Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Yantai Changyu Pioneer Wine Co., Ltd.
2018 Semi-annual Report
Final 2018-03
August, 2018
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Contents
I. Important Notice, Contents and Definition ................................................................................. 3
II. Brief Introduction for the Company and Main Financial Indicators .................................... 5
III. Summary of the Company’s Businesses .................................................................................. 8
IV. Management Discussion and Analysis ................................................................................... 11
V. Major issues ................................................................................................................................ 28
VI. Changes in Shares and the Shareholders’ Situation ............................................................. 39
VII. Related Situation of Preferred Shares .................................................................................. 44
VIII Situation for Directors, Supervisors, Senior Management Staffs ....................................... 44
IX. Related Situation of Corporation Bonds ............................................................................... 45
X. Financial Report .......................................................................................................................... 46
XI. Reference Document................................................................................................................ 151
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
I. Important Notice, Contents and Definition
The Board of Directors, the Board of Supervisors, directors, supervisors & senior
management staffs of the Company collectively and individually accept full responsibility for
the truthfulness, accuracy and completeness of the information contained in this report and
confirm that to the best of their knowledge and belief there are no unfaithful facts, significant
omissions or misleading statements.
Mr. Zhou Hongjiang (Chairman of the Company), Mr. Jiang Jianxun (Chief Financial Officer
& Financial Director) assure the truthfulness, accuracy and completeness of the financial
report in the semi-annual report.
Except the following directors, all other directors have personally attended the meeting for
deliberating the semi-annual report.
Director name with Director post with Reason for Name of
non-present in person non-present in person non-present in person mandatory
Sun Liqiang Director Business trip Zhou Hongjiang
Augusto Reina Director Business trip Aldino Marzorati
About significant risks that may be faced in production and operation process, please refer
to―10. Risks the Company faces and measures‖ in chapter four ―Management Discussion and
Analysis‖ of this report. We advise investors to read carefully and pay attention to the
investment risks.
The business plan and target in the report do not represent the earnings forecast of the listed
company to 2018. Whether the Company could achieve that or not depends on several factors
including the changes of market conditions and the effort extent of managing team etc. with a
great uncertainty, so the investors should be in a special attention.
The Company has no plan to distribute cash dividends and bonus shares, and capital reserve
will not be transferred to equity.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company/The Group Refers to Yantai Changyu Pioneer Wine Co. Ltd.
Changyu Group/Controlling Refers to
Yantai Changyu Group Co. Ltd.
Shareholder
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
Refers to Deloitte Hua Yong Certified Public Accountants
Deloitte Hua Yong
Co., LTD (special general partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
II、Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Abbreviation of the Shares: Changyu A、Changyu B Code number of the Shares 000869、200869
Abbreviation of the Shares
-
after alteration
Place of listing of the Shares Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Chinese name 张裕
Legal Name in English YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
Abbreviation of English name CHANGYU
Legal Representative Mr. Zhou Hongjiang
2. Contact person and information
Secretary to the Board of Directors Authorized Representative of the Securities Affairs
Name Mr. Qu Weimin Mr. Li Tingguo
Address 56 Dama Road, Yantai, Shandong, China 56 Dama Road, Yantai, Shandong, China
Tel 0086-535-6633656 0086-535-6633656
Fax 0086-535-6633639 0086-535-6633639
E-mail quwm@changyu.com.cn stock@changyu.com.cn
3. Other information
1) The Company’s contact information
Whether there is any change for the Company‘s registered address, office address, post code,
website and e-mail address during the report period.
□Available Not available
There is no any change for the Company‘s office address, post code, website and e-mail address
during the report period, please see 2017 annual report for more details.
2) Information disclosure and filling location
Whether there is any change for the information disclosure and filling location during the report
period.
□Available Not available
There is no any change for the newspapers in which the Company‘s information is disclosed,
website assigned by CSRC to carry the semi-annual report and the filling location during the report
period, please see 2017 annual report for more details.
4. Key accounting data and financial indicators
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years.
No
In the same period of last More or less than last
In the report period
year year (%)
Business revenue (CNY) 2,828,230,064 2,767,098,197 2.21%
Net profit attributed to the
shareholders of the listed 635,837,405 670,069,054 -5.11%
company (CNY)
Net profit attributed to the
shareholders of the listed
606,678,719 652,906,375 -7.08%
company after deducting the
irregular profit and loss (CNY)
Net cash flows from the
552,753,472 420,360,319 31.50%
operating activities (CNY)
Basic earnings per share
0.93 0.98 -5.10%
(CNY/share)
Diluted earnings per share
0.93 0.98 -5.10%
(CNY/share)
Weighted average for earning
6.89% 7.84% -0.95%
rate of the net assets
The end of the report More or less than last
The end of last year
period year (%)
Total assets (CNY) 13,038,507,425 12,536,755,208 4%
Net Assets attributed to the
shareholders of the listed 9,532,948,884 8,906,342,299 7.04%
company (CNY)
5. Differences in accounting data under PRC accounting standards and international
accounting standards
1) Differences of net profit and net asset in the financial report disclosed according to both
international accounting standards and PRC accounting standards
Available □Not available
Unit：CNY
Net profit attributed to the shareholders of Net Assets attributed to the shareholders of
the listed company the listed company
Current period Last period End of period Beginning of period
According to PRC
635,837,405 670,069,054 9,532,948,884 8,906,342,299
accounting standards
Item and amount adjusted according to international accounting standards
According to
international 635,837,405 670,069,054 9,532,948,884 8,906,342,299
accounting standards
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2) Differences of net profit and net asset in the financial report disclosed according to both
foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences of net profit and net asset in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards during the report period.
3) Explanation of the differences in accounting data under domestic and overseas accounting
standards
□Available Not available
6. Item and amount of irregular profit and loss
Available □Not available
Unit：CNY
Item Amount Explanation
Profit and loss on disposal of non-current assets, including the reversal of
93,958
accrued impairment provision
Government grants credited in profit and loss (except for those recurring
government grants that are closely related to the entity's operation, in line 37,982,878
with related regulations and have proper basis of calculation)
Other non-operating expense and income 614,030
Less: Income tax effect 9,447,208
Minority shareholders equity effect (after tax) 84,972
Total 29,158,686 -
The reasons shall be made clear and definitely as to the irregular profit and loss that the Company
has defined by virtue of the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss
as specified in the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss.
□Available Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and
loss in accordance with the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss during the report period.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
III. Summary of the Company’s Businesses
1. Main businesses during the report period
Whether the Company needs to follow the disclosure requirement of special business
No.
During the report period, the Company‘s main business is to produce and operate wine and brandy, thus providing the domestic and foreign
consumers with healthy and fashionable alcoholic drinks. The Company integrates the planting and procurement of grape, the procurement of
raw and auxiliary material, the production and sales of products. Compared with earlier stage, there are no significant changes happened to the
Company‘s main businesses. The wine industry that the Company involved in is still in the growth stage, the whole domestic wine market is on
the rising trend. The Company takes the dominant position in the domestic wine market. During the report period, the sales of low-price wines,
low-priced brandy and chateau wines of Castel are slightly down. The sales of mid-priced wines such as Noble Dragon remain stable. The sales
of mid-to-high priced brandy, imported wines and chateaus wines such as AFIP keep the favorable growth momentum. All these make the
Company‘s operating revenue appear a small increase compared with the same period of last year. However, due to factors such as rising prices
of raw materials and packaging materials, and increased depreciation, the Company's net profit declined slightly.
2. Significant changes of main assets
1) Significant changes of main assets
Main assets Explanation of significant changes
Equity asset No significant changes
Fixed asset No significant changes
Intangible asset No significant changes
Construction in process No significant changes
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2) Main overseas assets condition
Available □Not available
Control measures for Proportion of
Whether there are
Details of Formation Operation safeguarding of Earning overseas assets in
Assets scale Location significant
assets reasons mode condition the Company‘s net
asset security impairment risks
assets
The Company
participates in making
Hacienda Y
important decisions
Vinedos Acquisition Independent
456,572,779 Spain through board of 1,214,012 4.79% No
Marques Del of equity operation
directors and appoints
Atrio. SL
CFO on financial
management
The Company
participates in making
Indomita Wine important decisions
Founding of Independent
Company 483,324,945 Chile through board of -281,859 5.07% No
joint venture operation
Chile, SpA directors and appoints
CFO on financial
management
The Company directly
Francs Champs Founding of
Independent appoints senior
Participations sole 228,843,440 France -2,717,412 2.40% No
operation executives on
SAS proprietorship
management
The Company
participates in making
Kilikanoon Acquisition Independent
148,472,200 Australia important decisions -115,317 1.56% No
Estate Pty Ltd of equity operation
through board of
directors
Explanation on major holding companies and joint stock companies
During the report period, Indomita Wine Company Chile, SpA and Kilikanoon Estate Pty Ltd is with small losses, mainly due to the fact that the
two are located in the southern hemisphere as well as the low season sales of the first half of the year.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3. Analysis of core competitiveness
Whether the Company needs to follow the disclosure requirement of special business?
No.
Compared with the participants in the arena of the Chinese wine sector, we believe that the
Company is provided with the following advantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years, ―Changyu‖,
―Noble Dragon‖ and ―AFIP‖ are Chinese famous trademarks that have strong influence and good
reputation.
Secondly, the Company has set up a nationwide marketing network, formed a ―three-level‖
marketing network system mainly composed of the company‘s salesmen and distributors, possessed
the strong marketing ability and market exploitation ability.
Thirdly, the Company has already had strong research strength and a product R&D system, owned a
one and only ―State-level Wine R&D Center‖, made mastery of advanced winemaking technology
and production processes, been powerful enough in product innovation and established a perfect
quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases to meet its future
development, having developed a great deal of vineyards in the most suitable areas for wine grape
growing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Shanxi, whose scales and
structures have generally met the Company‘s needs for development.
Fifthly, the Company has a great variety of products composed of all grades, its wine，brandy and
sparkling wine of over 100 sorts can meet different consumers‘ demands. The Company has taken
the lead in the domestic wine sector through rapid development in the past 10-odd years and has
possessed comparative superiority in the future competition.
Sixthly, the Company has a relatively respect motivation system. Most of Company‘s employees
indirectly hold the Company‘s equity through controlling shareholders. There are high consistency
between employee benefits and shareholders benefits, in favor of motivating employees to create
value for shareholders.
Seventhly, the company has established a flexible and efficient decision-making mechanism. The
core management of the Company has always maintained a united and pragmatic work style and
flexible and efficient decision-making mechanism, enabling the Company to respond more
coercively to market changes.
Eighthly, the company has basically completed the global production capacity layout. The Company
has completed production capacity layout in the world's most important wine producing countries
such as China, France, Chile, Spain, Australia, etc., and can make better use of global high-quality
raw material resources, capital, talents and advanced production techniques and technologies to
provide consumers with diversification quality products and services.
Based on the above reasons, the Company has formed strong core competitiveness and will
maintain this comparative advantage in the foreseeable market competition in the future.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
IV. Management Discussion and Analysis
1. Summarization
During the report period, influenced by the slowdown of domestic economic growth, the overall
domestic wine industry is relatively stable. Influenced by the further decrease in product price
resulting from the overwhelming flow of foreign wine into Chinese market, the competition in
domestic wine market, especially for middle-and-low-level wines, is very fierce, plus the great
impact brought by E-commerce and other new channels to traditional sales channels in the
meantime this company‘s E-commerce business is still in the beginning stage, resulting in bigger
challenges for the Company to achieve sustained and steady growth. Facing quite a lot of external
disadvantages, the Company insists to focus on the market, timely adjust the development strategy
and marketing tactics, optimize the market layout and product structure, perfect the marketing
channels and assessment system, strive to promote product sales, achieving good results and
realizing business income of CNY2828.23 million, an increase of 2.21% compared with last year;
but due to the impact of increase in operating cost, taxes and additional, sales expense and
administrative expense, the Company realized net profit of CNY635.84 million belonging to the
parent company‘s shareholders, an decrease of 5.11% compared with last year.
During the report period, the Company mainly did following works:
Firstly, the Company adjusted and fortified its management team, increasing the management level
and capacity of management team.
Secondly, the Company proposed the strategy of ―Focus on big product, focus on high quality, focus
on middle-to-high end‖ (in other words ―Three Focus‖ strategy), further clarifying its development
direction.
Thirdly, the Company basically completed the reform and reorganization work in sales systems,
improving the mode of market investment and enhancing marketing ability. The Company further
implemented the measure of ―personnel reduction while salary increase‖ in sales system, reduced
redundant personnel, completed the personnel setting, position setting and personnel allocation
work in business management department in sales system, perfected performance assessment
method for marketing personnel and conducted authorized operation to partial business unit and
provincial branches, improving the sales team‘s working enthusiasm, initiative and fighting
capacity.
Fourthly, the Company fully implemented ―Three Focus‖ strategy, accelerated the product carding
as well as the backbone distributor system construction and increased the market investment,
improving products‘ market competitiveness. For high-end products, the Company focused on
―MOSER‖, ―AFIP‖, ―CASTEL‖, ―Golden Icewine Valley‖, ―Baron Balboa‖, ―Rena‖, ―Tinlot‖ wine
and ―Koya‖ brandy and strived to build ―MOSER‖ to a globally well-known high-end brand, to
build ―AFIP‖, ―CASTEL‖, ―Golden Icewine Valley‖ and ―Koya‖ to nationally well-known
high-end brands and to build ―Baron Balboa‖, ―Rena‖, ―Tinlot‖ to regionally well-known high-end
brands. For middle-end products, the Company focused on ―Noble Dragon‖ and reserva five-star
brandy, reinforced the market development in the ninth-edition Noble Dragon and reserva five-star
brandy, continued consolidating and enlarging the position of ―Noble Dragon‖ as domestic biggest
single product in wine market and continually increased the market share of middle-end brandy. For
low-to-mid-end products, the Company focused on ―Zuishixian‖ and mini-brandy to digging
consumption potential and to guide and cultivate new consumer group. For imported liquor, the
Company mainly paid attention to acquired brands, such as Atrio, Mirefleurs, Indomita, Kilikanoon
and Roullet Fransac in order to occupy important position in Chinese imported wine market. The
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Company also conducted comprehensive carding and reorganization to products and distributor
team, reduced product items, eliminated and replaced unqualified distributors, implemented strict
access system to distributors selling the ninth-edition Noble Dragon and new-edition ―Zuishixian‖,
changed the market investment mode, intensified the fighting degree to fleeing goods, further
standardized market order, better protected distributors‘ interest and improved distributors‘
enthusiasm.
Fifthly, the Company strengthened quality management and quickened the pace in product update
and upgrade in order to better adapt to market change. During the report period, the Company
revised internal quality management system, took unannounced inspection to eleven wineries and
conducted update and upgrade work to products including partial chateau wine, Noble Dragon,
reserva five-star brandy, five-star brandy and Zuishixian etc, effectively improving product quality
and better satisfying the market need.
Sixthly, the Company reinforced financial management and audit work in order to strive to
accomplish energy-saving and cost-reducing and to further reduce operating cost. During the report
period, the Company further strengthened internal fund allocation and control, reasonably arranged
loan structure, strived to reduce fund cost; intensified the cost management, such as advertisement
and major raw material purchase and so on, and strongly reduced freight and storage expense;
enhanced the financial management in overseas acquired enterprise and reinforced audit degree to
investment project in order to prevent operating risk and improve investment benefits; made great
efforts to increase the ratio of order-driven products, to shorten delivery time, to reduce inventory
and capital occupying and to improve enterprise profitability.
Seventhly, the Company continued implementing internationalization strategy and orderly promoted
overseas acquisition work. During the report period, the Company acquired 80% equity of
Kilikanoon Estate Pty Ltd in Australia, optimizing the Company‘s capacity layout and product
structure and further improving the market competition of imported products. Through M&A and
strategic cooperation, the Company‘s production had extended to Asia, Europe, America and
Oceania and the Company had completed the capacity layout in major global wine-producing
countries and famous wine-producing region, such as France, Spain, Australia and Chile and so on.
The Company also had deep brand cooperation with major wine enterprises in Italy, New Zealand,
Argentina and other countries. Now the Company owned five overseas chateaux, eight domestic
chateaux and more than twenty foreign and domestic major brands and sold its products to more
than seventy countries and regions in the world.
Eighthly, the Company strengthened the management in investment project and basically completed
the installation and commissioning work of major production lines in Changyu industrial park,
laying the foundation of putting into operation as soon as possible and further improving production
efficiency.
In order to achieve the operation target set by the Company at the beginning of this year, the
Company would do following work in the second half of 2018:
Firstly, the Company will intensify the brand construction and carding work and enlarge the
cooperation breadth and depth with domestic E-commerce magnate and new media in order to
improve brand awareness and reputation. The Company will intensify brand aggregation, continue
teasing and reducing product quantity and optimize product line; for choice of media, bind up with
high-flow platform, enhance resource exchange and share and take deep cooperation with precision
media with high category permeability to form high-flow and strong-viscosity communication
strategy; for publicity form, focus on output content, aim at different media attribute and make
brand image output at different platforms including MicroBlog, WeChat official account, Zhihu
account and TouTiao etc by adopting micro film, short video, multimedia, long image-text, live
broadcast and other forms.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Secondly, the Company will continue paying attention to the construction of key distributor team
and professional sales personnel team, conduct the tasting and promotion work of mid-to-high-end
products, such as chateau wine, Noble Dragon, ―Three Star‖ and above level brandy and Zuishixian
and so on, and strive to promote the sales of mid-to-high-end products; do the preparation work for
the opening of Koya chateau and the launch of new products, such as Koya brandy; continue
promoting the sales work of acquired brands in domestic and foreign markets, such as Atrio,
Mirefleurs, Donelli, Indomita and Kilikanoon and so on, further establish and perfect the domestic
and foreign sales system, take full advantage of foreign sales network to enlarge the export scale of
domestic wines; centralize marketing resources and focus on key markets to continually enlarge the
quantity and coverage of dominated market.
Thirdly, the Company will start the order-driven business mode for Noble Dragon distributors,
make great efforts to shorten delivery time and reduce inventory level and fund occupation.
Fourthly, the Company will further enlarge and implement authorized operation to improve the
positivity, initiative and flexibility of front-line production and management personnel and to
accelerate market reaction speed; improve the Company‘s assessment and incentive measures to
production and management department, enhance staff training and reorganization, strictly carry out
assessment, reward, promotion and elimination system, and motivate all staff‘s vitality and fighting
capacity.
Fifthly, the Company will orderly proceed the construction of investment projects and focus on the
connection between production and sales. The Company will pay special attention to the ending
work of main body‘s civil work in Yantai Changyu International Wine City (in other words Yantai
Changyu Industry Park), accelerate the construction of intelligentization and informatization
management system as well as the maintenance and transformation in Cognac Roullet Fransac
chateau and the fire engineering in the research institute; conduct the coordination work between
project construction and production and reasonably arrange construction and production progress to
timely satisfy the market need.
Sixthly, the Company will strengthen the management in supply chain and fully accomplish the
purchase in grape material. The Company will enhance the construction and management in the
supply chain of overseas and domestic grape material and other packing materials, strive to realize
diversification of material supply and make sure that, for all raw materials, the important segment
could be monitored and the whole course could be traced; based on the material requirement in
future years, scientifically make raw material purchase plan, further perfect raw material pricing
mechanism, reasonably determine raw material purchase price, comprehensively complete raw
material purchase work, preferably control raw material cost and improve raw material quality.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2. Analysis of main business
See ―1. Summarization‖ in ―Management Discussion and Analysis‖.
Period comparison of main financial data
Unit: CNY
In the report In the same period of More or less
Reason for changes
period last year (%)
Mainly attributed to the Company‘s consolidation of companies in Chile and
Operating revenue 2,828,230,064 2,767,098,197 2.21% Australia that are included in the scope of consolidation making an increase in
operating revenue
Operating cost Mainly attributed to the increase in prices of raw materials and packaging
974,557,292 925,754,133 5.27%
materials on year-on-year basis
Sales expense Mainly attributed to the increase in advertising promotion fees and marketing
710,659,033 668,735,726 6.27%
staff compensation on year-on-year basis
Management expense Mainly attributed to the increase of employee‘s compensation and depreciation
160,091,888 130,542,386 22.64%
expense on year-on-year basis
Mainly attributed to the increase in interest expenses and handling fees on
Financial expense 13,085,942 11,147,949 17.38%
year-on-year basis
Mainly attributed to the decrease in total profit (profit before tax) on
Income tax expense 211,979,735 228,752,790 -7.33% year-on-year basis which results in a decrease in current income tax expenses
on year-on-year basis
Net amount of cash flow
generated in operating Mainly attributed to the increase of cash received from goods selling and labor
552,753,472 420,360,319 31.50%
service providing on year-on-year basis
activities
Net amount of cash flow
Mainly attributed to the recovery of fixed term deposits making the cash
generated in investment -291,217,548 -797,540,941 63.49% injection in investment activities increased on year-on-year basis and the cash
activities outflow from investment activities decreased on year-on-year basis
Net amount of cash flow -6,350,537 353,878,706 -101.79% Mainly attributed to the year-on-year decrease in cash received from loans and
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
generated in financing the year-on-year increase in cash paid for debt repayment
activities
Net increased amount of
Mainly attributed to the increase in net cash flow from operating activities and
247,781,188 -27,454,401 1,002.52%
cash and cash equivalents net cash flow from investing activities on year-on-year basis
Whether there is any great change for the Company‘s profit structure or profit source during the report period
□Available Not available
There is no great change for the Company‘s profit structure or profit source during the report period.
Structure of main businesses
Unit: CNY
Increase or decrease of operating Increase or decrease of operating Increase or decrease of gross
Operating Gross profit
Item Operating cost revenue over the same period of cost over the same period of last profit over the same period of
revenue (%)
last year (%) year (%) last year
Sector
Wine and
alcoholic 2,828,230,064 974,557,292 65.54% 2.21% 5.27% -1%
beverages
Product
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Wine 2,235,369,550 759,887,101 66.01% 3.92% 7.94% -1.26%
Brandy 552,121,883 194,450,633 64.78% -4.03% -2.86% -0.43%
Other 40,738,631 20,219,557 50.37% 0.22% -6.23% 3.42%
3. Analysis to non-main business
□Available Not available
4. Assets and liabilities situation
1) Major changes of assets
Unit: CNY
The end of the report period The end of the same period of last year Proportion increase or
decrease Explanation on significant
Proportion in the Proportion in the total changes
Amount Amount (%)
total assets (%) assets (%)
Monetary funds 1,683,038,453 12.91% 1,550,067,781 12.63% 0.28% No significant changes
Receivables 243,413,092 1.87% 167,152,509 1.36% 0.51% No significant changes
Mainly attributed to the
increase in raw materials
Inventory 2,338,925,432 17.94% 2,024,302,929 16.49% 1.45%
reserved at the end of the
report period
Investment real estate 17,877,379 0.14% 0% 0.14% No significant changes
Long-term equity
0% 0% No significant changes
investments
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Mainly attributed to the
transfer of constructions in
Fixed assets 5,457,575,677 41.86% 4,591,037,486 37.40% 4.46%
progress during the report
period
Mainly attributed to the
transfer of constructions in
Construction in progress 1,015,914,753 7.79% 1,697,297,440 13.83% -6.04%
progress into fixed assets
during the report period
Mainly attributed to the
Short-term borrowings 750,454,676 5.76% 846,881,075 6.90% -1.14% return of short term bank
loans
Long-term borrowings 153,965,191 1.18% 175,270,580 1.43% -0.25% No significant changes
2) Measuring assets and liabilities at fair value
□Available Not available
3) Assets rights restricted situation up to the end of report period
Assets rights restricted situation of the Company up to the end of report period, please refer to Announcement on External Guarantee
(announcement number: 2016-Temporary 021) and Announcement on External Guarantee (announcement number: 2017-Temporary 015)
disclosed on China Securities Journal, Securities and the website (www.cninfo.com.cn) respectively on December 22nd, 2016 and December 12th,
2017.
5. Investment situation analysis
1) Overall situation
Available □Not available
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Amount of investment during the report period Amount of investment in the same period last year Extent of change
(CNY) (CNY)
312,384,336.55 630,502,100 50.45%
2) Situation of acquired main equity investments during the report period
Available □Not available
Unit: CNY
Investme
Progress Whethe
Name of nt profit
Main Investme up to the r or not
the Investme Investment Shareholdi Capital Produ Estimate and loss Disclosure Disclosure
businesse Partners nt balance to
invested nt mode amount ng ratio source ct type d profit for date index
s horizon sheet prosecu
company current
date te
period
PTO7 Pty
Ltd、 Announcemen
Bruce t on Equity
Warren & Acquisition of
Lindsey Kilikanoon
Anne Estate Pty Ltd
Producti
Kilikano Baudinet Decemb (announceme
on and Acquisiti 101,452,936. Self-own Complet 6,763,52 th
on Estate 80% 、Nathan 50 years Wines 9 -115,317 No er 12 , nt number:
sales of on 55 ed ed
Pty Ltd Waks & 2017 2017-Tempor
wines
Michelle ary 017)
Williams disclosed on
、 the website
Woodvale (www. cninfo.
Vintners com. cn)
Pty Ltd、
18
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
NWMW
Nominee
s Pty
Ltd、W.J.
Duthy
Holdings
Pty Ltd、
Warrick
James
Duthy、
SH & G
Nominee
s Pty
Ltd、
David
Leonard
&
Rebecca
Louise
Adams、
12-14
Marsden
Street Pty
Ltd、
Burford
Sampson
and Jane
Hamilton
Sampson
19
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
101,452,936. 6,763,52
Total - - - - - - - - -115,317 - - -
55 9
3) Situation of main ongoing non-equity investments during the report period
Available □Not available
Unit: CNY
Reasons
Accumulated Accumulated
for
Whether Investment actual realized
unreached
it belongs Amount investment Process profit up
Project Investment Involved Capital Estimated planning Disclosure Disclosure
to fixed during the amount up of to the end
name mode sectors source profit schedule date index
assets report to the end project of the
and
investment period of the report report
estimated profit
period period
Yantai
Please refer to
Changyu
Announcement on
International Resolution of the
Liquor
Wine City Seventh Session
and
Blending Self- Owned No direct Board of
Yes alcoholic 107,016,000 1,265,635,100 100% - - 2018.04.23
and constructed fund earnings Directors 8th
beverage
Cooling Meeting disclosed
sector
Center on China Securities
Construction Journal, Securities
Project and the website
(www.cninfo.com.cn)
Yantai Self- Yes Liquor 50,000,000 936,690,000 Owned 100% - - No direct 2018.04.23
20
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Changyu constructed and fund earnings on April 23rd, 2018.
International alcoholic
Wine City beverage
Bottling sector
Center
Construction
Project
Yantai
Changyu
Liquor
International
and
Wine City Self- Owned No direct
Yes alcoholic 0 415,207,200 100% - - 2018.04.23
Logistics constructed fund earning
beverage
Center
sector
Construction
Project
Changyu
Vine Liquor
and Wine and
Self- Owned Not put into
Research Yes alcoholic 1,800,000 117,560,000 75% - - 2018.04.23
constructed fund operation
Institute beverage
Construction sector
Project
Treasure Liquor
Wine and
Self- Owned Not put into
Chateau Yes alcoholic 9,840,000 119,830,000 75% - - 2018.04.23
constructed fund operation
Construction beverage
Project sector
21
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Koya Liquor
Brandy and
Self- Owned Not put into
Chateau Yes alcoholic 4,230,000 139,928,000 80% - - 2018.04.23
constructed fund operation
Construction beverage
Project sector
Liquor
and
Greening Self- Owned No direct
Yes alcoholic 4,000,000 57,105,700 100% - - 2018.04.23
Investment constructed fund earning
beverage
sector
Cognac Liquor
Fransac and
Chateau Self- Owned
Yes alcoholic 7,535,400 7,535,400 30% - - Not completed 2018.04.23
Rrepair and constructed fund
beverage
Renovation
sector
Project
Industrial
Liquor
Production and
SAP Self- Owned No direct
Yes alcoholic 26,510,000 37,850,000 60% - - 2018.04.23
Information constructed fund earning
beverage
Construction
Project sector
Liquor
Research
and
Institute Fire Self- Owned No direct
Yes alcoholic 0 0% - - 2018.04.23
Engineering constructed fund earning
beverage
Project
sector
22
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Liquor
Oak Barrel and
Self- Owned No direct
Procurement Yes alcoholic 0 0 0% - - 2018.04.23
constructed fund earning
Project beverage
sector
Non-dry
Liquor
Sticker and
Labeling Self- Owned No direct
Yes alcoholic 0 0 0% - - 2018.04.23
Machine constructed fund earning
beverage
Procurement
Project sector
Total — — — 210,931,400 3,097,341,400 — — - - -- -- --
4) Financial assets investment
(1) Security investment
□Available Not available
There is no security investment for the Company during the report period.
(2) Derivative investment
□Available Not available
There is no derivative investment for the Company during the report period.
23
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
6. Sale of major assets and equities
1) Sale of major assets
□Available Not available
There is no sale of major assets during the report period.
2) Sale of major equities
□Available Not available
7. Analysis to the major holding and joint stock companies
Available □Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the Company‘s net profit
Unit: CNY
Company Company Main business Registered capital Total asset Net asset Operation Operation Net Profit
name type revenue profit
Grape planting, grape juice, bulk
Xinjiang Tianzhu
Subsidiary wine and fruit wine processing, CNY75million 100,490,996 94,660,914 18,803 -1,156,537 -184,572
Winery Co., Ltd.
filling and sales
Yantai
Wine and sparkling wine research,
Changyu-Chateau
Subsidiary production and sales as well as the USD5million 254,998,005 83,446,152 43,226,910 3,706,113 2,861,474
Changyu Castel
tourism service
Wine Co. Ltd.
24
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Langfang Castel- Joint
Changyu Wine stock Wine production and sales USD6.108818million 35,673,406 31,609,890 5,038,281 -1,952,954 -1,952,954
Co. Ltd. company
Chateau Changyu
Brandy and wines research,
AFIP Global Subsidiary CNY642.75million 690,531,538 640,211,147 78,502,666 21,121,608 15,243,700
production and sales
Wine Co. Ltd.
Chateau Liaoning
Changyu Ice Subsidiary Ice wine production CNY59.6873million 84,138,776 55,148,440 27,305,133 2,913,516 905,396
Wine Co., Ltd.
Hacienda Y
Wine and other liquors production
Vinedos Marques Subsidiary EUR2.385732million 456,572,779 122,855,707 148,197,893 -771,033 1,214,012
and operation
Del Atrio, SL
Indomita Wine
Wine and other liquors production
Company Subsidiary USD47.19million 483,324,945 349,642,978 93,719,341 -1,582,286 -281,859
and operation
Chile, SpA
Kilikanoon Estate Wine and other liquors production
Subsidiary AUD6.529221million 148,472,200 83,884,229 25,904,401 -385,840 -115,317
Pty Ltd and operation
Acquisition and disposal of subsidiaries during the report period
□Available Not available
Information of main holding and joint stock companies
No
8. Main part situation of the special purpose being controlled by the Company
Not available
25
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
9. Forecast for the operation achievements from January to September of 2018
Caution and explanation for the prediction that the cumulative net profit from the beginning of the year to the end of next report period could be
in a loss or there will be in a great change comparing with the same period of last year.
Not available
10. Risks the Company faces and measures
(1) Risks in price fluctuation of raw materials
Grapes are the Company‘s main raw materials. The grape‘s yield and quality are affected to a certain extent by the natural factors such as
drought, wind, rain, frost and snow. These force majeure factors greatly influence the quantity and price of the grapes in Company orders and
add the uncertainty to the Company‘s production and operation. Therefore, the Company will lower the risks that are likely to affect grape
quality and result in price fluctuation by means of expanding the self-run vineyards, strengthening the vineyard management and optimizing the
layout of vineyards.
(2) Risks in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development, the Company has input more and more capital in
the market and the sales expense has taken up a higher percentage point in the business revenue. The input-output ratio will affect the
Company‘s operating results to a great extent and the risk that some investments may not reach the expectations is likely to occur. Therefore, the
Company will strengthen market research and analysis, enhance market forecast accuracy and continue to perfect the input-output evaluation
system to ensure the investments in market to be satisfactory as expected.
(3) Risks in product transport
The Company‘s products are fragile and sent to different places all over the world, mostly by sea, railway and expressway. The peak season of
sales is usually in cold winter and close to the spring festival when market has a great demand. At that time, the natural and human factors such
as serious shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as well as traffic accidents make the
transport departments difficult to send products to markets in time and safely. As a result, it makes the Company have to face the risks of missing
the peak season of sales. Therefore, the Company will adopt all methods possible like making precise sales prediction and well designed
connection of production and sales, reasonably arranging production and transport means and making use of more available warehouses in
different places to lower these kinds of risks.
(4) Risks in investment faults
According to the plan, currently the Company has finished the production layout at home, and the next step is to pay more attention to the
overseas merge and acquisition in the same industry. Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park)
26
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
has those features such as the big investment amount, long-term construction period and many uncertain factors; more unforeseeable factors for
the overseas merge and acquisition projects in the progress of M&A, it is difficult to make sure the fair and reasonable transaction price, the
integration and management after M&A is also hard. Under the influence of uncertain factors for individual projects, it leads to have the risks of
facing with the investment amount out of budget or hardly taking back the expected investment earnings. The Company will take an adequate
argument and scientific decision-making for investment projects, try hard to reduce and avoid investment risks.
27
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
V. Major issues
1. Information for the shareholders’ meeting and temporary shareholders’ meeting held during the report period
1) Information for the shareholders’ meeting during the report period
Participation ratio
Session Meeting type Convening date Disclosure date Disclosure Index
of investors
http://www.cninfo.com.cn
Annual Announcement on Resolution of
2017 Annual Shareholders‘
shareholders‘ 62.42% 2018.05.24 2018.05.25 2017 Annual Shareholders’ Meeting
Meeting
meeting （ Announcement number:2018-
Temporary 15）
2) Request for convening temporary shareholders’ meeting by priority shareholders owing recovered voting right
□Available Not available
2. The Company’s preliminary scheme of profit distribution and preliminary scheme of increasing equity with capital reserve
□Available Not available
There are no schemes of paying cash dividend, bonus share and increasing equity with capital during the semi-annual period.
3. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers and the Company and other related
commitment parties have implemented during the report period and have not implemented up to the end of the report period
Available □Not available
28
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Commitments Commitment party Commitment type Commitment content Commitment time Commitment period Implementation
Commitments at
share reform
Commitments
made in
acquisition report
or equity changes
report
Commitments at
asset
restructuring
Yantai Changyu Group Solve horizontal Non-horizontal competition Has been performing
1997.05.18 Forever
Co. Ltd. competition strictly
According to Trademark
License Contract, the
Company will pay
Commitments at trademark royalty for the
the initial public Changyu‘‘
offering or Yantai Changyu Group Clear the purpose of products of Yantai Changyu Has been performing
refinancing Group Co., Ltd every year, 1997.05.18 Forever
Co. Ltd. brand royalty strictly
Yantai Changyu Group Co.,
Ltd will use trademark
royalty to advertise
Changyu‘‘ trademarks and
Contracted products in this
contract.
Equity incentive
commitments
29
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Commitments at
middle and small
shareholders of
the Company
Commitment
under timely
Yes
implementation
or not
Whether or not to
have specific
reasons of the
No
unimplemented
commitment and
next steps
4. The appointment and dismissal of certified public accountants
Whether the semi-annual report has been audited
□ Yes No
The semi-annual report has not been audited.
5. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available Not available
6. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available Not available
7. Bankruptcy reorganization
□Available Not available
There are no related issues of bankruptcy reorganization happened during the report period and until the report period.
30
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
8. Litigation Issue
Material litigation and arbitration
□Available Not available
There are no material litigation and arbitration during the report period.
Other Litigation Issue
□Available Not available
9. Penalty and rectification
□Available Not available
There are no penalties or rectifications during the report period.
10. Credit of the Company, holding shareholders and actual controllers
Available □Not available
There is no situation such as court effective judgment is failure to execute, a large amount of
debt expires but it is unpaid by the company, holding shareholders and actual controllers.
11. Implementation of the Company’s equity inventive plan, employee stock ownership
plan or other employee incentive measures
□Available Not available
There are no implementation of the Company‘s equity inventive plan, employee stock
ownership plan and other employee incentive measures.
12. Significant related transactions
1) Related transactions in relation to routine operations
Available □Not available
Related transactions in relation to routine operations, please refer to XII "Related party and
Related Transaction" in the chapter X "Financial Report".
2) Related transactions in relation to acquisition and sales of assets or equity
□Available Not available
There are no related transactions in relation to acquisition or sales of assets or equity during
the report period.
3) Related transactions in relation to common foreign investment
31
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
□Available Not available
There are no related transactions in relation to common foreign investment during the report
period.
4) Related current credit and debt
Available □Not available
Whether or not to exist non-operating related credit and debt
□Yes No
There are no non-operating related credit and debt during the report period.
5) Other major related transactions
□Available Not available
There are no other major related transactions during the report period.
13. Non-business capital occupying of listed company by controlling shareholder and its
related parties
□Available Not available
There are no non-business capitals occupying of listed company by controlling shareholder
and its related parties during the report period.
14. Major and important contracts and execution results
1) Trusteeship, contract and leasehold issues
(1) Trusteeship situation
□Available Not available
There is no trusteeship situation during the report period.
(2) Contract situation
Available □Not available
Contract situation description
During the report period, about the Company‘s contract operation situation, please refer to
―41. Other payables‖ in Annex 7 ―Notes to consolidated financial statement‖ in the financial
32
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
report of this report.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available Not available
There are no contract projects in gains and losses for the Company to achieve more than 10%
of the total profit during the report period.
(3) Leasehold situation
Available □Not available
Leasehold situation description
On January 1st, 2017, the Company renewed the Space Lease Agreement with the controlling
shareholder Changyu Group. The Company leased the space with 15196.94 square meters
located at 174 Shihuiyao Road, Zhifu District,Yantai City. The rent per year is CNY1.4645
million with a rental period of 5 years from January 1st, 2017 to December 31st, 2021. On
January 1st, 2017, the Company‘s subordinate Sales&Marketing Co. of Yantai Changyu
Pioneer Wine Company Limited. Brand Sales Department renewed the Space Lease
Agreement with the controlling shareholder Changyu Group, leasing the space with 42552.83
square meters located at 1 Jichang Road, Zhifu District, Yantai City and the space with 3038
square meters located at 56 Dama Road, Zhifu District, Yantai City, which are all under the
name of controlling shareholder. The rent of the above spaces per year is CNY4.3935million
with a rental period of 5 years from January 1st, 2017 to December 31st, 2021.
On July 1st, 2017, this company signed a house-leasing contract with Yantai Shenma
Packaging Company Limited. According to this contract, since July 1st, 2017, this company
leased property to Yantai Shenma Packaging Company Limited for a business purpose with
the annual rent of CNY1,626,880. This contract expires on June 30th, 2022.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available Not available
There are no leasehold projects in gains and losses for the Company to achieve more than
10% of the total profit during the report period.
2) Major guarantee
Available □Not available
33
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
(1) Guarantee situation
Unit: CNY‘0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Yantai Economic and
Technological Mortgage;
2016.12.22 34,160 2016.12.21 34,160 10years No No
Development Zone Pledge
Management Council.
Total of the external guarantee quota approved Total of the actual external guarantee
0 0
during the report period (A1) amount during the report period (A2)
Balance of the actual external
Total of the external guarantee quota approved by
34,160 guarantee by the end of the report 34,160
the end of the report period (A3)
period (A4)
Guarantee situations between the Company and subsidiaries
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Sales & Marketing
Company of Yantai Joint liability
2016.10.31 10,000 2016.11.05 10,000 2 years No Yes
Changyu Pioneer Wine assurance
Company Limited
34
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Yantai Changyu Pioneer Mortgage;
2016.12.22 11,984 2016.12.21 11,984 10 years No Yes
Wine Company Limited Pledge
Yantai Changyu Wine
Joint liability
Research and
2016.12.22 72,176 2016.12.21 72,176 assurance; 10 years No Yes
Development Company
Mortgage
Limited
Kilikanoon Estate Pty Joint liability
2017.12.12 7,100 2018.01.09 7,100 1 year No Yes
Ltd assurance
Total of the actual guarantee amount
Total of the guarantee quota approved to subsidiaries
0 for subsidiaries during the report 7,100
during the report period (B1)
period (B2)
Balance of the actual guarantee for
Total of the guarantee quota approved to subsidiaries
89,276 subsidiaries by the end of the report 89,276
by the end of the report period (B3)
period (B4)
Guarantee situations between subsidiaries
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Hacienda Y Vinedos
Marques Del Atrio. 2016.04.29 3,502 2015.10.08 3,502 Mortgage Long-term No No
SL
Indomita Wine
Company Chile, 2018.04.23 1,986 2018.04.20 1,986 Mortgage Long-term No No
SpA
Total of the guarantee quota approved to 0 Total of the actual guarantee amount 5,488
35
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
subsidiaries during the report period (C1) for subsidiaries during the report
period (C2)
Balance of the actual guarantee for
Total of the guarantee quota approved to
5,488 subsidiaries by the end of the report 5,488
subsidiaries by the end of the report period (C3)
period (C4)
Total guarantee amount of the Company（Total of above three major items）
Total of the actual guarantee amount
Total of the approved guarantee quota during the
0 during the report period 12,588
report period（A1+B1+C1）
（A2+B2+C2）
Balance of the actual guarantee by
Total of the approved guarantee quota by the end of
128,924 the end of the report period 128,924
the report period（A3+B3+C3）
（A4+B4+C4）
The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company‘s
13.52%
net asset
Among :
The amount of guarantee for shareholders, actual controllers and their related parties（D） 0
The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70%
0
directly or indirectly（E）
Total amount of guarantee of the part that exceeds 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
(2) Illegal external guarantee
□Available Not available
There is no illegal guarantee situation during the report period.
36
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3) Other important contracts
□Available Not available
There are no other important contracts during the report period.
15. Situation for Social Responsibility
1) Major environmental situation
The listed company and its subsidiaries are whether or not to belong to the heavy pollution industry stipulated by the state environmental
protection department.
□Yes No
2) Situation for carrying out social responsibility of targeted poverty
(1) Targeted poverty plan
No
(2) Summary of semi-annual targeted poverty
Zhuqiao town in Yantai Laizhou locates in hilly land. The life of farmers living here depends on the weather and their income is very low. Since
2013, the Company has planted 8000 mu of wine-making grapes adapting to the infertile soil in here and employed more than 600 farmers in
around 16 villages to work in the vineyard, making these farmers‘ average annual income increase CNY10 thousand. This not only is beneficial
for local green ecology construction but also drives local farmers to overcome poverty and achieve prosperity. At present ,there is no
poverty-stricken family in these 16 villages.
(3) Targeted poverty effectiveness
The Company has adopted the mode of ―Company+Cooperative+Farmer‖ to achieve the layout of 200 thousands of mu of grape bases in
37
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
domestic six producing regions including Xinjiang, Ningxia, Yantai, Liaoning, Shaanxi and Hebei and so on, bringing about CNY800million to
nationwide fruit farmers every year and driving thousands of farmers to overcome poverty and achieve prosperity.
(4) Subsequent targeted poverty plan
No
16. Other Major issues
□Available Not available
There are no other major issues need to be explained during the report period.
17. Major issues of Company’s subsidiaries
□Available Not available
38
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
VI. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
1) Changes in shares
Unit: share
Amount before this change Change (+, -) Amount after this change
Transfer
Percentage Allot Distribute bonus
other Percentage
Amount new capital to others Sub total Amount
% share %
share share
capital
1、Unrestricted shares 685,464,000 100% 685,464,000 100%
(1) A shares 453,460,800 66.15% 453,460,800 66.15%
(2) B shares 232,003,200 33.85% 232,003,200 33.85%
2、Total shares 685,464,000 100% 685,464,000 100%
Cause of share change
□Available Not available
Approval of share change
□Available Not available
Transfer of changed shares
□Available Not available
39
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the
latest period, net asset per share belonging to the Company‘s common shareholders, etc.
□Available Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available Not available
2) Changes in restricted shares
□Available Not available
2. Securities issuance and listing situation
□Available Not available
3. Situation for shareholders and the actual controllers
Unit：share
Total number of preferred
Total common shareholders at the end of 40,428 (21,831 of Stock A and 18,597 of
shareholder recovering 0
report period Stock B)
voting power at the end of report period
Shareholders holding more than 5% or the top 10 shareholders holding situation
Name of Shareholders Character of shareholders Percentage Shares held until the end of Changes Number Number of Pledged or frozen
40
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
(%) the report period during the of unrestricted
report period restricted shares Share status Amount
shares
YANTAI CHANGYU Domestic non-state-owned legal 50.40% 345,473,856 0 0 345,473,856 0
GROUP CO. LTD. person
GAOLING FUND,L.P. Foreign legal person 3.08% 21,090,219 0 0 21,090,219 0
CHINA SECURITIES State-owned legal person 2.27% 15,531,455 -107,200 0 15,531,455 0
FINANCE CORP
BBH BOS S/A 2.22% 15,241,826 0 0 15,241,826 0
FIDELITY FD - CHINA Foreign legal person
FOCUS FD
SHENWAN 1.19% 8,144,869 1,590,215 0 8,144,869 0
HONGYUAN
Foreign legal person
SECURITIES(HONG
KONG) LIMITED
GUOTAI JUNAN 0.95% 6,535,089 -293,408 0 6,535,089 0
SECURITIES(HONGK Foreign legal person
ONG) LIMITED
FIDELITY PURITAN 0.89% 6,100,762 0 0 6,100,762 0
TRUST: FIDELITY
SERIES INTRINSIC Foreign legal person
OPPORTUNITIES
FUND
CENTRAL HUIJIN 0.69% 4,761,200 0 0 4,761,200 0
ASSET State-owned legal person
MANAGEMENT LTD.
41
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
VANGUARD 0.55% 3,788,487 0 0 3,788,487 0
EMERGING
Foreign legal person
MARKETS STOCK
INDEX FUND
FIDELITY CHINA 0.55% 3,779,202 0 0 3,779,202 0
SPECIAL SITUATIONS Foreign legal person
PLC
Strategic investors or legal result of the placement of new shares to
No
become a top 10 shareholders(if have)(see note 3)
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated
The explanation for the associated relationship and accordant
relationship or accordant action relationship with the other 9 listed shareholders, and the relationship
action
among the other shareholders is unknown.
The top 10 shareholders with unrestricted shares
Number of unrestricted shares Type of share
Name of Shareholders
held until the end of the year Type of share Amount
YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A 345,473,856
GAOLING FUND,L.P. 21,090,219 B 21,090,219
CHINA SECURITIES FINANCE CORP 15,531,455 A 15,531,455
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,241,826 B 15,241,826
SHENWAN HONGYUAN SECURITIES(HONG KONG) LIMITED 8,144,869 B 8,144,869
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 6,535,089 B 6,535,089
FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC OPPORTUNITIES FUND 6,100,762 B 6,100,762
CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A 4,761,200
VANGUARD EMERGING MARKETS STOCK INDEX FUND 3,788,487 B 3,788,487
42
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
FIDELITY CHINA SPECIAL SITUATIONS PLC 3,779,202 B 3,779,202
Among the top 10 shareholders, Yantai Changyu Group Company Limited
The explanation for the associated relationship and accordant action of the top 10
has no associated relationship or accordant action relationship with the
shareholders with unrestricted shares, the the associated relationship and accordant action
other 9 listed shareholders, and the relationship among the other
between the top 10 shareholders with unrestricted shares and the top 10 shareholders
shareholders is unknown.
Explanation for the top 10 shareholders who involved in financing activities and stock The top 10 shareholders do not involve in financing activities and stock
trading business (if have)(see note 4) trade business.
Whether or not the Company‘s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the
report period
□Yes No
There is no agreed repurchase trading taken by the Company‘s top 10 common shareholders and shareholders with unrestricted shares during the
report period.
4. Changes of controlling shareholders or the actual controllers situation
Changes of the controlling shareholders during the report period
□Available Not available
There is no any change of the controlling shareholders during the report period.
Changes of the actual controllers during the report period
□Available Not available
There is no any change of the actual controllers during the report period.
43
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
VII. Related Situation of Preferred Shares
□Available Not available
VIII. Situation for Directors, Supervisors, Senior Management Staffs
1. Changes in shareholdings of directors, supervisors and senior management staffs
□Available Not available
There are no any changes in shareholdings of directors, supervisors and senior management staffs
during the report period, details see 2017 annual report
2. Personnel changes in Company's directors, supervisors and senior management
Available □Not available
Name Positions held Type Date Reason
Sun Liqiang Chairman leaving the post 2017.12.08 Resigning from the post of
chairman on his own
initiative and no longer
serving as chairman;
currently serving as
director of the Company
Zhou Hongjiang Vice chairman leaving the post 2018.01.08 Resigning from the post of
vice chairman on his own
initiative, no longer
serving as vice chairman,
and is elected to serve as
chairman; currently
serving as chairman of the
Company
Zhou Hongjiang General manager Non-reappointment 2018.01.08 Resigning from the post of
general manager on his
own initiative and no
longer serving as general
manager; currently serving
as director of the Company
Leng Bin Vice general Non-reappointment 2018.01.08 Resigning from the post of
manager vice general manager on
his own initiative and no
longer serving as vice
44
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
general manager; currently
serving as director of the
Company.
Sun Jian Vice-general Appointed and removed 2018.01.08 Being appointed as general
manager manager and removed
from vice general
manager; currently serving
as the general manager of
the Company
Peng Bin Vice general Appointed 2018.01.08 Being appointed as vice
manager general manager; currently
serving as vice general
manager of the Company
Jiang Jianxun Chief financial Appointed 2018.01.08 Being appointed as chief
officer financial officer; currently
serving as chief financial
officer and finance
manager of the Company
IX. Related Situation of Corporation Bonds
Whether or not the Company has the corporation bonds issued in public, listed in the stock
exchange, not due on the Semi-annual report‘s authorized issue date or failed to pay in full on
the due date.
No
45
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
X. Financial Report
1. Audit report
Whether the semiannual report has been audited
□ Yes √ No
2. Financial statement
The unit in the statements of the financial annotations is RMB Yuan.
2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2018 Unit: Yuan
Item Note Ending balance Beginning balance
Current assets:
Monetary fund 7.1 1,683,038,453 1,402,522,509
Settlement reserves
Lending funds
Financial assets measured at the fair value and the variation of which is
recorded into the current profit and loss
Derivative financial assets
Bills receivable 7.2 367,210,884 244,796,818
Accounts receivable 7.3 243,413,092 263,796,355
Advance payment 7.4 3,122,797 2,417,931
Premium receivable
Reinsurance accounts receivable
Receivable reserves for reinsurance contract
Interest receivable 7.5 1,218,373 240,968
Dividends receivable
Other receivables 7.6 16,500,022 18,737,454
Buying back the sale of financial assets
Inventories 7.7 2,338,925,432 2,473,614,046
Assets held for sale 7.8 2,000,197 2,000,197
Non-current assets due within one year
Other current assets 7.9 362,977,990 230,822,759
Total current assets 5,018,407,240 4,638,949,037
Non-current assets:
Offering loans and imprest
Available-for-sale financial assets 7.10 463,880 467,251
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment real estate 7. 11 17,877,379 18,467,989
Fixed assets 7.12 5,457,575,677 5,329,083,969
Construction in progress 7.13 1,015,914,753 1,026,141,569
46
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Note Ending balance Beginning balance
Construction materials
Disposal of fixed assets
Productive biological assets 7.14 202,661,748 201,929,888
Oil and gas assets
Intangible assets 7.15 662,694,276 655,448,897
Development expenditure
Goodwill 7.16 163,930,875 128,135,981
Long-term prepaid expenses 7.17 227,993,424 230,009,231
Deferred tax assets 7.18 270,988,173 308,121,396
Other non-current assets
Total non-current assets 8,020,100,185 7,897,806,171
Total assets 13,038,507,425 12,536,755,208
Current liabilities:
Short-term loans 7.19 750,454,676 714,434,286
Borrowings from the Central Bank
Customer and interbank deposits
Borrowing funds
Financial liabilities measured at the fair value and the variation of which
is recorded into the current profit and loss
Derivative financial liabilities
Bills payable
Accounts payable 7.20 505,856,955 666,442,879
Advances from customers 7.21 366,355,280 350,894,156
Financial assets sold for repurchase
Handling fees and commissions payable
Employee remunerations 7.22 177,995,138 210,824,234
Taxes payable 7.23 73,859,747 145,094,156
Interest payable 7.24 834,247 771,250
Dividends payable 7.25 746,021
Other payables 7.26 671,707,915 602,964,319
Dividend payable for reinsurance
Reserves for insurance contracts
Acting trading securities
Acting underwriting securities
Liabilities held for sale
Non-current liabilities due within one year 7.27 140,570,388 110,954,827
Other current liabilities 7.28 16,311,727 16,878,199
Total current liabilities 2,704,692,094 2,819,258,306
Non-current liabilities:
Long-term borrowings 7.29 153,965,191 156,125,854
Bonds payable
Including: Preferred stock
Perpetual capital securities
Long-term accounts payable 7.30 235,000,000 259,000,000
Long-term employee remunerations payable
Special accounts payable
47
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Note Ending balance Beginning balance
Estimated liabilities
Deferred income 7.31 92,340,427 92,918,855
Deferred tax liabilities 7.18 26,020,063 24,264,203
Other non-current liabilities 7.32 6,848,847 7,209,312
Total non-current liabilities 514,174,528 539,518,224
Total liabilities 3,218,866,622 3,358,776,530
Owner’s equity:
Capital stock 7.33 685,464,000 685,464,000
Other equity instruments
Including: Preferred stock
Perpetual capital securities
Capital surplus 7.34 565,955,441 565,955,441
Minus: Treasury stock
Other comprehensive income 7.35 -6,121,580 3,109,240
Special reserves
Surplus reserves 7.36 342,732,000 342,732,000
General risk preparation
Retained earnings 7.37 7,944,919,023 7,309,081,618
Total owner‘s equities attributable to the parent company 9,532,948,884 8,906,342,299
Minority equity 286,691,919 271,636,379
Total owner‘s equities 9,819,640,803 9,177,978,678
Total liabilities and owner‘s equities 13,038,507,425 12,536,755,208
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
2.2 Balance sheet of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Ending balance Beginning balance
Current assets:
Monetary fund 818,844,330 559,174,466
Financial assets measured at the fair value and the variation of which is
recorded into the current profit and loss
Derivative financial assets
Bills receivable 33,180,494 41,645,203
Accounts receivable 15.1 12,408,787 7,805,333
Advance payment 453,842 99,673
Interest receivable 87,014 76,646
Dividends receivable 2,238,064 407,495,922
Other receivables 15.2 509,269,034 592,274,075
Inventories 393,024,758 348,042,053
Assets held for sale 2,000,197 2,000,197
Non-current assets due within one year
Other current assets 34,997,149 29,706,058
Total current assets 1,806,503,669 1,988,319,626
48
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Note Ending balance Beginning balance
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investments 15.3 4,617,128,388 4,511,202,204
Investment real estate 17,877,379 18,467,989
Fixed assets 273,244,802 288,150,901
Construction in progress 11,388,924 6,756,349
Construction materials
Disposal of fixed assets
Productive biological assets 120,973,169 119,572,539
Oil and gas assets
Intangible assets 68,433,643 69,623,219
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred tax assets 22,493,100 28,787,907
Other non-current assets 3,721,606,444 3,718,674,166
Total non-current assets 8,853,145,849 8,761,235,274
Total assets 10,659,649,518 10,749,554,900
Current liabilities:
Short-term loans 200,000,000 600,000,000
Financial liabilities measured at the fair value and the variation of which
is recorded into the current profit and loss
Derivative financial liabilities
Bills payable
Accounts payable 82,489,858 97,833,124
Advances from customers 6,000,000 6,000,000
Employee remunerations 59,439,264 70,108,076
Taxes payable 5,443,037 14,569,690
Interest payable 238,356 652,500
Dividends payable
Other payables 573,572,022 544,713,172
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities 3,693,054 3,953,054
Total current liabilities 930,875,591 1,337,829,616
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual capital securities
Long-term accounts payable
Long-term employee remuneration payable
Special accounts payable
Estimated liabilities
49
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Note Ending balance Beginning balance
Deferred income 11,253,946 12,970,473
Deferred tax liabilities
Other non-current liabilities 2,235,802 2,235,802
Total non-current liabilities 13,489,748 15,206,275
Total liabilities 944,365,339 1,353,035,891
Owner’s equity:
Capital stock 685,464,000 685,464,000
Other equity instruments
Including: Preferred stock
Perpetual capital securities
Capital surplus 557,222,454 557,222,454
Minus: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves 342,732,000 342,732,000
Retained earnings 8,129,865,725 7,811,100,555
Total owner‘s equities 9,715,284,179 9,396,519,009
Total liabilities and owner‘s equities 10,659,649,518 10,749,554,900
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.3 Consolidated profit statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Total operating income 2,828,230,064 2,767,098,197
Including: Operating income 7.38 2,828,230,064 2,767,098,197
Interest income
Earned premium
Handling fee and commission income
2. Total operating costs 2,018,939,458 1,890,800,616
Including: Operating costs 7.38 974,557,292 925,754,133
Interest expenditure
Handling fees and commission expenditure
Premium rebate
Net amount of indemnity expenditure
Net amount of the withdrawn reserve fund for insurance
contract
Policy bonus payment
Amortized reinsurance expenditures
Taxes and surcharges 7.39 165,276,251 160,473,998
Selling expenses 7.40 710,659,033 668,735,726
Administrative expenses 7.41 160,091,888 130,542,386
Financial expenses 7.42 13,085,942 11,147,949
Loss on impairment of assets 7.43 -4,730,948 -5,853,576
50
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Plus: Fair value change profit (loss is listed with "-")
Investment profit (loss is listed with "-")
Including: Investment profit for joint-run business and joint
venture
Exchange income (loss is listed with "-")
Income from asset disposal (loss is listed with "-") 7.44 93,958 -495,071
Other income 7.45 37,982,878
3. Operating profit (loss is listed with "-") 847,367,442 875,802,510
Plus: Non-operating income 7.46 2,006,392 23,147,605
Minus: Non-operating expenses 7.47 1,392,362 186,568
4. Total profits (total loss is listed with "-") 847,981,472 898,763,547
Minus: Income tax expenses 7.48 211,979,735 228,752,790
5. Net profit (net loss is listed with "-") 636,001,737 670,010,757
5.1 Net profit from continuing operation (net loss is listed with 636,001,737 670,010,757
"-")
5.2 Net profit from terminating operation (net loss is listed with
"-")
Net profit attributable to owner of the parent company 635,837,405 670,069,054
Minority interest income 164,332 -58,297
6. Net after-tax amount of other comprehensive income 7.49 -11,126,413 1,767,741
Net after-tax amount of other comprehensive income attributable to -9,230,820 1,458,809
owner of the parent company
6.1 Other comprehensive income not to be reclassified into profit and
loss later
6.1.1 Net liabilities or net assets change after remeasuring and
resetting the benefit plans
6.1.2 Share enjoyed in other comprehensive income not to be
reclassified into profit and loss in invested unit under equity law
6.2 Other comprehensive income to be reclassified into profit and -9,230,820 1,458,809
loss later
6.2.1 Share enjoyed in other comprehensive income to be reclassified
into profit and loss in invested unit under equity law
6.2.2 Profit and loss from changes in fair value of financial assets for
sale
6.2.3 Profit and loss from reclassification of held-to-maturity
investment into fair value of financial assets for sale
6.2.4 Effective part of profit and loss of cash-flow hedge
6.2.5 Difference in translation of Foreign Currency Financial -9,230,820 1,458,809
Statement
6.2.6 Other
Net after-tax amount of other comprehensive income attributable to -1,895,593 308,932
minority shareholders
7. Total comprehensive income 624,875,324 671,778,498
(1) Attributable to owner of the parent company 626,606,585 671,527,863
(2) Attributable to minority shareholders -1,731,261 250,635
8. Earnings per share
8.1 Basic earnings per share 0.93 0.98
8.2 Diluted earnings per share 0.93 0.98
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
51
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2.4 Profit statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Operating income 15.4 408,845,211 831,820,503
Minus: Operating costs 15.4 352,646,989 737,950,378
Taxes and surcharges 24,463,375 48,865,790
Selling expenses
Administrative expenses 40,187,747 40,078,068
Financial expenses -15,151,608 9,292,969
Loss on impairment of assets
Plus: Fair value change profit (loss is listed with "-")
Investment profit (loss is listed with "-") 15.5 312,409,576 66,127,980
Including: Investment profit for joint-run business and joint
venture
Income from asset disposal (loss is listed with "-") 75,000 10,448
Other income 1,976,527
2. Operating profit (loss is listed with "-") 321,159,811 61,771,726
Plus: Non-operating income 56,479 1,001,523
Minus: Non-operating expenses 528 20,257
3. Total profits (total loss is listed with "-") 321,215,762 62,752,992
Minus: Income tax expenses 2,450,592 -681,003
4. Net profit (net loss is listed with "-") 318,765,170 63,433,995
4.1 Net profit from continuing operation (net loss is listed with "-") 318,765,170 63,433,995
4.2 Net profit from terminating operation (net loss is listed with "-")
5. Net after-tax amount of other comprehensive income
5.1 Other comprehensive income not to be reclassified into profit and
loss later
5.1.1 Net liabilities or net assets change after remeasuring and
resetting the benefit plans
5.1.2 Share enjoyed in other comprehensive income not to be
reclassified into profit and loss in invested unit under equity law
5.2 Other comprehensive income to be reclassified into profit and
loss later
5.2.1 Share enjoyed in other comprehensive income to be reclassified
into profit and loss in invested unit under equity law
5.2.2 Profit and loss from changes in fair value of financial assets for
sale
5.2.3 Profit and loss from reclassification of held-to-maturity
investment into fair value of financial assets for sale
5.2.4 Effective part of profit and loss of cash-flow hedge
5.2.5 Difference in translation of Foreign Currency Financial
Statement
5.2.6 Other
6. Total comprehensive income 318,765,170 63,433,995
7. Earnings per share
7.1 Basic earnings per share 0.47 0.09
7.2 Diluted earnings per share 0.47 0.09
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
52
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Jiang Jianxun
2.5 Consolidated cash flow statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of 2,680,388,050 2,524,565,138
services
Net increase in customer and interbank deposits
Net increase in borrowings from central bank
Net increase in borrowings from other financial
institutions
Cash received from receiving insurance premium of
original insurance contract
Net cash received from reinsurance business
Net increase in policy holder deposits and investment
funds
Net increase after disposal of financial assets measured
at the fair value and the variation of which is recorded
into the current profit and loss
Cash received from collecting interest, handling fees
and commission
Net increase in borrowings
Net increase in repurchasement business funds
Tax refund received 26,089,608 12,777,072
Other cash received related to operating activities 7.50 42,343,021 38,889,912
Subtotal of cash flows of operating activities 2,748,820,679 2,576,232,122
Cash paid for goods and services 677,552,938 640,732,974
Net increase in customer loans and advances
Net increase in deposits in central bank and interbank
deposits
Cash paid to original insurance contract payments
Cash paid to interest, handling fees and commission
Cash paid to policy bonus
Cash paid to and on behalf of employees 278,814,385 239,805,346
Cash paid for taxes and expenses 802,722,798 842,815,705
Other cash paid related to operating activities 7.50 436,977,086 432,517,778
Sub-total of cash outflows of operating activities 2,196,067,207 2,155,871,803
Net cash flow from operating activities 552,753,472 420,360,319
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits 305,000,000 3,000,000
Cash received from obtaining investment profit 2,342,015 25,550
Cash received from disposal of fixed assets, intangible 471,130 237,161
assets and other long-term assets
Net cash received from disposal of branch and other
business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities 307,813,145 3,262,711
53
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Note Sum of current period Sum of prior period
Cash paid to acquire fixed assets, intangible assets and 154,464,274 282,149,010
other long-term assets
Cash for investment
Cash paid for purchasing fixed deposits 340,000,000 201,000,000
Net increase in hypothecated loan
Net cash paid for acquiring branch and other business 104,566,419
unit
Other cash paid related to investment activities 7.50 317,654,642
Subtotal of cash outflows of investment activities 599,030,693 800,803,652
Net cash flow from investing activities -291,217,548 -797,540,941
3. Cash flow from financing activities
Cash received from acquiring investment 48,396,726
Including: cash received from acquiring minority 48,396,726
shareholders investment by branch
Cash received from acquiring loans 669,905,706 773,435,000
Cash received from issuing bonds
Other cash received related to financing activities 7.50 23,521,431 1,303,473
Subtotal cash flows of financing activities 693,427,137 823,135,199
Cash paid for paying debts 658,512,141 451,386,980
Cash paid for distributing dividend and profit or paying 21,265,533 17,869,513
interest
Including: dividend and profit paid to minority
shareholders by branch
Other cash paid related to financing activities 7.50 20,000,000
Subtotal of cash outflows of financing activities 699,777,674 469,256,493
Net cash flow from financing activities -6,350,537 353,878,706
4. Influences of exchange rate fluctuation on cash -7,404,199 -4,152,485
and cash equivalents
5. Net Increase in cash and cash equivalents 247,781,188 -27,454,401
Plus: balance at the beginning of the period of cash and 1,180,889,274 1,256,942,304
cash equivalents
6. Balance at the end of the period of cash and cash 1,428,670,462 1,229,487,903
equivalents
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.6 Cash flow statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Sum of current period Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services 275,862,358 570,587,513
Tax refund received
Other cash received related to operating activities 100,163,394 385,490,644
Subtotal of cash flows of operating activities 376,025,752 956,078,157
Cash paid for goods and services 200,935,534 269,148,068
Cash paid to and on behalf of employees 43,647,320 52,895,854
Cash paid for taxes and expenses 43,132,327 169,319,730
54
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Sum of current period Sum of prior period
Other cash paid related to operating activities 19,942,485 62,494,076
Sub-total of cash outflows of operating activities 307,657,666 553,857,728
Net cash flow from operating activities 68,368,086 402,220,429
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits 305,000,000 3,000,000
Cash received from obtaining investment profit 720,009,450 198,082,845
Net cash received from disposal of fixed assets, intangible assets and 538,055.18 206,280
other long-term assets
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities 1,025,547,505.18 201,289,125
Cash paid to acquiring fixed assets, intangible assets and other 11,968,401 3,295,270
long-term assets
Cash for investment 105,926,184 329,440,824.11
Cash paid for purchasing fixed deposits 340,000,000 104,999,999.89
Net cash paid for acquiring branch and other business unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities 457,894,585 437,736,094
Net cash flow from investing activities 567,652,920.18 -236,446,969
3. Cash flow from financing activities
Cash received from acquiring investment
Cash received from acquiring loans 200,000,000 700,000,000
Cash received from issuing bonds
Other cash received related to financing activities
Subtotal cash flows of financing activities 200,000,000 700,000,000
Cash paid for debts 600,000,000 514,667,600
Cash paid to distribute dividend, profit or pay interest 11,660,417 9,720,581
Other cash paid related to financing activities
Subtotal of cash outflows of financing activities 611,660,417 524,388,181
Net cash flow from financing activities -411,660,417 175,611,819
4. Influences of exchange rate fluctuation on cash and cash
equivalents
5. Net Increase in cash and cash equivalents 224,360,589.18 341,385,279
Plus: balance at the beginning of the period of cash and cash 493,568,866 238,003,198
equivalents
6. Balance at the end of the period of cash and cash equivalents 717,929,455.18 579,388,477
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
55
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2.7 Consolidated owner’s equity changing list
Unit: Yuan
This period
Owners‘ equity of the parent company
Item Other equity instruments Minority
Minus: Other Total owners‘
Capital Special Surplus General risk Undistributed shareholders‘
Capital stock Perpetual Treasury comprehensive equity
Preferred
capital reserves reserves reserves preparation profits equity
stock Other stock income
securities
1. Balance at the end of last
685,464,000 565,955,441 3,109,240 342,732,000 7,309,081,618 271,636,379 9,177,978,678
year
Plus: Accounting policies
changing
Previous error correction
Business combination under
common control
Other
2. Balance at the beginning of
685,464,000 565,955,441 3,109,240 342,732,000 7,309,081,618 271,636,379 9,177,978,678
this year
3. Increased or decreased
amount in this period (reducing -9,230,820 635,837,405 15,055,540 641,662,125
amount is listed with "-")
3.1 Total comprehensive
-9,230,820 635,837,405 -1,731,261 624,875,324
income
3.2 Owners' invested and
17,532,822 17,532,822
reduced capital
3.2.1 Shareholders‘ invested
common stock
3.2.2 Other equity instrument
holders‘ invested capital
3.2.3 Amount of shares paid
and reckoned in owners' equity
56
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3.2.4 Other 17,532,822 17,532,822
3.3 Profit distribution -746,021 -746,021
3.3.1 Accrued surplus reserves
3.3.2 Accrued general risk
preparation
3.3.3 Distribution to owners
-746,021 -746,021
(or shareholders)
3.3.4 Other
3.4 Internal transfer of owners'
equity
3.4.1 Capital reserves
transferred and increased
capital (or capital stock)
3.4.2 Surplus reserves
transferred and increased
capital (or capital stock)
3.4.3 Surplus reserves covering
deficit
3.4.4 Other
3.5 Special reserves
3.5.1 Withdrawal in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this
685,464,000 565,955,441 -6,121,580 342,732,000 7,944,919,023 286,691,919 9,819,640,803
period
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Unit: Yuan
Prior period
Owners‘ equity of the parent company
Item Other equity instruments Minority
Minus: Other Total owners‘
Capital Special Surplus General risk Undistributed shareholders‘
Capital stock Preferred Perpetual Treasury comprehensive equity
equity
capital reserves reserves reserves preparation profits
stock Other stock income
securities
1. Balance at the end of last
685,464,000 565,955,441 -5,259,014 342,732,000 6,620,118,562 190,473,697 8,399,484,686
year
Plus: Accounting policies
changing
Previous error correction
Business combination under
common control
Other
2. Balance at the beginning of
685,464,000 565,955,441 -5,259,014 342,732,000 6,620,118,562 190,473,697 8,399,484,686
this year
3. Increased or decreased
amount in this period (reducing 8,368,254 688,963,056 81,162,682 778,493,992
amount is listed with "-")
3.1 Total comprehensive
8,368,254 1,031,695,056 3,594,080 1,043,657,390
income
3.2 Owners' invested and
78,236,726 78,236,726
reduced capital
3.2.1 Shareholders‘ invested
common stock
3.2.2 Other equity instrument
holders‘ invested capital
3.2.3 Amount of shares paid
and reckoned in owners' equity
3.2.4 Other 78,236,726 78,236,726
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3.3 Profit distribution -342,732,000 -668,124 -343,400,124
3.3.1 Drew surplus reserves
3.3.2 Drew general risk
preparation
3.3.3 Distribution to owners (or
-342,732,000 -668,124 -343,400,124
shareholders)
3.3.4 Other
3.4 Internal transfer of owners'
equity
3.4.1 Capital reserves
transferred and increased
capital (or capital stock)
3.4.2 Surplus reserves
transferred and increased
capital (or capital stock)
3.4.3 Surplus reserves covering
deficit
3.4.4 Other
3.5 Special reserves
3.5.1 Accrual in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this
685,464,000 565,955,441 3,109,240 342,732,000 7,309,081,618 271,636,379 9,177,978,678
period
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2.8 Owner’s equity changing list of the parent company
Unit: Yuan
This period
Other equity instruments Minus: Other
Item Capital Capital Special Surplus Undistributed Total owners‘
Preferred Perpetual capital Treasury comprehensive
stock Other reserves reserves reserves profits equity
stock securities stock income
1. Balance at the end of last year 685,464,000 557,222,454 342,732,000 7,811,100,555 9,396,519,009
Plus: Accounting policies changing
Previous error correction
Other
2. Balance at the beginning of this year 685,464,000 557,222,454 342,732,000 7,811,100,555 9,396,519,009
3. Increased or decreased amount in this
318,765,170 318,765,170
period (reducing amount is listed with "-")
3.1 Total comprehensive income 318,765,170 318,765,170
3.2 Owners' invested and reduced capital
3.2.1 Shareholders‘ invested common stock
3.2.2 Other equity instrument holder‘
invested capital
3.2.3 Amount of shares paid and reckoned in
owners' equity
3.2.4 Other
3.3 Profit distribution
3.3.1 Drew surplus reserves
3.3.2 Distribution to owners (or
shareholders)
3.3.3 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
increased capital (or capital stock)
3.4.2 Surplus reserves transferred and
increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Other
3.5 Special reserves
3.5.1 Accrual in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period 685,464,000 557,222,454 342,732,000 8,129,865,725 9,715,284,179
Unit: Yuan
Prior period
Other equity instruments Minus: Other
Item Capital Capital Special Surplus Undistributed Total owners‘
Preferred Perpetual capital Treasury comprehensive
stock reserves reserves reserves profits equity
stock securities Other stock income
1. Balance at the end of last year 685,464,000 557,222,454 342,732,000 7,360,234,545 8,945,652,999
Plus: Accounting policies changing
Previous error correction
Other
2. Balance at the beginning of this year 685,464,000 557,222,454 342,732,000 7,360,234,545 8,945,652,999
3. Increased or decreased amount in this
450,866,010 450,866,010
period (reducing amount is listed with "-")
3.1 Total comprehensive income 793,598,010 793,598,010
3.2 Owners' invested and reduced capital
3.2.1 Shareholders‘ invested common stock
3.2.2 Other equity instrument holder‘
invested capital
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3.2.3 Amount of shares paid and reckoned in
owners' equity
3.2.4 Other
3.3 Profit distribution -342,732,000 -342,732,000
3.3.1 Drew surplus reserves
3.3.2 Distribution to owners (or shareholders) -342,732,000 -342,732,000
3.3.3 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and
increased capital (or capital stock)
3.4.2 Surplus reserves transferred and
increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Other
3.5 Special reserves
3.5.1 Accrual in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period 685,464,000 557,222,454 342,732,000 7,811,100,555 9,396,519,009
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
3. Company profile
Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint-stock Company”) was
incorporated as a joint-stock limited company in accordance with the Company Law of the People’s
Republic of China (the “PRC”) in the merger and reorganization carried out by Yantai Changyu
Group Co., Ltd. (“Changyu Group Company”) with its assets and liabilities in relation to wine
business. The Company and its subsidiary companies (hereinafter collectively referred to as the
“Group”) are engaged in the production and sale of wine, brandy and champagne, planting and
purchase of grapes, development of tourism resources, etc. The registered address of the Company is
Yantai City, Shandong Province, and the office address of the headquarters is 56 Dama Road, Zhifu
District, Yantai City, Shandong Province.
As at June 30, 2018, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.33 for
the details.
The parent company of the Group is Changyu Group Company incorporated in China, which was
ultimately and actually controlled by four parties, including Yantai Guofeng Investment Holding Co.,
Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and Yantai Yuhua Investment &
Development Co., Ltd.
The financial statement and the consolidated financial statement of the Company were approved by
the Board of Directors on August 28, 2018.
The scope of the consolidated financial statement in this period can be seen in Note 9 “Equity in other
entities”. The scope changes of the consolidated financial statement in this period can be seen in Note
8 “Changes of the consolidated scope”.
4. Preparation basis of financial statement
4.1 Preparation basis
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
The Group implements the Accounting Standards for Business Enterprises (including the new and
revised editions published in 2014) (“ASBE”) published by the Ministry of Finance and relevant
regulations thereof. In addition, the Group also discloses relevant financial information in accordance
with Information Disclosure and Preparation Rules for Enterprises Publically Issuing Securities No.15
---- General Rules for Financial Statement (Revised in 2014).
Note-accounting basis and pricing principle
The note-accounting basis of financial accounting adopted by the Group is accrual system and the
measurement basis adopted by the Group in preparing its financial statement is historical cost.
Subsequently, if the assets are impaired, impairment provisions are made in accordance with relevant
accounting standards.
When the historical cost measurement is used, the assets are measured by the amount of cash or cash
equivalent when the assets are purchased or the fair value of the consideration. The liabilities are
measured by the actually received funds or assets for performing the current obligations, or the
contract amount for performing the current obligations, or the amount of cash or cash equivalent paid
for anticipated liabilities in the daily activities.
Fair value refers to a price received for selling an asset or paid for transferring a liability by the market
participant in orderly transactions on the measurement date. No matter the fair value is observable or
estimated by the valuation technique, the fair value measured and disclosed in this financial statement
is recognized on this basis.
The fair value measurement is divided into three levels based on the observable degree of the input
fair value and the importance of this input value on the whole fair value measurement:
*The input value of the first level is the unadjusted price of the same assets or liabilities which can be
acquired in an active market on the measurement date.
*The input value of the second level is the directly or indirectly observable input value of relevant
assets or liabilities except that of the first level.
*The input value of the third level is the unobservable input value of relevant assets or liabilities.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
4.2 Continuous operation
The Group has appraised the ability of continuous operation for 12 months from June 30, 2018, and no
issues or situations causing major doubts to this ability are found. Therefore, this financial statement is
prepared on the basis of the continuous operation assumption.
5. Main accounting policies and accounting estimates
5.1 Statement on compliance with ASBE
This financial statement fulfills the requirement of ASBE and gives a true and integrated view of the
financial status and the consolidated financial status as at June 30, 2018, as well as the operating result,
the consolidated operating result, the cash flow and the consolidated cash flow of the Company from
January to June 2018.
5.2 Accounting period
The accounting period of the Group is from January 1 to December 31.
5.3 Operating cycle
The operating cycle refers to the period from the enterprise purchases the assets used for processing to
the cash or cash equivalent is realized. The operating cycle of the Company is 12 months.
5.4 Recording currency
Since Renminbi (RMB) is the currency of the main economic environment in which the Company and
the domestic subsidiary companies thereof are situated, the Company and the subsidiary companies
thereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determine
Euro, Chilean Peso and Australian Dollar as the recording currency according to the main economic
environment in which they are situated. The currency in this financial statement prepared by the Group
is RMB.
5.5 Accounting treatment method for business combination under common control and
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
non-common control
5.5.1 Business combination and goodwill under non-common control
A business combination under non-common control is a business combination in which all of the
combining enterprises are not ultimately controlled by the same party or parties before and after the
combination.
The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed or
the equity instruments issued by the acquirer in exchange for the control over the acquiree. The
intermediary expenses such as audit, legal services and assessment consultation and other related
management expenses paid by the acquirer for business combination are included in the current profit
and loss when they occur.
The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in the
business combination and meet the recognition conditions shall be measured on the acquisition date
according to the fair value thereof.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is
measured at cost on initial recognition. Where the cost of combination is less than the acquirer ’s
interest in the fair value of the acquiree’s identifiable net assets, the acquirer firstly re-assesses the
measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment, the cost of combination is still
less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
recognises the remaining difference immediately in profit or loss for the current period.
The goodwill formed due to business combination shall be separately listed in the consolidated
financial statement and measured on the basis of the cost minus the accumulative impairment
provision.
5.6 Compiling methods of consolidated financial statement
The consolidation scope of the consolidated financial statement is determined on the basis of control.
Control means that the investor holds the power in the invested party, obtains variable returns by
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
participating in relevant activities of the invested party and has the ability to affect the amount of the
returns by using the power on the invested party. Once any change of the relevant facts and situations
results in any change of relevant elements of the above definition of Control, the Group will carry out
reappraisal.
The merger of any subsidiary company starts from the date when the Group acquires the power to
control this subsidiary company, while the termination of any subsidiary company ends in the date
when the Group losses the power to control this subsidiary company.
As for any subsidiary company obtained in a business combination under non-common control, the
business result and the cash flow thereof since the acquisition date (date of obtaining the control power)
shall have been properly included in the consolidated income statement and the consolidated cash flow
statement.
The principal accounting policies and accounting period adopted by the subsidiary companies shall be
determined in accordance with the accounting policies and accounting period uniformly regulated by
the Company.
The influence of the internal transaction between the Company and the subsidiary companies as well
as among subsidiary companies on the consolidated financial statement shall be neutralized at the time
of combination.
The shares in the owner's equity of the subsidiary companies, which do not belong to the parent
company, shall be recognized as the minority equity and listed under the item of “minority equity” of
the owner’s equity in the balance sheet. The shares in the current profit and loss of the subsidiary
companies, which belong to the minority equity, shall be listed under the item of “minority equity”of
the net profit in the consolidated income statement.
If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of the
owner's equity entitled therein by the minority shareholders at the beginning of the period, the
difference shall be still credited against the minority equity.
5.7 Recognition standards of cash and cash equivalents
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer to
short-term highly liquid investments which are readily convertible into known amount of cash with an
insignificant risk of changes in value.
5.8 Foreign currency transaction and foreign currency statement translation
5.8.1 Foreign currency transaction
At the time of initial recognition of a foreign currency transaction, the amount of the foreign currency
shall be translated into the amount of the recording currency at the spot exchange rate on the
transaction date.
The monetary items of the foreign currency transaction shall be translated into RMB at the spot
change rate on the balance sheet date. The currency translation difference generated by the difference
between the spot change rate on the balance sheet date and the spot change rate at the initial
recognition or on the previous balance sheet date shall be included in the current profit and loss,
except: ① the currency translation difference of the dedicated foreign currency loan that meets the
capitalization condition shall be included in the cost of assets as capitalization during the capitalization
period; ② the currency translation difference of the arbitrage tool to avoid foreign exchange risk
shall be treated according to the hedge accounting method; ③ the currency translation difference of
the available-for-sale monetary items generated by the book value other than the amortized cost shall
be recognized as other comprehensive income and included in other comprehensive income.
The amount of the non-monetary items of the foreign currency transaction measured by historical cost
shall be still translated into the amount in the recording currency at the spot exchange rate on the
transaction date. The non-monetary items of the foreign currency transaction measured by the fair
value shall be translated at the spot exchange rate on the fair value date, and the difference between the
amount in the recording currency and the amount in original recording currency shall be treated as the
change of the fair value (including exchange rate movement) and shall be included in the current profit
and loss or recognized as other comprehensive income.
5.8.2 Translation of foreign currency financial statement
In order to compile a consolidated financial statement, the foreign currency financial statement of
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
overseas business shall be translated into RMB financial statement in accordance with the following
methods: all asset and liability items in the balance sheet shall be translated at the spot exchange rate
on the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits",
shall be translated at the spot exchange rate at the time when they occur; all items and the items
reflecting the accrual profit distribution in the profit statement shall be translated at the exchange rate
similar to the spot exchange rate at the time when they occur; the undistributed profits at the beginning
of the year shall be the translated to the undistributed profits at the end of the previous year; the
undistributed profits at the end of the year shall be calculated and listed as the translated profit
distribution items; and the difference between the asset items and the sum of the liability items and the
shareholders’ equity items shall be recognized as other comprehensive income and included in the
shareholder's equity.
The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall be
translated at the exchange rate similar to the spot exchange rate at the time when they occur; the
amount of the cash and cash equivalents impacted by the exchange rate movement shall be, as a
reconciling item, separately listed under “impact of exchange rate movement on cash and cash
equivalents” in the cash flow statement.
The balance at the beginning of the year and the actual amount of the previous year shall be listed as
the amount translated according to the financial statement of the previous year.
5.9 Financial instruments
When becoming a party to a contract of financial instruments, the Group shall recognize a financial
asset or financial liability. The financial assets and financial liabilities shall be measured at their fair
value at the time of initial recognition. For other categories of financial assets and financial liabilities,
relevant transaction expenses thereof shall be included in the initially recognized amount.
5.9.1 Effective interest method
The effective interest method refers to the method by which the amortized cost and the interest income
or expenditure of different installments are calculated in light of the effective interest rates of the
financial assets or financial liabilities (including a group of financial assets or financial liabilities). The
effective interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
or financial liability within the predicted term of existence or within a shorter applicable term into the
current book value of the financial asset or financial liability.
When the effective interest rate is calculated, the Group predicts the future cash flow (taking no
account of the future credit loss) on the basis of considering all the contractual provisions concerning
the financial assets or financial liabilities, as well as all kinds of charges, transaction expenses,
discounts, premiums, etc. which are paid, charged, and included in the effective interest rate between
the contracting parties of the financial assets or liabilities.
5.9.2 Classification, recognition and measurement of financial assets
Financial assets are classified into the following categories when they are initially recognized: the
financial assets which are measured at the fair value and the variation of which is included in the
current profit and loss, the investments which will be held to their maturity, loans, accounts receivable
and available-for-sale financial assets. The financial assets purchased and sold through common
modes shall be recognized and terminated from recognition according to the accounting on the
transaction date. The financial assets held by the Group are loans, accounts receivable and
available-for-sale financial assets.
Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no quoted
price in an active market and of which the repo amount is fixed or determinable. The financial assets
classified by the Group into loans and accounts receivable include monetary capital, bills receivable,
accounts receivable, interest receivable, dividends receivable and other receivables.
The loans and accounts receivable shall be subsequently measured at amortized cost by adopting the
effective interest rate method. The profits or losses that occur when such loans and accounts receivable
are terminated from recognition, impaired or amortized shall be included in the current profit and loss.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available
for sale at the time of initial recognition and the financial assets other than those measured at their fair
value and the variation of which is included in the current profit and loss, loans, accounts receivable
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
and the investments which will be held to their maturity.
The equity instrument investment without quoted market price in an active market whose fair value
cannot be reliably measured shall be measured by cost.
5.9.3 Impairment of financial assets
On each balance sheet date, the Group checks the book value of the financial assets. If there is any
objective evidence indicating that a financial asset is impaired, the impairment provision is accrued.
Objective evidence indicating the impairment of financial assets refers to those occurring after the
initial recognition, have effect on the estimated future cash flow of the financial assets, and can be
measured reliably.
The objective evidence indicating the impairment of the financial assets includes the following
observable matters:
A serious financial difficulty occurs to the issuer or the debtor;
The debtor breaches any of the contractual stipulations, such as, failure to pay or delay of the payment
of interest or principal;
The Group makes any concession due to economic, legal factors or other factors to the debtor which is
in financial difficulties;
The debtor will probably become bankrupt or carry out other financial reorganizations;
The financial assets can no longer continue to be traded in an active market due to serious financial
difficulties of the issuer;
It is impossible to identify whether the cash flow of a certain asset within a certain group of financial
assets has decreased or not. But after making an overall appraisal according to the public data
available, it is found that the estimated future cash flow of the said group of financial assets has indeed
decreased since it was initially recognized and such decrease can be measured, including:
The payment ability of the debtor of the said group of financial assets worsens gradually;
The country or economic region where the debtor is situated has the conditions that may cause the
financial assets to be unpaid.
A serious unfavourable change occurs to the operating technology, market, economic environment,
legal environment of the issuer of the equity instruments that causes the investor of the equity
instruments can’t recover the investment costs;
The fair value of the equity instrument investment has serious or permanent decline;
Other objective evidence showing the depreciation of the financial assets.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Impairment of financial assets measured by amortized cost
Where a financial asset measured at amortized cost is impaired, the book value of the said financial
asset shall be written down to the current value of the predicted future cash flow determined according
to the capitalization of original effective exchange rate (excluding the loss of future credits not yet
occurred), and the amount as written down shall be recognized as loss of the impairment of the asset
and shall be included into the current profit and loss. If there is any objective evidence proving that the
value of the said financial asset has been restored, and it is objectively related to the events that occur
after such loss is recognized, the impairment losses originally recognized shall be reversed. However,
the reversed book value shall not be any more than the amortized costs of the said financial asset on
the day of reverse under the assumption that no provision is made for the impairment.
An impairment test shall be made by the Group independently on the individually significant financial
assets; with regard to not individually significant financial assets, an independent impairment test may
be carried out, or they may be included in a combination of financial assets with similar credit risk
characteristics so as to carry out an impairment-related test. Where, upon independent test, the
financial asset (including the individually significant financial assets and not individually significant
financial assets) has not been impaired, it shall be included in a combination of financial assets with
similar credit risk characteristics so as to conduct another impairment test. Assets that are individually
assessed for impairment and for which an impairment loss is or continues to be recognized shall not be
included in the combination of the financial assets with similar credit risk characteristics for
impairment test.
Impairment of available-for-sale financial assets measured by cost
When the equity instrument investment without quoted market price in an active market and the fair
value of which cannot be reliably measured is impaired, the book value is decreased to the current
value confirmed by the discounted future cash flow according to the current market return of the
similar financial assets. The decreased amount is recognized as impairment loss and included in the
current profit and loss. The impairment loss of this kind of financial assets can’t be transferred back
upon confirmation.
5.9.4 Transfer of financial assets
Where a financial asset satisfies any of the following conditions, it shall be terminated from
recognition: ① Where the contractual rights for collecting the cash flow of the said financial asset are
terminated; ② Where the said financial asset has been transferred and all the risks and rewards of the
financial asset have been substantially transferred to the receiver; ③ Where the financial asset has
been transferred, although the Group does not transfer or retain almost all the risks and rewards of the
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
financial asset, the Group still waives the control over the financial asset.
Where the overall transfer of the financial asset satisfies the derecognition conditions, the difference
between the book value of the transferred financial asset as well as the consideration received due to
such transfer and the summation of the cumulative amount of the fair value of the asset that is
originally included in other comprehensive income shall be included in the current profit and loss.
5.9.5 Classification, recognition and measurement of financial liabilities
The Group classifies the financial instruments or the components as financial liabilities or equity
instruments at the time of initial recognition according to the contract terms of the issued financial
instruments and the reflected economic essence rather than only the legal form, considering the
definition of financial liabilities and equity instruments.
On initial recognition, financial liabilities are classified into financial liabilities at fair value through
profit or loss and other financial liabilities. The financial liabilities in group are other financial
liabilities, including short-term borrowings, notes payable, account payables, interest payables, other
payables, non-current liabilities due within one year and long-term payables etc.
Other financial liabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with gain or loss arising from derecognition or amortisation recognised in profit or loss.
5.9.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present obligation
(or part of it) is discharged.
When the Group derecognises a financial liability or a part of it, it recognises the difference between
the carrying amount of the financial liability (or part of the financial liability) derecognised and the
consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in
profit or loss.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
5.9.7 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial assets
and financial liabilities, and intends either to settle on a net basis, or to realise the financial asset and
settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and
the net amount is presented in the balance sheet. Except for the above circumstances, financial assets
and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
5.9.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The Group does not recognise any changes in the fair value of equity
instruments. The equity instruments transaction expenses deducted from equity.
The Group treats distribution to equity instrument holders as profit distributions. Shareholder equity is
not affected by share dividend distributed.
5.10 Accounts Receivable
The Group believes that the individual receivables are all significant, and the corresponding
receivables are individually tested for impairment, and individual recognition method is used to
confirm bad debt provision.
5.11 Inventories
5.11.1 Categories of inventories
The Group's inventories mainly include raw materials, work in progress and finished goods.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs
of conversion and other expenditures incurred in bringing the inventories to their present location and
condition.
5.11.2 Valuation method of inventories upon delivery
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
The actual cost of inventories upon delivery is calculated using the weighted average method.
Agricultural products harvested are reported in accordance with the CAS 1 Inventories.
5.11.3 Basis for determining net realisable value of inventories and provision methods
for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If
the net realisable value is below the cost of inventories, a provision for decline in value of inventories
is made. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net
realisable value is determined on the basis of clear evidence obtained, and takes into consideration the
purposes of holding inventories and effect of post balance sheet events.
Provision for decline in value of other inventories is made based on the excess of cost of inventory
over its net realisable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that previously
caused inventories to be written down below cost no longer exist so that the net realisable value of
inventories is higher than their cost, the original provision for decline in value is reversed and the
reversal is included in profit or loss for the period.
5.11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
5.11.5 Amortisation method for low cost and short-lived consumable items and
packaging materials
Packaging materials and low cost and short-lived consumable items are amortised using the immediate
write-off method.
5.12 Non-current assets held for sale
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Non-current assets and disposal groups are classified as held for sale category when the Group
recovers the book value through a sale (including an exchange of nonmonetary assets that has
commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the following
conditions: (1) the asset or disposal group is available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such asset or disposal group; (2) the sale
is highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmed
purchase commitment and the sale is expected to be completed within one year.
The Group measures the no-current assets or disposal groups classified as held for sale at the lower of
their carrying amount and fair value less costs to sell. Where the carrying amount is higher than the net
amount of fair value less costs to sell, carrying amount should be reduced to the net amount of fair
value less costs to sell, and such reduction is recognized in impairment loss of assets and included in
profit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made.
When there is increase in the net amount of fair value of non-current assets held for sale less costs to
sell at the balance sheet date, the original deduction should be reversed in impairment loss of assets
recognized after the classification of held-for-sale category, and the reverse amount is include in profit
or loss for the period.
Non-current assets held for sale in non-current assets are not subject to depreciation or amortization.
5.13 Long term equity investments
5.13.1 Basis for determining control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. Joint control is the contractually agreed sharing of control over an economic activity,
and exists only when the strategic financial and operating policy decisions relating to the activity
require the unanimous consent of the parties sharing control. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the investee
(for example, warrants and convertible debts) held by the investing enterprises or other parties that are
currently exercisable or convertible shall be considered.
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5.13.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, the
investment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition are
expensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognised using
original cost.
5.13.3 Subsequent measurement and recognition of profit or loss
Long-term equity investment accounted for using the cost method
The Group accounts for long-term equity investment using the cost method. A subsidiary is an
investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Long-term equity investment is adjusted when capital is added or recollected. Investment income is
recognised in the period in accordance with the attributable share of cash dividends or profit
distributions declared by the investee.
5.13.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received
and receivable and the carrying amount is recognised in profit or loss for the period.
5.14 Investment properties
Investment property is property held to earn rentals or for capital appreciation or both.
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An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that economic
benefits associated with an investment property will flow to the Group and the subsequent
expenditures can be measured reliably. Other subsequent expenditures are recognised in profit or loss
in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciationor amortisation policy for the investment property which is consistent with that for
buildings or land use rights.
When an investment property is sold, transferred, retired or damaged, the Group recognises the
amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss for
the period.
5.15 Fixed assets
5.15.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes, and have useful lives of more than one accounting
year. A fixed asset is recognised only when it is probable that economic benefits associated with the
asset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets are
initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it
is probable that economic benefits associated with the asset will flow to the Group and the subsequent
expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is
derecognised. Other subsequent expenditures are recognised in profit or loss in the period in which
they are incurred.
5.15.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net residual
value rate and annual depreciation rate of each category of fixed assets are as follows:
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Depreciation Residual value Annual depreciation
Classification Depreciation method
life rate rate
Straight-line
Houses and buildings 20-40 years 0-5% 2.4%-5.0%
depreciation
Straight-line
5-30 years 0-5% 3.2%-20.0%
Machinery equipment depreciation
Straight-line
4-12 years 0-5% 7.9%-25.0%
Transportation tools depreciation
Estimated net residual value assumes the situation where a fixed asset expire for its estimated useful
life and is in its expected final status. Estimated net residual value is the amount that the Group can
obtain from the disposal less expected disposal fees.
5.15.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its
use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired or
damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related
taxes is recognised in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year-end, and account for any change as a change in an
accounting estimate.
5.16 Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various construction
expenditures during the construction period, borrowing costs capitalised before it is ready for intended
use and other relevant costs. Construction in progress is not depreciated. Construction in progress
is transferred to a fixed asset when it is ready for intended use.
5.17 Borrowing costs
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Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset
are capitalised when expenditures for such asset and borrowing costs are incurred and activities
relating to the acquisition, construction or production of the asset that are necessary to prepare the
asset for its intended use or sale have commenced. Capitalisation of borrowing costs ceases when the
qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale.
Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is suspended abnormally and when the suspension is for a continuous
period of more than 3 months. Capitalisation is suspended until the acquisition, construction or
production of the asset is resumed. Other borrowing costs are recognised as an expense in the period in
which they are incurred. Where funds are borrowed under a specific-purpose borrowing, the amount of
interest to be capitalized is the actual interest expense incurred on that borrowing for the period less
any bank interest earned from depositing the borrowed funds before being used on the asset or any
investment income on the temporary investment of those funds.
5.18 Biological assets
The Group's biological assets are bearer biological assets.
Bearer biological assets are biological assets, for example, held for the production of agricultural
produce, provision of services or rental, Bearer biological assets in the Group are vines. A bearer
biological asset is initially measured at cost. The cost of a bearer biological asset self-grown or
self-bred comprises those costs necessarily incurred and directly attributable to the asset before the
asset becomes available for its intended production and operating purposes, and any borrowing cost
meeting the capitalisation criteria.
The productive biological assets are not accrued depreciation until reaching the intended production
and operation purposes. After reaching the intended production and operation purposes, the productive
biological assets are accrued depreciation within the service life straight-line depreciation. The service
life, estimated net residual value rate and annual depreciation rate of different productive biological
assets are as follows:
Estimated Estimated Annual
Category useful life residual rate depreciation rate
Vines 20 years - 5.0%
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The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biological assets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and the
depreciation method applied at least once at each financial year-end, and account for any change as a
change in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological asset, the
proceeds on disposal net of the carrying amount and relevant taxes is recognised in profit or loss for
the current period.
5.19 Intangible assets
Intangible assets include land use rights, software, etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite useful
life is available for use, its original cost less net residual value and any accumulated impairment losses
is amortised over its estimated useful life using the straight-line method. Intangible assets with
indefinite useful lives are not amortized. The useful lives of the intangible assets are as follows:
Annual
Item Useful life Net residual value amortization rate
Land use rights 40-50 years - 2.0%-2.5%
Software 5-10 years - 10.0%-20.0%
Trademark 10 years - 10.0%
Except for the above intangible assets with finite useful lives, the Group had also land use right and
trademark with infinite useful lives. Land use right with infinite useful lives was related to the
acquisition of permanent ownership held by Via Indómita, S.A., Via Dos Andes, S.A., and Bodegas
Santa Alicia SpA. (collectively referred to as the "Chile Indomita Wine Group") according to related
Chilean law and the acquisition of permanent ownership held by Kilikanoon Estate Pty Ltd (referred
to as the "Australia Kilikanoon") according to related Australian law, for which there is no need to
conduct amortization. Trademark was related to the Group acquired the Chile Indomita Wine Group,
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which had no finite useful lives. The valuation of trademark was based on the trends in the market and
competitive environment, product cycle, and managing long-term development strategy. Those basis
indicated the trademark will provide net cash flows to the Group within a given period. Because it was
hard to predict the period that it would bring economic benefits to the Group, the useful lives were
uncertain.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortisation
method at the end of the period, and makes adjustments when necessary.
5.20 Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixed
assets, construction in progress, bearer biological asset and intangible assets with finite useful life at
the end of each year. If the assets exist impairment, the Group estimates the recoverable amount of the
assets.Intangible assets with indefinite useful life and intangible assets not yet available for use are
tested for impairment annually, irrespective of whether there is any indication that the assets may be
impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable
amount of an individual asset, the recoverable amount of the asset group to which the asset belongs
will be estimated. The recoverable amount of an asset is the higher of its fair value less costs of
disposal and the present value of the future cash flows expected to be derived from the asset.
If recoverable amount of assets is less than book value, the difference is recognised as impairment
provision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonably
allocated to the related assets group (s) or each of assets group (s) expected to benefit from the
synergies of the combination. An impairment loss is recognised if the recoverable amount of the assets
group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment
loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or
sets of assets groups, and then to the other assets of the group pro-rata on the basis of the carrying
amount of each asset (other than goodwill) in the group.
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The impairment is recognised in profit or loss for the period in which it is incurred and will not be
reversed in any subsequent period.
5.21 Long term prepaid expenses
Long term prepaid expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5-20 years
Leasehold improvement 3-5years
Others 3 years
5.22 Employee benefits
5.22.1 Short-term employee benefits
In an accounting period in which an employee has rendered service to the Group, the Group
recognises the actual employee benefits for that service as a liability. The employee benefits of the
Group are either included in cost of related assets or charged to profit or loss in the period when they
are incurred. Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds,
labor union and employee education fees paid by the Group for employees, are recognised as relevant
liability in the period in which the employees provide service, in accordance with the regulated
recognition basis and percentage. The related expenditures are either included in cost of related assets
or charged to profit or loss in the period when they are incurred.
5.22.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
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In the period in which the employees provide service, the Group recognise liability in accordance with
the amounts to be paid calculated according to the predetermined provision plan, and the related
expenditures are either included in cost of related assets or charged to profit or loss in the period when
they are incurred.
5.22.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognise employee benefits payroll
resulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from the
termination plan or the redundancy offer; the Group recognise relevant costs and expenses related to
the payment of termination benefits in reconstructuring.
5.23 Revenue
5.23.1 Revenue from sale of goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the significant
risks and rewards of ownership of the goods. The Group retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold.
The amount of revenue can be measured reliably and it is probable that the associated economic
benefits will flow to the Group. The associated costs incurred or to be incurred can be measured
reliably.
5.23.2 Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction shall be recognized by reference the stage of completion of the
transaction at the reporting date. The outcome of a transaction can be estimated reliably.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
revenue is recognised only to the extent of the costs incurred that will be recoverable, and the costs
incurred are recognised as expenses for the period. When it is not probable that the costs incurred will
be recovered, revenue is not recognised.
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5.24 Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government to
the Group at no consideration. A government grant is recognised only when the Group can comply
with the conditions attaching to the grant and the Group will receive the grant.
Monetary government grants are measured by the amount received or receivable.
5.24.1 Government grant related to an asset
A government grant related to an asset is recognised as deferred income, and evenly amortised to
profit or loss over the useful life of the related asset.
5.24.2Government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses
to be incurred in subsequent periods, the grant is recognised as deferred income, and recognised in
profit or loss over the periods in which the related costs are recognised. If the grant is a compensation
for related expenses or losses already incurred, the grant is recognised immediately in profit or loss for
the period.
A government grant related to the Group's daily activities is recognized in other income based on the
nature of economic activities; a government grant is not related to the Group's daily activities is
recognized in non-operating income and expenses.
The Company's government loans with below-market rate of interest are directly paid to the Company,
and the related low rate interest will write off related borrowing costs. The government loans with
below-market rate of interest obtained by other subsidiaries of the Group are government loans, which
is provided by local bureau of finance through bank with below-market rate of interest. The actual
amount of the loan received by the Group recognized as borrowings, and the related borrowing costs
are calculated according to the principal of the loan and the below-market rate.
5.25 Deferred tax assets/deferred tax liabilities
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The income tax expenses include current income tax and deferred income tax.
5.25.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
5.25.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax
base, or between the nil carrying amount of those items that are not recognised as assets or liabilities
and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are
recognised using the balance sheet liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for deductible
temporary differences are recognised to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences can be utilised. However, for
temporary differences associated with the initial recognition of goodwill and the initial recognition of
an asset or liability arising from a transaction (not a business combination) that affects neither the
accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax
asset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognised to
the extent that it is probable that future taxable profits will be available against which the deductible
losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries and associates, and interests in joint ventures, except where the Group is able to control
the timing of the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments and interests are only recognised to the extent that it is
probable that there will be taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
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At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to
tax laws, that are expected to apply in the period in which the asset is realised or the liability is settled.
Current and deferred tax expenses or income are recognised in profit or loss for the period, except
when they arise from transactions or events that are directly recognised in other comprehensive
income or in shareholders' equity, in which case they are recognised in other comprehensive income or
in shareholders' equity; and when they arise from business combinations, in which case they adjust the
carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no
longer probable that sufficient taxable profits will be available in the future to allow the benefit of
deferred tax assets to be utilised. Such reduction in amount is reversed when it becomes probable
that sufficient taxable profits will be available.
5.25.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to
realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities
are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred
tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend either to settle current tax
assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets or liabilities are expected to be reversed,
deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
5.26 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
5.26.1 Operating lease accounting methods
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The Group as lessee under operating leases
Operating lease payments are recognised on a straight-line basis over the term of the relevant lease,
and are either included in the cost of related asset or charged to profit or loss for the period. Initial
direct costs incurred are charged to profit or loss for the period.
The Group as lessor under operating leases
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs with more than an insignificant amount are capitalised
when incurred, and are recognised in profit or loss on the same basis as rental income over the lease
term. Other initial direct costs with an insignificant amount are charged to profit or loss in the period
in which they are incurred. Contingent rents are charged to profit or loss in the period in which they
actually arise.
5.27 Changes in major accounting policies and accounting estimates
5.27.1 Changes in major accounting policies
No
5.27.2 Changes in major accounting estimates
No
5.28 Others
Critical judgments in applying accounting policies and key assumptions and uncertainties in
accounting estimates
In the application of accounting policies as set out in Note 4, the Group is required to make judgments,
estimates and assumptions about the carrying amounts of items in the financial statements that cannot
be measured accurately, due to the internal uncertainties of the operating activities. These judgments,
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estimates and assumptions are based on historical experience of the Group's management as well as
other factors that are considered to be relevant. Actual results may differ from these estimates.
The Group periodically review the judgments, estimates and assumptions above on a going concern
basis. For those changes in accounting policies that only affect current financial statements, the
influences are recognized in current period. For those changes in accounting policies that affect both
current and future financial statements, the influences are recognized in both current and prospective
periods.
Significant accounting judgments and accounting estimates
The following are key assumptions for after balance sheet date event and other factors of uncertain
estimation. They may cause material adjustment on balance sheet in following accounting period.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilized. Significant management judgment is
required to determine the amount of deferred tax assets that can be recognized, based upon the likely
timing and level of future taxable profits together with future tax planning strategies.
Depreciation
The depreciation is calculated on the straight line basis to write-off the cost of each item of fixed
assets to its residual value over its estimated useful life. The Group's management determines the
estimated useful lives for its fixed assets. This estimate is based on the historical experience of the
actual useful lives of fixed assets of similar nature and functions. If the previous estimates have
significant changes, and depreciation expenses will be adjusted in the future periods.
Useful life of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical experience of
the actual useful lives of intangible assets of similar nature and functions as well as considering the
contractual rights and statutory rights applicable to the intangible assets.
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When the estimated useful lives of finite intangible assets are shortened or extended, the amortization
periods should be adjusted accordingly.
Impairment of long-term assets
The Group assesses whether the recoverable amount is lower than the book value. If there are any
indicators that the book value of non-current assets cannot be fully recoverable, impairment losses
should be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value of
the future cash flows expected to be derived from an asset. As it is difficult for the Group to obtain
the quoted market price of the assets (or assets group), the fair value of the assets cannot be reliably
estimated. When the management make estimation on the expected future cash flows from the asset
or cash generating unit, estimates should be made on choosing a suitable growth rate of sales , average
gross profit , related operating costs and discount rate in order to calculate the present value of those
cash flows, which has a high uncertainty.
Estimated provision for accounts receivable
A provision for impairment of trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy are
considered indicators that the trade receivable is impaired. The provision is reassessed at the end of
each year.
Inventory provision based on net realizable value
The inventories are measured on the lower of carrying value and net realizable value, and provision
should be made for impairment on obsolete and slow moving inventories. The group will reassess
whether the net realizable value is lower than the carrying cost at the end of each year.
The determination of the fair value of identifiable assets and liabilities associated with business
combination.
For the cost of business combination, the Group allocates the purchase price based on fair value of
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relatively identifiable assets and liabilities. When the fair value of relatively identifiable assets and
liabilities are evaluated by the present value of its future cash flows, The management need estimate
the growth rate of sales based on future market supply and demand to predict cash flows, and
considered the proper discount rate for calculating, management need use major accounting estimates
and judgments in the progress.
6. TAXES
6.1 The main taxes and tax rate are as follows:
Tax category Taxation basis Tax rate
Value added tax Levied on the balance between the
16%, 10%, 6% (Chinese), 20%
output tax calculated based on taxable
(France), 21% (Spain), 19% (Chile),
income and the input tax allowed to be
10% (Australia)
deducted in current period
Consumption tax Levied on taxable income 10%, 20% (Chinese)
City development tax Levied on circulation tax actually paid 7% (Chinese)
Corporate income tax Levied on taxable income 25%(Chinese), 33.3%(France), 28%
(Spain), 27% (Chile), 30%
(Australia)
6.2 Tax incentives and relative permit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group, whose
principal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region. According
to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures for
Implementation, Ningxia Growing enjoys an exemption of corporate income tax.
Yantai Changyu Grape Growing Co., Ltd.(" Grape Growing "), a branch of the Company, whose
principal activity is grape growing is incorporated in Zhifu District, Yantai City, Shandong Province.
According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax
Measures for Implementation, Grape Growing enjoys an exemption of corporate income tax.
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Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu"), a subsidiary of the Company, is an enterprise of wine
production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In accordance with the
Notice on Tax Policy Issues concerning Further Implementation of the Western China Development
Strategy (Cai Shui [2011] No.58), Xinjiang Tianzhu is qualified to enjoy preferential taxation policies,
which means it can pay corporate income tax at a preferential rate of 15% for the period from 2015 to
2020.
Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau"), a subsidiary of the Company, is an
enterprise of wine production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In
accordance with the Notice on Tax Policy Issues concerning Further Implementation of the Western
China Development Strategy (Cai Shui [2011] No.58), Shihezi Chateau is qualified to enjoy
preferential taxation policies, which means it can pay corporate income tax at a preferential rate of
15% for the period from 2015 to 2020.
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7. Notes to consolidated financial statement
7.1 Monetary capital
Unit: Yuan
Item Ending balance Beginning balance
Cash on hand 151,228 136,973
Bank deposit 1,561,166,484 1,278,397,711
Other monetary capital 121,720,741 123,987,825
Total 1,683,038,453 1,402,522,509
As at June 30, 2018, the restricted bank deposit details are listed as follows:
Item Ending balance Beginning balance
Housing fund of the unit 2,647,250 2,645,410
Total 2,647,250 2,645,410
As at June 30, 2018, the details of other monetary funds are listed as follows:
Item Ending balance Beginning balance
Pledge of fixed deposits by Yantai
Changyu Wine Research,
61,700,000 61,700,000
Development and Manufacture Co.,
Ltd. (―R&D Company‖)
Guaranteed deposits paid for the letter
57,946,190 57,946,190
of credit
Account balance of Alipay 1,743,116 4,317,635
Guaranty money for the unit card 321,435 14,000
Guaranty money for ICBC platform 10,000 10,000
Total 121,720,741 123,987,825
As at June 30, 2018, the bank deposits of the Group including short-term fixed deposits ranging from
3 months to 12 months amounted to RMB 130,000,000 Yuan (December 31, 2017: RMB 95,000,000
Yuan), with the interest rates ranging from 1.40% to 2.03%.
7.2 Bills receivable
7.2.1 Classification of bills receivable
Unit: Yuan
Type Ending balance Beginning balance
Bank acceptance 367,210,884 244,796,818
Trade acceptance
Total 367,210,884 244,796,818
7.2.2 Bills receivable pledged by the Company at the end of period
Nil
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7.2.3 Bills receivable endorsed or discounted by the Company at the end of period but
not yet matured as of the balance sheet date
Unit: Yuan
Amount terminating recognition at the end Amount not terminating recognition
Item
of period at the end of period
Bank acceptance 225,833,211
Trade acceptance
Total 225,833,211
7.2.4 Bills receivable reclassified as accounts receivable by the Company due to the
default of drawer at the end of period
Nil
7.3 Accounts receivable
7.3.1 Accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type
Amount Proportio Amount Accrued Book value Amount Proportion Amount Accrued Book value
n proportion proportion
Accounts 243,413,092 100.0% 243,413,092 263,796,355 100.0% 263,796,355
receivable of
significant
single amount
and single
accrued bad
debt
provision
Accounts
receivable
accrued bad
debt
provision by
credit risk
features
Accounts
receivable of
insignificant
single amount
and single
accrued bad
debt
provision
Total 243,413,092 100.0% 243,413,092 263,796,355 100.0% 263,796,355
The credit term of accounts receivable is normally one month. Major customers can be granted a credit
term up to one year. The accounts receivable are free from interest.
As at June 30, 2018, the accounts receivable with ownership restrictions were RMB 35,016,424 Yuan
94
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
(December 31, 2017: RMB 46,337,062 Yuan). Please refer to Note 7.19 for details.
7.3.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or
received in this period was RMB 0 Yuan.
7.3.3 Accounts receivable actually cancelled after verification in this period
Nil
7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the ending
balance
Unit: Yuan
Relationship with the Percentage in total
Unit Amount Period
Company accounts receivable
Nonggongshang
Supermarket (Group) Co., Third party 11,250,509 Within 1 year 4.6%
Ltd.
Yantai Zhongya Medical
Affiliated party 8,912,812 Within 1 year 3.7%
Health Wine Co., Ltd.
Lianhua Supermarket
Third party 8,263,237 Within 1 year 3.4%
Holdings Co., Ltd.
Suguo Supermarket Co., Ltd. Third party 5,812,309 Within 1 year 2.4%
Shanghai Lotus Supermarket
Third party 5,694,902 Within 1 year 2.3%
Chain Store Co., Ltd.
Total -- 39,933,769 -- 16.4%
7.3.5 Accounts receivable terminating recognition due to transfer of financial assets
Nil
7.3.6 Accounts receivable transferred and included in assets and liabilities
Nil
7.4 Advance payment
7.4.1 Advance payment listed by age
Unit: Yuan
Ending balance Beginning sum
Age
Amount Proportion Amount Proportion
Within 1 year 3,122,797 100.0% 2,417,931 100.0%
95
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
1-2 years
2-3 years
More than 3 years
Total 3,122,797 -- 2,417,931 --
7.4.2 Advance payment collected by the prepaid parties of top 5 units ranked by the
ending balance
Unit: Yuan
Percentage
Relationship with in the total
Unit Amount Age Reason for unsettlement
the Group advance
payment%
Yantai Power Supply Company of State
Within 1 Prepaid electricity
Grid Shandong Electric Power Third party 500,000 16.0%
year purchasing fund
Company
Within 1
Beijing Putianshou Trade Co., Ltd. Third party 192,000 Failure to receive the goods 6.1%
year
Within 1
Qingdao Vinopro Trading Co., Ltd. Third party 105,200 Failure to receive the goods 3.4%
year
Xinjiang Xinyanmushen Technology Within 1
Third party 116,980 Failure to receive the goods 3.7%
Co., Ltd. year
Yantai Bohong Industry & Trade Co., Within 1
Third party 95,137 Failure to receive the goods 3.0%
Ltd. year
Total -- 1,009,317 -- -- 32.2%
7.5 Interest receivable
7.5.1 Classification of interest receivable
Unit: Yuan
Item Ending balance Beginning balance
Fixed deposit 1,218,373 240,968
Entrusted loan
Bond investment
Total 1,218,373 240,968
96
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.6 Other accounts receivable
7.6.1 Other accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type
Amount Proportion Amount Accrued Book value Amount Proportion Amount Accrued Book value
proportion proportion
Other
accounts
receivable of
significant
single
16,500,022 100.0% 16,500,022 18,737,454 100.0% 18,737,454
amount and
single
accrued bad
debt
provision
Other
accounts
receivable
accrued bad
debt
provision by
credit risk
features
Other
accounts
receivable of
insignificant
single
amount and
single
accrued bad
debt
provision
Total 16,500,022 100.0% 16,500,022 18,737,454 100.0% 18,737,454
7.6.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or
received in this period was RMB 0 Yuan.
7.6.3 Other accounts receivable actually cancelled after verification in this period
Nil
7.6.4 Other accounts listed by nature
Unit: Yuan
Nature Ending book balance Beginning book balance
Deposit and guaranty money receivable 11,240,442 10,075,901
97
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Nature Ending book balance Beginning book balance
Imprest receivable 2,134,326 2,215,146
Investment receivable 2,050,000
Consumption tax and added-value tax export rebate 472,569 2,451,188
Other 2,652,685 1,945,219
Total 16,500,022 18,737,454
7.6.5 Other accounts receivable collected by the borrowers of top 5 units ranked by the
ending balance
Unit: Yuan
Percentage in total
Ending Ending balance of
Unit Nature Age ending balance of other
balance bad debt provision
accounts receivable
Construction
YEDA Construction Industry
guaranty 7,702,477 2-3 years 46.7%
Association
money
Advance
Beijing Shanshui Decoration electric
465,460 1-2 years 2.8%
Engineering Co., Ltd. charge
receivable
Advance
Shaanxi Fangyuan Construction electric
449,337 1-2 years 2.7%
Engineering Co., Ltd. charge
receivable
TRANSBANK Deposit 324,029 Within 1 year 2.0%
Guaranty
YEDA Finance Bureau 198,056 1-2 years 1.2%
money
Total -- 9,139,359 -- 55.4%
7.6.6 Other accounts receivable terminating recognition due to transfer of financial
assets
Nil
7.6.7 Other accounts receivable transferred and included in assets and liabilities
Nil
7.7 Inventories
7.7.1 Inventory classification
Unit: Yuan
Ending balance Beginning balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
195,466,096 195,466,096 66,881,090 66,881,090
Raw materials
98
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
1,529,164,344 1,529,164,344 1,568,230,851 1,568,230,851
Goods in process
627,705,074 13,410,082 614,294,992 864,097,497 25,595,392 838,502,105
Commodity stocks
2,352,335,514 13,410,082 2,338,925,432 2,499,209,438 25,595,392 2,473,614,046
Total
7.7.2 Inventory depreciation provision
Unit: Yuan
Increase in this period Decrease in this period
Beginning
Item Transfer back or Ending balance
balance Accrual Other Other
write-off
Raw materials
Goods in process
25,595,392 683,753 12,869,063 13,410,082
Commodity stocks
25,595,392 683,753 12,869,063 13,410,082
Total
7.8 Assets held for sale
Unit: Yuan
Estimated disposal
Item Ending book value Fair value Estimated disposal time
expenses
Zhenshantun collective
2,000,197 16,282,224 3,878,560 2018
apartment
Total 2,000,197 16,282,224 3,878,560 --
The Company has signed an irrevocable agreement for disposing the fixed assets, and the
contract amount is RMB 16,282,224 Yuan. The disposal is predicted to be completed in 2018.
7.9 Other current assets
Unit: Yuan
Item Ending balance Beginning balance
Prepaid corporate income tax 101,768,819 22,911,298
Deductible input tax 259,484,264 206,529,504
Rent to be amortized 1,724,907 1,381,957
Total 362,977,990 230,822,759
7.10 Available-for-sale financial assets
7.10.1 Particulars of available-for-sale financial assets
Unit: Yuan
Ending balance Beginning balance
Item Book Impairment Book Book Impairment Book
balance provision value balance provision value
99
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Available-for-sale financial
instruments:
Available-for-sale equity
463,880 463,880 467,251 467,251
instruments:
Fair value measurement
Cost measurement 463,880 463,880 467,251 467,251
Total 463,880 463,880 467,251 467,251
7.10.2 Available-for-sale financial assets by cost measurement at the end of period
Unit: Yuan
Book balance Impairment provision Cash
Shareholding
Increase Decrease Increase Decrease dividend
Invested unit ratio in the
Beginning in this in this Ending Beginning in this in this Ending in this
invested unit
period period period period period
Less than
Other (Note) 467,251 5053 8424 463,880
1%
Total 467,251 5053 8424 463,880 --
Note: The Group holds less than 1% of the shares in such invested entities. These invested
entities are all unlisted companies and their fair value can‘t be measured reliably, so the
Group shall measure such available-for-sale financial assets by cost method.
7.11 Investment real estate
7.11.1 Investment real estate by cost measurement method
√ Applicable □ Inapplicable
Unit: Yuan
Houses and Construction in
Item Land use right Total
buildings progress
Ⅰ Original book value
1. Beginning balance 38,347,283 38,347,283
2. Increase in this period
2.1 Outsourcing
2.2 Transfer in from
inventories\fixed assets\
construction in progress
2.3 Business merger
increase
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance 38,347,283 38,347,283
Ⅱ Accumulated
depreciation & accumulated
amortization
1. Beginning balance 19,879,294 19,879,294
2. Increase in this period 590,610 590,610
2.1 Accrual or 590,610 590,610
100
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Houses and Construction in
Item Land use right Total
buildings progress
amortization
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance 20,469,904 20,469,904
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance
Ⅳ Book value
1. Ending book value 17,877,379 17,877,379
2. Beginning book value 18,467,989 18,467,989
7.12 Fixed assets
7.12.1 Particulars of fixed assets
Unit: Yuan
Houses and
Item Machinery equipment Transportation tools Total
buildings
Ⅰ Original book value:
1. Beginning balance 4,508,868,684 2,247,350,293 28,689,415 6,784,908,392
2. Increase in this period 28,099,550 276,616,965 2,714,616 307,431,131
2.1 Acquisition 4,386,524 117,719,992 1,772,906 123,879,422
2.2 Transfer in from
98,234,615 98,234,615
construction in progress
2.3 Business merger
23,713,026 60,662,358 941,710 85,317,094
increase
2.4 Other
3. Decrease in this period 7,556,503 3,521,487 11,077,990
3.1 Disposal or
7,556,503 3,521,487 11,077,990
retirement
3.2 Other
4. Ending balance 4,536,968,234 2,516,410,755 27,882,544 7,081,261,533
Ⅱ Accumulated
depreciation
1. Beginning balance 512,643,486 922,944,520 20,236,417 1,455,824,423
2. Increase in this period 67,468,028 106,700,526 1,231,461 175,400,015
2.1 Accrual 65,844,058 72,709,493 559,369 139,112,920
2.2 Business merger
1,623,970 33,991,033 672,092 36,287,095
increase
2.3 Other
3. Decrease in this period 6,591,830 946,752 7,538,582
101
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Houses and
Item Machinery equipment Transportation tools Total
buildings
3.1 Disposal or
6,591,830 946,752 7,538,582
retirement
3.2 Other
4. Ending balance 580,111,514 1,023,053,216 20,521,126 1,623,685,856
Ⅲ Impairment provision
1. Beginning balance
2. Increase
2.1 Accrual
2.2 Other
3. Decrease
3.1 Disposal or
retirement
3.2 Other
4. Ending balance
Ⅳ Book value
1. Ending book value 3,956,856,720 1,493,357,539 7,361,418 5,457,575,677
2. Beginning book value 3,996,225,198 1,324,405,773 8,452,998 5,329,083,969
As at June 30, 2018, the net value of the fixed assets with ownership restrictions was RMB
142,338,624 Yuan (December 31, 2017: RMB 145,009,923 Yuan). Please refer to Note 7.52
for details.
As at June 30, 2018, the net value of the fixed assets divided into those held for sale was
RMB 2,000,197 Yuan (December 31, 2017: RMB 2,000,197 Yuan).
7.12.2 Temporarily idle fixed assets
Nil
7.12.3 Fixed assets under finance leases
Nil
7.12.4 Fixed assets under operating lease
Unit: Yuan
Item Ending book value
Machinery equipment 199,791
7.12.5 Fixed assets without property certificates
Unit: Yuan
Reason for not receiving the property
Item Book value
certificate
Industrial Production Center of the R&D Company 1,623,153,949 Under transaction
102
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Dormitory Building, Main Building and Reception Building of
353,370,544 Under transaction
Chang‘an Chateau
European Town, Main Building and Service Building of Beijing
190,443,678 Under transaction
Chateau
Main Building of Yantai Chateau Changyu Tinlot 84,912,291 Under transaction
Fermentation Workshop and Wine Storage Workshop of Xinjiang
18,143,780 Under transaction
Tianzhu
Office Building and Packaging Workshop of Icewine Valley 9,352,280 Under transaction
Wine-making Workshop of Changyu (Jingyang) 4,326,818 Under transaction
Office Building, Laboratory Building and Workshop of
3,750,132 Under transaction
Fermentation Center
Finished Goods Warehouse and Workshop of Kylin Packaging 2,442,189 Under transaction
Office of Sales Company 2,021,311 Under transaction
Total 2,291,916,972 Under transaction
7.13 Construction in progress
7.13.1 Particulars of construction in progress
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Research, Development & Manufacture
Center (―Changyu Wine City 835,624,055 835,624,055 883,731,540 883,731,540
Complex‖)
Construction Project of Chang‘an
48,016,036 48,016,036 53,290,036 53,290,036
Chateau
Construction Project of Ningxia
47,902,668 47,902,668 35,711,269 35,711,269
Chateau
Construction Project of Shihezi
29,221,272 29,221,272 25,463,724 25,463,724
Chateau
Construction Project of Sales Company 14,205,640 14,205,640 11,355,685 11,355,685
Construction Project of Chateau Tinlot 17,689,488 17,689,488 5,819,246 5,819,246
Construction Projects of Other
23,255,594 23,255,594 10,770,069 10,770,069
Companies
Total 1,015,914,753 1,015,914,753 1,026,141,569 1,026,141,569
103
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.13.2 Changes of major construction in progress in this period
Unit: Yuan
Including
Proportion
Other Accumulati :
Transferred of Capitalizati
decrea ve capitalize
Beginning Increase in to fixed Ending accumulati on ratio of Capital
Item Budget se in capitalized d amount
balance this period assets in balance ve project interest in source
this amount of of interest
this period input in this period
period interest in this
budget
period
Constructi
on Project
Loans
of
form
Research,
financial
Developm
4,505,780,0 883,731,54 39,381,9 87,489,3 835,624,0 11,092,50 2,664,5 1.20% institutio
ent & 72.5%
00 0 14 99 55 6 41 and 4.3%
Manufactu ns and
re Center self-raise
(―Changyu d funds
Wine City
Complex‖)
Constructi
on Project Self-rais
620,740,00 5,437,37 10,711,3 48,016,03
of 53,290,036 107.7% ed funds
0 2 72 6
Chang‘an
Chateau
Constructi
Self-rais
on Project 780,000,00 3,757,54 29,221,27
25,463,724 92.0% ed funds
of Shihezi 0 8 2
Chateau
Constructi
on Project Self-rais
161,350,00 2,849,95 14,205,64
11,355,685 95.2% ed funds
of Sales 0 5 0
Company
Constructi
Self-rais
on Project 12,191,3 47,902,66
41,415,000 35,711,269 128.0% ed funds
of Ningxia 99 8
Chateau
Constructi
on Project 192,400,00 Self-rais
11,870,2 17,689,48
5,819,246 102.5% ed funds
of Chateau 0 42 8
Tinlot
6,301,685,0 1,015,371,5 75,488,4 98,200,7 992,659,1 11,092,50 2,664,5 --
Total --
00 00 30 71 59 6 41
As at June 30, 2018, there was no indication for impairment of construction in progress of the
Group, so no provision for impairment was made.
104
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.14 Productive biological assets
7.14.1 Productive biological assets by cost measurement method
Unit: Yuan
Item Plantation Total
Immature Mature
Ⅰ Original book value
1. Beginning balance 12,175,000 217,537,353 229,712,353
2. Increase in this period 1,548,693 8,462,877 10,011,570
2.1 Outsourcing
2.2 Self cultivation 5,131,006 4,880,564 10,011,570
2.3 The immature turn to the mature -3,582,313 3,582,313
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 13,723,693 226,000,230 239,723,923
Ⅱ Accumulated depreciation
1. Beginning balance 27,782,465 27,782,465
2. Increase in this period 9,279,710 9,279,710
2.1 Accrual 9,279,710 9,279,710
2.2 Other
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 37,062,175 37,062,175
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
2.2 Other
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance
Ⅳ Book value
1. Ending book value 13,723,693 188,938,055 202,661,748
2. Beginning book value 12,175,000 189,754,888 201,929,888
As at June 30, 2018, no ownership of the biological assets was restricted.
As at June 30, 2018, there was no indication for impairment of biological assets of the Group, so no
provision was made.
105
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.15 Intangible assets
7.15.1 Particulars of intangible assets
Unit: Yuan
Item Land use right Software use right Trademark Total
Ⅰ Original book value
1. Beginning balance 521,731,139 73,666,754 159,702,508 755,100,401
2. Increase in this period 7,089,292 3,228,127 9,167,907 19,485,326
2.1 Acquisition 999,745 1,183,404 211,645 2,394,794
2.2 Internal R&D
2.3 Business merger
6,089,547 2,044,723 8,956,262 17,090,532
increase
2.4 Other
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 528,820,431 76,894,881 168,870,415 774,585,727
Ⅱ Accumulated amortization
1. Beginning balance 67,547,772 21,516,741 10,586,991 99,651,504
2. Increase in this period 5,316,763 4,729,142 2,194,042 12,239,947
2.1 Accrual 5,316,763 4,056,496 2,194,042 11,567,301
2.2 Business merger
672,646 672,646
increase
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 72,864,535 26,245,883 12,781,033 111,891,451
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
2.2 Other
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance
Ⅳ Book value
106
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
1. Ending book value 455,955,896 50,648,998 156,089,382 662,694,276
2. Beginning book value 454,183,367 52,150,013 149,115,517 655,448,897
As at June 30, 2018, the net value of the intangible assets with ownership restrictions was
RMB 161,934,242 Yuan (December 31, 2017: RMB 164,051,996 Yuan). Please refer to
Note 7.52 for details.
7.15.2 Land use right of that not receiving the property certificate
Nil
7.16 Goodwill
7.16.1 Original book value of goodwill
Unit: Yuan
Name of the invested Increase in this period Decrease in this period
Beginning
unit or matter forming Formed by business Ending balance
balance Other Disposal Other
goodwill merger
Etablissements Roullet
Fransac (―Roullet 13,112,525 13,112,525
Fransac‖)
Dicot Partners, S.L
92,391,901 92,391,901
(―Atrio Group‖)
Societe Civile
Argricole Du Chateau
15,761,440 15,761,440
De Mirefleurs
(―Mirefleurs‖)
Indomita Wine
6,870,115 6,870,115
Company Chile, SpA
Kilikanoon Estate,
35,794,894 35,794,894
Australia
Total 128,135,981 35,794,894 163,930,875
7.17 Long-term unamortized expenses
Unit: Yuan
Increase in this Amortization in this
Item Beginning balance Other decrease Ending balance
period period
Land lease fees 56,365,385 719,454 55,645,931
Land acquisition
43,976,036 569,650 43,406,386
fees
Afforestation fees 125,628,334 6,101,637 6,526,355 125,203,616
Renovation costs 873,263 109,158 764,105
Other 3,166,213 192,827 2,973,386
Total 230,009,231 6,101,637 8,117,444 227,993,424
107
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.18 Deferred income tax assets/liabilities
7.18.1 Un-offset deferred income tax assets
Unit: Yuan
Ending Balance Beginning Balance
Item Deductible Deductible
Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Asset impairment provision 13,410,082 3,352,521 25,595,392 6,398,848
Unrealized profits from inter-company
585,312,988 146,328,247 618,591,681 154,647,920
transactions
Deductible loss 300,198,853 77,339,305 345,639,059 88,584,337
Unpaid bonus 59,305,392 14,853,004 94,462,722 23,671,611
Dismission welfare 20,405,213 5,101,303 27,980,857 6,995,214
Deferred income 108,652,154 23,832,078 109,797,054 24,285,203
Asset valuation impairment 673,019 181,715 684,622 184,848
Accrued promotional expenses 13,413,655 3,353,415
Total 1,087,957,701 270,988,173 1,236,165,042 308,121,396
7.18.2 Un-offset deferred income tax liabilities
Unit: Yuan
Ending Balance Beginning Balance
Item Taxable Taxable
Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
difference difference
Assets appraisal appreciation in business merger
105,651,986 26,020,063 89,316,823 24,264,203
under non-common control
Changes in fair value of available-for-sale
financial assets
Total 105,651,986 26,020,063 89,316,823 24,264,203
7.18.3 Details of unconfirmed deferred income tax assets
Unit: Yuan
Item Ending balance Beginning balance
Deductible loss 157,307,221 150,320,039
Total 157,307,221 150,320,039
7.18.4 Deductible losses of unconfirmed deferred income tax assets will expire in:
Unit: Yuan
Year Ending sum Beginning sum Remark
2019 7,311,273 7,311,273
2020 45,960,766 45,960,766
108
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2021 82,685,213 82,685,213
2022 14,362,787 14,362,787
2023 6,987,182
Total 157,307,221 150,320,039 --
7.19 Short-term loans
7.19.1 Classification of short-term loans
Unit: Yuan
Item Ending balance Beginning balance
Pledge loan
Mortgage loan 54,882,050 65,939,662
Guaranteed loan 43,544,169
Fiduciary loan 652,028,457 648,494,624
Total 750,454,676 714,434,286
As at June 30, 2018, the mortgage loan referred to the factoring business for accounts
receivable of EUR 4,576,413 (equivalent to RMB 35,016,424 Yuan) that Hacienda y Vinedos
Marques del Atrio, S.L.U. (―Marques del Atrio‖) transacted in such banks as Banco de
Sabadell, S.A. (December 31, 2017: RMB 46,337,062 Yuan), and a loan of USD 3,000,000
(equivalent to RMB 19,865,626 Yuan) that Indomita Wine Company Chile, SpA from BBVA
bank by mortgage of fixed assets of CLP 3,139,045,000 (equivalent to RMB 31,704,355 Yuan)
(December 31, 2017: RMB 19,602,600 Yuan).
By means of overseas loan under domestic guarantee, the Company opened a financing
guarantee with the credit line of domestic bank to provide a guarantee for the loan of AUD
8,953,626 (equivalent to RMB 43,544,169 Yuan) of Kilikanoon Estate, Australia. The letter
of guarantee came into effect from January 17, 2018 and will expire on January 15, 2019.
7.20 Accounts payable
7.20.1 List of accounts payable
Unit: Yuan
Item Ending balance Beginning balance
Within one year 502,094,548 664,020,176
From one year to two years 2,408,743 2,051,592
From two years to three years 1,097,233 371,111
Over three years 256,431
Total 505,856,955 666,442,879
7.20.2 Explanation of significant accounts payable aged more than one year
As at June 30, 2018, there were no significant accounts payable aged more than one year.
109
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.21 Advances from customers
7.21.1 List of advances from customers
Unit: Yuan
Item Ending sum Beginning sum
Within one year 356,522,984 340,025,690
From one year to two years 2,894,155 7,072,254
From two years to three years 3,285,740 381,463
Over three years 3,652,401 3,414,749
Total 366,355,280 350,894,156
7.21.2 Advances from customers of significant amount aged more than one year
As at June 30, 2018, the Company had no advances from customers of significant amount
aged more than one year.
7.22 Employee remunerations payable
7.22.1 List of employee remunerations payable
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance
period period
1. Short-term remuneration 182,545,284 218,523,367 244,584,113 156,484,538
2. Post-employment welfare – defined
298,093 26,186,535 25,379,241 1,105,387
contribution plan
3. Dismission welfare 27,980,857 1,275,387 8,851,031 20,405,213
4.Other welfare due within one year
Total 210,824,234 245,985,289 278,814,385 177,995,138
7.22.2 List of short-term remunerations
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance
period period
1. Salaries, bonuses, allowances
185,014,318 194,859,167 220,953,405 158,920,080
and subsidies
2. Staff welfare 2,116,475 4,592,350 5,304,548 1,404,277
3. Social insurance charges 524,316 11,468,383 10,938,536 1,054,163
Including: Medical insurance 524,316 9,928,407 9,411,157 1,041,566
Injury insurance 819,706 807,109 12,597
Maternity insurance 720,270 720,270
4. Housing fund 39,256 5,680,880 5,709,726 10,410
5. Union fee and staff education fee 2,060,231 1,922,587 2,038,363 1,944,455
110
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Increase in this Decrease in this
Item Beginning balance Ending balance
period period
6. Short-term compensated
absences
7. Short-term profit-sharing plan
Minus: Those divided into
7,209,312 360,465 6,848,847
non-current liabilities
Total 182,545,284 218,523,367 244,584,113 156,484,538
7.22.3 List of defined contribution plan
Unit: Yuan
Item Beginning balance Increase Decrease Ending balance
1. Basic endowment insurance 297,591 25,034,196 24,821,104 510,683
2. Unemployment insurance 502 1,152,339 558,137 594,704
3. Enterprise annuity payment -
Total 298,093 26,186,535 25,379,241 1,105,387
7.22.4 Dismission welfare
Unit: Yuan
Item Beginning balance Increase Decrease Ending balance
1. Compensation for server of labor
1,275,387 1,275,387
relation
2. Compensation for early retirement 27,980,857 7,575,644 20,405,213
Total 27,980,857 1,275,387 8,851,031 20,405,213
7.23 Taxes payable
Unit: Yuan
Item Ending balance Beginning balance
Value added tax 15,404,619 35,681,696
Consumption tax 12,373,243 44,961,022
Corporate income tax 35,771,016 38,834,293
Individual income tax 804,004 7,805,917
Urban maintenance and construction tax 1,542,643 5,669,280
Property tax 3,976,184 4,647,644
Urban land use tax 2,493,549 2,645,687
Other 1,494,489 4,848,617
Total 73,859,747 145,094,156
7.24 Interest payable
Unit: Yuan
Item Ending balance Beginning balance
Interest of long-term loans with interest paid by
111
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Ending balance Beginning balance
installment and principal paid on maturity
Interest of corporate bonds
Interest payable of short-term loans 834,247 771,250
Interest of preferred shares\ perpetual bonds divided
into financial liabilities
Other
Total 834,247 771,250
7.25 Dividends payable
Unit: Yuan
Item Ending balance Beginning balance
Ordinary stock dividends
Preferred stock dividends/sustainable debt dividends
divided into equity instruments
Other 746,021
Total 746,021
7.26 Other payables
7.26.1 Other payables listed by nature
Unit: Yuan
Item Ending balance Beginning balance
Dealer‘s deposit payable 153,278,830 139,710,963
Equipment purchase and construction costs
112,120,286 130,706,777
payable
Transportation charges payable 13,329,596 27,847,092
Trademark use fees payable for Changyu Group
45,965,699 77,208,929
Company
Advertising expenses payable 243,506,777 132,248,615
Employee cash deposit 7,199,282 13,327,132
Supplier‘s deposit payable 11,909,254 3,082,595
Contracting fees payable 26,669,423 38,070,571
Other 57,728,768 40,761,645
Total 671,707,915 602,964,319
7.26.2 Other significant accounts payable aged more than one year
Unit: Yuan
Item Ending balance Cause of unpayment or carry-over
Beijing Qinglang Ecological Agriculture
7,033,763 The contracting fees haven‘t been settled
Technology Development
Yantai De‘an Investment Co., Ltd. 3,218,174 The contracting fees haven‘t been settled
Total 10,251,937 --
112
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.27 Non-current liabilities due within one year
Unit: Yuan
Item Ending balance Beginning balance
Long-term loans due within one 106,570,388 76,954,827
year
Long-term accounts payable due 34,000,000 34,000,000
within one year
Total 140,570,388 110,954,827
7.28 Other current liabilities
Unit: Yuan
Item Ending balance Beginning balance
Deferred income 16,311,727 16,878,199
Total 16,311,727 16,878,199
7.29 Long-term loans
7.29.1 Classification of long-term loans
Unit: Yuan
Item Ending balance Beginning balance
Pledge loan
Mortgage loan 7,528,121 6,693,544
Guaranteed loan 75,000,000 81,250,000
Fiduciary loan 71,437,070 68,182,310
Total 153,965,191 156,125,854
Description of the classification of long-term loans:
Unit: Yuan
Item Ending balance Long-term loan due within one Long-term loan due over one
year year
Pledge loan
Mortgage loan 7,528,121 7,528,121
Guaranteed loan 100,000,000 25,000,000 75,000,000
Fiduciary loan 153,007,458 81,570,388 71,437,070
Total 260,535,579 106,570,388 153,965,191
As at June 30, 2018, the guaranteed loan referred to the long-term loan of RMB 100,000,000
Yuan borrowed by the Company for the R&D Company by means of credit guarantee
(December 31, 2017: RMB 100,000,000 Yuan), and the mortgage loan referred to the loan of
EUR 679,560 (equivalent to RMB 5,199,656 Yuan) borrowed from Popular Espaol by
Marques del Atrio by mortgage of its fixed assets of EUR 4,264,170 (equivalent to RMB
32,627,300 Yuan) (December 31, 2017: RMB 9,502,372 Yuan). Kilikanoon Estate, Australia
borrowed a loan of AUD 478,783 (equivalent to RMB 2,328,465 Yuan) by pledge of its fixed
assets of AUD 503,163 (equivalent to RMB 2,447,034 Yuan) from NAB bank (December 31,
113
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
2017: Nil).
7.30 Long-term accounts payable
7.30.1 Long-term accounts payable listed by nature
Unit: Yuan
Item Ending balance Beginning balance
China Agricultural Development Key Construction Fund 235,000,000 259,000,000
Total 235,000,000 259,000,000
In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in the R&D
Company, accounting for 37.9% of the registered capital. According to the investment
agreement, it is agreed that Agricultural Development Fund will take back the investment
fund in ten years and obtain fixed income according to year, which is 1.2% of the remaining
principal. Except for the above fixed income, the Agricultural Development Fund shall not
enjoy other profits of the R&D Company or bear the losses of the R&D Company.
Accordingly, the investment of the Agricultural Development Fund in the R&D Company is
equity investment nominally, which is debt investment in deed. The Group included the
investment of the Agricultural Development Fund in long-term accounts payable measured by
amortized cost. In 2017, the Group gave back the principal of RMB 12,000,000 Yuan. From
January to June 2018, the Group gave back the principal of RMB 24,000,000 Yuan, and the
mortgaged and pledged assets included monetary capital of RMB 61,700,000 Yuan, fixed
assets of RMB 75,559,935 Yuan, and intangible assets of RMB 161,934,242.
Unit: Yuan
Balance of long-term accounts Long-term accounts payable Long-term accounts payable due in one
payable due within one year year later
269,000,000 34,000,000 235,000,000
7.31 Deferred income
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance Forming reason
period period
Governmental
109,797,054 8,200,000 9,344,900 108,652,154
subsidy
Minus: Those
included in current 16,878,199 16,311,727 --
liabilities
Non-current
92,918,855 92,340,427 --
liabilities
Projects related to governmental subsidy
Unit: Yuan
114
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Amount
Amount
of Amount
included Amount
subsidy included in
Beginning in other offset Other Ending Related to
Item of liabilities newly non-operating
balance income in the cost changes balance assets/income
increased revenue in
this expenses
in this this period
period
period
Grape bulk wine
4,739,400 717,450 4,021,950 Related to assets
brewing project
Reward for investment
in fixed assets of
9,276,600 1,140,000 8,136,600 Related to assets
Chateau Shihezi
project
Industrial revitalization
and technical
17,064,000 711,000 16,353,000 Related to assets
transformation project
in Xinjiang
Special subsidy for
supporting 5,300,000 530,000 4,770,000 Related to assets
infrastructure
Industrial revitalization
and technical
1,086,000 1,086,000 Related to assets
transformation project
in Ningxia
Tourism development
500,000 500,000 Related to income
fund subsidy project
Supporting fund for
10,200,000 10,200,000 Related to income
corporate development
Construction project of
grape brewing
3,600,000 200,000 3,400,000 Related to assets
production capacity
(Huanren)
Electronic traceability
3,192,311 333,527 2,858,784 Related to assets
system project of wine
Transferred fund of
Propaganda
888,945 444,472 444,473 Related to assets
Department, Miyun
County Committee
Wine industry
744,000 93,000 651,000 Related to assets
development project
Peninsula blue
economic zone 8,000,000 1,000,000 7,000,000 Related to assets
construction project
Technical
transformation project
of information-based 3,480,000 290,000 3,190,000 Related to assets
system construction
engineering
Cross-border
702,615 300,000 1,002,615 Related to income
e-commerce project
Research project of red
wine phenolic 284,601 284,601 Related to income
substances
Grape base
520,000 260,000 260,000 Related to assets
construction project
Fund for water
pollution treatment 320,132 56,801 263,331 Related to income
project
Infrastructure 1,843,750 62,500 1,781,250 Related to assets
115
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Amount
Amount
of Amount
included Amount
subsidy included in
Beginning in other offset Other Ending Related to
Item of liabilities newly non-operating
balance income in the cost changes balance assets/income
increased revenue in
this expenses
in this this period
period
period
construction fund
Supporting fund for
36,900,000 2,050,000 34,850,000 Related to assets
industrial development
Subsidy for economic
and energy-saving
1,154,700 64,150 1,090,550 Related to assets
technical
transformation project
Special fund for
building Yantai as a
4,750,000 4,750,000 Related to income
strong manufacturing
city
Efficient water-saving
3,150,000 306,000 2,844,000 Related to assets
irrigation project
Total 109,797,054 8,200,000 9,344,900 108,652,154 --
7.32 Other non-current liabilities
Unit: Yuan
Item Ending balance Beginning balance
Employee remunerations payable 6,848,847 7,209,312
Total 6,848,847 7,209,312
As at June 30, 2018, the employee remunerations payable referred to the job security deposit
deducted from the year-end bonus of the employees higher than sales manager of the
Company in proportion, which will be paid from 2019 to 2021 as predicted.
7.33 Share capital
Unit: Yuan
Increase or decrease (+,-) in this period
Share
Beginning transferred Ending
balance Newly issued Allocated balance
from Other Subtotal
shares shares
accumulation
fund
Total shares 685,464,000 685,464,000
7.34 Capital reserves
Unit: Yuan
Decrease in this
Item Beginning balance Increase in this period Ending balance
period
Capital premium (Share
560,038,853 560,038,853
capital premium)
Other capital reserves 5,916,588 5,916,588
Total 565,955,441 565,955,441
116
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.35 Other comprehensive income
Unit: Yuan
Amount incurred in this period
Minus: profit
Amount
or loss in this
Beginning incurred Minus: Attributable Attributable Ending
Item period
balance before income to parent to minority balance
transferred
income tax tax company shareholders
from other
in this expenses after tax after tax
comprehensive
period
income before
1. Other comprehensive income
not to be reclassified into profit
and loss later
Including: change in net liabilities
and net assets from recalculated
defined benefit plan
Share enjoyed in other
comprehensive income not to be
reclassified into profit and loss in
invested unit under equity law
2. Other comprehensive income to
be reclassified into profit and loss 3,109,240 -11,126,413 -9,230,820 -1,895,593 -6,121,580
later
Including: share enjoyed in other
comprehensive income to be
reclassified into profit and loss in
invested unit under equity law
Profit and loss from
changes in fair value of financial
assets for sale
Profit and loss from
reclassification of held-to-maturity
investment into fair value of
financial assets for sale
Effective part of profit and
loss of cash-flow hedge
Difference in translation of
Foreign Currency Financial 3,109,240 -11,126,413 -9,230,820 -1,895,593 -6,121,580
Statement
Total other comprehensive income 3,109,240 -11,126,413 -9,230,820 -1,895,593 -6,121,580
7.36 Surplus reserves
Unit: Yuan
Decrease in this
Item Beginning balance Increase in this period Ending balance
period
Legal surplus reserves 342,732,000 342,732,000
Free surplus reserves
Reserve fund
Enterprise expansion fund
Other
Total 342,732,000 342,732,000
117
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.37 Undistributed profit
Unit: Yuan
Item Ending balance Beginning balance
Undistributed profit at the end of prior period before adjustment 7,309,081,618 6,620,118,562
Total Undistributed profit at the beginning of the period before adjustment
(increase listed with+ , and decrease listed with -)
Undistributed profit at the beginning of the period after adjustment 7,309,081,618 6,620,118,562
Plus: Net profit for owner of the parent company 635,837,405 1,031,695,056
Minus: Drawn legal surplus
Drawn free surplus
Drawn common risk provision
Common dividend payable 342,732,000
Common dividend transferred to share capital
Undistributed profit at the end of period 7,944,919,023 7,309,081,618
7.38 Operating income and operating cost
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Item
Income Cost Income Cost
Main business 2,818,814,912 969,407,949 2,761,797,479 921,629,225
Other business 9,415,152 5,149,343 5,300,718 4,124,908
Total 2,828,230,064 974,557,292 2,767,098,197 925,754,133
7.39 Taxes and surcharges
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Consumption tax 97,343,463 87,580,364
Urban maintenance and construction tax 23,778,056 30,288,028
Education surcharges 17,417,976 21,968,359
Building tax 16,878,556 9,993,265
Land use tax 6,013,248 5,092,473
Stamp duty 2,247,814 1,970,707
Other 1,597,138 3,580,802
Total 165,276,251 160,473,998
118
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.40 Selling expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Advertising promotion expenses 362,293,691 353,792,438
Employee remunerations 139,247,494 115,463,193
Transportation expenses 67,177,736 64,053,872
Trademark use fees 43,363,867 44,428,033
Storage and lease expenses 19,857,616 27,357,293
Depreciation expenses 21,735,895 19,740,726
Service charges 12,459,237 6,734,393
Travel expenses 10,886,711 10,036,717
Water, electricity and gas charges 7,166,936 3,572,499
Office & postage costs 2,349,806 2,479,541
Packing expenses 3,873,287 3,140,528
Public security & clean-keeping
2,336,546 2,532,418
expenses
Business entertainment expenses 1,995,516 1,190,071
Afforestation fees 1,177,756 1,342,117
Property management expenses 1,291,390 1,348,857
Other 13,445,549 11,523,030
Total 710,659,033 668,735,726
7.41 Management expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Employee remunerations 60,660,238 45,732,792
Depreciation expenses 35,410,914 28,996,760
Contracting expenses 7,178,106 10,086,436
Repair expenses 7,076,148 5,768,634
Office expenses 10,977,189 8,693,956
Amortization expenses 9,520,182 9,569,693
Afforestation fees 6,493,556 3,893,103
Rental expenses 5,061,778 5,095,023
Business entertainment expenses 2,815,060 2,562,180
Public security & clean-keeping
3,953,646 2,787,735
expenses
Travel expenses 2,139,939 2,650,716
Other 8,805,132 4,705,358
Total 160,091,888 130,542,386
7.42 Financial expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Interest expenditure 18,739,528 15,042,038
Minus: Interest income 7,245,870 4,849,166
119
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Plus: Commission charges 3,005,483 754,300
Exchange gain or loss -1,413,199 200,777
Total 13,085,942 11,147,949
7.43 Loss on impairment of assets
Item Amount incurred in this period Amount incurred in prior period
1. Loss on bad debts
2. Inventory falling price loss -4,730,948 -5,853,576
3. Loss on impairment of available-for-sale
financial assets
4. Loss on impairment of held-to maturity
investment
5. Loss on impairment of long-term equity
investment
6. Loss on impairment of investment real estate
7. Loss on impairment of fixed assets
8. Loss on impairment of engineering materials
9. Loss on impairment of construction in progress
10. Loss on impairment of productive biological
assets
11. Loss on impairment of oil and gas assets
12. Loss on impairment of intangible assets
13. Loss on impairment of goodwill
14. Other
Total -4,730,948 -5,853,576
7.44 Income from asset disposal
Unit: Yuan
Source of income from asset disposal Amount incurred in this period Amount incurred in prior period
Income from disposal of fixed assets 93,958 -495,071
Total 93,958 -495,071
7.45 Other income
Unit: Yuan
Amount incurred in this Amount incurred in Nature
Source of other income
period prior period
Supporting fund for industrial development 2,050,000 Related to assets
Industrial revitalization and technical
1,086,000 Related to assets
transformation project in Ningxia
Reward for investment in fixed assets 1,140,000 Related to assets
Special fund for construction of peninsula blue
1,000,000 Related to assets
economic zone
Other 4,012,100 Related to assets
Tax returns 15,011,673 Related to income
Other 13,683,105 Related to income
120
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Amount incurred in this Amount incurred in Nature
Source of other income
period prior period
Total 37,982,878
7.46 Non-operating income
Unit: Yuan
Amount incurred in Amount incurred in Amount included in the current
Item
this period prior period non-recurring profits/losses
Gains on debt recombination
Gains on exchange of non-monetary
assets
Grains on donations
Governmental subsidy 19,735,204
Other 2,006,392 3,412,401 2,006,392
Total 2,006,392 23,147,605 2,006,392
Governmental subsidies included in the current profit/loss:
Unit: Yuan
Amount incurred in Amount incurred in
Item of subsidy Related to assets/income
this period prior period
Supporting fund of major projects 3,520,914 Related to assets
Supporting fund for the development of
2,086,027 Related to assets
small and medium-sized enterprises
Tax returns 12,737,950 Related to income
Other 1,390,313 Related to income
Total 19,735,204 --
7.47 Non-operating expenses
Unit: Yuan
Amount incurred in Amount incurred in Amount included in the current
Item non-recurring profits/losses
this period prior period
Loss on debt recombination
Loss on exchange of
non-monetary assets
Donation
Fine, penalty and overdue fine
paid due to violation of laws and 1,187,713 170,997 1,187,713
administrative regulations
Other 204,649 15,571 204,649
Total 1,392,362 186,568 1,392,362
121
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.48 Income tax expenses
7.48.1 List of income tax expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior
period
Current income tax expenses 178,993,081 195,716,215
Deferred income tax expenses 32,986,654 33,036,575
Total 211,979,735 228,752,790
7.48.2 Adjustment process of accounting profit and income tax expenses
Unit: Yuan
Item Amount incurred in this period
Total profit 847,981,472
Income tax expenses calculated according to the legal/applicable tax rate 211,995,368
Influence of different tax rates applicable to subsidiary -3,617,656
Influence of income tax in the term before adjustment 200,814
Influence of nontaxable income
Influence of non-deductible costs, expenses and losses 1,654,413
Influence of deductible loss from use of unconfirmed deferred income tax assets in prior
period
Influence of deductible temporary difference or deductible loss of unconfirmed deferred
1,746,796
income tax assets in this period
Income tax expense 211,979,735
7.49 Other comprehensive income
See details in Note 7.35.
7.50 Items of cash flow statement
7.50.1 Other cash received related to operating activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Governmental subsidy income 33,687,978 1,570,329
Interest income 3,555,019 3,007,182
Net amercement income 1,609,829 1,173,364
Withdrawal of cash deposit for bills payable 30,900,000
Other 3,490,195 2,239,037
Total 42,343,021 38,889,912
122
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
7.50.2 Other cash paid related to operating activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Selling expenses 387,846,396 352,845,674
Administrative expenses 45,235,101 43,700,254
Refundable deposits 35,030,980
Other 3,895,589 940,870
Total 436,977,086 432,517,778
7.50.3 Other cash paid related to investment activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Prepaid investment fund 317,654,642
Total 317,654,642
7.50.4 Other cash received related to financial activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Government subsidies received related to
3,150,000 1,000,000
assets
Interest income from pledge of fixed
371,431 303,473
deposits by the R&D Company
Long-term loans from pledge of fixed
20,000,000
deposits by R&D Company
Total 23,521,431 1,303,473
7.50.5 Other cash paid related to financial activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
R&D Company‘ long-term loans pledged by
20,000,000
fixed-term deposits
Total 20,000,000
7.51 Supplementary information to cash flow statement
7.51.1 Supplementary information to cash flow statement
Unit: Yuan
Supplementary materials Amount incurred in this period Amount incurred in prior period
1. Cash flows from operating activities calculated by
-- --
adjusting the net profit:
Net profit 636,001,737 670,010,757
Plus: Provision for impairment of assets -4,730,948 -5,853,576
Depreciation of fixed assets, oil-and-gas assets and
148,983,240 132,923,630
productive biological assets
123
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Supplementary materials Amount incurred in this period Amount incurred in prior period
Intangible assets amortization 11,567,301 9,588,347
Amortization of long term prepaid expenses 8,117,444 5,221,889
Losses on disposal of fixed assets, intangible assets and
-93,958 495,071
other long-term assets (profit listed with ―－‖)
Losses on retirement of fixed assets (profit listed with
―－‖)
Losses on fair value change (profit listed with ―－‖)
Financial costs (profit listed with ―－‖) 15,048,678 15,086,410
Investment losses (profit listed with ―－‖)
Decrease in deferred income tax assets (increase listed
37,133,223 36,092,247
with ―-‖)
Increase of deferred income tax liabilities (decrease
-4,146,569 -3,055,672
listed with ―－‖)
Decrease in inventories (increase listed with ―-‖) 216,486,236 230,160,387
Decrease in operating receivables (increase listed with
-305,623,146 -345,259,383
―-‖)
Increase in operating payable (decrease listed with ―-‖) -205,989,766 -325,049,788
Other
Net cash flows from operating activities 552,753,472 420,360,319
2. Significant investment and financing activities not
-- --
involving cash deposit and withdrawal:
Debt transferred into assets
Convertible corporate bond due within 1 year
Fixed assets under financing lease
3. Net changes of cash and cash equivalent: -- --
Ending balance of cash 1,428,670,462 1,229,487,903
Minus: Beginning balance of cash 1,180,889,274 1,256,942,304
Plus: Ending balance of cash equivalent
Minus: Beginning balance of cash equivalent
Net increase amount of cash and cash equivalent 247,781,188 -27,454,401
7.51.2 Composition of cash and cash equivalents
Unit: Yuan
Item Ending balance Beginning balance
1. Cash 1,428,670,462 1,229,487,903
Including: Cash on hand 151,228 112,832
Bank deposits on demand 1,428,519,234 1,229,375,071
Other monetary capital on demand
Due from central bank available for payment
Due from the industry
Inter-bank lending
2. Cash equivalents
Including: Bond investment due within three months
3. Balance of cash and cash equivalents at the end of
1,428,670,462 1,229,487,903
period
124
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Including: Restricted use of parent company or
subsidiaries in the group
7.52 Assets with ownership or use right restrictions
Unit: Yuan
Item Ending book value Reason for restriction
Loan deposit, L/C deposit, frozen balance of Alipay,
Monetary capital 124,367,991 housing fund and guaranty money for deposit in unit
card
Accounts receivable 35,016,424 Pledge of short-term loans
Pledge of short-term loans, long-term loans and
Fixed assets 142,338,624
long-term accounts payable
Intangible assets 161,934,242 Pledge of long-term accounts payable
Total 463,657,281 --
7.53 Foreign currency monetary items
7.53.1 Foreign currency monetary items
The foreign currency monetary items of the Group in domestic entities of China are listed as
follows:
Unit: Yuan
Item Ending foreign currency balance Translation exchange rate Ending converted RMB balance
Monetary capital -- -- 39,366,401
Including: USD 5,949,495 6.6166 39,365,429
EUR 127 7.6515 972
HKD
7.53.2 Overseas operational entities
The currency adopted by the overseas subsidiaries of the Company according to the main
economic environment where the operation is located shall be chosen as the recording
currency. Marques del Atrio and Francs Champs Participations SAS (―Francs Champs‖) both
use euro as the recording currency, Indomita Wine Company Chile, SpA uses Chilean peso as
the recording currency, and Kilikanoon Estate, Australia uses Australian dollar as the
recording currency. The foreign currency assets or liabilities of overseas subsidiaries are listed
as follows:
Unit: Yuan
Item Ending foreign currency balance Translation exchange rate Ending converted RMB balance
Monetary capital -- -- 41,202,833
Including: USD 6,169,166 6.6166 40,818,904
EUR 50,177 7.6515 383,929
HKD
Short-term loans -- -- 59,549,400
Including: USD 9,000,000 6.6166 59,549,400
EUR
HKD
125
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
8. Changes in scope of consolidation
8.1 Business merger under non-common control incurred in this period
Unit: Yuan
Income of Net profit of
the the
Determination purchased purchased
Time of Cost of
Name of the Shareholding Way of equity Purchasing basis of the from the from the
equity equity
purchased ratio acquisition date purchasing purchasing purchasing
acquisition acquisition
date date to the date to the
end of this end of this
period period
The Company
Kilikanoon
acquired the
Estate Pty
control right
Ltd January 18, January 18,
105,926,184 80% Purchase over the 25,904,401 -115,317
("Kilikanoon 2018 2018
merged party
Estate,
on the date of
Australia")
purchase.
According to the Equity Transfer Contract signed between the Company and the shareholders
of Kilikanoon Estate, Australia, the Company purchased 80% of the shares held by
Kilikanoon Estate, Australia with AUD 20,605,000 (equivalent to RMB 105,926,184 Yuan).
On January 18, 2018, the preconditions for full equity transfer were fulfilled, and the
Company acquired the control right over the finance and business policy of Kilikanoon Estate,
Australia.
8.1.2 Combined cost and goodwill
Unit: Yuan
Combined cost Kilikanoon Estate, Australia
--Cash 105,926,184
-- Fair value of the non-cash assets
-- Fair value of the issued or assumed debts
-- Fair value of the issued equity securities
-- Fair value of the contingent consideration
-- Fair value of the stock equity held before the purchasing date on the
purchasing date
--Other
Total combined cost 105,926,184
Minus: Fair value share of the acquired net identifiable assets 70,131,290
Amount of the share that the goodwill/combined cost is less than the fair
35,794,894
value of the net identifiable assets
8.1.3 Identifiable assets and liabilities of the purchased on the purchasing date
Unit: Yuan
Item Kilikanoon Estate, Australia
Fair value on the purchasing date Book value on the purchasing date
Assets:
Monetary capital 1,359,765 1,359,765
126
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Kilikanoon Estate, Australia
Fair value on the purchasing date Book value on the purchasing date
Accounts receivable 10,366,281 10,366,281
Advance payment 237,174 237,174
Other receivables 182,667 182,667
Inventory 69,612,312 57,946,312
Financial assets available for sale 5,053 5,053
Fixed assets 49,029,999 38,696,709
Intangible assets 16,417,886 7,461,624
Total assets 147,211,137 116,255,585
Liabilities:
Long-term loans 1,282,550 1,282,550
Accounts payable 6,198,846 6,198,846
Employee remuneration payable 876,987 876,987
Taxes and dues payable 1,789,093 1,789,093
Long-term loans 43,497,119 43,497,119
Deferred income tax liabilities 5,902,429
Total liabilities 59,547,024 53,644,595
Net assets 87,664,113 62,610,990
Minus: Minority equity 17,532,823 12,522,198
Net assets acquired 70,131,290 50,088,792
9. Equity in other entities
9.1 Equity in the subsidiaries
9.1.1 Constitution of enterprise group
Proportion of
Business shareholding
Name of subsidiary Principal business location Registration place Acquisition mode
nature
Direct Indirect
Shihezi City, Xinjiang Acquired from a business
Shihezi City, Xinjiang Uygur Manufacturing
Xinjiang Tianzhu (a) Uygur Autonomous Region, 60% combination under
Autonomous Region, China industry
China non-common control
Acquired from a business
Roullet Fransac Cognac, France Cognac, France Trading 100% combination under
non-common control
Acquired from a business
Mirefleurs Bordeaux, France Bordeaux, France Trading 100% combination under
non-common control
Acquired from a business
Marques del Atrio (b) Navarra, Spain Navarra, Spain Sales 75% combination under
non-common control
Acquired from a business
Adelaide, South Australia, Adelaide, South Australia,
Kilikanoon Estate, Australia Sales 80% combination under
Australia Australia
non-common control
Acquired by
Indomita Wine (c) Santiago, Chile Santiago, Chile Sales 85% establishment or
investment
Beijing Changyu Wine Acquired by
Marketing Co., Ltd. Beijing City, China Beijing City, China Sales 100% establishment or
(―Beijing Marketing‖) investment
Yantai Kylin Packaging Acquired by
Yantai City, Shandong Yantai City, Shandong Manufacturing
Co., Ltd. (―Kylin 100% establishment or
Province, China Province, China industry
Packaging‖) investment
127
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Proportion of
Business shareholding
Name of subsidiary Principal business location Registration place Acquisition mode
nature
Direct Indirect
Yantai Chateau Acquired by
Yantai City, Shandong Yantai City, Shandong Manufacturing
Changyu-Castel Co., Ltd. 70% establishment or
Province, China Province, China industry
(―Chateau Changyu‖) (d) investment
Changyu (Jingyang) Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi Manufacturing
Pioneer Wine Co., Ltd. 90% 10% establishment or
Province, China Province, China industry
(―Jingyang Wine‖) investment
Yantai Changyu Pioneer Acquired by
Yantai City, Shandong Yantai City, Shandong
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Sales Company‖) investment
Langfang Development
Acquired by
Zone Castel-Changyu Wine Langfang City, Hebei Langfang City, Hebei Province, Manufacturing
39% 10% establishment or
Co., Ltd. (―Langfang Province, China China industry
investment
Castel‖) (e)
Changyu (Jingyang) Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi
Pioneer Wine Sales Co., Sales 10% 90% establishment or
Province, China Province, China
Ltd. (―Jingyang Sales‖) investment
Langfang Changyu Pioneer Acquired by
Langfang City, Hebei Langfang City, Hebei Province,
Wine Sales Co., Ltd. Sales 10% 90% establishment or
Province, China China
(―Langfang Sales‖) investment
Shanghai Changyu Wine Acquired by
Marketing Co., Ltd. Shanghai City, China Shanghai City, China Sales 30% 70% establishment or
(―Shanghai Marketing‖) investment
Beijing Changyu AFIP
Eco-agriculture Acquired by
Miyun County, Beijing City, Miyun County, Beijing City,
Development Co., Ltd. Sales 100% establishment or
China China
(―Eco-agriculture investment
Development‖)
Beijing Changyu AFIP Acquired by
Manufacturing
Wine Chateau Co., Ltd. Beijing City, China Beijing City, China 90% establishment or
industry
(―Beijing Chateau‖) (f) investment
Acquired by
Yantai Changyu Wine Sales Yantai City, Shandong Yantai City, Shandong
Sales 90% 10% establishment or
Co., Ltd. ( ―Wine Sales‖) Province, China Province, China
investment
Yantai Changyu Pioneer Acquired by
Yantai City, Shandong Yantai City, Shandong
International Wine Co., Ltd. Sales 70% 30% establishment or
Province, China Province, China
(―Pioneer International‖) investment
Hangzhou Changyu Wine Acquired by
Hangzhou City, Zhejiang Hangzhou City, Zhejiang
Sales Co., Ltd. (―Hangzhou Sales 100% establishment or
Province, China Province, China
Changyu‖) investment
Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Planting
Ningxia Growing 100% establishment or
Autonomous Region, China Autonomous Region, China industry
investment
Huanren Changyu National Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province,
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China China
(―National Wine‖) investment
Liaoning Changyu Icewine Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province, Manufacturing
Valley Co., Ltd. (―Icewine 51% establishment or
Province, China China industry
Valley‖) (g) investment
Yantai Development Zone
Acquired by
Changyu Trading Co., Ltd. Yantai City, Shandong Yantai City, Shandong
Sales 100% establishment or
(―Development Zone Province, China Province, China
investment
Trading‖)
Shenzhen Changyu Wine Acquired by
Shenzhen City, Guangdong Shenzhen City, Guangdong
Marketing Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Shenzhen Marketing‖) investment
Yantai Fushan District Acquired by
Yantai City, Shandong Yantai City, Shandong
Changyu Trading Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Fushan Trading‖) investment
Beijing Changyu AFIP
Acquired by
International Conference Miyun County, Beijing City, Miyun County, Beijing City, Service
100% establishment or
Center Co., Ltd. China China industry
investment
(―Conference Center‖)
Beijing Changyu AFIP Acquired by
Miyun County, Beijing City, Miyun County, Beijing City, Tourist
Tourism and Culture Co., 100% establishment or
China China industry
Ltd. (―AFIP Tourism‖) investment
128
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Proportion of
Business shareholding
Name of subsidiary Principal business location Registration place Acquisition mode
nature
Direct Indirect
Changyu (Ningxia) Pioneer Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Manufacturing
Wine Co., Ltd. (―Ningxia 100% establishment or
Autonomous Region, China Autonomous Region, China industry
Wine‖) investment
Yantai Changyu Chateau Acquired by
Yantai City, Shandong Yantai City, Shandong Wholesale and
Tinlot Co., Ltd. (―Chateau 65% 35% establishment or
Province, China Province, China retail
Tinlot‖) investment
Changyu (Qingtongxia) Qingtongxia City, Ningxia Acquired by
Qingtongxia City, Ningxia Hui
Wine Sales Co., Ltd. Hui Autonomous Region, Sales 100% establishment or
Autonomous Region, China
(―Qingtongxia Sales‖) China investment
Shihezi City, Xinjiang Acquired by
Shihezi City, Xinjiang Uygur Manufacturing
Shihezi Chateau Uygur Autonomous Region, 100% establishment or
Autonomous Region, China industry
China investment
Chateau Changyu Moser Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Manufacturing
XV Ningxia Co., Ltd. 100% establishment or
Autonomous Region, China Autonomous Region, China industry
(―Ningxia Chateau‖) investment
Chateau Changyu Rena Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi Manufacturing
Shaanxi Co., Ltd. 100% establishment or
Province, China Province, China industry
(―Chang‘an Chateau‖) investment
Acquired by
Yantai City, Shandong Yantai City, Shandong Manufacturing
R&D Company (g) 65% establishment or
Province, China Province, China industry
investment
Changyu (Huanren) Pioneer Wine-making Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province,
Wine Co., Ltd. (―Huanren project 100% establishment or
Province, China China
Wine‖) preparation investment
Xinjiang Changyu Wine Shihezi City, Xinjiang Acquired by
Shihezi City, Xinjiang Uygur
Sales Co., Ltd. (―Xinjiang Uygur Autonomous Region, Sales 100% establishment or
Autonomous Region, China
Sales‖) China investment
Xinjiang Changyu Pioneer Shihezi City, Xinjiang Acquired by
Shihezi City, Xinjiang Uygur Manufacturing
Wine Co., Ltd. (―Xinjiang Uygur Autonomous Region, 100% establishment or
Autonomous Region, China industry
Wine‖) China investment
Ningxia Changyu Trading Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui
Co., Ltd. (―Ningxia Sales 100% establishment or
Autonomous Region, China Autonomous Region, China
Trading‖) investment
Shaanxi Changyu Rena Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Shaanxi Sales‖) investment
Penglai Changyu Wine Acquired by
Penglai City, Shandong Penglai City, Shandong
Sales Co., Ltd. (―Penglai Sales 100% establishment or
Province, China Province, China
Wine‖) investment
Laizhou Changyu Wine Acquired by
Laizhou City, Shandong Laizhou City, Shandong
Sales Co., Ltd. (―Laizhou Sales 100% establishment or
Province, China Province, China
Sales‖) investment
Acquired by
Francs Champs Investment
Cognac, France Cognac, France 100% establishment or
Participations SAS trade
investment
Lanzhou Changyu Wine Acquired by
Lanzhou City, Gansu Lanzhou City, Gansu Province,
Marketing Co., Ltd. Sales 100% establishment or
Province, China China
(―Lanzhou Marketing‖) investment
Beijing Changyu Trading Acquired by
Co., Ltd. (―Beijing Beijing City, China Beijing City, China Sales 100% establishment or
Trading‖) investment
Tianjin Changyu Pioneer Acquired by
Wine Sales Co., Ltd. Tianjin City, China Tianjin City, China Sales 100% establishment or
(―Tianjin Pioneer‖) investment
Fuzhou Changyu Pioneer Acquired by
Fuzhou City, Fujian Fuzhou City, Fujian Province,
Wine Co., Ltd. (―Fuzhou Sales 100% establishment or
Province, China China
Pioneer‖) investment
Nanjing Changyu Pioneer Acquired by
Nanjing City, Jiangsu Nanjing City, Jiangsu Province,
Wine Co., Ltd. (―Nanjing Sales 100% establishment or
Province, China China
Pioneer‖) investment
Xianyang Changyu Pioneer Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Xianyang Pioneer‖) investment
Shenyang Changyu Pioneer Shenyang City, Liaoning Shenyang City, Liaoning
Sales 100% Acquired by
Wine Co., Ltd. (―Shenyang Province, China Province, China establishment or
129
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Proportion of
Business shareholding
Name of subsidiary Principal business location Registration place Acquisition mode
nature
Direct Indirect
Pioneer‖) investment
Jinan Changyu Pioneer Acquired by
Jinan City, Shandong Jinan City, Shandong Province,
Wine Co., Ltd. (―Jinan Sales 100% establishment or
Province, China China
Pioneer‖) investment
Shanghai Changyu Pioneer Acquired by
Wine Co., Ltd. (―Shanghai Shanghai City, China Shanghai City, China Sales 100% establishment or
Pioneer‖) investment
Fuzhou Changyu Pioneer Acquired by
Fuzhou City, Jiangxi Fuzhou City, Jiangxi Province,
Wine Co., Ltd. (―Fuzhou Sales 100% establishment or
Province, China China
Pioneer‖) investment
Shijiazhuang Changyu
Acquired by
Pioneer Wine Sales Co., Shijiazhuang City, Hebei Shijiazhuang City, Hebei
Sales 100% establishment or
Ltd. (―Shijiazhuang Province, China Province, China
investment
Pioneer‖)
Hangzhou Yuzefeng Acquired by
Hangzhou City, Zhejiang Hangzhou City, Zhejiang
Trading Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Hangzhou Yuzefeng‖) investment
Acquired by
Jilin Changyu Pioneer Wine Changchun City, Jilin Changchun City, Jilin
Sales 100% establishment or
Co., Ltd. (―Jilin Pioneer‖) Province, China Province, China
investment
Beijing Changyu Pioneer Acquired by
Wine Sales Co., Ltd. Beijing City, China Beijing City, China Sales 100% establishment or
(―Beijing Pioneer‖) investment
Harbin Changyu Pioneer Acquired by
Harbin City, Heilongjiang Harbin City, Heilongjiang
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Harbin Pioneer‖) investment
Hunan Changyu Pioneer Acquired by
Changsha City, Hunan Changsha City, Hunan
Wine Co., Ltd. (―Hunan Sales 100% establishment or
Province, China Province, China
Pioneer‖) investment
Yinchuan Changyu Pioneer Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui
Wine Co., Ltd. (―Yinchuan Sales 100% establishment or
Autonomous Region, China Autonomous Region, China
Pioneer‖) investment
Kunming Changyu Pioneer Acquired by
Kunming City, Yunnan Kunming City, Yunnan
Wine Co., Ltd. (―Kunming Sales 100% establishment or
Province, China Province, China
Pioneer‖) investment
Chongqing Changyu Acquired by
Pioneer Wine Sales Co., Chongqing City, China Chongqing City, China Sales 100% establishment or
Ltd. (―Chongqing Pioneer‖) investment
Zhengzhou Changyu Acquired by
Zhengzhou City, Henan Zhengzhou City, Henan
Pioneer Wine Co., Ltd. Sales 100% establishment or
Province, China Province, China
(―Zhengzhou Pioneer‖) investment
Wuhan Changyu Pioneer Acquired by
Wuhan City, Hubei Wuhan City, Hubei Province,
Wine Co., Ltd. (―Wuhan Sales 100% establishment or
Province, China China
Pioneer‖) investment
Taiyuan Changyu Pioneer Acquired by
Taiyuan City, Shanxi Taiyuan City, Shanxi Province,
Wine Co., Ltd. (―Taiyuan Sales 100% establishment or
Province, China China
Pioneer‖) investment
Hohhot Changyu Pioneer Hohhot City, Inner Acquired by
Hohhot City, Inner Mongolia
Wine Co., Ltd. (―Hohhot Mongolia Autonomous Sales 100% establishment or
Autonomous Region , China
Pioneer‖) Region , China investment
Chengdu Changyu Pioneer Acquired by
Chengdu City, Sichuan Chengdu City, Sichuan
Wine Co., Ltd. (―Chengdu Sales 100% establishment or
Province, China Province, China
Pioneer‖) investment
Nanning Changyu Pioneer Nanning City, Guangxi Acquired by
Nanning City, Guangxi Zhuang
Wine Co., Ltd. (―Nanning Zhuang Autonomous Sales 100% establishment or
Autonomous Region, China
Pioneer‖) Region, China investment
Lanzhou Changyu Pioneer Acquired by
Lanzhou City, Gansu Lanzhou City, Gansu Province,
Wine Co., Ltd. (―Lanzhou Sales 100% establishment or
Province, China China
Pioneer‖) investment
Yantai Roullet-Fransac
Acquired by
Imported Wine Sales Co., Yantai City, Shandong Yantai City, Shandong
Sales 100% establishment or
Ltd. (―Yantai Province, China Province, China
investment
Roullet-Fransac‖)
Hefei Changyu Pioneer Hefei City, Anhui Province, Hefei City, Anhui Province,
Sales 100% Acquired by
Wine Co., Ltd. (―Hefei China China establishment or
130
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Proportion of
Business shareholding
Name of subsidiary Principal business location Registration place Acquisition mode
nature
Direct Indirect
Pioneer‖) investment
Urumchi Changyu Pioneer Urumchi City, Xinjiang Acquired by
Urumchi City, Xinjiang Uygur
Wine Co., Ltd. (―Urumchi Uygur Autonomous Region, Sales 100% establishment or
Autonomous Region, China
Pioneer‖) China investment
Guizhou Changyu Pioneer Acquired by
Guiyang City, Guizhou Guiyang City, Guizhou
Wine Co., Ltd. (―Guizhou Sales 100% establishment or
Province, China Province, China
Pioneer‖) investment
Guangzhou Changyu Acquired by
Guangzhou City, Guangzhou City, Guangdong
Pioneer Wine Co., Ltd. Sales 100% establishment or
Guangdong Province, China Province, China
(―Guangzhou Pioneer‖) investment
Acquired by
Yantai City, Shandong Yantai City, Shandong
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
investment
Explanation for difference between the proportion of shareholding and proportion of voting power
in the subsidiaries:
(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition,
whose 60% of the shares are held by the Company. The Company exercises full control over
the operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement.
This contract arrangement was expired on August 6, 2017. After the expiration, the minority
shareholders of Xinjiang Tianzhu shall enjoy/bear all rights/duties of shareholders specified in
the Articles of Association.
(b) On September 12, 2016, Atrio Group completed the internal reorganization, and Marques
del Atrio absorbed and merged Atrio Group and its subsidiaries Enotec S.L., Hostaler I S.L.,
and Faustino Rivero Ulecia S.L. After the reorganization was completed, Marques del Atrio
becomes the only existing company.
(c) Indomita Wine is a Sino-foreign joint venture jointly established by the Company and
Inversiones Beth-Wines Limitada, in which the Company invested USD 40,110,000
(equivalent to RMB 274,248,114 Yuan), holding 85% of the stock rights, and Inversiones
Beth-Wines Limitada invested USD 7,080,000 (equivalent to RMB 48,396,726 Yuan),
holding 15% of the stock rights.
(d) Changyu Chateau is a Sino-foreign joint venture established by the Company and a
foreign investor, whose 70% of the shares are held by the Company. The Company exercises
full control over the operation, investment and financing policies of Changyu Chateau by
contract arrangement. The contract arrangement will expire on December 31, 2022.
(e) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreign
investor, whose 49% of the shares are held by the Company and its subsidiaries. The
Company exercises full control over the operation, investment and financing policies of
Langfang Castel by contract arrangement. The contract arrangement will expire on December
31, 2022.
(f) Beijing Chateau is a limited liability company jointly established by the Company and
Yantai De‘an and Beijing Qinglang. In 2017, the Company made capital increase of RMB
131
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
502,910,000 Yuan in Beijing Chateau, and Yantai De‘an and Beijing Qinglang jointly made
capital increase of RMB 29,840,000 Yuan. On December 22, 2017, Beijing Chateau
completed business registration alteration. After the capital increase, the Company holds 90%
of the stock rights. The Company exercises full control over the operation, investment and
financing policies of Beijing Chateau by contract arrangement. The contract arrangement will
expire on September 2, 2019.
(g) Icewine Valley is a Sino-foreign joint venture established by the Company and a foreign
investor, whose 51% of the shares are held by the Company. The Company exercises full
control over the operation, investment and financing policies of Icewine Valley by contract
arrangement. The contract arrangement will expire on December 31, 2021.
(h) The R&D Company is a joint venture established by the Company and Agricultural
Development Fund, whose 65% of the shares were held by the Company on June 30, 2018.
As stated in Note 7.30, Agricultural Development Fund invested RMB 305,000,000 Yuan in
the R&D Company in 2016, accounting for 37.9% of the registered capital. According to the
investment agreement, it is agreed that Agricultural Development Fund will take back the
investment fund in ten years and obtain fixed income according to year, which is 1.2% of the
remaining principal. Except for the above fixed income, the Agricultural Development Fund
shall not enjoy other profits of the R&D Company or bear the losses of the R&D Company.
Accordingly, the investment of the Agricultural Development Fund in the R&D Company is
equity investment nominally, which is debt investment in deed. This Company shall include
the investment of the Agricultural Development Fund in long-term accounts payable
measured by amortized cost. The Company exercises full control over the operation,
investment and financing policies of the R&D Company by contract arrangement. The
contract arrangement will expire on May 22, 2026.
9.1.2 Important non-wholly-owned subsidiaries
Unit: Yuan
Dividend declared to be
Shareholding proportion Profit/loss attributable Balance of minority
distributed to minority
Name of subsidiary of minority to minority shareholders shareholder‘s interest at
shareholders in this
shareholders in this period the end of period
period
Xinjiang Tianzhu 40% -73,829 53,299,623
Marques del Atrio 25% 303,503 746,021 30,648,536
Changyu Chateau 30% 12,365,016
Langfang Castel 51% 22,702,522
Beijing Chateau 10% 65,133,868
Icewine Valley 49% 33,319,062
Indomita Wine 15% -42,279 52,446,446
Kilikanoon Estate,
20% -23,063 16,776,846
Australia
132
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Explanation for difference between the proportion of shareholding and proportion of voting
power of the minority shareholders in the subsidiaries: See details in Note 9.1.1.
9.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Ending balance
Name of
subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Xinjiang
31,621,493 68,869,503 100,490,996 493,969 5,336,114 5,830,082
Tianzhu
Changyu
140,023,527 114,974,477 254,998,005 171,551,853 171,551,853
Chateau
Langfang
18,220,999 17,452,408 35,673,406 4,063,516 4,063,516
Castel
Beijing
215,371,778 475,159,760 690,531,538 50,320,391 50,320,391
Chateau
Icewine
59,047,298 25,091,478 84,138,776 28,890,336 100,000 28,990,336
Valley
Marques del
348,900,749 107,672,031 456,572,779 246,746,293 86,970,780 333,717,072
Atrio
Indomita
183,652,569 299,672,376 483,324,945 127,449,902 6,232,065 133,681,967
Wine
Kilikanoon
Estate, 85,037,994 63,434,206 148,472,200 57,335,399 7,252,572 64,587,971
Australia
Unit: Yuan
Beginning balance
Name of
subsidiary Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Xinjiang
30,264,441 71,323,940 101,588,381 809,080 5,336,114 6,145,194
Tianzhu
Changyu
140,038,021 115,435,985 255,474,006 175,061,601 175,061,601
Chateau
Langfang
22,728,536 17,973,719 40,702,255 6,133,909 6,133,909
Castel
Beijing
214,079,274 481,668,050 695,747,324 73,963,043 73,963,043
Chateau
Icewine
38,657,358 25,484,359 64,141,717 10,871,695 100,000 10,971,695
Valley
Marques del
398,835,959 116,299,504 515,135,463 299,030,002 89,336,338 388,366,340
Atrio
Indomita
175,669,256 305,664,706 481,333,962 122,023,764 5,206,406 127,230,170
Wine
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Name of Total Total
subsidiary Operating Operating Operating Operating
Net profit comprehensive Net profit comprehensive
income cash flow income cash flow
income income
Xinjiang 18,803 -184,572 -184,572 10,284,801 115,904,168 22,453,715 22,453,715 -7,275,404
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Tianzhu
Changyu
43,226,910 2,861,474 2,861,474 2,419,427 20,668,538 -106,018 -106,018 12,978,276
Chateau
Langfang
5,038,281 -1,952,954 -1,952,954 -4,435,022 23,732,778 161,088 161,088 -137,422
Castel
Beijing
78,502,666 15,243,700 15,243,700 12,282,145 75,491,933 12,511,172 12,511,172 -37,040,335
Chateau
Icewine
27,305,133 905,396 905,396 2,018,740 16,724,881 -2,063,324 -2,063,324 -1,416,775
Valley
Marques
148,197,893 1,214,012 -929,332 -21,783,821 131,223,890 -233,187 3,996,659 -31,616,566
del Atrio
Indomita
93,719,341 -281,859 -4,460,814 -7,723,684
Wine
Kilikanoon
Estate, 25,904,401 -115,317 -3,779,883 -1,469,903
Australia
10. Risks related to financial instruments
The main financial instruments of the Group include monetary capital, bills receivable, accounts
receivable, interest receivable, other receivables, available-for-sale financial assets, short-term loans,
accounts payable, other payables, interest payable, long-term accounts payable and long-term loans.
Please refer to Note 7 of each financial instrument for the details. The risks related to these financial
instruments and risk management policies adopted by the Group to reduce these risks are shown as
follows. The management of the Group manages and monitors these risk exposures to ensure that the
above-mentioned risks are controlled within a defined scope.
The Group adopts sensitivity analysis techniques to analyze the possible influence of possible
reasonable changes of risk variables on the current profit and loss and shareholders‘ equity. Since any
risk variable merely changes independently and the final influence of relevance between variables on
the change of certain risk variable will exert a great effect, the following content is carried out under
the hypothesis that each variable changes independently.
The risk management objective of the Group is to achieve proper balance between risks and benefits,
to minimize the negative influence of the risks on the business performance of the Group and to
maximize the shareholders‘ benefit. Based on this risk management objective, the basic risk
management strategy of the Group is to determine and analyze various risks faced by the Group, to set
up proper risk tolerance bottom line and to carry out risk management, and to supervise various risks
timely and reliably to control the risks within a defined scope.
10.1 Risk management objective and policy
10.1.1 Market risk
① Foreign exchange risk
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Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreign
exchange risk borne by the Group is mainly relevant to EUR and USD. Except that the overseas
subsidiaries of the Group purchase and sell in EUR, Chilean peso and Australian dollar, which borrow
in USD, and domestic subsidiaries deposit in EUR and USD, other main business activities of the
Group are priced and settled in RMB. As at June 30, 2018, except that the assets and liabilities
mentioned in the table below were the balance of deposits or loans shown in foreign currencies, other
assets and liabilities of the entities of the Group were settled in their respective functional currencies.
Unit: Yuan
Item Ending balance Beginning balance
Monetary capital (EUR) 383,929 1,190,459
Monetary capital (USD) 40,818,904 34,843,968
Short-term loans (USD) 59,549,400 58,807,800
The foreign exchange risk caused by the assets and liabilities of such foreign currency balance may
exert an influence on the business performance of the Group. The Group pays close attention to the
influence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has not
taken any measures to avoid the foreign exchange risk at present.
Sensitivity analysis of foreign exchange risk
With the other variables unchanged, the pre-tax influence of possible reasonable exchange rate
fluctuation on current profit and loss and shareholders‘ equity is shown as follows:
Domestic entities:
Unit: Yuan
This period
Item Exchange rate fluctuation
Influence on profit in this period Influence on shareholders‘ equity
EUR 5% appreciation against RMB 49 49
EUR 5% depreciation against RMB -49 -49
USD 5% appreciation against RMB 1,968,271 1,968,271
USD 5% depreciation against RMB -1,968,271 -1,968,271
Overseas entities:
Unit: Yuan
This period
Item Exchange rate fluctuation
Influence on profit in this period Influence on shareholders‘ equity
USD 5% appreciation against EUR 22,027 22,027
USD 5% depreciation against EUR -22,027 -22,027
USD 10% appreciation against CLP -5,830,116 -5,830,116
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USD 10% depreciation against CLP 5,830,116 5,830,116
EUR 5% appreciation against CLP 19,205 19,205
EUR 5% depreciation against CLP -19,205 -19,205
Note: As at June 30, 2018, the management of the Group predicted that the EUR and USD exchange
rate against RMB, EUR exchange rate against USD, and EUR exchange rate against CLP changed by
5%; and USD exchange rate against CLP changed by 10%.
② Interest rate risk – risk of change in cash flow
The risk of change in cash flow of financial instruments caused by interest rate change of the Group is
mainly relevant to the monetary capital and bank loan at floating interest rate. The policy of the Group
is to maintain the floating interest rate of these loans to eliminate the risk of change in fair value of the
interest rate.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the hypothesis that the change in market interest
rate influences the interest income or expense of financial instruments at variable rate.
The management of the Group thinks that the interest rate risk of deposit in bank borne by the Group
is not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is not
disclosed here.
On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-tax
influence of possible reasonable exchange rate fluctuation on current profit and loss and shareholders‘
equity is as follows:
Unit: Yuan
This period
Item Interest rate change
Influence on profit of this period Influence on shareholders‘ equity
Bank loan Increase by 50 BP -1,751,529 -1,751,529
Bank loan Decrease by 50 BP 1,751,529 1,751,529
Note: As at June 30, 2018, the management of the Group predicted that the bank floating rate changed
by 50 basis points
10.1.2 Credit risk
As at June 30, 2018, the largest credit risk exposure possibly causing the financial loss of the
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Group was mainly caused by the loss generated by the financial assets of the Group due to
failure of another party of the contract in fulfilling obligations.
To lower the credit risk, the Group only trades with the recognized and reputable third party.
In accordance with the policy of the Group, credit check shall be carried out for all customers
who transact by means of credit. In addition, the Group conducts continuous monitoring on
the balance of accounts receivable to ensure that the Group will not face major risk of bad
debts. For transactions not settled with recording currency of relevant business units, unless
the credit control department of the Group specially approves, the Group will not provide
credit trade terms. In addition, the Group audits the collection of each single significant
account receivable on each date of balance sheet to ensure that sufficient bad-debt provision is
accrued for accounts unable to be collected. Therefore, the management of the Group thinks
the credit risk borne by the Group is greatly reduced.
Since the Group only trades with the recognized and reputable third party, no collateral is
required. The credit risk is managed centrally according to the customer/counter-party,
geographic area and industry. As at June 30, 2018, 16.4% of accounts receivable of the Group
came from top five borrowers in accounts receivable of the Group (December 31, 2017:
20.7%). The Group holds no collateral or other credit enhancement for the balance of
accounts receivable.
10.1.3 Liquidity risk
When managing the liquidity risk, the Group reserves and monitors the cash and cash
equivalents the management considers sufficient to satisfy the operation need of the Group
and reduce the influence of fluctuation in cash flow. The management of the Group monitors
the use of bank loans and ensures to abide by the loan agreement.
10.1.4 Disclosure of fair value – fair value of financial assets and liabilities not measured
by fair value
Fair value
Item Book value First-level Second-level fair Third-level
Total
fair value value fair value
Long-term accounts payable
269,000,000 - 229,053,269 - 229,053,269
measured by amortized cost
The management of the Group thinks that, as at June 30, 2018, except for the long-term
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
accounts payable stated above, the book value of other financial assets and liabilities
measured by amortized cost was close to the fair value thereof.
11. Related parties and related transactions
11.1 Particulars of the parent company of the Company
Proportion of Proportion of
Name of parent shareholding of the voting powers of
Registration place Business nature Registered capital
company parent company in the parent company
the Company in the Company
Changyu Group Manufacturing
Yantai City 50,000,000 50.40% 50.40%
Company industry
From January to June 2018, there was no fluctuation in the registered capital of the parent
company and its share in equity interest and voting right.
11.2 Particulars of the subsidiaries of the Company
See particulars of the subsidiaries of the Company in Note 9.
11.3 Particulars of other related parties
Name of other related parties Relationship between other related parties and the Company
Yantai Changyu Wine Culture Museum Co., Ltd. (―Wine
A company controlled by the same parent company
Culture Museum‖)
Yantai Changyu Window of International Wine City Co. Ltd.
A company controlled by the same parent company
(―Window of Wine City‖)
Yantai God Horse Packing Co., Ltd. (―God Horse Packing‖) A company controlled by the same parent company
Yantai Zhongya Medical Health Wine Co., Ltd. (―Zhongya
A company controlled by the same parent company
Medical‖)
Yantai Changyu Cultural Tourism Development Co., Ltd.
A company controlled by the same parent company
(―Changyu Cultural Tourism‖)
11.4 Related transactions
11.4.1 Related transactions of purchasing and selling goods and providing and receiving
services
List of purchasing goods/receiving services
Unit: Yuan
Amount incurred in this
Related parties Related transactions Amount incurred in prior period
period
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Amount incurred in this
Related parties Related transactions Amount incurred in prior period
period
God Horse Packing Purchasing goods 95,990,354 64,896,342
Zhongya Medical Purchasing goods 6,037,893 10,700,788
Wine Culture Museum Purchasing goods 9,475,159 6,319,776
Window of Wine City Purchasing goods 2,857,130 231,879
List of selling goods/providing services
Unit: Yuan
Amount incurred in this
Related parties Related transactions Amount incurred in prior period
period
Wine Culture Museum Selling goods 13,889,017 4,252,962
Window of Wine City Selling goods 8,773,612 5,642,914
Zhongya Medical Selling goods 2,203,629 1,956,658
God Horse Packing Selling goods 15,742 829,977
Changyu Cultural Tourism Selling goods 220,759
The price of transactions between the Group and the related parties are based on the
negotiated price.
11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing
Nil
11.4.3 Leasing with related parties
The Company as a lessor:
Unit: Yuan
Rental income recognized in Rental income recognized in
Name of the lessee Type of leased assets
this period prior period
Office building and
God Horse Packing 813,440
plant
Window of Wine City Office building 535,000
Zhongya Medical Office building 285,000
Pursuant to a lease contract dated July 1, 2017 signed between the Company and God Horse
Packing, starting from July 1, 2017, the Company rents properties to God Horse Packing for
operation purposes with annual rental income of RMB 1,626,880 Yuan, and the expired date
of the contract is June 30, 2022. From January to June 2018, the rental income recognized by
the Company amounted to RMB 813,440 Yuan.
Pursuant to a lease contract dated January 1, 2018 signed between the Company and Window
of Wine City, starting from January 1, 2018, the Company rents houses to Window of Wine
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
City for operation purposes with annual rental income of RMB 1,070,000 Yuan, and the
expired date of the contract is December 31, 2018. From January to June 2018, the rental
income recognized by the Company amounted to RMB 535,000 Yuan.
Pursuant to a lease contract dated January 1, 2018 signed between the Company and Zhongya
Medical, starting from January 1, 2018, the Company rents houses to Zhongya Medical for
operation purposes with annual rental income of RMB 570,000 Yuan, and the expired date of
the contract is December 31, 2018. From January to June 2018, the rental income recognized
by the Company amounted to RMB 285,000 Yuan.
The Company as a lessee:
Unit: Yuan
Rent recognized in prior
Name of the lessor Type of leased assets Rent recognized in this period
period
Changyu Group Company Office building and plant 3,775,362 3,775,362
Pursuant to a lease contract dated January 1, 2016 signed between the Company and Changyu
Group Company, starting from January 1, 2016, the Company rents properties from Changyu
Group Company for operation purposes at a basic annual rent of RMB 1,692,724 Yuan, and
the expired date of the contract is December 31, 2020. From January to June 2018, the rental
expenses recognized by the Company to Changyu Group Company amounted to RMB
846,362 Yuan.
Pursuant to a lease contract dated January 1, 2017 signed between the Company and Changyu
Group Company, starting from January 1, 2017, the Company rents properties from Changyu
Group Company for operation purposes at a basic annual rent of RMB 1,464,500 Yuan, and
the expired date of the contract is December 31, 2021. From January to June 2018, the rental
expenses recognized by the Company to Changyu Group Company amounted to RMB
732,250 Yuan.
Pursuant to a lease contract dated January 1, 2017 signed between the Company and Changyu
Group Company, starting from January 1, 2017, the Company rents properties from Changyu
Group Company for operation purposes at a basic annual rent of RMB 4,393,500 Yuan, and
the expired date of the contract is December 31, 2021. From January to June 2017, the rental
expenses recognized by the Company to Changyu Group Company amounted to RMB
2,196,750 Yuan.
11.4.4 Guarantee with related parties
Nil
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
11.4.5 Inter-bank borrowing and lending of related parties
Nil
11.4.6 Asset transfer and debt recombination of related parties
Nil
11.4.7 Other related transactions
Unit: Yuan
Item Note Amount incurred in this period Amount incurred in prior period
Trademark use fee (a) 43,363,867 44,428,033
Patent fee (b) 25,000 25,000
The price of transactions between the Group and the related parties is based on the negotiated
price.
(a) Trademark royalty contract
Pursuant to a trademark royalty contract dated May 18, 1997 signed between the Company
and Changyu Group Company, starting from September 18, 1997, the Company may use
certain trademark of Changyu Group Company, which has been registered with the PRC
Trademark Office. An annual royalty at 2% of the Company‘s annual specific sales is payable
to Changyu Group Company by the Company. The contract is effective until the expiry of the
registration of the trademark. From January to June 2018, the trademark royalty paid to
related parties by the Company accounted for 100% of the trademark royalty in the Group.
(b) Patent implementation license contract
Pursuant to a patent implementation license contract dated May 18, 1997 signed between the
Company and Changyu Group Company, starting from September 18, 1997, the Company
may use the patented technologies of Changyu Group Company. The annual patent royalty
payable by the Company to Changyu Group Company was RMB 50,000 Yuan. The contract
was expired on December 20, 2005. On August 20, 2016, the Company renewed the patent
implementation license contract for 10 year, which should pay the patent royalty of RMB
50,000 Yuan to Changyu Group Company annually as before. From January to June 2018, the
patent royalty payable by the Company to Changyu Group Company amounted to RMB
25,000 Yuan.
From January to June 2018, the patent fees paid to related parties by the Group accounted for
100% of the patent fees in the Group.
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
11.5 Accounts receivable and payable of the related parties
11.5.1 Accounts receivable
Unit: Yuan
Ending balance Beginning balance
Item Related parties Book Bad debt Bad debt
Book balance
balance provision provision
Accounts receivable Zhongya Medical 8,912,812 8,134,150
Accounts receivable God Horse Packing 1,668,058 1,342,348
Accounts receivable Window of Wine City 2,333,822 3,196,095
Accounts receivable Wine Culture Museum 57,360 34,280
Accounts receivable Changyu Cultural Tourism 256,080
11.5.2 Accounts payable
Unit: Yuan
Item Related parties Ending book balance Beginning book balance
Accounts payable God Horse Packing 36,775,249 52,403,056
Accounts payable Zhongya Medical 5,305,577 2,051,991
Accounts payable Wine Culture Museum 2,945,967 2,040,860
Accounts payable Window of Wine City 889,442 1,485,766
Other accounts payable Changyu Group Company 49,766,061 77,208,929
12. Commitment and contingency
12.1 Significant commitment
Unit: Yuan
Item Ending balance Beginning balance
Long-term asset commitments 810,228,900 1,246,506,000
12.2 Contingency
By the balance sheet date, the Group didn‘t have any undisclosed contingency to be disclosed.
13. Matters after balance sheet
13.1 Important non-adjusting events
Nil
13.2 Profit distribution
Unit: Yuan
Profits or dividends to be distributed 342,732,000
Allocated profits or dividends approved to declare upon
342,732,000
discussion
142
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
According to the decision of the Shareholders‘ Meeting dated May 24, 2018, based on the issued
capital stock of 685,464,000 shares in 2017, the Company allocated RMB 5 Yuan in cash (including
tax) for every 10 shares to all shareholders with the total cash dividends of RMB 342,732,000 Yuan.
Such cash dividends were distributed on July 9, 2018 and July 11, 2018 respectively.
14. Other important matters
Nil
15. Notes on major items in financial statements of the parent company
15.1 Accounts receivable
15.1.1 Accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision
Type
Accrued Book value Accrued Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Accounts receivable of
significant single amount
12,408,787 100% 12,408,787 7,805,333 100% 7,805,333
and single accrued bad
debt provision
Accounts receivable
accrued bad debt
provision by credit risk
features
Accounts receivable of
insignificant single
amount and single
accrued bad debt
provision
Total 12,408,787 100% 12,408,787 7,805,333 100% 7,805,333
15.1.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or
transferred back in this period was RMB 0 Yuan.
15.1.3 Accounts receivable actually canceled after verification in this period
Nil
143
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the ending
balance
Unit: Yuan
Percentage in
Relationship with
Unit Amount Age total accounts
the Company
receivable (%)
Yantai Zhongya Medical Health Wine
Affiliated party 7,847,857 Within 1 year 63.2%
Co., Ltd.
Shandong Yantai Winemaking Co., Ltd.
Third party 2,934,050 Within 1 year 23.6%
Liquan Wine Branch
Yantai God Horse Packing Co., Ltd. Affiliated party 1,626,880 Within 1 year 13.2%
Total 12,408,787 100.0%
15.1.5 Accounts receivable derecognized due to transfer of financial assets
Nil
15.1.6 Accounts receivable transferred and included in assets and liabilities
Nil
15.2 Other accounts receivable
15.2.1 Other accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Book balance Bad debt provision Book value Book balance Bad debt provision Book value
Type
Accrued Accrued
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Other accounts
receivable of
significant
single amount 509,269,034 100% 509,269,034 592,274,075 100% 592,274,075
and single
accrued bad
debt provision
Other accounts
receivable
accrued bad
debt provision
by credit risk
features
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Other accounts
receivable of
insignificant
single amount
and single
accrued bad
debt provision
Total 509,269,034 100% 509,269,034 592,274,075 100% 592,274,075
15.2.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or
transferred back in this period was RMB 0 Yuan.
15.2.3 Other accounts receivable classified by nature
Unit: Yuan
Nature of fund Ending book balance Beginning book balance
Accounts receivable of subsidiaries 507,332,524 589,897,407
Deposit and guaranty money receivable 2,500
Other 1,936,510 2,374,168
Total 509,269,034 592,274,075
15.2.4 Other accounts receivable collected by the borrower of top 5 units ranked by the
ending balance
Unit: Yuan
Percentage in the
Ending balance
Nature of total ending
Unit Ending balance Age of bad debt
fund balance of other
provision
accounts receivable
Internal
Sales Company incomings 216,011,410 Within 1 year 42.4%
and outgoings
Internal
R&D Company incomings 205,461,252 Within 1 year 40.3%
and outgoings
Internal
Chateau Tinlot incomings 20,500,000 Within 1 year 4.0%
and outgoings
Internal
Penglai Sales incomings 13,766,522 Within 1 year 2.7%
and outgoings
Internal
Laizhou Wine incomings 13,244,757 Within 1 year 2.6%
and outgoings
Total -- 468,983,942 -- 92.0%
15.2.5 Accounts receivable related to governmental subsidy
Nil
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
15.2.6 Other accounts receivable derecognized due to transfer of financial assets
Nil
15.2.7 Other accounts receivable transferred and included in assets and liabilities
Nil
15.3 Long-term equity investment
Unit: Yuan
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
reserve reserve
Investment in
4,617,128,388 4,617,128,388 4,511,202,204 4,511,202,204
subsidiaries
Investment in associated
enterprises and joint
ventures
Total 4,617,128,388 4,617,128,388 4,511,202,204 4,511,202,204
15.3.1 Investment in subsidiaries
Provision for Ending balance
Beginning Increase in this Decrease in this
Invested unit Ending balance impairment in of impairment
balance period period
this period provision
Xinjiang Tianzhu (a) 60,000,000 60,000,000
Kylin Packaging 23,176,063 23,176,063
Changyu Chateau
28,968,100 28,968,100
(a)
Pioneer
3,500,000 3,500,000
International (b)
Ningxia Growing 36,573,247 36,573,247
National Wine 2,000,000 2,000,000
Icewine Valley (a) 30,440,500 30,440,500
Beijing Chateau (a) 579,910,000 579,910,000
Sales Company 7,200,000 7,200,000
Langfang Sales (b) 100,000 100,000
Langfang Castel (a) 19,835,730 19,835,730
Wine Sales 4,500,000 4,500,000
Shanghai Marketing 300,000 300,000
146
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Provision for Ending balance
Beginning Increase in this Decrease in this
Invested unit Ending balance impairment in of impairment
balance period period
this period provision
(b)
Beijing Marketing 850,000 850,000
Jingyang Sales (b) 100,000 100,000
Jingyang Wine (b) 900,000 900,000
Ningxia Wine 222,309,388 222,309,388
Ningxia Chateau 443,463,500 443,463,500
Chateau Tinlot (b) 212,039,586 212,039,586
Shihezi Chateau 809,019,770 809,019,770
Chang‘an Chateau 803,892,258 803,892,258
R&D Company (a) 500,000,000 500,000,000
Huanren Wine 21,700,000 21,700,000
Wine Sales
Company
Francs Champs 236,025,404 236,025,404
Marques del Atrio 190,150,544 190,150,544
Indomita Wine 274,248,114 274,248,114
Kilikanoon Estate,
105,926,184 105,926,184
Australia
Total 4,511,202,204 105,926,184 4,617,128,388
(a) The Company acquired 100% voting right and usufruct of such non-wholly-owned subsidiaries by
means of contract arrangement. Please refer to Note 9.1.
(b) The Company acquired 100% voting right of such subsidiaries by means of indirect holding through its
wholly-owned subsidiaries.
From January to June 2018, there were no restrictions for the invested entities of the Company to transfer
assets to the Company.
15.4 Operating income and operating cost
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Item
Income Cost Income Cost
Main business 384,520,180 330,810,994 445,339,324 387,600,176
Other business 24,325,031 21,835,995 386,481,179 350,350,202
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Total 408,845,211 352,646,989 831,820,503 737,950,378
15.5 Investment income
Unit: Yuan
Amount incurred in this
Item Amount incurred in prior period
period
Income from long-term equity investment by cost method 312,409,576 66,127,980
Income from long-term equity investment by equity method
Investment income from disposal of long-term equity
investment
Investment income of the financial assets measured at their
fair values and the variation of which is recorded into the
current profit and loss during the holding period
Investment income gained from disposal of the financial
assets measured at their fair values and the variation of which
is recorded into the current profit and loss
Investment income of held-to-maturity investment during the
holding period
Investment income of financial assets held for sale during the
holding period
Investment income gained from disposal of financial assets
held for sale
Gains generated from the remaining equity remeasured as per
fair value after the loss of control
Total 312,409,576 66,127,980
16. Supplementary materials
16.1 List of non-current profits/losses in this period
Unit: Yuan
Item Amount Remark
Profits/losses on disposal of non-current assets 93,958
Tax return, deduction and exemption approved beyond the
authority or without formal approval document
Governmental subsidy included in the current profits/losses
37,982,878
(excluding those closely related to the enterprise business and
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Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Amount Remark
enjoyed in accordance with the unified standard quota or
ration of the state)
Payment for use of funds by non-financial enterprises included
in the current profits/losses
Income obtained when the investment cost obtained by the
enterprise from subsidiaries, joint-run business and joint
venture is less than the fair value of the net identifiable assets
obtained from the invested units when the investment is made
Profits/losses on exchange of non-monetary assets
Profits/losses on entrusting other people to make investment or
manage assets
Asset impairment provision accrued due to force majeure such
as natural disaster
Profits/losses on debt restructuring
Enterprise reorganization expenses such as staffing
expenditure and integration expenses, etc.
Profits/losses on those beyond the fair value generated from
transactions with unfair transaction price
Current net profits/losses on subsidiaries acquired from a
business combination under common control from the
beginning to the consolidation date
Profits/losses on contingencies irrelated to the normal business
of the Company
Profits/losses on changes of fair value of financial assets and
liabilities held for trading, and investment income from
disposal of financial assets and liabilities held for trading and
financial assets held for sale, excluding effective hedging
operations relevant to the normal business of the Company
Returns of provision for impairment of accounts receivable
with single impairment test
Profits/losses on external entrusted loans
Profits/losses on fair value changes of investment real estate
with fair value mode for follow-up measurement
149
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
Item Amount Remark
Influence of the one-time adjustment of the current
profits/losses in accordance with tax and accounting laws and
regulations on the current profits/losses
Trustee fee income from entrusted operation
Other non-operating income and expenditure besides the
614,030
above items
Other profits/losses conforming to the definition of
non-current profits/losses
Minus: Influenced amount of income tax 9,447,208
Influenced amount of minority shareholders‘ equity 84,972
Total 29,158,686 --
16.2 Return on net assets and earnings per share
Earnings per share
Weighted average return on
Profit incurred in this period Basic EPS Diluted EPS
net assets
(Yuan/Share) (Yuan/Share)
Net profit attributable to common
6.89% 0.93 0.93
shareholders of the Company
Net profit attributable to common
shareholders of the Company deducting 6.58% 0.88 0.88
non-incidental profits/losses
16.3 Accounting data difference under domestic and foreign accounting standard
16.3.1 Net profits & net assets difference disclosed in the financial report according to
the international accounting standard and Chinese accounting standard
Unit: Yuan
Net profits Net assets
Amount incurred in Amount incurred in prior
Ending balance Beginning balance
this period period
In accordance with the
635,837,405 670,069,054 9,532,948,884 8,906,342,299
Chinese accounting standard
Item & amount adjusted in accordance with the international accounting standard:
In accordance with the
international accounting 635,837,405 670,069,054 9,532,948,884 8,906,342,299
standard
150
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
XI. Reference Documents
(1)The original of 2018 Semi-annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman, chief accountant and
accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997; The Prospectus
and The Shares’ Change & Public Offering Announcement for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public during
the report period in the newspapers designated by China Securities Regulatory Commission.
Yantai Changyu Pioneer Wine Co. Ltd.
Board of Directors
August 30th, 2018
151
