangsu Suqian, Jiangsu
Commerce 83.63% 16.37% Establishment
Trade Co.,Ltd. province province
Wuxi Huaqu Wine
Wuxi, Jiangsu Wuxi, Jiangsu
Development Commerce 100.00% Establishment
province province
Co.,Ltd.
Taizhou Huaqu Wine
Taizhou, Jiangsu Taizhou, Jiangsu
Development Commerce 100.00% Establishment
province province
Co.,Ltd.
Jiangsu Huaqu Wine
Nantong, Jiangsu Nantong, Jiangsu
Group Nantong Commerce 100.00% Establishment
province province
Co.,Ltd.
Jiangsu Huaqu Wine
Suzhou, Jiangsu Suzhou, Jiangsu
Group Suzhou Commerce 100.00% Establishment
province province
Co.,Ltd.
Jiangsu Huaqu Wine
Yancheng, Yancheng, Jiangsu
Group Yancheng Commerce 100.00% Establishment
Jiangsu province province
Co.,Ltd.
Jiangsu Yanghe Suqian, Jiangsu Suqian, Jiangsu Commerce 100.00% Establishment
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
Liquor Operation province province
Mangement Co.,Ltd.
Jiangsu Shuanggou
Sihong, Jiangsu Sihong, Jiangsu
Liquor Commerce 100.00% Establishment
province province
OperationCo.,Ltd.
Jiangsu Dongdi
Suqian, Jiangsu Suqian, Jiangsu
Union International Commerce 100.00% Establishment
province province
Trade Co.,Ltd.
Jiangsu
Dongdixinghui Suqian, Jiangsu Suqian, Jiangsu
Commerce 100.00% Establishment
International Trade province province
Co.,Ltd.
Suqian Blue Dream Suqian, Jiangsu Suqian, Jiangsu
Commerce 100.00% Establishment
Trade Co.,Ltd. province province
Siyang Lantu Liquor Siyang, Jiangsu Siyang, Jiangsu
Commerce 100.00% Establishment
OperationCo.,Ltd. province province
JSSJ Industry
Hong Kong,
（HK） Holdings Hong Kong, China CORP 100.00% Establishment
China
Co., Limited
Hubei Lihuacun Shiyan, Hubei Yunxian, Hubei
Commerce 100.00% Establishment
Trade Co.,Ltd. province province
Business
combinations
Jiangsu Shuanggou
Sihong, Jiangsu Sihong, Jiangsu Liquor manufacture involving
Distillery Stock Co., 99.99% 0.01%
province province and sales enterprises not
Ltd.
under common
control
Business
combinations
Sihong Shuangtai Sihong, Jiangsu Sihong, Jiangsu involving
Liquor packaging 100.00%
Package Co.,Ltd. province province enterprises not
under common
control
Business
combinations
Sihong Shuanggou
Sihong, Jiangsu Sihong, Jiangsu Waste material involving
Antai waste recycling 100.00%
province province recycle enterprises not
Co.,Ltd.
under common
control
Business
combinations
Hubei Lihuacun
Shiyan, Hubei Yunxian, Hubei Process liquor, involving
Liquor Industry 100.00%
province province wine and fruit wine enterprises not
Co.,Ltd.
under common
control
Business
combinations
Ningxiang Miluochun Manufacture and
Ningxiang, Ningxiang, Hunan involving
Liquor Industry sale of liquor and 100.00%
Hunan province province enterprises not
Co.,Ltd. compound wine
under common
control
Business
combinations
Binxian, Binxian,
Harbin Binzhou involving
Heilongjiang Heilongjiang Liquor-making 100.00%
Brewery Co.,Ltd. enterprises not
province province
under common
control
Assets/investment
Su Wine Group
Nanjing, Jiangsu Nanjing, Jiangsu management,
Jiangsu Wealth 100.00% Establishment
province province information
Management Co.,Ltd.
consultation
Ningxiang Miluochun Ningxiang, Ningxiang, Hunan
Commerce 100.00% Establishment
Trade Co.,Ltd. Hunan province province
Jinagsu Kelite Biological
Suqian, Jiangsu Suqian, Jiangsu
Biology Technology engineering 100.00% Establishment
province province
Research Institute research, enzyme
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
Co.,Ltd. preparation
research and
technology transfer
Xuzhou Huaqu Wine
Xuzhou, Jiangsu Xuzhou, Jiangsu
Development Commerce 100.00% Establishment
province province
Co.,Ltd.
Suqian Sky Blue Suqian, Jiangsu Suqian, Jiangsu
Commerce 100.00% Establishment
Trade Co.,Ltd. province province
Shiyan Yunyang Liquor, compound
Shiyan, Hubei Shiyan, Hubei
Lihuacun Package wine, health wine 100.00% Establishment
province province
Service Co.,Ltd. packaging service
Network
technology
development,
Jiangsu Lion and
Nanjing, Jiangsu Nanjing, Jiangsu technical
Sheep Network 100.00% Establishment
province province consultation,
Technology Co.,Ltd.
technical services;
Software
development
Business
combinations
Jiangsu Zhaiyougou Nanjing, Jiangsu Nanjing, Jiangsu involving
Commerce 100.00%
E-commerce Co.,Ltd province province enterprises not
under common
control
Business
combinations
NanjingTongmeng
Nanjing, Jiangsu Nanjing, Jiangsu Freight Transport, involving
City Logistics 99.99%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Nanjing jinling
Nanjing, Jiangsu Nanjing, Jiangsu Freight Transport, involving
Tongmeng City 51.00%
province province Warehouse service enterprises not
Logistics Co.,Ltd.
under common
control
Business
Import and export
combinations
Nanjing Oubaosi business of self-run
Nanjing, Jiangsu Nanjing, Jiangsu involving
International Trade goods, agency 100.00%
province province enterprises not
Co.,Ltd. goods and
under common
technology
control
Business
combinations
Huaian Tongmeng
Huaian, Jiangsu Huaian, Jiangsu Freight Transport, involving
City Logistics 51.00%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
Changzhou combinations
Jiezzhong Tongmeng Changzhou, Changzhou, Freight Transport, involving
51.00%
City Logistics Jiangsu province Jiangsu province Warehouse service enterprises not
Co.,Ltd. under common
control
Business
combinations
Nantong Tongmeng
Nantong, Jiangsu Nantong, Jiangsu Freight Transport, involving
City Logistics 51.00%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Suzhou Tongmeng
Suzhou, Jiangsu Suzhou, Jiangsu Freight Transport, involving
City Logistics 51.00%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
Business
combinations
Taizhou Tongmeng
Taizhou, Jiangsu Taizhou, Jiangsu Freight Transport, involving
City Logistics 51.00%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Wuxi Tongmeng City Wuxi, Jiangsu Wuxi, Jiangsu Freight Transport, involving
51.00%
Logistics Co.,Ltd. province province Warehouse service enterprises not
under common
control
Business
combinations
Yancheng Tongmeng
Yancheng, Yancheng, Jiangsu Freight Transport, involving
City Logistics 51.00%
Jiangsu province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Zhenjiang Tongmeng
Zhenjiang, Zhenjiang, Jiangsu Freight Transport, involving
City Logistics 51.00%
Jiangsu province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Yangzhou Tongmeng
Yangzhou, Yangzhou, Jiangsu Freight Transport, involving
City Logistics 53.00%
Jiangsu province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
combinations
Suqian Tongmeng Freight Transport,
Suqian, Jiangsu Suqian, Jiangsu involving
City Logistics Warehouse 51.00%
province province enterprises not
Co.,Ltd. service
under common
control
Business
combinations
Pizhou Tongmeng
Xuzhou, Jiangsu Xuzhou, Jiangsu Freight Transport, involving
City Logistics 51.00%
province province Warehouse service enterprises not
Co.,Ltd.
under common
control
Business
Lianyungang combinations
Huaxing Tongmeng Lianyungang, Lianyungang, Freight Transport, involving
51.00%
City Logistics Jiangsu province Jiangsu province Warehouse service enterprises not
Co.,Ltd. under common
control
Business
combinations
Jiangsu Zhaibianli E- Nanjing, Jiangsu Nanjing, Jiangsu involving
Commerce 100.00%
commerce Co.,Ltd province province enterprises not
under common
control
Business
Hongkong combinations
Zhaiyougou Hong involving
Hong Kong,China Commerce 100.00%
International Trade Kong,China enterprises not
Co.,Ltd under common
control
Business
combinations
Liquor production;
Guizhou Guijiu Guiyang, Guiyang, Guizhou involving
Liquor and alcohol 100.00%
Co.,Ltd. Guizhou province province enterprises not
sales
under common
control
Guizhou Guijiu Liquor Guiyang, Guiyang, Guizhou Commerce 100.00% Establishment
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Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
Operation Guizhou province province
Management Co.,Ltd.
Guizhou Guijiu Trade Guiyang, Guiyang, Guizhou
Commerce 100.00% Establishment
Co.,Ltd. Guizhou province province
Guijiu series liquor,
Guizhou Guijiu Guiyang, Guiyang, Guizhou compound wine,
100.00% Establishment
Package Co.,Ltd. Guizhou province province health care wine
packaging
Jinagsu Guanmeng Information
Suzhou, Jiangsu Suzhou, Jiangsu
Information technology 100.00% Establishment
province province
Technology Co.,Ltd. development
Business
combinations
ZYG E-Commerce Hong Industrial involving
Hong Kong,China 100.00%
HK Limited Kong,China investment enterprises not
under common
control
Business
combinations
Industrial involving
ZYG LTD Cayman Islands Cayman Islands 69.08%
investment enterprises not
under common
control
YangHe International British Virgin British Virgin Industrial
100.00% Establishment
Investment Ltd Islands Islands investment
Internet technology
Nanjing Huiteng development,
Nanjing, Jiangsu Nanjing, Jiangsu
Media Technology design, production, 100.00% Establishment
province province
Co.,Ltd. agency, release
announcement
Jiangsu Shuanggou Healthy wine,
Healthy Liquor Suqian, Jiangsu Suqian, Jiangsu nutrition and health
100.00% Establishment
Research institute province province food research and
Co.,Ltd. development
Business
combinations
ZYG Technology British Virgin British Virgin Industrial involving
71.03%
Investment Ltd Islands Islands investment enterprises not
under common
control
Jiangsu Blue Dream Suqian, Jiangsu Suqian, Jiangsu
Commerce 100.00% Establishment
E-commerce Co.,Ltd. province province
Network
technology
Jiangsu Yanghe
Nanjing, Jiangsu Nanjing, Jiangsu development,
Weiketang Network 100.00% Establishment
province province technical
Technology Co.,Ltd.
consultation,
technical servic
Business
combinations
Guizhou Welcome Renhuai, Renhuai, Guizhou Liquor manufacture involving
100.00%
Drink Stock Co., Ltd. Guizhou province province and sales enterprises not
under common
control
Business
Dream Blue Industrial combinations
Chuanhaihui (Shiyan) Shiyan, Hubei Shiyan, Hubei investment, Online involving
95.00%
Trade Investment province province business enterprises not
Co.,Ltd. consultation under common
control
Road general
Suqian Su Wine Suqian, Jiangsu Suqian, Jiangsu cargo transport,
100.00% Establishment
Logistics Co.,Ltd. province province cargo distribution,
freight forwarder
Movable and real
Yanghe Chile SPA
Santiago, Chile Santiago, Chile estate investment 100.00% Establishment
services, building
202
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Major business Place of Shareholding Acquisition
Name of subsidiaries Nature of business
location registration Direct Indirect method
construction
services
Foreign
Jiangsu Yanghe investment, Asset
Suqian, Jiangsu Suqian, Jiangsu
Investment management, 50.00% 50.00% Establishment
province province
Management Co.,Ltd. Investment
consulting
Enterprise
management
consulting;
Su Wine Group
Nanjing, Jiangsu Nanjing, Jiangsu Industrial
Nanjing Operation 100.00% Establishment
province province investment; Food
Management Co.,Ltd.
sales; Gift sales;
House lease; Hotel
management
Jiangsu Zhongshiji Nanjing, Jiangsu Nanjing, Jiangsu Food sales, Gift
100.00% Establishment
liquor Co.,Ltd. province province sales
2. Interests in associates and a joint venture
(1) The impact of the Group’s associates on the Group is not significant.
Summarized information is as follows:
Closing Balance/Amount in Opening Balance/Amount in
current period previous period
Associates: -- --
Aggregated carrying amount of
9,423,328.82 1,980,046.94
investments
Aggregate of the following items
-- --
calculated in proportion to shareholding
Joint ventures: -- --
Aggregate of the following items
-- --
calculated in proportion to shareholding
--Net profit 1,819,591.30 -1,299,882.30
-- Total comprehensive income 1,819,591.30 -1,299,882.30
X. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainly
including: Credit risk, Liquidity risk, Market Risk, etc. The Company's management is fully
responsible for the formulation of risk management objectives and policies, and takes
responsibility for risk management objectives and policies. The objective of the
Company’s risk management is to identify and analysis risk, minimizing the adverse
impact of financial risks without excessive influence on the company's competitiveness
and resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform its
obligations and causes the financial losses of the other party. Credit risk mainly related to
notes receivables and accounts receivable, in order to control the risk, the Company
takes the following measures:
(1) Notes receivables and Accounts receivables
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The Company mainly trades with franchiser, according to company credit policy,and
adopts the way of delivery after the payments finished. For some group purchase
business, it only deals with the reputable group clients, and continuously monitors the
balance of notes receivables and accounts receivables, as a result, there is no collateral
required, and credit risk management concentrates on the clients. The balance of notes
receivables and accounts receivablesare small till December 31, 2018. The Company
does not hold any collateral or other credit enhancement for the balance of accounts
receivables.
(2) Other receivable
The other receivables are mainly deposits, security deposits and petty cash, employee
business loan and so on. The Company manages other receivables and continuously
monitors its balance, to ensure the Company not to face significant bad debt risks.
The amount included in notes receivables and accounts receivables which are not
overdue, impaired, and financial assets overdue but not impaired, duration analysis are
as follows:
Item Closing Balance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Notes receivable
and Account 247,072,542.59 995,518.37 123,378.21 2,061,671.49 250,253,110.66
receivable
Other receivable 5,600,638.03 7,283,730.25 1,345,777.77 16,366,022.83 30,596,168.88
（Continued）
Item Opening Balance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Notes receivable
and Account 217,962,053.12 3,621,893.85 12,493.33 2,049,351.46 242,957,583.97
receivable
Other receivable 14,638,635.49 2,497,442.07 7,213,051.26 14,839,793.55 39,188,922.37
(3) The impairment offinancial assets are CNY 65,747,048.93 depositin ICBC Zhenzhou
Jiefang Road Branch and Kaifeng Haode Branch.The security depositpaid to Jiangsu
Juntai Properties Co., Ltd. and Suqian Guotai Department Store Co.,Ltd. bankruptcy
administrator was CNY 15,000,000.00. The bad debts provision is CNY 47,839,924.27,
and for the investment in Suqian Traffic Investment Co,Ltd.,the available-for-sale
financial assets measured by cost is CNY 948,000.00, with full impairment provision.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligations
related to financial liabilities. The Company uses various financing methods such as bill
clearing and bank loan to optimize the financing structure and maintain the balance
between financing continuity and flexibility.
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The Company's financial liabilities according to the expiration of the remaining contract
obligations as follows:
Item Closing Balance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Notes payable
and Account 1,261,282,397.89 1,261,282,397.89
payables
Other payables 6,457,301,511.01 6,457,301,511.01
long-term loan 109,088.00 109,088.00
Special
198,404,248.85 198,404,248.85
payable
(Continued)
Item Opening Balance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Notes payable
and Account 1,119,603,574.47 1,119,603,574.47
payables
Other
5,620,040,515.94 5,620,040,515.94
payables
long-term loan 145,452.00 145,452.00
Special
199,107,530.75 199,107,530.75
payable
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due to
the fluctuation of market price, and it mainly includes: Interest rate risk, Foreign exchange
risk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flow
fluctuates due to the fluctuation of interest rate. The Company faces the risk of market
interest rate change mainly related to the Company's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assets
and liabilities in foreign currency. The less import and export business happened, the
lower impact of exchange rate fluctuation on company's operation.
The carrying amounts in CNY of the Company’s assets and liabilities denominated in
foreign currencies are summarized below:
Item Closing Balance Opening Balance
Balance in foreign Exchange Balance in Exchange
Balance in CNY Balance in CNY
currency rate foreign currency rate
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Item Closing Balance Opening Balance
Balance in foreign Exchange Balance in Exchange
Balance in CNY Balance in CNY
currency rate foreign currency rate
Cash and cash
equivalents
Include: USD 5,234,261.55 6.8632 35,923,783.86 54,045,724.59 6.5342 353,145,573.62
HKD 1,153,729.70 0.8762 1,010,897.96 988,300.75 0.83591 826,130.48
CLF 1,356,097,790.00 0.0098436 13,348,876.41
Other receivables
Include: USD
HKD 273,999.76 0.8762 240,078.59 227,665.60 0.83591 190,307.95
Available-for-sale
financial assets
Include: USD 9,660,971.29 6.8632 66,305,178.14 8,058,272.79 6.5342 52,654,366.05
CLF 28,928,067,943.20 0.009844 284,756,163.23
Account payables
Include: USD 494,265.45 6.8632 3,392,242.64 198,911.03 6.5342 1,299,724.45
CLF 6,139,589.00 0.009844 60,435.62
Other payables
Include: HKD 3,430,385.91 0.8762 3,005,704.13 2,436,507.98 0.83591 2,036,701.39
CLF 168,352.00 0.009844 1,657.19
Net amount 395,124,938.61 403,479,952.26
XI.Fair value disclosure
1. Continuous measurement at fair value and discontinuous
measurement at fair value
Closing fair value
Item
Level 1 Level 2 Level 3 Total
Disclosure of continuous
-- -- -- --
measurement at fair value
2. Available-for-sale financial assets 284,756,163.23 284,756,163.23
(2) Equity instrument investment
284,756,163.23 284,756,163.23
Disclosure of discontinuous
-- -- -- --
measurement at fair value
2. Determination basis of the market value of items measured
continuously and discontinuously within Level 1 of the fair value
hierarchy
Active market quote
Item Fair value
Transaction price Sources
Continuous measurement at fair value
Available-for-sale financial assets 284,756,163.23 284,756,163.23
Closing price in local
Include: Equity instrument investment 284,756,163.23 284,756,163.23
open market
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Total amount of assets measured at
284,756,163.23 284,756,163.23
fair value continuously
XII. Related parties and related party transactions
1. The parent company of the Company
Shareholdi Voting
Name of Parent Registration Registered ng Ratio by Ratio by
Business Nature
Company Place Capital the Parent the Parent
Company Company
Sales of brewing
machinery equipment,
export of liquor, import
of various raw and CNY
Jiangsu Yanghe Suqian,
auxiliary materials, 110.00 34.16% 34.16%
Group Co.,Ltd. Jiangsu
equipment and million
accessories required
for production,
industrial investment.
Information about the Company’s parent company
The final control party of the Company is State-owned Assets Supervision and
Administration Commission of Suqian
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to Note IX.1 Interests in
Subsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Notes.
Other joint ventures and associates whose related party transactions with the Company
in the current period or balance formed from related party transactions with the Company
in the prior period as follows:
Name of Joint Venture and Associate Relationship with the Company
Jiangsu Su Wine Cultural Transmission Co.,Ltd. Joint venture
Nanjing Hesong Culture TechnologyCo.,Ltd. Joint venture
Jiangsu Xinghe Investment Management Co.,Ltd. Joint venture
4. Other related party
Name of Other Related Party Relationship with the Company
Shanghai Haiyan Logistics Development Co.,Ltd. Holding 9.67% shares
Joint stock company, holding 5%
Suning Consumption Finance Co.,Ltd.
shares
Joint stock company, holding 12.50%
VSPT, Via San Pedro Tarapacá S.A.
shares
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5. Related party transactions
(1) Related transactions of purchase of goods / supply and receipt of labor
services
Table of Purchase of Goods / Receipt of Labor Services
Approved Whether it is over Amount in
Transaction Amount in
Related Party Transaction transaction amount previous
Content current period
amount or not period
VSPT, Via
San Pedro Red wine 23,075,164.23
Tarapacá S.A
Nanjing Hesong
Advertising and
Culture
general publicity 21,460,376.65
Technology
expense
Co.,Ltd.
Table of sales of goods/rendering of labor services
Amount in current
Related Party Transaction Content Amount in previous period
period
Shanghai Haiyan
Logistics Development Sales of liquor 24,698,678.39 21,254,112.01
Co.,Ltd.
Jiangsu Su WineCultural
Sales of liquor 34,464,141.85 29,337,312.84
Transmission Co.,Ltd.
(2) Related party leasing
The Company as Lessor：
Leasehold income Leasehold income
Name of lessee Type of leased asset recognized during recognized during
current reporting period previous reporting period
The Company as Lessee：
Leasing fee Leasing fee
recognized during recognized during
Name of lessor Type of leased asset
current reporting previous reporting
period period
Jiangsu Yanghe
Building 666,666.67
Group Co.,Ltd.
(3) Other related party transactions
Deposit business
Su Wine Group Jiangsu Wealth Management Co., Ltd, the holding subsidiary, collected
CNY 15,000.00 of one-year deposit in Suning Consumption Finance Co., Ltd and
collected deposit interest of CNY 9,903,472.22.
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Jiangsu Yanghe Investment Management Co., Ltd.,the holding subsidiary, deposited
CNY 50million, CNY 50 million, CNY 50 million, CNY 50 million, CNY 50 million and CNY
10 million of one-year deposits in Suning Consumption Finance Co., Ltd. on November 6,
November 9, November 16, November 19 and December 7, 2018 separately, with a total
deposit of CNY 300 million and an annual interest rate of 6.50%.
6. Receivables and payables of related parties
(1) Payables
Item Related Party Closing Balance Opening Balance
Advance from Shanghai Haiyan Logistics
8,427,121.32 244,800.00
customer Development Co.,Ltd.
Advance from Jiangsu Su WineCultural
4,541,664.83
customer Transmission Co.,Ltd.
Shanghai Haiyan Logistics
Other Payables 801,624.00 120,920.00
Development Co.,Ltd.
Jiangsu Su WineCultural
Other Payables 933,060.00 100,000.00
Transmission Co.,Ltd.
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet date
By the end of 31 December 2018, there were no significant commitments needed to be
disclosed.
2. Contingencies
(1) Significant contingencies existing on the balance date
Su Wine Group Trade Co.,Ltd., the holding subsidiary, deposited CNY 1.3 billion in ICBC
Zhengzhou Jiefang Road Branch and ICBC Kaifeng Dehao Branch. For the tort liability
dispute events, Su Wine Trade Group had started civil proceedings to recover losses
from the relevant responsible unit and person. On 12 February 2015, the Company
received the case acceptance notice from Jiangsu Suqian Intermediate People's
Courtand the court has put on record. According to the civil ruling paper from Jiangsu
Higher People's Court separately on 30 October 2015 and 14 December 2015, the above
tort liability dispute casewas accepted by Jiangsu Suqian Intermediate People's Court.
Some infringers involved in criminal offence were tried. By the end of 31 December 2018,
the amount not yet recovered was CNY65,747,048.93.
On July 16, 2018, regarding the tort liability dispute case of ICBC Zhengzhou Jiefang
Road Branch, Su Wine Group Trade Co., Ltd. applied for a change of claim, requesting
the defendant to jointly and severally compensate the plaintiff with CNY 46,025,000.00
of principal and interest loss during the deposit period (The interest loss is based on
CNY 103,250,000.00 and it is calculated from 21 May 2014 according to the loan interest
rate of the People's Bank of China in the same period and the same file. Among those,
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CNY 18,257,000.00 is calculatedtill 8September 2017, CNY 38,968,000.00 is calculated
till 13 December 2017, and CNY 46,025,000.00 is calculated till the actual date of
payment). The case has been heard twice by the Jiangsu Suqian Intermediate People's
Court and court debate was over, and the decision will be made at a later date.
Due to the need to further sort out and supply relevant evidences, Su Wine Group Trade
Co., Ltd. applied to withdraw the lawsuit about the tort liability dispute events involving
ICBC Kaifeng Haode Branch mentioned above on December 19, 2018.
Except for the above event, by the end of 31 December 2018, the Company had no other
significant contingencies required to be disclosed.
XIV. Post balance sheet event
1. The distribution of profits
Profits or dividends planed to be distributed 4,822,361,600.00
XV. Other important information
1. Segment information
(1) Other statement
The Company mainly engaged in liquor business, and it is unnecessary disclose the
division information data.
XVI. Notes to main items of parent company financial
statements
1. Notes receivable and accounts receivable
Item Closing Balance Opening Balance
Notes receivable 143,456,446.32 162,947,960.82
Accounts receivable 697,277,202.71 7,526,709,429.22
Total 840,733,649.03 7,689,657,390.04
(1) Notes receivable
1) Classification of notes receivable
Item Closing Balance Opening Balance
Bank acceptance bill 143,456,446.32 162,947,960.82
Total 143,456,446.32 162,947,960.82
2) Notes receivable that have been endorsed to other parties by the Company but have
not expired at the end of year
Item Derecognition at period end Not derecognition at period end
Bank acceptance bill 83,665,000.00
Total 83,665,000.00
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(2) Accounts receivable
1) Disclosure of accounts receivable by categories
ClosingBalance OpeningBalance
Book Balance Provision for bad debt Book Balance Provision for bad debt
Type
Proportion Book Value Proportion Book Value
Amount Proportion Amount Amount Proportion Amount
of Provision of Provision
Accounts receivable
tested for impairment on
the portfolio with 697,277,202.71 100.00% 697,277,202.71 7,526,709,429.22 100.00% 7,526,709,429.22
characteristics of credit
risk
Total 697,277,202.71 100.00% 697,277,202.71 7,526,709,429.22 100.00% 7,526,709,429.22
Accounts receivable with significant single amount and tested for impairment individually:
Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by aging analysis method:
Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by balance percentage method:
Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by other methods:
Other portfolios are account receivables of holding subsidiaries with no provision for bad debt.
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2) Bad debt provision of the current period
The amount of bad debt provision is CNY 0.00; amount of bad debt provision recovered or transferred back in the current period is CNY 0.00.
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3) Top five entities with the largest balances of the account receivables
Proportion in the
Name of debtors ClosingBalance Provision amount
total
Jiangsu Yanghe Liquor Operation
610,858,742.66 87.61
Management Co.,Ltd
Hubei Lihuacun Liquor Industry
75,497,839.31 10.83
Co.,Ltd.
Siyang Lantu Liquor Operation
10,920,620.74 1.56
Co.,Ltd.
Total 697,277,202.71 100.00
1. Other receivables
Item ClosingBalance Opening Balance
Dividend receivables 713,143.77 2,605,425,138.06
Other receivables 948,376,069.75 1,160,366,132.04
Total 949,089,213.52 3,765,791,270.10
(1) Dividend receivables
1) Dividend receivables
Item ClosingBalance Opening Balance
Jiangsu Shuanggou Distillery Stock Co.,Ltd. 713,143.77 2,605,425,138.06
Total 713,143.77 2,605,425,138.06
b) Significant dividend receivable whose aging is over 1 year
Whether impair and
Item Closing balance Overdue period Overdue reason
determination basis
None
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(2) Other receivables
1) Disclosure of other receivable by categories
ClosingBalance OpeningBalance
Book Balance Provision for bad debt Book Balance Provision for bad debt
Type
Proportion Book Value Proportion Book Value
Amount Proportion Amount Amount Proportion Amount
of Provision of Provision
Other receivables
with significant
single amount
15,000,000.00 1.55% 15,000,000.00 100.00% 15,000,000.00 1.27% 15,000,000.00 100.00%
and tested for
impairment
individually
Other receivables
tested for
impairment on the
950,030,841.74 98.45% 1,654,771.99 0.17% 948,376,069.75 1,161,729,311.41 98.73% 1,363,179.37 0.12% 1,160,366,132.04
portfolio with
characteristics of
credit risk
Total 965,030,841.74 100.00% 16,654,771.99 1.73% 948,376,069.75 1,176,729,311.41 100.00% 16,363,179.37 1.39% 1,160,366,132.04
Other receivable with significant single amount and tested for impairment individually：
√ Applicable N/A
ClosingBalance
Other receivables（by unit）
Other receivables Provision for bad debt Proportion of provision Reason
Jiangsu Juntai Properties Co.,Ltd., Suqian
Guotai Department Store Co.,Ltd. 15,000,000.00 15,000,000.00 100.00% Estimated unable to recover
bankruptcy administrator
Total 15,000,000.00 15,000,000.00 -- --
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In the portfolio, accounts receivable tested for impairment by aging analysis method：
√ Applicable N/A
Closing Balance
Aging Provision for bad Proportion of
Other receivables
debt provision
Subtotal of amount within 1 year
With in 1 year 1,647,100.22 82,355.01 5.00%
Subtotal of amount
1,647,100.22 82,355.01 5.00%
within 1 year
1-2 years 2,093,391.36 209,339.14 10.00%
2-3 years 177,136.79 53,141.04 30.00%
3-4 years 1,377,525.00 688,762.50 50.00%
4-5 years 169,299.40 135,439.52 80.00%
Over 5 years 485,734.78 485,734.78 100.00%
Total 5,950,187.55 1,654,771.99 27.81%
Statement of determining the basis of portfolio:
In the portfolio, accounts receivable tested for impairment by balance percentage method:
Applicable √ N/A
In the portfolio, other receivable tested for impairment by other methods：
Applicable √ N/A
2) Provision, recovery or reversal for bad debt in the current period.
The provision for bad debt was CNY 291,592.62 in the current period; the amount of
recovery or reversal was CNY 0.00.
Significant recovery or reversal for bad debt in the current period:
Company name recovery or reversal Way of recovery
3) Disclosure of other receivable by nature
Nature ClosingBalance OpeningBalance
Loans of subsidiaries within
944,080,654.19 1,155,861,401.41
the scope of the merger
Deposit 15,807,031.24 15,020,000.00
Business loans and cash
3,953,955.18 3,572,581.57
reserve
Other 1,189,201.13 2,275,328.43
Total 965,030,841.74 1,176,729,311.41
(4) Top five entities with the largest balances of the other receivables
Provisioning
Closing Proportion in
Company Name Category Aging amount at period
Balance total receivables
end
Guizhou Guijiu Loans 753,604,192.86 171,710,000.00 78.09%
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Provisioning
Closing Proportion in
Company Name Category Aging amount at period
Balance total receivables
end
Co.,Ltd. within 1 year ,
345,078,300.00
in 1 to 2 years,
236,815,892.86
2 to 3 years
56,069,261.60
with in 1 year ,
4,160,000.00 in
1 to 2 years,
4,373,000.00 in
Hubei Lihuacun
2 to 3years,
Liquor Industry Loans 139,841,961.60 14.49%
CNY
Co,Ltd.
16,600,000.00
in 3 to 4
years,CNY
39,800,000.00
in 4 to 5years
Jiangsu
Shuanggou
Loans 44,654,953.70 With in 1 year 4.63%
Distillery Stock
Co., Ltd.
Jiangsu Juntai
Properties
Co.,Lt., Suqian
Guotai
Department Deposit 15,000,000.00 Over 5 years 1.55% 15,000,000.00
Store Co.,Ltd.
bankruptcy
administrator
deposit
848,000.00 with
in 1 year,
Harbin Binzhou 290,000.00 in 1
Loans 4,887,100.00 0.51%
Brewery Co.,Ltd. to 2 years,
3,749,100.00 in
4 to 5 years
Total -- 957,988,208.16 -- 99.27% 15,000,000.00
3. Long-term equity investments
Closing Balance Opening Balance
Item Impairment Impairment
Book balance Book Value Book balance Book Value
provision provision
Investment in
7,365,139,180.24 0.00 7,365,139,180.24 5,408,241,180.24 0.00 5,408,241,180.24
subsidiaries
Investment of the
joint venture and
0.00 0.00 0.00 0.00 0.00 0.00
associated
enterprise
Total 7,365,139,180.24 7,365,139,180.24 5,408,241,180.24 5,408,241,180.24
(1) Investment in subsidiaries
Provision for Closing
impairment of balance of
Investee Opening Balance Increase Decrease Closing Balance
the current provision for
period impairment
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Provision for Closing
impairment of balance of
Investee Opening Balance Increase Decrease Closing Balance
the current provision for
period impairment
Jiangsu Yanghe
153,109,422.39 153,109,422.39
Package Co.,Ltd.
Suqian Yanghe
700,000.00 700,000.00
Guibinguan Co.,Ltd.
Jiangsu Shuanggou
1,713,152,320.00 1,713,152,320.00
Distillery Stock Co.,Ltd.
Su Wine Trade Group
285,225,078.23 285,225,078.23
Co.,Ltd.
Jiangsu Yanghe Liquor
Operation Managment 10,983,280.00 10,983,280.00
Co.,Ltd
Jiangsu Dongdi Union
International Trade 5,000,000.00 5,000,000.00
Co.,Ltd.
Jiangsu Dongdixinghui
International Trade 5,000,000.00 5,000,000.00
Co.,Ltd
Siyang Lantu Liquor
3,161,700.00 3,161,700.00
Operation Co.,Ltd.
Hubei Lihuacun Liquor
3,000,000.00 3,000,000.00
Industry Co.,Ltd.
Ningxiang Miluochun
2,129,000.00 2,129,000.00
Liquor Industry Co.,Ltd.
Harbin Binzhou
2,000,000.00 2,000,000.00
Brewery Co.,Ltd.
Su Wine Group Jiangsu
Wealth Management 3,000,000,000.00 3,000,000,000.00
Co.,Ltd.
Jinagsu Kelite Biology
Technology Research 10,000,000.00 10,000,000.00
Institute Co.,Ltd.
Jiangsu Lion and
Sheep Network 5,442,000.00 18,000.00 5,460,000.00
Technology Co.,Ltd.
Guizhou Guijiu Co.,Ltd. 193,300,000.00 193,300,000.00
Jiangsu Yanghe
Weiketang Network 300,000.00 300,000.00
Technology Co.,Ltd.
Dream Blue
Haichuanhui (Shiyan)
15,738,379.62 15,738,379.62
Trade Investment
Co.,Ltd.
Yanghe Chile SPA 456,880,000.00 456,880,000.00
Jiangsu Yanghe
Investment 1,500,000,000.00 1,500,000,000.00
Management Co., Ltd.
Total 5,408,241,180.24 1,956,898,000.00 7,365,139,180.24 0.00
4. Operating revenue and cost of sales
Current Period Previous Period
Item Operating Operating
Cost of sales Cost of sales
revenue revenue
Primary business 8,929,113,755.67 4,329,862,499.55 6,723,099,100.17 5,495,546,962.23
Other business 790,965,922.15 733,774,470.86 564,333,847.88 529,578,197.52
Total 9,720,079,677.82 5,063,636,970.41 7,287,432,948.05 6,025,125,159.75
5. Investment income
Item Current Period Previous Period
217
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Income from long-term equity
6,099,622,529.13 5,590,572,005.23
investments under the cost method
Income from long-term equity
investments under the equity -2,074,635.42
method
Investment income from the
disposal of long-term equity 5,873,795.89
investment
Investment income from holding
16,371,813.72 13,940,148.16
available-for-sale financial assets
Investment income from the
disposal of available-for-sale 56,995,537.28 90,627,738.02
financial assets
Other investment income 546,760,832.64 218,369,154.01
Total 6,719,750,712.77 5,917,308,205.89
XVII. Supplementary information
1. Detailed statement of non-recurring profits and losses
Applicable √ N/A
Item Amount Notes
Profit or loss from disposal of non-current
22,203,572.96
assets
Government grants accounted for, in the
profit or loss for the current period (except
for the government grants closely related to
59,870,221.67
the business of the Company and given at a
fixed amount or quantity in accordance with
the state's uniform standards)
Except for effectively hedging business
related to normal business operations of the
company, profit or loss arising from the
change in the fair value of held-for-trading
Disposal of available-
financial assets and liabilities, as well as 56,995,537.28
for-sale financial assets
investment profit or loss produced from the
disposal of held-for-trading financial assets
and liabilities and available-for-sale financial
assets
Other non-operating income and expenditure
27,967,026.98
except above-mentioned items
Other profit and loss items that conform to
the definition of non-recurring profits and 827,837,138.81
losses
Less: Effect of income tax 248,875,376.58
Effect of minority equity 139,932.20
Total 745,858,188.92 --
Explain the reasons if the Company classifies an item as a non-recurring profit and loss
according to the definition in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Profits
218
The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
and Losses, or classifies any non-recurring profit and loss item mentioned in the said
explanatory announcement as a recurring profit and loss item
Applicable √ N/A
2. Return on equity and earnings per share
EPS(CNY/Share)
Profit during reporting period Weighted average ROE
Basic EPS Diluted EPS
Net profits attributable to ordinary
25.95% 5.3850 5.3850
shareholders of the Company
Net profits attributable to ordinary
shareholders of the Company after
23.56% 4.8901 4.8901
deduction of extraordinary gain
and loss
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The 2018 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Section XII Documents Available for Preference
1. Financial statements signed and stamped by the legal representative, the financial
head and the accounting supervisor;
2. The original of the auditor’s report with the seal of the accounting firm, and signed and
stamped by CPAs;
3. The originals of all company documents and announcements that are disclosed to the
public via media designated by CSRC during the reporting period;
4. The original of the 2018 annual report signed by the legal representative.
The above documents placed in shareholder reading room of corporate headquarters.
Address: No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province
220
